WebProNews

As you're probably aware by now, Google released its financial results for the fourth quarter yesterday, and although they managed to beat the analysts' expectations, they also had a drop in profit.

Google has also announced an employee option exchange program. "Recognizing that about 85% of our employees have at least some stock options that are underwater (i.e., have an exercise price higher than the current market price of our common stock), we plan to offer our employees the opportunity to exchange those options," says Laszlo Bock, VP, People Operations.

According to the announcement, here's how the program would work:

- This will be a one-for-one, voluntary exchange. Employees will be able to exchange part or all of an existing option grant for the same number of new options.

- The offer period will begin on January 29, 2009 and end at 6:00 a.m. Pacific Time on March 3, 2009, unless Google is required or opts to extend the offer period.

- Based on this expected timeline, employees will be able to exchange their underwater options for new options with a strike price equal to the closing price of our stock on March 2, 2009.
 
- The new options will have a new vesting schedule that adds 12 months to the original vesting schedule. In addition, new options will vest no sooner than 6 months after the close of the offer period.

- Generally, all Googlers with options are eligible to participate (Eric Schmidt, Sergey Brin, and Larry Page do not hold options) except where precluded by legal and tax issues in certain countries. We are working to address these issues and the final offer documentation will specify any countries in which we are not able to offer the program.

- This option exchange program has been approved by our Board of Directors.

Google has a FAQ page for the program in place here. Actually, it's a PDF document.