-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BDeOo8MPt6xfMcKVMpooUC3DL4HtpvPKiCrzS5dUBMlVRCvEgWeLdLS4fxsXA3G5 DWWSTvUCiBJt26R8jPvk1A== 0000950133-98-003490.txt : 19981012 0000950133-98-003490.hdr.sgml : 19981012 ACCESSION NUMBER: 0000950133-98-003490 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19981006 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19981009 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NETWORK SOLUTIONS INC /DE/ CENTRAL INDEX KEY: 0001030341 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 521146119 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 000-22967 FILM NUMBER: 98723794 BUSINESS ADDRESS: STREET 1: 505 HUNTMAR PARK DR CITY: HERNDON STATE: VA ZIP: 20170 BUSINESS PHONE: 7037420400 MAIL ADDRESS: STREET 1: 505 HUNTMAR PARK DRIVE CITY: HERNDON STATE: VA ZIP: 20170 FORMER COMPANY: FORMER CONFORMED NAME: NETWORK SOLUTIONS INC /DE/ DATE OF NAME CHANGE: 19970702 8-K 1 FORM 8-K DATED OCTOBER 6, 1998 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report: October 6, 1998 NETWORK SOLUTIONS, INC. (Exact name of registrant as specified in its charter) Delaware 0-22967 52-1146119 (State or other jurisdiction (Commission File (I.R.S. Employer of incorporation) Number) Identification Number)
505 Huntmar Park Drive, Herndon, Virginia 20170 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (703) 742-0400
2 ITEM 5. OTHER EVENTS. On October 6, 1998, Network Solutions, Inc., a Delaware corporation (the "Company"), announced that it had entered into an amendment (the "Amendment") to the Company's Cooperative Agreement with the United States Department of Commerce. (The authority to administer the Cooperative Agreement, previously held by the National Science Foundation (the "NSF"), was transferred by the NSF to the Department of Commerce on September 9, 1998.) A copy of the Amendment is attached hereto as Exhibit 99.1. A copy of the Company's press release, dated October 6, 1998, announcing the Amendment is attached hereto as Exhibit 99.2 and incorporated by reference herein. This report and the Company's press release attached hereto contain forward looking statements that involve risks and uncertainties, including, without limitation, those relating to competition and Internet governance. More information about potential factors which could affect the Company's financial results is included in the Company's annual report on Form 10-K for the year ended December 31, 1997, including, without limitation, under the captions, "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Risk Factors," "Competition" and "Relationship with the NSF; Recent Developments in Internet Governance," and the Company's quarterly report on Form 10-Q for the period ended June 30, 1998, which are on file with the Securities and Exchange Commission (http://www.sec.gov). ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. (c) Exhibits.
Exhibit Description - ------- ----------- 99.1 Amendment No. 11 to the Cooperative Agreement dated October 6, 1998. 99.2 Text of Press Release dated October 6, 1998.
2 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. NETWORK SOLUTIONS, INC. Date: October 9, 1998 By: /s/ Gabriel A. Battista ------------------------------------------- Gabriel A. Battista Chief Executive Officer
3 4 NETWORK SOLUTIONS, INC. INDEX TO EXHIBITS
Exhibit Description - ------- ----------- 99.1 Amendment No. 11 to the Cooperative Agreement dated October 6, 1998. 99.2 Text of Press Release dated October 6, 1998.
4 EX-99.1 2 AMENDMENT NO. 11 TO THE COOPERATIVE AGREEMENT 1 EXHIBIT 99.1
- ------------------------------------------------------------------------------------------------------------ FORM CD-451 U.S. DEPARTMENT OF COMMERCE [ ] GRANT [X] COOPERATIVE AGREEMENT (REV 10/98) - ------------------------------------------------------------------------------------------------------------ AMENDMENT TO ACCOUNTING CODE FINANCIAL ASSISTANCE AWARD N/A -------------------------------------------- AWARD NUMBER NCR 92-18742 - ------------------------------------------------------------------------------------------------------------ RECIPIENT NAME AMENDMENT NUMBER Network Solutions, Incorporated Eleven (11) - ------------------------------------------------------------------------------------------------------------ STREET ADDRESS EFFECTIVE DATE 505 Huntmar Park Drive October 7, 1998 - ------------------------------------------------------------------------------------------------------------ CITY, STATE, ZIP CODE EXTEND WORK COMPLETION TO Herndon, Virginia 22070 September 30, 2000 - ------------------------------------------------------------------------------------------------------------ DEPARTMENT OF COMMERCE OPERATING UNIT NATIONAL TELECOMMUNICATIONS AND INFORMATION ADMINISTRATION - ------------------------------------------------------------------------------------------------------------ COSTS ARE REVISED AS PREVIOUS ADD DEDUCT TOTAL FOLLOWS : N/A ESTIMATED COST ESTIMATED COST - ------------------------------------------------------------------------------------------------------------ FEDERAL SHARE OF COST $ $ $ $ - ------------------------------------------------------------------------------------------------------------ RECIPIENT SHARE OF COST $ $ $ $ - ------------------------------------------------------------------------------------------------------------ TOTAL ESTIMATED COST $ $ $ $ - ------------------------------------------------------------------------------------------------------------ REASON(S) FOR AMENDMENT In accordance with the Memorandum of Agreement entered into under the authority of the National Science Foundation Act of 1950, as amended, 42 U.S.C. Sec. 1861-75, and specifically 42 U.S.C. Sec. 1870(c), (j), and 42 U.S.C. 1862(a) (4), (h), the flexibility period of the Cooperative Agreement is extended at no additional cost to the Government. - ------------------------------------------------------------------------------------------------------------ This Amendment approved by the Grants Officer is issued in triplicate and constitutes an obligation of Federal funding. By signing the three documents, the Recipient agrees to comply with the Amendment provisions checked below and attached, as well as previous provisions incorporated into the Award. Upon acceptance by the Recipient, two signed Amendment documents shall be returned to the Grants Officer and the third document shall be retained by the Recipient. If not signed and returned without modification by the Recipient within 30 days of receipt, the Grants Officer may unilaterally terminate this Amendment. [X] Special Award Conditions [ ] Line Item Budget [ ] Other(s) ---------------------------------------------------------------------------------------------- - ------------------------------------------------------------------------------------------------------------ SIGNATURE OF DEPARTMENT OF COMMERCE GRANTS OFFICER DATE Joseph Levine /s/ Joseph Levine 10/06/98 Acting Grants Officer Office of Executive Assistance Management - ------------------------------------------------------------------------------------------------------------ TYPED NAME, TYPED TITLE, AND SIGNATURE OF AUTHORIZED RECIPIENT OFFICIAL DATE David M. Graves /s/ D M Graves 10/06/98 Director, Business Affairs - ------------------------------------------------------------------------------------------------------------
2 SPECIAL AWARD CONDITIONS NCR-9218742 Amendment No. 11 Parties: Department of Commerce (USG), Network Solutions, Inc. (NSI) Effective Date: October 7, 1998 Purpose: This agreement facilitates the stable evolution of the Internet domain name system (DNS) in accordance with the provisions of the Statement of Policy on DNS administration, "Management of Internet Names and Addresses," 63 Fed. Reg. 31741 (1998)(hereinafter "Statement of Policy" or "White Paper") by: (1) providing for recognition by NSI of NewCo when recognized by the USG in accordance with the provisions of the Statement of Policy; (2) amending the Cooperative Agreement No. NCR-9218742; (3) authorizing NSI's continued operation of the primary root server during the transition; and (4) providing for the development, deployment and licensing by NSI of a mechanism that allows multiple registrars to accept registrations for the generic top level domains (gTLDs) for which NSI acts as a registry. Term and Transition: This agreement extends the Cooperative Agreement through September 30, 2000; provided, however, that as the USG transitions DNS responsibilities to NewCo, corresponding obligations under the Cooperative Agreement as amended will be terminated and, as appropriate, covered in a contract between NSI and NewCo. General Definition of NewCo: For purposes of this agreement, NewCo is the not-for-profit corporation described in the Statement of Policy and recognized by the USG in accordance with the provisions of the Statement of Policy for so long as the USG continues its recognition of NewCo. COMPETITION Shared Registry: In order to create an environment conducive to the development of robust competition among domain name registrars, NSI will, either directly or by contract, develop a protocol and associated software supporting a system that permits multiple registrars to provide registration services within the gTLDs for which NSI now acts as a registry (Shared Registration System). 1 3 Development of the Shared Registration System shall reflect the following agreed upon time line, which assumes that the USG does not request changes in the specifications: 1. By November 1, 1998, NSI shall provide functional and interface specifications for the Shared Registration System and a milestone schedule for its development and implementation. 2. By December 1, 1998, NSI shall create a focused input technical advisory group consisting of not more than 10 individuals designated by NewCo to comment on the design of and participate in testing of the Shared Registration System. 3. By March 31, 1999, NSI will establish a test bed supporting actual registrations in .com, .net and .org by 5 registrars accredited by NewCo (Accredited Registrars). (Phase 1) 4. By June 1, 1999, the Shared Registration System will be deployed by NSI and available to support multiple licensed Accredited Registrars offering registration services within the gTLDs for which NSI now acts as a registry. (Phase 2) 5. By October 1, 1999, NSI will have completed reengineering of NSI's registry/registrar interface and back end systems so as to assure that NSI, acting as registry, shall give all licensed Accredited Registrars (including NSI acting as registrar) equivalent access ("equal access") to registry services through the Shared Registration System. (Phase 3) The functional and interface specifications of the Shared Registration System shall describe a protocol and associated software able to: (1) provide security and authentication protocols and procedures for requests from registrars; and (2) permit second level domain name holders to change registrars within the same registry without changing domain names. NSI agrees to license the Shared Registration System protocol, associated documentation, and reference implementation to Accredited Registrars, on reasonable terms and conditions approved by the USG, such approval not to be unreasonably withheld, that are designed to promote the development of robust competition for the provisions of registrar services. 2 4 Enhanced Searchable Database: Not later than November 1, 1998, NSI shall provide the USG with a written description of its proposed enhancements to the existing WhoIs database(s). Within 60 days after the publication by the World Intellectual Property Organization (WIPO) of recommended characteristics of an enhanced searchable database containing domain name registration data, NSI will provide a report to the USG regarding how and under what conditions such a database might be designed and implemented in the gTLDs for which NSI now acts as the registry. Pricing: Commencing upon the Phase 1 deployment of the Shared Registration System, and for the term of this agreement, NSI's prices for registry services through the Shared Registration System in the gTLDs for which NSI now acts as the registry, will be no more than a dollar amount per registration/year to be specified in a further amendment reflecting NSI's costs and a reasonable return on its investment. This price cap will be adjusted via an amendment to the Cooperative Agreement to reflect demonstrated changed costs of NSI arising from newly enacted legislation, NewCo fees, inflation, regulations, standards, costs of new litigation (including settlements and judgments) in excess of NSI's operating plan or changes in the operation of the registry, or to fund specific additional activities in the event such activities are reflected in an amendment to the Cooperative Agreement. Existing NSI Customers: Commencing upon the Phase 1 deployment of the Shared Registration System, and for a period of 18 months thereafter, NSI shall permit any customer with whom it has a contract pursuant to which NSI provides registration services that is either facially or effectively exclusive as to registration services, to terminate the registration provisions of such contract (following payment of all amounts due up through the time of such termination) and obtain registration services from other registrars; provided, however, that NSI may enter into agreements pursuant to which NSI's counterparty agrees not to utilize proprietary intellectual property or confidential proprietary information provided by NSI to the counterparty pursuant to their agreement. New Contracts: Commencing on the effective date of this agreement, and for a period of 18 months after the Phase 1 deployment of the Shared Registration System, NSI will not enter into an agreement with any other party that 3 5 limits in any way that party's ability to serve as a registrar or to operate a registry; provided, however, that (1) NSI may enter into agreements pursuant to which NSI's counterparty agrees not to utilize proprietary intellectual property or confidential proprietary information provided by NSI to the counterparty pursuant to their agreement; and (2) the mere provision by NSI, on a nonexclusive basis, of registration services to a party shall not be deemed to limit that party's ability to serve as a registrar or operate a registry. Separation of Registry/Registrar Services: Following the Phase 1 deployment of the Shared Registration System, NSI shall make a certification to the USG every six months designed to demonstrate by means of objective criteria, which shall be agreed upon between USG and NSI, that NSI is providing all licensed Accredited Registrars with equal access to its registry services. NSI also will by February 1, 1999, employ appropriate safeguards, approved by the USG, to ensure that revenues and assets of the registry are not utilized to financially advantage NSI's registrar activities to the detriment of other registrars. DATA, KNOW HOW, TECHNICAL ASSISTANCE, ETC. Software and Data: Not later than 30 days after the date of this agreement, NSI shall submit to the USG an electronic copy of all software and data generated under the Cooperative Agreement through September 30, 1998. Not later than 60 days after the date of this agreement, NSI shall submit to the USG all existing documentation for such software and data generated through September 30, 1998. The USG will take appropriate measures, including the development and execution of confidentiality agreements acceptable to NSI, to protect the confidentiality of such data, software and documentation so delivered. To the extent any such software, data or documentation need to be made available to any agent, contractor or project partner of the USG, the USG will promptly so notify NSI and will require such agent, contractor or project partner to comply with similar appropriate confidentiality requirements; provided, however, that, except as otherwise expressly provided herein, nothing in this paragraph is intended to alter any intellectual property rights of the USG or NSI established in the Cooperative Agreement. 4 6 Assistance to NewCo: If NewCo has a technical question or a need to access appropriate intellectual property of NSI, and the answer to such question or such access is reasonably necessary for NewCo to carry out its responsibilities as described in the "Coordinated Functions", the "Purpose" and the "Transition" sections of the Statement of Policy (NewCo's Responsibilities), and provided that NewCo shall have agreed to protect the confidentiality and security of any such information under a confidentiality agreement mutually acceptable to NSI and NewCo, NSI shall provide such answer or access and shall not assert any of its intellectual property rights or its desire to protect confidentiality or security as a basis to deny such requests; provided, however, that NSI shall not be required to expend excessive time or resources in answering such questions or fulfilling such requests unless it receives reasonable compensation for such expenditures; and provided further, that, except as otherwise expressly provided herein, nothing in this paragraph is intended to alter any intellectual property rights of the USG or NSI established in the Cooperative Agreement. RECOGNITION OF NEWCO NewCo: As provided in the Statement of Policy, the USG will effect the transition of its DNS responsibilities through an agreement with NewCo. That agreement will (i) require NewCo to exercise the responsibilities delineated in the Statement of Policy in a transparent, non-arbitrary, and reasonable manner, (ii) prohibit NewCo from acting unjustifiably and arbitrarily to injure particular persons or entities or particular categories of persons or entities, and (iii) require NewCo to subject registrars to consistent requirements designed to promote a stable and robustly competitive DNS, as set forth in the Statement of Policy. Following the finalization of the agreement between the USG and NewCo, NSI will recognize NewCo pursuant to a contract between NSI and NewCo. NSI acknowledges that NewCo will have the authority, consistent with the provisions of the Statement of Policy and the agreement between the USG and NewCo, to carry out NewCo's Responsibilities. Nothing in this agreement, apart from NSI's recognition of NewCo pursuant to this section of this agreement, shall limit NSI's rights to operate as a registry or registrar in TLDs other than .com, .net, .org, .edu, or to participate in any other lawful business pursuit. 5 7 MISCELLANEOUS Root Servers: NSI agrees to continue to function as the administrator for the primary root server for the root server system and as a root zone administrator until such time as the USG instructs NSI in writing to transfer either or both of these functions to NewCo or a specified alternate entity. While NSI continues to operate the primary root server, it shall request written direction from an authorized USG official before making or rejecting any modifications, additions or deletions to the root zone file. Such direction will be provided within ten (10) working days and it may instruct NSI to process any such changes directed by NewCo when submitted to NSI in conformity with written procedures established by NewCo and recognized by the USG. Modification Of Cooperative Agreement: Except as modified by this Amendment, the terms and conditions of the Cooperative Agreement, as previously amended, remain unchanged. 6 EX-99.2 3 PRESS RELEASE DATED OCTOBER 6, 1998 1 EXHIBIT 99.2 US GOVERNMENT EXTENDS NETWORK SOLUTIONS COOPERATIVE AGREEMENT THROUGH SEPTEMBER 2000 HERNDON, VA., OCTOBER 6, 1998 - Network Solutions, Inc. (NASDAQ: NSOL) and officials from the Department of Commerce's National Telecommunications and Information Administration (NTIA) have agreed to a two-year extension of the Cooperative Agreement between the US Government and Network Solutions with provisions to transition relevant US Government authority to a new non-profit corporation for coordination of some domain name system functions. As part of the agreement, Network Solutions and NTIA have agreed to a plan for the transition to a shared registration system in a phased approach beginning March 31, 1999 with full implementation by June 1, 1999. Network Solutions will build a shared registration system to support multiple licensed, accredited registrars offering registration services. Network Solutions and other domain name registrars will function as retailers of domain name registration services through Network Solutions' shared registration system. Network Solutions will also continue in its role as the registry -- or wholesaler -- of .com, .net and .org domain name registrations. Network Solutions has registered more than 2.3 million domain names, or Web addresses, in .com, .net , .org and .edu. Network Solutions has worked with the US Government pursuant to a five year Cooperative Agreement to develop and maintain some of the key administrative functions of the Internet including the domain name registration system. This new amendment extends the Cooperative Agreement through September 30, 2000. Other highlights from the extension include the following: - - Network Solutions will submit a copy of all software and data generated under the Cooperative Agreement through September 30, 1998 to the US Government. - - Once a shared registration system is implemented, pricing for Network Solutions' shared registry services for .com, .net, .org and .edu will be a specific dollar amount per registration, per year, and will be specified in a further amendment reflecting Network Solutions' costs and a reasonable return on its investment. 2 - - Following the finalization of the US Government's agreement with a new non-profit corporation - also known as Newco -- that will act as a coordinating body for domain name system administrative functions, Network Solutions will negotiate a contractual relationship with Newco. - - Network Solutions will continue to function as the administrator for the primary root server -- known as root server A -- for the root server system and as a root zone administrator until such time as the US Government instructs Network Solutions to transfer either or both of these functions to Newco or a specific alternate entity. Founded in 1979, Network Solutions, Inc. (NASDAQ: NSOL) pioneered the development of registering Web addresses ending in .com, .net, .org and .edu. Network Solutions also provides enterprise network consulting services, focusing on network engineering, network security and network management solutions for commercial customers. For more information, see the www.networksolutions.com Web site. Contact: For Media, Christopher Clough, chrisc@netsol.com (703) 742-4706, for Investor Relations, Bob Korzeniewski, bobk@netsol.com, (703) 742-4741. ### -----END PRIVACY-ENHANCED MESSAGE-----