<PAGE>
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------
FORM 10-K/A
(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the year ended December 31, 1999
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission File Number: 000-23593
----------------
VERISIGN, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-3221585
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1350 Charleston Road, Mountain View, CA 94043-1331
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (650) 961-7500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
----------------
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES [X] NO [_]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K. [_]
The aggregate market value of the common stock held by non-affiliates of the
registrant as of January 31, 2000 was approximately $16,746,000,000.
The number of shares outstanding of the registrant's common stock as of
January 31, 2000 was 103,770,044.
DOCUMENTS INCORPORATED BY REFERENCE
None
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<PAGE>
Part III of the Annual Report on Form 10-K filed by Registrant on March 22,
2000 is amended as follows;
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth information regarding each of our directors
and executive officers as of December 31, 1999:
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Stratton D. Sclavos...... 38 President, Chief Executive Officer and Director
Dana L. Evan............. 40 Executive Vice President of Finance and
Administration and Chief Financial Officer
Quentin P. Gallivan...... 42 Executive Vice President of Worldwide Sales
Diana S. Keith........... 40 Vice President of Customer Services
Arnold Schaeffer......... 36 Executive Vice President of Engineering
Richard A. Yanowitch..... 43 Executive Vice President of Worldwide Marketing
Timothy Tomlinson(2)..... 50 Secretary and Director
Kevin R. Compton(2)...... 41 Director
David J. Cowen(1)........ 33 Director
D. James Biazos(1)....... 44 Chairman of the Board
William Chenevich(1)(2).. 56 Director
</TABLE>
- --------
Notes: (1) Member of the compensation committee
(2) Member of the audit committee
Stratton D. Sclavos has served as President and Chief Executive Officer and
as a director of VeriSign since he joined VeriSign in July 1995. From October
1993 to June 1995, he was Vice President, Worldwide Marketing and Sales of
Taligent, Inc., a software development company that was a joint venture among
Apple Computer, Inc., IBM and Hewlett-Packard. Prior to that time, he served in
various sales, business development and marketing capacities for GO
Corporation, MIPS Computer Systems, Inc. and Megatest Corporation. Mr. Sclavos
is also a director and a member of the compensation committee of Network
Solutions, Inc. and a director of Keynote Systems, Inc., Marimba, Inc. and
SalesForce.com, Inc. Mr. Sclavos holds a B.S. degree in Electrical and Computer
Engineering from the University of California at Davis.
Dana L. Evan has served as Vice President of Finance and Administration and
Chief Financial Officer of VeriSign since she joined VeriSign in June 1996.
From 1988 to June 1996, she worked as a financial consultant in the capacity of
chief financial officer, vice president of finance or corporate controller for
various public and private companies and partnerships, including VeriSign from
November 1995 to June 1996, Delphi Bioventures, a venture capital firm, from
1988 to June 1995, and Identix Incorporated, a manufacturer of biometric
identity verification and imaging products, from 1991 to August 1993. Prior to
1988, she was employed by KPMG LLP, most recently as a senior manager. Ms. Evan
is a certified public accountant and holds a B.S. degree in Commerce with a
concentration in Accounting and Finance from the University of Santa Clara.
Diana S. Keith has served as Vice President of Customer Services since
August 1998. From June 1996 to August 1998 she was Director of Customer
Services for VeriSign. From May 1988 to June 1996 she was employed by Apple
Computer, Inc., most recently as the Senior Manager of Worldwide Operations of
Apple Online Systems. Ms. Keith holds a B.S. degree in Business Management and
Administration from San Jose State University.
Quentin P. Gallivan has served as Vice President of Worldwide Sales of
VeriSign since he joined VeriSign in October 1997. From April 1996 to October
1997, he was Vice President for Asia Pacific and Latin America of Netscape, a
software company. Prior to that time, Mr. Gallivan was with General Electric
Information Services, an electronic commerce services company, most recently as
Vice President, Sales and Services for the Americas.
ii
<PAGE>
Arnold Schaeffer has served as Vice President of Engineering of VeriSign
since he joined VeriSign in January 1996. From March 1992 to December 1995, he
was employed by Taligent, most recently as Vice President of Engineering,
CommonPoint Products. Prior to working at Taligent, he served as a software
engineer for Apple, Intellicorp and Hewlett-Packard. Mr. Schaeffer holds a B.S.
degree in Information and Computer Science from the Georgia Institute of
Technology and an M.B.A. degree from the University of California at Berkeley.
Richard A. Yanowitch has served as Vice President of Marketing of VeriSign
since he joined VeriSign in May 1996. From July 1995 to May 1996, he was a
management consultant to private software companies. From 1989 to June 1995, he
held a series of marketing positions with Sybase, Inc., a software company,
most recently as Vice President of Corporate Marketing. Prior to that time, he
held various sales, marketing and operating positions with The Santa Cruz
Operation, Inc., Digital Equipment Corporation, Lanier Harris Corporation and
Brooks International Corporation. Mr. Yanowitch holds a B.A. degree in History
from Swarthmore College and an M.B.A. degree in Entrepreneurial Management and
Marketing from Harvard Business School.
Timothy Tomlinson has been Secretary and a director of VeriSign since its
founding in April 1995. He has been a partner of Tomlinson Zisko Morosoli &
Maser LLP, a law firm, since 1983. Mr. Tomlinson is also a director of Portola
Packaging, Inc. and Oak Technology, Inc. Mr. Tomlinson holds a B.A. degree in
Economics, an M.B.A. degree and a J.D. degree from Stanford University.
Kevin R. Compton has been a director of VeriSign since February 1996. He has
been a general partner of Kleiner Perkins Caufield & Byers, a venture capital
firm, since January 1990. Mr. Compton is also a director of Citrix Systems,
Inc., Corsair Communications, Inc., Active Software Inc. and Rhythms
NetConnections, Inc. Mr. Compton holds a B.S. degree in Business Management
from the University of Missouri.
David J. Cowan has been a director of VeriSign since its founding in April
1995. From April 1995 to June 1996, he served as our Chairman of the Board, and
from April 1995 to June 1995 as our Chief Financial Officer. Since August 1996,
Mr. Cowan has been a general partner of Bessemer Venture Partners, a venture
capital investment firm, where he now serves as the Managing General Partner.
Mr. Cowan was an associate at Bessemer Venture Partners from July 1992 to July
1996. From August 1996 to April 1997, he served as Chief Executive Officer of
Visto Corporation, an Internet services company. Mr. Cowan also serves as a
director on the board of Keynote Systems, Inc. as well as the board of several
private companies. Mr. Cowan holds an A.B. degree in mathematics and computer
science and an M.B.A. degree from Harvard University.
D. James Bidzos has served as Chairman of the Board of VeriSign since its
founding in April 1995 and served as Chief Executive Officer of VeriSign from
April 1995 to July 1995. He served as President and Chief Executive Officer of
RSA Data Security from 1986 to 1999. RSA Data Security, an encryption software
company, was acquired by Security Dynamics Technologies, Inc., which
subsequently changed its name to RSA Security, in July 1996 and has been a
wholly owned subsidiary of Security Dynamics since that time. Mr. Bidzos is
presently Vice Chairman of the board of directors of RSA Security and a
director of SmartDisk Corporation. He served as Executive Vice President of RSA
Security from 1996 to 1999.
William Chenevich has been a director of VeriSign since its founding in
April 1995. He has been Vice Chairman, Information Systems and Operations of
Firstar Corporation, a regional bank holding company, since April 1999. Prior
to that time, he served as Group Executive Vice President, Data Processing
Systems of VISA, a financial services company, from October 1993. From May 1992
to October 1993, he was Executive Vice President and Chief Information Officer
of Ahmanson Corporation, a financial services company. Mr. Chenevich is also a
director of Longs Drug Stores Corporation. Mr. Chenevich holds a B.B.A. degree
in Business and an M.B.A. degree in Management from the City College of New
York.
iii
<PAGE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16 of the Securities Exchange Act of 1934, as amended requires
VeriSign's directors and officers and persons who own more than 10% of
Verisign's common stock to file initial reports of ownership and reports of
changes in ownership with the Securities and Exchange Commission (the "SEC")
and the Nasdaq Stock Market. These persons are required by SEC regulations to
furnish VeriSign with copies of all section 16(a) forms that they file.
Based solely on its review of the copies of the forms furnished to VeriSign
and written representations from the executive officers and directors, VeriSign
believes that all section 16(a) filing requirements for the year ended December
31, 1999 were met with the exception of the following James D. Bidzos filed a
report on Form 4 for the month of July one day late. Stratton D. Sclavos filed
a report on Form 4 for the months of December one day late and David Cowan
filed a report on Form 5 for 1999 one day late. Additionally, three Forms 5,
which were originally submitted via fax within the required time period, have a
later filing date resulting from the illegibility of the documents as printed
by the fax machine at the SEC.
ITEM 11. EXECUTIVE COMPENSATION
Executive Compensation
The following table sets forth summary information concerning the
compensation awarded to, earned by, or paid for services rendered to VeriSign
in all capacities during 1997, 1998 and 1999 by VeriSign's Chief Executive
Officer and the four most highly compensated executive officers, other than the
Chief Executive Officer, who were serving as executive officers at the end of
1999 and one executive officer, on a sabbatical at the end of 1999, who would
have otherwise been included in the following table. These officers are
referred to together as the named executive officers.
Summary Compensation Table
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
---------------------- ------------
Securities
Name and Principal Underlying
Position Year Salary Bonus Options
------------------ ---- -------- -------- ------------
<S> <C> <C> <C> <C>
Stratton D. Sclavos...... 1999 $250,000 $ 78,125 400,000
President and Chief
Executive Officer 1998 250,000 130,625 400,000
1997 200,000 183,022 100,000
Quentin P. Gallivan...... 1999 150,000 150,000 300,000
Executive Vice President
of Worldwide Sales 1998 150,000 150,000 45,000
1997 40,866 -- 115,000
Richard A. Yanowitch..... 1999 165,000 49,840 200,000
Executive Vice President
of Worldwide 1998 166,667 67,070 45,000
Marketing 1997 140,000 59,084 --
Dana L. Evan............. 1999 165,000 49,840 200,000
Executive Vice President
of Finance and 1998 167,708 65,046 60,000
Administration and
Chief Financial Officer 1997 145,000 46,349 45,000
Diana S. Keith........... 1999 150,000 47,630 150,000
Vice President of
Customer Service 1998 143,295 27,384 280,000
1997 135,914 13,341 --
Arnold Schaeffer......... 1999 165,000 49,840
Executive Vice President
of Engineering 1998 167,708 48,572 90,000
1997 145,000 30,226 58,000
</TABLE>
iv
<PAGE>
Option Grants in Fiscal 1999
The following table sets forth information regarding stock options granted
to each of the named executive officers during the year ended December 31,
1999.
<TABLE>
<CAPTION>
Individual Grants(1)
----------------------------------------------------
Potential Realizable
Value at Assumed
Number of Percent of Annual Rates of Stock
Securities Total Options Price Appreciation For
Underlying Granted to Exercise Option Term(2)
Options Employees in Price Expiration ----------------------
Name Granted Fiscal Year(%)(3) Per Share(4) Date 5% 10%
---- ---------- ----------------- ------------ ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Stratton D. Sclavos..... 400,000 5.8% $37.06 7/30/06 $6,035,264 $14,064,731
Quentin P. Gallivan..... 300,000 4.4 37.06 7/30/06 4,526,448 10,548,548
Richard A. Yanowitch.... 200,000 2.9 37.06 7/30/06 3,017,632 7,032,366
Dana L. Evan............ 200,000 2.9 37.06 7/30/06 3,017,632 7,032,366
Arnold Schaeffer........ -- -- -- -- -- --
Diana S. Keith.......... 150,000 2.2 37.06 7/30/06 2,263,224 5,274,274
</TABLE>
- --------
Notes:
(1) Options granted in 1999 were granted under VeriSign's 1998 Equity
Incentive Plan. These options become exercisable with respect to 25% of
the shares covered by the option on the first anniversary of the date of
grant and with respect to an additional 6.25% of these shares each quarter
thereafter. These options have a term of seven years. Upon specific
changes in control of VeriSign, this vesting schedule will accelerate as
to 50% of any shares that are then unvested.
(2) Potential realizable values are net of exercise price but before taxes,
and are based on the assumption that the common stock of VeriSign
appreciates at the annual rate shown, compounded annually, from the date
of grant until the expiration of the seven-year term. These numbers are
calculated based on Securities and Exchange Commission requirements and do
not reflect VeriSign's projection or estimate of future stock price
growth.
(3) VeriSign granted options to purchase 6,869,950 shares of common stock to
employees during 1999.
(4) Options were granted at an exercise price equal to the fair market value
per share of VeriSign common stock, as quoted on the Nasdaq National
Market.
v
<PAGE>
Aggregate Option Exercises in Fiscal 1999 and Fiscal Year-End Option Values
The following table sets forth for each of the named executive officers the
shares acquired and the value realized on each exercise of stock options
during the year ended December 31, 1999 and the year-end number and value of
exercisable and unexercisable options.
<TABLE>
<CAPTION>
Number of Securities Value of Unexercised
Shares Underlying Unexercised In-the-Money
Acquired Options at 12/31/99(1) Options at 12/31/99(2)
on Value ------------------------- -------------------------
Name Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
---- -------- ---------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Stratton D. Sclavos..... -- -- 300,000 1,800,000 $55,700,150 $314,849,300
Quentin P. Gallivan..... 160,024 $6,566,208 -- 665,000 -- 114,474,314
Richard A. Yanowitch.... -- -- 74,608 335,000 13,673,117 55,516,024
Dana L. Evan............ 91,000 6,460,360 59,000 470,000 11,059,576 80,812,418
Arnold Schaeffer........ 116,000 6,496,541 62,000 386,000 11,559,999 71,456,655
Diana S. Keith.......... 136,252 6,555,191 13,749 376,247 2,622,629 64,849,159
</TABLE>
- --------
Notes:
(1) Options shown were granted under VeriSign's 1995 Stock Option Plan, 1997
Stock Option Plan and 1998 Equity Incentive Plan, and are subject to
vesting as described in footnote (1) to the option grant table above.
(2) Based on a value of $190.94, the closing price per share of VeriSign's
common stock on The Nasdaq National Market on December 31, 1999, net of
the option exercise price.
No compensation intended to serve as incentive for performance to occur
over a period longer than one year was paid pursuant to a long-term incentive
plan during 1999 to any named executive officer. VeriSign does not have any
defined benefit or actuarial plan under which benefits are determined
primarily by final compensation and years of service with any of the named
executive officers.
Compensation Arrangements with Executive Officers
In November 1996, Dana L. Evan was granted an option to purchase 680,000
shares of common stock, Arnold Schaeffer was granted an option to purchase
800,000 shares of common stock and Richard A. Yanowitch was granted an option
to purchase 1,160,000 shares of common stock, at exercise prices ranging from
$0.03 to $1.50. Each of these options is subject to the standard four-year
vesting schedule under the 1995 Stock Option Plan or, in some circumstances,
is immediately exercisable, subject to VeriSign's right to repurchase shares
subject to these options, which repurchase right lapses on a schedule similar
to the vesting schedule for options granted under the 1995 Stock Option Plan.
However, upon the occurrence of specific change-in-control transactions, 50%
of each of these named executive officer's then-unvested options will become
vested or, if applicable, the right of repurchase will lapse as to 50% of the
shares covered by the right of repurchase. As of December 31, 1999, 245,500
shares subject to these options were unvested.
Director Compensation
Directors do not receive any cash fees for their service on the board or
any board committee, but they are entitled to reimbursement of all reasonable
out-of-pocket expenses incurred in connection with their attendance at board
and board committee meetings. All board members are eligible to receive stock
options under VeriSign's stock option plans, and outside directors receive
stock options pursuant to automatic grants of stock options under the 1998
Directors Stock Option Plan, or the Directors Plan.
In October 1997, the board adopted, and in January 1998 the stockholders
approved, the Directors Stock Option Plan and reserved a total of 500,000
shares, as adjusted for stock splits, of VeriSign's common stock for issuance
under that plan. As of December 31, 1999, options to purchase 300,000 shares
of common stock had been granted under the Directors' Plan and 200,000 shares
remained available for future grant. If proposal no. 7 is approved, an
additional 250,000 shares will be reserved for future grant. Members of the
vi
<PAGE>
board who are not employees of VeriSign, or any parent, subsidiary or affiliate
of VeriSign are eligible to participate in the Directors Plan. The option
grants under the Directors Plan are automatic and nondiscretionary, and the
exercise price of the options is 100% of the fair market value of the common
stock on the date of grant. Each new director who is eligible to participate
will initially be granted an option to purchase 60,000 shares on the date that
director first becomes a director. These grants are referred to as "Initial
Grants." On each anniversary of a director's Initial Grant or most recent grant
if that director did not receive an Initial Grant, each eligible director will
automatically be granted an additional option to purchase 30,000 shares if that
director has served continuously as a member of the board since the date of
that director's Initial Grant, or most recent grant if that director did not
receive an Initial Grant. The term of these options is ten years. They will
terminate seven months following the date the director ceases to be a director
or, if VeriSign so specifies in the grant, a consultant of VeriSign (twelve
months if the termination is due to death or disability). All options granted
under the Directors Plan will vest as to 6.25% of the shares each quarter after
the date of grant, provided the optionee continues as a director or, if
VeriSign so specifies in the grant, as a consultant of VeriSign. Additionally,
immediately prior to the dissolution or liquidation of VeriSign or a "change in
control" transaction, all options granted under the Directors Plan will
accelerate and will be exercisable for a period of up to six months following
the transaction, after which period any unexercised options will expire. In
July 1999, VeriSign granted to each of Messrs. Bidzos, Chenevich, Compton,
Cowan and Tomlinson an option to purchase 30,000 shares of its common stock
under the Directors Plan with an exercise price of $41.19 per share.
Compensation Committee Interlocks and Insider Participation
No interlocking relationship exists between the board or compensation
committee and the board of directors or compensation committee of any other
company.
vii
<PAGE>
REPORT OF THE COMPENSATION COMMITTEE OF VERISIGN
Under Item 402(a)(9) of Regulation S-K promulgated by the Securities and
Exchange Commission, neither the "Report of the Compensation Committee" nor the
material under the caption "Performance Graph" shall be deemed to be filed with
the SEC for purposes of the Securities Exchange Act of 1934, nor shall the
report or the graph be deemed to be incorporated by reference in any past or
future filing by the Company under the Securities Exchange Act or the
Securities Act.
The compensation committee of the board of directors administers VeriSign's
executive compensation program. The current members of the compensation
committee are D. James Bidzos, William Chenevich and David J. Cowan. Each of
these persons is a non-employee director within the meaning of section 16 of
the Securities Exchange Act of 1934, and an "outside director" within the
meaning of section 162(m) of the Internal Revenue Code. None of Mr. Bidzos, Mr.
Chenevich or Mr. Cowan has any interlocking relationships as defined by the
Securities and Exchange Commission.
General Compensation Philosophy
The role of the compensation committee is to set the salaries and other
compensation of the executive officers and other key employees of VeriSign, and
to make grants under, and to administer, the stock option and other employee
equity and bonus plans. VeriSign's compensation philosophy for executive
officers is to relate compensation to corporate performance and increases in
stockholder value, while providing a total compensation package that is
competitive and enables VeriSign to attract, motivate, reward and retain key
executives and employees. Accordingly, each executive officer's compensation
package may, in one or more years, be comprised of the following three
elements:
. base salary that is designed primarily to be competitive with base
salary levels in effect at high technology companies in the Silicon
Valley that are of comparable size to VeriSign and with which VeriSign
competes for executive personnel;
. annual variable performance awards, such as bonuses, payable in cash and
tied to the achievement of performance goals, financial or otherwise,
established by the compensation committee; and
. long-term stock-based incentive awards, which strengthen the mutuality
of interests between the executive officers and VeriSign's stockholders.
Executive Compensation
Base Salary. Salaries for executive officers for 1999 were generally
determined on an individual basis by evaluating each executive's scope of
responsibility, performance, prior experience and salary history, as well as
the salaries for similar positions at comparable companies. In addition,
VeriSign's Human Resources department provided information to the compensation
committee regarding salary range guidelines for specific positions.
Annual Incentive Awards. VeriSign has established a management incentive
plan. Certain employees, including executive officers, are eligible to
participate in this plan. Target bonuses are established based on a percentage
of base salary and become payable upon the achievement of specified total
company financial goals and personal and team objectives. The compensation
committee administers this plan with regard to Mr. Sclavos. Mr. Sclavos
administers the plan with regard to the other executive officers.
Long-Term Incentive Awards. The compensation committee believes that equity-
based compensation in the form of stock options links the interests of
executive officers with the long-term interests of VeriSign's stockholders and
encourages executive officers to remain in VeriSign's employ. Stock options
generally have value for executive officers only if the price of VeriSign's
stock increases above the fair market value on the grant date and the officer
remains in VeriSign's employ for the period required for the shares to vest.
viii
<PAGE>
VeriSign grants stock options in accordance with the Equity Incentive Plan.
In 1999, stock options were granted to some executive officers as incentives
for them to become employees or to aid in the retention of executive officers
and to align their interests with those of the stockholders. Stock options
typically have been granted to executive officers when the executive first
joins VeriSign, in connection with a significant change in responsibilities
and, occasionally, to achieve equity within a peer group. The compensation
committee may, however, grant additional stock options to executive officers
for other reasons. The number of shares subject to each stock option granted is
within the discretion of the compensation committee and is based on anticipated
future contribution and ability to impact VeriSign's results, past performance
or consistency within the officer's peer group. In 1999, the compensation
committee considered these factors, as well as the number of unvested option
shares held by the officer as of the date of grant. At the discretion of the
compensation committee, executive officers may also be granted stock options to
provide greater incentives to continue their employment with VeriSign and to
strive to increase the value of VeriSign's common stock. The stock options
generally become exercisable over a four-year period and are granted at a price
that is equal to the fair market value of VeriSign's common stock on the date
of grant.
Chief Executive Officer Compensation
Mr. Sclavos' base salary, target bonus, bonus paid and long-term incentive
awards for 1998 were determined by the compensation committee in a manner
consistent with the factors described above for all executive officers.
Internal Revenue Code Section 162(m) Limitation
Section 162(m) of the Internal Revenue Code limits the tax deduction to $1.0
million for compensation paid to executives of public companies. Having
considered the requirements of section 162(m), the compensation committee
believes that grants made pursuant to the Equity Incentive Plan meet the
requirements that such grants be "performance based" and are, therefore, exempt
from the limitations on deductibility. Historically, the combined salary and
bonus of each executive officer has been below the $1.0 million limit. The
compensation committee's present intention is to comply with section 162(m)
unless the compensation committee feels that required changes would not be in
the best interest of VeriSign or its stockholders.
Compensation Committee
/s/ D. James Bidzos
/s/ William Chenevich
/s/ David J. Cowan
ix
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information with respect to the
beneficial ownership of VeriSign's common stock as of March 3, 2000 by:
. each person who is known by VeriSign to own beneficially more than 5% of
VeriSign's common stock;
. each director of VeriSign;
. each of the named executive officers of VeriSign; and
. all directors and executive officers of VeriSign as a group.
The percentage ownership is based on 114,820,683 shares of common stock
outstanding at March 3, 2000. Shares of common stock that are subject to
options currently exercisable or exercisable within 60 days of March 3, 2000,
are deemed outstanding for the purpose of computing the percentage ownership
of the person holding those options but are not deemed outstanding for
computing the percentage ownership of any other person. Unless otherwise
indicated in the footnotes following the table, the persons and entities named
in the table have sole voting and sole investment power with respect to all
shares beneficially owned, subject to community property laws where
applicable.
<TABLE>
<CAPTION>
Shares
Beneficially
Owned
-----------------
Name of Beneficial Owner Number Percent
------------------------ --------- -------
<S> <C> <C>
Putnam Investments Inc.(1)................................ 9,738,266 8.5
Janus Capital Corporation(2).............................. 9,055,055 7.9
D. James Bidzos(3)........................................ 5,255,300 4.6
Stratton D. Sclavos(4).................................... 696,856 *
Richard A. Yanowitch(5)................................... 421,796 *
Arnold Schaeffer(6)....................................... 240,115 *
Kevin R. Compton(7)....................................... 172,401 *
David J. Cowan(8)......................................... 130,195 *
Dana L. Evan(9)........................................... 126,650 *
Quentin P. Gallivan(10)................................... 40,000 *
Diana S. Keith(11)........................................ 33,600 *
Timothy Tomlinson(12)..................................... 9,815 *
William Chenevich......................................... 3,000 *
All officers and directors as a group (11 persons)(13).... 7,129,728 6.2
</TABLE>
- --------
* Less than 1% of VeriSign's common stock
(1) Based on a Schedule 13G filed on February 18, 2000. Represents 8,814,170
shares held by Putnam Investment Management, Inc. and 924,096 shares held
by The Putnam Advisory Company, Inc. Putnam Investment Management and The
Putnam Advisory Company are wholly owned subsidiaries of Putnam
Investments. The address of Putnam Investments is One Post Office Square,
Boston, Massachusetts 02109.
(2) Based on a Schedule 13G filed on February 15, 2000. The address of Janus
Capital Corporation is 100 Fillmore Street, Denver, Colorado 80206-4923.
(3) Represents 5,000,000 shares held by RSA Security, Inc. or by its wholly
owned subsidiaries, 1,000 shares held by D. James Bidzos, 191,800 shares
held by Kairdos L.L.C., 40,000 shares subject to options held by D. James
Bidzos that are exercisable within 60 days of March 3, 2000 and 22,500
shares subject to options held by Kairdos L.L.C. that are exercisable
within 60 days of March 3, 2000. Mr. Bidzos, the Chairman of the Board of
VeriSign, is the President of RSA Security, Inc. an Executive Vice
President and a director of RSA Security, Inc. and the General manager
and a member of Kairdos L.L.C. Mr. Bidzos disclaims
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beneficial ownership of the shares held by Kairdos L.L.C. except for his
proportional interest therein, and disclaims beneficial ownership of the
shares held by RSA Security, Inc. or its wholly owned subsidiaries.
(4) Includes 4,400 shares held by Stratton or Jody Sclavos as Custodians
under UTMA for Nicholas L. Sclavos, 4,400 shares held by Stratton or Jody
Sclavos as Custodians under UTMA for Alexandra C. Sclavos and 17,205
shares held by the Sclavos family foundation, of which Mr. Sclavos is a
beneficiary. Also includes 350,000 shares subject to options held by
Stratton D. Sclavos that are exercisable within 60 days of March 3, 2000.
Mr. Sclavos is President, Chief Executive Officer and a director of
VeriSign.
(5) Includes 67,500 shares subject to options held by Richard A. Yanowitch
that are exercisable within 60 days of March 3, 2000. Mr. Yanowitch is
Executive Vice President of Worldwide Marketing of VeriSign. Of the
shares shown in the table, as of March 3, 2000, 145,000 are subject to a
right of repurchase that lapses as to 72,500 of the shares each quarter.
(6) Includes 74,227 shares subject to options held by Arnold Schaeffer that
are exercisable within 60 days of March 3, 2000. Mr. Schaeffer is Vice
President of Engineering of VeriSign. Of the shares shown in the table,
as of March 3, 2000, 38,000 are subject to the right of repurchase that
lapses as to 35,500 of the shares each quarter.
(7) Includes 65,875 shares subject to options held by Kevin R. Compton that
are exercisable within 60 days of March 3, 2000.
(8) Includes 29,625 shares subject to options held by Deer III & Co. LLC that
are exercisable within 60 days of March 3, 2000 and 18,750 shares subject
to options held by David J. Cowan that are exercisable within 60 days of
March 3, 2000. Mr. Cowan, a director of VeriSign, is a manager of Deer
III & Co. LLC. Mr. Cowan disclaims beneficial ownership of shares held by
Deer III & Co. LLC except for his manager interest in that entity.
(9) Includes 14,000 shares held by Dana L. Evan as Custodian under UTMA for
Christopher Thomas Evan, 14,000 shares held by Dana L. Evan as Custodian
under UTMA for Ryan Joseph Evan and 68,580 shares subject to options held
by Dana L. Evan that are exercisable within 60 days of March 3, 2000. Ms.
Evan is Executive Vice President of Finance and Administration and Chief
Financial Officer of VeriSign. Of the shares shown in the table, as of
March 3, 2000, 62,500 are subject to a right of repurchase that lapses as
to 31,248 of the shares each quarter.
(10) Includes 40,000 shares subject to options held by Quentin Gallivan that
are exercisable within 60 days of March 3, 2000. Mr. Gallivan is
Executive Vice President of Worldwide Sales of VeriSign.
(11) Includes 20,937 shares subject to options held by Diana Keith that are
exercisable within 60 days of March 3, 2000. Diana Keith is Vice
President of Customer Service of VeriSign.
(12) Includes 4,050 shares subject to options held by Timothy Tomlinson that
are exercisable within 60 days of March 3, 2000 and 3,375 shares subject
to options held by TZM Investment Fund that are exercisable within 60
days of March 3, 2000. Mr. Tomlinson, the Secretary and a director of
VeriSign, is a general partner of TZM Investment Fund. Mr. Tomlinson
disclaims beneficiary ownership of shares held by TZM Investments Fund
except for his proportional interest in that entity.
(13) Includes the shares described in footnotes (3)-(12).
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Since January 1, 1999, there has not been, nor is there currently proposed,
any transaction or series of similar transactions to which VeriSign or any of
its subsidiaries was or is to be a party in which the amount involved exceeded
or will exceed $60,000 and in which any director, executive officer or holder
of more than 5% of the common stock of VeriSign or any member of the immediate
family of any of the foregoing persons had or will have a direct or indirect
material interest other than (1) the compensation agreements, which are
described where required in "Executive Compensation," and (2) the transactions
described below.
Legal Fees. During 1999, the law firm of Tomlinson Zisko Morosoli & Maser
LLP, of which Mr. Tomlinson is a partner, provided legal services to VeriSign
on a variety of matters. VeriSign paid to Tomlinson Zisko Morosoli & Maser LLP
an aggregate of approximately $738,000 in 1999.
VeriSign believes that all of the transactions set forth above were made on
terms no less favorable to it than could have been obtained from unaffiliated
third parties. All future transactions between VeriSign and its officers,
directors and principal stockholders and their affiliates will be approved by a
majority of the board, including a majority of the independent and
disinterested directors of the board, and will be on terms no less favorable to
VeriSign than could be obtained from unaffiliated third parties.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amended report to be signed on its behalf by
the undersigned, thereunto duly authorized, in the City of Mountain View, State
of California, on the 26th day of April 2000.
Verisign, Inc.
/s/ Stratton D. Sclavos
By __________________________________
Stratton D. Sclavos,
President and Chief Executive
Officer
In accordance with the requirements of the Securities Exchange Act of 1934,
this amended report has been signed by the following persons on behalf of the
registrant and in the capacities indicated on the 26th day of April 2000.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Stratton D. Sclavos President, Chief Executive Officer and
___________________________________________ Director
Stratton D. Sclavos
* Executive Vice President of Finance and
___________________________________________ Administration and Chief Financial Officer
Dana L. Evan
* Chairman of the Board
___________________________________________
D. James Bidzos
* Director
___________________________________________
William Chenevich
* Director
___________________________________________
Kevin R. Compton
* Director
___________________________________________
David J. Cowan
* Director and Secretary
___________________________________________
Timothy Tomlinson
/s/ Stratton D. Sclavos
*By: _________________________________
Stratton D. Sclavos
attorney-in-fact
</TABLE>
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