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As previously announced by VeriSign, Inc. (Nasdaq: VRSN), an ad hoc group of independent Directors of VeriSign’s Board of Directors has been reviewing VeriSign’s historical stock option grant practices. Although the review is not complete, on November 15, 2006, the Board concluded that the company must restate its historical financial statements for the years and interim periods from 2001-2005 and for the first quarter of 2006 to record additional non-cash, stock-based compensation expense related to past stock option grants having incorrect measurement dates and other administrative inconsistencies related to certain stock option grant dates and prices. Based on the findings to date, the non-cash charge to the financial statements for the periods 2001 - 2005 is not expected to exceed $250 million, however the investigation is still on-going.Accordingly, the financial statements and all earnings press releases and similar communications issued by the company relating to those periods should not be relied upon pending completion of the restatements. The amount of additional non-cash stock-based compensation expense to be recorded in any specific period or in any future period and the resulting tax and accounting impact have not been determined.
The ad hoc group of independent Directors anticipates its review of VeriSign's historical stock option grant practices will be completed by the end of the year. As soon as practicable following the completion of the review, VeriSign intends to prepare restated financial statements for all affected periods and thereafter become current on the filing of its periodic reports required under the Securities Exchange Act of 1934, as amended. VeriSign is evaluating the impact of this matter on its internal controls over financial reporting and on its disclosure controls and procedures.
VeriSign has discussed the above matters with KPMG LLP, the company's independent registered public accounting firm.
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