VeriSign Annual Report 2017

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FY2017 Annual Report · VeriSign

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ABOUT VERISIGN

Verisign, a global leader in domain names and internet security, enables internet

navigation for many of the world’s most recognized domain names and provides

protection for websites and enterprises around the world. Verisign ensures the

security, stability and resiliency of key internet infrastructure and services, including

the .com and .net domains and two of the internet’s root servers, as well as performs

the root-zone maintainer function for the core of the internet’s Domain Name System

(DNS). Verisign’s Security Services include Distributed Denial of Service Protection

and Managed DNS. To learn more about what it means to be Powered by Verisign,

please visit Verisign.com.

please visit

please visit Verisign.com.

WORLDWIDE

UNITED STATES:

12061 Bluemont Way

Reston, VA 20190

Phone: + 1 703 948 3200

EUROPE:

Route du Petit Moncor 1E

2nd Floor

CH-1752 Villars sur Glane

Switzerland

Phone: + 41 (0) 26 408 7778

Verisign

United Kingdom Sales Office

1st Floor – Suite 01A117

2 Eastbourne Terrace

London W2 6 LG

United Kingdom

Phone: + 44 20 3402 3669

Verisign.com

ASIA:

807-A, Park Centra

Sector-30 NH-8

Gurgaon, Haryana

India

Phone: + 91 12 0253 1622

AUSTRALIA:

5 Queens Road

Level 10

Melbourne, VIC, 3004

Australia

Phone: + 61 3 9926 6700

Parkview Green

Office Building A, Level 15, Suite 1511 & Suite 1518

9 Dongdaqiao Road

Chaoyang District, Beijing, 100020, PRC

Phone: + 86 (10) 5730 6081

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ANNUAL REPORT
ANNUAL REPORT
2017
2017

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DEAR VERISIGN STOCKHOLDERS:

BOARD OF DIRECTORS

OUR MISSION

Enable the world to connect online
with reliability and confidence, anytime,
anywhere

OUR VALUES

• We are stewards of the internet and our

Company

• We are passionate about the pursuit of

technology and innovation

• We take responsibility for our actions
• We respect others and exhibit integrity

in our actions

Todd B. Strubbe, D. James Bidzos, George E. Kilguss, III.

2018 Kelsey Ayres / Nasdaq, Inc.

In 2017, we continued to provide secure, stable internet infrastructure
services, which billions of internet users worldwide rely on daily while
growing and managing our business. Significant milestones of 2017
include:

• In July, Verisign announced the renewal of the .net Registry

Agreement with ICANN making Verisign the sole registry operator for the .net registry through June 30, 2023.
• Revenues totaled $1.17 billion for 2017, marking the seventh straight year of revenue expansion while steadily

growing our margins and free cash flow.

• The domain name base for .com and .net names ended 2017 with 146.5 million names, up by 4.3. million net new

names which represents a three percent increase over the base at the end of the prior year.
• During 2017, we repurchased 6.3 million shares, returning $593 million to our stockholders.
• Our balance sheet remained strong with year-end cash, cash equivalents, and marketable securities at $2.4 billion.

For more than 20 years, Verisign has maintained 100% operational accuracy and stability of the .com and .net domain
name system infrastructure, helping to keep the world connected online, seamlessly, and securely.

In January of 2018, the company celebrated 20 years since the initial listing of Verisign shares on Nasdaq.

Secure, reliable operation of internet infrastructure is fundamental to what we provide and this commitment to security
and stability has contributed to our technical expertise and leadership. I want to extend a special note of thanks to
our employees whose expertise and dedication in both developing and maintaining our specialized infrastructure
have enabled Verisign to deliver long term value to our customers and to our shareholders. We remain committed to
protecting, growing, and managing our business while returning value to shareholders.

I would like to extend my thanks to our stockholders, customers, and employees for your ongoing support.

Jim Bidzos
Executive Chairman,
President, and Chief Executive Officer
April 2018

D. James Bidzos

Jamie S. Gorelick

Chairman of the Board of Directors

Partner

Executive Chairman,

Wilmer Cutler Pickering Hale and Dorr LLP

Timothy Tomlinson

Former General Counsel

Portola Minerals Company

President and Chief Executive Officer

VeriSign, Inc.

Kathleen A. Cote

Former Chief Executive Officer

Worldport Communications Company

Roger H. Moore

Former President and Chief Executive Officer

Illuminet Holdings, Inc.

Thomas F. Frist III

Principal

Frist Capital, LLC

Louis A. Simpson

Chairman

SQ Advisors, LLC

EXECUTIVE OFFICERS

D. James Bidzos

Chairman of the Board of Directors

Executive Chairman,

President, and Chief Executive Officer

Todd B. Strubbe

Executive Vice President,

Chief Operating Officer

George E. Kilguss, III

Executive Vice President,

Chief Financial Officer

Thomas C. Indelicarto

Executive Vice President,

General Counsel, and Secretary

Verisign Investor Relations or through our website

Phone: + 1 800 922 4917

INVESTOR INFO

Quarterly earnings releases, corporate news

releases, and Securities and Exchange

Commission filings are available by contacting

at https://investor.verisign.com. A copy of

Verisign’s Annual Report on Form 10-K for

the fiscal year ended December 31, 2017,

containing additional information of possible

interest to stockholders will be sent without

charge to any stockholder who requests

it. Please direct your request to Verisign

Investor Relations at the address at the right.

STOCK EXCHANGE LISTING

NASDAQ Stock Market

Ticker Symbol: VRSN

VERISIGN INVESTOR RELATIONS

12061 Bluemont Way

Reston, VA 20190

Int’l: + 1 703 948 3447

Email: ir@verisign.com

https://investor.verisign.com/

KPMG LLP

1676 International Drive, Suite 1200

McLean, VA 22102

TRANSFER AGENT

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

If you have questions concerning stock certificates, change of

address, consolidation of accounts, transfer of ownership, or other

stock account matters, please contact Verisign’s transfer agent:

Computershare Inc.

P.O. Box 505000

Louisville, KY 40233

Phone: + 1 877 255 1918

Int’l: + 1 201 680 6578

http://www.computershare.com/investor

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
————————
FORM 10-K

(Mark One)

 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2017
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
(State or other jurisdiction of
incorporation or organization)

12061 Bluemont Way, Reston, Virginia
(Address of principal executive offices)

94-3221585
(I.R.S. Employer
Identification No.)

20190
(Zip Code)

Registrant’s telephone number, including area code: (703) 948-3200
Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Common Stock $0.001 Par Value Per Share

Name of each exchange on which registered

NASDAQ Global Select Market

Securities registered pursuant to Section 12(g) of the Act: None
———————

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES  NO 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES  NO 
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 NO 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required

to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). YES  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 or any amendment to this
Form 10-K. 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See

the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Non-accelerated filer





Accelerated filer

Smaller reporting company

Emerging growth company



If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new

or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.): YES  NO 

The aggregate market value of the voting and non-voting common equity stock held by non-affiliates of the Registrant as of June 30, 2017, was $3.3 billion

based upon the last sale price reported for such date on the NASDAQ Global Select Market. For purposes of this disclosure, shares of Common Stock held by
persons known to the Registrant (based on information provided by such persons and/or the most recent schedule 13Gs filed by such persons) to beneficially own
more than 5% of the Registrant’s Common Stock and shares held by officers and directors of the Registrant have been excluded because such persons may be
deemed to be affiliates. This determination is not necessarily a conclusive determination for other purposes.

Number of shares of Common Stock, $0.001 par value, outstanding as of the close of business on February 9, 2018: 97,120,531 shares.

Portions of the definitive Proxy Statement to be delivered to stockholders in connection with the 2018 Annual Meeting of Stockholders are incorporated by

DOCUMENTS INCORPORATED BY REFERENCE

reference into Part III.

2017VERISIGN FORM 10-K

TABLE OF CONTENTS

Page

Item 1.

Item 1A.

Item 1B.

Item 2.

Item 3.

Item 4.

Item 5.

Item 6.

Item 7.

PART I
Business ...............................................................................................................................................

Risk Factors ..........................................................................................................................................

Unresolved Staff Comments ...................................................................................................................

Properties..............................................................................................................................................
Legal Proceedings..................................................................................................................................
Mine Safety Disclosures .........................................................................................................................
Executive Officers of the Registrant.........................................................................................................
PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity
Securities ..............................................................................................................................................
Selected Financial Data ..........................................................................................................................

Management's Discussion and Analysis of Financial Condition and Results of Operations ............................

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk......................................................................

Item 8.

Item 9.

Item 9A.

Item 9B.

Item 10.

Item 11.

Item 12.

Item 13.

Item 14.

Item 15.

Item 16.

Financial Statements and Supplementary Data ..........................................................................................

Changes in and Disagreements With Accountants on Accounting and Financial Disclosure ...........................

Controls and Procedures.........................................................................................................................

Other Information ..................................................................................................................................

PART III
Directors, Executive Officers and Corporate Governance...........................................................................

Executive Compensation ........................................................................................................................

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters ...........

Certain Relationships and Related Transactions, and Director Independence................................................

Principal Accountant Fees and Services....................................................................................................

Exhibits, Financial Statement Schedules ..................................................................................................

10-K Summary ......................................................................................................................................

PART IV

Financial Statements and Notes to Consolidated Financial Statements ............................................................................

Signatures ................................................................................................................................................................

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2017VERISIGN FORM 10-KFor purposes of this Annual Report, the terms “Verisign”, “the Company”, “we”, “us”, and “our” refer to VeriSign, Inc. and
its consolidated subsidiaries.

PART I

ITEM 1.

BUSINESS

Overview

We are a global provider of domain name registry services and internet security, enabling internet navigation for many of the

world’s most recognized domain names and providing protection for websites and enterprises around the world (“Registry
Services”). Our Registry Services ensure the security, stability, and resiliency of key internet infrastructure and services,
including the .com and .net domains, two of the internet’s root servers, and operation of the root zone maintainer function for the
core of the internet’s Domain Name System (“DNS”). Our product suite also includes Security Services, consisting of
Distributed Denial of Service (“DDoS”) Protection Services and Managed DNS Services. On April 1, 2017, we completed the
sale of our iDefense Security Intelligence Services (“iDefense”) business.

We have one reportable segment, which consists of Registry Services and Security Services. We have operations inside as

well as outside the United States (“U.S.”). For certain additional information about our segment, including a geographic
breakdown of revenues and changes in revenues, see “Management’s Discussion and Analysis of Financial Condition and Results
of Operations” in Item 7 and Note 7, “Geographic and Customer Information” of our Notes to Consolidated Financial Statements
in Item 15 of this Form 10-K.

We were incorporated in Delaware on April 12, 1995. Our principal executive offices are located at 12061 Bluemont Way,
Reston, Virginia 20190. Our telephone number at that address is (703) 948-3200. Our common stock is traded on the NASDAQ
Global Select Market under the ticker symbol VRSN. VERISIGN, the VERISIGN logo, and certain other product or service
names are registered or unregistered trademarks in the U.S. and other countries. Other names used in this Form 10-K may be
trademarks of their respective owners. Our primary website is https://www.Verisign.com. The information available on, or
accessible through, this website is not incorporated in this Form 10-K by reference.

Our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to

those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), are available, free of charge, on the Investor Relations section of our website as soon as is reasonably
practicable after filing such reports with the Securities and Exchange Commission (the “SEC”). The public may read and copy
any materials we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public
may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC
maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file
electronically with the SEC at https://www.sec.gov.

Pursuant to our agreements with the Internet Corporation for Assigned Names and Numbers (“ICANN”), we make available

on our website (at https://www.Verisign.com/zone) files containing all active domain names registered in the .com and
.net registries. At the same website address, we make available a summary of the active zone count registered in the .com and
.net registries and the number of .com and .net domain names in the domain name base. The domain name base is the active zone
plus the number of domain names that are registered but not configured for use in the respective top level domain zone file plus
the number of domain names that are in a client or server hold status. These files and the related summary data are updated at
least once per day. The update times may vary each day. The number of domain names provided in this Form 10-K are as of
midnight of the date reported.

We announce material financial information to our investors using our investor relations website

https://investor.Verisign.com, SEC filings, investor events, news and earnings releases, public conference calls and webcasts. We
use these channels as well as social media to communicate with our investors and the public about our company, our products and
services, and other issues. It is possible that the information we post on social media could be deemed to be material information.
Therefore, we encourage investors, the media, and others interested in our Company to review the information we post on the
social media channels listed below. This list may be updated from time to time on our investor relations website.

https://www.Facebook.com/Verisign
https://www.Twitter.com/Verisign
https://www.LinkedIn.com/company/Verisign
https://www.YouTube.com/user/Verisign
https://www.Verisign.com
https://blog.Verisign.com

2017VERISIGN FORM 10-KThe contents of these websites are not intended to be incorporated by reference into this Annual Report on Form 10-K or in

any other report or document we file.

Registry Services

Registry Services operates the authoritative directory of and/or the back-end systems for all .com, .net, .cc, .tv, .gov, .jobs,

.edu and .name domain names, among others. Registry Services allows individuals and organizations to establish their online
identities, while providing the secure, always-on access they need to communicate and transact reliably with large-scale online
audiences.

We are the exclusive registry of domain names within the .com, .net, and .name generic top-level domains (“gTLDs”),

among others, under agreements with ICANN and also, with respect to the .com agreement, the U.S. Department of Commerce
(“DOC”). We are also the exclusive registry of domain names within certain transliterations of .com and .net in a number of
different native languages and scripts (“IDN gTLDs”). As a registry, we maintain the master directory of all second-level domain
names in these gTLDs and IDN gTLDs (e.g., johndoe.com and janedoe.net). Our global constellation of domain name servers
provides internet protocol (“IP”) address information in response to queries, enabling the use of browsers, email systems, and
other systems on the internet. In addition, we own and maintain the shared registration system that allows all registrars to enter
new second-level domain names into the master directory and to submit modifications, transfers, re-registrations and deletions for
existing second-level domain names (“Shared Registration System”).

Separate from our agreements with ICANN, we have agreements to be the exclusive registry for the .tv and .cc country code
top-level domains (“ccTLDs”) for Tuvalu and Cocos (Keeling) Islands, respectively, and to operate the back-end registry systems
for the .gov, .jobs, and .edu sponsored TLDs. These TLDs are also supported by our global constellation of domain name servers
and Shared Registration System.

We also provide internationalized domain name (“IDN”) services that enable internet users to access websites in characters

representing their local language. Our gTLDs and ccTLDs can support standards compliant registrations in over 100 different
native languages and scripts.

Domain names can be registered for between one and 10 years. The fees charged for .com, .net and .name may only be
increased according to adjustments prescribed in our agreements with ICANN over the applicable term. With respect to .com,
price increases require prior approval by the DOC according to the terms of Amendment 32 of the Cooperative Agreement, as
amended, between the DOC and Verisign (“Cooperative Agreement”). Revenues for .cc and .tv domain names and our IDN
gTLDs are based on a similar fee system and registration system, although the fees charged are not subject to the same pricing
restrictions as those imposed by ICANN on .com, .net and .name. The fees received from operating the .gov registry are based on
the terms of Verisign’s agreement with the U.S. General Services Administration. The fees received from operating the .jobs
registry infrastructure, and that of others for which Verisign provides such services, are based on the terms of Verisign’s
agreements with those respective registry operators.

Historically, we have experienced higher domain name growth in the first quarter of the year compared to other quarters.

Our quarterly revenue does not reflect these seasonal patterns because the preponderance of our revenue for each quarterly period
is provided by the ratable recognition of our deferred revenue balance. The effect of this seasonality has historically resulted in
the largest amount of growth in our deferred revenue balance occurring during the first quarter of the year compared to the other
quarters.

Security Services

Security Services provides infrastructure assurance to organizations and is comprised of DDoS Protection Services and

Managed DNS Services.

DDoS Protection Services supports online business continuity by providing monitoring and mitigation services against
DDoS attacks. We help companies stay online without needing to make significant investments in infrastructure or establish
internal DDoS expertise. As a cloud-based service, DDoS Protection Services can be deployed quickly and easily, with no
customer premise equipment required. This saves time and money through operational efficiencies, support costs, and economies
of scale to provide detection and protection against the largest DDoS attacks. Customers include financial institutions, software-
as-a-service providers, e-commerce providers, and media companies. Customers pay a subscription fee that varies depending on
the customer’s network requirements.

2017VERISIGN FORM 10-KManaged DNS Services is a hosting service that delivers DNS resolution, improving the availability of web-based systems.

It provides DNS availability through a globally distributed, securely managed, cloud-based DNS infrastructure, allowing
enterprises to save on capital expenses associated with DNS infrastructure deployment and reduce operational costs and
complexity associated with DNS management. Managed DNS service provides full support for DNS Security Extensions
(“DNSSEC”) compliance features and Geo Location traffic routing capabilities. DNSSEC is designed to protect the DNS
infrastructure from man-in-the-middle attacks that corrupt, or poison, DNS data. Geo Location allows website owners to
customize responses for end-users based on their physical location or IP address, giving them the ability to deliver location-
specific content. Customers include financial institutions, e-commerce, and software-as-a-service providers. Customers pay a
subscription fee that varies based on the amount of DNS traffic they receive.

Operations Infrastructure

Our operations infrastructure consists of three secure data centers in Dulles, Virginia; New Castle, Delaware; and Fribourg,

Switzerland as well as more than 100 resolution sites around the world. These secure data centers operate 24 hours a day,
supporting our business units and services. The performance and scale of our infrastructure are critical for our business, and give
us the platform to maintain our leadership position. Key features of our operations infrastructure include:

• Distributed Servers: We operate a large number of high-speed servers globally to support localized capacity and

availability demands. In conjunction with our proprietary software, processes and procedures, this platform offers rapid
failover, global and local load balancing, and threshold monitoring on critical servers.

• Networking: We deploy and maintain a redundant and diverse global network, maintain high-speed, redundant

connections to numerous internet service providers, and maintain peering relationships globally to ensure that our critical
services are readily accessible to customers at all times.

• Security: We incorporate architectural concepts such as protected domains, restricted nodes and distributed access
control in our system architecture. In addition, we employ firewalls and intrusion detection software, as well as
proprietary security mechanisms at many points across our infrastructure. We perform recurring internal vulnerability
testing and controls audits, and also contract with third-party security consultants who perform periodic penetration tests
and security risk assessments on our systems. Verisign has engineered resiliency and diversity into how it hosts classes
of products throughout its set of interconnected sites to mitigate unknown vendor defects and zero-hour security
vulnerabilities. This includes different physical security silos, which themselves are separated into bulkheads, and in
which servers are located. Corporate networks are in their own physical silo. Thus, the corporate networks to which
personnel directly connect are separated from the silos that house production services; administration of production gear
from corporate systems must go through an internal, fortified intermediary; and account credentials used within the
corporate networks are not used within the production silos, nor on the fortified systems.

• Data Integrity: Verisign employs both phased and systemic integrity validation operations via a number of proprietary

mechanisms on all internal DNS publication operations.

As part of our operations infrastructure for our Registry Services business, we operate all authoritative domain name servers
that answer domain name queries for the .com and .net zones, as well as for the other TLDs for which we are the registry operator.
We also perform the root zone maintainer function for the core of the internet’s Domain Name System (“DNS”) and administer
and operate two of the 13 root zone servers that contain authoritative data for the very top of the DNS hierarchy. Our domain
name servers provide the associated authoritative name servers and IP addresses for every .com and .net domain name on the
internet and a large number of other TLD queries, resulting in an average of approximately 132 billion transactions per day.
These name servers are located in resolution facilities which are in a controlled and monitored environment, incorporating
security and system maintenance features. This network of name servers is one of the cornerstones of the internet’s DNS
infrastructure.

We have continuously expanded our infrastructure to meet demands to support normal and peak system load and attack

volumes based on what we have experienced historically, as well as to address projected internet attack trends.

Call Centers and Help Desk: We provide customer support services through our phone-based call centers, email help desks

and web-based self-help systems. Our Virginia call center is staffed 24 hours a day, every day of the year to support our
businesses. All call centers have a staff of trained customer support agents and also provide web-based support services utilizing
customized automatic response systems to provide self-help recommendations.

Operations Support and Monitoring: Through our network operations centers, we have an extensive monitoring capability

that enables us to track the status and performance of our critical database systems and our global resolution systems. Our
network operations center is staffed 24 hours a day, every day of the year.

2017VERISIGN FORM 10-KDisaster Recovery Plans: We have disaster recovery and business continuity capabilities that are designed to deal with the

loss of entire data centers and other facilities. Our Registry Services business maintains dual mirrored data centers that allow
rapid failover with no data loss and no loss of function or capacity, as well as off-continent tertiary Registry Services capabilities.
Our critical data services (including domain name registration and global resolution) use advanced storage systems that provide
data protection through techniques such as synchronous mirroring and remote replication.

Marketing, Sales and Distribution

We seek to expand our business through focused marketing campaigns and programs that target growth in the .com and .net

domain name base, both domestically and in foreign markets. We offer promotional marketing programs for our registrars based
upon market conditions and the business environment in which the registrars operate. We provide tools to be used by both
registrars and end users to allow them to find relevant domain names. We market our Security Services worldwide through
multiple distribution channels, including direct sales and indirect channels. We have marketing and sales offices in several
countries around the world.

Research and Development

We believe that timely development of new and enhanced services, including monitoring and visualization, registry
provisioning platforms, navigation and resolution services, data services, value added services, and Security Services, as well as
new and enhanced ways to ensure the security, stability, and resiliency of our services, is necessary to remain competitive in the
marketplace. During 2017, 2016, and 2015 our research and development expenses were $52.3 million, $59.1 million and $63.7
million, respectively.

Our future success will depend, in large part, on our ability to continue to maintain and enhance our current technologies

and services and to develop new ones. We actively investigate and incubate new concepts and evaluate new business ideas
through our innovation pipeline. We expect that most of the future enhancements to our existing services and our new services
will be the result of internal development efforts in collaboration with suppliers, other vendors, customers, and the technology
community. Under certain circumstances, we may also acquire or license technology from third parties.

The markets for our services are dynamic, characterized by rapid technological developments, frequent new product
introductions, and evolving industry standards. The constantly changing nature of these markets and their rapid evolution will
require us to continually improve the performance, features, and reliability of our services, particularly in response to competitive
offerings, and to introduce both new and enhanced services as quickly as possible and prior to our competitors.

Competition

We compete with numerous companies in both the Registry Services and Security Services businesses. The overall number

of our competitors may increase and the identity and composition of competitors may change over time.

New technologies and the expansion of existing technologies may increase competitive pressure. In addition, our markets
are characterized by announcements of collaborative relationships involving our competitors. The existence or announcement of
any such relationships could adversely affect our ability to attract and retain customers.

Competition in Registry Services: We face competition in the domain name registry space from other gTLD and ccTLD
registries that are competing for the business of entities and individuals that are seeking to obtain a domain name registration,
establish a web presence, as well as other uses of domain names, such as branded email. In addition to the gTLDs and ccTLDs we
operate or for which we provide back-end registry services, there are over 1,000 other operational gTLD registries, over 250 Latin
script ccTLD registries, more than 50 IDN ccTLD registries, and over 80 IDN gTLD registries. Under our agreements with
ICANN, we are subject to certain restrictions in the operation of .com, .net and .name on pricing, bundling, marketing, methods of
distribution, the introduction of new registry services, and use of registrars, that do not apply to ccTLDs and other gTLDs and
therefore may create a competitive disadvantage.

To the extent end-users navigate using search engines or social media, as opposed to direct navigation, we may face
competition from search engine operators such as Google, Microsoft, and Verizon, operators of social media networks such as
Facebook, operators of ecommerce platforms such as Amazon, eBay and Taobao, and operators of microblogging tools such as
Twitter. In addition, we may face competition from these social media businesses and ecommerce platforms if they are used to
establish an online presence by end-users rather than through the use of a domain name. Furthermore, to the extent end-users
increase the use of web and mobile applications to locate and access content, we may face competition from providers of such
web and mobile applications.

2017VERISIGN FORM 10-KWe also face competition from service providers that offer outsourced domain name registration, resolution and other DNS
services to organizations that require a reliable and scalable infrastructure. Among our competitors are Neustar, Inc., Afilias plc,
and CentralNic Ltd.

Competition in Security Services: Several of our current and potential competitors have longer operating histories and/or
significantly greater financial, technical, marketing, sales, and other resources than we do and therefore may be able to respond
more quickly than we can to new or changing opportunities, technologies, standards, and customer requirements. Many of these
competitors also have broader and more established distribution channels that may be used to deliver competing products or
services directly to customers through bundling or other means. If such competitors were to bundle competing products or
services for their customers, we may experience difficulty establishing or increasing demand for our products and services or
distributing our products successfully. In addition, it may be difficult to compete against consolidation and partnerships among
our competitors which create integrated product suites.

Our Security Services business faces competition from companies such as Akamai Technologies, Inc., Cisco, Neustar, Inc.,

and Oracle, among others.

Industry Regulation

The internet is governed under a multi-stakeholder model comprising civil society, the private sector including for-profit

and not-for-profit organizations such as ICANN, governments including the U.S. government, academia, non-governmental
organizations, and international organizations. ICANN plays a central coordination role in the multi-stakeholder system. ICANN
is mandated through its bylaws to uphold a private sector-led multi-stakeholder approach to internet governance for the public
benefit. The multi-stakeholder process has and will continue to create policies, programs, and standards that directly or indirectly
impact or affect our business. In addition, country-level regulations, such as those implemented by China, impose additional costs
on our Registry Services, can affect the growth or renewal rates of domain name registrations, and may also affect our ability to
do business. Similarly, in the European Union, legislative and regulatory bodies responsible for data privacy continue to enhance
and modify data privacy protections, which impacts our collection and delivery of personal data as we provide our domain name
registry services, and could affect costs of operation.

As the exclusive registry of domain names within the .com and .net gTLDs, we have entered into certain agreements with

ICANN and, in the case of .com, the DOC under a Cooperative Agreement.

.com Registry Agreement

Following the extension of the .com Registry Agreement on October 20, 2016, the .com Registry Agreement provides that we

will continue to be the sole registry operator for domain names in the .com gTLD through November 30, 2024. As part of the
extension of the .com Registry Agreement, the Company and ICANN agreed to cooperate and negotiate in good faith to amend
the terms of the .com Registry Agreement: (i) by October 20, 2018, to preserve and enhance the security and stability of the
internet or the .com TLD, and (ii) as may be necessary for consistency with changes to, or the termination or expiration of, the
Cooperative Agreement. The .com Registry Agreement includes pricing restrictions for .com domain name registrations, which
sets a maximum price of $7.85 for a .com domain name registration and is consistent with the terms of the Cooperative
Agreement as set forth below. In addition, on a quarterly basis, we pay $0.25 to ICANN for each annual increment of a domain
name registered or renewed during such quarter. We are required to comply with and implement temporary specifications or
policies and consensus policies, as well as other provisions pursuant to the .com Registry Agreement relating to handling of data
and other registry operations. The .com Registry Agreement also provides a procedure for Verisign to propose, and ICANN to
review and approve, additional registry services.

The .com and .net Registry Agreements with ICANN contain a “presumptive” right of renewal upon the expiration of their

current terms. In addition to ICANN’s approval, a renewal of the .com Registry Agreement must be approved by the DOC, which,
under certain circumstances, could refuse to grant its approval to the renewal of the .com Registry Agreement on similar terms, or
at all. ICANN could terminate or refuse to renew our .com and/or .net Registry Agreements if, upon proper notice, (i) we fail to
cure a fundamental and material breach of certain specified obligations, and (ii) we fail to timely comply with a final decision of
an arbitrator or court. See “Risk Factors - Risks arising from our agreements governing our Registry Services business could limit
our ability to maintain or grow our business” in Part I, Item 1A of this Annual Report on Form 10-K for further information. Our
.com and .net Registry Agreements contain obligations to provide access to our systems, restrictions on our ability to market and
bundle our products and services, and restrictions on our ability to control our registrar channel or own a registrar.

See the risk factor “Risks arising from our agreements governing our Registry Services business could limit our ability to

maintain or grow our business” in Part 1A for further information.

2017VERISIGN FORM 10-K

Cooperative Agreement

The Cooperative Agreement will expire on November 30, 2018, unless the DOC, in its sole discretion, extends the term. The
DOC has the right to conduct a public interest review for the sole purpose of determining whether the DOC will exercise its right
to extend the term of the Cooperative Agreement. In connection with the aforementioned review, we agreed to cooperate fully and
to work in good faith to reach a mutual agreement with the DOC to resolve issues identified in such review and to work in good
faith to implement any agreed upon changes as of the expiration of the current term of the Cooperative Agreement.

The Cooperative Agreement provides that the Maximum Price (as defined in the .com Registry Agreement) of a .com
domain name shall not exceed $7.85 for the term of the .com Registry Agreement, except that we are entitled to increase the
Maximum Price of a .com domain name due to the imposition of any new Consensus Policy or documented extraordinary
expense resulting from an attack or threat of attack on the Security or Stability of the DNS as described in the .com Registry
Agreement, provided that we may not exercise such right unless the DOC provides prior written approval that the exercise of such
right will serve the public interest, such approval not to be unreasonably withheld. The Cooperative Agreement further provides
that we shall be entitled at any time during the term of the .com Registry Agreement to seek to remove the pricing restrictions
contained in the .com Registry Agreement if we demonstrate to the DOC that market conditions no longer warrant pricing
restrictions in the .com Registry Agreement, as determined by the DOC.

The Cooperative Agreement also provides that the DOC’s approval of the .com Registry Agreement is not intended to confer
federal antitrust immunity on us with respect to the .com Registry Agreement. The Cooperative Agreement also provides that any
renewal or extension of the .com Registry Agreement is subject to prior written approval by the DOC. The DOC shall approve
such renewal if it concludes that approval will serve the public interest in (a) the continued security and stability of the internet
DNS and the operation of the .com registry including, in addition to other relevant factors, consideration of Verisign’s compliance
with consensus policies and technical specifications, its service level agreements as set forth in the .com Registry Agreement, and
the investment associated with improving the security and stability of the DNS, and (b) the provision of Registry Services as
defined in the .com Registry Agreement at reasonable prices, terms and conditions. The parties have an expectancy of renewal of
the .com Registry Agreement so long as the foregoing public interest standard is met and Verisign is not in breach of the .com
Registry Agreement.

.net Registry Agreement

We entered into a renewal of our .net Registry Agreement with ICANN that was effective on July 1, 2017. The .net Registry

Agreement provides that we will continue to be the sole registry operator for domain names in the .net TLD through June 30,
2023.

Root Zone Maintainer Service Agreement

In the fourth quarter of 2016, we entered into a new agreement with ICANN, the Root Zone Maintainer Service Agreement
(“RZMA”) under which we perform the Root Zone Maintainer functions on behalf of ICANN. The RZMA will expire on October
19, 2024, with an automatic renewal unless earlier terminated.

The descriptions of the .com Registry Agreement, the Cooperative Agreement, and the .net Registry Agreement are
qualified in their entirety by the text of the complete agreements that are incorporated by reference as exhibits in this Form 10-K.

Intellectual Property

We rely on a combination of copyrighted software, trademarks, service marks, patents, trade secrets, know-how, restrictions
on disclosure, and other methods to protect our proprietary assets. We also enter into confidentiality and/or invention assignment
agreements with our employees, consultants and current and potential affiliates, customers and business partners. We also control
access to and distribution of proprietary documentation and other confidential information.

We have been issued numerous patents in the U.S. and abroad, covering a wide range of our technologies. Additionally, we
continue to file numerous patent applications with respect to certain of our technologies in the U.S. Patent and Trademark Office
and internationally. Patents may not be awarded with respect to these applications and even if such patents are awarded, such
patents may not provide sufficient protection of our intellectual property. We continue to focus on growing our patent portfolio
and consider opportunities for its strategic use.

We have obtained trademark registrations for the VERISIGN mark and VERISIGN logo in the U.S. and certain countries,
and have pending trademark applications for the VERISIGN logo in a number of other countries. We have common law rights in

2017VERISIGN FORM 10-K

other proprietary names. We take steps to enforce and police Verisign’s trademarks. We rely on the strength of our Verisign brand
to help differentiate ourselves in the marketing of our products and services.

Our principal intellectual property consists of, and our success is dependent upon, proprietary software used in our Registry

Services business and certain methodologies (many of which are patented or for which patent applications are pending) and
technical expertise and proprietary know-how we use in both the design and implementation of our current and future registry
services. We own our proprietary Shared Registration System through which registrars submit second-level domain name
registrations for each of the registries we operate, as well as the ATLAS distributed lookup system which processes billions of
queries per day. Our Security Services business also depends on proprietary intellectual property. Some of the software and
protocols used in our business are in the public domain or are otherwise available to our competitors, and some are based on open
standards set by organizations such as the Internet Engineering Task Force. To the extent any of our patents are considered
“standard essential patents,” we may be required to license such patents to our competitors on reasonable and non-discriminatory
terms or otherwise be limited in our ability to assert such patents.

Employees

The following table shows a comparison of our consolidated employee headcount, by function:

Employee headcount by function:

Cost of revenues ...........................................................................................................................
Sales and marketing .....................................................................................................................
Research and development ...........................................................................................................
General and administrative ...........................................................................................................
Total ......................................................................................................................................

As of December 31,

2017

2016

2015

288
133
226
305
952

324
143
228
295
990

314
183
253
269
1,019

We have never had a work stoppage, and no U.S.-based employees are represented under collective bargaining agreements.

Our ability to achieve our financial and operational objectives depends in large part upon our continued ability to attract,
integrate, train, retain, and motivate highly qualified sales, technical and managerial personnel, and upon the continued service of
our senior management and key sales and technical personnel. Competition for qualified personnel in our industry and in some of
our geographical locations is intense, particularly for software development personnel.

2017VERISIGN FORM 10-K

ITEM 1A.

RISK FACTORS

In addition to other information in this Form 10-K, the following risk factors should be carefully considered in evaluating
us and our business because these factors currently have a significant impact or may have a significant impact on our business,
operating results or financial condition. Actual results could differ materially from those projected in the forward-looking
statements contained in this Form 10-K as a result of the risk factors discussed below and elsewhere in this Form 10-K and in
other filings we make with the SEC.

Risks arising from our agreements governing our Registry Services business could limit our ability to maintain or grow
our business.

We are parties to (i) a Cooperative Agreement (as amended) with the DOC with respect to the .com gTLD and

(ii) Registry Agreements with ICANN for .com, .net, .name, and other gTLDs including our IDN gTLDs. As substantially all of
our revenues are derived from our Registry Services business, limitations and obligations in, or changes or challenges to, these
agreements, particularly the agreements that involve .com and .net, could have a material adverse impact on our business.
Certain competing registries, such as the ccTLDs, do not face the same limitations or obligations that we face in our
agreements.

Modifications or Amendments. In October 2016, the Company and ICANN entered into an amendment to extend the term

of the .com Registry Agreement to November 30, 2024 (the “.com Amendment”). As part of the .com Amendment, the
Company and ICANN agreed to negotiate in good faith to amend the terms of the .com Registry Agreement: (i) by October 20,
2018, to preserve and enhance the security and stability of the internet or the .com TLD, and (ii) as may be necessary for
consistency with changes to, or the termination or expiration of, the Cooperative Agreement. We can provide no assurance that
any new terms for the .com Registry Agreement that we agree to as a result of the above obligations will not have a material
adverse impact on our business, operating results, financial condition, and cash flows.

The DOC approved the .com Amendment under amendment 34 to the Cooperative Agreement. The DOC did not extend

the term of the Cooperative Agreement, which will expire on November 30, 2018, unless the DOC, in its sole discretion,
extends the term. Under amendment 34, the DOC has the right to conduct a public interest review for the sole purpose of
determining whether the DOC will exercise its right to extend the term of the Cooperative Agreement. In connection with the
aforementioned review, we agreed to cooperate fully and to work in good faith to reach a mutual agreement with the DOC to
resolve issues identified in such review and to work in good faith to implement any agreed upon changes as of the expiration of
the current term of the Cooperative Agreement. We can provide no assurance that any changes that we agree to as a result of the
above obligations will not have a material adverse impact on our business, operating results, financial condition, and cash
flows.

In addition, our Registry Agreements for new gTLDs, including the Registry Agreements for our IDN gTLDs, include

ICANN’s right to amend the agreements without our consent, which could impose unfavorable contract obligations on us that
could impact our plans and competitive positions with respect to new gTLDs. At the time of renewal of our .com or .net
Registry Agreements, ICANN might also attempt to impose this same unilateral right to amend these registry agreements under
certain conditions. ICANN has also included new mandatory obligations on new gTLD registry operators, including us, that
may increase the risks and potential liabilities associated with operating new gTLDs. ICANN might seek to impose these new
mandatory obligations in our other Registry Agreements under certain conditions. We can provide no assurance that any
changes to our Registry Agreements as a result of the above obligations will not have a material adverse impact on our
business, operating results, financial condition, and cash flows.

Pricing. Under the terms of the Cooperative Agreement with the DOC and the .com Registry Agreement with ICANN, we

are restricted during the term of the Registry Agreement from increasing the price of registrations or renewals of .com domain
names above $7.85, except that we are entitled to increase the price up to 7%, with the prior approval of the DOC, due to the
imposition of any new ICANN consensus policies, as established and defined under ICANN’s bylaws and due process, and
covering certain items listed in the .com Registry Agreement, or documented extraordinary expense resulting from an attack or
threat of attack on the security and stability of the DNS. However, it is uncertain that such circumstances will arise, or if they
do, whether we would seek, or the DOC would approve, any request to increase the price for .com domain name registrations.
We also have the right under the Cooperative Agreement to seek the removal of these pricing restrictions if we demonstrate to
the DOC that market conditions no longer warrant such restrictions. However, it is uncertain whether we will seek the removal
of such restrictions, or whether the DOC would approve the removal of such restrictions. In comparison, under the terms of the
.net and .name Registry Agreements with ICANN, we are permitted to increase the price of domain name registrations and
renewals in these TLDs up to 10% per year. Additionally, ICANN’s registry agreements for new gTLDs do not contain such
pricing restrictions.

Vertical integration. Under the .com, .net, and .name Registry Agreements with ICANN, as well as the Cooperative
Agreement with the DOC, we are not permitted to acquire, directly or indirectly, control of, or a greater than 15% ownership

interest in, any ICANN-accredited registrar. Historically, all gTLD registry operators were subject to this vertical integration

prohibition; however, ICANN has established a process whereby registry operators may seek ICANN’s approval to remove this

restriction, and ICANN has approved such removal in several instances. If we were to seek removal of the vertical integration

restrictions contained in our agreements, it is uncertain whether ICANN and/or DOC approval would be obtained. Additionally,

ICANN’s registry agreement for new gTLDs generally permits such vertical integration, with certain limitations including

ICANN’s right, but not the obligation, to refer such vertical integration activities to competition authorities. Furthermore, such

vertical integration restrictions do not generally apply to ccTLD registry operators. If registry operators of other TLDs, or

ccTLDs, are able to obtain competitive advantages through such vertical integration, it could materially harm our business.

Renewal and Termination. Our .com, .net, and .name Registry Agreements with ICANN contain “presumptive” rights of

renewal upon the expiration of their current terms on November 30, 2024, June 30, 2023 and August 15, 2018, respectively. The

Registry Agreements for our new gTLDs including our IDN gTLDs are subject to a 10-year term and contain similar

“presumptive” renewal rights. If certain terms in our .com and .net Registry Agreements are not similar to such terms generally

in effect in the registry agreements of the five largest gTLDs, then a renewal of these agreements shall be upon terms

reasonably necessary to render such terms similar to the registry agreements for those other gTLDs. There can be no assurance

that such terms, if they apply, will not have a material adverse impact on our business. A renewal of the .com Registry

Agreement must be approved by the DOC, which, under certain circumstances, could refuse to grant its approval to the renewal

of the .com Registry Agreement on similar terms, or at all. A failure (i) by ICANN or the DOC to approve the renewal of the

.com Registry Agreement prior to the expiration of its current term on November 30, 2024, or (ii) by ICANN to approve the

renewal of the .net Registry Agreement prior to or upon the expiration of its current term on June 30, 2023, would have, absent

an extension, a material adverse effect on our business. ICANN could terminate or refuse to renew our .com or .net Registry

Agreements if, upon proper notice, (i) we fail to cure a fundamental and material breach of certain specified obligations, and (ii)

we fail to timely comply with a final decision of an arbitrator or court. ICANN’s termination or refusal to renew either the .com

or .net Registry Agreement would have a material adverse effect on our business.

Consensus Policies. Our Registry Agreements with ICANN require us to implement Consensus Policies and

specifications or policies established on a temporary basis (“Temporary Policies”). ICANN could adopt Consensus Policies or

Temporary Policies that are unfavorable to us as the registry operator of .com, .net and our other gTLDs, that are inconsistent

with our current or future plans, that impose substantial costs on our business, that subject the Company to additional legal

risks, or that affect our competitive position. Such Consensus Policies or Temporary Policies could have a material adverse

effect on our business. As an example, ICANN has adopted a Consensus Policy that requires Verisign to receive and display

Thick WHOIS data for .com and .net. The costs of complying or failing to comply with this policy as well as laws and

regulations regarding publicly identifiable information and data privacy, such as domestic and various foreign privacy regimes,

could expose us to compliance costs and substantial liability, and result in costly and time-consuming investigations or

litigation.

Legal Challenges. Our Registry Agreements have faced, and could face in the future, challenges, including possible legal

challenges, resulting from our activities or the activities of ICANN, registrars, registrants, and others, and any adverse outcome

from such challenges could have a material adverse effect on our business.

Governmental regulation and the application of new and existing laws in the U.S. and overseas may slow business

growth, increase our costs of doing business, create potential liability and have an adverse effect on our business.

Application of new and existing laws and regulations in the U.S. or overseas to the internet and communications industry

can be unclear. The costs of complying or failing to comply with these laws and regulations could limit our ability to operate in

our current markets, expose us to compliance costs and substantial liability, and result in costly and time-consuming litigation.

For example, the government of the People’s Republic of China (“PRC”) has indicated that it will issue, and in some instances

has begun to issue, new regulations, and has begun to enforce existing regulations, that impose additional costs on, and risks to,

our provision of Registry Services in the PRC and could impact the growth or renewal rates of domain name registrations in the

PRC. In addition to registry operators, certain of such regulations will also require registrars to obtain a government-issued

license for each TLD whose domain name registrations they intend to sell directly to registrants. Any failure to obtain the

required licenses, or to comply with any license requirements or any updates thereto, by us or our registrars could impact the

growth of our business in the PRC.

Foreign, federal or state laws could have an adverse impact on our business, financial condition, results of operations and

cash flows, and our ability to conduct business in certain foreign countries. For example, laws designed to restrict who can

register and who can distribute domain names, the online distribution of certain materials deemed harmful to children, online

gambling, counterfeit goods, and intellectual property violations such as cybersquatting; laws designed to require registrants to

provide additional documentation or information in connection with domain name registrations; and laws designed to promote

cyber security may impose significant additional costs on our business or subject us to additional liabilities. We have a contract

2017VERISIGN FORM 10-Kinterest in, any ICANN-accredited registrar. Historically, all gTLD registry operators were subject to this vertical integration
prohibition; however, ICANN has established a process whereby registry operators may seek ICANN’s approval to remove this
restriction, and ICANN has approved such removal in several instances. If we were to seek removal of the vertical integration
restrictions contained in our agreements, it is uncertain whether ICANN and/or DOC approval would be obtained. Additionally,
ICANN’s registry agreement for new gTLDs generally permits such vertical integration, with certain limitations including
ICANN’s right, but not the obligation, to refer such vertical integration activities to competition authorities. Furthermore, such
vertical integration restrictions do not generally apply to ccTLD registry operators. If registry operators of other TLDs, or
ccTLDs, are able to obtain competitive advantages through such vertical integration, it could materially harm our business.

Renewal and Termination. Our .com, .net, and .name Registry Agreements with ICANN contain “presumptive” rights of

renewal upon the expiration of their current terms on November 30, 2024, June 30, 2023 and August 15, 2018, respectively. The
Registry Agreements for our new gTLDs including our IDN gTLDs are subject to a 10-year term and contain similar
“presumptive” renewal rights. If certain terms in our .com and .net Registry Agreements are not similar to such terms generally
in effect in the registry agreements of the five largest gTLDs, then a renewal of these agreements shall be upon terms
reasonably necessary to render such terms similar to the registry agreements for those other gTLDs. There can be no assurance
that such terms, if they apply, will not have a material adverse impact on our business. A renewal of the .com Registry
Agreement must be approved by the DOC, which, under certain circumstances, could refuse to grant its approval to the renewal
of the .com Registry Agreement on similar terms, or at all. A failure (i) by ICANN or the DOC to approve the renewal of the
.com Registry Agreement prior to the expiration of its current term on November 30, 2024, or (ii) by ICANN to approve the
renewal of the .net Registry Agreement prior to or upon the expiration of its current term on June 30, 2023, would have, absent
an extension, a material adverse effect on our business. ICANN could terminate or refuse to renew our .com or .net Registry
Agreements if, upon proper notice, (i) we fail to cure a fundamental and material breach of certain specified obligations, and (ii)
we fail to timely comply with a final decision of an arbitrator or court. ICANN’s termination or refusal to renew either the .com
or .net Registry Agreement would have a material adverse effect on our business.

Consensus Policies. Our Registry Agreements with ICANN require us to implement Consensus Policies and

specifications or policies established on a temporary basis (“Temporary Policies”). ICANN could adopt Consensus Policies or
Temporary Policies that are unfavorable to us as the registry operator of .com, .net and our other gTLDs, that are inconsistent
with our current or future plans, that impose substantial costs on our business, that subject the Company to additional legal
risks, or that affect our competitive position. Such Consensus Policies or Temporary Policies could have a material adverse
effect on our business. As an example, ICANN has adopted a Consensus Policy that requires Verisign to receive and display
Thick WHOIS data for .com and .net. The costs of complying or failing to comply with this policy as well as laws and
regulations regarding publicly identifiable information and data privacy, such as domestic and various foreign privacy regimes,
could expose us to compliance costs and substantial liability, and result in costly and time-consuming investigations or
litigation.

Legal Challenges. Our Registry Agreements have faced, and could face in the future, challenges, including possible legal
challenges, resulting from our activities or the activities of ICANN, registrars, registrants, and others, and any adverse outcome
from such challenges could have a material adverse effect on our business.

Governmental regulation and the application of new and existing laws in the U.S. and overseas may slow business
growth, increase our costs of doing business, create potential liability and have an adverse effect on our business.

Application of new and existing laws and regulations in the U.S. or overseas to the internet and communications industry
can be unclear. The costs of complying or failing to comply with these laws and regulations could limit our ability to operate in
our current markets, expose us to compliance costs and substantial liability, and result in costly and time-consuming litigation.
For example, the government of the People’s Republic of China (“PRC”) has indicated that it will issue, and in some instances
has begun to issue, new regulations, and has begun to enforce existing regulations, that impose additional costs on, and risks to,
our provision of Registry Services in the PRC and could impact the growth or renewal rates of domain name registrations in the
PRC. In addition to registry operators, certain of such regulations will also require registrars to obtain a government-issued
license for each TLD whose domain name registrations they intend to sell directly to registrants. Any failure to obtain the
required licenses, or to comply with any license requirements or any updates thereto, by us or our registrars could impact the
growth of our business in the PRC.

Foreign, federal or state laws could have an adverse impact on our business, financial condition, results of operations and

cash flows, and our ability to conduct business in certain foreign countries. For example, laws designed to restrict who can
register and who can distribute domain names, the online distribution of certain materials deemed harmful to children, online
gambling, counterfeit goods, and intellectual property violations such as cybersquatting; laws designed to require registrants to
provide additional documentation or information in connection with domain name registrations; and laws designed to promote
cyber security may impose significant additional costs on our business or subject us to additional liabilities. We have a contract

2017VERISIGN FORM 10-Kpursuant to which we provide services to the U.S. government and it imposes compliance costs, including compliance with the
Federal Acquisition Regulation, which could be significant to the Company.

To conduct our operations, we regularly move data across national borders and receive data originating from different
jurisdictions, and consequently are subject to a variety of continuously evolving and developing laws and regulations in the
United States and abroad regarding privacy, data protection and data security. The scope of the laws that may be applicable to
us is often uncertain and may be conflicting, particularly with respect to foreign laws. For example, the European Union’s
General Data Protection Regulation, which greatly increases the jurisdictional reach of European Union law and adds a broad
array of requirements for handling personal data, including the public disclosure of significant data breaches, becomes effective
in May 2018. Other countries have enacted or are enacting data localization laws that require data to stay within their borders.
All of these evolving compliance and operational requirements can impose significant costs for us that are likely to increase
over time.

Due to the nature of the internet, it is possible that state or foreign governments might attempt to regulate internet
transmissions or prosecute us for violations of their laws. We might unintentionally violate such laws, such laws may be
modified, and new laws may be enacted in the future. In addition, as we launch our IDN gTLDs and increase our marketing
efforts of our other TLDs in foreign countries, we may raise our profile in certain foreign countries thereby increasing the
regulatory and other scrutiny of our operations. Any such developments could increase the costs of regulatory compliance for
us, affect our reputation, force us to change our business practices or otherwise materially harm our business. In addition, any
such new laws could impede growth of or result in a decline in domain name registrations, as well as impact the demand for our
services.

Undetected or unknown defects in our service, security breaches, defects in the technologies and services in our supply
chain, and DDoS attacks could expose us to liability and harm our business and reputation.

Services as complex as those we offer or develop could contain undetected defects or errors. Despite testing, defects or

errors may occur in our existing or new services, which could result in compromised customer data, including DNS data,
diversion of development resources, injury to our reputation, tort or contract claims, increased insurance costs or increased
service costs, any of which could harm our business. Performance of our services could have unforeseen or unknown adverse
effects on the networks over which they are delivered as well as, more broadly, on internet users and consumers, and third-party
applications and services that utilize our services, which could result in legal claims against us, harming our business. Our
failure to identify, remediate and mitigate security vulnerabilities and breaches or our inability to meet customer expectations in
a timely manner could also result in loss of or delay in revenues, failure to meet contracted service level obligations, loss of
market share, failure to achieve market acceptance, injury to our reputation and increased costs.

In addition to undetected defects or errors, we are also subject to cyber-attacks and attempted security breaches. We retain

certain customer and employee information in our data centers and various domain name registration systems. It is critical to
our business strategy that our facilities and infrastructure remain secure and are perceived by the marketplace to be secure. The
Company, as an operator of critical internet infrastructure, is frequently targeted and experiences a high rate of attacks. These
include the most sophisticated forms of attacks, such as advanced persistent threat attacks and zero-hour threats. These forms of
attacks involve situations where the threat is not compiled or has been previously unobserved within our observation and threat
indicators space until the moment it is launched. In addition, these forms of attacks may target specific unidentified or
unresolved vulnerabilities that exist only within the target’s supply chain or operating environment, making these attacks
virtually impossible to anticipate and difficult to defend against. In addition to external threats, we may be subject to insider
threats, including those from third-party suppliers such as consultants and advisors, SaaS providers, other outside vendors, or
from current, former or contract employees; these threats can be realized from intentional or unintentional actions. The Shared
Registration System, the root zone servers, the root zone file, the Root Zone Management System, the TLD name servers and
the TLD zone files that we operate are critical to our Registry Services operations. Despite the significant time and money
expended on our security measures, we have been subject to a security breach, as disclosed in our Quarterly Report on Form
10-Q for the quarter ended September 30, 2011, and our infrastructure may in the future be vulnerable to physical break-ins,
outages resulting from destructive malcode, hardware defects, computer viruses, attacks by hackers or nefarious actors or
similar disruptive problems, including hacktivism. It is possible that we may have to expend additional financial and other
resources to address such problems. Any physical or electronic break-in or other security breach or compromise of the
information stored at our data centers or domain name registration systems may cause an outage of or jeopardize the security of
information stored on our premises or in the computer systems and networks of our customers. In such an event, we could face
significant liability, fail to meet contracted service level obligations, customers could be reluctant to use our services and we
could be at risk for loss of various security and standards-based compliance certifications needed for operation of our
businesses, all or any of which could adversely affect our reputation and harm our business. Such an occurrence could also
result in adverse publicity and therefore adversely affect the market’s perception of the security of e-commerce and
communications over the internet as well as of the security or reliability of our services.

2017VERISIGN FORM 10-KWe use externally developed technology, systems and services including both hardware and software, for a variety of

purposes, including, without limitation, compute, storage, encryption and authentication, back-office support, and other
functions. While we have developed operational policies and procedures to reduce the impact of a security breach at a vendor
where Company data is stored or processed, such measures cannot provide absolute security. Breaches of our vendors’
technology, systems and services could expose us or our customers to a risk of loss or misuse of Company data, including but
not limited to personal information.

Additionally, our networks have been, and likely will continue to be, subject to DDoS attacks. Recent attacks have
demonstrated that DDoS attacks continue to grow in size and sophistication and have an ability to widely disrupt internet
services. While we have adopted mitigation techniques, procedures and strategies to defend against such attacks, there can be
no assurance that we will be able to defend against every attack, especially as the attacks increase in size and sophistication.
Any attack, even if only partially successful, could disrupt our networks, increase response time, negatively impact our ability
to meet our contracted service level obligations, and generally hamper our ability to provide reliable service to our Registry
Services customers and the broader internet community. Further, we sell DDoS protection services to our Security Services
customers. Although we increase our knowledge of and develop new techniques in the identification and mitigation of attacks
through the protection of our Security Services customers, the DDoS protection services share some of the infrastructure used
in our Registry Services business. Therefore the provision of such services might expose our critical Registry Services
infrastructure to temporary degradations or outages caused by DDoS attacks against those customers, in addition to any attacks
directed specifically against us and our networks.

Changes to the multi-stakeholder model of internet governance could materially and adversely impact our business.

The internet is governed under a multi-stakeholder model comprising civil society, the private sector including for-profit

and not-for-profit organizations such as ICANN, governments including the U.S. government, academia, non-governmental
organizations and international organizations.

Role of the U.S. Government. In the fourth quarter of 2016, the United States government completed a transition to the
multistakeholder community of the historical role played by NTIA in the coordination of the DNS. Changes arising from this
transition to the multi-stakeholder model of internet governance could materially and adversely impact our business. For
example, ICANN has adopted bylaws that are designed, in part, to enhance accountability through a new organization called the
Empowered Community, which is comprised of a cross section of stakeholders. ICANN or the Empowered Community may
assert positions that could negatively impact our strategy or our business.

By completing the transition discussed above, the U.S. Government through the NTIA has ended its coordination and
management of important aspects of the DNS including the IANA functions and the root zone. There can be no assurance that
the removal of the U.S. Government oversight of these key functions will not negatively impact our business.

Role of ICANN. ICANN plays a central coordination role in the multi-stakeholder system. ICANN is mandated through its
bylaws to uphold a private sector-led multi-stakeholder approach to internet governance for the public benefit. If ICANN or the
Empowered Community fails to uphold or significantly redefines the multi-stakeholder model, it could harm our business.
Additionally, the Empowered Community could adversely impact ICANN, which could negatively impact its ability to
coordinate the multi-stakeholder system of governance, or negatively affect our interests. Also, legal, regulatory or other
challenges could be brought challenging the legal authority underlying the roles and actions of ICANN, the Empowered
Community or us.

Role of Foreign Governments. Some governments and members of the multi-stakeholder community have questioned
ICANN’s role with respect to internet governance and, as a result, could seek a multilateral oversight body as a replacement.
Additionally, the role of ICANN’s Governmental Advisory Committee, which is comprised of representatives of national
governments, could change, giving governments more control of certain aspects of internet governance. Some governments and
governmental authorities outside the U.S. have in the past disagreed, and may in the future disagree, with the actions, policies
or programs of ICANN, the U.S. Government and us relating to the DNS. Changes to the roles that foreign governments play in
internet governance could materially and adversely impact our business.

2017VERISIGN FORM 10-KWe face risks from our operation of two root zone servers and performance of the Root Zone Maintainer functions
under the RZMA.

We operate two of the 13 root zone servers. Root zone servers are name servers that contain authoritative data for the very

top of the DNS hierarchy. These servers have the software and DNS configuration data necessary to locate name servers that
contain authoritative data for the TLDs. These root zone servers are critical to the functioning of the internet. We also have an
important operational role in support of a key IANA function as the Root Zone Maintainer. In this role, we provision and
publish the authoritative root zone data and make it available to all root server operators under an agreement with ICANN, the
Root Zone Maintainer Service Agreement (“RZMA”).

As we perform the Root Zone Maintainer functions under the RZMA, we may be subject to significant claims challenging
the agreement or our performance under the agreement, and we may not have immunity from, or sufficient indemnification for,
such claims.

For example, DNSSEC enabled in the root zone and at other levels of the DNS requires new preventative maintenance,

including root key signing key (“KSK”) rollover, functions and complex operational practices that did not exist prior to the
introduction of DNSSEC. Any failure by us, ICANN, external DNS vendors and service providers, or relying parties to comply
with stated practices, such as those outlined in relevant DNSSEC Practice Statements, introduces risk to DNSSEC relying
parties and other internet users and consumers of the DNS, which could have a material adverse impact on our business. In
particular, because root KSK rollover involves updates both to certain keys managed by us in our role as Root Zone Maintainer
and to corresponding keys maintained by external DNS vendors and service providers’ DNSSEC implementations, if such
external parties are not adequately prepared for and/or do not appropriately effectuate root key updates, any root KSK rollover,
including the rollover currently planned by ICANN, may introduce substantial risk to relying parties. Even where we have
correctly implemented our key updates, we could face potential legal claims and reputational harm if the failures described
occur.

Additionally, over 1,200 new gTLDs have already been delegated into the root zone in the current round of new

gTLDs. ICANN plans on offering a subsequent round of new gTLDs , the timing of which remains uncertain. As set forth in
the Verisign Labs Technical Report #1130007 version 2.2: New gTLD Security and Stability Considerations released on March
28, 2013, and expanded upon in subsequent publications, we continue to believe there are potential security and stability issues
that could involve the root zone and at other levels of the DNS from the deployment of the new gTLDs that should have been
addressed before any new gTLDs were delegated, and despite our and others’ efforts, some of these issues have not been
addressed by ICANN sufficiently, if at all. For example, domain name collisions have been reported to ICANN, which have
resulted in various network interruptions for enterprises as well as confusion and usability issues that have led to phishing
attacks. It is anticipated that as additional new gTLDs are delegated more domain name collisions and associated security issues
will occur.

The evolution of internet practices and behaviors and the adoption of substitute technologies may impact the demand
for domain names.

Domain names and the domain name system have been used by consumers and businesses to access or disseminate
information, conduct e-commerce, and develop an online identity for many years. The growth of technologies such as social
media, mobile devices, apps and the dominance of search engines has evolved and changed the internet practices and behaviors
of consumers and businesses alike. These changes can impact the demand for domain names by those who purchase domain
names for personal, commercial and investment reasons. Factors such as the evolving practices and preferences of internet users
and how they navigate the internet as well as the motivation of domain name registrants and how they will monetize their
investment in domain names can negatively impact our business. Some domain name registrars and registrants seek to purchase
and resell domain names following an increase in their value. Adverse changes in the resale value of domain names could result
in a decrease in the demand and/or renewal rates for domain names in our TLDs obtained for resale.

Some domain name registrants use a domain name to access or disseminate information, conduct e-commerce, and
develop an online identity. Currently, internet users often navigate to a website either by directly typing its domain name into a
web browser, the use of an app on their smart phone or mobile device, the use of a voice recognition technology such as Alexa,
Cortana, Google Assistant, or Siri, or through the use of a search engine. If (i) web browser or internet search technologies were
to change significantly; (ii) internet users’ preferences or practices shift away from recognizing and relying on web addresses
for navigation through the use of new and existing technologies; (iii) internet users were to significantly decrease the use of
web browsers in favor of applications to locate and access content; (iv) internet users were to significantly decrease the use of
domain names to develop and protect their online identity; or (v) internet users were to increasingly use third level domains or
alternate identifiers, such as social networking and microblogging sites, in each case the demand for domain names in our TLDs
could decrease. This may trigger current or prospective customers and parties in our target markets to reevaluate their need for
registration or renewal of domain names.

2017VERISIGN FORM 10-KSome domain name registrars and registrants seek to generate revenue through advertising on their websites; changes in
the way these registrars and registrants are compensated (including changes in methodologies and metrics) by advertisers and
advertisement placement networks, such as Google, Yahoo!, Baidu and Bing, have, and may continue to, adversely affect the
market for those domain names favored by such registrars and registrants which has resulted in, and may continue to result in, a
decrease in demand and/or the renewal rate for those domain names. For example, according to published reports, Google has
in the past changed (and may change in the future) its search algorithm, which may decrease site traffic to certain websites and
provide less pay-per-click compensation for certain types of websites. This has made such websites less profitable which has
resulted in, and may continue to result in, fewer domain registrations and renewals. In addition, as a result of the general
economic environment, spending on online advertising and marketing may not increase or may be reduced, which in turn, may
result in a further decline in the demand for those domain names.

If any of the above factors negatively impact the renewal of domain names or the demand for new domain names, we may

experience material adverse impacts on our business, operating results, financial condition and cash flows.

Many of our markets are evolving, and if these markets fail to develop or if our products and services are not widely
accepted in these markets, our business could be harmed.

We seek to serve many new, developing and emerging markets in foreign countries to grow our business. These markets

are rapidly evolving, and may not grow. Even if these markets grow, our services may not be widely used or accepted.
Accordingly, the demand for our services in these markets is very uncertain. The factors that may affect market acceptance or
adoption of our services in these markets include the following:

•

regional internet infrastructure development, expansion, penetration and adoption;

• market acceptance and adoption of substitute products and services that enable online presence without a domain,

including social media, ecommerce platforms, website builders and mobile applications;

• public perception of the security of our technologies and of IP and other networks;

•

the introduction and consumer acceptance of new generations of mobile devices, and in particular the use of internet
navigation mobile applications as the primary engagement mechanism;

•

increasing cyber threats and the associated customer need and demand for our Security Services offerings;

• government regulations affecting internet access and availability, domain name registrations or the provision of

registry services, or e-commerce and telecommunications over the internet;

•

the maturity and depth of the sales channels within developing and emerging markets and their ability and motivation
to establish and support sales for domain names;

• preference by markets for the use of their own country’s ccTLDs as a substitute or alternative to our TLDs; and

•

increased acceptance and use of new gTLDs as substitutes for established gTLDs.

If the market for e-commerce and communications over IP and other networks does not grow or these services are not

widely accepted in the market, our business could be materially harmed.

The business environment is highly competitive and, if we do not compete effectively, we may suffer lower demand for
our products, reduced gross margins and loss of market share.

The internet and communications network services industries are characterized by rapid technological change and
frequent new product and service announcements which require us continually to improve the performance, features and
reliability of our services, particularly in response to competitive offerings or alternatives to our products and services. In order
to remain competitive and retain our market position, we must continually improve our access to technology and software,
support the latest transmission technologies, and adapt our products and services to changing market conditions and our
customers’ and internet users’ preferences and practices, or launch entirely new products and services such as new gTLDs in
anticipation of, or in response to, market trends. We cannot assure that competing technologies developed by others or the
emergence of new industry standards will not adversely affect our competitive position or render our services or technologies
noncompetitive or obsolete. In addition, our markets are characterized by announcements of collaborative relationships
involving our competitors. The existence or announcement of any such relationships could adversely affect our ability to attract
and retain customers. As a result of the foregoing and other factors, we may not be able to compete effectively with current or
future competitors, and competitive pressures that we face could materially harm our business.

We face competition in the domain name registry space from other gTLD and ccTLD registries that are competing for the

business of entities and individuals that are seeking to obtain a domain name registration and/or establish a web presence. We

2017VERISIGN FORM 10-K

have been designated as the registry operator for new gTLDs including certain IDN gTLDs; however, there is no guarantee that
such new gTLDs will be as or more successful than the new gTLDs obtained by our competitors. For example, some of the new
gTLDs, including our new gTLDs, may face additional universal acceptance and usability challenges in that current desktop
and mobile device software does not ubiquitously recognize these new gTLDs and developers of desktop and mobile device
software may be slow to adopt standards or support these gTLDs, even if demand for such products is strong. This is
particularly true for IDN gTLDs, but applies to conventional gTLDs as well. As a result of these challenges, it is possible that
resolution of domain names within some of these new gTLDs may be blocked within certain state or organizational
environments, challenging universal resolvability of these strings and their general acceptance and usability on the internet.

See the “Competition” section in Part I, Item 1 for further information.

We must establish and maintain strong relationships with registrars and their resellers to maintain their focus on
marketing our products and services otherwise our Registry Service business could be harmed.

All of our domain name registrations occur through registrars. Registrars and their resellers utilize substantial marketing
efforts to increase the demand and/or renewal rates for domain names as well as their own associated offerings. Consolidation
in the registrar or reseller industry or changes in ownership, management, or strategy among individual registrars or resellers
could result in significant changes to their business, operating model and cost structure. Such changes could include reduced
marketing efforts or other operational changes that could adversely impact the demand and/or the renewal rates for domain
names.

With the introduction of new gTLDs, many of our registrars have chosen to, and may continue to choose to, focus their

short or long-term marketing efforts on these new offerings and/or reduce the prominence or visibility of our products and
services on their e-commerce platforms. Our registrars and resellers sell domain name registrations of other competing
registries, including the new gTLDs, and some also sell and support their own services for websites such as email, website
hosting, as well as other services. Therefore, our registrars and resellers may be more motivated to sell to registrants to whom
they can also market their own services. To the extent that registrars and their resellers focus more on selling and supporting
their services and less on the registration and renewal of domain names in our TLDs, our revenues could be adversely impacted.
Our ability to successfully market our services to, and build and maintain strong relationships with, new and existing registrars
or resellers is a factor upon which successful operation of our business is dependent. If we are unable to keep a significant
portion of their marketing efforts focused on selling registrations of domain names in our TLDs as opposed to other competing
TLDs, including the new gTLDs, or their own services, our business could be harmed.

If we encounter system interruptions or failures, we could be exposed to liability and our reputation and business could
suffer.

We depend on the uninterrupted operation of our various systems, secure data centers and other computer and

communication networks. Our systems and operations are vulnerable to damage or interruption from:

• power loss, transmission cable cuts and other telecommunications failures;

• damage or interruption caused by fire, earthquake, and other natural disasters;

•

attacks, including hacktivism, by miscreants or other nefarious actors;

computer viruses, software defects, or hardware defects;

• physical or electronic break-ins, sabotage, intentional acts of vandalism, terrorist attacks, unintentional mistakes or

errors, and other events beyond our control;

•

risks inherent in or arising from the terms and conditions of our agreements with service providers to operate our
networks and data centers;

state suppression of internet operations; and

any failure to implement effective and timely remedial actions in response to any damage or interruption.

Most of the computing infrastructure for our Shared Registration System is located at, and most of our customer
information is stored in, our facilities in New Castle, Delaware; Dulles, Virginia; and Fribourg, Switzerland. To the extent we
are unable to partially or completely switch over to our primary alternate or tertiary sites, any damage or failure that causes
interruptions in any of these facilities or our other computer and communications systems could materially harm our business.
Although we carry insurance for property damage, we do not carry insurance or financial reserves for such interruptions, or for
potential losses arising from terrorism.

In addition, our Registry Services business and certain of our other services depend on the secure and efficient operation
of the internet connections to and from customers to our Shared Registration System residing in our secure data centers. These

2017VERISIGN FORM 10-K

connections depend upon the secure and efficient operation of internet service providers, internet exchange point operators, and
internet backbone service providers, some or all of which have had periodic operational problems or experienced outages in the
past beyond our scope of control. In addition, if these service providers do not protect, maintain, improve, and reinvest in their
networks or present inconsistent data regarding the DNS through their networks, our business could be harmed.

A failure in the operation or update of the root zone servers, the root zone file, the Root Zone Management System, the
TLD name servers, or the TLD zone files that we operate, including, for example, our operation of the .gov registry, or other
network functions, could result in a DNS resolution or other service outage or degradation; the deletion of one or more TLDs
from the internet; the deletion of one or more second-level domain names from the internet for a period of time; or a
misdirection of a domain name to a different server. A failure in the operation or update of the supporting cryptographic and
other operational infrastructure that we maintain could result in similar consequences. A failure in the operation of our Shared
Registration System could result in the inability of one or more registrars to register or maintain domain names for a period of
time. In the event that a registrar has not implemented back-up services in conformance with industry best practices, the failure
could result in permanent loss of transactions at the registrar during that period. Any of these problems or outages could create
potential liability, including liability arising from a failure to meet our service level agreements in our Registry Agreements, and
could decrease customer satisfaction, harming our business or resulting in adverse publicity and damage to our reputation that
could adversely affect the market’s perception of the security of e-commerce and communications over the internet as well as of
the reliability of our services or call into question our ability to preserve the security and stability of the internet.

Our operating results may be adversely affected as a result of unfavorable market, economic, social and political
conditions.

An unfavorable global economic, social and political environment has impacted or may negatively impact, among other

things:

• our customers’ continued growth and development of their businesses and our customers’ ability to continue as going

concerns or maintain their businesses, which could affect demand for our products and services;

•

current and future demand for our services, including decreases as a result of reduced spending on information
technology and communications by our customers;

• price competition for our products and services;

•

the price of our common stock;

• our liquidity and our associated ability to execute on any share repurchase plans; and

• our ability to service our debt, to obtain financing or assume new debt obligations.

In addition, to the extent that the economic, social and political environment impacts specific industry and geographic
sectors in which many of our customers are concentrated, that may have a disproportionate negative impact on our business.

Our international operations subject our business to additional economic, legal and political risks that could have an
adverse impact on our revenues and business.

A significant portion of our revenues is derived from customers outside the U.S. Doing business in international markets
has required and will continue to require significant management attention and resources. We may also need to tailor some of
our services for a particular market and to enter into international distribution and operating relationships. We may fail to
maintain our ability to conduct business, including potentially material business operations in some international locations, or
we may not succeed in expanding our services into new international markets or expand our presence in existing markets.
Failure to do so could materially harm our business. Moreover, local laws and customs in many countries differ significantly
from those in the U.S. In many foreign countries, particularly in those with developing economies, it is common for others to
engage in business practices that are prohibited by our internal policies and procedures or U.S. law or regulations applicable to
us. There can be no assurance that our employees, contractors and agents will not take actions in violation of such policies,
procedures, laws and/or regulations. Violations of laws, regulations or internal policies and procedures by our employees,
contractors or agents could result in financial reporting problems, investigations, fines, penalties, or prohibition on the
importation or exportation of our products and services and could have a material adverse effect on our business. In addition,
we face risks inherent in doing business on an international basis, including, among others:

•

competition with foreign companies or other domestic companies entering the foreign markets in which we operate, as
well as foreign governments actively promoting their ccTLDs, which we do not operate;

legal uncertainty regarding liability, enforcing our contracts, and compliance with foreign laws;

tariffs and other trade barriers and restrictions;

2017VERISIGN FORM 10-K

• difficulties in staffing and managing foreign operations;

•

currency fluctuations;

• potential problems associated with adapting our services to technical conditions existing in different countries;

• difficulty of verifying customer information, including complying with the customer verification requirements of

certain countries;

• more stringent privacy policies in some foreign countries;

•

additional vulnerability from terrorist groups targeting U.S. interests abroad;

• potentially conflicting or adverse tax consequences;

•

reliance on third parties in foreign markets in which we only recently started doing business; and

• potential concerns of international customers and prospects regarding doing business with U.S. technology companies

due to alleged U.S. government data collection policies.

We rely on our intellectual property rights to protect our proprietary assets, and any failure by us to protect or enforce,
or any misappropriation of, our intellectual property could harm our business.

Our success depends in part on our internally developed technologies and related intellectual property. Despite our
precautions, it may be possible for an external party to copy or otherwise obtain and use our intellectual property without
authorization. Furthermore, the laws of foreign countries may not protect our proprietary rights in those countries to the same
extent U.S. law protects these rights in the U.S. In addition, it is possible that others may independently develop substantially
equivalent intellectual property. If we do not effectively protect our intellectual property, our business could suffer.
Additionally, we have filed patent applications with respect to some of our technology in the U.S. Patent and Trademark Office
and patent offices outside the U.S. Patents may not be awarded with respect to these applications and even if such patents are
awarded, third parties may seek to oppose or otherwise challenge our patents, and such patents’ scope may differ significantly
from what was requested in the patent applications and may not provide us with sufficient protection of our intellectual
property. In the future, we may have to resort to litigation to enforce and protect our intellectual property rights, to protect our
trade secrets or to determine the validity and scope of the proprietary rights of others. This type of litigation is inherently
unpredictable and, regardless of its outcome, could result in substantial costs and diversion of management attention and
technical resources. Some of the software and protocols used in our business are based on standards set by standards setting
organizations such as the Internet Engineering Task Force. To the extent any of our patents are considered “standards essential
patents,” we may be required to license such patents to our competitors on reasonable and non-discriminatory terms.

We also license externally developed technology that is used in some of our products and services to perform key
functions. These externally developed technology licenses may not continue to be available to us on commercially reasonable
terms or at all. The loss of or our inability to obtain or maintain any of these technology licenses could hinder or increase the
cost of our launching new products and services, entering into new markets and/or otherwise harm our business. Some of the
software and protocols used in our Registry Services business are in the public domain or may otherwise become publicly
available, which means that such software and protocols are equally available to our competitors.

We rely on the strength of our Verisign brand to help differentiate Verisign in the marketing of our products. Dilution of

the strength of our brand could harm our business. We are at risk that we will be unable to fully register, build equity in, or
enforce the Verisign logo in all markets where Verisign products and services are sold. In addition, in the U.S. and most other
countries, word marks solely for TLDs have currently not been successfully registered as trademarks. Accordingly, we may not
be able to fully realize or maintain the value of these intellectual property assets.

We could become subject to claims of infringement of intellectual property of others, which could be costly to defend

and could harm our business.

We cannot be certain that we do not and will not infringe the intellectual property rights of others. Claims relating to

infringement of intellectual property of others or other similar claims have been made against us in the past and could be made

against us in the future. It is possible that we could become subject to additional claims for infringement of the intellectual

property of other parties. The international use of our logo could present additional potential risks for external party claims of

infringement. Any claims, with or without merit, could be time consuming, result in costly litigation and diversion of technical

and management personnel attention, cause delays in our business activities generally, or require us to develop a non-infringing

logo or technology or enter into royalty or licensing agreements. Royalty or licensing agreements, if required, may not be

available on acceptable terms or at all. If a successful claim of infringement were made against us, we could be required to pay

damages or have portions of our business enjoined. If we could not identify and adopt an alternative non-infringing logo,

develop non-infringing technology or license the infringed or similar technology on a timely and cost-effective basis, our

business could be harmed.

An external party could claim that the technology we license from other parties infringes a patent or other proprietary

right. Litigation between the licensor and a third party or between us and a third party could lead to royalty obligations for

which we are not indemnified or for which indemnification is insufficient, or we may not be able to obtain any additional

license on commercially reasonable terms or at all.

In addition, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights in

internet-related businesses, including patents related to software and business methods, are uncertain and evolving. Because of

the growth of the internet and internet-related businesses, patent applications are continuously being filed in connection with

internet-related technology. There are a significant number of U.S. and foreign patents and patent applications in our areas of

interest, and we believe that there has been, and is likely to continue to be, significant litigation in the industry regarding patent

and other intellectual property rights.

We could become involved in claims, lawsuits, audits or investigations that may result in adverse outcomes.

In addition to possible intellectual property litigation and infringement claims, we are, and may in the future, become

involved in other claims, lawsuits, audits and investigations, including with respect to the RZMA. Such proceedings may

initially be viewed as immaterial but could prove to be material. Litigation is inherently unpredictable, and excessive verdicts

do occur. Adverse outcomes in lawsuits, audits and investigations could result in significant monetary damages, including

indemnification payments, or injunctive relief that could adversely affect our ability to conduct our business and may have a

material adverse effect on our financial condition, results of operations and cash flows. Given the inherent uncertainties in

litigation, even when we are able to reasonably estimate the amount of possible loss or range of loss and therefore record an

aggregate litigation accrual for probable and reasonably estimable loss contingencies, the accrual may change in the future due

to new developments or changes in approach. In addition, such claims, lawsuits, audits and investigations could involve

significant expense and diversion of management’s attention and resources from other matters.

We continue to explore new strategic initiatives, the pursuit of any of which may pose significant risks and could have a

material adverse effect on our business, financial condition and results of operations.

We explore possible strategic initiatives which may include, among other things, the investment in, and the pursuit of,

new revenue streams, services or products, changes to our offerings, initiatives to leverage our patent portfolio, our Security

Services business, back-end registry services and IDN gTLDs. In addition, we have evaluated and are pursuing and will

continue to evaluate and pursue acquisitions of TLDs that are currently in operation and those that have not yet been awarded

or delegated as long as they support our growth strategy.

Any such strategic initiative may involve a number of risks, including: the diversion of our management’s attention from

our existing business to develop the initiative, related operations and any requisite personnel; possible regulatory scrutiny or

third-party claims; possible material adverse effects on our results of operations during and after the development process; our

possible inability to achieve the intended objectives of the initiative; as well as damage to our reputation if we are unsuccessful

in pursuing a strategic initiative. Such initiatives may result in a reduction of cash or increased costs. We may not be able to

successfully or profitably develop, integrate, operate, maintain and manage any such initiative and the related operations or

employees in a timely manner or at all. Furthermore, under our agreements with ICANN, we are subject to certain restrictions

in the operation of .com, .net, .name and other TLDs, including required ICANN approval of new registry services for such

TLDs. If any new initiative requires ICANN review or ICANN determines that such a review is required, we cannot predict

whether this process will prevent us from implementing the initiative in a timely manner or at all. Any strategic initiative to

leverage our patent portfolio will likely increase litigation risks from potential licensees and we may have to resort to litigation

to enforce our intellectual property rights.

2017VERISIGN FORM 10-K

We could become subject to claims of infringement of intellectual property of others, which could be costly to defend
and could harm our business.

We cannot be certain that we do not and will not infringe the intellectual property rights of others. Claims relating to
infringement of intellectual property of others or other similar claims have been made against us in the past and could be made
against us in the future. It is possible that we could become subject to additional claims for infringement of the intellectual
property of other parties. The international use of our logo could present additional potential risks for external party claims of
infringement. Any claims, with or without merit, could be time consuming, result in costly litigation and diversion of technical
and management personnel attention, cause delays in our business activities generally, or require us to develop a non-infringing
logo or technology or enter into royalty or licensing agreements. Royalty or licensing agreements, if required, may not be
available on acceptable terms or at all. If a successful claim of infringement were made against us, we could be required to pay
damages or have portions of our business enjoined. If we could not identify and adopt an alternative non-infringing logo,
develop non-infringing technology or license the infringed or similar technology on a timely and cost-effective basis, our
business could be harmed.

An external party could claim that the technology we license from other parties infringes a patent or other proprietary

right. Litigation between the licensor and a third party or between us and a third party could lead to royalty obligations for
which we are not indemnified or for which indemnification is insufficient, or we may not be able to obtain any additional
license on commercially reasonable terms or at all.

In addition, legal standards relating to the validity, enforceability, and scope of protection of intellectual property rights in
internet-related businesses, including patents related to software and business methods, are uncertain and evolving. Because of
the growth of the internet and internet-related businesses, patent applications are continuously being filed in connection with
internet-related technology. There are a significant number of U.S. and foreign patents and patent applications in our areas of
interest, and we believe that there has been, and is likely to continue to be, significant litigation in the industry regarding patent
and other intellectual property rights.

We could become involved in claims, lawsuits, audits or investigations that may result in adverse outcomes.

In addition to possible intellectual property litigation and infringement claims, we are, and may in the future, become

involved in other claims, lawsuits, audits and investigations, including with respect to the RZMA. Such proceedings may
initially be viewed as immaterial but could prove to be material. Litigation is inherently unpredictable, and excessive verdicts
do occur. Adverse outcomes in lawsuits, audits and investigations could result in significant monetary damages, including
indemnification payments, or injunctive relief that could adversely affect our ability to conduct our business and may have a
material adverse effect on our financial condition, results of operations and cash flows. Given the inherent uncertainties in
litigation, even when we are able to reasonably estimate the amount of possible loss or range of loss and therefore record an
aggregate litigation accrual for probable and reasonably estimable loss contingencies, the accrual may change in the future due
to new developments or changes in approach. In addition, such claims, lawsuits, audits and investigations could involve
significant expense and diversion of management’s attention and resources from other matters.

We continue to explore new strategic initiatives, the pursuit of any of which may pose significant risks and could have a
material adverse effect on our business, financial condition and results of operations.

We explore possible strategic initiatives which may include, among other things, the investment in, and the pursuit of,
new revenue streams, services or products, changes to our offerings, initiatives to leverage our patent portfolio, our Security
Services business, back-end registry services and IDN gTLDs. In addition, we have evaluated and are pursuing and will
continue to evaluate and pursue acquisitions of TLDs that are currently in operation and those that have not yet been awarded
or delegated as long as they support our growth strategy.

Any such strategic initiative may involve a number of risks, including: the diversion of our management’s attention from

our existing business to develop the initiative, related operations and any requisite personnel; possible regulatory scrutiny or
third-party claims; possible material adverse effects on our results of operations during and after the development process; our
possible inability to achieve the intended objectives of the initiative; as well as damage to our reputation if we are unsuccessful
in pursuing a strategic initiative. Such initiatives may result in a reduction of cash or increased costs. We may not be able to
successfully or profitably develop, integrate, operate, maintain and manage any such initiative and the related operations or
employees in a timely manner or at all. Furthermore, under our agreements with ICANN, we are subject to certain restrictions
in the operation of .com, .net, .name and other TLDs, including required ICANN approval of new registry services for such
TLDs. If any new initiative requires ICANN review or ICANN determines that such a review is required, we cannot predict
whether this process will prevent us from implementing the initiative in a timely manner or at all. Any strategic initiative to
leverage our patent portfolio will likely increase litigation risks from potential licensees and we may have to resort to litigation
to enforce our intellectual property rights.

2017VERISIGN FORM 10-KWe depend on key employees to manage our business effectively, and we may face difficulty attracting and retaining
qualified leaders.

We operate in a unique competitive and highly regulated environment, and we depend on the knowledge, experience, and
performance of our senior management team and other key employees in this regard and otherwise. We periodically experience
changes in our management team. If we are unable to attract, integrate, retain and motivate these key individuals and additional
highly skilled technical, sales and marketing, and other experienced employees, and implement succession plans for these
personnel, our business may suffer. For example, our service products are highly technical and require individuals skilled and
knowledgeable in unique platforms, operating systems and software development tools.

Changes in, or interpretations of, tax rules and regulations or our tax positions may adversely affect our income taxes.

We are subject to income taxes in both the U.S. and numerous foreign jurisdictions. Significant judgment is required in
determining our worldwide provision for income taxes. In the ordinary course of our business, there are many transactions and
calculations where the ultimate tax determination is uncertain. Our effective tax rates may fluctuate significantly on a quarterly
basis because of a variety of factors, including changes in the mix of earnings and losses in countries with differing statutory
tax rates, changes in our business or structure, or the expiration of or disputes about certain tax agreements in a particular
country. We are subject to audit by various tax authorities. In accordance with U.S. GAAP, we recognize income tax benefits,
net of required valuation allowances and accrual for uncertain tax positions. For example, we claimed a worthless stock
deduction on our 2013 federal income tax return and recorded a net income tax benefit of $380.1 million. Although we believe
our tax estimates are reasonable, the final determination of tax audits and any related litigation could be materially different
than that which is reflected in historical income tax provisions and accruals. Should additional taxes be assessed as a result of
an audit or litigation, an adverse effect on our results of operations, financial condition and cash flows in the period or periods
for which that determination is made could result.

The Tax Cuts and Jobs Act (“Tax Act”) was enacted on December 22, 2017. The Tax Act significantly revamped U.S.

taxation of corporations, including a reduction of the federal income tax rate from 35% to 21%, a limitation on interest
deductibility, and a new tax regime for foreign earnings. The limitation on interest deductibility, the new U.S. taxes on
accumulated and future foreign earnings, other adverse changes resulting from the Tax Act, or a change in the mix of domestic
and foreign earnings, might offset the benefit from the reduced tax rate, and our future effective tax rates and/or cash taxes may
increase, even significantly, or not decrease much, compared to recent or historical trends. Many of the provisions of the Tax
Act are highly complex and may be subject to further interpretive guidance from the IRS or others. Some of the provisions of
the Tax Act may be changed by a future Congress or challenged by the World Trade Organization (“WTO”) or be subject to
trade or tax retaliation by other countries. Although we cannot predict the nature or outcome of such future interpretive
guidance, or actions by a future Congress, WTO or other countries, they could adversely impact our financial condition, results
of operations and cash flows. We might also reassess our capital structure, including the amount and composition of our total
indebtedness, as a result of the lower tax rate and the limitation on interest deductibility, which could adversely impact our
financial condition, results of operations and cash flows. Income tax expense on accumulated foreign earnings recorded as a
result of the Tax Act is a provisional amount and reflects our current best estimate, which may be adjusted over the course of
2018 and materially impact our results of operations.

Our marketable securities portfolio could experience a decline in market value, which could materially and adversely
affect our financial results.

As of December 31, 2017, we had $2.4 billion in cash, cash equivalents, marketable securities and restricted cash, of
which $1.9 billion was invested in marketable securities. The marketable securities consist primarily of debt securities issued by
the U.S. Treasury meeting the criteria of our investment policy, which is focused on the preservation of our capital through the
investment in investment grade securities. We currently do not use derivative financial instruments to adjust our investment
portfolio risk or income profile.

These investments, as well as any cash deposited in bank accounts, are subject to general credit, liquidity, market and
interest rate risks, which may be exacerbated by financial market credit and liquidity events. If the global credit or liquidity
market deteriorates or other events negatively impact the market for U.S. Treasury securities, our investment portfolio may be
impacted and we could determine that some of our investments have experienced an other-than-temporary decline in fair value,
requiring an impairment charge which could adversely impact our results of operations and cash flows.

2017VERISIGN FORM 10-KWe are subject to the risks of owning real property.

We own the land and building in Reston, Virginia, which constitutes our headquarters facility. Ownership of this property,

as well as our data centers in Dulles, Virginia and New Castle, Delaware, may subject us to risks, including:

•

adverse changes in the value of the properties, due to interest rate changes, changes in the commercial property
markets, easements or other encumbrances, a government exercising its right of eminent domain, or other factors;

ongoing maintenance expenses and costs of improvements;

the possible need for structural improvements in order to comply with environmental, health and safety, zoning,
seismic, disability law, or other requirements;

the possibility of environmental contamination or notices of violation from federal or state environmental agencies;
and

possible disputes with neighboring owners, tenants, service providers or others.

We have anti-takeover protections that may discourage, delay or prevent a change in control that could benefit our
stockholders.

Our amended and restated Certificate of Incorporation and Bylaws contain provisions that could make it more difficult for

an outside party to acquire us without the consent of our Board of Directors (“Board”). These provisions include:

•

our stockholders may take action only at a duly called meeting and not by written consent;

special meetings of our stockholders may be called only by the chairman of the board of directors, the president, our
Board, or the secretary (acting as a representative of the stockholders) whenever a stockholder or group of
stockholders owning at least twenty-five percent (25%) in the aggregate of the capital stock issued, outstanding and
entitled to vote, and who held that amount in a net long position continuously for at least one year, so request in
writing;

vacancies on our Board can be filled until the next annual meeting of stockholders by a majority of directors then in
office; and

our Board has the ability to designate the terms of and issue new series of preferred stock without stockholder
approval.

In addition, Section 203 of the General Corporation Law of Delaware prohibits a publicly held Delaware corporation from
engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns or
within the last three years has owned 15% or more of our voting stock, for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless in the same transaction the interested stockholder
acquired 85% ownership of our voting stock (excluding certain shares) or the business combination is approved in a prescribed
manner. Section 203 therefore may impact the ability of an acquirer to complete an acquisition of us after a successful tender
offer and accordingly could discourage, delay or prevent an acquirer from making an unsolicited offer without the approval of
our Board.

We have a considerable number of common shares subject to future issuance.

As of December 31, 2017, we had one billion authorized common shares, of which 97.6 million shares were outstanding.
In addition, of our authorized common shares, 14.0 million common shares were reserved for issuance pursuant to outstanding
equity and employee stock purchase plans (“Equity Plans”), and 36.4 million shares were reserved for issuance upon
conversion of our 3.25% Junior Subordinated Convertible Debentures due 2037 (“Subordinated Convertible Debentures”). As a
result, we keep substantial amounts of our common stock available for issuance upon exercise or settlement of equity awards
outstanding under our Equity Plans and/or the conversion of Subordinated Convertible Debentures into our common stock. In
February 2018, we called for the redemption of all the outstanding Subordinated Convertible Debentures. The debentures will
be redeemed on May 1, 2018 and may be converted at any time before the close of business on Monday, April 30, 2018. If
holders elect to convert their debentures, we intend to settle the $1.25 billion principal value in cash, and the excess value will
be settled through the issuance of shares of Verisign’s stock. Issuance of shares to settle the Subordinated Convertible
Debentures or under our Equity Plans would be dilutive to existing security holders, could adversely affect the prevailing
market price of our common stock and could impair our ability to raise additional capital through the sale of equity securities.

2017VERISIGN FORM 10-KOur financial condition and results of operations could be adversely affected if we do not effectively manage our
indebtedness.

We have a significant amount of outstanding debt, and we may incur additional indebtedness in the future. Our substantial

indebtedness, including any future indebtedness, requires us to dedicate a significant portion of our cash flow from operations
or to arrange alternative liquidity sources to make principal and interest payments, when due, or to repurchase or settle our debt,
if triggered, by certain corporate events, certain events of default, or conversion. It could also limit our flexibility in planning
for or reacting to changes in our business and our industry, or make required capital expenditures and investments in our
business; make it difficult or more expensive to refinance our debt or obtain new debt; trigger an event of default; and increase
our vulnerability to adverse changes in general economic and industry conditions. Some of our debt contains covenants which
may limit our operating flexibility, including restrictions on share repurchases, dividends, prepayment or repurchase of debt,
acquisitions, disposing of assets, if we do not continue to meet certain financial ratios. Any rating assigned to our debt securities
could be lowered or withdrawn by a rating agency, which could make it more difficult or more expensive for us to obtain
additional debt financing in the future. The occurrence of any of the foregoing factors could have a material adverse effect on
our business, cash flows, results of operations and financial condition.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

2017VERISIGN FORM 10-KITEM 2.

PROPERTIES

Our corporate headquarters are located in Reston, Virginia. We have administrative, sales, marketing, research and

development and operations facilities located in the U.S., Europe, Asia, and Australia. As of December 31, 2017, we owned
approximately 454,000 square feet of space, which includes facilities in Reston and Dulles, Virginia and New Castle, Delaware.
As of December 31, 2017, we leased approximately 17,000 square feet of space in Europe, Australia and Asia. These facilities
are under lease agreements that expire at various dates through 2022.

We believe that our existing facilities are well maintained and in good operating condition, and are sufficient for our

needs for the foreseeable future. The following table lists our major locations and primary use as of December 31, 2017:

Major Locations

United States:

Approximate
Square Footage

Use

Reston, Virginia ...........................................................

221,000 Corporate Headquarters

New Castle, Delaware .................................................

105,000 Data Center

Dulles, Virginia............................................................

60,000 Data Center

Europe:

Fribourg, Switzerland ..................................................

10,000 Data Center and Corporate Services

The table above does not include approximately 68,000 square feet of space owned by us and leased to third parties.

ITEM 3.

LEGAL PROCEEDINGS

On January 18, 2017, the Company received a Civil Investigative Demand from the Antitrust Division of the United

States Department of Justice (“DOJ”) requesting certain material related to the Company becoming the registry operator for
the .web gTLD. On January 9, 2018, the DOJ notified the Company that this investigation was closed.

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

2017VERISIGN FORM 10-KEXECUTIVE OFFICERS OF THE REGISTRANT

The following table sets forth information regarding our executive officers as of February 16, 2018:

Name
D. James Bidzos........................................................

Age

Position

62 Executive Chairman, President and Chief Executive Officer

Todd B. Strubbe ........................................................

54 Executive Vice President, Chief Operating Officer

George E. Kilguss, III ...............................................

57 Executive Vice President, Chief Financial Officer

Thomas C. Indelicarto ...............................................

54 Executive Vice President, General Counsel and Secretary

D. James Bidzos has served as Executive Chairman since August 2009 and President and Chief Executive Officer since

August 2011. He served as Executive Chairman and Chief Executive Officer on an interim basis from June 2008 to August
2009 and served as President from June 2008 to January 2009. He served as Chairman of the Board since August 2007 and
from April 1995 to December 2001. He served as Vice Chairman of the Board from December 2001 to August 2007.
Mr. Bidzos served as a director of VeriSign Japan from March 2008 to August 2010 and served as Representative Director of
VeriSign Japan from March 2008 to September 2008. Mr. Bidzos served as Vice Chairman of RSA Security Inc., an Internet
identity and access management solution provider, from March 1999 to May 2002, and Executive Vice President from July
1996 to February 1999. Prior thereto, he served as President and Chief Executive Officer of RSA Data Security, Inc. from 1986
to February 1999.

Todd B. Strubbe has served as Chief Operating Officer since April 2015. From September 2009 to April 2015, he served

as the President of the Unified Communications Business Segment for West Corporation, a provider of technology-driven
communications services. Prior to this, he was a co-founder and Managing Partner of Arbor Capital, LLC. He has also served
in executive leadership positions at First Data Corporation and CompuBank, N.A. and as an associate and then as an
engagement manager with McKinsey & Company, Inc. He also served for five years as an infantry officer with the United
States Army. Mr. Strubbe holds an M.B.A. degree from Harvard Business School and a B.S. degree from the United States
Military Academy at West Point.

George E. Kilguss, III has served as Chief Financial Officer since May 2012. From April 2008 to May 2012, he was the

Chief Financial Officer of Internap Network Services Corporation, an IT infrastructure solutions company. From December
2003 to December 2007, he served as the Chief Financial Officer of Towerstream Corporation, a company that delivers high
speed wireless Internet access to businesses. Mr. Kilguss holds an M.B.A. degree from the University of Chicago’s Graduate
School of Business and a B.S. degree in Economics and Finance from the University of Hartford.

Thomas C. Indelicarto has served as General Counsel and Secretary since November 2014. From September 2008 to
November 2014, he served as Vice President and Associate General Counsel. From January 2006 to September 2008, he served
as Litigation Counsel. Prior to joining the Company, Mr. Indelicarto was in private practice as an associate at Arnold & Porter
LLP and Buchanan Ingersoll (now, Buchanan Ingersoll & Rooney, PC). Mr. Indelicarto also served as a U.S. Army officer for
nine years. Mr. Indelicarto holds a J.D. degree from the University of Pittsburgh School of Law and a B.S. degree from Indiana
University of Pennsylvania.

2017VERISIGN FORM 10-KPART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND

ISSUER PURCHASES OF EQUITY SECURITIES

Price Range of Common Stock

Our common stock is traded on the NASDAQ Global Select Market under the symbol “VRSN.” The following table sets

forth, for the periods indicated, the high and low sales prices per share for our common stock as reported by the NASDAQ
Global Select Market:

Price Range

High

Low

Year ended December 31, 2017:

Fourth Quarter ..................................................................................................................................... $ 118.28 $ 106.17
92.91
Third Quarter ....................................................................................................................................... $ 106.81 $
87.01
Second Quarter .................................................................................................................................... $ 94.93 $
76.45
First Quarter ......................................................................................................................................... $ 88.08 $

Year ended December 31, 2016:

Fourth Quarter ..................................................................................................................................... $ 86.98 $
Third Quarter ....................................................................................................................................... $ 87.19 $
Second Quarter .................................................................................................................................... $ 91.99 $
First Quarter ......................................................................................................................................... $ 90.61 $

74.46
74.01
80.47
70.26

On February 9, 2018, there were 426 holders of record of our common stock. We cannot estimate the number of

beneficial owners since many brokers and other institutions hold our stock on behalf of stockholders. On February 9, 2018, the
reported last sale price of our common stock was $109.09 per share as reported by the NASDAQ Global Select Market.

We have not declared or paid any cash dividends on our common stock or any other securities in the last six years. We

continually evaluate the overall cash and investing needs of the business and consider the best uses for our cash, including
investments in the strengthening of our infrastructure and growth opportunities for our business, as well as potential share
repurchases.

For information regarding securities authorized for issuance under our equity compensation plans, see Note 8, “Employee

Benefits and Stock-based Compensation,” of our Notes to Consolidated Financial Statements in Item 15 of this Form 10-K.

Share Repurchases

The following table presents the share repurchase activity during the three months ended December 31, 2017:

October 1 – 31, 2017 ........................................................
November 1 – 30, 2017 ....................................................
December 1 – 31, 2017 .....................................................

Total Number
of Shares
Purchased

Average
Price Paid
per Share

Total Number
of Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs

Approximate
Dollar Value of
Shares That May
Yet Be Purchased
Under the Plans or
Programs (1)(2)

(Shares in thousands)

468
433
403
1,304

$108.28
$111.64
$114.32

468 $
433 $
403 $
1,304

571.8million
523.5million
477.4million

(1) Effective February 9, 2017, our Board authorized the repurchase of approximately $640.9 million of our common stock, in addition to the $359.1 million
of our common stock remaining available for repurchase under the previous share repurchase program, for a total repurchase authorization of up to $1.0
billion of our common stock.

(2) Effective February 8, 2018, our Board authorized the repurchase of approximately $585.8 million of our common stock, in addition to the $414.2 million
of our common stock remaining available for repurchase under the previous share repurchase program, for a total repurchase authorization of up to $1.0
billion of our common stock. The share repurchase program has no expiration date. Purchases made under the program could be effected through open
market transactions, block purchases, accelerated share repurchase agreements or other negotiated transactions.

2017VERISIGN FORM 10-K

Performance Graph

The information contained in the Performance Graph shall not be deemed to be “soliciting material” or “filed” with the

SEC or subject to the liabilities of Section 18 of the Exchange Act, except to the extent that we specifically incorporate it by
reference into a document filed under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.

The following graph compares the cumulative total stockholder return on our common stock, the Standard and Poor’s
(“S&P”) 500 Index, and the S&P 500 Information Technology Index. The graph assumes that $100 (and the reinvestment of
any dividends thereafter) was invested in our common stock, the S&P 500 Index and the S&P 500 Information Technology
Index on December 31, 2012, and calculates the return annually through December 31, 2017. The stock price performance on
the following graph is not necessarily indicative of future stock price performance.

VeriSign, Inc ............................................................................. $
S&P 500 Index ......................................................................... $
S&P 500 Information Technology Index .................................. $

100 $
100 $
100 $

154 $
132 $
128 $

147 $
150 $
154 $

225 $
153 $
163 $

196 $
171 $
186 $

12/31/12

12/31/13

12/31/14

12/31/15

12/31/16

12/31/17
295
208
258

2017VERISIGN FORM 10-K

ITEM 6.

SELECTED FINANCIAL DATA

The following table sets forth selected financial data as of and for the last five fiscal years. The information set forth

below is not necessarily indicative of results of future operations, and should be read in conjunction with Item 7,
“Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and our Notes to Consolidated
Financial Statements in Item 15 of this Form 10-K, to fully understand factors that may affect the comparability of the
information presented below.

Selected Consolidated Statements of Comprehensive Income Data: (in millions, except per share data)

Year Ended December 31,

2017

2016

2015

2014

2013 (1)

Revenues ........................................................................................ $
Operating income ........................................................................... $
Income from continuing operations ............................................... $
Income from continuing operations per share: ...............................

1,165 $
708 $
457 $

1,142 $
687 $
441 $

1,059 $
606 $
375 $

1,010 $
564 $
355 $

Basic ............................................................................................ $
Diluted ......................................................................................... $

4.56 $
3.68 $

4.12 $
3.42 $

3.29 $
2.82 $

2.80 $
2.52 $

965
528
544

3.77
3.49

———————

(1)

Income from continuing operations for 2013 includes a $375.3 million income tax benefit related to a worthless stock deduction, net of valuation
allowances, and accrual for uncertain tax positions, partially offset by $167.1 million of income tax expense related to the repatriation of cash held by
foreign subsidiaries.

Consolidated Balance Sheet Data: (in millions)

As of December 31,

2017

2016

2015

2014

2013

Cash, cash equivalents and marketable securities (1)..................... $
Total assets (1)................................................................................ $
Deferred revenues .......................................................................... $
Subordinated Convertible Debentures, including contingent
interest derivative ........................................................................... $
Long-term debt (1) ......................................................................... $
——————

2,415 $
2,941 $
999 $

1,798 $
2,335 $
976 $

1,915 $
2,358 $
961 $

1,425 $
1,901 $
890 $

628 $
1,783 $

630 $
1,237 $

634
$
1,235 $

621 $
740 $

1,723
2,249
856

613
739

(1) The increase in Long-term debt from 2016 to 2017 was due to the issuance of $550.0 million aggregate principal amount of 4.75% senior unsecured notes
due 2027. The increase in Long-term debt from 2014 to 2015 was due to the issuance of $500.0 million aggregate principal amount of 5.25% senior
unsecured notes due 2025. The proceeds from these senior notes issuances resulted in the increase in cash, cash equivalents and marketable securities as
well as total assets in the same periods.

2017VERISIGN FORM 10-K

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS

FORWARD-LOOKING STATEMENTS

This Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act and

Section 21E of the Exchange Act. These forward-looking statements involve risks and uncertainties, including, among other
things, statements regarding our anticipated costs and expenses and revenue mix. Forward-looking statements include, among
others, those statements including the words “expects,” “anticipates,” “intends,” “believes” and similar language. Our actual
results may differ significantly from those projected in the forward-looking statements. Factors that might cause or contribute to
such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in Part I, Item 1A of this Form
10-K. You are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date of this
Form 10-K. We undertake no obligation to publicly release any revisions to the forward-looking statements or reflect events or
circumstances after the date of this document.

Overview

We are a global provider of domain name registry services and internet security, enabling internet navigation for many of

the world’s most recognized domain names and providing protection for websites and enterprises around the world. Our
Registry Services ensure the security, stability and resiliency of key internet infrastructure and services, including
the .com and .net domains, two of the internet’s root servers, and the operation of the root zone maintainer function for the core
of the internet’s DNS. Our product suite also includes Security Services, consisting of DDoS Protection Services, and Managed
DNS Services. Revenues from Security Services are not significant in relation to our consolidated revenues. On April 1, 2017,
we completed the sale of our iDefense business.

As of December 31, 2017, we had approximately 146.4 million .com and .net registrations in the domain name base. The
number of domain names registered is largely driven by continued growth in online advertising, e-commerce, and the number
of internet users, which is partially driven by greater availability of internet access, as well as marketing activities carried out by
us and third-party registrars. Growth in the number of domain name registrations under our management may be hindered by
certain factors, including overall economic conditions, competition from ccTLDs, the introduction of new gTLDs, and ongoing
changes in the internet practices and behaviors of consumers and businesses. Factors such as the evolving practices and
preferences of internet users, and how they navigate the internet, as well as the motivation of domain name registrants and how
they will manage their investment in domain names, can negatively impact our business and the demand for new domain name
registrations and renewals.

2017 Business Highlights and Trends

•

We recorded revenues of $1,165.1 million in 2017, which represents an increase of 2% compared to 2016.

We recorded operating income of $707.7 million during 2017, which represents an increase of 3% as compared to
2016.

We finished 2017 with 146.4 million .com and .net registrations in the domain name base, which represents a 3%
increase from December 31, 2016.

The final .com and .net renewal rate for the third quarter of 2017 was 74.4% compared with 73.0% for the same
quarter in 2016. Renewal rates are not fully measurable until 45 days after the end of the quarter.

We repurchased 6.3 million shares of our common stock for an aggregate cost of $592.7 million in 2017. As of
December 31, 2017, there was $477.4 million remaining for future share repurchases under the share repurchase
program.

Through February 8, 2018, we repurchased an additional 0.6 million shares for $63.2 million under our share
repurchase program. Effective February 8, 2018, our Board authorized the repurchase of approximately $585.8
million of our common stock, in addition to the $414.2 million of our common stock remaining available for
repurchase under the previous share repurchase program, for a total repurchase authorization of up to $1.0 billion
of our common stock.

We generated cash flows from operating activities of $702.8 million in 2017, which represents an increase of 1%
as compared to 2016.

On April 1, 2017, we completed the sale of our iDefense business, which resulted in a pre-tax gain of
approximately $10.4 million.

2017VERISIGN FORM 10-K•

•

On June 28, 2017, we entered into a renewal of the .net Registry Agreement with ICANN, pursuant to which we
will remain the sole registry operator of the .net TLD through June 30, 2023.

On July 5, 2017, we issued $550.0 million of 4.75% Senior Notes due July 15, 2027. The proceeds are being used
for general corporate purposes, including, but not limited to, the repurchase of shares under our share repurchase
program.

We increased the annual fee for a .net domain name registration from $8.20 to $9.02, effective February 1, 2018.

Critical Accounting Policies and Significant Management Estimates

The discussion and analysis of our financial condition and results of operations are based upon our Consolidated
Financial Statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The
preparation of these financial statements requires management to make estimates and judgments that affect the reported
amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. On an ongoing
basis, management evaluates those estimates. Management bases its estimates on historical experience and on various
assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily available from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

An accounting estimate is considered critical if the nature of the estimates or assumptions is material due to the levels of

subjectivity and judgment involved, and the impact of changes in the estimates and assumptions would have a material effect
on the consolidated financial statements. We believe the following critical accounting estimates and policies have the most
significant impact on our consolidated financial statements:

Revenue recognition

We generate revenues by providing services over a period of time. Fees for these services are deferred and recognized as

performance occurs. The majority of our revenue transactions contain standard business terms and conditions. However, at
times, we enter into non-standard arrangements including multiple-element arrangements. As a result, we must evaluate
(1) whether an arrangement exists; (2) how the arrangement consideration should be allocated among the deliverables; (3) when
to recognize revenue on the deliverables; and (4) whether all elements of the arrangement have been delivered. Our revenue
recognition policy also requires an assessment as to whether collection is reasonably assured, which requires us to evaluate the
creditworthiness of our customers. As discussed in Note 1, “Description of Business and Summary of Significant Accounting
Policies” of our Notes to Consolidated Financial Statements in Item 15 of this Form 10-K, the adoption of the new revenue
guidance in Accounting Standards Codification 606 Revenue from Contracts with Customers, is not expected to have a material
impact on our revenue recognition when it becomes effective in 2018.

Income taxes

Accounting for income taxes requires significant judgments in the development of estimates used in income tax
calculations. Such judgments include, but are not limited to, the likelihood we would realize the benefits of carryforwards from
net operating losses (“NOLs”), capital losses, domestic and/or foreign tax credits, the adequacy of valuation allowances, and the
rates used to measure transactions with foreign subsidiaries. To the extent recovery of deferred tax assets is not likely, we record
a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized.

Our operations involve dealing with uncertainties and judgments in the application of complex tax regulations in
multiple jurisdictions. The final taxes payable are dependent upon many factors, including negotiations with taxing authorities
in various jurisdictions and resolution of disputes arising from U.S. federal, state, and international tax audits. We only
recognize or continue to only recognize tax positions that are more likely than not to be sustained upon examination. We adjust
these amounts in light of changing facts and circumstances; however, due to the complexity of some of these uncertainties, the
ultimate resolution may result in a payment that is materially different from our current estimate of the tax liabilities.

Due to the enactment of the Tax Act, we no longer intend to indefinitely reinvest the earnings of our foreign subsidiaries.

For further discussion of this change, see Note 10, “Income taxes” of our Notes to Consolidated Financial Statements in Item
15 of this Form 10-K.

Earnings per Share

We use the treasury stock method to calculate the impact of our Subordinated Convertible Debentures on diluted earnings
per share. Under this method, only a positive conversion spread related to the Subordinated Convertible Debentures is included
in the diluted earnings per share calculations. This is based on our intent and ability to settle the principal amount of the
Subordinated Convertible Debentures in cash. A change in our intent and ability would require us to use the if-converted
method, which could have a material impact on our diluted earnings per share.

2017VERISIGN FORM 10-KResults of Operations

The following table presents information regarding our results of operations as a percentage of revenues:

Year Ended December 31,

2017

2016

2015

Revenues ...................................................................................................................

100.0%

Costs and expenses:

Cost of revenues.................................................................................................

Sales and marketing ...........................................................................................

Research and development.................................................................................

General and administrative.................................................................................

Total costs and expenses .............................................................................

Operating income ......................................................................................................
Interest expense .........................................................................................................

Non-operating income (loss), net ..............................................................................

Income before income taxes......................................................................................
Income tax expense ...................................................................................................

Net income ................................................................................................................

16.6

7.0

4.5

11.2

39.3

60.7

(11.7)

2.4

51.4

(12.2)

39.2%

17.4

7.0

5.2

10.3

39.9

60.1

(10.1)

0.9

50.9

(12.3)

38.6%

18.2

8.5

6.0

10.1

42.8

57.2

(10.2)

(1.0)

46.0

(10.6)

35.4%

Revenues
Revenues related to our Registry Services are primarily derived from registrations for domain names in

the .com and .net domain name registries. We also derive revenues from operating domain name registries for several other
TLDs and from providing back-end registry services to a number of TLD registry operators, all of which are not significant in
relation to our consolidated revenues. For domain names registered with the .com and .net registries we receive a fee from
registrars per annual registration that is fixed pursuant to our agreements with ICANN. Individual customers, called registrants,
contract directly with registrars or their resellers, and the registrars in turn register the domain names with Verisign. Changes in
revenues are driven largely by changes in the number of new domain name registrations and the renewal rate for existing
registrations as well as the impact of new and prior price increases, to the extent permitted by ICANN and the DOC. New
registrations and the renewal rate for existing registrations are impacted by continued growth in online advertising, e-
commerce, and the number of internet users, as well as marketing activities carried out by us and our registrar customers. We
increased the annual fee for a .net domain name registration from $6.79 to $7.46 on February 1, 2016, from $7.46 to $8.20 on
February 1, 2017, and from $8.20 to $9.02 on February 1, 2018. We have the contractual right to increase the fees
for .net domain name registrations by up to 10% each year during the term of our agreement with ICANN, through June 30,
2023. The annual fee for a .com domain name registration is $7.85 for the duration of the current .com Registry Agreement
through November 30, 2024, except that prices may be raised by up to 7% each year due to the imposition of any new
Consensus Policy or documented extraordinary expense resulting from an attack or threat of attack on the Security and Stability
(each as defined in the .com Registry Agreement) of the DNS, subject to approval of the DOC. We offer promotional marketing
programs for our registrars based upon market conditions and the business environment in which the registrars operate. All fees
paid to us for .com and .net registrations are in U.S. dollars. Revenues from Security Services are not significant in relation to
our total consolidated revenues.

A comparison of revenues is presented below:

Year Ended December 31,

2017

%
Change

2016

%
Change

2015

(Dollars in thousands)

Revenues............................................................................... $ 1,165,095

2% $ 1,142,167

8% $ 1,059,366

The following table compares the domain name base for .com and .net managed by our Registry Services business:

Domain name base for .com and .net ................................... 146.4 million

3% 142.2 million

2% 139.8 million

As of December 31,

2017

%
Change

2016

%
Change

2015

2017VERISIGN FORM 10-K2017 compared to 2016: Revenues increased by $22.9 million, primarily due to a 4% increase in the domain name base
for .com and increases in the .net domain name registration fees in February 2016 and 2017, partially offset by a 5% decline in
the domain name base for .net. Additionally, 2016 revenue was elevated due to an increased volume of new domain name
registrations primarily from our registrars in China during the second half of 2015 and the first quarter of 2016. The volume of
these new registrations was inconsistent and episodic compared to prior periods, and by the end of the first quarter of 2016,
reverted back to a more normalized registration pace. A significant portion of these registrations did not renew upon expiration.

2016 compared to 2015: Revenues increased by $82.8 million, primarily due to an increase in the average number of
domain names ending in .com and .net and increases in the .net domain name registration fees in February 2015 and 2016. The
increase in the average number of domain names ending in .com and .net was significantly impacted by the elevated volume of
registrations from our registrars in China discussed above.

Growth in the domain name base has been primarily driven by continued internet growth and marketing activities carried

out by us and our registrars. Competitive pressure from ccTLDs, the introduction of new gTLDs, ongoing changes in internet
practices and behaviors of consumers and business, as well as the motivation of existing domain name registrants and how they
will manage their investment in domain names, and historical global economic uncertainty, have limited the rate of growth of
the domain name base in recent years and may continue to do so in 2018 and beyond. We expect revenues will continue to
grow in 2018, as a result of the increased volume of domain registrations in 2017, continued growth in the domain name base in
2018, and increases in the .net domain name registration fees in February 2017 and 2018.

Geographic revenues

We generate revenue in the U.S.; Europe, the Middle East and Africa (“EMEA”); China; and certain other countries,

including Canada, Australia and Japan.

The following table presents a comparison of the Company’s geographic revenues:

Year Ended December 31,

2017

%
Change

2016

%
Change

2015

U.S ..................................................................................... $
EMEA ...............................................................................
China .................................................................................
Other ..................................................................................

694,759
211,349
106,526
152,461
Total revenues ................................................................. $ 1,165,095

(Dollars in thousands)
667,301
4 % $
207,474
2 %
127,298
(16)%
140,094
9 %
2 % $ 1,142,167

4 % $
639,170
7 %
193,623
53 %
83,456
143,117
(2)%
8 % $ 1,059,366

Revenues for our Registry Services business are attributed to the country of domicile and the respective regions in which

our registrars are located, however, this may differ from the regions where the registrars operate or where registrants are
located. Revenue growth for each region may be impacted by registrars reincorporating, relocating, or from acquisitions or
changes in affiliations of resellers. Revenue growth for each region may also be impacted by registrars domiciled in one region,
registering domain names in another region. These factors impacted revenues in China and the Other region during 2017.
Additionally, while revenues grew in the U.S., EMEA and Other regions during 2017, revenues from China decreased.
Revenues from China in 2016 benefited from the increased volume of registrations in the second half of 2015 and the first
quarter of 2016, as discussed earlier. However, a significant portion of those registrations did not renew, resulting in the decline
in revenues from China in 2017.

2017VERISIGN FORM 10-K

Cost of revenues

Cost of revenues consist primarily of salaries and employee benefits expenses for our personnel who manage the

operational systems, depreciation expenses, operational costs associated with the delivery of our services, fees paid to ICANN,
customer support and training, consulting and development services, costs of facilities and computer equipment used in these
activities, telecommunications expense and allocations of indirect costs such as corporate overhead.

A comparison of cost of revenues is presented below:

Year Ended December 31,

2017

%
Change

2016

%
Change

2015

Cost of revenues .............................................................. $

193,326

(Dollars in thousands)

(2)% $

198,242

3% $

192,788

2017 compared to 2016: Cost of revenues decreased by $4.9 million, primarily due to decreases in depreciation expenses

and salary and employee benefits expenses, partially offset by an increase in telecommunications expenses. Depreciation
expenses decreased by $5.3 million as a result of lower average hardware purchases over the last several years. Salary and
employee benefits expenses decreased by $3.1 million, primarily due to a reduction in average headcount related to the sale of
the iDefense business in April 2017, partially offset by increases in salary and employee benefits expenses for the remaining
employee base. Telecommunications expenses increased by $3.2 million as a result of an increase in network costs supporting
our operations.

2016 compared to 2015: Cost of revenues increased by $5.5 million, primarily due to increases in salary and employee
benefits expenses, and allocated overhead expenses, partially offset by a decrease in telecommunications expenses. Salary and
employee benefits expenses increased by $6.0 million, primarily due to an increase in average headcount and an increase in
bonus expenses. Allocated overhead expenses increased by $1.5 million as a result of an increase in average headcount
compared to other cost types. Telecommunications expenses decreased by $1.9 million, primarily due to savings on renewals of
colocation agreements.

We expect cost of revenues as a percentage of revenues to decrease slightly in 2018 as compared to 2017 as revenue is

expected to grow faster than direct costs.

Sales and marketing

Sales and marketing expenses consist primarily of salaries, sales commissions, sales operations and other personnel-

related expenses, travel and related expenses, trade shows, costs of lead generation, costs of computer and communications
equipment and support services, facilities costs, consulting fees, costs of marketing programs, such as online, television, radio,
print and direct mail advertising costs, and allocations of indirect costs such as corporate overhead.

A comparison of sales and marketing expenses is presented below:

General and administrative ..................................................... $

129,754

Year Ended December 31,

2017

%
Change

2016

%
Change

2015

Sales and marketing......................................................... $

81,951

(Dollars in thousands)

2% $

80,250

(11)% $

90,184

2017 compared to 2016: Sales and marketing expenses increased by $1.7 million, primarily due to an increase in
advertising and marketing expenses, partially offset by a decrease in salary and employee benefits expenses. Advertising and
marketing expenses increased by $7.0 million, primarily due to increases in costs related to certain marketing campaigns
supporting our Registry Services business. Salary and employee benefits expenses decreased by $4.2 million due to a reduction
in average headcount.

2016 compared to 2015: Sales and marketing expenses decreased by $9.9 million, primarily due to decreases in

advertising and consulting expenses, salary and employee benefits expenses, stock-based compensation expenses, and allocated
overhead expenses. Advertising and consulting expenses decreased by $3.7 million, primarily due to a decrease in marketing
activities and advertising agency costs. Salary and employee benefits expenses, including stock-based compensation expenses,
decreased by $2.9 million due to a reduction in average headcount. Allocated overhead expenses decreased by $1.4 million due
to the decrease in average headcount relative to other cost types.

We expect sales and marketing expenses as a percentage of revenues to remain consistent in 2018 as compared to 2017.

Research and development

Research and development expenses consist primarily of costs related to research and development personnel, including

salaries and other personnel-related expenses, consulting fees, facilities costs, computer and communications equipment,

support services used in our service and technology development, and allocations of indirect costs such as corporate overhead.

A comparison of research and development expenses is presented below:

Year Ended December 31,

2017

Change

2016

Change

2015

(Dollars in thousands)

Research and development .............................................. $

52,342

(11)% $

59,100

(7)% $

63,718

2017 compared to 2016: Research and development expenses decreased by $6.8 million, primarily due to a decrease in

salary and employee benefits expenses as a result of a reduction in average headcount.

2016 compared to 2015: Research and development expenses decreased by $4.6 million, primarily due to decreases in

salary and employee benefits expenses, and allocated overhead costs, partially offset by a decrease in capitalized labor. Salary

and employee benefits expenses, allocated overhead expenses, and capitalized labor decreased by $2.4 million, $1.7 million,

and $1.5 million, respectively, due to a reduction in average headcount.

We expect research and development expenses as a percentage of revenues to remain consistent in 2018 as compared to

2017.

General and administrative

General and administrative expenses consist primarily of salaries and other personnel-related expenses for our executive,

administrative, legal, finance, information technology and human resources personnel, costs of facilities, computer and

communications equipment, management information systems, support services, professional services fees, certain tax and

license fees, and bad debt expense, offset by allocations of indirect costs such as facilities and shared services expenses to other

cost types.

A comparison of general and administrative expenses is presented below:

Year Ended December 31,

2017

Change

2016

Change

2015

(Dollars in thousands)

10% $

118,003

11% $

106,730

2017 compared to 2016: General and administrative expenses increased by $11.8 million, primarily due to increases in

salary and employee benefits expenses, including stock-based compensation expenses, legal expenses, and a decrease in

overhead expenses allocated to other cost types, partially offset by a decrease in depreciation expenses. Salary and employee

benefits expenses, including stock-based compensation expenses, increased by $4.9 million due to an increase in average

headcount and higher projected achievement levels on certain performance-based restricted stock units (“RSU”) grants. Legal

expenses increased by $4.5 million primarily due to higher external legal fees. Overhead expenses allocated to other cost types

decreased by $2.5 million due to an increase in the average headcount relative other cost types. Depreciation expenses

decreased by $2.8 million as a result of a decrease in capital expenditures in recent years.

2017VERISIGN FORM 10-K

We expect sales and marketing expenses as a percentage of revenues to remain consistent in 2018 as compared to 2017.

Research and development

Research and development expenses consist primarily of costs related to research and development personnel, including

salaries and other personnel-related expenses, consulting fees, facilities costs, computer and communications equipment,
support services used in our service and technology development, and allocations of indirect costs such as corporate overhead.

A comparison of research and development expenses is presented below:

Year Ended December 31,

2017

%
Change

2016

%
Change

2015

(Dollars in thousands)

Research and development .............................................. $

52,342

(11)% $

59,100

(7)% $

63,718

2017 compared to 2016: Research and development expenses decreased by $6.8 million, primarily due to a decrease in

salary and employee benefits expenses as a result of a reduction in average headcount.

2016 compared to 2015: Research and development expenses decreased by $4.6 million, primarily due to decreases in

salary and employee benefits expenses, and allocated overhead costs, partially offset by a decrease in capitalized labor. Salary
and employee benefits expenses, allocated overhead expenses, and capitalized labor decreased by $2.4 million, $1.7 million,
and $1.5 million, respectively, due to a reduction in average headcount.

We expect research and development expenses as a percentage of revenues to remain consistent in 2018 as compared to

2017.

General and administrative

General and administrative expenses consist primarily of salaries and other personnel-related expenses for our executive,

administrative, legal, finance, information technology and human resources personnel, costs of facilities, computer and
communications equipment, management information systems, support services, professional services fees, certain tax and
license fees, and bad debt expense, offset by allocations of indirect costs such as facilities and shared services expenses to other
cost types.

A comparison of general and administrative expenses is presented below:

General and administrative ..................................................... $

129,754

(Dollars in thousands)

10% $

118,003

11% $

106,730

Year Ended December 31,

2017

%
Change

2016

%
Change

2015

2017 compared to 2016: General and administrative expenses increased by $11.8 million, primarily due to increases in

salary and employee benefits expenses, including stock-based compensation expenses, legal expenses, and a decrease in
overhead expenses allocated to other cost types, partially offset by a decrease in depreciation expenses. Salary and employee
benefits expenses, including stock-based compensation expenses, increased by $4.9 million due to an increase in average
headcount and higher projected achievement levels on certain performance-based restricted stock units (“RSU”) grants. Legal
expenses increased by $4.5 million primarily due to higher external legal fees. Overhead expenses allocated to other cost types
decreased by $2.5 million due to an increase in the average headcount relative other cost types. Depreciation expenses
decreased by $2.8 million as a result of a decrease in capital expenditures in recent years.

2017VERISIGN FORM 10-K

2016 compared to 2015: General and administrative expenses increased by $11.3 million, primarily due to increases in

salary and employee benefits expenses, stock-based compensation expenses, legal expenses, and a decrease in overhead
expenses allocated to other cost types, partially offset by a decrease in depreciation expenses and certain non-income related
taxes. Salary and employee benefits expenses increased by $8.0 million due to increases in bonus expenses and average
headcount. Stock based compensation expenses increased by $4.5 million due to increases in the total value of RSUs granted in
2015 and 2016 and higher projected achievement levels on certain performance-based RSU grants. Legal expenses increased by
$2.6 million primarily due to an increase in services performed by external legal counsel. Overhead expenses allocated to other
cost types decreased by $1.6 million due to lower average headcount for other cost types. Depreciation expenses decreased by
$2.6 million as a result of a decrease in capital expenditures in recent years. We incurred $2.1 million of certain non-income
taxes in 2015, which did not recur in 2016.

We expect general and administrative expenses as a percentage of revenues to remain consistent in 2018 as compared to

2017.

Interest expense

See Note 4, “Debt and interest expense” of our Notes to Consolidated Financial Statements in Item 15 of this Form 10-K.

We expect interest expense to decrease in 2018 as compared to 2017 due to a decrease in interest expense related to the
Subordinated Convertible Debentures as we notified holders that the Subordinated Convertible Debentures will be redeemed on
May 1, 2018, partially offset by an increase related to the senior notes issued in July 2017.

Non-operating income (loss), net

See Note 9, “Non-operating income (loss), net” of our Notes to Consolidated Financial Statements in Item 15 of this

Form 10-K.

Income tax expense

Year Ended December 31,

2017

2016

2015

Income tax expense .......................................................................................... $ 141,764
Effective tax rate ...............................................................................................

(Dollars in thousands)
$ 140,528
$
24%

24%

112,414

23%

Our effective tax rate for each year presented was lower than the statutory federal rate of 35% primarily due to benefits

from foreign income taxed at lower rates, partially offset by state income taxes. Our effective tax rate for 2017 was also
impacted by the changes arising out of the enactment of the Tax Act in December 2017.

Due to the change in tax law, we will owe U.S. federal taxes on our accumulated and future foreign earnings and as a

result we no longer intend to indefinitely reinvest our foreign earnings. Our 2017 income tax expense includes a provisional
$162.4 million of expense related to the U.S. tax on accumulated foreign earnings and a provisional $33.6 million deferred tax
expense for foreign withholding tax on unremitted foreign earnings, both net of related, previously unrecognized foreign tax
credits. These tax expenses are offset by a tax benefit of $186.8 million related to the remeasurement of our net deferred tax
liabilities at the new U.S. federal corporate tax rate of 21% which became effective on January 1, 2018. We expect our
effective tax rate to decrease slightly in 2018 as a result of the impact of the Tax Act. For further discussion of the Tax Act, see
Note 10, “Income taxes” of our Notes to Consolidated Financial Statements in Item 15 of this Form 10-K.

As of December 31, 2017, we had deferred tax assets arising from deductible temporary differences, tax losses, and tax

credits of $202.6 million, net of valuation allowances, but before the offset of certain deferred tax liabilities. With the exception
of deferred tax assets related to capital loss and certain state NOL carryforwards, we believe it is more likely than not that the
tax effects of the deferred tax liabilities, together with future taxable income, will be sufficient to fully recover the remaining
deferred tax assets. Our deferred tax assets related to NOL carryforwards increased in 2017 due to the adoption of ASU No.
2016-09, Improvements to Employee Share-Based Payment Accounting, and the resulting recognition of $35.4 million of
previously unrecognized excess tax benefits from stock-based compensation. Total deferred tax assets decreased in 2017 due to
the usage of tax credit carryforwards to offset 2017 taxable income and the remeasurement of deferred tax assets due to the
reduction in the U.S. corporate tax rate.

We qualify for a tax holiday in Switzerland which does not expire, unless the required non-Swiss income and expense

thresholds are no longer met, or there is a law change which eliminates the holiday. The tax holiday provides reduced rates of
taxation on certain types of income and also requires certain thresholds of foreign source income. The tax holiday increased the
Company’s earnings per share by $0.10, $0.16, and $0.14 in 2017, 2016, and 2015, respectively.

Liquidity and Capital Resources

As of December 31,

2017

2016

(In thousands)

465,851 $

1,948,900

2,414,751 $

231,945

1,565,962

1,797,907

Cash and cash equivalents ......................................................................................................... $

Marketable securities ................................................................................................................

Total ................................................................................................................................... $

As of December 31, 2017, our principal source of liquidity was $465.9 million of cash and cash equivalents and $1.9

billion of marketable securities. The marketable securities consist primarily of debt securities issued by the U.S. Treasury

meeting the criteria of our investment policy, which is focused on the preservation of our capital through investment in

investment grade securities. The cash equivalents consist mainly of amounts invested in money market funds and U.S. Treasury

bills purchased with original maturities of less than 90 days. As of December 31, 2017, all of our debt securities have

contractual maturities of less than one year. Our cash and cash equivalents are readily accessible. For additional information on

our investment portfolio, see Note 2, “Fair Value of Financial Instruments,” of our Notes to Consolidated Financial Statements

in Item 15 of this Form 10-K.

As of December 31, 2017, the amount of cash and cash equivalents and marketable securities held by foreign subsidiaries

was $1.7 billion. As a result of the recent changes in U.S. tax laws, we no longer intend to indefinitely reinvest these funds

outside of the U.S. and accordingly, we recognized a provisional income tax expense of $162.4 million related to the U.S. tax

on our accumulated foreign earnings and a provisional $33.6 million related to withholding taxes on unremitted foreign

earnings. By early second quarter of 2018, we intend to repatriate approximately $1.1 billion of cash held by foreign

subsidiaries, net of withholding taxes, based on current exchange rates.

In 2017, we repurchased 6.3 million shares of our common stock at an average stock price of $94.59 for an aggregate cost

of $592.7 million under our share repurchase program. In 2016, we repurchased 7.8 million shares of our common stock at an

average stock price of $81.73 for an aggregate cost of $636.5 million. In 2015, we repurchased 9.3 million shares of our

common stock at an average stock price of $66.59 for an aggregate cost of $621.9 million. On February 8, 2018, our Board

authorized the repurchase of approximately $585.8 million of our common stock, in addition to the $414.2 million of our

common stock remaining available for repurchase under the previous share repurchase program, for a total repurchase

authorization of up to $1.0 billion of our common stock.

On July 5, 2017, we issued $550.0 million of 4.75% senior unsecured notes due July 15, 2027. The proceeds are being

used for general corporate purposes, including, but not limited to, the repurchase of shares under our share repurchase program.

As of December 31, 2017, we also had $500.0 million principal amount outstanding of the 5.25% senior unsecured notes due

2025 and $750.0 million principal amount outstanding of the 4.625% senior unsecured notes due 2023.

As of December 31, 2017, we have a $200.0 million unsecured revolving credit facility with no borrowings outstanding.

This facility will expire in 2020.

As of December 31, 2017, we had $1.25 billion principal amount outstanding of our Subordinated Convertible

Debentures. The price of our common stock exceeded the conversion price threshold trigger during the fourth quarter of 2017.

Accordingly, the Subordinated Convertible Debentures are convertible at the option of each holder through March 31, 2018.

We have historically derived significant tax savings from the Subordinated Convertible Debentures as the interest

deduction for tax purposes has exceeded the cash interest paid due to the structure of the debentures and the related tax laws.

During 2017 and 2016, the interest deduction, for income tax purposes, related to our Subordinated Convertible Debentures,

was $191.5 million and $183.7 million, respectively, compared to cash interest paid, including contingent interest, of $55.9

million and $54.0 million in 2017 and 2016, respectively. The size of the interest deduction for tax purposes resulted in a tax

benefit that exceeded the cash interest paid for the debentures in each of these years. However, as a result of the enactment of

the Tax Act, which includes limits on interest deductibility and a lower U.S. federal income tax rate, these tax savings are

expected to diminish in the future. Due to the diminished tax savings and several other factors, on February 15, 2018 we called

for the redemption of all the outstanding Subordinated Convertible Debentures, with a redemption date of May 1, 2018. If

holders elect to convert their debentures, we will settle the $1.25 billion principal amount in cash and settle the remaining value

through the issuance of shares of Verisign’s common stock. Based on the if-converted value of the Subordinated Convertible

Debentures as of December 31, 2017, the conversion spread would have required us to issue up to 25.4 million shares of

common stock.

2017VERISIGN FORM 10-K

Liquidity and Capital Resources

Cash and cash equivalents ......................................................................................................... $
Marketable securities ................................................................................................................

Total ................................................................................................................................... $

As of December 31,

2017

2016

(In thousands)

465,851 $

1,948,900
2,414,751 $

231,945
1,565,962
1,797,907

As of December 31, 2017, our principal source of liquidity was $465.9 million of cash and cash equivalents and $1.9

billion of marketable securities. The marketable securities consist primarily of debt securities issued by the U.S. Treasury
meeting the criteria of our investment policy, which is focused on the preservation of our capital through investment in
investment grade securities. The cash equivalents consist mainly of amounts invested in money market funds and U.S. Treasury
bills purchased with original maturities of less than 90 days. As of December 31, 2017, all of our debt securities have
contractual maturities of less than one year. Our cash and cash equivalents are readily accessible. For additional information on
our investment portfolio, see Note 2, “Fair Value of Financial Instruments,” of our Notes to Consolidated Financial Statements
in Item 15 of this Form 10-K.

As of December 31, 2017, the amount of cash and cash equivalents and marketable securities held by foreign subsidiaries

was $1.7 billion. As a result of the recent changes in U.S. tax laws, we no longer intend to indefinitely reinvest these funds
outside of the U.S. and accordingly, we recognized a provisional income tax expense of $162.4 million related to the U.S. tax
on our accumulated foreign earnings and a provisional $33.6 million related to withholding taxes on unremitted foreign
earnings. By early second quarter of 2018, we intend to repatriate approximately $1.1 billion of cash held by foreign
subsidiaries, net of withholding taxes, based on current exchange rates.

In 2017, we repurchased 6.3 million shares of our common stock at an average stock price of $94.59 for an aggregate cost
of $592.7 million under our share repurchase program. In 2016, we repurchased 7.8 million shares of our common stock at an
average stock price of $81.73 for an aggregate cost of $636.5 million. In 2015, we repurchased 9.3 million shares of our
common stock at an average stock price of $66.59 for an aggregate cost of $621.9 million. On February 8, 2018, our Board
authorized the repurchase of approximately $585.8 million of our common stock, in addition to the $414.2 million of our
common stock remaining available for repurchase under the previous share repurchase program, for a total repurchase
authorization of up to $1.0 billion of our common stock.

On July 5, 2017, we issued $550.0 million of 4.75% senior unsecured notes due July 15, 2027. The proceeds are being
used for general corporate purposes, including, but not limited to, the repurchase of shares under our share repurchase program.
As of December 31, 2017, we also had $500.0 million principal amount outstanding of the 5.25% senior unsecured notes due
2025 and $750.0 million principal amount outstanding of the 4.625% senior unsecured notes due 2023.

As of December 31, 2017, we have a $200.0 million unsecured revolving credit facility with no borrowings outstanding.

This facility will expire in 2020.

As of December 31, 2017, we had $1.25 billion principal amount outstanding of our Subordinated Convertible

Debentures. The price of our common stock exceeded the conversion price threshold trigger during the fourth quarter of 2017.
Accordingly, the Subordinated Convertible Debentures are convertible at the option of each holder through March 31, 2018.

We have historically derived significant tax savings from the Subordinated Convertible Debentures as the interest
deduction for tax purposes has exceeded the cash interest paid due to the structure of the debentures and the related tax laws.
During 2017 and 2016, the interest deduction, for income tax purposes, related to our Subordinated Convertible Debentures,
was $191.5 million and $183.7 million, respectively, compared to cash interest paid, including contingent interest, of $55.9
million and $54.0 million in 2017 and 2016, respectively. The size of the interest deduction for tax purposes resulted in a tax
benefit that exceeded the cash interest paid for the debentures in each of these years. However, as a result of the enactment of
the Tax Act, which includes limits on interest deductibility and a lower U.S. federal income tax rate, these tax savings are
expected to diminish in the future. Due to the diminished tax savings and several other factors, on February 15, 2018 we called
for the redemption of all the outstanding Subordinated Convertible Debentures, with a redemption date of May 1, 2018. If
holders elect to convert their debentures, we will settle the $1.25 billion principal amount in cash and settle the remaining value
through the issuance of shares of Verisign’s common stock. Based on the if-converted value of the Subordinated Convertible
Debentures as of December 31, 2017, the conversion spread would have required us to issue up to 25.4 million shares of
common stock.

2017VERISIGN FORM 10-K

We believe existing cash, cash equivalents and marketable securities, and funds generated from operations, together with

our ability to arrange for additional financing should be sufficient to meet our working capital, capital expenditure
requirements, and to service our debt for the next 12 months. We regularly assess our cash management approach and activities
in view of our current and potential future needs.

In summary, our cash flows for 2017, 2016, and 2015 were as follows:

Net cash provided by operating activities ...................................................... $
Net cash used in investing activities ..............................................................
Net cash used in financing activities .............................................................
Effect of exchange rate changes on cash and cash equivalents .....................

Net increase in cash and cash equivalents .............................................. $

Net cash provided by operating activities

Year Ended December 31,

2017

2016

2015

(In thousands)

702,761 $
(405,076)
(65,073)
1,294
233,906 $

693,007 $
(40,399)
(648,821)
(501)
3,286 $

669,946
(496,899)
(136,242)
246
37,051

Our largest source of operating cash flows is cash collections from our customers. Our primary uses of cash from
operating activities are for personnel related expenditures, and other general operating expenses, as well as payments related to
taxes, interest and facilities.

2017 compared to 2016: Cash provided by operating activities increased primarily due to increases in cash received from
customers and an increase in interest income, partially offset by increases in cash paid to suppliers and employees, cash paid for
income taxes, and cash paid for interest on our debt obligations. Cash received from customers increased primarily due to
higher .com domain name registrations and renewals and the increase in .net domain name registration fees in February 2017.
Cash received from interest income increased due to increases in interest rates and our investments in debt securities. Cash
paid to suppliers and employees increased primarily due to timing of certain vendor payments. Cash paid for income taxes
increased due to higher non-U.S. income tax payments. Cash paid for interest increased due to higher contingent interest related
to the Subordinated Convertible Debentures.

2016 compared to 2015: Cash provided by operating activities increased primarily due to an increase in cash received

from customers and a decrease in cash paid for income taxes, partially offset by an increase in cash paid for interest. Cash
received from customers increased primarily due to an increase in the number of domain name registration renewals and the
increase in .net domain name registration fees in February 2016. Cash paid for income taxes decreased primarily due to income
tax payments in 2015 related to the reorganization of certain international operations. Cash paid for interest increased due to
the interest paid on the $500.0 million senior notes issued on March 2015, and higher contingent interest related to the
Subordinated Convertible Debentures.

Net cash used in investing activities

The changes in cash flows from investing activities primarily relate to purchases, maturities and sales of marketable

securities, and purchases of property and equipment and rights to intangible assets.

2017 compared to 2016: The increase in cash used in investing activities was primarily due to an increase in purchases

of marketable securities, net of sales and maturities, and an increase in purchases of property and equipment, partially offset by
the payments made in 2016 for the future assignment of the rights to the .web gTLD, and an increase in other investing
activities including the proceeds received from the sale of our iDefense business.

2016 compared to 2015: The decrease in cash used in investing activities was primarily due to an increase in sales and

maturities of marketable securities, net of purchases, and a decrease in purchases of property and equipment and other investing
activities, partially offset by the payments made for the future assignment of the rights to the .web gTLD.

Net cash used in financing activities

The changes in cash flows from financing activities primarily relate to share repurchases, proceeds from and repayment

of borrowings, and our employee stock purchase plan (“ESPP”).

2017VERISIGN FORM 10-K

2017 compared to 2016: The decrease in net cash used in financing activities was primarily due to the proceeds received
from the issuance of the 4.75% senior notes due 2027 in the third quarter of 2017, net of issuance costs, and a decrease in share
repurchases.

2016 compared to 2015: The increase in net cash used in financing activities was primarily due to an increase in share

repurchases, and proceeds from the issuance of senior notes in March 2015.

Impact of Inflation

We do not believe that inflation has had a significant impact on our operations in any of the periods presented.

Income taxes

As a result of the enactment of the Tax Act in December 2017, we will owe U.S. income tax on our foreign earnings and

as a result, we no longer intend to indefinitely reinvest our foreign earnings. We expect the amount of cash paid for income
taxes in 2018 to increase due to the foreign withholding taxes that will be paid related to funds repatriated to the U.S. and other
impacts of the Tax Act.

Property and Equipment Expenditures

Our planned property and equipment expenditures for 2018 are anticipated to be between $45.0 million and $55.0

million and will primarily be focused on infrastructure upgrades and enhancements to our product portfolio.

Contractual Obligations

See Note 11, “Commitments and Contingencies,” Purchase Obligations and Contractual Agreements, of our Notes to

Consolidated Financial Statements in Item 15 of this Form 10-K.

Off-Balance Sheet Arrangements

It is not our business practice to enter into off-balance sheet arrangements. As of December 31, 2017, we did not have any
significant off-balance sheet arrangements. See Note 11, “Commitments and Contingencies,” Off-Balance Sheet Arrangements,
of our Notes to Consolidated Financial Statements in Item 15 of this Form 10-K for further information regarding off-balance
sheet arrangements.

Dilution from RSUs

Grants of stock-based awards are key components of the compensation packages we provide to attract and retain certain

of our talented employees and align their interests with the interests of existing stockholders. We recognize that these stock-
based awards dilute existing stockholders and have sought to control the number granted while providing competitive
compensation packages. As of December 31, 2017, there are a total of 1.6 million unvested RSUs which represent potential
dilution of 1.6%. This maximum potential dilution will only result if all outstanding RSUs vest and are settled. In recent years,
our stock repurchase program has more than offset the dilutive effect of RSU grants to employees; however, we may reduce the
level of our stock repurchases in the future as we may use our available cash for other purposes.

2017VERISIGN FORM 10-K

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

We are exposed to financial market risks, including changes in interest rates, foreign exchange rates and market risks. We

have not entered into any market risk sensitive instruments for trading purposes.

Financial Statements

Interest rate sensitivity

Verisign’s financial statements required by this Item are set forth as a separate section of this Form 10-K. See Item 15 for

a listing of financial statements provided in the section titled “Financial Statements.”

The fixed income securities in our investment portfolio are subject to interest rate risk. As of December 31, 2017, we had

Supplementary Data (Unaudited)

$2.2 billion of fixed income securities, which consisted of U.S. Treasury bills with maturities of less than one year. A
hypothetical change in interest rates by 100 basis points would not have a significant impact on the fair value of our
investments.

Foreign exchange risk management

We conduct business in several countries and transact in multiple foreign currencies. The functional currency for all of

our international subsidiaries is the U.S. Dollar. Our foreign currency risk management program is designed to mitigate foreign
exchange risks associated with monetary assets and liabilities of our operations that are denominated in currencies other than
the U.S. dollar. The primary objective of this program is to minimize the gains and losses to income resulting from fluctuations
in exchange rates. We may choose not to hedge certain foreign exchange exposures due to immateriality, prohibitive economic
cost of hedging particular exposures, and limited availability of appropriate hedging instruments. We do not enter into foreign
currency transactions for trading or speculative purposes, nor do we hedge foreign currency exposures in a manner that entirely
offsets the effects of changes in exchange rates. The program may entail the use of forward or option contracts, which are
usually placed and adjusted monthly. These foreign currency forward contracts are derivatives and are recorded at fair market
value. We attempt to limit our exposure to credit risk by executing foreign exchange contracts with financial institutions that
have investment grade ratings.

As of December 31, 2017, we held foreign currency forward contracts in notional amounts totaling $29.7 million to
mitigate the impact of exchange rate fluctuations associated with certain foreign currencies. Gains or losses on the foreign
currency forward contracts would be largely offset by the remeasurement of our foreign currency denominated assets and
liabilities, resulting in an insignificant net impact to income.

A hypothetical uniform 10% strengthening or weakening in the value of the U.S. dollar relative to the foreign currencies

in which our revenues and expenses are denominated would not result in a significant impact to our financial statements.

Market risk management

The fair market values of our Subordinated Convertible Debentures and the senior notes are subject to interest rate risk.
Generally, the fair market value of fixed interest rate debt will increase as interest rates fall and decrease as interest rates rise.
The Subordinated Convertible Debentures are subject to market risk due to the convertible feature of the debentures. The fair
market value will increase as the market price of our common stock increases, and decrease as the market price of our common
stock falls. As of December 31, 2017, the fair value of the Subordinated Convertible Debentures was approximately $4.2
billion and the fair values of the senior notes issued in 2013, the senior notes issued in 2015, and the senior notes issued in 2017
were $772.9 million, $544.4 million, and $563.7 million, respectively, based on available market information from public data
sources.

The following tables set forth unaudited supplementary quarterly financial data for the two year period ended

December 31, 2017. In management’s opinion, the unaudited data has been prepared on the same basis as the audited

information and includes all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of

the data for the periods presented.

2017

Quarter Ended

Year Ended

March 31

June 30 (2)

September 30

December 31

December 31,

(In thousands, except per share data)

Revenues ............................................... $

288,614 $

288,552 $

292,428 $

295,501 $

1,165,095

Gross Profit ........................................... $

237,945 $

Operating Income .................................. $

175,271 $

240,908 $

174,960 $

245,095 $

247,821 $

181,059 $

176,432 $

Net income ............................................ $

116,412 $

123,100 $

114,899 $

102,837 $

971,769

707,722

457,248

Earnings per share: ................................

Basic ................................................. $

Diluted (1) ........................................ $

1.14 $

0.94 $

1.22 $

0.99 $

1.15 $

0.93 $

1.05 $

0.83 $

4.56

3.68

——————

(1) Earnings per share for the year is computed independently and may not equal the sum of the quarterly earnings per share.

(2) Results for the quarter ended June 30, 2017 include a $10.6 million pre-tax gain recognized on the sale of the iDefense business.

2016

Quarter Ended

Year Ended

March 31

June 30

September 30

December 31

December 31,

(In thousands, except per share data)

Revenues ............................................... $

281,876 $

286,466 $

287,554 $

286,271 $

1,142,167

Gross Profit ........................................... $

231,294 $

Operating Income .................................. $

166,767 $

Net income ............................................ $

107,456 $

237,713 $

176,267 $

113,210 $

237,747 $

237,171 $

174,776 $

168,762 $

114,427 $

105,552 $

943,925

686,572

440,645

Earnings per share: ................................

Basic ................................................. $

Diluted (1) ........................................ $

0.98 $

0.82 $

1.05 $

0.87 $

1.08 $

0.90 $

1.01 $

0.84 $

4.12

3.42

——————

(1) Earnings per share for the year is computed independently and may not equal the sum of the quarterly earnings per share.

Our quarterly revenues and operating results are difficult to forecast. Therefore, we believe that period-to-period

comparisons of our operating results will not necessarily be meaningful, and should not be relied upon as an indication of future

performance. Also, operating results may fall below our expectations and the expectations of securities analysts or investors in

one or more future quarters. If this were to occur, the market price of our common stock would likely decline.

2017VERISIGN FORM 10-K

ITEM 8.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Financial Statements

Verisign’s financial statements required by this Item are set forth as a separate section of this Form 10-K. See Item 15 for

a listing of financial statements provided in the section titled “Financial Statements.”

Supplementary Data (Unaudited)

The following tables set forth unaudited supplementary quarterly financial data for the two year period ended

December 31, 2017. In management’s opinion, the unaudited data has been prepared on the same basis as the audited
information and includes all adjustments (consisting only of normal recurring adjustments) necessary for a fair presentation of
the data for the periods presented.

2017

Quarter Ended

Year Ended

March 31

June 30 (2)

September 30

December 31

December 31,

(In thousands, except per share data)

288,614 $
237,945 $
175,271 $
116,412 $

Revenues ............................................... $
Gross Profit ........................................... $
Operating Income .................................. $
Net income ............................................ $
Earnings per share: ................................
Basic ................................................. $
Diluted (1) ........................................ $
——————
(1) Earnings per share for the year is computed independently and may not equal the sum of the quarterly earnings per share.
(2) Results for the quarter ended June 30, 2017 include a $10.6 million pre-tax gain recognized on the sale of the iDefense business.

292,428 $
245,095 $
181,059 $
114,899 $

288,552 $
240,908 $
174,960 $
123,100 $

1.15 $
0.93 $

1.22 $
0.99 $

1.14 $
0.94 $

295,501 $
247,821 $
176,432 $
102,837 $

1.05 $
0.83 $

1,165,095
971,769
707,722
457,248

4.56
3.68

2016

Quarter Ended

Year Ended

March 31

June 30

September 30

December 31

December 31,

(In thousands, except per share data)

287,554 $
237,747 $
174,776 $
114,427 $

286,466 $
237,713 $
176,267 $
113,210 $

281,876 $
231,294 $
166,767 $
107,456 $

1.08 $
0.90 $

1.05 $
0.87 $

0.98 $
0.82 $

286,271 $
237,171 $
168,762 $
105,552 $

1,142,167
943,925
686,572
440,645

1.01 $
0.84 $

4.12
3.42

Our quarterly revenues and operating results are difficult to forecast. Therefore, we believe that period-to-period

comparisons of our operating results will not necessarily be meaningful, and should not be relied upon as an indication of future
performance. Also, operating results may fall below our expectations and the expectations of securities analysts or investors in
one or more future quarters. If this were to occur, the market price of our common stock would likely decline.

2017VERISIGN FORM 10-K

ITEM 9.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A.

CONTROLS AND PROCEDURES

a. Evaluation of Disclosure Controls and Procedures

Based on our management’s evaluation, with the participation of our Chief Executive Officer (our principal executive

officer) and our Chief Financial Officer (our principal financial officer), as of December 31, 2017, our principal executive
officer and principal financial officer have concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e)
and 15d-15(e) under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)) are effective to ensure that
information required to be disclosed by us in reports that we file or submit under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in SEC rules and forms and is accumulated and communicated to
our management, including our principal executive officer and principal financial officer, as appropriate to allow timely
decisions regarding required disclosure.

b. Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as
defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our
management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the
effectiveness of our internal control over financial reporting as of December 31, 2017 using the criteria established in Internal
Control-Integrated Framework (2013 Framework) issued by the Committee of Sponsoring Organizations of the Treadway
Commission (“COSO”).

Based on our evaluation under the COSO framework, management has concluded that our internal control over financial

reporting is effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with generally accepted accounting principles.

KPMG LLP, an independent registered public accounting firm, has issued a report concerning the effectiveness of our
internal control over financial reporting as of December 31, 2017. See “Report of Independent Registered Public Accounting
Firm” in Item 15 of this Form 10-K.

c. Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-
15(f) under the Exchange Act) during the three months ended December 31, 2017 that has materially affected, or is reasonably
likely to materially affect, the Company’s internal control over financial reporting.

d. Inherent Limitations of Disclosure Controls and Internal Control over Financial Reporting

Because of their inherent limitations, our disclosure controls and procedures and our internal control over financial
reporting may not prevent material errors or fraud. A control system, no matter how well conceived and operated, can provide
only reasonable, not absolute, assurance that the objectives of the control system are met. The effectiveness of our disclosure
controls and procedures and our internal control over financial reporting is subject to risks, including that the controls may
become inadequate because of changes in conditions or that the degree of compliance with our policies or procedures may
deteriorate.

ITEM 9B.

OTHER INFORMATION

On February 14, 2018, our Board of Directors amended our Bylaws to decrease the aggregate ownership percentage of

stockholders needed to call a special meeting from 35% to 25% as described in Article I, Section 2 of the Bylaw. The amended
Bylaws, which were effective upon approval by the Board of Directors, contain certain notice and other requirements relevant
to the ability of stockholders to call a special meeting.

This description of the amendment to the Bylaws is qualified in its entirety by reference to the text of the Bylaws, filed as

Exhibit 3.02 to this Form 10-K.

2017VERISIGN FORM 10-KPART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by this item relating to our directors and nominees, regarding compliance with Section 16(a) of
the Exchange Act, and regarding our Audit Committee, Corporate Governance and Nominating Committee and Compensation
Committee will be included under the captions “Proposal No. 1: Election of Directors,” “Security Ownership of Certain
Beneficial Owners and Management-Section 16(a) Beneficial Ownership Reporting Compliance,” and “Corporate
Governance” in our Proxy Statement related to the 2018 Annual Meeting of Stockholders and is incorporated herein by
reference (“2018 Proxy Statement”).

Pursuant to General Instruction G(3) of Form 10-K, the information required by this item relating to our executive

officers is included under the caption “Executive Officers of the Registrant” in Part I of this Annual Report on Form 10-K.

We have adopted a “Verisign Code of Conduct”, which is posted on our website under “Ethics and Business Conduct” at
https://investor.verisign.com/corporate-governance.cfm. The code of conduct applies to all directors, officers and employees,
including the principal executive officer, principal financial officer and other senior accounting officers. We have also adopted
the “Corporate Governance Principles for the Board of Directors,” which provide guidance to our directors on corporate
practices that serve the best interests of the Company and its shareholders.

We intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from,

a provision of the “Verisign Code of Conduct,” to the extent applicable to the principal executive officer, principal financial
officer, or other senior accounting officers, by posting such information on our website, on the web page found by clicking
through to “Ethics and Business Conduct” as specified above.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this item is incorporated herein by reference to our 2018 Proxy Statement from the discussions

under the captions “Compensation of Directors,” “Non-Employee Director Retainer Fees and Equity Compensation
Information” and “Non-Employee Director Compensation Table for Fiscal 2017,” and “Executive Compensation.”

ITEM 12.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS

Information required by this item is incorporated herein by reference from the discussions under the captions “Security
Ownership of Certain Beneficial Owners and Management” and “Equity Compensation Plan Information” in our 2018 Proxy
Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

Information required by this item is incorporated herein by reference to our 2018 Proxy Statement from the discussions
under the captions “Policies and Procedures with Respect to Transactions with Related Persons,” “Certain Relationships and
Related Transactions” and “Independence of Directors.”

ITEM 14.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Information required by this item is incorporated herein by reference to our 2018 Proxy Statement from the discussions

under the captions “Principal Accountant Fees and Services” and “Policy on Audit Committee Pre-Approval of Audit and
Permissible Non-Audit Services of Independent Auditors.”

2017VERISIGN FORM 10-KITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES

PART IV

(a) Documents filed as part of this report

1. Financial statements

•

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets as of December 31, 2017 and 2016

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2017, 2016, and 2015

Consolidated Statements of Stockholders’ Deficit for the Years Ended December 31, 2017, 2016, and 2015

Consolidated Statements of Cash Flows for the Years Ended December 31, 2017, 2016, and 2015

Notes to Consolidated Financial Statements

2. Financial statement schedules

Financial statement schedules are omitted because the information called for is not material or is shown either
in the consolidated financial statements or the notes thereto.

3. Exhibits

(a) Index to Exhibits

Pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), the Company has filed

certain agreements as exhibits to this Form 10-K. These agreements may contain representations and warranties by the parties
thereto. These representations and warranties have been made solely for the benefit of the other party or parties to such
agreements and (1) may be intended not as statements of fact, but rather as a way of allocating the risk to one of the parties to
such agreements if those statements prove to be inaccurate, (2) may have been qualified by disclosures that were made to such
other party or parties and that either have been reflected in the Company’s filings or are not required to be disclosed in those
filings, (3) may apply materiality standards different from what may be viewed as material to investors and (4) were made only
as of the date of such agreements or such other date(s) as may be specified in such agreements and are subject to more recent
developments. Accordingly, these representations and warranties may not describe the Company’s actual state of affairs at the
date hereof or at any other time.

Exhibit
Number

2.01

3.01

3.02

4.01

4.02

4.03

4.04

Exhibit Description

Agreement and Plan of Merger dated as of March 6, 2000, by
and among the Registrant, Nickel Acquisition Corporation and
Network Solutions, Inc.

Incorporated by Reference

Form

Date

Number

8-K

3/8/00

2.1

Filed
Herewith

Sixth Amended and Restated Certificate of Incorporation of the
Registrant.

10-K

2/17/17

3.01

Bylaws of VeriSign, Inc.

Indenture dated as of August 20, 2007 between the Registrant
and U.S. Bank National Association.

8-K/A

9/6/07

Indenture, dated as of April 16, 2013, between VeriSign, Inc.,
each of the subsidiary guarantors party thereto and U.S. Bank
National Association, as trustee.

8-K

4/17/13

Indenture dated as of March 27, 2015 between VeriSign, Inc.
and U.S. Bank National Association, as trustee.

Indenture, dated as of July 5, 2017, between VeriSign, Inc. and
U.S. Bank National Association, as trustee.

8-K

3/30/15

7/5/17

4.1

10.01

Amended and Restated 2007 Employee Stock Purchase Plan, as
adopted August 30, 2007, and amended May 25, 2017. +

DEF
14A

4/12/17

Appendix

2017VERISIGN FORM 10-KExhibit
Number

10.02

Exhibit Description

Amendment No. Thirty (30) to Cooperative Agreement - Special
Awards Conditions NCR-92-18742, between VeriSign and U.S.
Department of Commerce managers.

10.03

VeriSign, Inc. Annual Incentive Compensation Plan. +

Incorporated by Reference

Form

Date

Number

Filed
Herewith

10-K

7/12/07

10.27

DEF
14A

10-Q

4/8/15

Appendix

7/27/17

10.01

10.04

10.05

10.06

10.07

10.08

10.09

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

10.18

21.01

23.01

Form of Amended and Restated Change-in-Control and
Retention Agreement [CEO Form of Agreement]. +

Amended and Restated Change-in-Control and Retention
Agreement. +

10-Q

7/27/17

10.02

Purchase and Sale Agreement for 12061 Bluemont Way Reston,
Virginia between 12061 Bluemont Owner, LLC, a Delaware
limited liability company, as Seller and VeriSign, Inc., a
Delaware corporation, as Purchaser Dated August 18, 2011.

8-K

9/7/11

10.01

VeriSign, Inc. 2006 Equity Incentive Plan Form of Non-
Employee Director Restricted Stock Unit Agreement. +

10-Q

7/27/12

10.03

Registry Agreement between VeriSign, Inc. and the Internet
Corporation for Assigned Names and Numbers, entered into on
November 29, 2012.

Amendment Number Thirty-Two (32) to the Cooperative
Agreement between VeriSign, Inc. and Department of
Commerce, entered into on November 29, 2012.

8-K

11/30/12

10.1

8-K

11/30/12

10.2

VeriSign, Inc. 2006 Equity Incentive Plan Employee Restricted
Stock Unit Agreement. +

10-Q

4/25/13

10.02

VeriSign, Inc. 2006 Equity Incentive Plan Performance-Based
Restricted Stock Unit Agreement +

10-Q

4/28/16

10.01

Credit Agreement dated as of March 31, 2015 among VeriSign,
Inc., the Lenders as defined therein, JPMorgan Chase Bank,
N.A., as Administrative Agent, and J.P. Morgan Europe Limited,
as London Agent.

8-K

4/1/15

99.1

VeriSign, Inc. 2006 Equity Incentive Plan Form of Employee
Restricted Stock Unit Agreement +

10-K

2/19/16

10.70

Amendment to the .com Registry Agreement between VeriSign,
Inc. and the Internet Corporation for Assigned Names and
Numbers, entered into on October 20, 2016

8-K

10/20/16

10.1

Amendment Number Thirty-Three (33) to the Cooperative
Agreement between VeriSign, Inc. and Department of
Commerce, entered into on October 20, 2016

8-K

10/20/16

10.2

Amendment Number Thirty-Four (34) to the Cooperative
Agreement between VeriSign, Inc. and Department of
Commerce, entered into on October 20, 2016

Amended and Restated VeriSign, Inc. 2006 Equity Incentive
Plan, as amended and restated +

.Net Registry Agreement between VeriSign, Inc. and the Internet
Corporation for Assigned Names and Numbers, entered into on
June 28, 2017.

Subsidiaries of the Registrant.

Consent of Independent Registered Public Accounting Firm.

8-K

10/20/16

10.3

DEF
14A

8-K

4/29/16

6/28/17

Appendix

10.1

2017VERISIGN FORM 10-KExhibit
Number

24.01

31.01

31.02

32.01

32.02

Exhibit Description

Powers of Attorney (Included as part of the signature pages
hereto).

Certification of Principal Executive Officer pursuant to
Exchange Act Rule 13a-14(a).

Certification of Principal Financial Officer pursuant to
Exchange Act Rule 13a-14(a).

Certification of Principal Executive Officer pursuant to
Exchange Act Rule 13a-14(b) and Section 1350 of Chapter 63 of
Title 18 of the U.S. Code (18 U.S.C. 1350). *

Certification of Principal Financial Officer pursuant to
Exchange Act Rule 13a-14(b) and Section 1350 of Chapter 63 of
Title 18 of the U.S. Code (18 U.S.C. 1350). *

101.INS

XBRL Instance Document.

101.SCH

XBRL Taxonomy Extension Schema.

101.CAL

XBRL Taxonomy Extension Calculation Linkbase.

101.DEF

XBRL Taxonomy Extension Definition Linkbase.

101.LAB

XBRL Taxonomy Extension Label Linkbase.

101.PRE

XBRL Taxonomy Extension Presentation Linkbase.

Incorporated by Reference

Form

Date

Number

Filed
Herewith

As contemplated by SEC Release No. 33-8212, these exhibits are furnished with this Annual Report on Form 10-K and are
not deemed filed with the Securities and Exchange Commission and are not incorporated by reference in any filing of
VeriSign, Inc. under the Securities Act of 1933 or the Securities Exchange Act of 1934, whether made before or after the
date hereof and irrespective of any general incorporation language in such filings.

Indicates a management contract or compensatory plan or arrangement.

ITEM 16.

10-K SUMMARY

None.

2017VERISIGN FORM 10-KAs required under Item 8—Financial Statements and Supplementary Data, the consolidated financial statements of
Verisign, Inc. are provided in this separate section. The consolidated financial statements included in this section are as follows:

FINANCIAL STATEMENTS

Financial Statement Description
Reports of Independent Registered Public Accounting Firm .................................................................................
Consolidated Balance Sheets
As of December 31, 2017 and December 31, 2016.................................................................................................

Page

Consolidated Statements of Comprehensive Income
For the Years Ended December 31, 2017, 2016, and 2015......................................................................................

Consolidated Statements of Stockholders’ Deficit
For the Years Ended December 31, 2017, 2016, and 2015......................................................................................

Consolidated Statements of Cash Flows
For the Years Ended December 31, 2017, 2016, and 2015......................................................................................
Notes to Consolidated Financial Statements ...........................................................................................................

2017VERISIGN FORM 10-KReport of Independent Registered Public Accounting Firm

To the stockholders and board of directors

VeriSign, Inc.:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of VeriSign, Inc. and subsidiaries (the “Company”) as of
December 31, 2017 and 2016, the related consolidated statements of comprehensive income, stockholders’ deficit, and cash
flows for each of the years in the three-year period ended December 31, 2017, and the related notes (collectively, the
“consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material
respects, the financial position of the Company as of December 31, 2017 and 2016, and the results of their operations and their
cash flows for each of the years in the three-year period ended December 31, 2017, in conformity with U.S. generally accepted
accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2017, based on criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and our report dated February 16, 2018 expressed an unqualified opinion on the effectiveness of the Company’s
internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express
an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the
PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the
consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such
procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial
statements. Our audits also included evaluating the accounting principles used and significant estimates made by management,
as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a
reasonable basis for our opinion.

/s/ KPMG LLP

We have served as the Company’s auditor since 1995.

McLean, Virginia
February 16, 2018

2017VERISIGN FORM 10-KReport of Independent Registered Public Accounting Firm

To the stockholders and board of directors

VeriSign, Inc.:

Opinion on Internal Control Over Financial Reporting

We have audited VeriSign, Inc.’s and subsidiaries’ (the “Company”) internal control over financial reporting as of
December 31, 2017, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee
of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects,
effective internal control over financial reporting as of December 31, 2017, based on criteria established in Internal Control -
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States)
(“PCAOB”), the consolidated balance sheets of the Company as of December 31, 2017 and 2016, the related consolidated
statements of comprehensive income, stockholders’ deficit, and cash flows for each of the years in the three-year period ended
December 31, 2017, and the related notes (collectively, the consolidated financial statements), and our report dated February
16, 2018 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s
Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are
required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable
rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all
material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control
over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP
McLean, Virginia
February 16, 2018

2017VERISIGN FORM 10-KVERISIGN, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except par value)

December 31,
2017

December 31,
2016

Current assets:

ASSETS

Cash and cash equivalents .................................................................................................. $
Marketable securities .........................................................................................................
Other current assets ............................................................................................................

Total current assets ......................................................................................................
Property and equipment, net ......................................................................................................
Goodwill ...................................................................................................................................

Deferred tax assets ....................................................................................................................
Deposits to acquire intangible assets .........................................................................................
Other long-term assets ...............................................................................................................

Total long-term assets .................................................................................................
Total assets .................................................................................................................. $

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:

Accounts payable and accrued liabilities ........................................................................... $
Deferred revenues ..............................................................................................................
Subordinated convertible debentures, including contingent interest derivative .................

Total current liabilities ................................................................................................
Long-term deferred revenues ....................................................................................................
Senior notes ...............................................................................................................................
Deferred tax liabilities ...............................................................................................................
Other long-term tax liabilities ...................................................................................................

Total long-term liabilities ............................................................................................
Total liabilities ............................................................................................................

465,851 $

1,948,900
31,402
2,446,153
263,513
52,527
15,392
145,000
18,603
495,035
2,941,188 $

219,603 $
713,309
627,616
1,560,528
286,097
1,782,529
444,108
128,197
2,640,931
4,201,459

231,945
1,565,962
44,435
1,842,342
266,125
52,527
9,385
145,000
19,193
492,230
2,334,572

203,920
688,265
629,764
1,521,949
287,424
1,237,189
371,433
117,172
2,013,218
3,535,167

Commitments and contingencies
Stockholders’ deficit:

Preferred stock—par value $.001 per share; Authorized shares: 5,000; Issued and
outstanding shares: none ....................................................................................................
Common stock—par value $.001 per share; Authorized shares: 1,000,000; Issued
shares: 325,218 at December 31, 2017 and 324,118 at December 31, 2016; Outstanding
shares: 97,591 at December 31, 2017 and 103,091 at December 31, 2016 ........................
Additional paid-in capital ...................................................................................................
Accumulated deficit ...........................................................................................................
Accumulated other comprehensive loss .............................................................................

Total stockholders’ deficit ...........................................................................................
Total liabilities and stockholders’ deficit .................................................................... $

—

325
16,437,135
(17,694,790)
(2,941)
(1,260,271)
2,941,188 $

324
16,987,488
(18,184,954)
(3,453)
(1,200,595)
2,334,572

See accompanying Notes to Consolidated Financial Statements.

2017VERISIGN FORM 10-K

VERISIGN, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In thousands, except per share data)

Revenues ........................................................................................................................ $ 1,165,095 $ 1,142,167 $ 1,059,366
Costs and expenses:

Year Ended December 31,

2017

2016

2015

Cost of revenues ......................................................................................................
Sales and marketing .................................................................................................
Research and development ......................................................................................
General and administrative ......................................................................................

Total costs and expenses ...................................................................................
Operating income ...........................................................................................................
Interest expense ..............................................................................................................
Non-operating income (loss), net ...................................................................................

192,788
90,184
63,718
106,730
453,420
605,946
(107,631)
(10,665)
487,650
(112,414)
375,236
(291)
(519)
(185)
Other comprehensive income (loss) ...............................................................................
(995)
Comprehensive income .................................................................................................. $ 457,760 $ 441,185 $ 374,241

Net income .....................................................................................................................
Realized foreign currency translation adjustments, included in net income ............
Unrealized gain (loss) on investments .....................................................................
Realized gain on investments, included in net income ............................................

193,326
81,951
52,342
129,754
457,373
707,722
(136,336)
27,626
599,012
(141,764)
457,248
530
385
(403)
512

198,242
80,250
59,100
118,003
455,595
686,572
(115,564)
10,165
581,173
(140,528)
440,645
85
533
(78)
540

Income before income taxes ...........................................................................................
Income tax expense ........................................................................................................

Earnings per share:

Basic ........................................................................................................................ $
Diluted ..................................................................................................................... $

4.56 $
3.68 $

4.12 $

3.42 $

3.29

2.82

Shares used to compute earnings per share

Basic ........................................................................................................................

Diluted .....................................................................................................................

100,325
124,180

107,001

128,833

114,155

133,031

See accompanying Notes to Consolidated Financial Statements.

2017VERISIGN FORM 10-K

VERISIGN, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(In thousands)

Common Stock

Amount

Additional Paid-
In Capital

Accumulated
Deficit

Accumulated Other
Comprehensive
Loss

Total Stockholders'
Deficit

Balance at December 31, 2014 ...................... 118,452 $
Net income ................................................
Other comprehensive loss..............................
Issuance of common stock under stock plans ......
Stock-based compensation .............................
Net excess income tax benefits associated with

1,291

—

stock-based compensation..........................
Repurchase of common stock .........................

—

(9,671)

Balance at December 31, 2015 ...................... 110,072
Net income ................................................
—
Other comprehensive income .........................
Issuance of common stock under stock plans ......
Stock-based compensation .............................
Net excess income tax benefits associated with
stock-based compensation .............................
Repurchase of common stock .........................

1,128

—

(8,109)

Balance at December 31, 2016 ...................... 103,091
Cumulative adjustment upon adoption of ASU
2016-09 ....................................................
Net income ................................................
Other comprehensive income .........................
Issuance of common stock under stock plans ......
Stock-based compensation .............................
Repurchase of common stock .........................

1,100

—

(6,600)

322 $

18,120,045 $

(19,000,835) $

—

14,689

48,793

18,464

(643,169)

375,236

—

323

17,558,822

(18,625,599)

—

13,669

52,430

25,058

(662,491)

440,645

—

(2,998 ) $
—
(995 )
—
—

—
—

(3,993 )
—
540
—
—

—
—

(883,466)

375,236

(995)

14,690

48,793

18,464

(643,169)

(1,070,447)

440,645

540

13,670

52,430

25,058

(662,491)

324

16,987,488

(18,184,954)

(3,453 )

(1,200,595)

—

2,544

—

12,914

55,362

(621,173)

32,916

457,248

—

—
—
512
—
—
—

35,460

457,248

512

12,915

55,362

(621,173)

Balance at December 31, 2017 ......................

97,591 $

325 $

16,437,135 $

(17,694,790) $

(2,941 ) $

(1,260,271)

See accompanying Notes to Consolidated Financial Statements

2017VERISIGN FORM 10-K

VERISIGN, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)

Year Ended December 31,

2017

2016

2015

457,248 $

440,645 $

375,236

Cash flows from operating activities:

Net income ................................................................................................. $
Adjustments to reconcile net income to net cash provided by operating
activities:

Depreciation of property and equipment .............................................
Stock-based compensation ..................................................................
Gain on sale of business ......................................................................
Unrealized loss (gain) on contingent interest derivative on
Subordinated Convertible Debentures .................................................
Payment of contingent interest ............................................................
Amortization of debt discount and issuance costs ...............................
Amortization of discount on investments in debt securities ................
Other, net .............................................................................................
Changes in operating assets and liabilities

Prepaid expenses and other assets .....................................................
Accounts payable and accrued liabilities ..........................................
Deferred revenues .............................................................................
Net deferred income taxes and other long-term tax liabilities ..........

Net cash provided by operating activities ....................................

49,878

52,907
(10,421)

893
(15,232)
14,678
(14,860)
(67)

13,775
15,483
25,348
113,131
702,761

58,167
50,044
—

(2,402)
(13,385)
13,411
(5,527)
1,740

8,109
40,244
14,347
87,614
693,007

Cash flows from investing activities:

Proceeds from maturities and sales of marketable securities......................
Purchases of marketable securities .............................................................
Purchases of property and equipment .........................................................
Deposits to acquire intangible assets ..........................................................
Other investing activities ............................................................................

Net cash used in investing activities ............................................

4,562,161
(4,929,834)
(49,499)
—
12,096
(405,076)

3,817,899
(3,691,057)
(26,574)
(143,000)
2,333
(40,399)

Cash flows from financing activities:

Proceeds from employee stock purchase plan
Repurchases of common stock ...................................................................
Proceeds from senior notes, net of issuance costs ......................................

Net cash used in financing activities ............................................
Effect of exchange rate changes on cash and cash equivalents .......................
Net increase in cash and cash equivalents .......................................................
Cash and cash equivalents at beginning of period ...........................................

Cash and cash equivalents at end of period ..................................................... $

12,915

(621,173)
543,185
(65,073)
1,294
233,906
231,945
465,851 $

13,670
(662,491)
—
(648,821)
(501)
3,286
228,659
231,945 $

61,491

46,075
—

14,130
(10,759)
12,292
(1,843)
62

(1,067)
21,013
70,988
82,328
669,946

2,767,027
(3,219,329)
(40,656)
—
(3,941)
(496,899)

14,690
(643,169)
492,237
(136,242)
246
37,051
191,608
228,659

Supplemental cash flow disclosures:

Cash paid for interest .................................................................................. $
Cash paid for income taxes, net of refunds received .................................. $

117,234 $

28,294 $

115,544 $
14,303 $

99,473

39,723

See accompanying Notes to Consolidated Financial Statements.

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2017, 2016 AND 2015

Note 1. Description of Business and Summary of Significant Accounting Policies

Description of Business

VeriSign, Inc. (“Verisign” or “the Company”) was incorporated in Delaware on April 12, 1995. The Company has one

reportable segment, which consists of Registry Services and Security Services. Registry Services ensure the security, stability
and resiliency of key internet infrastructure and services, including the .com and .net domains, two of the Internet’s root servers,
and operation of the root-zone maintainer functions for the core of the internet’s Domain Name System (“DNS”). Security
Services provides infrastructure assurance services consisting of Distributed Denial of Services (“DDoS”) Protection Services,
and Managed DNS Services. On April 1, 2017, the Company completed the sale of its iDefense business.

Basis of Presentation

The accompanying consolidated financial statements of Verisign and its subsidiaries have been prepared in conformity
with generally accepted accounting principles (“GAAP”) in the United States (“U.S.”). All significant intercompany accounts
and transactions have been eliminated.

The preparation of these consolidated financial statements requires management to make estimates and judgments that

affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosures of contingent assets and
liabilities. Actual results may differ from these estimates under different assumptions or conditions.

Reclassifications

Certain reclassifications have been made to prior period amounts to conform to current period presentation. Such

reclassifications have no effect on net income as previously reported.

Adoption of New Accounting Standards

Effective January 1, 2017, the Company adopted Accounting Standards Update (“ASU”) No. 2016-09, Improvements to

Employee Share-Based Payment Accounting, issued by the Financial Accounting Standards Board (“FASB”). The new guidance
requires excess tax benefits and tax deficiencies to be recorded as a discrete adjustment to income tax expense when stock
awards vest, rather than in additional paid-in capital when they reduce income taxes payable. The Company also made the
accounting policy election, as allowed by the new guidance, to account for forfeitures of stock awards as they occur, rather than
estimating forfeitures. These changes were required to be applied on a modified retrospective basis through a cumulative-effect
adjustment to the opening balance of retained earnings. The cumulative effect of adopting ASU 2016-09 was an increase in
Deferred tax assets of $11.0 million, a decrease in Deferred tax liabilities of $24.4 million, an increase in Additional paid-in
capital of $2.5 million, and a decrease in Accumulated deficit of $32.9 million, as of January 1, 2017, as a result of
recognizing $35.4 million of previously unrecognized excess tax benefits from stock-based compensation, and a $2.5
million adjustment related to the change in accounting policy for forfeitures. Additionally, the new guidance requires cash flows
related to excess tax benefits from stock-based compensation to be recognized with other income tax cash flows in operating
activities, rather than separately as a financing activity. The Company elected to apply this new cash flow presentation
requirement retrospectively, which resulted in an increase to both net cash from operating activities and net cash used in
financing activities of $25.1 million and $18.5 million for the years ended December 31, 2016 and 2015, respectively.

Effective January 1, 2017, the Company adopted ASU 2017-04, Simplifying the Test for Goodwill Impairment, which was

issued by the FASB. The guidance in the ASU simplifies certain aspects of the goodwill impairment test, including the
elimination of the requirement to perform a qualitative assessment of the likelihood of a goodwill impairment for reporting
units with a negative carrying value. All of the Company’s goodwill is included in the Registry Services reporting unit which
has a negative carrying value. As a result, the Company will no longer be required to perform the qualitative assessment.

2017VERISIGN FORM 10-KVERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

Recent Accounting Pronouncements

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity

to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to
customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The
new standard will be effective for the Company’s 2018 fiscal year. The FASB also issued several amendments to the standard,
including clarification on accounting for licenses of intellectual property and identifying performance obligations. Upon
adoption the Company will record an asset of $27.3 million related to fees paid to ICANN for registrations and renewals of
domain names ending in .com. These costs have historically been recognized as expense in the period of the registration or
renewal but the Company has determined that they represent costs incurred to obtain a contract under the new guidance and
will be capitalized and amortized over the respective domain terms beginning in 2018. The standard will be adopted on a
modified retrospective basis and recorded as a cumulative effect adjustment to Accumulated deficit on January 1, 2018. This
adjustment will be reflected in the financial statements included in our Form 10-Q for the three months ended March 31, 2018.
Apart from this adjustment and the inclusion of the additional required disclosures, the Company does not expect the adoption
of the new revenue standard to impact its consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. The guidance introduces a lessee model that requires most

leases to be reported on the balance sheet. This ASU will become effective for the Company on January 1, 2019 and requires
the modified retrospective transition method. Based on its current portfolio of leases, the Company does not expect the adoption
of this standard to have a material impact on its consolidated financial statements.

Significant Accounting Policies

Cash and Cash Equivalents

Verisign considers all highly-liquid investments purchased with original maturities of three months or less to be cash

equivalents. Cash and cash equivalents include certain money market funds, debt securities and various deposit accounts.
Verisign maintains its cash and cash equivalents with financial institutions that have investment grade ratings and, as part of its
cash management process, performs periodic evaluations of the relative credit standing of these financial institutions.

Marketable Securities

Marketable securities primarily consist of debt securities issued by the U.S. Treasury. All marketable securities are

classified as available-for-sale and are carried at fair value. Unrealized gains and losses, net of taxes, are reported as a
component of Accumulated other comprehensive loss. The specific identification method is used to determine the cost basis of
the marketable securities sold. The Company classifies its marketable securities as current based on their nature and availability
for use in current operations.

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line

method over the estimated useful lives of the assets of 35 to 47 years for buildings, 10 years for building improvements and
three to five years for computer equipment, software, office equipment, and furniture and fixtures. Leasehold improvements are
amortized using the straight-line method over the lesser of the estimated useful lives of the assets or associated lease terms.

Capitalized Software

Software included in property and equipment includes amounts paid for purchased software and development costs for

internally developed software. The Company capitalized $17.7 million and $18.0 million of costs related to internally
developed software during 2017 and 2016, respectively.

Goodwill and Other Long-lived Assets

Goodwill represents the excess of purchase consideration over fair value of net assets of businesses acquired. Goodwill is

not amortized, but instead tested for impairment. All of the Company’s goodwill is included in the Registry Services reporting
unit which has a negative carrying value. Upon adoption of ASU 2017-04, Simplifying the Test for Goodwill Impairment in
2017, the Company is no longer required to perform the qualitative assessment at the end of each reporting period to determine
if any events have occurred or circumstances exist that would indicate that it is more likely than not that a goodwill impairment
exists.

2017VERISIGN FORM 10-KVERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2017, 2016 AND 2015

VERISIGN, INC.

Long-lived assets, such as property, plant, and equipment are reviewed for impairment whenever events or changes in

circumstances indicate that the carrying amount of an asset, or asset group, may not be recoverable. Such events or
circumstances include, but are not limited to, a significant decrease in the fair value of the underlying business, a significant
decrease in the benefits realized from an acquired business, difficulties or delays in integrating the business or a significant
change in the operations of an acquired business. Recoverability of assets to be held and used is measured by a comparison of
the carrying amount of an asset, or asset group, to estimated undiscounted future cash flows expected to be generated by the
asset, or asset group. An impairment charge is recognized in the amount by which the carrying amount of the asset exceeds its
fair value.

As of December 31, 2017, the Company’s assets include a deposit related to the purchase of the contractual rights to the

.web gTLD. The amount paid to date has been recorded as a deposit until such time that the contractual rights are transferred to
the Company. This asset would be tested for recoverability if the Company were to determine that it is no longer probable that
the rights will be transferred. At the time of the transfer of the contractual rights, the Company will record the amount as an
indefinite-lived intangible asset subject to review for impairment on an annual basis or more frequently if events or changes in
circumstances indicate that an impairment is more likely than not.

3.25% Junior Subordinated Convertible Debentures Due 2037 (“Subordinated Convertible Debentures”)

Upon issuance of the Subordinated Convertible Debentures, Verisign separated the liability (debt) and equity (conversion

option) components in a manner that reflected the borrowing rate for a similar non-convertible debt. The liability component
was recognized based on the fair value of a similar instrument without a conversion feature at issuance. The excess of the
principal amount of the Subordinated Convertible Debentures over the liability component at issuance is the equity component
or debt discount. Such excess represents the estimated fair value of the conversion feature and is recorded as Additional paid-in
capital. The debt discount is amortized using the Company’s effective interest rate over the term of the Subordinated
Convertible Debentures as a non-cash charge to interest expense.

The Subordinated Convertible Debentures also have a contingent interest payment provision that requires the Company to

pay interest based on certain thresholds, and upon the occurrence of certain events, as outlined in the Indenture governing the
Subordinated Convertible Debentures. The contingent interest payment provision was identified as an embedded derivative, and
accounted for separately at fair value, with any gains and losses recorded in Non-operating income (loss), net. Contingent
interest payments through August 15, 2017, reflected the settlement of the embedded derivative. Effective August 15, 2017,
Verisign has the right to redeem the Subordinated Convertible Debentures under the terms of the indenture, Therefore, the fair
value of the contingent interest embedded derivative for periods after August 15, 2017 is negligible and is no longer recognized
separately. Expense for contingent interest payments after August 15, 2017 are included within Interest expense on the
Consolidated Statements of Comprehensive Income.

Foreign Currency Remeasurement

Verisign conducts business in several different countries and transacts in multiple currencies. The functional currency for
all of Verisign’s international subsidiaries is the U.S. Dollar. The Company’s subsidiaries’ financial statements are remeasured
into U.S. Dollars using a combination of current and historical exchange rates and any remeasurement gains and losses are
included in Non-operating income (loss), net. Remeasurement gains and losses were not significant in each of the last three
years.

Verisign maintains a foreign currency risk management program designed to mitigate foreign exchange risks associated
with the monetary assets and liabilities that are denominated in currencies other than the U.S. dollar. The primary objective of
this program is to minimize the gains and losses resulting from fluctuations in exchange rates. The Company does not enter into
foreign currency transactions for trading or speculative purposes, nor does it hedge foreign currency exposures in a manner that
entirely offsets the effects of changes in exchange rates. The program may entail the use of forward or option contracts, which
are usually placed and adjusted monthly. These foreign currency forward contracts are derivatives and are recorded at fair
market value. The Company records gains and losses on foreign currency forward contracts in Non-operating income (loss),
net. Gains and losses related to foreign currency forward contracts were not significant in each of the last three years.

As of December 31, 2017, Verisign held foreign currency forward contracts in notional amounts totaling $29.7 million to

with a one-time tax on accumulated foreign earnings. The effect on deferred tax assets and liabilities of a change in law or tax

mitigate the impact of exchange rate fluctuations associated with certain assets and liabilities held in foreign currencies.

Revenue Recognition

Verisign recognizes revenues when the following four criteria are met:

• Persuasive evidence of an arrangement exists: It is the Company’s customary practice to have a written contract,

signed by both the customer and Verisign or a service order form from those customers who have previously

negotiated a standard master services agreement with Verisign.

• Delivery has occurred or services have been rendered: The Company’s services are usually delivered continuously

from service activation date through the term of the arrangement.

• The fee is fixed or determinable: Substantially all of the Company’s revenue arrangements have fixed or determinable

fees.

• Collectability is reasonably assured: Collectability is assessed on a customer-by-customer basis. Verisign typically

sells to customers for whom there is a history of successful collection. The majority of customers either maintain a

deposit with Verisign or provide an irrevocable letter of credit in excess of the amounts owed. New customers are

subjected to a credit review process that evaluates the customer’s financial condition and, ultimately, their ability to

pay. If Verisign determines from the outset of an arrangement that collectability is not probable based upon its credit

review process, revenues are recognized as cash is collected.

Registry Services

Registry Services revenues primarily arise from fixed fees charged to registrars for the initial registration or renewal of

.com, .net, and other domain names. Revenues from the initial registration or renewal of domain names are deferred and

recognized ratably over the registration term, generally one year and up to ten years. Fees for renewals and advance extensions

to the existing term are deferred until the new incremental period commences. These fees are then recognized ratably over the

renewal term.

Verisign also offers promotional marketing programs to its registrars based upon market conditions and the business

environment in which the registrars operate. Amounts payable to these registrars for such promotional marketing programs are

usually recorded as a reduction of revenue. If Verisign obtains an identifiable benefit separate from the services it provides to

the registrars, then amounts payable up to the fair value of the benefit received are recorded as advertising expenses and the

Following the revenue recognition criteria above, revenues from Security Services are usually deferred and recognized

excess, if any, is recorded as a reduction of revenue.

Security Services

over the service term, generally one to two years.

Advertising Expenses

$16.0 million in 2017, 2016, and 2015, respectively.

Income Taxes

Advertising costs are expensed as incurred and are included in Sales and marketing expenses. Advertising expenses,

including costs for advertising campaigns conducted jointly with our registrar customers were $27.4 million, $17.2 million, and

Verisign uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized

for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets

and liabilities and their respective tax bases and net operating loss carryforwards. Deferred tax assets and liabilities are

measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are

expected to be recovered or settled. The Tax Cuts and Jobs Act (“Tax Act”) was enacted on December 22, 2017, most

provisions of which will take effect starting in 2018. The Tax Act makes substantial changes to U.S. taxation of corporations,

including, lowering the U.S. federal corporate income tax rate from 35% to 21%, and instituting a territorial tax system, along

rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to

reduce deferred tax assets to an amount whose realization is more likely than not. For every tax-paying component and within

each tax jurisdiction, all deferred tax liabilities and assets are offset and presented as a single net noncurrent asset or liability.

2017VERISIGN FORM 10-KVERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

Revenue Recognition

Verisign recognizes revenues when the following four criteria are met:

• Persuasive evidence of an arrangement exists: It is the Company’s customary practice to have a written contract,
signed by both the customer and Verisign or a service order form from those customers who have previously
negotiated a standard master services agreement with Verisign.

• Delivery has occurred or services have been rendered: The Company’s services are usually delivered continuously

from service activation date through the term of the arrangement.

• The fee is fixed or determinable: Substantially all of the Company’s revenue arrangements have fixed or determinable

fees.

• Collectability is reasonably assured: Collectability is assessed on a customer-by-customer basis. Verisign typically
sells to customers for whom there is a history of successful collection. The majority of customers either maintain a
deposit with Verisign or provide an irrevocable letter of credit in excess of the amounts owed. New customers are
subjected to a credit review process that evaluates the customer’s financial condition and, ultimately, their ability to
pay. If Verisign determines from the outset of an arrangement that collectability is not probable based upon its credit
review process, revenues are recognized as cash is collected.

Registry Services

Registry Services revenues primarily arise from fixed fees charged to registrars for the initial registration or renewal of

.com, .net, and other domain names. Revenues from the initial registration or renewal of domain names are deferred and
recognized ratably over the registration term, generally one year and up to ten years. Fees for renewals and advance extensions
to the existing term are deferred until the new incremental period commences. These fees are then recognized ratably over the
renewal term.

Verisign also offers promotional marketing programs to its registrars based upon market conditions and the business
environment in which the registrars operate. Amounts payable to these registrars for such promotional marketing programs are
usually recorded as a reduction of revenue. If Verisign obtains an identifiable benefit separate from the services it provides to
the registrars, then amounts payable up to the fair value of the benefit received are recorded as advertising expenses and the
excess, if any, is recorded as a reduction of revenue.

Security Services

Following the revenue recognition criteria above, revenues from Security Services are usually deferred and recognized

over the service term, generally one to two years.

Advertising Expenses

Advertising costs are expensed as incurred and are included in Sales and marketing expenses. Advertising expenses,
including costs for advertising campaigns conducted jointly with our registrar customers were $27.4 million, $17.2 million, and
$16.0 million in 2017, 2016, and 2015, respectively.

Income Taxes

Verisign uses the asset and liability method to account for income taxes. Deferred tax assets and liabilities are recognized

for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax bases and net operating loss carryforwards. Deferred tax assets and liabilities are
measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are
expected to be recovered or settled. The Tax Cuts and Jobs Act (“Tax Act”) was enacted on December 22, 2017, most
provisions of which will take effect starting in 2018. The Tax Act makes substantial changes to U.S. taxation of corporations,
including, lowering the U.S. federal corporate income tax rate from 35% to 21%, and instituting a territorial tax system, along
with a one-time tax on accumulated foreign earnings. The effect on deferred tax assets and liabilities of a change in law or tax
rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to
reduce deferred tax assets to an amount whose realization is more likely than not. For every tax-paying component and within
each tax jurisdiction, all deferred tax liabilities and assets are offset and presented as a single net noncurrent asset or liability.

2017VERISIGN FORM 10-KVERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

The Company’s income taxes payable is reduced by the tax benefits from restricted stock unit (“RSU”) vestings equal to

the fair market value of the stock at the vesting date. Subsequent to the adoption of ASU No. 2016-09, Improvements to
Employee Share-Based Payment Accounting on January 1, 2017, if the income tax benefit at the exercise or vesting date differs
from the income tax benefit recorded based on the grant date fair value of the RSUs, the excess or shortfall of the tax benefit is
recognized within income tax expense.

Among other changes, the Tax Act includes a provision designed to currently tax global intangible low-taxed income

(“GILTI”). The Company is evaluating available accounting policy alternatives to either record the U.S. income tax effect of
future GILTI inclusions in the period in which they arise or establish deferred taxes with respect to the expected future tax
liabilities associated with future GILTI inclusions, but has not yet made a policy election.

Verisign’s global operations involve dealing with uncertainties and judgments in the application of complex tax
regulations in multiple jurisdictions. The final taxes payable are dependent upon many factors, including negotiations with
taxing authorities in various jurisdictions and resolution of disputes arising from U.S. federal, state, and international tax audits.
The Company may only recognize or continue to recognize tax positions that are more likely than not to be sustained upon
examination. The Company adjusts these liabilities for uncertain tax positions in light of changing facts and circumstances;
however, due to the complexity of some of these uncertainties, the ultimate resolution may result in a payment that is materially
different from its current estimate of the tax liabilities.

The Company’s assumptions, judgments and estimates relative to the value of a deferred tax asset take into account
predictions of the amount and character of future taxable income, such as income from operations or capital gains income.
Actual operating results and the underlying amount and character of income in future years could render the Company’s current
assumptions, judgments and estimates of recoverable net deferred taxes inaccurate. Any of the assumptions, judgments and
estimates mentioned above could cause the Company’s actual income tax obligations to differ from its estimates, thus
materially impacting its financial condition and results of operations.

Stock-based Compensation

The Company’s stock-based compensation is primarily related to RSUs granted to employees and its employee stock

purchase plan (“ESPP”). Stock-based compensation expense is typically recognized ratably over the requisite service period.
Subsequent to the adoption of ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting on January 1,
2017, forfeitures of stock-based awards are no longer estimated at the time of grant but are recognized as they occur. The
Company also grants RSUs which include performance conditions, and in some cases market conditions, to certain executives.
The expense for these performance-based RSUs is recognized based on the probable outcome of the performance conditions.
The expense recognized for awards with market conditions is based on the grant date fair value of the awards including the
impact of the market conditions, using a Monte Carlo simulation model. The Company uses the Black-Scholes option pricing
model to determine the fair value of its ESPP offerings. The determination of the fair value of stock-based payment awards
using the Monte Carlo simulation model or the Black-Scholes option-pricing model is affected by the Company’s stock price as
well as assumptions regarding a number of complex and subjective variables.

Earnings per Share

The Company computes basic earnings per share by dividing net income by the weighted-average number of common

shares outstanding during the period. Diluted earnings per share gives effect to dilutive potential common shares, including
outstanding stock options, unvested RSUs, ESPP offerings and the conversion spread related to the Subordinated Convertible
Debentures using the treasury stock method.

Fair Value of Financial Instruments

The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three
levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair
value measurement:

• Level 1: Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets.
• Level 2: Inputs reflect quoted prices for identical assets or liabilities in markets that are not active; quoted prices for
similar assets or liabilities in active markets; inputs other than quoted prices that are observable for the assets or
liabilities; or inputs that are derived principally from or corroborated by observable market data by correlation or other
means.

2017VERISIGN FORM 10-KVERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

• Level 3: Unobservable inputs reflecting the Company’s own assumptions incorporated in valuation techniques used to
determine fair value. These assumptions are required to be consistent with market participant assumptions that are
reasonably available.

The Company measures and reports certain financial assets and liabilities at fair value on a recurring basis, including its

investments in money market funds classified as Cash and cash equivalents, marketable securities, and foreign currency
forward contracts.

Legal Proceedings

Verisign is involved in various investigations, claims and lawsuits arising in the normal conduct of its business, none of

which, in its opinion, will have a material adverse effect on its financial condition, results of operations, or cash flows. The
Company cannot assure you that it will prevail in any litigation. Regardless of the outcome, any litigation may require the
Company to incur significant litigation expense and may result in significant diversion of management attention.

While certain legal proceedings and related indemnification obligations to which the Company is a party specify the
amounts claimed, such claims may not represent reasonably possible losses. Given the inherent uncertainties of the litigation,
the ultimate outcome of these matters cannot be predicted at this time, nor can the amount of possible loss or range of loss, if
any, be reasonably estimated, except in circumstances where an aggregate litigation accrual has been recorded for probable and
reasonably estimable loss contingencies. A determination of the amount of accrual required, if any, for these contingencies is
made after careful analysis of each matter. The required accrual may change in the future due to new developments in each
matter or changes in approach such as a change in settlement strategy in dealing with these matters. The Company does not
believe that any such matter currently being reviewed will have a material adverse effect on its financial condition, results of
operations, or cash flows.

Note 2. Financial Instruments

Cash, Cash Equivalents, and Marketable Securities

The following table summarizes the Company’s cash, cash equivalents, and marketable securities and the fair value
categorization of the financial instruments measured at fair value on a recurring basis:

Cash .......................................................................................................................................... $
Time deposits ...........................................................................................................................
Money market funds (Level 1) .................................................................................................
Debt securities issued by the U.S. Treasury and other U.S. government corporations and
agencies (Level 1) ....................................................................................................................
Equity securities of public companies (Level 1) ......................................................................

Total .................................................................................................................................. $

Included in Cash and cash equivalents ..................................................................................... $
Included in Marketable securities .............................................................................................
Included in Other assets (Restricted cash) ................................................................................

Total .................................................................................................................................. $

As of December 31,

2017

2016

(In thousands)

135,092 $
3,682
116,068

39,183
4,632
134,790

2,169,172
25

2,424,039 $

1,626,764
2,174
1,807,543

465,851 $

1,948,900
9,288
2,424,039 $

231,945
1,565,962
9,636
1,807,543

The fair value of the debt securities held as of December 31, 2017 was $2.2 billion, including less than $1.0 million of

gross and net unrealized losses. All of the debt securities held as of December 31, 2017 have contractual maturities of less than
one year.

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

Fair Value Measurements

The fair value of the Company’s investments in money market funds approximates their face value. Such instruments are

classified as Level 1 and are included in Cash and cash equivalents.

The fair value of the debt securities consisting of U.S. Treasury bills is based on their quoted market prices and are
classified as Level 1. Debt securities purchased with original maturities in excess of three months are included in Marketable
securities. Debt securities purchased with original maturities less than three months are included in Cash and cash equivalents.

The fair value of the equity securities of public companies is based on quoted market prices and are classified as Level 1.

Investments in equity securities of public companies are included in marketable securities.

As of December 31, 2017, the Company’s other financial instruments include cash, accounts receivable, restricted cash,

and accounts payable whose carrying values approximated their fair values. The fair value of the Company’s Subordinated
Convertible Debentures was $4.2 billion as of December 31, 2017. The fair values of the Company’s senior notes due 2023
(the “2023 Senior Notes”), the senior notes due 2025 (the “2025 Senior Notes”), and the senior notes due 2027 (the “2027
Senior Notes”) were $772.9 million, $544.4 million, and $563.7 million, respectively, as of December 31, 2017. The fair values
of these debt instruments are based on available market information from public data sources and are classified as Level 2.

Note 3. Other Balance Sheet Items

Other Current Assets

Other current assets consist of the following:

Prepaid expenses ...................................................................................................................... $
Accounts receivable, net ...........................................................................................................
Income taxes receivable ...........................................................................................................
Other .........................................................................................................................................

Total other current assets ................................................................................................... $

Property and Equipment, Net

The following table presents the detail of property and equipment, net:

Land ......................................................................................................................................... $
Buildings and building improvements .....................................................................................
Computer equipment and software ..........................................................................................
Capital work in progress ..........................................................................................................
Office equipment and furniture ................................................................................................
Leasehold improvements .........................................................................................................
Total cost .............................................................................................................................
Less: accumulated depreciation ...............................................................................................

Total property and equipment, net ....................................................................................... $

As of December 31,

2017

2016

(In thousands)

15,787 $
5,111
6,347
4,157
31,402 $

14,385
13,051
15,328
1,671
44,435

As of December 31,

2017

2016

(In thousands)

31,141 $
246,654
462,469
4,024
6,472
1,403
752,163
(488,650)
263,513 $

31,141
246,237
441,732
4,246
6,203
1,350
730,909
(464,784)
266,125

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

Goodwill

The following table presents the detail of goodwill:

Goodwill, gross ........................................................................................................................ $
Accumulated goodwill impairment ..........................................................................................

Total goodwill ...................................................................................................................... $

As of December 31,

2017

2016

(In thousands)

1,537,843 $
(1,485,316)

52,527 $

1,537,843
(1,485,316)
52,527

There was no impairment of goodwill or other long-lived assets recognized in any of the periods presented.

Deposits to Acquire Intangible Assets

As of December 31, 2017, the Company has recorded $145.0 million for the future assignment to the Company of
contractual rights to the .web gTLD, pending resolution of objections by other applicants, regulatory review, and approval from
ICANN. Upon assignment of the contractual rights, the Company will record the total investment as an indefinite-lived
intangible asset.

Other Long-Term Assets

Other long-term assets consist of the following:

Long-term restricted cash .........................................................................................................
Other taxes receivable ..............................................................................................................
Long-term prepaid expenses and other assets ..........................................................................

Total other long-term assets .............................................................................................. $

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consist of the following:

Accounts payable ..................................................................................................................... $
Accrued employee compensation .............................................................................................
Customer deposits, net .............................................................................................................
Interest Payable ........................................................................................................................
Taxes payable and other tax liabilities ......................................................................................
Other accrued liabilities ............................................................................................................

Total accounts payable and accrued liabilities .................................................................. $

As of December 31,

2017

2016

(In thousands)
9,288
5,673
3,642
18,603 $

9,636
5,673
3,884
19,193

As of December 31,

2017

2016

(In thousands)

20,923 $
51,481
63,617
47,357
13,477
22,748
219,603 $

19,455
61,426
52,173
27,701
23,144
20,021
203,920

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

DECEMBER 31, 2017, 2016 AND 2015

VERISIGN, INC.

Note 4. Debt and Interest Expense

Senior Notes

As of December 31, 2017, the Company had senior notes outstanding of $1.8 billion, net of unamortized issuance costs.

The balance of the senior notes includes the $550.0 million principal amount of 4.75% senior unsecured notes which were
issued in July 2017. All of the outstanding senior notes were issued at par and are senior unsecured obligations of the
Company. Interest is payable on each of the senior notes semi-annually. Each of the senior notes issuances is redeemable, in
whole or in part, at the Company’s option at times and redemption prices specified in the indentures.

The following table summarizes information related to our Senior notes (in thousands, except interest rates):

As of December 31,

2017

2016

Senior notes due 2023 ......................

April 16, 2013 May 1, 2023

4.625%$

750,000 $

Issuance Date

Maturity Date

Interest Rate

Principal

Senior notes due 2025 ......................

March 27, 2015 April 1, 2025

Senior notes due 2027 ......................

July 5, 2017 July 15, 2027

5.250%

4.750%

500,000

550,000

(17,471)

750,000

500,000

—

(12,811)

1,782,529 $

1,237,189

Unamortized issuance costs .............

Total senior notes ........................

The indenture governing the 2023 Senior Notes contains covenants that limit the ability of the Company and/or its

restricted subsidiaries, under certain circumstances, to, among other things: (i) pay dividends or make distributions on, or
redeem or repurchase, its capital stock; (ii) make certain investments; (iii) create liens on assets; (iv) enter into sale/leaseback
transactions and (v) merge or consolidate or sell all or substantially all of its assets. These covenants are subject to a number of
important limitations and exceptions. The Indenture also provides for events of default, which, if any of them occurs, may
permit or, in certain circumstances, require the principal, premium, if any, accrued and unpaid interest and any other monetary
obligations on all the then outstanding Notes to be due and payable immediately. The Company has remained in compliance
with these covenants and no events of default have occurred over the term of the Notes.

2015 Credit Facility

On March 31, 2015, the Company entered into a credit agreement for a $200.0 million committed senior unsecured
revolving credit facility (the “2015 Credit Facility”). The 2015 Credit Facility includes financial covenants requiring that the
Company’s interest coverage ratio not be less than 3.0 to 1.0 for any period of four consecutive quarters and the Company’s
leverage ratio not exceed 2.5 to 1.0. As of December 31, 2017, there were no borrowings outstanding under the facility and the
Company was in compliance with the financial covenants. The 2015 Credit Facility expires on April 1, 2020 at which time any
outstanding borrowings are due. Verisign may from time to time request lenders to agree on a discretionary basis to increase the
commitment amount by up to an aggregate of $150.0 million.

Subordinated Convertible Debentures

In August 2007, Verisign issued $1.25 billion principal amount of 3.25% subordinated convertible debentures due
August 15, 2037, in a private offering. The Subordinated Convertible Debentures are initially convertible, subject to certain
conditions, into shares of the Company’s common stock at a conversion rate of 29.0968 shares of common stock per $1,000
principal amount of Subordinated Convertible Debentures, representing an initial effective conversion price of approximately
$34.37 per share of common stock.

The Company’s common stock price exceeded the current conversion price threshold trigger of $44.68 during the fourth

quarter of 2017. Accordingly, the Subordinated Convertible Debentures were convertible at the option of each holder during
the first quarter of 2018. Further, in the event of conversion, the Company intends, and has the ability, to settle the principal
amount of the Subordinated Convertible Debentures in cash, and therefore, classified the debt component of the Subordinated
Convertible Debentures, net of unamortized debt issuance costs as a current liability, as of December 31, 2017. As of
December 31, 2017, the if-converted value of the Subordinated Convertible Debentures exceeded its principal amount. Based
on the if-converted value of the Subordinated Convertible Debentures as of December 31, 2017, the conversion spread could
have required the Company to issue up to an additional 25.4 million shares of common stock.

At issuance, the Company calculated the carrying value of the liability component as the present value of its cash flows

using a discount rate of 8.5% (borrowing rate for similar non-convertible debt with no contingent payment options), adjusted

for the fair value of the contingent interest feature, yielding an effective interest rate of 8.39%. The excess of the principal

amount of the debt over the carrying value of the liability component is also referred to as the “debt discount” or “equity

component” of the Subordinated Convertible Debentures. The debt discount has been amortized using the Company’s effective

interest rate of 8.39% over the 30 year term of the Subordinated Convertible Debentures as a non-cash charge included in

Interest expense. Interest is paid semiannually in arrears on August 15 and February 15.

Proceeds upon issuance of the Subordinated Convertible Debentures were as follows (in thousands):

Principal value of Subordinated Convertible Debentures .................................................................................... $

1,250,000

Less: Issuance costs ..............................................................................................................................................

(25,777)

Net proceeds, Subordinated Convertible Debentures ............................................................................... $

1,224,223

Amounts recognized at issuance:

Subordinated Convertible Debentures, including contingent interest derivative (net of issuance costs of

$11,328) ........................................................................................................................................................ $

Additional paid-in capital ..............................................................................................................................

Long-term deferred tax liabilities ..................................................................................................................

Non-operating loss ........................................................................................................................................

546,915

418,996

267,225

(8,913)

Net proceeds, Subordinated Convertible Debentures ............................................................................... $

1,224,223

The table below presents the carrying amounts of the liability and equity components:

Debt discount upon issuance (net of issuance costs of $14,449) ........................................... $

Deferred taxes associated with the debt discount upon issuance ..........................................

Carrying amount of equity component .................................................................................. $

Principal amount of Subordinated Convertible Debentures .................................................. $

Unamortized discount of liability component .......................................................................

Unamortized debt issuance costs associated with the liability component ...........................

Carrying amount of liability component ...............................................................................

Contingent interest derivative ...............................................................................................

Subordinated Convertible Debentures, including contingent interest derivative .................. $

As of December 31,

2017

2016

(In thousands)

686,221 $

(267,225)

418,996 $

1,250,000 $

(612,303)

(10,081)

627,616

—

627,616 $

686,221

(267,225)

418,996

1,250,000

(624,315)

(10,260)

615,425

14,339

629,764

The Company evaluated its debt obligations, including the Subordinated Convertible Debentures subsequent to the

enactment of the Tax Act which lowers the U.S. federal income tax rate and imposes a new limitation on interest deductibility

for tax purposes. On February 15, 2018, the Company called for the redemption of all of the outstanding Subordinated

Convertible Debentures. The debentures will be redeemed on May 1, 2018 at a redemption price equal to 100% of the principal,

plus accrued but unpaid interest up to, but not including, the redemption date. The Subordinated Convertible Debentures called

for redemption may be converted at any time before the close of business on Monday, April 30, 2018. If holders elect to convert

their debentures, the Company intends to settle the $1.25 billion principal value in cash, and the excess value will be settled in

shares of the Company’s stock.

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

At issuance, the Company calculated the carrying value of the liability component as the present value of its cash flows
using a discount rate of 8.5% (borrowing rate for similar non-convertible debt with no contingent payment options), adjusted
for the fair value of the contingent interest feature, yielding an effective interest rate of 8.39%. The excess of the principal
amount of the debt over the carrying value of the liability component is also referred to as the “debt discount” or “equity
component” of the Subordinated Convertible Debentures. The debt discount has been amortized using the Company’s effective
interest rate of 8.39% over the 30 year term of the Subordinated Convertible Debentures as a non-cash charge included in
Interest expense. Interest is paid semiannually in arrears on August 15 and February 15.

Proceeds upon issuance of the Subordinated Convertible Debentures were as follows (in thousands):

Principal value of Subordinated Convertible Debentures .................................................................................... $
Less: Issuance costs ..............................................................................................................................................

Net proceeds, Subordinated Convertible Debentures ............................................................................... $

Amounts recognized at issuance:

Subordinated Convertible Debentures, including contingent interest derivative (net of issuance costs of
$11,328) ........................................................................................................................................................ $
Additional paid-in capital ..............................................................................................................................
Long-term deferred tax liabilities ..................................................................................................................
Non-operating loss ........................................................................................................................................

Net proceeds, Subordinated Convertible Debentures ............................................................................... $

1,250,000
(25,777)
1,224,223

546,915
418,996
267,225
(8,913)
1,224,223

The table below presents the carrying amounts of the liability and equity components:

Debt discount upon issuance (net of issuance costs of $14,449) ........................................... $
Deferred taxes associated with the debt discount upon issuance ..........................................
Carrying amount of equity component .................................................................................. $

Principal amount of Subordinated Convertible Debentures .................................................. $
Unamortized discount of liability component .......................................................................
Unamortized debt issuance costs associated with the liability component ...........................
Carrying amount of liability component ...............................................................................
Contingent interest derivative ...............................................................................................
Subordinated Convertible Debentures, including contingent interest derivative .................. $

As of December 31,

2017

2016

(In thousands)

686,221 $
(267,225)
418,996 $

1,250,000 $
(612,303)
(10,081)
627,616
—

627,616 $

686,221
(267,225)
418,996

1,250,000
(624,315)
(10,260)
615,425
14,339
629,764

The Company evaluated its debt obligations, including the Subordinated Convertible Debentures subsequent to the
enactment of the Tax Act which lowers the U.S. federal income tax rate and imposes a new limitation on interest deductibility
for tax purposes. On February 15, 2018, the Company called for the redemption of all of the outstanding Subordinated
Convertible Debentures. The debentures will be redeemed on May 1, 2018 at a redemption price equal to 100% of the principal,
plus accrued but unpaid interest up to, but not including, the redemption date. The Subordinated Convertible Debentures called
for redemption may be converted at any time before the close of business on Monday, April 30, 2018. If holders elect to convert
their debentures, the Company intends to settle the $1.25 billion principal value in cash, and the excess value will be settled in
shares of the Company’s stock.

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

The following table presents the components of the Company’s interest expense:

Contractual interest on Subordinated Convertible Debentures ................. $
Contractual interest on Senior Notes .........................................................
Amortization of debt discount on the Subordinated Convertible
Debentures ................................................................................................
Amortization of debt issuance costs and other interest expense ...............

Total interest expense ......................................................................... $

Year Ended December 31,

2017

2016

2015

(In thousands)

47,432 $
73,638

12,012
3,254
136,336 $

40,625 $
60,938

11,094
2,907
115,564 $

40,625
54,667

10,218
2,121
107,631

Note 5. Stockholders’ Deficit

Treasury Stock

Treasury stock is accounted for under the cost method. Treasury stock includes shares repurchased under stock repurchase

programs and shares withheld in lieu of minimum tax withholdings due upon vesting of RSUs.

On February 9, 2017, the Company’s Board of Directors (“Board”) authorized the repurchase of approximately $640.9
million of its common stock, in addition to the $359.1 million of its common stock remaining available for repurchase under the
previous share repurchase program, for a total repurchase authorization of up to $1.0 billion of its common stock. The share
repurchase program has no expiration date. Purchases made under the program could be effected through open market
transactions, block purchases, accelerated share repurchase agreements or other negotiated transactions. As of December 31,
2017 there was approximately $477.4 million remaining available for repurchases under the share repurchase program.

Effective February 8, 2018, the Company’s Board authorized the repurchase of approximately $585.8 million of its

common stock, in addition to the $414.2 million of its common stock remaining available for repurchase under the previous
share repurchase program, for a total repurchase authorization of up to $1.0 billion of its common stock.

The summary of the Company’s common stock repurchases for 2017, 2016 and 2015 are as follows:

2017

2016

2015

Average
Price

(In thousands, except average price amounts)

Total repurchases under the repurchase plans ............
Total repurchases for tax withholdings ......................
Total repurchases ........................................................

6,265 $ 94.59
335 $ 85.27
6,600 $ 94.12

7,789 $ 81.73
320 $ 80.74
8,109 $ 81.70

9,338 $ 66.59
333 $ 64.03
9,671 $ 66.50

Total costs .................................................................. $ 621,173

$ 662,491

$ 643,169

Since inception, the Company has repurchased 227.6 million shares of its common stock for an aggregate cost of $8.8

billion, which is recorded as a reduction of Additional paid-in capital.

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

Accumulated Other Comprehensive Loss

The following table summarizes the changes in the components of Accumulated other comprehensive loss for 2017 and

2016:

Foreign Currency
Translation Adjustments
Loss

Unrealized (Loss) Gain On
Investments

(In thousands)

Total Accumulated
Other Comprehensive
Loss

Balance, December 31, 2015 ...................................... $
Changes ......................................................................
Balance, December 31, 2016 ......................................
Changes ......................................................................
Balance, December 31, 2017 ...................................... $

(3,451) $
85
(3,366)
530
(2,836) $

(542) $
455
(87)
(18)
(105) $

(3,993)
540
(3,453)
512
(2,941)

Note 6. Calculation of Earnings per Share

The following table presents the computation of weighted-average shares used in the calculation of basic and diluted

earnings per share:

Weighted-average shares of common stock outstanding ..............................
Weighted-average potential shares of common stock outstanding:

Conversion spread related to Subordinated Convertible Debentures ....
Unvested RSUs, and ESPP ....................................................................

Shares used to compute diluted earnings per share ......................................

Year Ended December 31,

2017

2016

2015

(In thousands)

100,325

107,001

114,155

23,247
608
124,180

21,074
758
128,833

18,047
829
133,031

The calculation of diluted weighted average shares outstanding, excludes potentially dilutive securities, the effect of
which would have been anti-dilutive, as well as performance based RSUs granted by the Company for which the relevant
performance criteria have not been achieved. The number of potential shares excluded from the calculation was not significant
in any period presented.

Note 7. Geographic and Customer Information

The Company generates revenue in the U.S.; Europe, the Middle East and Africa (“EMEA”); China; and certain other

countries, including Canada, Australia and Japan.

The following table presents a comparison of the Company’s geographic revenues:

U.S ............................................................................................................. $
EMEA ........................................................................................................
China ..........................................................................................................
Other ..........................................................................................................

Total revenues .......................................................................................... $

Year Ended December 31,

2017

2016

2015

694,759 $
211,349
106,526
152,461
1,165,095 $

(In thousands)

667,301 $
207,474
127,298
140,094
1,142,167 $

639,170
193,623
83,456
143,117
1,059,366

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

Revenues for our Registry Services business are generally attributed to the country of domicile and the respective regions
in which the Company’s registrars are located, however, this may differ from the regions where the registrars operate or where
registrants are located. Revenue growth for each region may be impacted by registrars reincorporating, relocating, or from
acquisitions or changes in affiliations of resellers. Revenue growth for each region may also be impacted by registrars
domiciled in one region, registering domain names in another region.

participant is granted an option to purchase common stock on the first day of each 24-month offering period and this option is

automatically exercised on the last day of each six-month purchase period during the offering period. The purchase price for the

common stock under the ESPP is 85% of the lesser of the fair market value of the common stock on the first day of the

applicable offering period or the last day of the applicable purchase period. Offering periods begin on the first business day of

February and August of each year. As of December 31, 2017, 3.5 million shares of the Company’s common stock remain

The following table presents a comparison of property and equipment, net of accumulated depreciation, by geographic

region:

reserved for future issuance under this plan.

Stock-based Compensation

U.S. .......................................................................................................................................... $
Other ........................................................................................................................................
Total property and equipment, net ........................................................................................... $

As of December 31,

2017

2016

(In thousands)

258,231 $
5,282
263,513 $

261,837
4,288
266,125

Major Customers

One customer accounted for approximately 31%, 30%, and 31% of revenues in 2017, 2016, and 2015, respectively. The

Company does not believe that the loss of this customer would have a material adverse effect on the Company’s business
because, in that event, end-users of this customer would transfer to the Company’s other existing customers.

Note 8. Employee Benefits and Stock-based Compensation

401(k) Plan

The Company maintains a defined contribution 401(k) plan (the “401(k) Plan”) for substantially all of its U.S. employees.

Under the 401(k) Plan, eligible employees may contribute up to 50% of their pre-tax salary, subject to the Internal Revenue
Service (“IRS”) annual contribution limits. The Company matches 50% of up to the first 6% of the employee’s annual salary
contributed to the plan. The Company contributed $4.0 million in 2017, $3.8 million in 2016, and $3.7 million in 2015 under
the 401(k) Plan. The Company can terminate matching contributions at its discretion at any time.

Equity Incentive Plan

The majority of Verisign’s stock-based compensation relates to RSUs. As of December 31, 2017, a total of 10.5 million

shares of common stock were reserved for issuance upon the vesting of RSUs and for the future grant of equity awards.

On May 26, 2006, the stockholders of Verisign approved the 2006 Equity Incentive Plan, which was amended and
restated on June 9, 2016 (the “2006 Plan”). The 2006 Plan authorizes the award of incentive stock options to employees and
non-qualified stock options, restricted stock awards, RSUs, stock bonus awards, stock appreciation rights and performance
shares to eligible employees, officers, directors, consultants, independent contractors and advisers. The 2006 Plan is
administered by the Compensation Committee which may delegate to a committee of one or more members of the Board or
Verisign’s officers the ability to grant certain awards and take certain other actions with respect to participants who are not
executive officers or non-employee directors. RSUs are awards covering a specified number of shares of Verisign common
stock that may be settled by issuance of those shares (which may be restricted shares). RSUs generally vest over four years.
Certain performance-based RSUs, granted to the Company’s executives, vest over either three or four year terms. Additionally,
the Company has granted fully vested RSUs to members of its Board in each of the last three years. The Compensation
Committee may authorize grants with a different vesting schedule in the future. A total of 27.0 million common shares were
authorized and reserved for issuance under the 2006 Plan.

2007 Employee Stock Purchase Plan

On August 30, 2007, the Company’s stockholders approved the 2007 Employee Stock Purchase Plan, and in 2017

approved an amendment to increase the shares reserved for issuance by 2.5 million to a total of 8.5 million common shares
authorized and reserved for issuance under the ESPP. Eligible employees may purchase common stock through payroll
deductions by electing to have between 2% and 25% of their compensation withheld to cover the purchase price. Each

Stock-based compensation is classified in the Consolidated Statements of Comprehensive Income in the same expense

line items as cash compensation. The following table presents the classification of stock-based compensation:

Year Ended December 31,

2017

2016

2015

(In thousands)

Cost of revenues ......................................................................................... $

7,030 $

Sales and marketing....................................................................................

Research and development .........................................................................

General and administrative .........................................................................

5,688

6,113

34,076

Total stock-based compensation ................................................................. $

52,907 $

7,253 $

5,738

6,739

30,314

50,044 $

7,009

6,763

6,488

25,815

46,075

The following table presents the nature of the Company’s total stock-based compensation:

RSUs .......................................................................................................... $

Performance-based RSUs ..........................................................................

ESPP ..........................................................................................................

Capitalization (Included in Property and equipment, net) .........................

Total stock-based compensation expenses .......................................... $

Year Ended December 31,

2017

2016

2015

(In thousands)

38,087 $

13,270

4,005

(2,455)

52,907 $

37,325 $

11,512

3,593

(2,386)

50,044 $

36,664

8,078

4,051

(2,718)

46,075

The income tax benefit that was included within Income tax expense related to these stock-based compensation expenses for

2017, 2016, and 2015 was $12.5 million, $17.7 million, and $16.0 million, respectively. In 2017, the tax benefit reflects the

reduction in the U.S. statutory corporate tax rate from 35% to 21%.

RSUs Information

The following table summarizes unvested RSUs activity:

Unvested at beginning of period ...............

1,846 $

Granted .....................................................

Vested and settled ......................................

Forfeited ....................................................

2017

2016

2015

Year Ended December 31,

Weighted-

Average

Grant-Date

Fair Value

66.30

79.94

61.75

72.90

74.69

732

(885)

(105)

1,588 $

Weighted-

Average

Grant-Date

Fair Value

(Shares in thousands)

2,110 $

760

(873)

(151)

1,846 $

54.77

78.58

49.95

61.57

66.30

Weighted-

Average

Grant-Date

Fair Value

2,179 $

1,075

(932)

(212)

2,110 $

46.36

61.74

43.92

51.47

54.77

2017VERISIGN FORM 10-K

participant is granted an option to purchase common stock on the first day of each 24-month offering period and this option is
automatically exercised on the last day of each six-month purchase period during the offering period. The purchase price for the
common stock under the ESPP is 85% of the lesser of the fair market value of the common stock on the first day of the
applicable offering period or the last day of the applicable purchase period. Offering periods begin on the first business day of
February and August of each year. As of December 31, 2017, 3.5 million shares of the Company’s common stock remain
reserved for future issuance under this plan.

Stock-based Compensation

Stock-based compensation is classified in the Consolidated Statements of Comprehensive Income in the same expense

line items as cash compensation. The following table presents the classification of stock-based compensation:

Year Ended December 31,

2017

2016

2015

(In thousands)

Cost of revenues ......................................................................................... $
Sales and marketing....................................................................................
Research and development .........................................................................
General and administrative .........................................................................

Total stock-based compensation ................................................................. $

7,030 $
5,688
6,113
34,076
52,907 $

7,253 $
5,738
6,739
30,314
50,044 $

7,009
6,763
6,488
25,815
46,075

The following table presents the nature of the Company’s total stock-based compensation:

RSUs .......................................................................................................... $
Performance-based RSUs ..........................................................................
ESPP ..........................................................................................................
Capitalization (Included in Property and equipment, net) .........................

Total stock-based compensation expenses .......................................... $

Year Ended December 31,

2017

2016

2015

(In thousands)

38,087 $
13,270
4,005
(2,455)
52,907 $

37,325 $
11,512
3,593
(2,386)
50,044 $

36,664
8,078
4,051
(2,718)
46,075

The income tax benefit that was included within Income tax expense related to these stock-based compensation expenses for
2017, 2016, and 2015 was $12.5 million, $17.7 million, and $16.0 million, respectively. In 2017, the tax benefit reflects the
reduction in the U.S. statutory corporate tax rate from 35% to 21%.

RSUs Information

The following table summarizes unvested RSUs activity:

Unvested at beginning of period ...............
Granted .....................................................
Vested and settled ......................................
Forfeited ....................................................

2017

2016

2015

Year Ended December 31,

Weighted-
Average
Grant-Date
Fair Value

1,846 $
732
(885)
(105)
1,588 $

66.30
79.94
61.75
72.90
74.69

Weighted-
Average
Grant-Date
Fair Value

(Shares in thousands)

2,110 $
760
(873)
(151)
1,846 $

54.77
78.58
49.95
61.57
66.30

Weighted-
Average
Grant-Date
Fair Value

2,179 $
1,075
(932)
(212)
2,110 $

46.36
61.74
43.92
51.47
54.77

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

The RSUs in the table above include certain RSUs granted to the Company’s executives that are subject to performance

conditions, and in some cases, market conditions. The unvested RSUs as of December 31, 2017 include approximately 0.4
million RSUs subject to performance and/or market conditions. The number of RSUs, subject to these performance and market
conditions, that ultimately vest may range from zero to a maximum of 0.8 million RSUs depending on the level of performance
achieved and whether any market conditions are satisfied.

The closing price of Verisign’s stock was $114.44 on December 31, 2017. As of December 31, 2017, the aggregate

market value of unvested RSUs was $181.7 million. The fair values of RSUs that vested during 2017, 2016, and 2015 were
$75.9 million, $70.5 million, and $59.8 million, respectively. As of December 31, 2017, total unrecognized compensation cost
related to unvested RSUs was $77.5 million which is expected to be recognized over a weighted-average period of 2.5 years.

Note 9. Non-operating Income (Loss), Net

The following table presents the components of Non-operating income (loss), net:

Year Ended December 31,

2017

2016

2015

(In thousands)

Interest income ........................................................................................... $
Gain on sale of business .............................................................................
Unrealized (loss) gain on contingent interest derivative on Subordinated
Convertible Debentures ..............................................................................
Other, net ....................................................................................................
Total non-operating income (loss), net ....................................................... $

17,944 $
10,421

(893)
154
27,626 $

6,191 $
—

2,402
1,572
10,165 $

2,128
—

(14,130)
1,337
(10,665)

Interest income is earned principally from the Company’s surplus cash balances and marketable securities. On April 1,

2017, the Company completed the sale of its iDefense business, which resulted in a gain of approximately $10.4 million in
2017. The unrealized gains and losses on the contingent interest derivative on the Subordinated Convertible Debentures reflects
the change in value of the derivative that results primarily from the changes in the Company’s stock price. The fair value of the
contingent interest derivative for periods after August 15, 2017 is negligible due to the Company’s right to redeem the
debentures. Contingent interest after August 15, 2017 was included in Interest expense.

Note 10. Income Taxes

Income before income taxes is categorized geographically as follows:

United States .............................................................................................. $
Foreign .......................................................................................................

Total income before income taxes ........................................................... $

Year Ended December 31,

2017

2016

2015

313,351 $
285,661
599,012 $

(In thousands)

299,304 $
281,869
581,173 $

248,932
238,718
487,650

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

The provision for income taxes consisted of the following:

Current expense:

Federal ................................................................................................ $
State ....................................................................................................
Foreign, including withholding tax .....................................................

Deferred expense (benefit):

Federal ................................................................................................
State ....................................................................................................
Foreign ................................................................................................

Total income tax expense ...................................................................... $

Year Ended December 31,

2017

2016

2015

(In thousands)

16,870 $
294
15,539
32,703

90,113
19,654
(706)
109,061
141,764 $

34,842 $
240
19,268
54,350

64,301
21,492
385
86,178
140,528 $

13,601
156
17,241
30,998

65,168
15,767
481
81,416
112,414

The difference between income tax expense and the amount resulting from applying the federal statutory rate of 35% to

Income before income taxes is attributable to the following:

Year Ended December 31,

2017

2016

2015

(In thousands)

Income tax expense at federal statutory rate .............................................. $
State taxes, net of federal benefit ...............................................................
Differences between statutory rate and foreign effective tax rate ..............
U.S. federal tax rate change .......................................................................
U.S. tax on accumulated foreign earnings, net of foreign tax credits .........
Foreign withholding tax on unremitted foreign earnings, net of foreign
tax credits ...................................................................................................
Other ..........................................................................................................
Total income tax expense ........................................................................... $

209,654 $
13,029
(83,808)
(186,800)
162,353

33,619
(6,283)
141,764 $

203,410 $
14,517
(79,087)
—
—

—
1,688
140,528 $

170,677
9,616
(66,238)
—
—

—
(1,641)
112,414

The Tax Act was enacted on December 22, 2017, most provisions of which will take effect starting in 2018. The Tax Act
makes substantial changes to U.S. taxation of corporations, including, lowering the U.S. federal corporate income tax rate from
35% to 21%, and instituting a territorial tax system, along with a one-time tax on accumulated foreign earnings. Upon
enactment, the Company remeasured its deferred tax balances to reflect the new 21% U.S. federal tax rate, which resulted in a
tax benefit of $186.8 million in 2017. The Company also recorded a provisional deferred tax liability for the one-time U.S. tax
of $162.4 million, triggered by the Tax Act, on accumulated foreign earnings, net of $38.3 million of resulting previously
unrecognized foreign tax credits. As a result of the Tax Act, the Company no longer intends to indefinitely reinvest the earnings
of its foreign subsidiaries offshore, and therefore, recognized a provisional deferred tax liability of $33.6 million for foreign
withholding tax on its unremitted foreign earnings, net of $26.3 million of resulting foreign tax credits.

The Company has not completed its accounting for the tax effects of the enactment of the Tax Act. Specifically, the
amounts recorded for the U.S. tax on accumulated foreign earnings, net of foreign tax credits and the foreign withholding tax on
unremitted foreign earnings, net of foreign tax credits, and the state income tax effects of these two items are provisional
amounts based on the Company’s estimates. The Company expects to complete the accounting for these impacts of the Tax Act
in the fourth quarter of 2018 as it finalizes its cumulative earnings and profits of its foreign subsidiaries and receives additional
guidance from the IRS pertaining to the Tax Act. The impacts of additional guidance and changes in estimates related to the
effects of the Tax Act, if any, will be recorded in the period the additional guidance or information is available.

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

The Company qualifies for a tax holiday in Switzerland which does not expire, unless the required non-Swiss income and
expense thresholds are no longer met, or there is a law change which eliminates the holiday. The tax holiday provides reduced
rates of taxation on certain types of income and also require certain thresholds of foreign source income. The tax holiday
increased the Company’s earnings per share by $0.10, $0.16, and $0.14 in 2017, 2016, and 2015, respectively.

The tax effects of temporary differences that give rise to significant portions of the Company’s deferred tax assets and

liabilities are as follows:

Deferred tax assets:

Net operating loss carryforwards .......................................................................................... $
Deductible goodwill and intangible assets ............................................................................
Tax credit carryforwards .......................................................................................................
Deferred revenue, accruals and reserves ...............................................................................
Capital loss carryforwards ....................................................................................................
Other .....................................................................................................................................
Total deferred tax assets .....................................................................................................
Valuation allowance ................................................................................................................
Net deferred tax assets ........................................................................................................

Deferred tax liabilities:

Property and equipment ........................................................................................................
U.S. tax on accumulated foreign earnings ............................................................................
Foreign withholding tax on unremitted earnings ..................................................................
Subordinated Convertible debentures ...................................................................................
Other .....................................................................................................................................
Total deferred tax liabilities ................................................................................................
Total net deferred tax liabilities .......................................................................................... $

As of December 31,

2017

2016

(In thousands)

70,587 $
1,192
52,659
77,869
778,430
5,584
986,321
(783,725)
202,596

(1,577)
(162,912)
(33,619)
(430,088)
(3,116)
(631,312)
(428,716) $

46,879
10,473
59,337
114,548
1,161,772
4,791
1,397,800
(1,162,101)
235,699

(4,212)
—
—
(590,921)
(2,614)
(597,747)
(362,048)

With the exception of deferred tax assets related to capital loss and certain state net operating loss carryforwards,
management believes it is more likely than not that the tax effects of the deferred tax liabilities together with future taxable
income, will be sufficient to fully recover the remaining deferred tax assets.

As of December 31, 2017, the Company had federal, state and foreign net operating loss carryforwards of approximately

$5.5 million, $1.3 billion and $18.9 million, respectively, before applying tax rates for the respective jurisdictions. As of
December 31, 2017, the Company had federal and state research tax credits of $4.2 million and $2.3 million, respectively, and
alternative minimum tax credits of $17.0 million available for future years. Certain net operating loss carryforwards and credits
are subject to an annual limitation under Internal Revenue Code Section 382, but are expected to be fully realized. The federal
and state net operating loss and federal tax credit carryforwards expire in various years from 2018 through 2034. The foreign
net operating loss can be carried forward indefinitely. As of December 31, 2017, the Company had federal and state capital loss
carryforwards of $2.9 billion and $3.1 billion, respectively, before applying tax rates for the respective jurisdictions. The capital
loss carryforwards expire in 2018 and are also subject to annual limitations under Internal Revenue Code Section 382. The
Company does not expect to realize any tax benefits from the capital loss carryforwards and accordingly has reserved the entire
amount through valuation allowance and accrual for uncertain tax positions. As of December 31, 2017, the Company has
foreign tax credit carryforwards of $121.5 million. The majority of these foreign tax credits will expire in 2024.

The deferred tax liability related to the Subordinated Convertible Debentures is driven by the excess of the tax deduction
taken for interest expense over the amount of interest expense recognized in the consolidated financial statements. The interest
expense deducted for tax purposes is based on the adjusted issue price of the Subordinated Convertible Debentures, while the
interest expense recognized in accordance with GAAP is based only on the liability portion of the Subordinated Convertible

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

Debentures. The adjusted issue price of the Subordinated Convertible Debentures grows over the term due to the difference
between the interest deduction taken for income tax, using a comparable yield of 8.5%, and the coupon rate of 3.25%,
compounded annually, adjusted for actual versus projected contingent interest payments

The Company maintains liabilities for uncertain tax positions. These liabilities involve considerable judgment and
estimation and are continuously monitored by management based on the best information available including changes in tax
regulations and other information. A reconciliation of the beginning and ending balances of the total amounts of gross
unrecognized tax benefits is as follows:

Beginning balance ................................................................................................................... $
Increases in tax positions for prior years .................................................................................
Decreases in tax positions for prior years ...............................................................................
Increases in tax positions for current year ...............................................................................
Decreases in tax positions due to settlement with taxing authorities ......................................
Ending balance ........................................................................................................................ $

As of December 31,

2017

2016

(In thousands)

220,682 $
3,699
(144)
395
(1,416)
223,216 $

220,280
119
(71)
354
—
220,682

As of December 31, 2017, approximately $217.0 million of unrecognized tax benefits, including penalties and interest,

could affect the Company’s tax provision and effective tax rate. It is reasonably possible that during the next twelve months, the
Company’s unrecognized tax benefits may change by a significant amount as a result of IRS audits. However the timing of
completion and ultimate outcome of the audits remains uncertain. Therefore, the Company cannot currently estimate the impact
on the balance of unrecognized tax benefits.

In accordance with its accounting policy, the Company recognizes accrued interest and penalties related to unrecognized

tax benefits as a component of tax expense. These accruals were not material in any period presented.

The Company’s major taxing jurisdictions are the U.S., the state of Virginia, and Switzerland. The Company’s U.S.
federal income tax returns are currently under examination by the IRS for 2010 through 2014. The Company’s other tax returns
are not currently under examination by their respective taxing jurisdictions. Because the Company has used net operating loss
carryforwards and other tax attributes to offset its taxable income in current and future years’ income tax returns for the U.S.
and Virginia, such attributes can be adjusted by these taxing authorities until the statute closes on the year in which such
attributes were utilized. The open years in Switzerland are the 2012 tax year and forward.

Note 11. Commitments and Contingencies

Purchase Obligations and Contractual Agreements

The following table represents the minimum payments required by Verisign under certain purchase obligations, leases, the

.tv Agreement with the Government of Tuvalu, and the interest payments and principal on the Subordinated Convertible
Debentures and the Senior Notes:

2018 .............................................................................. $
2019 ..............................................................................
2020 ..............................................................................
2021 ..............................................................................
2022 ..............................................................................
Thereafter .....................................................................
Total ............................................................................. $

Purchase
Obligations

.tv Agreement

Senior Notes
(In thousands)

Subordinated
Convertible
Debentures

Total

87,063 $ 1,279,388 $ 1,404,626
5,000 $
87,063
5,000
96,956
—
87,063
5,000
92,869
—
87,063
5,000
92,675
—
87,063
—
—
87,364
— 2,030,938
— 2,030,938
20,000 $ 2,466,253 $ 1,279,388 $ 3,805,428

33,175 $
4,893
806
612
301
—
39,787 $

2017VERISIGN FORM 10-K

VERISIGN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
DECEMBER 31, 2017, 2016 AND 2015

The amounts included in the table above related to the Subordinated Convertible Debentures include the February 2018

coupon and contingent interest payments in addition to the repayment of the full principal amount as a result of the redemption
of the debentures as discussed in Note 4, “Debt and Interest Expense.”

The amounts in the table above exclude $217.0 million of income tax related uncertain tax positions, as the Company is

unable to reasonably estimate the ultimate amount or time of settlement of those liabilities.

Verisign enters into certain purchase obligations with various vendors. The Company’s significant purchase obligations

include firm commitments with telecommunication carriers and other service providers. The Company does not have any
significant purchase obligations beyond 2022.

The Company has an agreement with Internet Corporation for Assigned Names and Numbers (“ICANN”) to be the sole
registry operator for domain names in the .com registry through November 30, 2024. Under this agreement, the Company pays
ICANN on a quarterly basis, $0.25 for each annual increment of a domain name registered or renewed during such quarter. As
of December 31, 2017, there were 131.9 million domain names in the .com registry. However, the number of domain names
registered and renewed each quarter may vary significantly. The Company incurred registry fees for the .com registry of $32.3
million in 2017, $31.5 million in 2016, and $30.9 million in 2015. Registry fees for other top-level domains that we operate
have been excluded from the table above because the amounts are variable or passed through to registrars.

The Company has an agreement with the Government of Tuvalu to be the sole registry operator for .tv domain names

through December 31, 2021. Registry fees were $5.0 million in each of the last three years.

Verisign leases a small portion of its facilities under operating leases that extend into 2020. Rental expenses under

operating leases were not material in any period presented. Future rental expenses under existing operating leases are not
material.

Off-Balance Sheet Arrangements

As of December 31, 2017 and 2016, the Company did not have any relationships with unconsolidated entities or financial

partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been
established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As
such, the Company is not exposed to any financing, liquidity, market or credit risk that could arise if the Company had engaged
in such relationships.

It is not the Company’s business practice to enter into off-balance sheet arrangements. However, in the normal course of

business, the Company does enter into contracts in which it makes representations and warranties that guarantee the
performance of the Company’s products and services. Historically, there have been no significant losses related to such
guarantees.

2017VERISIGN FORM 10-K

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its

behalf by the undersigned, thereunto duly authorized, in the City of Reston, Commonwealth of Virginia, on the 16th day of February 2018.

SIGNATURES

VERISIGN, INC.

By:

/S/ D. JAMES BIDZOS
D. James Bidzos
President and Chief Executive Officer

(Principal Executive Officer)

KNOW ALL PERSONS BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints D. James Bidzos,
George E. Kilguss, III, and Thomas C. Indelicarto, and each of them, his or her true lawful attorneys-in-fact and agents, with full power of substitution, for him
or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the
same, with all exhibits thereto and all documents in connection therewith, with the Securities and Exchange Commission, granted unto said attorneys-in-fact
and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents
or any of them, or his, her or their substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the registrant and

in the capacities indicated on the 16th day of February 2018.

Signature

Title

/S/ D. JAMES BIDZOS

D. JAMES BIDZOS

/S/ GEORGE E. KILGUSS, III
GEORGE E. KILGUSS, III

/S/ KATHLEEN A. COTE
KATHLEEN A. COTE

/S/ THOMAS F. FRIST III

THOMAS F. FRIST III

/S/ JAMIE S. GORELICK
JAMIE S. GORELICK

/S/ ROGER H. MOORE
ROGER H. MOORE

/S/

LOUIS A. SIMPSON
LOUIS A. SIMPSON

/S/ TIMOTHY TOMLINSON
TIMOTHY TOMLINSON

President, Chief Executive Officer,
Executive Chairman and Director
(Principal Executive Officer)

Chief Financial Officer

(Principal Financial and Accounting Officer)

Director

2017VERISIGN FORM 10-K(This page intentionally left blank)

2017VERISIGN FORM 10-K
VeriSign, Inc.
12061 Bluemont Way
Reston, Virginia 20190

April 11, 2018

To Our Stockholders:

You are cordially invited to attend the 2018 Annual Meeting of Stockholders of VeriSign, Inc. (the “Company”) to be held at our

corporate offices located at 12061 Bluemont Way, Reston, Virginia 20190 on Thursday, May 24, 2018, at 10:00 a.m., Eastern Time
(the “Meeting”).

The matters expected to be acted upon at the Meeting are described in detail in the following Notice of the 2018 Annual Meeting

of Stockholders and Proxy Statement.

We are utilizing a U.S. Securities and Exchange Commission rule that allows companies to furnish their proxy materials over

the internet. As a result, we are mailing to our stockholders a Notice of Internet Availability of Proxy Materials instead of a paper copy
of our annual report to security holders, which includes our Annual Report on Form 10-K for the year ended December 31, 2017 (the
“Annual Report”), and this Proxy Statement. The Notice of Internet Availability of Proxy Materials contains instructions on how to
access those documents over the internet. The Notice of Internet Availability of Proxy Materials also contains instructions on how
each stockholder can receive a paper copy of our proxy soliciting materials, including this notice and Proxy Statement, our Annual
Report and a form of proxy card or voting instruction card. We believe that this process will conserve natural resources and reduce the
costs of printing and distributing our proxy materials.

It is important that you use this opportunity to take part in the affairs of the Company by voting on the business to come before

this Meeting. WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE THE PROXY
ELECTRONICALLY OR BY PHONE AS DESCRIBED ON THE NOTICE OF INTERNET AVAILABILITY OF PROXY
MATERIALS AND UNDER “INTERNET AND TELEPHONE VOTING” IN THE PROXY STATEMENT, OR ALTERNATIVELY,
IF RECEIVING PAPER COPIES OF PROXY MATERIALS, DATE, SIGN AND PROMPTLY RETURN THE ACCOMPANYING
PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO THAT YOUR SHARES MAY BE REPRESENTED AT THE
MEETING. Returning or completing the proxy does not deprive you of your right to attend the Meeting and to vote your shares in
person.

We look forward to seeing you at our 2018 Annual Meeting of Stockholders.

Sincerely,

/s/ D. James Bidzos
D. James Bidzos
Chairman of the Board of Directors and Executive
Chairman, President and Chief Executive Officer

2018VERISIGN PROXY
(This page intentionally left blank)

2018VERISIGN PROXY
VERISIGN, INC.
12061 Bluemont Way
Reston, Virginia 20190

Notice of the 2018 Annual Meeting of Stockholders

TO OUR STOCKHOLDERS:

NOTICE IS HEREBY GIVEN that the 2018 Annual Meeting of Stockholders of VeriSign, Inc. (the “Company”) will be held at

the Company’s corporate offices located at 12061 Bluemont Way, Reston, Virginia 20190 on Thursday, May 24, 2018, at 10:00 a.m.,
Eastern Time. The 2018 Annual Meeting of Stockholders is being held for the following purposes:

1. To elect the seven directors of the Company named in the Proxy Statement, each to serve until the next annual meeting,

or until a successor has been elected and qualified or until the director’s earlier resignation or removal.

2. To approve, on a non-binding, advisory basis, the Company’s executive compensation.

3. To ratify the selection of KPMG LLP as the Company’s independent registered public accounting firm for the year

ending December 31, 2018.

4. To vote on a stockholder proposal, if properly presented at the meeting, requesting that the Board take steps to amend

the special meetings Bylaw provision, to reduce the ownership threshold to call a special meeting.

5. To transact such other business as may properly come before the 2018 Annual Meeting of Stockholders or any

adjournment or postponement thereof.

The foregoing items of business are more fully described in the Proxy Statement accompanying this Notice.

Only stockholders of record at the close of business on March 29, 2018, are entitled to notice of, and to vote at, the 2018 Annual

Meeting of Stockholders or any adjournment or postponement thereof.

By Order of the Board of Directors,

/s/ Thomas C. Indelicarto
Thomas C. Indelicarto
Secretary

Reston, Virginia
April 11, 2018

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE THE PROXY
ELECTRONICALLY OR BY PHONE AS DESCRIBED ON THE NOTICE OF INTERNET AVAILABILITY OF PROXY
MATERIALS AND UNDER “INTERNET AND TELEPHONE VOTING” IN THE PROXY STATEMENT, OR
ALTERNATIVELY, IF RECEIVING PAPER COPIES OF PROXY MATERIALS, COMPLETE, DATE, SIGN AND
PROMPTLY RETURN THE PROXY IN THE ENCLOSED POSTAGE-PAID ENVELOPE SO THAT YOUR SHARES MAY
BE REPRESENTED AT THE MEETING.

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting of Stockholders to be Held on May 24,
2018: The Proxy Statement and Annual Report are available at www.edocumentview.com/vrsn.

2018VERISIGN PROXYTABLE OF CONTENTS

Proxy Statement for the 2018 Annual Meeting of Stockholders...................................................................................................
Proposal No. 1—Election of Directors ..........................................................................................................................................
Director Nominees ...............................................................................................................................................................
Non-Employee Director Compensation Table for Fiscal 2017 ............................................................................................
Corporate Governance ...................................................................................................................................................................
Independence of Directors ...................................................................................................................................................
Board Leadership Structure .................................................................................................................................................
Succession Planning .............................................................................................................................................................
Board Role in Risk Oversight ..............................................................................................................................................
Board and Committee Meetings ..........................................................................................................................................
Board Members’ Attendance at the Annual Meeting ...........................................................................................................
Corporate Governance and Nominating Committee ............................................................................................................
Audit Committee ..................................................................................................................................................................
Audit Committee Financial Expert ......................................................................................................................................
Report of the Audit Committee ............................................................................................................................................
Compensation Committee ....................................................................................................................................................
Communicating with the Board ...........................................................................................................................................
Code of Conduct ..................................................................................................................................................................
Security Ownership of Certain Beneficial Owners and Management ...........................................................................................
Beneficial Ownership Table .................................................................................................................................................
Section 16(a) Beneficial Ownership Reporting Compliance ...............................................................................................

Proposal No. 2—To Approve, on a Non-Binding Advisory Basis, Verisign’s Executive Compensation
Executive Compensation ...............................................................................................................................................................
Compensation Discussion and Analysis ..............................................................................................................................
Compensation Committee Report ........................................................................................................................................
Compensation Committee Interlocks and Insider Participation ..........................................................................................
Summary Compensation Table ............................................................................................................................................
Grants of Plan-Based Awards for Fiscal 2017 .....................................................................................................................
Outstanding Equity Awards at Fiscal 2017 Year End ..........................................................................................................
Option Exercises and Stock Vested for Fiscal 2017 ............................................................................................................
Potential Payments Upon Termination or Change-in-Control .............................................................................................
Equity Compensation Plan Information ........................................................................................................................................
CEO Pay Ratio ..............................................................................................................................................................................
Policies and Procedures With Respect to Transactions With Related Persons ..............................................................................
Certain Relationships and Related Transactions ...........................................................................................................................
Proposal No. 3—Ratification of Selection of Independent Registered Public Accounting Firm .................................................
Principal Accountant Fees and Services ........................................................................................................................................
Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors .........

Proposal No. 4—Stockholder Proposal Requesting the Directors Take Steps to Amend the Bylaws to Change the
Ownership Threshold to Call Special Meetings ............................................................................................................................
Other Information ..........................................................................................................................................................................
2019 Stockholder Proposals or Nominations .......................................................................................................................
Other Business .....................................................................................................................................................................
Communicating With Verisign .............................................................................................................................................

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2018VERISIGN PROXYVERISIGN, INC.
12061 Bluemont Way
Reston, Virginia 20190

PROXY STATEMENT
FOR THE 2018 ANNUAL MEETING OF STOCKHOLDERS

April 11, 2018

The accompanying proxy is solicited on behalf of the Board of Directors (the “Board”) of VeriSign, Inc. (“Verisign” or the
“Company”) for use at the 2018 Annual Meeting of Stockholders (the “Meeting”) to be held at our corporate offices located at 12061
Bluemont Way, Reston, Virginia 20190 on Thursday, May 24, 2018 at 10:00 a.m., Eastern Time. Only holders of record of our
common stock at the close of business on March 29, 2018, which is the record date, will be entitled to vote at the Meeting. This Proxy
Statement and the accompanying form of proxy (collectively, the “Proxy Statement”) were first made available to stockholders on or
about April 11, 2018. Our annual report to security holders, which includes our Annual Report on Form 10-K for the year ended
December 31, 2017 (collectively, the “Annual Report”), is enclosed with this Proxy Statement for stockholders receiving a paper copy
of proxy soliciting materials. The Annual Report and Proxy Statement can both be accessed on the Investor Relations section of our
website at https://investor.verisign.com, or at www.edocumentview.com/vrsn.

All proxies will be voted in accordance with the instructions as submitted. Unless contrary instructions are specified, if the

applicable proxy is submitted (and not revoked) prior to the Meeting, the shares of Verisign common stock represented by the proxy
will be voted: (1) FOR the election of each of the seven director candidates nominated by the Board; (2) FOR the non-binding,
advisory resolution to approve Verisign’s executive compensation; (3) FOR the ratification of the selection of KPMG LLP as our
independent registered public accounting firm for the fiscal year ending December 31, 2018 (“fiscal 2018”); (4) AGAINST the
stockholder proposal, if properly presented at the meeting, requesting that the Board of Directors take steps to amend the bylaws to
reduce the ownership threshold to call a special meeting; and (5) in accordance with the best judgment of the named proxies on any
other matters properly brought before the Meeting.

Voting Rights

At the close of business on the record date, we had 97,004,832 shares of common stock outstanding and entitled to vote.

Holders of our common stock are entitled to one vote for each share held as of the record date.

Quorum, Effect of Abstentions and Broker Non-Votes, Vote Required to Approve the Proposals

A majority of the shares of common stock outstanding and entitled to vote must be present or represented by proxy at the
Meeting in order to have a quorum. Abstentions and broker non-votes will be treated as shares present for the purpose of determining
the presence of a quorum for the transaction of business at the Meeting. A broker non-vote occurs when a bank, broker or other
stockholder of record holding shares for a beneficial owner has not received voting instructions from the beneficial owner and does
not vote on a particular proposal because that record holder does not have discretionary voting power with respect to that “non-
routine” proposal. Each of the election of directors, the non-binding, advisory vote to approve executive compensation, and the
stockholder proposal, if properly presented at the meeting, requesting that the Board of Directors take steps to amend the bylaws to
reduce the ownership threshold to call a special meeting is a “non-routine” proposal and so shares for which record holders do not
receive voting instructions will not be voted on such matters.

If a quorum is present, to be elected, a nominee for director must receive a majority of the votes cast (the number of shares
voted “for” a director nominee must exceed the number of votes cast “against” that nominee). Under this voting standard, abstentions
and broker non-votes will not affect the voting outcome. Stockholders may not cumulate votes in the election of directors.

2018VERISIGN PROXYIf a nominee who currently serves as a director is not re-elected, Delaware law provides that the director would continue to

serve on the Board as a “holdover director.” Under our Corporate Governance Principles, each director that is not re-elected by the
stockholders must tender his or her resignation to the Board. In that situation, our Corporate Governance and Nominating Committee
would make a recommendation to the Board about whether to accept or reject the resignation, or whether to take other action. Within
90 days from the date that the election results are certified, the Board will act on the Corporate Governance and Nominating
Committee’s recommendation and publicly disclose its decision and the rationale behind it.

If a quorum is present, approvals of the proposals for:

•

the non-binding, advisory resolution to approve Verisign’s executive compensation;

• the ratification of the selection of KPMG LLP as the Company’s independent registered public accounting firm for fiscal

2018; and

•

the stockholder proposal, if properly presented at the meeting, requesting that the Board take steps to amend the bylaws to
reduce the ownership threshold to call a special meeting

require the affirmative vote of a majority of the shares of common stock present or represented by proxy and entitled to vote on the
subject matter. Under this voting standard, abstentions will have the effect of votes cast against the proposal, and broker non-votes will
not affect the voting outcome.

The inspector of elections appointed for the Meeting will separately tabulate for and against votes, abstentions and broker non-

votes.

Adjournment of Meeting

In the event that a quorum shall fail to attend the Meeting, either in person or represented by proxy, the Chairman may adjourn

the Meeting, or alternatively, the holders of a majority of the shares of stock entitled to vote who are present, in person or by proxy,
may adjourn the Meeting. Any such adjournment proposed by a stockholder or person named as a proxy would require the affirmative
vote of the majority of the outstanding shares present in person or represented by proxy at the Meeting.

Expenses of Soliciting Proxies

Verisign will pay the expenses of soliciting proxies to be voted at the Meeting. Verisign intends to retain Morrow Sodali LLC

for various services related to the solicitation of proxies, which we anticipate will cost approximately $32,500, plus reimbursement of
expenses. Following the original mailing of the Notice of Internet Availability of Proxy Materials and paper copies of proxies and
other proxy soliciting materials, we and/or our agents may also solicit proxies by mail, telephone, electronic transmission, including
email, or in person. Following the original mailing of the Notice of Internet Availability of Proxy Materials and paper copies of the
proxies and other proxy soliciting materials, we will request that brokers, custodians, nominees and other record holders of our shares
forward copies of the proxy and other proxy soliciting materials to persons for whom they hold shares and request authority for the
exercise of proxies. In such cases, we will reimburse the record holders for their reasonable expenses if they ask us to do so.

Revocability of Proxies

A stockholder who holds shares of record as a registered stockholder may revoke any proxy that is not irrevocable by attending

the Meeting and voting in person or by delivering a proxy in accordance with applicable law bearing a later date to the Secretary of the
Company. If your shares are held through a bank or brokerage firm, you must follow the instructions provided by that institution to
change or revoke your voting instructions.

Internet and Telephone Voting

If you hold shares of record as a registered stockholder, you can simplify your voting process and save the Company expense by

voting your shares by telephone at 1-800-652-VOTE (8683) or on the internet at www.envisionreports.com/vrsn twenty-four hours a
day, seven days a week. Telephone and internet voting are available through 12:00 a.m. Eastern Time the day of the Meeting. More
information regarding internet voting is given on the Notice of Internet Availability of Proxy Materials. If you hold shares through a
bank or brokerage firm, the bank or brokerage firm will provide you with separate instructions on a form you will receive from them.
Many such firms make telephone or internet voting available, but the specific processes available will depend on those firms’
individual arrangements.

Householding

A number of brokerage firms have instituted a procedure called “householding,” which has been approved by the Securities and

Exchange Commission (the “SEC”). Under this procedure, the firm delivers only one copy of the Notice of Internet Availability of
Proxy Materials or paper copies of the Annual Report and Proxy Statement, as the case may be, to multiple stockholders who share the
same address and have the same last name, unless it has received contrary instructions from an affected stockholder. If your shares are
held in “street name” and you would like to receive only one copy of these materials (instead of separate copies) in the future, please
contact your bank, broker or other holder of record to request information about householding. If you would like to receive an
individual copy of the Notice of Internet Availability of Proxy Materials or paper copies of the Annual Report and Proxy Statement, as
the case may be, now or in the future, we will promptly deliver these materials to you upon request to VeriSign, Inc., 12061 Bluemont
Way, Reston, Virginia 20190, Attention: Secretary or (703) 948-3200.

2018VERISIGN PROXYPROPOSAL NO. 1
ELECTION OF DIRECTORS

There are currently seven directors. The terms of the current directors, who are identified below, expire upon the election and
qualification of the directors to be elected at the Meeting. The Board has nominated D. James Bidzos, Kathleen A. Cote, Thomas F.
Frist III, Jamie S. Gorelick, Roger H. Moore, Louis A. Simpson and Timothy Tomlinson, each of whom are current directors, for re-
election at the Meeting to serve until the 2019 Annual Meeting of Stockholders and until their respective successors have been elected
and qualified. Proxies cannot be voted for more than seven persons, which is the number of nominees.

Unless otherwise directed, the persons named in the proxy intend to vote all proxies FOR the re-election of the nominees, as

listed below, each of whom has consented to serve as a director if elected. If, at the time of the Meeting, any of the nominees is unable
or declines to serve as a director, the discretionary authority provided in the enclosed proxy will be exercised to vote for a substitute
candidate designated by the Board, unless the Board chooses to reduce its own size. The Board has no reason to believe any of the
nominees will be unable or will decline to serve if elected.

Director Nominees

Set forth below is certain information relating to our director nominees, including details on each director nominee’s specific

experience, qualifications, attributes or skills that led the Board to conclude that the person should serve as a director of the Company.

Name
Nominees for election as directors
for a term expiring in 2019:
D. James Bidzos...............................................................

Kathleen A. Cote(1)(2).....................................................
Thomas F. Frist III (2)......................................................
Jamie S. Gorelick(2)(3)....................................................
Roger H. Moore(1)(2)......................................................
Louis A. Simpson(2)(3) ...................................................
Timothy Tomlinson(1)(2)(3)............................................

(1)
(2)
(3)

Member of the Audit Committee.
Member of the Corporate Governance and Nominating Committee.
Member of the Compensation Committee.

Age

Position

69
50
67
76
81
68

Chairman of the Board, Executive Chairman, President and
Chief Executive Officer
Director
Director
Director
Director
Lead Independent Director
Director

D. James Bidzos has served as Executive Chairman since August 2009 and President and Chief Executive Officer since August
2011. He served as Executive Chairman and Chief Executive Officer on an interim basis from June 2008 to August 2009 and served as
President from June 2008 to January 2009. He served as Chairman of the Board since August 2007 and from April 1995 to December
2001. He served as Vice Chairman of the Board from December 2001 to August 2007. Mr. Bidzos served as a director of VeriSign
Japan K.K. (“VeriSign Japan”) from March 2008 to August 2010 and served as Representative Director of VeriSign Japan from March
2008 to September 2008. Mr. Bidzos served as Vice Chairman of RSA Security Inc., an internet identity and access management
solution provider, from March 1999 to May 2002, and Executive Vice President from July 1996 to February 1999. Prior thereto, he
served as President and Chief Executive Officer of RSA Data Security, Inc. from 1986 to February 1999.

Mr. Bidzos is a business executive with significant expertise in the technology that is central to the Company’s businesses.
Mr. Bidzos is an internet and security industry pioneer who understands the strategic technology trends in markets that are important
to the Company. Mr. Bidzos was a founder of the Company and has been either Chairman or Vice Chairman of the Company’s Board
since the Company’s founding in April 1995, providing him with valuable insight and institutional knowledge of the Company’s
history and development. Mr. Bidzos has prior experience on our Compensation Committee and our Corporate Governance and
Nominating Committee and as a member of several other public-company boards. Mr. Bidzos’s years of board-level experience
contribute important knowledge and insight to the Board. Additionally, Mr. Bidzos’s executive-level experience includes many years
as a Chief Executive Officer, providing him with a perspective that the Board values. Mr. Bidzos also has international business
experience from his service as a director of VeriSign Japan.

Kathleen A. Cote has served as a director since February 2008. From May 2001 to June 2003, Ms. Cote served as Chief
Executive Officer of Worldport Communications Company, a provider of internet managed services. From September 1998 to May
2001, she served as Founder and President of Seagrass Partners, a consulting firm specializing in providing strategic planning,
business, operational and management support for startup and mid-sized technology companies. Prior thereto, she served as President
and Chief Executive Officer of Computervision Corporation, a supplier of desktop and enterprise, client server and web-based product
development and data management software and services. During the past five years, Ms. Cote has held directorships at GT Advanced

2018VERISIGN PROXYTechnologies Inc. and Western Digital Corporation. Ms. Cote holds an Honorary Doctorate from the University of Massachusetts, an
M.B.A. degree from Babson College, and a B.A. degree from the University of Massachusetts, Amherst.

Ms. Cote is a business executive with significant expertise overseeing global companies in technology and operations in the
areas of systems integration, networks, hardware and software, including web-based applications and internet services. Ms. Cote’s
expertise in technology and operations is directly relevant to the Company’s businesses. Ms. Cote’s expertise as a business executive
also includes sales and marketing, product development, strategic planning and international experience, which contributes important
expertise to the Board in those areas of business administration. Ms. Cote’s financial and accounting skills qualify her as an audit
committee financial expert. In addition to Ms. Cote’s tenure as a director of the Company, Ms. Cote has served on several other boards
of directors, including service on the audit and corporate governance committees of those boards, providing her with valuable board-
level experience. Ms. Cote’s executive-level experience includes experience as a Chief Executive Officer, providing her with a
perspective that the Board values.

Thomas F. Frist III has served as a director and member of the Corporate Governance and Nominating Committee since
December 2015. Mr. Frist is the Founder and Managing Principal of Frist Capital, LLC, an investment firm based in Nashville, TN he
founded in 2002 that makes long-term equity investments in public and private companies. Prior to that he was the managing member
of FS Partners II, LLC in New York and he worked in principal investments at Rainwater, Inc. from 1992 to 1995. Mr. Frist holds a
B.A. degree from Princeton University and an M.B.A. degree from Harvard Business School.

Mr. Frist’s significant directorship experience provides valuable expertise and perspective to the Board. Mr. Frist was on the

Audit Committee and Board of Directors of Triad Hospitals, Inc. from 1998-2007. He joined the board of HCA Holdings, Inc., one of
the largest non-governmental operators of health care facilities in the United States, in 2008, serving on the Executive and Audit
Committees, chairing the Nominating and Governance Committee, and chairing the Finance and Investments Committee. Mr. Frist
has also served as a director for Science Applications International Corporation since from 2009 to 2017, serving as Chair of the
Nominating and Governance Committee and a member of the Audit Committee since its separation from Leidos in 2013. He also
chaired the Finance Committee at legacy SAIC. In addition to the significant experience as a board member mentioned above, Mr.
Frist provides valuable experience in areas of business administration, finance and operations, which the Board values.

Jamie S. Gorelick has served as a director since January 2015. Ms. Gorelick has been a partner at Wilmer Cutler Pickering Hale

and Dorr LLP, an international law firm, since 2003. She served as Deputy Attorney General of the United States from 1994 to 1997
and as General Counsel of the Department of Defense from 1993 to 1994. She has been a director of Amazon.com, Inc. since 2012
and serves as Chair of its Nominating and Governance Committee. She previously served as a director of United Technologies Corp.
and of Schlumberger, Ltd. She holds B.A. and J.D. degrees from Harvard University.

Ms. Gorelick is an experienced attorney with significant expertise in legal, policy and corporate matters. Ms. Gorelick’s

regulatory and policy experience is directly relevant to the Company’s business. She is well-versed in critical infrastructure and
national security issues and brings a valuable skill-set and wealth of government experience to the Board. Ms. Gorelick has served on
several other corporate boards, a compensation committee, and a nominating and governance committee, and served on numerous
government boards and commissions. Ms. Gorelick’s experience in both the public and private sectors, combined with her experience
in the corporate boardroom, provides her valuable board experience, and she offers a perspective the Board values.

Roger H. Moore has served as a director since February 2002. From December 2007 to May 2009, he served as a consultant
assisting Verisign in the divestiture of its Communications Services business. From June 2007 through November 2007, Mr. Moore
served as interim Chief Executive Officer of Arbinet Corporation, a provider of online trading services. He was President and Chief
Executive Officer of Illuminet Holdings, Inc. from December 1995 until December 2001 when Verisign acquired Illuminet Holdings.
During the past five years, Mr. Moore has held directorships at Western Digital Corporation and Consolidated Communications
Holdings, Inc. Mr. Moore holds a B.S. degree in General Science from Virginia Polytechnic Institute and State University.

Mr. Moore is a business executive with significant expertise in general management, sales, technology and strategic planning in

the telecommunications industry. Mr. Moore’s expertise contributes operational knowledge of important inputs to the Company’s
businesses and provides valuable experience in areas of business administration. Mr. Moore also has significant experience, both as a
senior executive and as a board member, in joint venture and mergers and acquisition transactions, which is experience that is valuable
to the Board. Mr. Moore’s financial and accounting skills qualify him as an audit committee financial expert. Mr. Moore also serves on
several other boards of directors, including service on the audit, compensation and corporate governance committees of certain of
those boards, providing him with valuable board-level experience. In addition to the several years of business management experience
mentioned above, Mr. Moore has international business experience from his time as President of Nortel Japan and as President of
AT&T Canada.

Louis A. Simpson has served as a director since May 2005. Mr. Simpson has served as Chairman of SQ Advisors, LLC, an
investment firm since January 2011. From May 1993 to December 2010, he served as President and Chief Executive Officer, Capital
Operations, of GEICO Corporation, a passenger auto insurer. Mr. Simpson previously served as Vice Chairman of the Board of
GEICO from 1985 to 1993. During the past five years, Mr. Simpson has held directorships at Science Applications International

2018VERISIGN PROXYCorporation. and Chesapeake Energy Corporation. Mr. Simpson holds a B.A. degree from Ohio Wesleyan University and an M.A.
degree in Economics from Princeton University.

Mr. Simpson is a business executive with significant expertise in insurance, finance and private investment. Mr. Simpson’s
expertise contributes all around business acumen, skills in strategic planning and finance, along with knowledge important to mergers
and acquisitions activity. Throughout his career, Mr. Simpson has served on the boards of directors of more than fifteen publicly
traded companies, providing him with extensive and valuable board-level experience. Mr. Simpson’s board-level experience also
includes previous audit committee, finance committee, nominating and corporate governance committee and compensation committee
experience on certain of those public-company boards. Mr. Simpson is a recognized expert in corporate governance matters, having
lectured and presented numerous times on corporate governance topics at seminars and continuing education courses. As indicated
above, Mr. Simpson’s career includes executive-level experience as a Chief Executive Officer, providing him with a perspective that
the Board values.

Timothy Tomlinson was a corporate lawyer employed as General Counsel of Portola Minerals Company, a producer and seller

of limestone products, from May 2011 through December 2013. Mr. Tomlinson was employed as Of Counsel by the law firm
Greenberg Traurig, LLP from May 2007 through May 2011. Mr. Tomlinson was the founder and a named partner of Tomlinson Zisko
LLP and practiced with this Silicon Valley law firm from 1983 until its acquisition by Greenberg Traurig, LLP in May 2007. He served
as managing partner of Tomlinson Zisko LLP for multiple terms. Mr. Tomlinson is a long-tenured member of the Board, having served
from the Company’s founding in 1995 until 2002, and again since his reappointment in November 2007. Mr. Tomlinson holds a B.A.
degree in Economics, a Ph.D. degree in History, an M.B.A. and a J.D. degree from Stanford University.

Mr. Tomlinson has significant expertise in corporate matters including finance and mergers and acquisitions and has represented

clients in the technology industry for more than thirty years. Mr. Tomlinson’s long-term service on our Board has provided him with
valuable insight and institutional knowledge of the Company’s history and development. Mr. Tomlinson’s financial and accounting
skills qualify him as an audit committee financial expert. He has extensive experience in corporate governance, both as a lawyer
advising clients, and through serving on our Audit, Compensation and Corporate Governance and Nominating Committees, as well as
the audit, compensation, and governance committees of other public companies.

Compensation of Directors

This section provides information regarding the compensation policies for non-employee directors and amounts earned and
securities awarded to these directors in fiscal 2017. Mr. Bidzos is the Company’s Executive Chairman, President and Chief Executive
Officer. As an employee of the Company, Mr. Bidzos does not participate in the compensation program for non-employee directors,
and he is compensated as an executive officer of the Company. Mr. Bidzos’ compensation is described in “Executive Compensation”
elsewhere in this Proxy Statement.

Non-Employee Director Retainer Fees and Equity Compensation Information

On July 25, 2017, the Compensation Committee met to consider the cash and equity-based compensation to be paid to non-
employee directors. The Compensation Committee reviewed competitive market data prepared by Frederic W. Cook & Co., Inc. (“FW
Cook”), its independent compensation consultant, for the same peer group it used to benchmark executive compensation, as well as
compensation practices for boards of other companies. For information about the peer group, see “Executive Compensation—
Compensation Discussion and Analysis.” The Compensation Committee sets director compensation levels at or near the market
median relative to directors at companies in the peer group in order to ensure directors are paid competitively for their time
commitment and responsibilities. Providing a competitive compensation package is important because it enables us to attract and
retain highly qualified directors who are critical to our long-term success. Following the July 2017 review, including consideration of
the recommendations made by FW Cook, the Compensation Committee determined that it was in the best interests of Verisign and its
stockholders to make no changes to the amount of the directors’ annual cash retainer fees or to the annual equity award grant to each
director of $250,000 (made solely in the form of restricted stock units (“RSUs”)). Historically, new directors are granted an equity
award equal to the pro rata amount of such annual equity award, the amount of which is determined based on the date of such new
director’s appointment or election to the Board. Directors are subject to the Company’s Stock Retention Policy as described in
“Executive Compensation—Compensation Discussion and Analysis.”

2018VERISIGN PROXYDirectors received annual cash retainer fees for fiscal 2017 as follows:

Annual retainer for non-employee directors ...................................................................................................................... $
Additional annual retainer for Non-Executive Chairman of the Board(1)......................................................................... $
Additional annual retainer for Lead Independent Director ................................................................................................ $
Additional annual retainer for Audit Committee members................................................................................................ $
Additional annual retainer for Compensation Committee members.................................................................................. $
Additional annual retainer for Corporate Governance and Nominating Committee members.......................................... $
Additional annual retainer for Audit Committee Chairperson ........................................................................................... $
Additional annual retainer for Compensation Committee Chairperson............................................................................. $
Additional annual retainer for Corporate Governance and Nominating Committee Chairperson..................................... $
Additional annual retainer for Safety and Security Council Liaison ................................................................................. $

40,000
100,000
25,000
25,000
20,000
10,000
15,000
10,000
5,000
15,000

(1)

The position of “Non-Executive Chairman of the Board” was not held during 2017, and as such no annual retainer fees were paid during this period.

Non-employee directors are reimbursed for their expenses incurred in attending meetings.

Non-Employee Director Compensation Table for Fiscal 2017

The following table sets forth a summary of compensation information for our non-employee directors for fiscal 2017.

DIRECTOR COMPENSATION FOR FISCAL 2017

Non-Employee Director Name
Kathleen A. Cote.................................................................................................................
Thomas F. Frist ...................................................................................................................
Jamie S. Gorelick................................................................................................................
Roger H. Moore ..................................................................................................................
Louis A. Simpson................................................................................................................
Timothy Tomlinson.............................................................................................................

Fees Earned or
Paid in Cash
($)(1)

80,000
50,000
70,000
90,000
105,000
110,000

Stock
Awards
($)(2)
249,926
249,926
249,926
249,926
249,926
249,926

Total ($)
329,926
299,926
319,926
339,926
354,926
359,926

(1)
(2)

Amounts shown represent retainer fees earned by each director.
Stock Awards consist solely of RSUs which vest immediately upon grant. Amounts shown represent the aggregate grant date fair value computed in accordance with FASB ASC Topic
718 for the applicable awards granted in fiscal 2017. The grant date fair value of each Stock Award granted to each non-employee director on July 25, 2017 was $ 249,926 (2,475 RSUs
at $100.98 per share closing price on the grant date).

The Board Recommends a Vote “FOR” the Election of Each of the Nominated Directors.

2018VERISIGN PROXYCORPORATE GOVERNANCE

Independence of Directors

As required under The Nasdaq Stock Market’s listing standards, a majority of the members of our Board must qualify as
“independent,” as determined by the Board. The Board and the Corporate Governance and Nominating Committee consult with our
legal counsel to ensure that the Board’s determinations are consistent with all relevant securities and other laws and regulations
regarding the definition of “independent,” including those set forth in pertinent listing standards of The Nasdaq Stock Market.

Consistent with these considerations, after review of all relevant transactions and relationships between each director, or any of

his or her family members, and Verisign, our executive officers or our independent registered public accounting firm, the Board
affirmatively determined on February 13, 2018 that the majority of our Board is comprised of independent directors. Our independent
directors are: Ms. Cote, Mr. Frist, Ms. Gorelick, Mr. Moore, Mr. Simpson and Mr. Tomlinson. Each director who serves on the Audit
Committee, the Compensation Committee or the Corporate Governance and Nominating Committee is an independent director.
Mr. Bidzos serves as Executive Chairman, President and Chief Executive Officer and thus is not considered independent.

Board Leadership Structure

The Board regularly considers the appropriate leadership structure for the Company and has concluded that the Company and its

stockholders are best served by not having a formal policy on whether the same individual should serve as both Chief Executive
Officer and Chairman of the Board. This flexibility allows the Board to utilize its considerable experience and knowledge to elect the
most appropriate director as Chairman, while maintaining the ability to separate the Chairman of the Board and Chief Executive
Officer roles when necessary. This determination is made according to what the Board believes is best to provide appropriate
leadership for the Company at such time. Currently, the Company’s seven-member Board is led by Chairman D. James Bidzos.
Mr. Bidzos is also an officer of the Company, serving as its Executive Chairman, President and Chief Executive Officer. The Board
has appointed Louis A. Simpson as Lead Independent Director. The Lead Independent Director (a) has authority to call executive
sessions of the independent directors, (b) presides at all meetings of the Board at which the Chairman of the Board is not present,
including executive sessions of the independent directors, (c) has responsibility for reviewing and approving agendas for meetings of
the Board, (d) serves as liaison between the Chairman of the Board and the independent directors, and (e) exercises such other powers
and duties as from time to time may be assigned to him or her by the Board.

The Board has determined that its current leadership represents an appropriate structure for the Company. In particular, this

structure capitalizes on the expertise and experience of Messrs. Bidzos and Simpson due to their long-tenured service to the Board.
The structure permits Mr. Bidzos to engage in the operations of the Company in a more in-depth way as Executive Chairman,
President and Chief Executive Officer. Lastly, the structure ensures Board independence from management by permitting the Lead
Independent Director to call and chair meetings of the independent directors separate and apart from the Chairman of the Board.

Mr. Bidzos was a founder of the Company and its initial Chief Executive Officer, and he has been either Chairman or Vice
Chairman of the Company’s Board since the Company’s founding in 1995. Mr. Bidzos’s current tenure as Chairman of the Board dates
to August 2007. Mr. Bidzos was appointed Executive Chairman, President and Chief Executive Officer of Verisign on an interim basis
on June 30, 2008. On January 14, 2009, Mr. Bidzos resigned as President, and on August 17, 2009, Mr. Bidzos resigned as Chief
Executive Officer. On August 1, 2011, Mr. Bidzos was re-appointed President and Chief Executive Officer. Mr. Simpson has been the
Lead Independent Director since July 2015.

Succession Planning

The Board recognizes the importance of the effectiveness of the Company’s executive leaders for the Company’s success,

and the Board is actively engaged in executive succession planning. The Board has delegated to the Corporate Governance and
Nominating Committee responsibility for reviewing and assessing the management development and succession planning process for
senior management. As part of the succession planning process, the Committee works closely with management, including Human
Resources, to identify succession candidates for senior management other than the Executive Chairman, President and Chief
Executive Officer. Although the Board retains responsibility for identifying succession candidates for the Executive Chairman,
President and Chief Executive Officer, the Committee is charged with developing the processes to identify succession candidates.

Board Role in Risk Oversight

The Board is actively engaged in overseeing the Company’s enterprise risk management program and the major risks facing the

Company. Throughout the year, the Board and senior management discuss the areas of material risk to the Company, including
operational, financial, legal and regulatory, and strategic and reputational risks. The full Board (or the appropriate committee in the
case of risks that are under the purview of a particular committee) receives reports from the appropriate member of senior
management responsible for mitigating these risks within the organization to enable the Board to understand our risk identification,
risk management and risk mitigation strategies. The Audit Committee oversees the Company’s processes to manage business and
financial risk and compliance with significant applicable legal and regulatory requirements. The Compensation Committee oversees

2018VERISIGN PROXY
the Company’s risk assessment and risk management relative to the Company’s compensation programs, policies, and practices. The
Chairpersons of the relevant committees brief the full Board on the committees’ oversight of risks within their purview during the
committee reports portion of each regular Board meeting. This enables the Board and its committees to coordinate the risk oversight
role, particularly with respect to risk interrelationships, and enables the full Board to provide input on the Company’s risk assessment
and risk management efforts. All of our Board members have experience with enterprise risk management.

The Board as a whole retains responsibility for oversight of the Company’s cybersecurity risk management program. The Board

receives quarterly status reports on the cyber risk management program from the Company’s Chief Security Officer. In addition, the
Board has appointed Mr. Moore as its liaison to management’s Safety and Security Council (the “Council”). The Council’s purpose is
to see that the Company’s safety and security functions are effective and performed in a comprehensive and coordinated manner. The
Council provides strategic direction and oversight for initiatives to minimize the cyber, physical, and other security risks to the
Company and holds regular monthly meetings. The Council is composed of company executives with responsibility for cybersecurity,
physical security, network operations, technology, finance and legal and is chaired by the CEO. Mr. Moore participates in Council
meetings and receives regular, scheduled briefings from Council members regarding incidents and network operations. The Board
reviews and discusses the activities of the Council with Mr. Moore at each scheduled Board meeting.

Board and Committee Meetings

The Board met six times and its committees collectively met fourteen times during 2017. During 2017, no director attended
fewer than 75% of the aggregate of (i) the total number of meetings held by the Board and (ii) the total number of meetings held by all
committees on which he or she served.

Board Members’ Attendance at the Annual Meeting

We do not have a formal policy regarding attendance by members of the Board at our annual meeting of stockholders. One

member of the Board attended our 2017 Annual Meeting of Stockholders.

Corporate Governance and Nominating Committee

The Board has established a Corporate Governance and Nominating Committee to recruit, evaluate, and nominate candidates for

appointment or election to serve as members of the Board, recommend nominees for committees of the Board, assess contributions
and independence of incumbent directors, review and make recommendations regarding the Board’s leadership structure, recommend
changes to corporate governance principles and committee charters and periodically review and assess the adequacy of these
documents, and review annually the performance of the Board. The Corporate Governance and Nominating Committee is currently
composed of Ms. Cote (Chairperson), Mr. Frist, Ms. Gorelick, Mr. Moore, Mr. Simpson and Mr. Tomlinson, each of whom has been
determined by the Board to be an “independent director” under the rules of The Nasdaq Stock Market. The Corporate Governance and
Nominating Committee operates pursuant to a written charter. The Corporate Governance and Nominating Committee’s charter is
located on our website at https://investor.verisign.com//corporate-governance. The Corporate Governance and Nominating Committee
met four times during fiscal 2017.

In nominating candidates for election to the Board, the Corporate Governance and Nominating Committee considers the
performance and qualifications of each potential nominee or candidate, not only for his or her individual strengths but also for his or
her potential contribution to the Board as a group. While it has no express policy, in carrying out this responsibility the Corporate
Governance and Nominating Committee also considers additional factors, such as diversity of business administration specialty,
expertise within industries and markets tangential or complementary to the Company’s industry, and business contacts among the
various market segments relevant to the Company’s sales, human resource and development strategies. Additionally, pursuant to its
charter, the Corporate Governance and Nominating Committee evaluates and reviews with the Board the criteria for selecting new
directors, including skills and characteristics, in the context of the current composition of the Board and its committees.

The Corporate Governance and Nominating Committee considers candidates for director nominees proposed by directors and

stockholders. The Corporate Governance and Nominating Committee may also from time to time retain one or more third-party search
firms to identify suitable candidates.

If you would like to recommend to the Corporate Governance and Nominating Committee a prospective candidate, please

submit the candidate’s name and qualifications to: Thomas C. Indelicarto, Secretary, VeriSign, Inc., 12061 Bluemont Way, Reston,
Virginia 20190.

The Corporate Governance and Nominating Committee will consider all candidates identified by the directors, chief executive

officer, stockholders, or third-party search firms through the processes described above, and will evaluate each of them, including
incumbents and candidates nominated by stockholders, based on the same criteria.

2018VERISIGN PROXYAudit Committee

The Board has established an Audit Committee that oversees the accounting and financial reporting processes at the Company,

internal control over financial reporting, audits of the Company’s financial statements, the qualifications of the Company’s
independent registered public accounting firm, and the performance of the Company’s internal audit department and the independent
registered public accounting firm. The independent registered public accounting firm reports directly to the Audit Committee, and the
Audit Committee is responsible for the appointment (subject to stockholder ratification), compensation and retention of the
independent registered public accounting firm. The Audit Committee also oversees the Company’s processes to manage business and
financial risk, and compliance with significant applicable legal and regulatory requirements, and oversees the Company’s ethics and
compliance programs. The Audit Committee is currently composed of Mr. Tomlinson (Chairperson), Ms. Cote and Mr. Moore. Each
member of the Audit Committee meets the independence criteria of The Nasdaq Stock Market and the SEC. Each Audit Committee
member meets The Nasdaq Stock Market’s financial knowledge requirements, and the Board has determined that the Audit Committee
has at least one member who has past employment experience in finance or accounting, requisite professional certification in
accounting, or any other comparable experience or background which results in the individual’s financial sophistication, including
being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities as
required by Rule 5605(c)(2) of The Nasdaq Stock Market. The Audit Committee operates pursuant to a written charter, which
complies with the applicable provisions of the Sarbanes-Oxley Act of 2002 and related rules of the SEC and The Nasdaq Stock
Market. The Audit Committee’s charter is located on our website at https://investor.verisign.com/corporate-governance. The Audit
Committee met five times during fiscal 2017.

Audit Committee Financial Expert

Our Board has determined that Ms. Cote, Mr. Moore and Mr. Tomlinson are “audit committee financial experts” as such term is
defined in Item 407(d)(5) of Regulation S-K of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Ms. Cote, Mr.
Moore and Mr. Tomlinson meet the independence requirements for audit committee members as defined in the applicable listing
standards of The Nasdaq Stock Market.

Report of the Audit Committee

The Audit Committee is composed of three directors who meet the independence and experience requirements of The Nasdaq

Stock Market Rules. The Audit Committee operates under a written charter adopted by the board of directors (the “Board”) of
VeriSign, Inc. (“Verisign”). The members of the Audit Committee are Messrs. Tomlinson (Chairperson) and Moore, and Ms. Cote. The
Audit Committee met five times during fiscal 2017.

Management is responsible for the preparation, presentation and integrity of Verisign’s financial statements, accounting and

financial reporting principles and internal controls and processes designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external purposes in accordance with accounting standards and
applicable laws and regulations (the “Internal Controls”). The independent registered public accounting firm, KPMG LLP (“KPMG”),
is responsible for performing an independent audit of Verisign’s consolidated financial statements and the effectiveness of the
Company’s internal control over financial reporting in accordance with standards of the Public Company Accounting Oversight Board
(United States) and for issuing reports thereon.

The Audit Committee is responsible for oversight of Verisign’s financial, accounting and reporting processes and its compliance

with significant applicable legal and regulatory requirements. The Audit Committee is also responsible for the appointment,
compensation and oversight of Verisign’s independent registered public accounting firm, including (i) annually evaluating the
independent registered public accounting firm’s qualifications and performance, with consideration given to comments from
management, including the Chief Financial Officer’s assessment of their performance, (ii) annually reviewing and confirming the
independent registered public accounting firm’s independence, (iii) reviewing and approving the planned scope of the annual audit,
(iv) overseeing the audit work of the independent registered public accounting firm, (v) reviewing and pre-approving any non-audit
services that may be performed by the independent registered public accounting firm, which are considered in the evaluation of the
independent registered public accounting firm’s independence, (vi) annually reviewing with management and the independent
registered public accounting firm the adequacy of Verisign’s Internal Controls, (vii) annually reviewing Verisign’s critical accounting
policies, and the application of accounting principles, and (viii) overseeing the conduct of the annual audit, including the oversight of
the resolution of any issues identified by the independent registered public accounting firm.

To ensure the independence of Verisign’s independent registered public accountant, we follow the applicable laws, rules and
regulations regarding the rotation of audit partners, including Rule 2-01 of Regulation S-X. The Audit Committee is involved in the
selection of the audit partner when a rotational change is required.

During fiscal 2017, the Audit Committee met privately with KPMG to discuss the results of the audit, evaluations by the

independent registered public accounting firm of Verisign’s Internal Controls, and the quality of Verisign’s financial reporting. In
addition, during its regularly scheduled meetings, the Audit Committee met privately with each of Verisign’s Chief Financial Officer,

2018VERISIGN PROXYGeneral Counsel and Compliance Officer, Vice President of Internal Audit, and Controller to discuss various legal, accounting,
auditing and internal control matters.

The Audit Committee has reviewed and discussed the audited consolidated financial statements contained in Verisign’s Annual
Report on Form 10-K for the year ended December 31, 2017 with management. This review included a discussion of the accounting
principles, reasonableness of significant judgments, and clarity of disclosures in the consolidated financial statements. Management
represented to the Audit Committee that Verisign’s consolidated financial statements were prepared in accordance with accounting
principles generally accepted in the United States of America and the Audit Committee has reviewed and discussed the consolidated
financial statements with KPMG.

The Audit Committee has discussed with KPMG the matters required to be discussed under the applicable rules adopted by the
Public Company Accounting Oversight Board. In addition, the Audit Committee has received from KPMG the written disclosures and
the letter required by applicable requirements of the Public Company Accounting Oversight Board regarding KPMG’s
communications with the Audit Committee concerning independence, and the Audit Committee has discussed with KPMG their
independence.

Based upon the review and discussions referred to above, the Audit Committee recommended to the Board that the audited

consolidated financial statements be included in Verisign’s Annual Report on Form 10-K for the year ended December 31, 2017, for
filing with the SEC.

This report is submitted by the Audit Committee
Timothy Tomlinson (Chairperson)
Kathleen A. Cote
Roger H. Moore

Compensation Committee

The Board has established a Compensation Committee to discharge the Board’s responsibilities with respect to all forms of

compensation of the Company’s employees, including directors and executive officers, to administer the Company’s equity incentive
plans, and to produce an annual report on executive compensation for use in the Company’s Proxy Statement. The Compensation
Committee is also responsible for overseeing Verisign’s overall compensation philosophy and approving and evaluating executive
officer compensation arrangements, plans, policies, and programs of the Company, and for administering the Company’s equity
incentive plans for employees. The Compensation Committee operates pursuant to a written charter. The Compensation Committee’s
charter is located on our website at https://investor.verisign.com/corporate-governance. The Compensation Committee is currently
composed of Mr. Simpson (Chairperson), Ms. Gorelick, and Mr. Tomlinson, each of whom is an “independent director” under the
rules of The Nasdaq Stock Market for compensation committee members, a “non-employee director” pursuant to Rule 16b-3
promulgated under Section 16 of the Exchange Act and an “outside director” pursuant to Section 162(m) of the Internal Revenue Code
of 1986, as amended (the “Code”). The Compensation Committee met five times during fiscal 2017. For further information regarding
the role of compensation consultants and management in setting executive compensation, see “Executive Compensation—
Compensation Discussion and Analysis.”

Communicating with the Board

Any stockholder who desires to contact the Board may do so electronically by sending an e-mail to the following address:
bod@verisign.com. Alternatively, a stockholder may contact the Board by writing to: Board of Directors, VeriSign, Inc., 12061
Bluemont Way, Reston, Virginia 20190, Attention: Secretary. Communications received electronically or in writing are distributed to
the Chairman of the Board or other members of the Board, as appropriate, depending on the facts and circumstances outlined in the
communication received.

Code of Conduct

We have adopted a “Verisign Code of Conduct,” which is posted on our website under “Ethics and Business Conduct” at https://

investor.verisign.com/corporate-governance. The code of conduct that applies to all officers and employees, including our principal
executive officer, principal financial officer and other senior accounting officers.

We intend to satisfy any disclosure requirement under Item 5.05 of Form 8-K regarding an amendment to, or waiver from, a

provision of the “Verisign Code of Conduct,” to the extent applicable to the principal executive officer, principal financial officer, or
other senior accounting officers, by posting such information on our website, on the web page found by clicking through to “Ethics
and Business Conduct” as specified above.

2018VERISIGN PROXY
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 29,

2018, except as otherwise indicated, by:

• each current stockholder who is known to own beneficially more than 5% of our common stock;

• each current director;

• each of the Named Executive Officers (see “Executive Compensation—Summary Compensation Table” elsewhere in this

Proxy Statement); and

• all current directors and executive officers as a group.

The percentage ownership is based on 97,004,832 shares of common stock outstanding at March 29, 2018. Shares of common
stock that are covered by RSUs vesting within 60 days of March 29, 2018, are deemed outstanding for the purpose of computing the
percentage ownership of the person holding such RSUs 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.

2018VERISIGN PROXYBENEFICIAL OWNERSHIP TABLE

Name and Address of Beneficial Owner
Greater Than 5% Stockholders

Warren Buffett(2)
Berkshire Hathaway, Inc.
3555 Farnam Street
Omaha, NE 68131 .......................................................................................................

Capital World Investors(3)
333 South Hope Street
Los Angeles, CA 90071 ...............................................................................................

The Vanguard Group(4)
100 Vanguard Boulevard
Malvern, PA 19355 ......................................................................................................

BlackRock, Inc. (5)
55 East 52nd Street
New York, NY 10055 ...................................................................................................

Renaissance Technologies, LLC (6)
800 Third Avenue
New York, NY 10022 ...................................................................................................

Wellington(7)
c/o Wellington Management Company LLP
280 Congress Street
Boston, MA 02210........................................................................................................

Shares
Beneficially Owned

Number(1)

Percent(1)

12,952,745

13.35 %

12,264,717

12.64 %

8,608,062

8.87 %

8,531,215

8.79 %

6,826,054

7.04 %

6,653,218

6.86 %

Directors and Named Executive Officers

D. James Bidzos(8).......................................................................................................
Kathleen A. Cote...........................................................................................................
Thomas F. Frist III ........................................................................................................
Jamie S. Gorelick..........................................................................................................
Roger H. Moore ............................................................................................................
Louis A. Simpson(9).....................................................................................................
Timothy Tomlinson(10)................................................................................................
Todd B. Strubbe(11)......................................................................................................
George E. Kilguss, III(12) ............................................................................................
Thomas C. Indelicarto(13)............................................................................................
All current directors and executive officers as a group (10 persons)(14).....................

726,033
38,294
7,117
12,214
35,687
213,113
15,878
82,194
137,385
39,292
1,307,207

*
*
*
*
*
*
*
*
*
*

1.35 %

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Less than 1% of Verisign’s outstanding common stock.
The percentages are calculated using 97,004,832 outstanding shares of the Company’s common stock on March 29, 2018 as adjusted pursuant to Rule 13d-3(d)(1)(i).
Pursuant to Rule 13d-3(d)(1) of the Exchange Act, beneficial ownership information for each person also includes shares subject to options exercisable, or RSUs vesting,
within 60 days of March 29, 2018, as applicable.

Based on Schedule 13G/A filed on February 14, 2017 with the SEC by Berkshire Hathaway, Inc., with respect to beneficial ownership of 12,952,745 shares. Berkshire
Hathaway, Inc., is a diversified holding company which Mr. Buffett may be deemed to control. Mr. Buffett and Berkshire Hathaway share voting and dispositive power
over 12,952,745 of these shares, which include shares beneficially owned by certain subsidiaries of Berkshire Hathaway. National Indemnity Company and GEICO
Corporation each share voting and dispositive power over 7,905,481 of these shares.

Based on Schedule 13G/A filed on February 14, 2018 with the SEC by Capital World Investors, with respect to beneficial ownership of 12,264,717 shares. Capital World
Investors has sole dispositive power over 12,264,717 of these shares.

Based on Schedule 13G/A filed on February 9, 2018 with the SEC by The Vanguard Group with respect to beneficial ownership of 8,608,062 shares. The Vanguard Group
has sole voting power over 123,194 of these shares, sole dispositive power over 8,457,973 of these shares, shared voting power over 27,588 of these shares and shared
dispositive power over 150,089 of these shares.

Based on Schedule 13G/A filed on February 8, 2018 with the SEC by BlackRock, Inc. with respect to beneficial ownership of 8,531,215 shares. BlackRock has sole voting
power over 7,291,761 of these shares and sole dispositive power over 8,531,215 of these shares.

Based on Schedule 13G filed on February 14, 2018 with the SEC by Renaissance Technologies, LLC with respect to beneficial ownership of 6,826,054 shares.
Renaissance Technologies LLC has sole voting power over 6,720,841 of these shares, sole dispositive power over 6,779,364 of these shares and shared dispositive power
over 46,690 of these shares.

Based on Schedule 13G filed on February 8, 2018 with the SEC by Wellington Management Group LLP, Wellington Group Holdings LLP, Wellington Investment Advisors
Holdings LLP and Wellington Management Company LLP (“Wellington”) with respect to beneficial ownership of 6,653,218 shares. Wellington Management Group LLP,
Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP each has shared voting power over 3,961,007 of these shares and shared dispositive

2018VERISIGN PROXYpower over 6,653,218 of these shares. Wellington Management Company LLP has shared voting power over 3,740,146 of these shares and shared dispositive power over
6,379,843 of these shares.

(8)

(9)

(10)

(11)

(12)

(13)

(14)

Includes 6,174 RSUs vesting within 60 days of March 29, 2018 held directly by Mr. Bidzos.

Includes 213,113 shares held by the Louis A. Simpson Living Trust, under which Mr. Simpson is the trustee.

Includes 15,878 shares held by the Tomlinson Family Trust, under which Mr. Tomlinson and his spouse are co-trustees.

Includes 21,579 RSUs vesting within 60 days of March 29, 2018 held directly by Mr. Strubbe.

Includes 2,012 RSUs vesting within 60 days of March 29, 2018 held directly by Mr. Kilguss.

Includes 1,479 RSUs vesting within 60 days of March 29, 2018 held directly by Mr. Indelicarto.

Includes the shares described in footnotes (8)-(13).

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our 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 SEC and The Nasdaq Stock Market.
These persons are required by SEC regulations to furnish us with copies of all Section 16(a) forms that they file. We file Section 16(a)
reports on behalf of our directors and executive officers to report their initial and subsequent changes in beneficial ownership of our
common stock.

Based solely on a review of the reports we filed on behalf of our directors and executive officers, or written representations from

reporting persons that all reportable transactions were reported, the Company believes that all Section 16(a) filing requirements
applicable to our directors and executive officers were complied with for fiscal 2017.

2018VERISIGN PROXYPROPOSAL NO. 2
TO APPROVE, ON A NON-BINDING ADVISORY BASIS, VERISIGN’S EXECUTIVE COMPENSATION

Under Schedule 14A of the Exchange Act and the corresponding SEC rules, Verisign is seeking an advisory stockholder vote

with respect to approval of compensation awarded to our Named Executive Officers for 2017 as disclosed in the Compensation
Discussion and Analysis section and accompanying compensation tables contained in this Proxy Statement. The stockholder vote
approving executive compensation is advisory only, and the result of the vote is not binding upon the Company or its Board. Although
the resolution is non-binding, the Board and the Compensation Committee will consider the outcome of the advisory vote approving
executive compensation when making future compensation decisions. On May 25, 2017, the majority of the Company’s stockholders
voted in favor of an annual non-binding stockholder advisory vote approving executive compensation and, in consideration of the
outcome of the frequency vote, the Board determined to hold such advisory vote each year. Following the Meeting, the next such non-
binding advisory vote to approve Verisign’s executive compensation is scheduled to occur at the 2019 Annual Meeting of
Stockholders.

Verisign’s executive compensation program and compensation paid to the Named Executive Officers are described elsewhere in

this Proxy Statement. The Compensation Committee oversees the program and compensation awarded, adopting changes to the
program and awarding compensation as appropriate to reflect the Company’s circumstances and to promote the main objectives of the
program: to provide competitive overall pay relative to peers, taking into account company and individual performance, to effectively
tie pay to performance, and to align the Named Executive Officers’ interests with stockholders.

This proposal allows our stockholders to express their opinions regarding the decisions of the Compensation Committee on the

prior fiscal year’s annual compensation to the Named Executive Officers. You may vote for or against the following resolution, or you
may abstain. This vote is advisory and non-binding.

Resolved, that the stockholders approve the compensation of VeriSign, Inc.’s Named Executive Officers, as disclosed

under Securities and Exchange Commission rules, including the Compensation Discussion and Analysis section, the
compensation tables and related material included in this Proxy Statement.

The Board Recommends a Vote “FOR” the foregoing resolution.

2018VERISIGN PROXYTO APPROVE, ON A NON-BINDING ADVISORY BASIS, VERISIGN’S EXECUTIVE COMPENSATION

PROPOSAL NO. 2

Under Schedule 14A of the Exchange Act and the corresponding SEC rules, Verisign is seeking an advisory stockholder vote

with respect to approval of compensation awarded to our Named Executive Officers for 2017 as disclosed in the Compensation

Discussion and Analysis section and accompanying compensation tables contained in this Proxy Statement. The stockholder vote

approving executive compensation is advisory only, and the result of the vote is not binding upon the Company or its Board. Although

the resolution is non-binding, the Board and the Compensation Committee will consider the outcome of the advisory vote approving

executive compensation when making future compensation decisions. On May 25, 2017, the majority of the Company’s stockholders

voted in favor of an annual non-binding stockholder advisory vote approving executive compensation and, in consideration of the

outcome of the frequency vote, the Board determined to hold such advisory vote each year. Following the Meeting, the next such non-

binding advisory vote to approve Verisign’s executive compensation is scheduled to occur at the 2019 Annual Meeting of

Stockholders.

Verisign’s executive compensation program and compensation paid to the Named Executive Officers are described elsewhere in

this Proxy Statement. The Compensation Committee oversees the program and compensation awarded, adopting changes to the

program and awarding compensation as appropriate to reflect the Company’s circumstances and to promote the main objectives of the

program: to provide competitive overall pay relative to peers, taking into account company and individual performance, to effectively

tie pay to performance, and to align the Named Executive Officers’ interests with stockholders.

This proposal allows our stockholders to express their opinions regarding the decisions of the Compensation Committee on the

prior fiscal year’s annual compensation to the Named Executive Officers. You may vote for or against the following resolution, or you

may abstain. This vote is advisory and non-binding.

Resolved, that the stockholders approve the compensation of VeriSign, Inc.’s Named Executive Officers, as disclosed

under Securities and Exchange Commission rules, including the Compensation Discussion and Analysis section, the

compensation tables and related material included in this Proxy Statement.

The Board Recommends a Vote “FOR” the foregoing resolution.

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

This Compensation Discussion and Analysis (“CD&A”) provides comprehensive information about our executive compensation
program for our fiscal 2017 Named Executive Officers (“NEOs”), who are listed below, and provides context for the decisions
underlying the compensation reported in the executive compensation tables in the Proxy Statement. Our NEOs are:

• D. James Bidzos, Executive Chairman, President and Chief Executive Officer (“CEO”);
• Todd B. Strubbe, Executive Vice President, Chief Operating Officer (“COO”);
• George E. Kilguss, III, Executive Vice President, Chief Financial Officer (“CFO”); and
• Thomas C. Indelicarto, Executive Vice President, General Counsel and Secretary.

In the sections below, we will describe the material elements of our executive compensation program for 2017, including how we set
compensation and tie pay to performance. We refer to our NEOs and Senior Vice Presidents, collectively as our “executives.”

Compensation Philosophy and Objectives

Our executive compensation program is designed to attract and retain the executive talent we need to maintain our high performance
standards and grow our business for the future. Our philosophy is to provide a mix of compensation that motivates our executives to
achieve our short and long-term performance goals, which in turn will create value for our stockholders. No significant changes were
made to our executive compensation program in 2017, but we continue to monitor our program for market competitiveness and
alignment with best practice.

Our executive compensation program is designed with the following objectives in mind:

Objective

Program Element

Attract and retain talented executives

Provide a competitive level of total compensation (base salary, bonus and
long-term incentive).

Tie a significant portion of our executives’
compensation to achievement of the Company’s
performance objectives

Provide a compensation program that is weighted in favor of annual and
long-term incentives that are tied to financial and strategic goals
designed to enhance stockholder value.

Recognize and reward individual performance

Align the interests of our executives with our
stockholders

Provide annual incentive bonuses based on Company performance that
may be modified up or down based on individual performance to closely
align executives’ personal accomplishments with their compensation.

Tie a significant portion of compensation to the long-term value of our
stock by requiring executives to meet stock ownership guidelines and
retain minimum stock ownership until six months after termination of
employment.

Key features of our current executive compensation program include:

• A majority of our executives’ compensation is performance-based.

• Our executives do not have employment contracts.

• Our executives’ change in control agreements contain a double trigger and do not allow for tax gross-ups.

• We do not have special pension plans, special retirement plans or other significant perquisites for executives.

• Our executives participate in the same benefit programs as all other employees.

• Our Board of Directors has established an incentive compensation recovery policy applicable to our NEOs in the event of a

materially inaccurate financial statement.

• We have robust stock ownership requirements applicable to our executives and directors.

• Our securities trading policy prohibits any employee or director from shorting, hedging or pledging our stock.

•

The Compensation Committee has retained an independent compensation consultant.

• We pay careful attention to stockholder dilution and burn rate in our equity compensation decisions.

• We mitigate undue risk in our compensation programs and complete a comprehensive risk assessment each year.

2018VERISIGN PROXYPay and Performance Relationship: Attracting and retaining the executive talent we need to be successful is a key objective of our
executive compensation program. It is equally important that our executives are motivated and rewarded to achieve objectives that
provide long-term benefits to our stockholders. We have designed our executive compensation program so that a significant amount of
our NEOs’ compensation is performance-based to ensure the actual compensation paid to our NEOs is appropriately aligned with our
Company’s performance and stockholders’ long-term interests. The charts below illustrate our emphasis on performance-based
compensation.

1Performance-Based Compensation = 2017 Annual Target Bonus + 2017 Long-Term Incentive, valued as of the date of the grant.

Results of Shareholder Advisory Votes on Executive Compensation: When the Compensation Committee set compensation amounts
for 2018 it took into account the results of the stockholder advisory vote on executive compensation that took place in May 2017.
Although the vote was advisory and not binding, our stockholders indicated strong support of our executive compensation program for
our NEOs as disclosed in the 2017 Proxy Statement (86,233,869 votes were in favor, 28,139 abstained and 653,351 voted against,
with 6,478,541 broker non-votes). Over 98% of the votes cast and approximately 85% of the shares entitled to vote (the number of
shares entitled to vote as of the record date was 101,843,488) approved our NEO compensation program.

Elements of Our Executive Compensation Program

Our executive compensation program is made up of three main elements: base salary, annual incentive bonus, and long-term incentive
compensation. The chart below shows our objectives for each element of compensation and what factors we use to determine actual
awards. For each element of compensation, we review peer group and relevant survey data before determining award levels.

Element

Objective

Factors Used to Determine Awards

Base Salary

Annual Incentive
Bonus

Long-Term
Incentive
Compensation

Provide a guaranteed level of
annual income in order to
attract and retain our executive
talent and promote a
performance culture. Increases
are not automatic or guaranteed.

• Job responsibilities
• Experience
• Individual contributions
• Internal pay equity
• Effect on other elements of

compensation

Provide a target reward for
achieving financial and strategic
operational goals, and a greater
than target award for exceeding
goals.

Provide a reward that both
serves a retentive purpose and
incentivizes executives to
manage Verisign from the
perspective of a stockholder.

• Company performance
• Individual performance

• Job responsibilities
• Individual contributions
• Future potential of the executive
• Value of executive’s vested and

unvested outstanding equity awards

• Internal pay equity

2018VERISIGN PROXYOur Process for Setting Compensation

Role of the Compensation Committee: The Compensation Committee oversees our compensation and benefit programs and sets the
policies that govern compensation of our executives and other employees. As part of its role in approving executives’ compensation,
the Compensation Committee annually:

•

Reviews and makes changes as appropriate to the peer group used to benchmark competitive compensation levels for our
executives;

Reviews the report from its compensation consultant as described below in the section titled “Role of External Compensation
Consultant”;

Reviews and approves design elements of executive compensation for market competitiveness and alignment with Company
goals;

Sets performance goals for our annual and long-term incentive compensation programs;

Reviews the Board’s assessment of the individual performance of the CEO during the fiscal year and determines any
adjustments to the CEO’s base salary, annual incentive bonus, and equity awards based on this assessment, its review of peer
company data, and its review of its compensation consultant’s report; and

Reviews the CEO’s assessment of the individual performance of each executive during the fiscal year and approves any
adjustments to base salary, annual incentive bonus, and equity awards based on this assessment, its review of peer company
data, and its review of its compensation consultant’s report.

Role of Management: The CEO annually reviews the performance of each executive, other than the CEO (whose performance is
reviewed by the Board), and makes recommendations to the Compensation Committee for base salary adjustments, annual incentive
bonuses and equity awards based on this assessment.

Role of External Compensation Consultant: The Compensation Committee has engaged FW Cook as its independent consultant to
assist it in evaluating and analyzing the Company’s executive compensation program. FW Cook also reviews compensation design
recommendations by the Company’s management and provides recommendations to the Compensation Committee on the impact of
those recommendations. FW Cook also reviews the CEO’s compensation program’s design and makes recommendations to the
Committee if it believes changes to the CEO’s compensation would be appropriate. FW Cook provides the following services to the
Compensation Committee:

•

Analyzes the executives’, including the CEO’s, annual compensation based on comparisons to the Company’s peer group,
including comparing target and actual total compensation, and advises the Compensation Committee on the appropriateness
of management’s recommendations for any changes to the executives’ compensation;

Reviews the Company’s peer group annually and provides recommendations for changes as appropriate;

Advises the Compensation Committee on best practices related to governance and design of the Company’s executive
compensation program;

Reviews the Company’s equity compensation philosophy and incentive design;

Reviews and provides guidance on the impact of regulatory changes on executive and non-employee director compensation;

Reviews the risk assessment of the Company’s incentive plans and arrangements;

Reviews and provides guidance on the executive compensation disclosures; and

Reviews non-employee director compensation.

At its meeting in October 2017, the Compensation Committee reviewed FW Cook’s performance, and in December 2017, the
Committee assessed FW Cook’s independence against the six independence factors set forth in the Nasdaq rules. The Committee
determined that FW Cook was independent and engaged FW Cook for fiscal year 2018. FW Cook performs no other services for the
Company and the Committee concluded that its services for the Committee do not raise any conflicts of interest.

Competitive Market Assessment: Each year, we assess the competitiveness of our executives’ base salary, annual incentive bonus
targets and long-term incentive compensation targets (element by element and in aggregate) by comparing our program to a peer
group of publicly-traded, high technology companies that we view as representative of our competitors for executive talent. We
examine the compensation data of our peer group and also review broader survey data for high technology companies that are
comparable to us in industry and financial metrics.

The Compensation Committee carefully considers our peer group and survey data when determining total compensation for our
executives. The Compensation Committee also considers each executive’s individual performance, future potential, scope of
responsibilities and experience when approving compensation.

2018VERISIGN PROXYEach year, the Compensation Committee reviews the peer group with the assistance of its independent consultant and makes changes
as appropriate in order to ensure it continues to suitably reflect the competitive market for executive talent. In making 2017
compensation decisions, the peer group the Compensation Committee used was:

Akamai Technologies

Alliance Data Systems

ANSYS

Autodesk

Citrix Systems

Equinix

F5 Networks

Factset Research Systems

Fiserv

Intuit

Nuance Communications

Paychex

Red Hat

Roper Technologies

Teradata

Total System Services

Verisign’s revenue, operating income and market capitalization percentile as compared to its 2017 peer group were as follows: first
quartile for revenue, third quartile for operating income and second quartile for market capitalization. The data for market
capitalization is as of December 31, 2017, while revenue and operating income reflect the most recently reported four quarters.

As part of its annual review in October 2017, FW Cook completed and provided the Committee with an evaluation to revalidate
current peers and identify any potential new peers based on financial size (revenue, operating income, and market capitalization), free
cash flow yield, EBITDA growth, use of dividends or buybacks, inclusion in the S&P 500 and their industry. The evaluation resulted
in four additional peers being added for use in setting 2018 compensation: Cadence Design Systems, Global Payments, Synopsys and
Verisk Analytics.

Base Salary: For 2017, the Compensation Committee reviewed competitive benchmark data provided by FW Cook and
recommendations from our CEO regarding each executive’s individual performance other than himself. Based on that review,
adjustments were made to NEOs’ salaries as summarized in the chart below.

Name
D. James Bidzos Executive Chairman,

Position

President and CEO

Todd B. Strubbe

Executive Vice President,
COO

George E.
Kilguss, III

Thomas C.
Indelicarto

Executive Vice President,
CFO

Executive Vice President,
General Counsel and
Secretary

2016 Base
Salary
800,000

550,000

475,000

425,000

2017 Base
Salary
850,000 Mr. Bidzos received a salary increase to better align

Rationale for Adjustment

with CEO peer group market data.

550,000 Mr. Strubbe received no increase for 2017 as base

salary was aligned with peer group.

475,000 Mr. Kilguss received no increase for 2017 as base

salary was aligned with peer group.

425,000 Mr. Indelicarto received no increase for 2017 as base

salary was aligned with peer group.

Annual Incentive Bonus: The Compensation Committee provides annual cash bonuses to our NEOs under the Verisign Performance
Plan (“VPP”). These bonuses are based on the Company’s achievement of pre-established financial goals, as well as individual
performance. The Compensation Committee retains the ability to use its discretion to increase (up to the maximum individual bonus
payments described below for NEOs under Tax Treatment of Executive Compensation and the 175% funding limitation for the VPP) or
reduce the payouts when appropriate.

The Compensation Committee determines the target annual incentive opportunity for each of our NEOs based on a comparison to our
peer group and information obtained from relevant survey data. For 2017, the Compensation Committee made no changes to bonus
targets as a percent of base salary and approved the following for our NEOs:

NEOs
Executive Chairman, President and CEO...............................................................................................
Executive Vice President, COO..............................................................................................................
Executive Vice President, CFO ..............................................................................................................
Executive Vice President, General Counsel and Secretary.....................................................................

2017 Bonus Target as a %
of Base Salary

125%
80%
75%
75%

2018VERISIGN PROXYThe Compensation Committee approves actual annual incentive award payments for our executives taking into account the
Company’s and the individual’s performance. The Company’s performance determines the initial level of funding for the annual
incentive bonus pool. The Compensation Committee then considers, and approves as appropriate, management’s recommendation for
modifying any individual awards above or below the level of funding based on an assessment of individual performance, subject to the
maximum individual bonus payments described below for NEOs under Tax Treatment of Executive Compensation and the 175%
funding limitation for the VPP.

The Company’s performance goals for the fiscal 2017 VPP were approved by the Compensation Committee in December 2016 and
were based on two financial measures: Revenue and non-GAAP operating margin, both weighted equally at 50%.

For purposes of determining the bonus pool, we calculate the non-GAAP operating margin by taking the Company’s consolidated non-
GAAP operating income as a percentage of revenue. We determine the consolidated non-GAAP operating income by excluding stock-
based compensation from the Company’s consolidated operating income as determined under GAAP.

The funding at different achievement levels (threshold, target and maximum) established for each of the metrics (Revenue and non-
GAAP operating margin) pertaining to the 2017 VPP are set forth in the table below. It also illustrates actual Revenue and non-GAAP
margin achieved for 2017 and the corresponding funding levels resulting in a 104% funding for the 2017 VPP.

Achievement

Metric
(in millions)

Funding

Metric

Funding

Total Funding

Revenue

Non-GAAP Operating Margin

Threshold .................................................................................................

$1,132.9

Target .......................................................................................................

$1,156.0

Maximum.................................................................................................

$1,213.8

Actual ......................................................................................................

$1,165.0

12.5%

50.0%

87.5%

54.0%

63.8%

65.1%

68.4%

65.3%

12.5%

50.0%

87.5%

50.0%

25.0%

100.0%

175.0%

104.0%

In order to establish actual award amounts under the VPP bonus plan, the Compensation Committee also reviewed the CEO’s
assessment of individual performance of the NEOs and considered the Board’s assessment of the CEO’s individual performance. The
chart below indicates the Compensation Committee’s approved annual incentive bonus award for each NEO under the 2017 VPP
bonus plan.

Name

D. James Bidzos (1)

Todd B. Strubbe (2)

George E. Kilguss, III (3)

Thomas C. Indelicarto (4)

Position

Executive
Chairman,
President and CEO

Executive Vice
President, COO

Executive Vice
President, CFO

Executive Vice
President, General
Counsel and
Secretary

2017 Actual Bonus Payment

2017
Base
Salary

Bonus
Target
as a % of
Base Salary

$850,000

125%

Funding
Multiplier
as a % of
Target

104%

Actual
Payout
as a
% of
Target

104%

Actual
Payout
Amount

Actual Payout
as a % of
Base Salary

$1,105,000

130%

$550,000

80%

104%

$457,600

$475,000

75%

104%

112%

$400,000

$425,000

75%

104%

110%

$350,000

83%

84%

82%

(1)

(2)

(3)
(4)

Mr. Bidzos received a bonus payment at the funding multiplier level with no further adjustment.

Mr. Strubbe received a bonus payment at the funding multiplier level with no further adjustment

Mr. Kilguss received a bonus payment at 112% of his bonus target; the adjustment over the funding multiplier level was made due to his notable contributions and performance.

Mr. Indelicarto received a bonus payment at 110% of his bonus target; the adjustment over the funding multiplier level was made due to his notable contributions and performance.

Long-Term Incentive Compensation: Equity-based grants are a key element of our total compensation program. Consistent with our
compensation philosophy, we believe it is important that these awards have a performance component and that they are aligned with
total shareholder return. The target award amounts are based on several factors including competitiveness as determined by our peer
group and relevant survey data provided by FW Cook, job responsibilities, individual contributions, and future potential of the
executive.

In 2017, the Compensation Committee granted long-term equity compensation to our executives, other than the CEO, consisting of
50% performance-based RSUs (“PSUs”) and 50% time-vesting RSUs. The CEO received long-term equity compensation consisting

2018VERISIGN PROXYof 60% PSUs and 40% time-vesting RSUs. The time-vesting RSUs provide strong retentive value for our executive talent as they vest
ratably over four years, subject to continued employment. They are also linked to increases in stockholder value creation as their value
goes up or down with the Company’s stock price. The PSUs are linked to long-term Company financial performance as well as
increases in stockholder value.

The metrics associated with the 2017 PSUs consist of two financial measures - compound annual growth rate (“CAGR”) of operating
income per share and Total Shareholder Return (“TSR”) of Verisign stock compared to the TSR of the S&P 500 Index, each measured
over a three-year performance period from January 1, 2017 through December 31, 2019. The number of PSUs earned may range from
0% to 200% of the target award based on CAGR of operating income per share for the performance period, but no more than 100% of
target may be earned unless the TSR of Verisign stock equals or outperforms the TSR of the S&P 500 Index for the performance
period. We believe that the performance metrics coincide with shareholder interests, create a long-term performance focus and
complement the performance metrics in the Company’s short term annual incentive plan. The vesting of the 2017 PSUs at the end of a
three-year performance period provides a strong retention incentive.

Equity awards for NEOs were granted on February 14, 2017 at the regularly scheduled Compensation Committee meeting. The
Compensation Committee approved the total value granted to individual executives (time-vesting and performance-based) based on
the factors discussed herein. The actual number of RSUs was a function of the closing stock price on February 14, 2017.

The chart below shows the number of RSUs granted to each NEO in February 2017:

Name

Position

D. James Bidzos ...............

Executive Chairman, President and CEO

Todd B. Strubbe................

Executive Vice President, COO

George E. Kilguss, III.......

Executive Vice President, CFO

Thomas C. Indelicarto ......

Executive Vice President, General
Counsel and Secretary

2017 Annual Equity Grants

Total Market Value
of Equity Grant (1)

Grant Date
Fair Value

Time-vesting
RSUs granted (2)
(3)

PSUs granted (1)
(2)

6,999,937

2,759,858

2,099,907

1,399,938

82.68

33,865

16,690

12,699

8,466

50,798

16,690

12,699

8,466

(1)

(2)

Total market value of equity grant is the combined value of time-vesting RSUs and PSUs based on grant date fair value per share. Number of PSUs granted represents shares to be earned
at target achievement. Vesting occurs after the performance goal has been certified by the Committee and the Company has received an unqualified signed opinion on the Company’s
financial statements from its independent registered public accounting firm.

The equity award values for the CEO and other NEOs were determined taking into account alignment with market LTI values of our peer group, in addition to individual factors such as
job responsibilities, experience, individual contributions, future potential, and internal equity.

(3)

25% vested on February 15, 2018, and the remainder vests ratably, 6.25% each quarter for the 3 years thereafter.

Achievement of Performance Awards Granted in 2015

In February 2015, the Committee granted PSUs with a performance period of January 1, 2015 through December 31, 2017. The
performance goals were the achievement of CAGR of Operating Income per share, with above target potential subject to Verisign’s
TSR outperforming the TSR of the S&P 500 Index for the relevant performance period. The number of PSUs earned was to be
determined by the payout scale at the end of the performance period with a maximum achievement of 200%. In February 2018, the
Committee reviewed the extent of achievement of the performance goal results for these PSUs.

The CAGR of Operating Income per share over the three-year period ended December 31, 2017 was 12.5% versus the target
achievement of 9.2%. Verisign’s 98.17% TSR was greater than the S&P 500 Index’s 38.16% TSR. This resulted in an award of 183%
of target.

The chart below shows the number of PSUs that were earned in February 2018 based on achievement of the 2015 performance
metrics.

Name

Position

D. James Bidzos................................

Executive Chairman, President and CEO

Todd B. Strubbe ................................

Executive Vice President, COO

George E. Kilguss, III .......................

Executive Vice President, CFO

Thomas C. Indelicarto.......................

Executive Vice President, General Counsel and Secretary

Total PSUs
Granted in
2015

Goal
Achievement

Actual PSUs Earned
and Vested in
February 2018

57,490

20,755

16,425

9,034

183%

105,206

37,981

30,057

16,532

2018VERISIGN PROXYOther Features of our Executive Compensation Program

Stock Retention Policy: Our stock retention policy applies to our employees at the Senior Vice President level and above, officers who
are subject to the provisions of Section 16 of the Securities Exchange Act of 1934, as amended (“Section 16 Officers”), and board
members.

Ownership levels are set as a multiple of base salary or annual retainer and are as follows:

• CEO: 6x Base Salary

• Directors: 10x Annual Retainer

•

Section 16 Officers and Senior Vice Presidents, other than the CEO: 2x Base Salary

At its July 2017 meeting, the Compensation Committee amended the stock retention policy to increase the required multiple of annual
retainer from 5x to 10x. The policy also requires participants to retain 50% of their shares received from equity awards (net of taxes)
until they reach the required minimum ownership level, and that required minimum number of shares must be held until six months
after the participant ceases employment or board service with the Company. We believe requiring executives and board members to
continue to retain stock after their service with the Company ceases aligns our executives’ interests with the long-term interests of our
stockholders. Our Stock Retention Policy can be found on our website at https://investor.verisign.com/corporate-governance.

Securities Trading Policy: Our Securities Trading Policy prohibits employees, including our executives and directors, from buying or
selling derivative securities related to our common stock, such as puts or calls. We believe derivative securities diminish the alignment
of incentives between our executives and stockholders. The Policy also prohibits employees and directors from entering into
agreements or purchasing instruments designed to hedge or offset decreases in the market value of the Company’s securities.
Additionally, under our Policy, our executives and directors may only purchase and sell our common stock during approved trading
windows.

Recovery of Incentive Compensation: The Compensation Committee adopted an executive incentive compensation recovery policy in
March 2010, and amended it in 2014, that applies to annual and long-term incentive awards. The policy applies when there is an
inaccurate financial statement, including statements of earnings, revenues, or gains or any other materially inaccurate calculation of a
performance metric criterion, regardless of whether such inaccuracy was the subject of an accounting restatement. If, as a result of
such inaccurate financial statement or calculation, certain executives received materially more incentive compensation than they
would have had the correct financial statement or calculation been prepared at the time of the compensation award, the Compensation
Committee shall (subject to the exception noted below) seek recovery of this overpayment. The recovery could occur either by
limiting future awards or directly seeking repayment. The Compensation Committee may determine not to seek recovery of such an
overpayment if the direct costs of recovery are expected to exceed the amount of recovery. In the case of fraudulent, intentional,
willful or grossly negligent misconduct by the recipient of an award, the Compensation Committee can attempt to recoup previous
incentive awards paid regardless of when the awards were paid to the executive. If the inaccuracy is not the result of these
circumstances, the Compensation Committee can only recover incentive awards paid based on the inaccuracy if they were paid in the
three years prior to the determination that the financial statement was inaccurate.

Equity Award Practices: The Compensation Committee approves all equity awards to our executives, the aggregate annual equity
pool, employee grant guidelines, and all equity awards to eligible employees during the annual grant process, which generally takes
place in February. For employees hired during the year that are below the Senior Vice President level, the Compensation Committee
has delegated actual award determination to the Grant Committee which currently has one member, D. James Bidzos. Grant
Committee awards are granted on the 15th of the month (or next scheduled trading day if the 15th is not a trading day) following
approval by the Grant Committee.

Benefits: We do not provide our executives with any benefits other than those provided to all of our other U.S.-based employees. All
of our U.S.-based employees are eligible for medical, dental and vision insurance, life insurance, short and long-term disability, paid
time off, an employee stock purchase plan, and a qualified 401(k) salary deferral plan.

Severance Agreements: We generally do not enter into severance or employment agreements with our executives (except as described
below), nor do we provide severance or other benefits following voluntary termination. However, the Compensation Committee may
determine in special circumstances that providing such severance payments and benefits is warranted in order to attract a potential
executive or for other business considerations.

Change-In-Control and Retention Agreements: We have entered into change-in-control and retention agreements with our executives.
These agreements provide for change-in-control severance benefits and payments in the event the executive’s employment is
terminated in connection with a change in control of the Company. They are “double trigger” agreements which means the executives
will only be eligible for payments under the agreements if both a change-in-control of the Company occurs and the executive’s
employment is terminated without cause (or by the executive for good reason) within 24 months of the change-in-control.

2018VERISIGN PROXYThe Compensation Committee believes these agreements are necessary to attract and retain executive talent and to neutralize the
personal interests of our executives when making decisions related to potentially beneficial corporate transactions. Each year, the
Compensation Committee reviews the provisions of the change-in-control agreements with FW Cook and makes adjustments as
necessary to ensure alignment of executives’ interests with stockholders’ interests. No changes were made to the benefits provided
under the agreements in 2017 as FW Cook advised the Compensation Committee that they were in line with best practices which
include double trigger benefits, severance multiples less than or equal to 2x base salary and target bonus, and have no tax-gross up
provision. The CEOs change-in-control agreement provides for a severance payment of 2x his base salary and a bonus payment of 2x
target bonus plus the cash equivalent of two years of continuation of health benefits if he participates in the Company’s health plans at
the date of his termination. The other terms of his change-in-control agreement are the same as other executives. Additional details
about these agreements, including potential payments, may be found in the “Potential Payments Upon Termination or Change-in-
Control” section and the “Termination and Change-in-Control Benefit Estimates as of December 31, 2017” table.

Risk Assessment: In 2017, we performed a comprehensive assessment of our compensation policies and program design to determine
whether risks arising under them would be likely to have a material adverse effect on the Company. We considered each element of
our compensation programs and policies in our enterprise-wide risk assessment and determined that none of our compensation policies
and programs creates a risk that is reasonably likely to have a material adverse effect on the Company.

Tax Treatment of Executive Compensation: Section 162(m) of the Internal Revenue Code of 1986, as in effect for 2017, limits the
amount of compensation in excess of $1,000,000 that the Company may deduct in any one year with respect to its CEO and three
other most highly compensated officers (excluding the CFO) serving at the end of the fiscal year as disclosed in the annual Proxy
Statement. There were, in 2017, exceptions to this deduction limit if the compensation was “performance-based” under
Section 162(m). The Company does not limit compensation as a result of Section 162(m) but does try to structure its executive
compensation program to maximize the amount of compensation that may be deducted. While base salaries and time-vesting RSUs are
subject to the deduction limitation, our performance-based awards, including annual incentive bonus and PSUs, were designed to
allow for qualification as performance-based compensation under Section 162(m) as in effect at the beginning of 2017 when those
awards were granted. Because there are uncertainties regarding the application of Section 162(m), it is possible that awards intended
to qualify for deductions under Section 162(m) may be challenged or disallowed. In addition, as a result of changes to the tax laws
enacted in December 2017 and effective beginning January 1, 2018, we expect that equity awards or other compensation granted or
provided under arrangements entered into or modified after November 2, 2017 to any person who is or was a named executive officer
(including the CFO) will not be deductible to the extent such executives’ total compensation exceeds $1 million in any one year.

In order to try to ensure that annual incentive bonuses paid to certain executives are considered performance-based compensation
under Section 162(m) as then in effect, in 2015, stockholders approved the Annual Incentive Compensation Plan (“AICP”). The AICP
is the vehicle under which certain of our executives’ bonuses, determined as described above, are paid.

Under the AICP, for 2017, assuming the performance goal was met, each such executive could be awarded a maximum bonus of 300%
of his or her target bonus (but no more than $5 million), subject to the Compensation Committee’s discretion to award bonuses in
lesser amounts. The Compensation Committee exercised its discretion to award bonuses in lesser amounts and primarily based the
AICP payments on the funding results of the VPP annual bonus program of 104%.

The performance goal for the AICP was approved by the Compensation Committee at its February 14, 2017 meeting and provided that
the Company must achieve non-GAAP operating income in excess of $50 million before a bonus could be paid. This target was
achieved.

2018VERISIGN PROXYCompensation Committee Report

The Compensation Committee has reviewed and discussed with management the Compensation Discussion and Analysis
included in this Proxy Statement. Based on the review and discussions, the Compensation Committee recommended to the Board that
the Compensation Discussion and Analysis be included in this Proxy Statement.

This report is submitted by the Compensation Committee
Louis A. Simpson (Chairperson)
Jamie S. Gorelick
Timothy Tomlinson

Compensation Committee Interlocks and Insider Participation

The members of the Compensation Committee during 2017 were Louis A. Simpson, Jamie S. Gorelick and Timothy Tomlinson.

All of the members of the Compensation Committee during 2017 were independent directors, and none of the members of the
Compensation Committee during 2017 were employees or officers or former officers of Verisign, during the prior three years as
required for director independence under the Nasdaq rules. No executive officer of Verisign has served on the Compensation
Committee (or other board committee performing equivalent functions, if any) or the board of directors of another entity, one of whose
executive officers served as a member of the Compensation Committee of Verisign during 2017; and no executive officer of Verisign
has served on the Compensation Committee (or other board committee performing equivalent functions or, in the absence of any such
committee, the entire board of directors) of another entity, one of whose executive officers served as a member of the Board during
2017.

Summary Compensation Table

The following table sets forth certain summary information concerning the compensation received by each person who served

as our principal executive officer and principal financial officer during fiscal 2017 and our NEOs.

SUMMARY COMPENSATION TABLE

Named Executive Officer
and Principal Position
D. James Bidzos

......................................

Executive Chairman, President and Chief
Executive Officer

Todd B. Strubbe...............................................

Executive Vice President and Chief
Operating Officer

George E. Kilguss, III ..........................................

Executive Vice President, Chief Financial
Officer

Thomas C. Indelicarto .....................................
Executive Vice President, General Counsel
and Secretary

Year

Salary
($)(1)

2017

2016

2015

2017

2016

2015

2017

2016

2015

2017

2016

2015

842,308

792,308

750,000

550,000

370,192

475,000

467,308

422,692

425,000

413,462

346,923

Stock
Awards
($)(2)
6,999,937

8,477,344

8,499,901

2,759,858

2,759,852

6,559,970

2,099,907

2,555,373

2,499,895

1,399,938

1,855,392

1,599,966

Non-Equity
Incentive Plan
Compensation
($)(3)
1,105,000

1,430,000

877,500

All Other
Compensation
($)(4)

7,068 (5)

720

Total ($)
8,954,313

10,700,372

20,421 (6)

10,147,822

457,600

613,800

350,000

400,000

509,438

350,000

485,000

300,000

8,820

30,317 (7)

222,764 (7)

8,784

8,872

8,807

7,068

594

499

3,776,278

3,953,969

7,502,926

2,983,691

3,540,991

3,281,394

2,182,006

2,754,448

2,247,388

(1)
(2)

(3)
(4)

(5)
(6)
(7)

Includes, where applicable, amounts electively contributed by each Named Executive Officer under our 401(k) Plan.

Amounts shown represent the aggregate grant date fair value, which is based on the closing share price on the date of the grant. Stock Awards consist of RSUs granted in 2017,
2016, and 2015, respectively. Amounts shown in “Stock Awards” include the value of awards subject to performance and market conditions based upon the probable outcome of the
performance conditions as of the grant date of the award. Grant date fair value for PSUs included in “Stock Awards” were as follows: Mr. Bidzos, $4,199,979 (2017), $3,599,927
(2016), $3,499,991 (2015); Mr. Strubbe, $1,379,929 (2017), $1,379,926 (2016), $1,380,000 (2015); Mr. Kilguss, $1,049,953 (2017), $1,049,972 (2016), $999,954 (2015); and Mr.
Indelicarto, $699,969 (2017), $699,981 (2016), $549,990 (2015). Grant date fair value for PSUs granted in 2017, 2016, and 2015, at the maximum achievement level (i.e., 200%
payout) would be 158%, 152%, and 163%, respectively, of the amounts for each executive, calculated using a Monte Carlo simulation model. Grant date fair value for special PSUs
included in “Stock Awards” for 2016 includes $2,277,452 for Mr. Bidzos and $455,429 each for Mr. Kilguss and Mr. Indelicarto calculated using a Monte Carlo simulation model.
Grant date fair value for these special PSUs reflects the possible range of achievement levels that may occur and will not change regardless of actual outcome. The PSUs granted in
2015 vested in February 2018 resulting in 183% payout.

Amounts shown are for non-equity incentive plan compensation earned during the year indicated, but paid in the following year.

Except as otherwise indicated, amounts in “All Other Compensation” for fiscal 2017, fiscal 2016, and fiscal 2015 include, where applicable, matching contributions made by the
Company to the VeriSign, Inc. 401(k) Plan, wellness incentive payment, life insurance and accidental death and dismemberment insurance payments.

Includes $6,348 in payments for Mr. Bidzos personal use of leased jet hours.

Includes $11,450 in payments for a leased automobile. Mr. Bidzos no longer leases an automobile.

Includes $20,418 (2016) and $222,284 (2015) in relocation payments for Mr. Strubbe, who was hired April 20, 2015.

2018VERISIGN PROXYGrants of Plan-Based Awards for Fiscal 2017

The following table shows all plan-based awards granted to the Named Executive Officers during fiscal 2017 under annual and

long-term plans.

GRANTS OF PLAN-BASED AWARDS FOR FISCAL 2017(1)

Estimated Future Payouts Under
Non-Equity
Incentive Plan Awards ($)

Estimated Future Payouts
Under Equity Incentive
Plan Awards

Named Executive Officer

Grant
Date

Threshold
($)

Target
($)

Maximum
($)

Threshold
(#)(2)

Target
(#)(2)

Maximum
(#)(2)

D. James Bidzos ...............

2/14/2017

265,625

1,062,500

3,187,500

5,080

50,798

101,596

2/14/2017

All Other
Stock
Awards:
Number of
Shares
of Stock
or Units
(#) (3)

Grant
Date Fair
Value
of Stock
and
Option
Awards
($)

4,199,979

33,865

2,799,958

Todd B. Strubbe................

2/14/2017

110,000

440,000

1,320,000

1,669

16,690

33,380

1,379,929

2/14/2017

George E. Kilguss, III.......

2/14/2017

89,063

356,250

1,068,750

1,270

12,699

25,398

2/14/2017

Thomas C. Indelicarto ......

2/14/2017

79,688

318,750

956,250

847

8,466

16,932

2/14/2017

16,690

1,379,929

1,049,953

12,699

1,049,953

8,466

699,969

(1)

(2)

(3)

Named Executive Officers are eligible to receive an annual cash bonus under the AICP and VPP and long-term incentive compensation under our 2006 Plan as described in
“Compensation Discussion and Analysis” elsewhere in this Proxy Statement.
The Named Executive Officers were awarded PSUs on February 14, 2017, to be earned based on Company performance and subject to a relative TSR achievement threshold in fiscal
year 2019 and determination to be made after the end of fiscal year 2019.
The RSU awards vested 25% of the total award on February 15, 2018 and the remainder vests 6.25% of the total award each quarter thereafter, until fully vested.

2018VERISIGN PROXY Outstanding Equity Awards at 2017 Fiscal Year-End

The following table shows all outstanding equity awards held by the Named Executive Officers at the end of fiscal 2017 granted

under the 2006 Plan.

Named
Executive
Officer

D. James Bidzos ...................

Todd B. Strubbe....................

George E. Kilguss, III...........

Thomas C. Indelicarto (8).....

OUTSTANDING EQUITY AWARDS AT 2017 FISCAL YEAR-END

Stock Awards

Number of Shares or
Units of Stock That
Have Not Vested
(#)

Market Value of
Shares or Units of
Stock That Have Not
Vested
($)(1)

Equity Incentive Plan
Awards: Number of
Unearned Shares, Units
or Other Rights That
Have Not Vested
(#)

Equity Incentive Plan
Awards: Market or
Payout Value of Unearned
Shares, Units or Other
Rights That Have Not
Vested
(#)(1)

11,314

(2)

20,532

(2)

1,294,774

2,349,682

16,492

(3)

1,887,344

17,955

(3)

2,054,770

33,865

(3)

3,875,511

10,377

14,287

(2)

(9)

1,187,544

1,635,004

9,529

(3)

1,090,499

16,690

(3)

1,910,004

3,846

8,212

(2)

3,298

(3)

7,250

(3)

440,136

939,781

377,423

829,690

12,699

(3)

1,453,274

250

1,000

2,250

4,516

(2)

3,298

(3)

4,833

(3)

8,466

(3)

28,610

114,440

257,490

516,811

377,423

553,089

968,849

105,206 (4)

12,039,775

29,779 (5)

44,198 (6)

50,798 (7)

37,981 (4)

16,942 (6)

16,690 (7)

3,407,909

5,058,019

5,813,323

4,346,546

1,938,842

1,910,004

30,057 (4)

3,439,723

5,955 (5)

12,891 (6)

12,699 (7)

681,490

1,475,246

1,453,274

16,532 (4)

1,891,922

5,955 (5)

8,594 (6)

8,466 (7)

681,490

983,497

968,849

Grant
Date

02/19/2014

02/10/2015

10/20/2015

01/04/2016

02/17/2016

02/14/2017

04/20/2015

02/17/2016

02/14/2017

02/19/2014

02/10/2015

10/20/2015

01/04/2016

02/17/2016

02/14/2017

01/15/2014

02/19/2014

11/14/2014

02/10/2015

10/20/2015

01/04/2016

02/17/2016

02/14/2017

(1)
(2)
(3)

(4)

(5)

(6)

(7)

(8)
(9)

The market value is calculated by multiplying the number of shares by the closing price of our common stock on December 31, 2017, which was $114.44.
The RSU award vests 25% of the total award on each anniversary of the date of grant until fully vested.
The RSU award vests 25% of the total award on approximately the first anniversary of the date of grant and then vests 6.25% of the total award each quarter thereafter until
fully vested.
Awards of PSUs were granted on February 10, 2015 (on April 20, 2015 to Mr. Strubbe upon hire), to be earned based on Company performance in fiscal years 2015, 2016
and 2017. Performance criteria were achieved at 183% and as such, these PSUs vested on the date the Company received an unqualified signed opinion on the Company’s
financial statements from its independent registered public accounting firm, February 16, 2018.
Awards of PSUs were granted on January 4, 2016, to be earned based on achievement of specified levels of TSR of Verisign stock compared to the TSR of the S&P 500
Index over a four-year performance period. The number of shares shown reflects achievement of the target level of relative TSR of Verisign stock compared to the TSR of
the S&P 500 Index for 2016 and 2017.
Awards of PSUs were granted on February 17, 2016, to be earned based on Company performance in fiscal years 2016, 2017, and 2018 and determination to be made after
the end of fiscal year 2018. The number of shares shown reflects achievement of the target performance level based on Company performance and relative TSR of Verisign
stock compared to the TSR of the S&P 500 for 2016 and 2017.
Awards of PSUs were granted on February 14, 2017, to be earned based on Company performance in fiscal years 2017, 2018, and 2019 and determination to be made after
the end of fiscal year 2019. The number of shares shown reflects achievement of the target performance level based on Company performance and relative TSR of Verisign
stock compared to the TSR of the S&P 500 for 2017.
Includes awards granted prior to promotion and appointment as NEO and Section 16 Officer.
The RSU award vested 25% of the total award on June 30, 2015 and then 25% of the total award on each anniversary of the date of grant until fully vested.

2018VERISIGN PROXYOption Exercises and Stock Vested for Fiscal 2017

The following table shows all stock options exercised and the value realized upon exercise, and all stock awards vested and the

value realized upon vesting, by our Named Executive Officers during fiscal 2017.

OPTION EXERCISES AND STOCK VESTED FOR FISCAL 2017

Name
D. James Bidzos ......................................................................................................................................
Todd B. Strubbe.......................................................................................................................................
George E. Kilguss, III..............................................................................................................................
Thomas C. Indelicarto .............................................................................................................................

Stock Awards

Number of
Shares
Acquired on
Vesting (#)

184,467
26,890
50,762
13,079

Value
Realized on
Vesting ($)
15,408,125
2,393,863
4,248,206
1,193,944

Potential Payments Upon Termination or Change-in-Control

Except as described below, the Company has no formal severance program for its NEOs, each of whom may be terminated at

any time at the discretion of the Board.

Treatment of Equity Upon Death or Disability

On February 26, 2013, the Compensation Committee approved modifications to the form of Employee Restricted Stock Unit

Agreements to allow for full acceleration of unvested equity for grants made on or after February 26, 2013 in the event of termination
due to death or disability as follows:

• Time-based RSUs – unvested RSUs shall accelerate in full according to the terms in the “Employee Restricted Stock

•

Unit Agreement;” and
PSUs – If such termination occurs during the applicable performance period and before the conclusion of such
performance period, then such PSUs will accelerate based on the target achievement level; if such termination occurs
after the conclusion of the applicable performance period but before the award for such performance period has been
paid, then the PSUs will fully accelerate based upon the actual achievement level.

Change in Control Agreements

Each of our executives is party to a change in control and retention agreement (the “CIC Agreements”). Under the CIC

Agreements, each of the executives is entitled to receive severance benefits if, within the twenty-four months following a “change-in-
control” (or under certain circumstances, during the six-month period preceding a change-in-control), the executive’s employment is
terminated by the Company or its successor without “cause” or by the executive for “good reason” (referred to as a “qualified
termination”). The terms and conditions of the CIC Agreements are described below.

Under the CIC Agreements, “change-in-control” means:

(a) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or other

fiduciary holding securities of the Company under an employee benefit plan of the Company or its subsidiaries, becomes the
“beneficial owner” (as defined in Rule 13d-3 promulgated under the Exchange Act), directly or indirectly (excluding, for
purposes of this Section, securities acquired directly from the Company), of securities of the Company representing at least
thirty-five percent (35%) of (A) the then-outstanding shares of common stock of the Company or (B) the combined voting
power of the Company’s then-outstanding securities;

(b) the consummation of a merger or consolidation, or series of related transactions, which results in the voting securities

of the Company outstanding immediately prior thereto failing to continue to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity), directly or indirectly, at least fifty (50%) percent of the combined
voting power of the voting securities of the Company or such surviving entity outstanding immediately after such merger or
consolidation;

majority of the directors are incumbent directors;

(d) the sale or disposition of all or substantially all of the Company’s assets (or consummation of any transaction, or series

of related transactions, having similar effect); or

2018VERISIGN PROXY
(e) stockholder approval of the dissolution or liquidation of the Company.

Under the CIC Agreements, “cause” means:

(a) an executive’s willful and continued failure to substantially perform the executive’s duties after written notice

providing the executive with ninety (90) days from the date of the executive’s receipt of such notice in which to cure;

(b) conviction of (or plea of guilty or no contest to) the executive for a felony involving moral turpitude;

(d) an executive’s willful violation of the Company’s policies resulting in material harm to the Company.

Under the CIC Agreements, “good reason” means:

(a) a change in the executive’s authority, duties or responsibilities that is inconsistent in any material and adverse respect

from the executive’s authority, duties and responsibilities immediately preceding the change-in-control;

(b) a reduction in the executive’s base salary compared to the executive’s base salary immediately preceding the change-
in-control, except for an across-the-board reduction of not more than ten percent (10%) of base salary applicable to all senior
executives of the Company;

(c) a reduction in the executive’s bonus opportunity of five percent (5%) or more from the executive’s bonus opportunity
immediately preceding the change-in-control, except for an across-the-board reduction applicable to all senior executives of the
Company;

(d) a failure to provide the executive with long-term incentive opportunities that in the aggregate are at least comparable

to the long-term incentives provided to other senior executives at the Company;

(e) a reduction of at least 5% in aggregate benefits that the executive is entitled to receive under all employee benefit plans
of the Company following a change-in-control compared to the aggregate benefits the executive was eligible to receive under all
employee benefit plans maintained by the Company immediately preceding the change-in-control;

(f) a requirement that the executive be based at any office location more than 40 miles from the executive’s primary office

location immediately preceding the change-in-control, if such relocation increases the executive’s commute by more than ten
(10) miles from the executive’s principal residence immediately preceding the change-in-control; or

(g) the failure of the Company to obtain the assumption of the agreement from any successor as provided in the

agreement.

Under the CIC Agreements, “incumbent director” means: directors who either (i) are directors as of the date of the CIC

Agreement, or (ii) are elected, or nominated for election, to the Board with the affirmative votes of at least a majority of the
incumbent directors at the time of such election or nomination (but shall not include an individual whose election or
nomination is in connection with an actual or threatened proxy contest relating to the election of directors to the Company).

If a change-in-control occurs and the executive officer experiences a qualifying termination and timely delivers a general
release agreement, the CIC Agreements provide that Verisign will make the following payments and provide the following benefits to
the executive officer (subject to a six month delay if and to the extent required by the deferred compensation rules set forth in and
promulgated under Section 409A of the Code):

• a lump sum equal to the pro rata target bonus for the year in which the executive officer was terminated;

• a lump sum equal to a specified multiple of the sum of (i) the executive officer’s annual base salary plus (ii) the average of
the executive officer’s target annual bonus amount for the last three full fiscal years prior to a change-in-control, or, if the
executive officer was employed by the Company for fewer than three full fiscal years preceding the fiscal year in which the
change-in-control occurs, the average target bonus for the number of full fiscal years the executive officer was employed by
the Company before the change-in-control or the target bonus for the fiscal year in which the change-in-control occurs if the
executive officer was not eligible to receive a bonus from the Company during any of the prior three fiscal years; the
applicable multiples are 200% of the annual base salary and bonus for the CEO and 100% of the annual base salary and
bonus for other executive officer participants;

•

if the executive elects to continue medical coverage under COBRA, reimbursement of the total cost of the executive’s
premiums that would be required to provide health insurance coverage, for 24 months for the CEO and for 12 months for all
other executives;

immediate acceleration of vesting of all of the executive officer’s unvested stock options and RSUs; however, if the
consideration to be received by stockholders of the Company in connection with the change-in-control consists of
substantially all cash or if the stock options and RSUs held by the executive officer are not assumed in the change-in-control,
then all of the executive officer’s then-unvested and outstanding stock options and RSUs shall vest immediately prior to the
change-in-control regardless of whether or not there is a termination of employment in connection therewith; and

2018VERISIGN PROXY•

if performance shares are accelerated, and the performance period has not been completed, the amount payable is computed
as if the performance has been satisfied at the target level.

In addition, the CIC Agreements include the following terms and conditions:

•

to the extent any change-in-control payments or benefits are characterized as excess parachute payments within the meaning
of Section 4999 of the Code, and such characterization would subject the executive officer to a federal excise tax due to that
characterization, the executive officer’s termination benefits will be reduced to an amount so that none of the amounts
payable constitute excess parachute payments if this would result in the executive officer’s receipt, on an after-tax basis, of
the greatest amount of termination and other benefits, after taking into account applicable federal, state and local taxes,
including the excise tax under Section 4999 of the Code;

• an initial term ending on August 24, 2012 and automatic renewal for one-year periods thereafter unless the Board terminates

the CIC Agreement at least 90 days before the end of the then-current term, provided that such termination shall not be
effective until the last day of the then-current term; and

•

the executive officer is prohibited from soliciting employees of Verisign or competing against Verisign for a period of twelve
months following termination.

The following table shows the value of RSUs that would have vested for our Named Executive Officers as of December 31,
2017, as well as the additional cash compensation payable, if any, under the change-in-control and termination scenarios described
above. The value of the accelerated RSUs is based on the market value of our common stock as of December 31, 2017, which was
$114.44.

Termination and Change-in-Control Benefit Estimates as of December 31, 2017

Named Executive Officer
D. James Bidzos ..................................
Todd B. Strubbe...................................
George E. Kilguss, III..........................
Thomas C. Indelicarto .........................

Value of Cash and Continued
Health Benefits ($)(1)

Value of Accelerated
Stock Awards ($)

Change-in-Control
plus Qualifying
Termination

Death, Disability or Change-in-Control
plus Qualifying
Termination(2)

4,647,972
1,444,451
1,182,332
1,040,593

32,320,488
12,047,099
9,529,991
6,484,399

(1)

(2)

To the extent any payments made or benefits provided upon termination of an executive officer’s employment constitute deferred compensation subject to Section 409A of the Code,
payment of such amounts or provision of such benefits will be delayed for six months after the executive officer’s separation from service if and to the extent required under
Section 409A.

If the equity awards held by the executive are not assumed upon a change-in-control or the consideration to be received by stockholders consists of substantially all cash, then all such
equity awards shall have their vesting and exercisability accelerated in full immediately prior to the change-in-control regardless of whether there is a qualifying termination.

2018VERISIGN PROXYEquity Compensation Plan Information

The following table sets forth information about our common stock that may be issued upon the exercise of options, warrants

and rights under all of our existing equity compensation plans as of December 31, 2017.

EQUITY COMPENSATION PLAN INFORMATION

Plan Category

Equity compensation plans approved by stockholders (2) .............

Equity compensation plans not approved by stockholders .............

Total ................................................................................................

Equity Compensation Plan Information

(A)

(B)

Number of securities
to be issued upon exercise
of outstanding options,
warrants and rights(1)

Weighted-average
exercise price of
outstanding options,
warrants and rights

(C)
Number of securities
remaining available
for future issuance
under equity
compensation plans
(excluding securities
reflected in column (A))

1,587,614

—

1,587,614

0.00

—

0.00

12,363,143 (3)

—

12,363,143

(1)

(2)

(3)

Only includes shares subject to RSUs outstanding as of December 31, 2017 that were issued under the 2006 Plan. Excludes purchase rights accruing under the 2007
Employee Stock Purchase Plan (the “2007 Purchase Plan”), which has a remaining stockholder-approved reserve of 3,455,927 shares as of December 31, 2017. There
are no outstanding options or warrants.

Includes the 2006 Plan, and the 2007 Purchase Plan.

Consists of shares available for future issuance under the 2006 Plan and the 2007 Purchase Plan. As of December 31, 2017, an aggregate of 8,907,216 shares and
3,455,927 shares of common stock were available for issuance under the 2006 Plan and the 2007 Purchase Plan, respectively, including 101,865 shares purchased
under the 2007 Purchase Plan in January 2018. In addition to options and RSUs, shares can be granted under the 2006 Plan pursuant to stock appreciation rights,
restricted stock awards, stock bonuses and performance shares.

CEO Pay Ratio

As required by Item 402(u) of Regulation S-K, we are providing the ratio of the annual total compensation of our CEO, Mr.

Bidzos, to the annual total compensation of our median employee. For 2017, the annual total compensation of the median employee
was $171,615; and the annual total compensation of our CEO, as reported in the Summary Compensation Table included on page 23
of this Proxy Statement, was $8,954,313.

Based on this information for fiscal year 2017, the ratio of our CEO’s annual total compensation to the annual total

compensation of our median employee was 52:1. Our pay ratio is a reasonable estimate calculated in a manner consistent with Item
402(u) of Regulation S-K using the data and assumptions summarized below.

The median employee was determined based on the total 2017 target direct compensation for all our employees (other than our
CEO), who were employed as of December 31, 2017. For purposes of this pay ratio, we defined target direct compensation as the sum
of annual base salary determined as of December 31, 2017, target annual bonus for the 2017 performance year, and the grant date
value of annual equity grants in 2017. We applied our compensation measure consistently to all of our employees. Salaries for
international employees were converted to USD based on the foreign exchange rate on December 31, 2017. Once we identified our
median employee, we then determined that employee’s annual total compensation in the same manner that we determine the total
compensation of our named executive officers for purposes of the Summary Compensation Table disclosed above. This annual total
compensation amount for our median employee was then compared to the 2017 total compensation of our CEO as reported in the
Summary Compensation Table to determine the pay ratio.

POLICIES AND PROCEDURES WITH RESPECT TO TRANSACTIONS WITH RELATED PERSONS

Verisign’s Audit Committee approved a written Policy for Entering into Transactions with Related Persons (the “Related Person

Transaction Policy”) which sets forth the requirements for review, approval or ratification of transactions between Verisign and
“related persons,” as such term is defined under Item 404 of Regulation S-K.

Pursuant to the terms of the Related Person Transaction Policy, the Audit Committee shall review, approve or ratify the terms of

any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any
indebtedness or guarantee of indebtedness) in which (i) Verisign was or is to be a participant and (ii) a related person has or will have a
direct or indirect material interest (“Related Person Transaction”), except for those transactions, arrangements or relationships

2018VERISIGN PROXYspecifically listed in the Related Person Transaction Policy that do not require approval or ratification. In determining whether to
approve or ratify a Related Person Transaction, the Audit Committee will take into account, among other factors it deems appropriate,
whether the Related Person Transaction terms are no more favorable to the related person than terms generally available to an
unaffiliated third-party under the same or similar circumstances and the materiality of the related person’s direct or indirect interest in
the transaction.

Prior approval of the Audit Committee shall be required for the following Related Person Transactions:

• Any Related Person Transaction to which a related person is a named party to the underlying agreement or arrangement;

provided, however, certain agreements or arrangements between Verisign and a related person concerning employment and
any compensation solely resulting from employment or concerning compensation as a member of the Board that have, in
each case, been entered into or approved in accordance with policies of Verisign shall not be subject to prior approval of the
Audit Committee;

• Any Related Person Transaction involving an indirect material interest of a related person where the terms of the agreement

or arrangement are not negotiated on an arm’s length basis or where the Related Person Transaction is not a transaction in the
ordinary course of business; and

• Any Related Person Transaction where the total transaction value exceeds $1,000,000.

On a quarterly basis, the Audit Committee shall review and, if determined by the Audit Committee to be appropriate, ratify any

Related Person Transactions not requiring prior approval of the Audit Committee pursuant to the Related Person Transaction Policy.

In the event Verisign proposes to enter into a transaction with a related person who is a member of the Audit Committee or an

immediate family member of a member of the Audit Committee, prior approval by a majority of the disinterested members of the
Board shall be required. No Audit Committee member nor his or her immediate family member, who is a party to a proposed
transaction, shall participate in any discussion or approval of such transaction, except to provide all material information concerning
the Related Person Transaction.

The following Related Person Transactions shall not require approval or ratification by the Audit Committee:

• Payment of compensation to executive officers in connection with their employment with Verisign; provided that such

compensation has been approved in accordance with policies of Verisign.

• Remuneration to directors in connection with their service as a member of the Board; provided that such remuneration has

been approved in accordance with policies of Verisign.

• Reimbursement of expenses incurred in exercising duties as an officer or director of Verisign; provided that such

reimbursement has been approved in accordance with policies of Verisign.

• Any transaction with another company at which a related person’s only relationship is as a director or beneficial owner of

less than 10% of that company’s equity interests, if the aggregate amount involved does not exceed $1,000,000.

• Any transaction with a related person involving services as a bank depositary of funds, transfer agent, registrar, trustee under

a trust indenture, or similar services.

• Any transaction involving a related person where the rates or charges involved are determined by competitive bids, or the
transaction involves the rendering of services as a common or contract carrier, or public utility, at rates or charges fixed in
conformity with law or governmental authority.

• Any transaction where the related person’s interest arises solely from the ownership of Verisign’s common stock and all

holders of Verisign’s common stock received the same benefit on a pro rata basis (e.g., dividends).

There are no transactions required to be reported under Item 404(a) of Regulation S-K where the Related Person Transaction

Policy did not require review, approval or ratification, or where the Related Person Transaction Policy was not followed during fiscal
2017.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Since January 1, 2017, there has not been, nor is there currently proposed, any transaction or series of similar transactions to

which we or any of our subsidiaries are or were to be a party in which the amount involved exceeded or will exceed $120,000 and in
which any director, executive officer or beneficial 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.

2018VERISIGN PROXYPROPOSAL NO. 3
RATIFICATION OF SELECTION OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Audit Committee of the Board has selected KPMG LLP as our independent registered public accounting firm to perform the

audit of our consolidated financial statements for the year ending December 31, 2018, and, as a matter of good corporate governance,
our stockholders are being asked to ratify this selection. Representatives of KPMG LLP, expected to be present at the Meeting, will
have the opportunity to make a statement at the Meeting if they desire to do so and are expected to be available to respond to
appropriate questions.

The Board Recommends a Vote “FOR” the Ratification of the Selection of KPMG LLP as our
Independent Registered Public Accounting Firm.

2018VERISIGN PROXYPRINCIPAL ACCOUNTANT FEES AND SERVICES

The following table presents fees billed for professional services rendered by KPMG LLP for the audit of our annual
consolidated financial statements for the years ended December 31, 2017 and December 31, 2016, and fees billed for other services
provided by KPMG LLP, in each of the last two completed fiscal years.

Audit fees (1) ..............................................................................................................................
Audit-related fees........................................................................................................................
Tax fees (2) .................................................................................................................................
All other fees...............................................................................................................................
Total Fees.................................................................................................................

2017 Fees

2016 Fees

1,958,979

1,618,527

—

1,260

—

1,958,979

1,619,787

(1) Audit Fees consist of fees for the integrated audit of the Company’s annual financial statements, the review of the interim financial statements included in the Company’s

Quarterly Reports on Form 10-Q and other professional services provided in connection with statutory and regulatory filings or engagements for those fiscal years.

(2) Tax Fees consist principally of technical tax advice.

Policy on Audit Committee Pre-Approval of Audit and Permissible Non-Audit Services of Independent Auditors

Per the Audit Committee’s Charter, the Audit Committee, or a designated member of the Audit Committee, pre-approved all

audit and permissible non-audit services provided by the independent registered public accounting firm. These services included audit
services, audit-related services, tax services and other services. Any pre-approval is detailed as to the particular service or category of
services and is generally subject to a specific budget. The independent registered public accounting firm and management are required
to periodically report to the Audit Committee regarding the extent of services provided by the independent registered public
accounting firm in accordance with this pre-approval, and the fees for the services performed to date.

2018VERISIGN PROXYPROPOSAL NO. 4
STOCKHOLDER PROPOSAL REQUESTING THAT THE BOARD TAKE STEPS TO AMEND THE SPECIAL MEETINGS
BYLAW PROVISION

John Chevedden has submitted a stockholder proposal for consideration at the Annual Meeting. Mr. Chevedden’s address is
2215 Nelson Avenue, No. 205, Redondo Beach, CA 90278. We have been notified that Mr. Chevedden has continuously owned no
fewer than 50 shares of our common stock since October 1, 2016. If properly presented at the Annual Meeting, the Board
unanimously recommends a vote “AGAINST” the following proposal. The affirmative vote of the holders of a majority of the stock
present in person or represented by proxy and entitled to vote at the Annual Meeting will be required to approve the stockholder
proposal. Mr. Chevedden has requested that the proposal set forth in the box below be presented for a vote at the Meeting:

Proposal 4 -- Special Shareholder Meeting Improvement

RESOLVED, Shareowners ask our board to take the steps necessary (unilaterally if possible) to amend our bylaws and each
appropriate governing document to give holders in the aggregate of 10% of our outstanding common stock the power to call a
special shareowner meeting. In other words this proposal asks for adoption of the most shareholder-friendly version of the
shareholder right to call a special meeting as permitted by Delaware law. This proposal does not impact our board’s current power
to call a special meeting.

A shareholder right to call a special meeting and to act by written consent and are 2 complimentary ways (written consent
completely lacking at Verisign) to bring an important matter to the attention of both management and shareholders outside the
annual meeting cycle such as the election of directors. More than 100 Fortune 500 companies provide for shareholders to call
special meetings and to act by written consent.

This proposal is more important at Verisign because VRSN shareholders have the most craziest and toothless form of a right to call
a special meeting.

At VRSN it would take a whopping 35% of shares (instead of the 10% called for in Delaware law) and then all shares held for less
than one continuous year would be disqualified. Thus in order to obtain the 35% requirement it could take holders of 60% of
VRSN shares to obtain the 35% that represented one-year of continuous holdings. In other words it could take 60% of shares to
initiate a meeting in which 51% of shares would be needed to take action.

I challenge VRSN top management to name one company that adopted a more restricted form of shareholder called special
meetings in response to a shareholder proposal.

A shareholder ability to call a special meeting would put shareholders in a better position to ask for improvement in our board of
directors after the 2018 annual meeting. Some of our directors could be reassigned to less demanding roles.

For instance, in our small aboard of 7 directors Louis Simpson was Lead Director at age 79 with 12-years long-tenure and received
25-times as many negative votes as certain other VRSN directors. Long-tenure can impair the independence of a director no matter
how well qualified. And independence is an all-important qualification for a Lead Director. Plus Mr. Simpson had oversized
influence since he was assigned to 2 of our most important board committees.

Another example of long-tenure was Roger Moore who had 15-years long-tenure at age 75.

Any claim that a shareholder right to call a special meeting can be costly - may be largely moot. When shareholders have a good
reason to call a special meeting - our board should be able to take positive responding action to make a special meeting
unnecessary.

Please vote to improve our corporate governance:

Shareholder Meeting Improvement - Proposal 4

The Board recommends a vote “against” this proposal for the following reasons:

The Board is committed to sound corporate governance policies and practices, which allow stockholders to voice their

opinions as well as drive stable, long-term value for stockholders. The Board has carefully reviewed this proposal and for the
following reasons believes it is not in the best interest of our stockholders and recommends voting “AGAINST” this proposal.

25% Ownership Threshold is Already in Place

Stockholders holding at least 25% of our outstanding shares may call special meetings, a meaningful right based on peer and
market data. The Board has a continuous quality improvement approach to our corporate governance practices and policies. As part of
the Company’s commitment to robust corporate governance, the Board monitors and evaluates trends and events in corporate
governance on an on-going basis in order to compare and evaluate new developments against the Company’s current practices. After
reviewing the special meeting rights provided by our peers and members of the S&P 500, in February 2018 the Board amended the
Company’s bylaws to reduce the ownership threshold required for stockholders to call a special meeting of stockholders to 25% of our

2018VERISIGN PROXY

outstanding shares from 35%.

Verisign’s Size and Concentrated Holdings Make 25% an Appropriate Threshold

In selecting the 25% ownership threshold, we note that an ownership threshold of 25% can be met by as few as two of our
stockholders acting together. Moreover, either of our two largest investors, acting individually, could meet the 10% ownership level
requested by the proponent. We further noted that, as of February 2018, the 25% ownership threshold is the same as, or more
favorable to stockholders than, the special meetings rights at approximately 78.9% of the 469 S&P 500 companies survey by
SharkRepellent.com, as well as most of our peers.

The Board believes that corporate governance policies and practices tailored to the Company’s unique circumstances generate
the most value for stockholders. In establishing the 25% ownership threshold, the Board designed the special meeting right to provide
our stockholders with a significant ability to raise important matters with the Board and Company management in a manner that is
appropriate in light of the Company’s particular ownership composition.

Special meetings of stockholders can be costly and potentially disruptive to the Company’s business operations and to long-

term stockholder interests. An inappropriately low ownership threshold can allow a minority of very few stockholders to utilize the
special meeting mechanism for their own special interests, which may not be shared by other stockholders. For example, if the Board
were to reduce the ownership threshold to 10%, it could force the Company to expend time and resources on a special meeting of
stockholders that 90% of our stockholders do not support. The Board believes the existing 25% ownership threshold is aligned with
our stockholders’ interests because it strikes an appropriate balance between allowing stockholders to vote on important matters that
arise between annual meetings and minimizing potential waste and disruption.

Strong Corporate Governance Practices are in Place

The Company’s corporate governance policies and practices have delivered strong returns for our stockholders. Since the

completion of the Board-led divestiture strategy in the third quarter of 2010, the Company’s financial performance has shown a
consistent and improving track record. As noted in our financial results, our annual revenue, operating income, and cash flow from
operations have all grown sequentially for seven straight years, and the Company has returned over $5.57 billion to shareholders in the
form of share repurchases and special dividends (excluding payments to holders of our convertible debentures triggered by the special
dividends). The Board believes that its existing 25% ownership threshold, which is tailored to the Company’s unique circumstances,
generates the most value for stockholders while delivering a robust and stockholder friendly corporate governance structure.

In addition to our current special meeting right, the Board has taken numerous actions that are designed to promote effective

corporate governance and to provide our stockholders with the ability to communicate their priorities to the Board and Company
management. These stockholder-friendly actions include:

• Proxy Access Right -- The Board has adopted a proxy access right with standard terms that permits stockholders to

include director nominees in Company proxy materials.

• Declassification of the Board -- We have recommended, and stockholders have approved, amendments to the
Certificate of Incorporation to eliminate the classified board and provide for the annual election of all directors.

• Lead Independent Director -- The Board has appointed a lead independent director, ensuring Board independence from
management by permitting the lead independent director to call and chair meetings of the independent directors separate
and apart from the Chairman of the Board.

• Majority Voting -- Verisign’s Bylaws provide for a majority of votes cast standard in uncontested director elections

rather than a plurality.

• No Super Majority Voting -- Verisign’s corporate documents do not include any supermajority voting provisions.

• No Stockholder Rights Plan -- Verisign does not have a stockholder rights plan, also known as a poison pill.

• Annual Advisory Vote on Executive Compensation -- The Board has implemented an annual stockholder advisory
vote on executive compensation, which means that stockholders have the opportunity to provide feedback on the
Company’s executive compensation practices on an annual basis.

The Company also regularly engages with stockholders and feedback received from our stockholders is carefully considered.

The Board believes our strong corporate governance policies and practices, including the ability of a reasonable minority of
stockholders to request a special meeting, make implementation of this proposal unnecessary.

The Board Recommends a Vote “AGAINST” this proposal for the reasons discussed above. Proxies solicited by the Board will
be voted “AGAINST” this proposal unless a stockholder indicates otherwise in voting the proxy.

2018VERISIGN PROXY
OTHER INFORMATION

2019 Stockholder Proposals or Nominations

Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, as amended, some stockholder proposals may be eligible for
inclusion in our 2019 Proxy Statement. These stockholder proposals must be submitted, along with proof of ownership of our stock in
accordance with Rule 14a-8, to our principal executive offices in care of our Secretary by the means discussed below in the
“Communicating with Verisign” section of this Proxy Statement. Failure to deliver a proposal in accordance with this procedure may
result in the proposal not being deemed timely received. We must receive all submissions no later than 6:00 p.m. Eastern Time on
December 12, 2018.

We strongly encourage any stockholder interested in submitting a proposal to contact our Secretary in advance of this deadline

to discuss the proposal, and stockholders may find it helpful to consult knowledgeable counsel with regard to the detailed
requirements of applicable securities laws. Submitting a stockholder proposal does not guarantee that we will include it in our Proxy
Statement. Our Corporate Governance and Nominating Committee reviews all stockholder proposals and makes recommendations to
the Board for action on such proposals. For information on recommending individuals for consideration as director nominees, see the
“Corporate Governance and Nominating Committee” section of this Proxy Statement.

Verisign engages in a continuous quality improvement approach to corporate governance practices. We monitor and evaluate

trends and events in corporate governance and compare and evaluate new developments against our current practices; we understand
that corporate governance is not in a static state with regard to numerous topic areas. We seek and receive input from stockholders and
other commentators on our practices and policies, and our Board and the Board’s Corporate Governance and Nominating Committee
consider this input when reviewing proposals to change practices or policies.

In addition, under our Bylaws, any stockholder who intends to nominate a candidate for election to the Board or propose any

business at our 2019 annual meeting (other than precatory (non-binding) proposals presented under Rule 14a-8), pursuant to the
advance notice provisions of the Bylaws, must be received by our Secretary no earlier than 6:00 p.m. Eastern Time on January 24,
2019 and no later than 6:00 p.m. Eastern Time on February 23, 2019. Notice of proxy access director nominees must be received by
our Secretary no earlier than 6:00 p.m. Eastern Time on November 12, 2019 and no later than 6:00 p.m. Eastern Time on December
13, 2018. In each case, the notice must include the information specified in our Bylaws, including information concerning the
nominee or proposal, as the case may be, and information about the stockholder’s ownership of and agreements related to our stock. If
the 2019 annual meeting is held more than 30 days before or more than 60 days after the anniversary of the 2018 Annual Meeting of
Stockholders, a stockholder seeking to nominate a candidate for election to the Board or propose any business at our 2019 annual
meeting, pursuant to the advance notice provisions of the Bylaws, must submit notice of any such nomination or no earlier than 6:00
p.m. Eastern Time on the 120th day prior to such annual meeting and no later than 6:00 p.m. Eastern Time on the later of the 90th day
prior to such annual meeting or the 10th day following the day on which the date of such meeting is first publicly announced by
Verisign. If the 2019 annual meeting is held more than 30 days from the anniversary of the 2018 Annual Meeting of Stockholders, a
stockholder seeking to nominate a candidate for election to the Board pursuant to the proxy access provisions of the Bylaws must
submit notice of any such nomination no earlier than 6:00 p.m. Eastern Time on the 150th day prior to such annual meeting and no
later than 6:00 p.m. Eastern Time on the later of the 120th day prior to such annual meeting or the 10th day following the day on
which the date of such meeting is first publicly announced by Verisign.

2018VERISIGN PROXYOther Business

The Board does not presently intend to bring any other business before the Meeting, and, so far as is known to the Board, no
matters are to be brought before the Meeting except as specified in the Notice of the Meeting. As to any business that may properly
come before the Meeting, however, it is intended that proxies will be voted in respect thereof in accordance with the judgment of the
persons voting such proxies.

Whether or not you expect to attend the Meeting, please complete the proxy electronically as described on the Notice of
Internet Availability of Proxy Materials and under “Internet and Telephone Voting” in this Proxy Statement, or alternatively,
if you have requested paper copies of the proxy soliciting materials, please complete, date, sign and promptly return the proxy
in the enclosed postage paid envelope or cast your vote by phone so that your shares may be represented at the Meeting.

Communicating With Verisign

We have from time-to-time received calls from stockholders inquiring about the available means of communication with

Verisign. We thought that it would be helpful to describe those arrangements that are available for your use.

• If you would like to receive information about Verisign, you may use one of these convenient methods:

To have information such as our latest Annual Report on Form 10-K or Quarterly Report on Form 10-Q mailed to
you, please email our Investor Relations Department at ir@verisign.com, and specify your mailing address, or call
our Investor Relations Department at 1-800-922-4917 (U.S.) or 1-703-948-3447 (international).

To view our website on the internet, use our internet address: www.verisign.com. Our home page gives you access to
product, marketing and financial data, and an on-line version of this Proxy Statement, our Annual Report on Form
10-K and other filings with the SEC. The information available on, or accessible through, this website is not
incorporated herein by reference.

•

If you would like to write to us, please send your correspondence to the following address:

VeriSign, Inc.
Attention: Investor Relations
12061 Bluemont Way
Reston, Virginia 20190

or via email at ir@verisign.com.

• If you would like to inquire about stock transfer requirements, lost certificates and change of stockholder address, please call
our transfer agent, Computershare Inc. at 1-877-255-1918. Foreign stockholders please call 1-201-680-6578. You may also
visit their website at http://www.computershare.com/investor for step-by-step transfer instructions.

WE WILL PROVIDE, WITHOUT CHARGE, ON THE WRITTEN REQUEST OF ANY STOCKHOLDER, A COPY OF
OUR 2017 ANNUAL REPORT ON FORM 10-K, INCLUDING THE FINANCIAL STATEMENTS AND THE FINANCIAL
STATEMENT SCHEDULES REQUIRED TO BE FILED WITH THE SEC PURSUANT TO RULE 13A-1.
STOCKHOLDERS SHOULD DIRECT SUCH REQUESTS TO INVESTOR RELATIONS AT 12061 BLUEMONT WAY,
RESTON, VIRGINIA, OR BY EMAIL AT IR@VERISIGN.COM.

2018VERISIGN PROXY

DEAR VERISIGN STOCKHOLDERS:

BOARD OF DIRECTORS

OUR MISSION

Enable the world to connect online

with reliability and confidence, anytime,

anywhere

OUR VALUES

• We are stewards of the internet and our

Company

• We are passionate about the pursuit of

technology and innovation

• We take responsibility for our actions

• We respect others and exhibit integrity

in our actions

Todd B. Strubbe, D. James Bidzos, George E. Kilguss, III.

2018 Kelsey Ayres / Nasdaq, Inc.

In 2017, we continued to provide secure, stable internet infrastructure

services, which billions of internet users worldwide rely on daily while

growing and managing our business. Significant milestones of 2017

include:

• In July, Verisign announced the renewal of the .net Registry

Agreement with ICANN making Verisign the sole registry operator for the .net registry through June 30, 2023.

• Revenues totaled $1.17 billion for 2017, marking the seventh straight year of revenue expansion while steadily

growing our margins and free cash flow.

• The domain name base for .com and .net names ended 2017 with 146.5 million names, up by 4.3. million net new

names which represents a three percent increase over the base at the end of the prior year.

• During 2017, we repurchased 6.3 million shares, returning $593 million to our stockholders.

• Our balance sheet remained strong with year-end cash, cash equivalents, and marketable securities at $2.4 billion.

For more than 20 years, Verisign has maintained 100% operational accuracy and stability of the .com and .net domain

name system infrastructure, helping to keep the world connected online, seamlessly, and securely.

In January of 2018, the company celebrated 20 years since the initial listing of Verisign shares on Nasdaq.

Secure, reliable operation of internet infrastructure is fundamental to what we provide and this commitment to security

and stability has contributed to our technical expertise and leadership. I want to extend a special note of thanks to

our employees whose expertise and dedication in both developing and maintaining our specialized infrastructure

have enabled Verisign to deliver long term value to our customers and to our shareholders. We remain committed to

protecting, growing, and managing our business while returning value to shareholders.

I would like to extend my thanks to our stockholders, customers, and employees for your ongoing support.

Jim Bidzos

Executive Chairman,

President, and Chief Executive Officer

April 2018

D. James Bidzos
Chairman of the Board of Directors
Executive Chairman,
President and Chief Executive Officer
VeriSign, Inc.

Jamie S. Gorelick
Partner
Wilmer Cutler Pickering Hale and Dorr LLP

Timothy Tomlinson
Former General Counsel
Portola Minerals Company

Kathleen A. Cote
Former Chief Executive Officer
Worldport Communications Company

Roger H. Moore
Former President and Chief Executive Officer
Illuminet Holdings, Inc.

Thomas F. Frist III
Principal
Frist Capital, LLC

Louis A. Simpson
Chairman
SQ Advisors, LLC

EXECUTIVE OFFICERS

D. James Bidzos
Chairman of the Board of Directors
Executive Chairman,
President, and Chief Executive Officer

Todd B. Strubbe
Executive Vice President,
Chief Operating Officer

George E. Kilguss, III
Executive Vice President,
Chief Financial Officer

Thomas C. Indelicarto
Executive Vice President,
General Counsel, and Secretary

INVESTOR INFO

Quarterly earnings releases, corporate news
releases, and Securities and Exchange
Commission filings are available by contacting
Verisign Investor Relations or through our website
at https://investor.verisign.com. A copy of
Verisign’s Annual Report on Form 10-K for
the fiscal year ended December 31, 2017,
containing additional information of possible
interest to stockholders will be sent without
charge to any stockholder who requests
it. Please direct your request to Verisign
Investor Relations at the address at the right.

STOCK EXCHANGE LISTING
NASDAQ Stock Market
Ticker Symbol: VRSN

VERISIGN INVESTOR RELATIONS
12061 Bluemont Way
Reston, VA 20190
Phone: + 1 800 922 4917
Int’l: + 1 703 948 3447
Email: ir@verisign.com
https://investor.verisign.com/

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
KPMG LLP
1676 International Drive, Suite 1200
McLean, VA 22102

TRANSFER AGENT
If you have questions concerning stock certificates, change of
address, consolidation of accounts, transfer of ownership, or other
stock account matters, please contact Verisign’s transfer agent:

Computershare Inc.
P.O. Box 505000
Louisville, KY 40233
Phone: + 1 877 255 1918
Int’l: + 1 201 680 6578
http://www.computershare.com/investor

ABOUT VERISIGN

Verisign, a global leader in domain names and internet security, enables internet
Verisign, a global leader in domain names and internet security, enables internet
navigation for many of the world’s most recognized domain names and provides
navigation for many of the world’s most recognized domain names and provides
protection for websites and enterprises around the world. Verisign ensures the
protection for websites and enterprises around the world. Verisign ensures the
security, stability and resiliency of key internet infrastructure and services, including
security, stability and resiliency of key internet infrastructure and services, including
the .com and .net domains and two of the internet’s root servers, as well as performs
the .com and .net domains and two of the internet’s root servers, as well as performs
the root-zone maintainer function for the core of the internet’s Domain Name System
the root-zone maintainer function for the core of the internet’s Domain Name System
(DNS). Verisign’s Security Services include Distributed Denial of Service Protection
(DNS). Verisign’s Security Services include Distributed Denial of Service Protection
and Managed DNS. To learn more about what it means to be Powered by Verisign,
and Managed DNS. To learn more about what it means to be Powered by Verisign,
.
please visit
please visit Verisign.com.
.
please visit
please visit Verisign.com.
please visit Verisign.com.

WORLDWIDE
WORLDWIDE
WORLDWIDE

UNITED STATES:

UNITED STATES:
UNITED STATES:
12061 Bluemont Way
12061 Bluemont Way
12061 Bluemont Way
12061 Bluemont Way
12061 Bluemont Way
Reston, VA 20190
Reston, VA 20190
Reston, VA 20190
Reston, VA 20190
Reston, VA 20190
Phone: + 1 703 948 3200
Phone: + 1 703 948 3200
Phone: + 1 703 948 3200
Phone: + 1 703 948 3200
Phone: + 1 703 948 3200

EUROPE:

EUROPE:
EUROPE:
Route du Petit Moncor 1E
Route du Petit Moncor 1E
Route du Petit Moncor 1E
Route du Petit Moncor 1E
2nd Floor
2nd Floor
2nd Floor
2nd Floor
CH-1752 Villars sur Glane
CH-1752 Villars sur Glane
CH-1752 Villars sur Glane
CH-1752 Villars sur Glane
Switzerland
Switzerland
Switzerland
Switzerland
Phone: + 41 (0) 26 408 7778

Route du Petit Moncor 1E
2nd Floor
CH-1752 Villars sur Glane
Switzerland
Phone: + 41 (0) 26 408 7778

ASIA:

807-A, Park Centra
807-A, Park Centra
Sector-30 NH-8
Sector-30 NH-8
Gurgaon, Haryana
Gurgaon, Haryana
India
India
Phone: + 91 12 0253 1622
Phone: + 91 12 0253 1622

Parkview Green
Office Building A, Level 15, Suite 1511 & Suite 1518
9 Dongdaqiao Road
Chaoyang District, Beijing, 100020, PRC
Phone: + 86 (10) 5730 6081

Verisign
Verisign
Verisign
Verisign
Verisign
United Kingdom Sales Office
United Kingdom Sales Office
1st Floor – Suite 01A117
1st Floor – Suite 01A117
1st Floor – Suite 01A117
1st Floor – Suite 01A117
1st Floor – Suite 01A117
2 Eastbourne Terrace
2 Eastbourne Terrace
2 Eastbourne Terrace
2 Eastbourne Terrace
2 Eastbourne Terrace
London W2 6 LG
London W2 6 LG
London W2 6 LG
London W2 6 LG
London W2 6 LG
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
Phone: + 44 20 3402 3669
Phone: + 44 20 3402 3669
Phone: + 44 20 3402 3669
Phone: + 44 20 3402 3669
Phone: + 44 20 3402 3669

AUSTRALIA:

5 Queens Road
Level 10
Melbourne, VIC, 3004
Australia
Phone: + 61 3 9926 6700

Verisign.com

Verisign.com
Verisign.com
Verisign.com
Verisign.com

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ANNUAL REPORT

2017