On the brink of trial, Google Inc. settled a suit with its shareholders.

First, some background. Under Google's existing stock structure, Class A common shares carry one vote, and Class B shares carry 10 votes. Founders Larry Page and Sergey Brin hold Class B shares amounting to more than 56 percent of the company's voting rights.

Google proposed a stock reclassification plan that would create Class C shares, which carry no voting rights. All investors would receive a dividend in the form of Class C shares.

But following the announcement in April 2012, a group of investors sued Google, claiming the plan would allow Page and Brin to reap millions of dollars in stock sales without any effect on their voting control. Google contended that the stock split was designed to boost the company's flexibility in market acquisitions while rewarding employees and allowing Page and Brin to maintain control of the company.

Testimony was supposed to begin today in a Delaware court, but at the 11th hour, Google reached an agreement with the plaintiffs. The proposed settlement approves the stock split plan but calls for enhanced scrutiny of Page's and Brin's requests to amend restrictions on sales of their company shares and on company acquisitions. A judge must still approve the settlement.

Read Bloomberg and the Washington Post for more information.

For more InsideCounsel stories about shareholder suits, read:

On the brink of trial, Google Inc. settled a suit with its shareholders.

First, some background. Under Google's existing stock structure, Class A common shares carry one vote, and Class B shares carry 10 votes. Founders Larry Page and Sergey Brin hold Class B shares amounting to more than 56 percent of the company's voting rights.

Google proposed a stock reclassification plan that would create Class C shares, which carry no voting rights. All investors would receive a dividend in the form of Class C shares.

But following the announcement in April 2012, a group of investors sued Google, claiming the plan would allow Page and Brin to reap millions of dollars in stock sales without any effect on their voting control. Google contended that the stock split was designed to boost the company's flexibility in market acquisitions while rewarding employees and allowing Page and Brin to maintain control of the company.

Testimony was supposed to begin today in a Delaware court, but at the 11th hour, Google reached an agreement with the plaintiffs. The proposed settlement approves the stock split plan but calls for enhanced scrutiny of Page's and Brin's requests to amend restrictions on sales of their company shares and on company acquisitions. A judge must still approve the settlement.

Read Bloomberg and the Washington Post for more information.

For more InsideCounsel stories about shareholder suits, read: