Just off the wires! The Google legal department might have some additional work on its hands.
Google Cops to Illegal Shares
Google may have illegally issued more than 23 million shares of its stock to hundreds of employees and consultants, injecting an unexpected legal risk into the online search engine leader's highly anticipated IPO.
The Mountain View-based company disclosed the possible violations Wednesday in a prospectus offering to buy back the affected shares and outstanding stock options for a total of $25.9 million, including interest payments.
With $549 million in cash as of June 30, Google can easily afford to make amends.
But it's uncertain whether the gesture will satisfy everyone affected by potential bureaucratic blunders that occurred from September 2001 through June 2004.
Google warned that its buyback, or "recission," offer may be rejected by some people who prefer to sue the company. Google believes it faces potential liabilities in 18 states and the District of Columbia, as well as federal court.
A successful IPO might make the recission offer a moot point. Wednesday's filing said the stockholders that reject or don't respond to the recission offer will have their shares and options automatically registered under federal securities law after the IPO is completed. The shares then would become tradable after the recission offer expires next month.
The offer applies to 1,105 current and former employees, as well as company consultants, who own the affected common stock. The options, carrying exercise prices ranging from 30 cents to $80 per share, are held by 301 people.
Here's the EDGAR filing released
today. You'll see a discussion about a "rescission" offer at the beginning of the document.