Google rolls out its option exchange program…

Last month, Google (GOOG) announced an options exchange program that would let employees exchange their underwater options. In the announcement, Google estimated that about 85% of its employees had underwater options and told employees that “if you’re interested in learning more about this employee-only stock option exchange, we encourage you to read our related SEC filings when they become available.” Uh-huh!

Well, last night those documents became available though we wonder how many Googlers will actually read them. In the filing, there’s the email to employees that went out yesterday, which officially opened the program. Employees will be able to exchange options through March 9 and the rules seem pretty basic: you have to be a Google employee through at least March 9 and you have to have underwater options. While participation in the program is voluntary, it’s hard to imagine why most employees wouldn’t want to do an exchange. The exchange can be done online via what we’re assuming is an internal website (go/optionexchange) since we can’t access it.

The program has met with criticism from various corners, including Henry Blodget at AlleyInsider, who last month described it as “the easy way out” for Google. Yesterday’s FT also had an interesting round-up from different experts opining on the program, even though the details were not yet available.

But back to the document, which includes lots of different pieces, including a 10-page presentation that includes three different case studies to help illustrate the pros and cons of exchanging options. In the case study, new Googler “Sunil”, who joined in November 2007 when Google stock was trading at $740 decides to do the exchange, but “Pat” who joined in June 2005, does not. There’s also a prospectus that details how this impacts far-flung Google employees who work in places like Kenya or the UAE. There’s even a transcript of a video that further explains the program.

No matter what you think about option exchange programs, Google is clearly providing its employees — and the rest of us — lots of information on the program, which is more than we can say for other companies that have gone down the option exchange program before. So at the very least, they get points for transparency.

Image source: Paul Sakuma/Associated Press