Google settles class action lawsuit over new Class C stock
June 17 (Reuters) - Google Inc has settled a shareholder class action lawsuit that clears the way for the company to issue a new class of nonvoting stock, giving the company a currency for acquisitions that would not dilute the founders' control.
The online search engine leader had planned to issue Class C shares as a dividend to investors, but a shareholder, the Brockton Retirement Board, sued, claiming the plan gave the founders, Sergey Brin and Larry Page, added control without paying for it.
The lawsuit was scheduled to go to trial on Tuesday in a Delaware state court. The founders were expected to testify.
The settlement will give holders of the new Class C stock a cash or stock payment if the value of the stock differs by more than 1 percent from the value of Class A shares, which have traded on the Nasdaq since its public listing in 2004.
The settlement was disclosed in a regulatory filing on Monday.
"We're pleased to have reached an agreement to settle this litigation," the company said in a statement.
"We've always believed our founder-led approach gives us the freedom to make long-term bets, like Android, Chrome and YouTube, that benefit consumers and shareholders alike."
Google has had two classes of stock since it went public. Class A carries one vote each, while Brin and Page control Google through their holdings of Class B shares, which carry 10 votes each.
The new Class C shares will allow Brin and Page to sell more stock without surrendering control of the company.
Google shares rose 1.5 percent to $888.46 alongside a broadly higher market.