Registration No. 33-______
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM S-8
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
GOLD RESERVE CORPORATION
(Exact name of registrant as specified in its charter)
----------------
Montana 81-0266636
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
----------------
1940 Seafirst Financial Center
Spokane, Washington 99201
(509) 623-1500
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
----------------
Gold Reserve 1985 Stock Option Plan
Gold Reserve 1992 Stock Option Plan
Gold Reserve 1994 Stock Option Plan
Gold Reserve KSOP Plan
----------------
Rockne J. Timm
President and Chief Executive Officer
Gold Reserve Corporation
1940 Seafirst Financial Center
Spokane, Washington 99201
(509) 623-1500
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
COPY TO:
Douglas J. Siddoway, Esq.
Randall & Danskin, P.S.
1500 Seafirst Financial Center
601 West Riverside Avenue
Spokane, Washington 99201
(509) 747-2052
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Title of each class Amount offering aggregate Amount of
of securities to be to be price offering registration
registered registered per unit price fee
-------------------- ----------------- -------- --------- ------------
<S> <C> <C> <C> <C>
Common Stock, no par
value per share 2,578,102 shares - - $5,556.25
Common Stock options 2,319,802 options - - -
</TABLE>
The reoffer prospectus included herein in conformity with Form S-3 relates
to shares of the Common Stock of the Company registered hereby, and
options for the purchase of 435,858 shares of Common Stock previously
registered pursuant to registration statements on Form S-8 dated
February 20, 1993 and October 4, 1993, as amended on June 27, 1994. Such
prospectus is included herein in reliance on Rule 429.
CALCULATION OF REGISTRATION FEE
The amount of the registration fee with respect to the shares of Common
Stock and the Common Stock purchase warrants offered pursuant to this
Registration Statement has been calculated in accordance with Section 6(c)
of the Securities Act and Rules 457(c) and (g) adopted thereunder, using
the average bid and asked prices of the Common Stock as reported by the
Nasdaq Stock Market on July 14, 1995, which was $6.25 per share.
CROSS REFERENCE SHEET PURSUANT TO ITEM 501(b)
<TABLE>
<CAPTION>
Item Caption or
No. Form S-3 Caption Location in Prospectus
---- ------------------------------------- -------------------------------
<S> <C> <C>
1. Forepart of the Registration State- Forepart of Registration State-
ment and Outside ment; Outside
Front Cover Page of Prospectus Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Inside Front and Outside Back
Pages of Prospectus Cover Pages of Prospectus
3. Summary Information, Risk Factors and Prospectus Summary; Risk
Ratio of Earnings to Fixed Charges Factors; Background of the
Offering
4. Use of Proceeds *
5. Determination of Offering Price *
6. Dilution *
7. Selling Security Holders Background of the Offering;
Selling Shareholders
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Description of Capital Stock
Registered
10. Interests of Named Experts and Counsel Legal Matters; Experts
11. Material Changes *
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Item Caption or
No. Form S-3 Caption Location in Prospectus
---- ------------------------------------- -------------------------------
<S> <C> <C>
12. Incorporation of Certain Information Incorporation of Certain
by Reference Documents by Reference
13. Disclosure of Commission Position on Plan of Distribution
Indemnification for Securities Act
Liabilities
</TABLE>
____________________
*Items identified by asterisk have been omitted because the item is
inapplicable.
Options to Purchase 2,755,660 Shares of Common Stock,
2,755,660 Shares of Common Stock Issuable upon
the Exercise of such Options and 258,300 Shares of
Common Stock Issuable pursuant to the Gold Reserve KSOP Plan
GOLD RESERVE CORPORATION
This Prospectus relates to options (the "Options") to purchase
2,755,660 shares of common stock, no par value (the "Common Stock") of
Gold Reserve Corporation (the "Company" or "Gold Reserve"), a Montana
corporation, issued or issuable under the Company's incentive stock option
plans; 2,755,660 shares of Common Stock issuable upon the exercise of the
Options; and 258,300 shares of Common Stock issuable pursuant to the
Company's combined 401(k) salary reduction plan and employee stock
ownership plan, known as the Gold Reserve KSOP Plan. The shares of Common
Stock offered hereby are hereinafter collectively referred to as the
"Shares". The Shares will be offered and sold from time to time by their
recipients (the "Selling Shareholders"). The Company will not receive any
of the proceeds from the sale of the Shares, but will receive amounts
equal to the exercise prices of the Options when, as and if they are
exercised. The Options are generally not transferable and will not be
resold pursuant to this Prospectus. See "Background of the Offering,"
"Selling Shareholders" and "Plan of Distribution."
The Selling Shareholders propose to sell the Shares from time to time or
at any time during a period of two years after the registration statements
of which this Prospectus is a part have become effective, in the over-the-
counter market, in other permitted public sales, in privately negotiated
transactions or otherwise, at market prices prevailing at the time of sale
or at negotiated prices. Some or all of the Shares may be sold in
transactions involving broker-dealers, who may act solely as agent or may
acquire Shares as principal. Broker-dealers participating in such
transactions as agent may receive commissions from the Selling
Shareholders and, if they act as agent for the purchaser, also from the
purchaser. Selling Shareholders and any such broker-dealer may be deemed
to be "underwriters," as that term is defined in the Securities Act. Any
commissions received by any such broker-dealer in connection with any such
sales, and any profits received from the resale of Shares acquired by such
broker-dealer as principal, may be deemed to be underwriting discounts and
<PAGE>
commissions pursuant to the Securities Act. The Company has paid all fees
and expenses incident to the registration of the Shares. Normal
commission expenses and brokerage fees, and any applicable transfer taxes
relating to the Shares, are payable by the Selling Shareholders. See
"Plan of Distribution."
The Common Stock is traded on the Nasdaq Stock Market under the symbol
"GLDR" and on the Toronto Stock Exchange under the symbol "GLR". On
July 14, 1995, the closing sales prices per share of the Common Stock, as
reported by the Nasdaq Stock Market, was $6.25.
These are speculative securities and involve a high degree of risk.
See "Risk Factors."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Underwriting Discounts Proceeds to Selling
Price to Public or Commissions Shareholder
--------------- ---------------------- -------------------
<S> <C> <C> <C>
Per Share See Text Above See Text Above See Text Above
</TABLE>
No person has been authorized to give any information or to make any
representations other than those contained or incorporated by reference in
this Prospectus, and if given or made, such information or representations
must not be relied upon as having been authorized. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the registered securities to which it relates or an
offer to sell or the solicitation of an offer to buy such securities in
any circumstances in which such an offer or solicitation would be
unlawful. Neither the delivery of this Prospectus nor any sale made
hereunder shall, under any circumstances, create an implication that there
has been no change in the affairs of the Company or that the information
contained herein is correct as of any time subsequent to the date hereof.
The date of this Prospectus is July 19, 1995.
<PAGE>
PERSONS WHO PUBLICLY REOFFER THE SECURITIES OFFERED HEREBY IN THE UNITED
STATES MAY BE DEEMED UNDER CERTAIN CIRCUMSTANCES TO BE "UNDERWRITERS" AS
THAT TERM IS DEFINED IN SECTION 2(11) OF THE SECURITIES ACT. PERSONS
PLANNING TO REOFFER SUCH SECURITIES PUBLICLY IN THE UNITED STATES SHOULD
CONSULT WITH THEIR COUNSEL PRIOR TO ANY SUCH REOFFER IN ORDER TO DETERMINE
WHETHER SUCH REOFFERS SHOULD BE ACCOMPANIED BY DELIVERY OF A PROSPECTUS.
____________________
AVAILABLE INFORMATION
Gold Reserve has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-8 (the "Registration
Statement"), pursuant to the provisions of the Securities Act, and the
rules and regulations promulgated thereunder. Such Registration Statement
provides for the registration of 2,319,802 Options and 2,578,102 Shares
offered hereby, and also updates and amends registration statements on
Form S-8 previously filed by Gold Reserve for the registration of the
remaining 435,858 Options and Shares, pursuant to Rule 429 of the
Securities Act. This Prospectus, which constitutes a part of the
Registration Statement, does not contain all of the information set forth
in the Registration Statement, certain portions of which have been omitted
as permitted by the rules and regulations of the Commission. For further
information with respect to Gold Reserve and the Options and Shares
offered hereby, reference is made to the Registration Statement, including
the exhibits thereto and financial statements and notes incorporated by
reference as a part thereof. Statements made in this Prospectus
concerning the contents of any contract or other document are not
necessarily complete. With respect to each such contract or other
document filed with the Commission as an exhibit to the Registration
Statement, or incorporated by reference to exhibits previously filed,
reference is made to the exhibit for a more complete description of the
matter involved, and each such statement shall be deemed qualified in its
entirety by such reference.
Gold Reserve is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and, in
accordance therewith, files reports and other information with the
Commission. The Registration Statements and the exhibits thereto, and
other reports and information filed by Gold Reserve with the Commission,
may be inspected and copied at the public reference facilities maintained
by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and will also be available for inspection and
copying at the following regional offices of the Commission upon payment
of prescribed fees: Northeast Regional Office, 7 World Trade Center,
Suite 1300, New York, New York 10048 and Midwest Regional Office, Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
<PAGE>
PROSPECTUS SUMMARY
The following is a summary of certain information contained in this
Prospectus and is qualified in its entirety by reference to the more
detailed information and financial statements appearing elsewhere in this
Prospectus.
THE COMPANY
Gold Reserve is a Montana corporation organized in 1956 to explore and
develop mining properties. The Company is presently engaged, through
subsidiary foreign corporations, in exploring a gold property in Venezuela
for possible development, and, to a lesser extent, in exploring other
mineral properties in Venezuela and elsewhere in the world for possible
acquisition or joint venture. The Company's principal mining asset is the
Brisas concession, which is in the exploration state and is located in the
Kilometer 88 mining area of southeastern Venezuela. See "Risk Factors."
Unless the context requires otherwise, the term the "Company" used
throughout this Prospectus refers to Gold Reserve Corporation and the
following subsidiaries: Compania Aurifera Brisas del Cuyuni, C.A.
("Brisas"); Gold Reserve de Venezuela, C.A. ("GLDRV"); Compania Minera
Unicornio, C.A. ("Unicorn"); Great Basin Energies, Inc. ("Great Basin");
MegaGold Corporation ("MegaGold"); Gold Reserve Holdings A.V.V. ("GR
Holdings"); Gold Reserve de Aruba A.V.V. ("Gold Reserve Aruba");
G.L.D.R.V. Aruba A.V.V. ("GLDRV Aruba"); Glandon Company A.V.V.
("Glandon"); GoldenLake A.V.V. ("GoldenLake"); Stanco Investments A.V.V.
("Stanco"); and Mont Ventoux A.V.V. ("Mont Ventoux").
The principal executive offices of the Company are located at 1940
Seafirst Financial Center, Spokane, Washington 99201. The Company's
telephone number is (509) 623-1500. The Company also maintains offices in
Caracas and Puerto Ordaz, Venezuela.
The Offering
The securities being offered consist of Options to purchase
2,755,660 Shares granted or to be granted under the Company's incentive
stock option plans, 2,755,660 Shares issuable upon the exercise of the
Options, and 258,300 Shares issuable pursuant to the Gold Reserve KSOP
Plan. The Options have been or will be granted to the Selling
Shareholders from time-to-time following the effective date of this
registration statement pursuant to the Company's incentive stock option
plans. The Shares will be issued from time-to-time if, as and when the
Options are exercised, or pursuant to the Gold Reserve KSOP Plan, and will
be sold by the Selling Shareholders. The Options are generally not
transferable and will not be resold pursuant to this Prospectus. The
Selling Shareholders consist primarily of certain affiliates of the
Company. The Options granted or to be granted by the Company are or will
be exercisable at prices per Share equal to then prevailing market prices
for the Common Stock. See "Background of the Offering."
<PAGE>
The Company will receive no proceeds from the sale or distribution of
the Shares offered hereby, but will receive amounts equal to the exercise
prices of the Options when, as and if they are exercised, which will be
used for general corporate purposes.
As of July 1, 1995, 23,137,886 shares of Common Stock were outstanding
or deemed outstanding pursuant to presently exercisable options and
warrants, including 693,362 shares held by Great Basin, MegaGold and
Stanco. Great Basin and MegaGold are each majority-owned subsidiaries of
the Company and Stanco is an indirect wholly-owned subsidiary of the
Company.
The Common Stock of the Company is approved for quotation on the Nasdaq
Stock Market under the symbol GLDR and on the Toronto Stock Exchange under
the symbol GLR.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference and made a part hereof, except as
superseded or modified herein: (i) the Company's Annual Report on
Form 10-K for the fiscal year ended December 31, 1994; (ii) the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 1995; and
(iii) the Company's Proxy Statement and related materials filed in
connection with its 1995 annual meeting of shareholders held on May 19,
1995.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of
this Prospectus and prior to the termination of the offering of the Common
Stock and Warrants covered by this Prospectus shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof
from the date of filing of such documents. Any statement contained in any
document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of
this Prospectus to the extent that such a statement contained herein or in
any other subsequently filed document which also is or is deemed to be
incorporated by reference in this Prospectus modifies or supersedes such
statement. Any such statement so modified or superseded shall not be
deemed to constitute a part of this Prospectus, except as modified or
superseded.
The Company will provide without charge to each person to whom this
Prospectus is delivered, including any beneficial owner, upon written or
oral request of such person, a copy of any and all of the documents that
have been or may be incorporated by reference in this Prospectus (other
than exhibits to such documents that are not specifically incorporated by
reference into such documents. Such requests should be directed to Robert
A. McGuinness, Vice President of Finance and Chief Financial Officer, Gold
Reserve Corporation, 1940 Seafirst Financial Center, Spokane, Washington
99201 (telephone: (509) 623-1500).
RISK FACTORS
The following matters, in addition to those discussed elsewhere in this
Prospectus, should be carefully considered before purchasing the Shares
offered hereby.
<PAGE>
THE BRISAS VETA CONCESSION
The Company's Brisas concession covers only rights to alluvial gold
mineralization on the Brisas property. In February 1993, the Company
applied for a concession covering a significant polymetallic resource
believed to underlay the near-surface alluvial deposit. This application
was approved by the Venezuelan Ministry of Energy and Mines, which
exercises jurisdiction over the Brisas property, in March 1995, and is
expected to be submitted for public comment soon. The Company reasonably
believes that such concession will be granted. Under Venezuelan law, the
decree that governs such grants excludes the possibility of granting the
concession to anyone other than the holder of the alluvial gold
concession. However, the process of obtaining a concession in Venezuela
is lengthy and bureaucratically complex, and no assurance can be given
that the Company will be successful in obtaining a concession to this
resource in the near term, if at all.
RECENT LOSSES
The Company's reported net income of $100,329 for the three months ended
March 31, 1995, was derived entirely from interest earned on invested
funds. The Company has no revenue from mining operations and has
experienced losses from operations for each of the last five years. For
the first three months of 1994, the Company reported a net loss of
$405,714. For the years ended December 31, 1994 and 1993, the Company
reported losses of $23,740,478 and $2,843,553, respectively. The
increased loss during 1994 resulted primarily from costs of approximately
$22,500,000 incurred in settling the Brisas litigation. The Company
expects to incur losses from operations for the next several years as the
result of increased expenditures associated with the management of
exploration and development activities on the Brisas concession. This
trend is expected to reverse if and when gold and copper is produced from
the concession.
PROJECT DEVELOPMENT
The Company's principal mining asset is the Brisas alluvial gold
concession, which is in the exploration stage. The Company currently
estimates that capital expenditures for the project will total
approximately $8,000,000 in 1995 and up to $12,000,000 in 1996, and will
be significantly more in ensuing years if, as and when the concession is
placed into production. The Company will fund 1995 and 1996 expenditures
from proceeds received from prior sales of Common Stock of the Company and
from proceeds expected to be received upon the exercise of outstanding
options and the Warrants if exercised. Future expenditures are expected
to be funded from additional sales of Common Stock of the Company, or
other means, however no assurance can be given such funding can be obtained.
The Company's estimate of capital expenditures for the project is based upon
currently available information and could increase or decrease depending
upon a number of factors beyond the Company's control. It is not unusual
in new mining operations to experience unexpected problems during the
exploration and development phase. As is described under " - Risks
Inherent in the Mining Industry Generally," the mining business is subject
to a number of risks and hazards. There can be no assurance these risks
and hazards will be avoided if, as and when the Brisas concession is
developed.
<PAGE>
FOREIGN OPERATIONS
At December 31, 1994, approximately 23% of the Company's identifiable
assets (88% of its noncash assets), including its mining property, were
located in Venezuela. The Company believes its activities in Venezuela
pose no greater risk than those of mining activities conducted in the
United States, and that the economic environment in Venezuela is generally
conducive to the Company's activities. Nonetheless, its activities and
investment in Venezuela could be adversely affected by exchange controls,
currency fluctuations, political and social events, and laws or policies
of Venezuela and the United States affecting trade, investment and
taxation.
RISKS INHERENT IN THE MINING INDUSTRY GENERALLY
The Company is subject to all of the risks inherent in the mining
industry, including environmental hazards, industrial accidents, labor
disputes, unusual or unexpected geologic formations, cave-ins, flooding
and periodic interruptions due to inclement weather. Such risks could
result in damage to, or destruction of, mineral properties and production
facilities, personal injury, environmental damage, delays, monetary losses
and legal liability. The Company does not presently maintain insurance
covering environmental or other catastrophic liabilities, and is not
expected to do so unless and until it is economically feasible to do so.
Insurance against environmental risks (including pollution or other
hazards resulting from the disposal of waste products generated from
exploration and production activities) is not generally available to the
Company or other companies in the mining industry at present. Were the
Company subjected to environmental liabilities, the payment of such
liabilities would reduce the funds available to the Company. Were the
Company unable to fund fully the cost of remedying an environmental
problem, it might be required to suspend operations or enter into interim
compliance measures pending completion of remedial activities. In
addition to the foregoing risks, the Company will also encounter or be
subject to competition from other mining companies having significantly
greater resources than the Company, governmental regulation of its mining
activities and practices, the speculative nature of mineral exploration
and development, operating hazards, fluctuating metals prices, and
inflation and other economic conditions over which it has no control.
ENVIRONMENTAL MATTERS
Venezuela has adopted environmental laws and regulations for the mining
industry which, though less restrictive than the environmental laws of the
United States, nonetheless impose significant obligations on companies
doing business in the country. The Company will be required to submit
detailed reports outlining the environmental impact of the development of
its Brisas concession, and will be required to rehabilitate and restore
the Brisas property once mining activities are completed. The Company
will also be subject to routine inspection by the Venezuelan Ministry of
Environment and Renewable Resources to ensure that its activities are in
compliance with environmental laws.
<PAGE>
FLUCTUATING PRICES OF GOLD AND COPPER
The Company's operations will be significantly influenced by the prices
of gold and copper. Gold prices fluctuate widely and are affected by
numerous factors beyond the Company's control, such as inflation, the
strength of the United States dollar relative to foreign currencies,
global and regional demand, and the political and economic conditions of
major gold producing countries throughout the world. Copper prices also
fluctuate and are generally affected by global and regional demand and
existing inventories.
RESERVES
The Company has not yet established either proven or probable reserves
on the Brisas concession and no assurance can be given that any reserves
will be established on the concession. Although the Company believes,
based on engineering and geological studies which have been completed,
that significant reserves may exist on the Brisas concession, no
independent reserve reports have yet been prepared.
DEPENDENCY ON FINANCING ACTIVITIES
The Company does not have any revenues from operations and has financed
its mining activities in Venezuela since 1991 primarily from the sale of
its equity securities. Although management anticipates that the Company's
cash position (approximately $28,500,000 at March 31, 1995, excluding
$4,500,000 in escrowed funds payable by the Company upon the satisfaction
of certain conditions in connection with the settlement of the Brisas
litigation), together with proceeds expected to be received from the
future exercise of outstanding options and the Warrants, will be
sufficient to cover estimated operating and capital expenditures
associated with the exploration and development of its Brisas concession
through 1996, there can be no assurance that the options or Warrants will
be exercised, or even if exercised, that proceeds received by the Company
will be sufficient to finance these activities and other Company
expenditures. In addition, significant additional financing will be
required to be obtained by the Company if, as and when the Brisas
concession is placed into production.
SHARES ELIGIBLE FOR FUTURE SALE; EFFECT ON MARKET PRICEOF COMMON STOCK
The Company's directors and executive officers currently beneficially
own 1,793,738 Shares, or 8.8% of the outstanding Common Stock as of the
date of this Prospectus, all of which are offered for sale pursuant to
this Prospectus and a related prospectus filed as part of the Company's
registration statement on Form S-3 (Registration No. 33-60779) under the
Securities Act, which was declared effective on July 10, 1995. Such
directors and executive officers also own options for the purchase of an
additional 810,882 Shares, which, if exercised, would increase their
ownership to 12.3% of the then outstanding Common Stock.
In addition, Marwood International Ltd. ("Marwood"), which is a
subsidiary of TVX Gold Inc. ("TVX"), and Bluegrotto Trading Limited
("Bluegrotto") respectively own 1,500,000 shares and 1,250,000 shares of
Common Stock, representing approximately 13.5% of the outstanding Common
<PAGE>
Stock, and also own warrants to purchase an additional 500,000 shares and
250,000 shares of Common Stock, which, if exercised, would increase their
ownership to 16.5% of the then outstanding Common Stock. Such shares and
warrants were issued to Marwood and Bluegrotto on December 31, 1994, in
connection with the settlement of legal proceedings in Venezuela
associated with the ownership, custody and control of the Company's Brisas
concession. Pursuant to the terms of related settlement and standstill
agreements among the Company and such companies, Marwood and Bluegrotto
are permitted to sell no more than 75,000 of such shares during any 30-day
period, in addition to other permitted block trade sales, for a period of
three years from the date of settlement or until such time as TVX,
Marwood, Bluegrotto and any of their related persons own less than 5% of
the Common Stock then outstanding, provided such sales are in accordance
with applicable federal, state or Canadian provincial securities laws.
None of such shares or warrants are offered for sale pursuant to this
Prospectus.
Although the Common Stock is approved for quotation on the Nasdaq Stock
Market and the Toronto Stock Exchange, trading activity in these markets
is sometimes characterized by infrequent transactions. As a consequence,
the sale from time-to-time of the Shares offered hereby, or the shares of
Common Stock available for sale by Marwood and Bluegrotto, may have the
effect of depressing the market price of the Common Stock.
BACKGROUND OF THE OFFERING
OVERVIEW. This Prospectus relates to Options to
purchase 2,755,660 Shares granted or to be granted under the Company's
incentive stock option plans, 258,300 Shares issuable pursuant to the Gold
Reserve KSOP Plan, and 2,755,660 Shares issuable upon exercise of the
Options. The Options are exercisable by the Selling Shareholders at
prevailing market prices equivalent to the mean of the high and low sales
prices of the Common Stock as reported by the Nasdaq Stock Market and the
Toronto Stock Exchange as of the dates of grant. The Shares granted or to
be granted pursuant to the Gold Reserve KSOP Plan are similarly valued.
DESCRIPTION OF INCENTIVE STOCK OPTION AND EMPLOYEE STOCK OWNERSHIP
PLANS. The Company currently maintains three stock option plans, the 1985
Stock Option Plan, the 1992 Stock Option Plan and the 1994 Stock Option
Plan. All plans provide for the issuance of incentive stock options
intended to qualify under Section 422A of the Internal Revenue Code of
1986, as amended (the "Code"), and options that are not qualified under
the Code. Key individuals of the Company and its subsidiaries, including
officers and directors who are also employees, and consultants, are
eligible to receive grants of options under the plans. All options are
exercisable at prices equivalent to the mean of the high and low sales
prices of the Common Stock, as reported by the Nasdaq Stock Market and the
Toronto Stock Exchange as of the date of grant.
As of the date of this Prospectus, options for the purchase of
27,502 and 1,417,866 shares remained available for grant under the 1992
and 1994 plans, respectively. Options for the purchase of
1,310,293 shares granted under the 1985, 1992 and 1994 plans remained
unexercised at such date. The incentive stock option plans are jointly
<PAGE>
administered by the executive remuneration committee, management and the
compensation committee of the board of directors. The primary function of
the executive remuneration committee is to review and evaluate the
fairness of the recommendations of management and the compensation
committee of the board concerning proposed grants to directors and
executive officers of the Company.
The Company also maintains a combined 401(k) salary reduction plan and
employee stock ownership plan, known as the Gold Reserve KSOP Plan, for
the benefit of eligible employees of the Company and its subsidiaries.
The plan can and has invested in Common Stock of the Company through
Company-guaranteed loans. During 1994 and 1992, the plan purchased
20,000 shares and 53,571 shares of Common Stock from the Company,
respectively, at then-prevailing market prices, for consideration of
$123,760 and $50,000, respectively. No shares of Common Stock of the
Company were purchased during 1993. Such shares were allocated to
participants' accounts based on the contributions by the Company or the
participants during the plan year and the prices at which such shares were
purchased by the plan. The terms of the plan permit investment in
approved securities other than the Company's Common Stock, and allow plan
participants to self-direct the investment of their account. To date, the
plan's sole investment has been Common Stock of the Company.
The salary reduction component of the plan, which has not been utilized
to date, enables eligible employees of the Company and its subsidiaries to
invest in Common Stock of the Company or other approved securities
purchased by the plan, limited by contributions to the plan by the Company
or the employee during the year. The employee stock ownership component
of the plan, which has been utilized, is intended to qualify under
Sections 421 and 423 of the Code, and was established to provide eligible
employees an opportunity to purchase Common Stock of the Company.
Contributions to the plan are limited in each year to (i) the total
amount of salary reduction the employee elected to defer during the year
(which is limited to 10% of such employee's compensation during the year,
or such amount as is established by law), (ii) a matching contribution
from the Company equal to 50% of any salary reduction the employee elected
to defer during the year, (iii) special contributions by the Company equal
to a percentage of the employee's compensation during the year and
(iv) discretionary contributions by the Company determined in each year by
the Company. The plan is available to all eligible employees of the
Company or subsidiaries who have been employed for a period in excess of
one year and who have worked at least 480 hours during the year in which
any allocation is to be made. Employer and employee contributions to the
plan are limited to 25% of salary, and distributions from the plan are not
permitted before the participating employee reaches the age of 59 1/2,
except in the case of death, disability, termination of employment by the
Company or financial hardship.
SELLING SHAREHOLDERS
The following table sets out as of July 1, 1995 the name of each Selling
Shareholder known to the Company to own any of the Options or Shares; any
position, office or other material relationship between the Selling
Shareholder and the Company within the past three years; the number of
shares of Common Stock known to the Company to be beneficially owned by
<PAGE>
the Selling Shareholder at such date; the number of Shares offered hereby
by the Selling Shareholder; and the number of shares of Common Stock and
percentage ownership interest of the Selling Shareholder following this
offering. Pursuant to Rule 429 of the Securities Act, the Form S-8
Registration Statement of which this Prospectus is a part also updates and
amends the Company's registration statements on Form S-8 that were
declared effective on February 20, 1993 and October 4, 1993, as amended on
June 27, 1994.
The Shares offered hereby by the Selling Shareholders are in addition to
other shares of Common Stock and Common Stock purchase warrants to
purchase Common Stock being offered and sold by the Selling Shareholders
and others pursuant to a prospectus dated July 10, 1995. Such prospectus
was included in a registration statement on Form S-3 under the Securities
Act and relates to the offer and sale of 11,325,798 previously issued
shares of Common Stock, 1,000,000 previously issued Common Stock purchase
warrants and 1,000,000 shares of Common Stock issuable upon exercise of
the warrants.
<TABLE>
<CAPTION>
Shares of Common Stock
---------------------------------------------------------
Name and Beneficially Offered Remaining After Offering
Position(s) Held Owned Hereby and Percentage(1)
----------------------- ------------ ------------ ------------------------
<S> <C> <C> <C>
Valmore Acevedo(2) 10,000 10,000 -
Corey Allen(2) 25,000 15,000 10,000 / less than 1%
A. Douglas Belanger(3) 554,683 220,382 334,301 / 1.4%
Oreste Bujosa(2) 7,500 7,500 -
Lucia Casanas(2) 10,000 5,000 5,000 / less than 1%
James Coleman(3) 102,000 100,000 2,000 / less than 1%
Linda S. Cunningham(3) 245,498 55,298 190,200 / less than 1%
Steve Farnell(4) 15,000 15,000 -
Perfecto Flores(2) 11,697 1,697 10,000 / less than 1%
Ben Hansen(2) 5,000 5,000 -
Robert Kovacevich(4) 11,197 5,000 6,197 / less than 1%
Julie Langenheim(2) 31,857 16,970 14,887 / less than 1%
Brent Lindsey(2) 99,825 78,185 21,640 / less than 1%
John Malysa(2) 58,485 10,000 48,485 / less than 1%
Patrick McChesney(3) 137,262 75,000 62,262 / less than 1%
Robert McGuinness(3) 110,985 100,985 10,000 / less than 1%
Alexandrino Noguiera(2) 47,457 10,000 37,457 / less than 1%
David Onzay(2) 36,182 32,891 3,291 / less than 1%
Bernardo Paul(4) 201,969 125,158 76,811 / less than 1%
J.C. Potvin(3) 100,000 100,000 -
James Reeves(2) 42,000 40,000 2,000 / less than 1%
Karen Robinson(2) 7,377 6,421 956 / less than 1%
Simon Rodriguez(2) 12,500 12,500 -
James Stephenson(2) 28,500 26,800 1,700 / less than 1%
Hobart Teneff(3) 1,111,617 68,700 1,042,917 / 4.5%
Rockne J. Timm(3) 714,002 232,620 481,382 / 2.1%
Ron Tracy(2) 204,767 33,788 170,979 / less than 1%
Alan Wright(2) 42,500 42,500 -
Albert K.F. Wu(3) 30,114 21,197 8,917 / less than 1%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Shares of Common Stock
---------------------------------------------------------
Name and Beneficially Offered Remaining After Offering
Position(s) Held Owned Hereby and Percentage(1)
----------------------- ------------ ------------ ------------------------
<S> <C> <C> <C>
Gold Reserve 1985 Stock
Option Plan - 45,000(5) -
Gold Reserve 1992 Stock
Option Plan - 27,502(5) -
Gold Reserve 1994 Stock
Option Plan - 1,417,866(5) -
Gold Reserve KSOP Plan - 95,000(5) -
</TABLE>
(1) All of the Shares remaining after offering are presently included in
an effective registration statement on Form S-3 under the Securities
Act and are available for sale, with the exception of 2,500 shares
owned by Robert A. McGuinness.
(2) Current or former employees of the Company or its subsidiaries, or
consultants to the Company or its subsidiaries.
(3) Current or former directors or executive officers of the Company.
(4) Mr. Farnell, Mr. Kovacevich and Mr. Paul are counsel to the Company
or its subsidiaries.
(5) Consists of the maximum number of remaining Options or Shares
available for grant or issuance under such plans as of the date of
this Prospectus.
PLAN OF DISTRIBUTION
The Selling Shareholders propose to sell the Shares from time to time or
at any time during a period of two years commencing the date the
Registration Statements of which this Prospectus is a part have become
effective, in transactions in the over-the-counter market, in other
permitted public sales, in privately negotiated transactions or otherwise,
at market prices prevailing at the time of sale or at negotiated prices.
Some or all of the Shares may be sold in transactions involving broker-
dealers, who may act solely as agent or may acquire Shares or Warrants as
principal. Broker-dealers who participate in such transactions as agent
may receive commissions from Selling Shareholders and, if they act as
agent for the purchaser, also from the purchaser. Selling Shareholders
and any such broker-dealer may be deemed to be "underwriters", as that
term is defined in Section 2(11) of the Securities Act. Any commissions
received by any such broker-dealer in connection with any such sales, and
any profits received from the resale of Shares or Warrants acquired by
such broker-dealer as principal, may be deemed to be underwriting
discounts and commissions pursuant to the Securities Act.
<PAGE>
The Company has agreed to indemnify the Selling Shareholders for certain
liabilities, including liabilities arising under the Securities Act, in
conjunction with the offer and sale of the Shares by the Selling
Shareholders pursuant to the Registration Statement of which this
Prospectus is a part.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted pursuant to the foregoing, or to directors, officers
and controlling persons of the Company pursuant to applicable provisions
of the Montana Business Corporation Act and the Company's bylaws, the
Company has been advised that in the opinion of the Commission, such
indemnification is against public policy as expressed in the Securities
Act and is therefore unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Company of expenses incurred or paid by a director, officer or controlling
person of the Company in a successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the Shares and Options being registered pursuant to this
Registration Statement, the Company will, unless in the opinion of its
counsel such matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question of whether such
indemnification is against public policy as expressed in the Securities
Act, and will be governed by the final adjudication of such issue.
DESCRIPTION OF CAPITAL STOCK
The Company is authorized under its Articles of Incorporation, as
amended, to issue up to 50,000,000 shares of capital stock, of which
40,000,000 shares are designated Common Stock, without par value, and
10,000,000 shares are designated preferred stock issuable in one or more
series, with such rights, preferences, limitations and other
characteristics as the board of directors may from time-to-time determine.
At July 1, 1995, 23,137,886 shares of Common Stock were outstanding or
deemed outstanding, including 693,362 shares of Common Stock held at such
date by Great Basin, MegaGold and Stanco, and 2,415,368 shares issuable
pursuant to presently exercisable options and warrants. No shares of
preferred stock were outstanding at such date.
Some corporate and securities law commentators believe that companies
having authorized preferred stock are less vulnerable to unsolicited
takeovers (and by implication, the higher prices that may be paid to
shareholders in an unsolicited takeover), since preferred stock can be
issued by a board of directors as a defensive strategy to such offers.
Other commentators believe that the issuance of preferred stock as a
defensive strategy increases the price eventually paid to shareholders in
a successful takeover because the specter of such issuance forces an
offeror to negotiate price with the board of directors. The Company is
presently not aware of any unsolicited takeover attempt and cannot predict
whether any such attempt would be made in the future. Similarly, the
board of directors has not adopted a prospective defensive strategy to an
unsolicited takeover attempt utilizing the preferred stock, and is not
expected to consider or adopt any such strategy in the absence of such an
attempt. It is the present position of the board of directors that any
such defensive strategy should be adopted, if at all, only after the terms
and conditions of any such takeover attempt have been made known and the
board of directors, together with its financial advisors, have had an
opportunity to study the offer and its effect on the Company and its
shareholders.
<PAGE>
COMMON STOCK
Holders of Common Stock are entitled to one vote per share upon all
matters on which they have the right to vote, and with respect to the
election of directors are entitled to cumulate their votes. Shares of
Common Stock do not have preemptive rights and are not subject to
redemption. Holders of Common Stock are entitled to receive such
dividends as may be declared by the Board of Directors out of funds
legally available therefore. In the event of dissolution or winding up of
the affairs of the Company, holders of Common Stock are entitled to share
ratably in all assets of the Company remaining after payment of all
creditors. The Common Stock is fully paid and nonassessable.
The transfer agent and registrar for the Common Stock is Transecurities
International, Inc., East 12525 Mission, Spokane, Washington 99216.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon for
the Company by Randall & Danskin, P.S., 1500 Seafirst Financial Center,
Spokane, Washington 99201.
EXPERTS
The consolidated balance sheets of the Company as of December 31, 1994
and 1993, and the consolidated statements of operations, changes in
shareholders' equity and cash flows for each of the three years in the
period ended December 31, 1994 incorporated by reference in this
Prospectus have been incorporated herein in reliance on the report, which
includes an explanatory paragraph related to uncertainties regarding the
Company's ability to recover its investments in its Brisas mining
concession, of Coopers & Lybrand L.L.P., independent accountants, given on
the authority of that firm as experts in accounting and auditing.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED TO GIVE ANY INFORMATION
OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS. ANY
INFORMATION OR REPRESENTATION NOT CONTAINED HEREIN, IF GIVEN OR MADE, MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, BY ANY
SELLING SHAREHOLDER OR ANY UNDERWRITER. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY
ANY SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION
CONTAINED OR INCORPORATED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
TABLE OF CONTENTS
Page
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . 1
Prospectus Summary . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Background of the Offering . . . . . . . . . . . . . . . . . . . . . . 7
Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . 8
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . 9
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . 10
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Options to Purchase 2,755,660 Shares of
Common Stock, 2,755,660 Shares of
Common Stock Issuable upon the Exercise of
such Options and 258,300 Shares of
Common Stock Issuable pursuant to the
Gold Reserve KSOP Plan
GOLD RESERVE CORPORATION
--------------------
PROSPECTUS
--------------------
July 19, 1995
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 3. Incorporation of Documents by Reference
The Company's Annual Report on Form 10-K, as amended, for the year ended
December 31, 1994 and its Quarterly Report on Form 10-Q for the three
months ended March 31, 1995 are incorporated in this Prospectus by
reference and hereby made a part hereof:
All reports and other documents subsequently filed by the Company
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, prior
to the termination of the offering of the Shares, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of
the filing of such reports and documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus.
Item 4. Description of Securities
Not applicable.
Item 5. Interests of Named Experts and Counsel
Not applicable.
Item 6. Indemnification of Directors and Officers
The only statutes, charter provisions, by-laws, contracts or other
arrangements under which a controlling person, director or officer of the
Company is insured or indemnified in any manner against liability which he
may incur in his capacity as such are Sections 35-1-451 through 31-1-459
of the Montana Business Corporation Act and Article 7 of the Company's
Bylaws. Taken together, these statutory and bylaw provisions generally
allow the Company to indemnify its directors and officers against
liability, and to advance the costs of defending any such person against
liability, provided (i) such indemnification or advancement of expenses is
authorized by the vote of those directors who are not parties to the
proceeding upon which such liability is predicated (or, in certain
instances, by alternate disinterested means), (ii) the director or officer
was acting on behalf of the Company in his official capacity as a director
or officer and (iii) such director or officer conducted himself in good
faith and believed his conduct was in, or not opposed to, the best
interests of the Company (or in the case of any criminal proceeding, that
he had no reasonable cause to believe his conduct was unlawful. The
Company may not indemnify a director or officer, however, if such director
or officer is adjudged liable to the Company, or if the director or
officer is adjudged to have derived an improper personal benefit.
<PAGE>
Indemnification permitted by these provisions is limited to reasonable
expenses incurred in connection with the proceeding upon which liability
is predicated, which includes the amount of any such liability actually
imposed.
Sections 35-1-141 through 35-1-459 of the Montana Business Corporation
Act are set forth in their entirety as follows:
35-1-451. Definitions. As used in 35-1-451 through 35-1-459, the
following definitions apply:
(1) "Corporation" includes any domestic or foreign predecessor entity
of a corporation in a merger or other transaction in which the
predecessor's existence ceased upon consummation of the transaction.
(2) (a) "Director" means an individual who is or was a director of a
corporation or an individual who, while a director of a corporation,
is or was serving at the corporation's request as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise. A director is considered to be serving an
employee benefit plan at the corporation's request if the director's
duties to the corporation include duties or services by him to the
plan or to participants in or beneficiaries of the plan.
(b) Director includes, unless the context requires otherwise, the
estate or personal representative of a director.
(3) "Expenses" include attorney fees.
(4) "Liability" means the obligation to pay a judgment, settlement,
penalty, or fine, including an excise tax assessed with respect to an
employee benefit plan, or to pay reasonable expenses incurred with
respect to a proceeding.
(5) (a) "Official capacity" means:
(i) when used with respect to a director, the office of director in a
corporation; or
(ii) when used with respect to an individual other than a director, as
contemplated in 35-1-457, the office in a corporation held by the
officer or the employment or agency relationship undertaken by the
employee or agent on behalf of the corporation.
(b) Official capacity does not include service for any other foreign
or domestic corporation or any partnership, joint venture, trust,
employee benefit plan, or other enterprise.
(6) "Party" includes an individual who was, is, or is threatened to be
made a named defendant or respondent in a proceeding.
(7) "Proceeding" means any threatened, pending, or completed action,
suit, or proceeding, whether civil, criminal, administrative, or
investigative and whether formal or informal.
35-1-452. Authority to indemnify. (1) Except as provided in
subsection (4), an individual made a party to a proceeding because he
is or was a director may be indemnified against liability incurred in
the proceeding if:
(a) he conducted himself in good faith;
(b) he reasonably believed:
(i) in the case of conduct in his official capacity with the
corporation, that his conduct was in the corporation's best interests;
and
<PAGE>
(ii) in all other cases, that his conduct was at least not opposed to
the corporation's best interests; and
(c) in the case of any criminal proceeding, he had no reasonable cause
to believe his conduct was unlawful.
(2) A director's conduct with respect to an employee benefit plan for
a purpose the director reasonably believed to be in the interests of
the participants in and beneficiaries of the plan is conduct that
satisfies the requirement of subsection (1)(b)(ii).
(3) The termination of a proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent is
not, of itself, determination that the director did not meet the
standard of conduct described in this section.
(4) A corporation may not indemnify a director under this section:
(a) in connection with a proceeding by or in the right of the
corporation in which the director was adjudged liable to the
corporation; or
(b) in connection with any other proceeding charging improper personal
benefit to the director, whether or not involving action in the
director's official capacity, in which the director was adjudged
liable on the basis that personal benefit was improperly received by
the director.
(5) Indemnification permitted under this section in connection with a
proceeding by or in the right of the corporation is limited to
reasonable expenses incurred in connection with the proceeding.
35-1-453. Mandatory indemnification. Unless limited by its articles
of incorporation, a corporation shall indemnify a director who was
wholly successful, on the merits or otherwise, in the defense of any
proceeding to which the director was a party because he is or was a
director of the corporation, against reasonable expenses incurred by
the director in connection with the proceeding.
35-1-454. Advance for expenses. (1) A corporation may pay for or
reimburse the reasonable expenses incurred by a director who is a
party to a proceeding in advance of final disposition of the
proceeding if:
(a) the director furnishes the corporation a written affirmation of
the director's good faith belief that the director has met the
standard of conduct described in 35-1-452;
(b) the director furnishes the corporation a written undertaking,
executed personally or on the director's behalf, to repay the advance
if it is ultimately determined that the director did not meet the
standard of conduct described in 35-1-452; and
(c) a determination is made that the facts then known to those making
the determination would not preclude indemnification under 35-1-451
through 35-1-459.
(2) The undertaking required by subsection (1)(b) must be an unlimited
general obligation of the director but need not be secured and may be
accepted without reference to financial ability to make repayment.
(3) Determinations and authorizations of payments under this section
must be made in the manner specified in 35-1-456.
<PAGE>
35-1-455. Court-ordered indemnification. Unless a corporation's
articles of incorporation provide otherwise, a director of the
corporation who is a party to a proceeding may apply for
indemnification to the court conducting the proceeding or to another
court of competent jurisdiction. On receipt of an application, the
court, after giving any notice the court considers necessary, may
order indemnification if it determines that the director:
(1) is entitled to mandatory indemnification under 35-1-453, in which
case the court shall also order the corporation to pay the director's
reasonable expenses incurred in obtaining court-ordered
indemnification; or
<PAGE>
(2) is fairly and reasonably entitled to indemnification in view of
all the relevant circumstances, whether or not the director met the
standard of conduct set forth in 35-1-452 or was adjudged liable as
described in 35-1-454(2). If the director was adjudged liable as
described in 35-1-452(4), the director's indemnification is limited to
reasonable expenses incurred.
35-1-456. Determination and authorization of indemnification. (1) A
corporation may not indemnify a director under 35-1-452 unless
authorized in the specific case after a determination has been made
that indemnification of the director is permissible in the
circumstances because the director has met the standard of conduct set
forth in 35-1-452.
(2) The determination must be made:
(a) by the board of directors by majority vote of a quorum consisting
of directors not at the time parties to the proceeding;
(b) if a quorum cannot be obtained under subsection (2)(a), by
majority vote of a committee designated by the board of directors, in
which designated directors who are parties may participate, consisting
solely of two or more directors not at the time parties to the
proceeding;
(c) by special legal counsel:
(i) selected by the board of directors or its committee in the manner
prescribed in subsection (2)(a) or (2)(b); or
(ii) if a quorum of the board of directors cannot be obtained under
subsection (2)(a) and a committee cannot be designated under
subsection (2)(b), selected by a majority vote of the full board of
directors in which selected directors who are parties may participate;
or
(d) by the shareholders, but shares owned by or voted under the
control of directors who are at the time parties to the proceeding may
not be voted on the determination.
(3) Authorization of indemnification and evaluation as to
reasonableness of expenses must be made in the same manner as the
determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses must
be made by those entitled under subsection (2)(c) to select counsel.
35-1-457. Indemnification of officers, employees, and agents. Unless
a corporation's articles of incorporation provide otherwise:
(1) an officer of the corporation who is not a director is entitled to
mandatory indemnification under 35-1-453 and is entitled to apply for
court-ordered indemnification under 35-1-455 to the same extent as a
director;
(2) the corporation may indemnify and advance expenses under 35-1-451
through 35-1-459 to an officer, employee or agent of the corporation
who is not a director to the same extent as to a director; and
(3) a corporation may also indemnify and advance expenses to an
officer, employee, or agent who is not a director to the extent,
consistent with public policy, that may be provided by its articles of
incorporation, bylaws, general or specific action of its board of
directors, or contract.
<PAGE>
35-1-458. Insurance. A corporation may purchase and maintain
insurance on behalf of an individual who is or was a director,
officer, employee, or agent of the corporation or who, while a
director, officer, employee, or agent of the corporation, is or was
serving at the request of the corporation as a director, officer,
partner, trustee, employee, or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan,
or other enterprise, against liability asserted against or incurred by
him in that capacity or arising from his status as a director,
officer, employee, or agent, whether not the corporation would have
power to indemnify him against the same liability under 35-1-452 or
35-1-453.
35-1-459. Application. (1) A provision treating a corporation's
indemnification of or advance for expenses to directors that is
contained in its articles of incorporation, its bylaws, a resolution
of its shareholders or board of directors, a contract, or other
instrument is valid only if and to the extent the provision is
consistent with 35-1-451 through 35-1-459. It articles of
incorporation limit indemnification or advance for expenses,
indemnification and advance for expenses are valid only to the extent
consistent with the articles of incorporation.
(2) Sections 35-1-451 through 45-1-459 do not limit a corporation's
power to pay or reimburse expenses incurred by a director in
connection with the director's appearance as a witness in a proceeding
at a time when the director has not been made a named defendant or
respondent to the proceeding.
Article 7 of the Company's Bylaws is set forth in its entirety as
follows:
ARTICLE 7
Indemnification of Officers, Directors, Employees, and Other Agents
7.1 Directors and Officers. The corporation shall indemnify its
directors and officers to the fullest extent permitted by the Montana
Business Corporation Act, as the same exists or may hereafter be amended
(but, in the case of alleged occurrences of actions or omissions preceding
any such amendment, only to the extent that such amendment permits the
corporation to provide broader indemnification rights than the Montana
Business Corporation Act permitted the corporation to provide prior to
such amendment).
7.2 Employees and Other Agents. The corporation shall have power to
indemnify its employees and other agents as set forth in the Montana
Business Corporation Act.
7.3 No Presumption of Bad Faith. The termination of any proceeding by
judgment, order, settlement, conviction or upon a plea of nolo contendere
or its equivalent shall not, of itself, create a presumption that the
person did not act in good faith and in a manner which the person
reasonably believed, in the case of conduct in the person's official
capacity, the person's conduct was in the corporation's best interests and
in all other cases, the person's conduct was at least not opposed to the
corporation's best interests, and with respect to any criminal proceeding,
that the person had reasonable cause to believe that the conduct was
lawful.
<PAGE>
7.4 Advances of Expenses. The expenses incurred by a director or
officer in any proceeding shall be paid by the corporation in advance at
the written request of the director or officer, if the director or
officer:
A. furnishes the corporation a written affirmation of such
person's good faith belief that such person is entitled to be
indemnified by the corporation; and
B. furnishes the corporation a written undertaking to repay such
advance to the extent that it is ultimately determined by a
court that such person is not entitled to be indemnified by the
expenses and without regard to the person's ultimate
entitlement to indemnification under this bylaw or otherwise.
7.5 Enforcement. Without the necessity of entering into an express
contract, all rights to indemnification and advances under this bylaw
shall be deemed to be contractual rights and be effective to the same
extent and as if provided for in a contract between the corporation and
the director or officer who serves in such capacity at any time while this
bylaw and relevant provisions of the Montana Business Corporation Act and
other applicable law, if any, are in effect. Any right to indemnification
or advances granted by this bylaw to a director or officer shall be
enforceable by or on behalf of the person holding such right in any court
of competent jurisdiction if (a) the claim for indemnification or advances
is denied, in whole or in part, or (b) no disposition of such claim is
made within ninety days of request therefor. The claimant in such
enforcement action, if successful in whole or in part, shall be entitled
to be paid also the expense of prosecuting a claim. It shall be a
defense to any such action (other than an action brought to enforce a
claim for expenses incurred in connection with any proceeding in advance
of its final disposition when the required affirmation and undertaking
have been tendered to the corporation) that the claimant has not met the
standards of conduct which make it permissible under the Montana Business
Corporation Act for the corporation to indemnify the claimant for the
amount claimed, but the burden of proving such defense shall be on the
corporation. Neither the failure of the corporation (including its board
of directors, independent legal counsel or its shareholders) to have made
a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances because the
claimant has met the applicable standard of conduct set forth in the
Montana Business Corporation Act, nor an actual determination by the
corporation (including its board of directors, independent legal counsel
or its shareholders) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of
conduct.
7.6 Non-Exclusivity of Rights. The rights conferred on any person by
this bylaw shall not be exclusive of any other right which such person may
have or hereafter acquire under any statute, provision of the articles of
incorporation, bylaws, agreement, vote of shareholders or disinterested
directors or otherwise, both as to action in the person's official
capacity and as to action in another capacity while holding office. The
corporation is specifically authorized to enter into individual contracts
with any or all of its directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent permitted by the law.
<PAGE>
7.7 Survival of Rights. The rights conferred on any person by this
bylaw shall continue as to a person who has ceased to be a director,
officer, employee or other agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
7.8 Insurance. To the fullest extent permitted by the Montana Business
Corporation Act, the corporation, upon approval by the board of directors,
may purchase insurance on behalf of any person required or permitted to be
indemnified pursuant to this bylaw.
7.9 Amendments. Any repeal of this bylaw shall only be prospective and
no repeal or modification hereof shall adversely affect the rights under
this bylaw in effect at the time of the alleged occurrence of any action
or omission to act that is the cause of any proceeding against any agent
of the corporation.
7.10 Savings Clause. If this bylaw or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, the
corporation shall indemnify each director, officer or other agent to the
fullest extent permitted by any applicable portion of this bylaw that
shall not have been invalidated, or by any other applicable law.
7.11 Certain Definitions. For the purposes of this bylaw, the following
definitions shall apply:
A. "corporation" shall include any domestic or foreign predecessor
entity of a corporation in a merger or other transaction in
which the predecessor's existence ceased upon consummation of
the transaction, and any domestic or foreign subsidiary
corporation.
B. "director" shall mean an individual who is or was a director of
a corporation or an individual who, while a director of a
corporation, is or was serving at the corporation's request as
a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, partnership, joint
venture, trust, employee benefit plan, or other enterprise. A
director is considered to be serving an employee benefit plan
at the corporation's request if the director's duties to the
corporation also impose duties on, or otherwise involve
services by, the director to the plan or to participants in or
beneficiaries of the plan. "Director" includes, unless the
context requires otherwise, the estate or personal
representative of a director.
C. "expenses" shall include counsel fees.
D. "official capacity" shall mean: when used in regard to a
director, the office of director in a corporation or to an
individual other than a director, as contemplated in the
Montana Business Corporation Act, the office in a corporation
held by the officer or the employment or agency relationship
undertaken by the employee or agent on behalf of the
corporation. "Official capacity" does not include service for
any other foreign or domestic corporation or any partnership,
joint venture, trust, employee benefit plan, or other
enterprise.
<PAGE>
E. "proceeding" shall mean any threatened, pending, or completed
action, suit or proceeding, whether civil, criminal,
administrative, or investigative and whether formal or
informal.
Item 7. Exemption from Registration Claimed
The Common Stock to be reoffered or resold pursuant to this registration
statement consists of (i) Common Stock to be issued upon the exercise of
options granted pursuant to the Gold Reserve 1992 Stock Option Plan and
the Gold Reserve 1994 Stock Option Plan and (ii) Common Stock allocated to
the accounts of plan participants under the Gold Reserve KSOP Plan, in
each case in reliance upon the exemptions from registration under the
Securities Act contained in Sections 3(b), 4(2) and 4(6) thereof, and with
respect to the exemption contained in Section 3(b), Rule 505 and
Regulation D promulgated thereunder.
Item 8. Exhibits
An Index to Exhibits appears at page E-1.
Item 9. Undertakings
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment of the registrant of expenses incurred or paid by a
director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such
issue.
(a) The undersigned registrant hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement to
include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or
any material change to such information in the registration statement;
(2) that for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the time of the offering.
<PAGE>
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-8 and has duly caused
this registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Spokane, State of Washington.
GOLD RESERVE CORPORATION
By: /s/ Rockne J. Timm
----------------------------------------
Rockne J. Timm
President and Chief Executive Officer
Dated: June 30, 1995
<PAGE>
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Rockne J. Timm his attorney-in-fact, with the power of substitution, for
him in any and all capacities, to sign any amendments to this registration
statement, and to file the same with exhibits thereto and other documents
in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that said attorney-in-fact or his
substitute or substitutes may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons on
behalf of the registrant and in the capacities and on the dates indicated.
By: /s/ A. Douglas Belanger
-----------------------------------
A. Douglas Belanger, a Director
Date: June 30, 1995
By: /s/ Patrick D. McChesney
-----------------------------------
Patrick D. McChesney, a Director
Date: June 30, 1995
By: /s/ J.C. Potvin
-----------------------------------
J.C. Potvin, a Director
Date: June 30, 1995
By: /s/ James H. Coleman
-----------------------------------
James H. Coleman, a Director
Date: June 30, 1995
By: /s/ Robert A. McGuinness
-----------------------------------
Robert A. McGuinness, its Principal
Financial and Accounting Officer
Date: June 30, 1995
<PAGE>
INDEX TO EXHIBITS
The following exhibits are filed as part of this amendment to
registration statement. Exhibits previously filed are incorporated by
reference, as noted. Exhibits filed herewith appear beginning at page
E-2.
<TABLE>
<CAPTION>
Exhibit Page Number
Number Exhibit in this Report
------ -------------------------------------------------- --------------
<S> <C> <C>
5.1 Opinion of Randall & Danskin, P.S. regarding E-2
legality of securities offered. Filed herewith.
6.0 *
8.0 *
12.0 *
15.0 *
23.1 Consent of Coopers & Lybrand L.L.P. Filed herewith. E-4
23.2 Consent of Randall & Danskin, P.S. Included in
its opinion filed herewith as Exhibit 5.1.
24.1 Powers of attorney. Included in the signature page
to this registration statement.
</TABLE>
____________________
* Items denoted by an asterisk have either been omitted or are not
applicable.
<PAGE>
Exhibit 5.1 to
Form S-3 Registration Statement
RANDALL & DANSKIN, P.S.
1500 Seafirst Financial Center
West 601 Riverside Avenue
Spokane, Washington 99201
Telephone: (509) 747-2052
July 17, 1995
Gold Reserve Corporation
1940 Seafirst Financial Center
Spokane, Washington 99201
Re: Gold Reserve Corporation
Registration Statement on Form S-3
Our File No. 40078
Gentlemen:
We have acted as counsel for Gold Reserve Corporation (the
"Company"), a Montana corporation, in connection with the
preparation of a registration statement on Form S-8 under the
Securities Act of 1933, as amended (the "Registration
Statement"), for the registration of options for the purchase of
2,755,660 shares of the Company's common stock, without par value
(the "Common Stock"), 2,755,660 shares of Common Stock to be
issued upon exercise of the options, and 258,300 shares of Common
Stock issuable pursuant to the Company's combined 401(k) salary
reduction plan and employee stock ownership plan, all of which
are to be offered and sold by the selling shareholders identified
therein.
As counsel to the Company, we are familiar with the corporate
proceedings taken by the Company to authorize the filing of the
Registration Statement. We have examined originals or copies
otherwise certified or identified to our satisfaction of such
documents, corporate records and other instruments as we have
deemed necessary or appropriate for this opinion. In making such
examination, we have assumed the genuineness of all signatures,
the authenticity of all documents submitted to us as originals
and the conformity to original documents of all documents
submitted to us as certified or photostatic copies. As to
questions of fact material to this opinion, where such facts have
not been independently established, we have relied to the extent
we deem reasonably appropriate upon the representations and
warranties of the Company and upon certificates or
representations of corporate officers of the Company. We have
also considered those questions of law that we deemed relevant.
<PAGE>
Gold Reserve Corporation
July 17, 1995
Page 2
In rendering this opinion, we call to your attention the fact
that we are admitted to practice in the State of Washington and
do not purport to be experts in the laws of any jurisdiction
other than the laws of such state and the federal laws of the
United States. Although we are not admitted to practice in the
State of Montana, we are generally familiar with the corporate
laws of such state and have relied upon standard compilations of
such laws in expressing this opinion.
Based upon the foregoing, it is our opinion that all of the
shares of Common Stock registered pursuant to the Registration
Statement are validly issued, fully paid and non-assessable, and
that the options to purchase Common Stock, when exercised in
accordance with their terms, will be validly issued, fully paid
and nonassessable.
We consent to the inclusion of this opinion in the Registration
Statement as an exhibit.
Very truly yours,
RANDALL & DANSKIN, P.S.
Douglas Siddoway
<PAGE>
Exhibit 23.1 to
Form S-3 Registration Statement
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement on Form S-8 of our report dated February 21, 1995, on our
audits of the consolidated financial statements of Gold Reserve
Corporation as of December 31, 1994 and 1993 and for the years ended
December 31, 1994, 1993 and 1992, which report is incorporated by
reference in this Form S-8. We also consent to the reference to our
firm under the caption "Experts."
Coopers & Lybrand L.L.P.
Spokane, Washington
July 17, 1995
<PAGE>
