August 5, 2004

Google is looking at an emergency stock buyback plan after it realised it had forgotten to register staff shares under federal and state regulators.

The company, which is teetering on the edge of an expected $36bn IPO, is now offering to rescind some 28 million shares and stock options granted to current and past staff, as well as consultants, between September 2001 and June 2004.

In an SEC statement filed yesterday, it said: 'These option grants and stock issuances may have violated the Securities Act of 1933 and the state securities laws... The rescission offer is intended to address these federal and state securities laws compliance issues by allowing the holders of the options and shares covered by the rescission offer to rescind the underlying securities transactions and sell those securities back to us.'

Google is offering to repurchase the shares and options at prices ranging from $0.3 to $80 with its own cash. The company has about $550mn in its coffers.

Shareholders will receive the price originally paid, plus interest, while those with options will get 20 per cent of the price they could buy at, plus interest. There are 1,105 stock holders with 23,240,668 shares, and 301 people with options on 5,592,248 shares that stand to benefit from this offer, which ends next month.

The company said that one of its officers and a 5 per cent stock holder are eligible for the rescission offer, but have indicated they will not take it up.

The proposal has yet to be approved by the SEC.

Source: PC Pro.com

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