As filed with the Commission on June 10, 1998
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 (I.R.S. Employer
incorporation or organization) Identification No.)
601 West Riverside Avenue
Suite 1940
Spokane, Washington
-----------------------------------------------------
(Address of principal executive offices)
99201
-----------------------------------------------------
(Zip Code)
GOLD RESERVE 1997 EQUITY INCENTIVE PLAN
(Full title of the plan)
ROCKNE J. TIMM
601 West Riverside Avenue
Suite 1940
Spokane, Washington 99201
(509) 623-1500
(Name and address of agent for service)
with a copy to:
ALAN G. HARVEY
Baker & McKenzie
2001 Ross Avenue, Suite 4500
Dallas, Texas 75201
(214) 978-3000
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Class of Proposed Maximum Proposed Maximum Amount of
Securities to be Amount to be Offering Price Per Aggregate Offering Registration
Registered (1) Registered (2) Security (3) Price (3) Fee (4)
---------------- -------------- ------------------ ------------------ ----------------
<S> <C> <C> <C> <C>
Common Stock,
no par value
per share 4,108,889 Shares $1.891 $7,769,909 $2,292.12
Preferred Stock
Purchase
Rights 4,108,889 Rights Not Applicable Not Applicable Not Applicable(1)
</TABLE>
<PAGE>
(1) Shares of common stock of Gold Reserve Corporation (the
"Company"), no par value per share (the "Common Stock"), being
registered hereby relate to the Gold Reserve 1997 Equity
Incentive Plan (the "1997 Plan"). Pursuant to Rule 416
promulgated under the Securities Act of 1933, as amended (the
"Securities Act"), there are also being registered such
additional shares of Common Stock as may become issuable pursuant
to the anti-dilution provisions of the 1997 Plan.
(2) This Registration Statement is also deemed, pursuant to
Instruction E to Form S-8, to relate to an aggregate of 2,108,889
shares of Common Stock previously registered on the following
registration statements of the Company in connection with
predecessor plans, with respect to which registration fees
totaling $4,545.02 have been paid: (a) Registration Statement on
Form S-8 (Registration No. 033-61113), as amended; (b)
Registration Statement on Form S-8 (Registration No. 033-58700),
as amended; (c) Registration Statement on Form S-8 (Registration
No. 033-69912), as amended; and (d) Registration Statement on
Form S-8 (Registration No. 033-35595).
(3) Estimated solely for the purpose of calculating the registration
fee pursuant to Rule 457(c) and (h) promulgated under the
Securities Act on the basis of the average of the high and low
sale prices of the Common Stock on June 8, 1998, as reported on
the Nasdaq SmallCap Market.
(4) In accordance with Rule 457(g), no additional registration fee is
required in respect of the Preferred Stock Purchase Rights.
<PAGE>
EXPLANATORY NOTE
This Registration Statement relates to the registration of the
following securities of the Company: up to 4,108,889 shares of Common
Stock (including the preferred stock purchase rights attaching
thereto) issuable under the 1997 Plan. A total of 4,397,386 shares of
Common Stock were registered on the following registration statements
of the Company for issuance in connection with predecessor plans to
the 1997 Plan: (a) Registration Statement on Form S-8 (Registration
No. 033-61113), as amended; (b) Registration Statement on Form S-8
(Registration No. 033-58700), as amended; (c) Registration Statement
on Form S-8 (Registration No. 033-69912), as amended; and (d)
Registration Statement on Form S-8 (Registration No. 033-35595). On
June 5, 1997, the stockholders of the Company approved the 1997 Plan.
The Company is no longer granting options or restricted stock under
the predecessor plans. Shares of Common Stock subject to stock
options previously existing under the predecessor plans that as a
result of forfeiture to the Company again become subject to reissuance
are reissued and administered pursuant to the 1997 Plan. 2,108,889
shares of Common Stock previously registered under such registration
statements remain unsold and have not been issued under the
predecessor plans (with respect to which registration fees totaling
$4,545.02 have been paid) and, pursuant to Instruction E to Form S-8
and the telephonic interpretation of the Securities and Exchange
Commission set forth at item 89 of section G of the Division of
Corporation Finance's Manual of Publicly Available Telephone
Interpretations (July 1997), are carried forward to, and deemed
covered by, this Registration Statement on Form S-8 filed in
connection with the 1997 Plan. None of the 258,300 shares relating to
the Company's KSOP Plan registered under the Registration Statement on
Form S-8 (Registration No. 33-61113), as amended, are carried forward
to, or deemed covered by, the Registration Statement filed hereby.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
------------------------------------------------
The documents listed below are hereby incorporated by reference into
this Registration Statement. All documents subsequently filed by the
Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
prior to the filing of a post-effective amendment to the Registration
Statement which indicates that all shares of Common Stock offered
hereunder have been sold or which deregisters all shares then
remaining unsold, shall be deemed to be incorporated herein by
reference and to be a part hereof from the date of filing of such
documents.
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998; and
(c) The description of the Company's Common Stock as contained in the
Company's Registration Statement on Form 10 dated July 20, 1982,
including all amendments and reports filed for the purpose of
updating such descriptions; and the description of the Company's
Preferred Stock Purchase Rights as contained in the Company's
Registration Statement on Form 8-A filed May 21, 1998, including
all amendments and reports filed for the purpose of updating such
descriptions.
Item 4. Description of Securities
----------------------------------
Not Applicable.
Item 5. Interest of Named Experts and Counsel
----------------------------------------------
None.
Item 6. Indemnification of Directors and Officers.
---------------------------------------------------
The only statutes, charter provisions, bylaws, 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, but sometimes require, 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
<PAGE>
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.
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.
(2)(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.
<PAGE>
(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.
(5)(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 (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
<PAGE>
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 expense
incurred in obtaining court-ordered indemnification; or (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(4). 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.
<PAGE>
(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.
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 or not the corporation
would have power to indemnify him against the same
liability under 35-1-452 or 35-1-453.
<PAGE>
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. If 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.
<PAGE>
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.
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,
<PAGE>
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.
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.
----------------------------------------------
Not Applicable.
Item 8. Exhibits.
------------------
Exhibit
Number Description
------- -----------------------------------------------------------
4.1 Gold Reserve 1997 Equity Incentive Plan*
4.2 Articles of Incorporation of the Registrant, as amended on
July 16, 1973. Filed as Exhibit E to the Registrant's
Registration Statement on Form 10 dated July 20, 1982 and
incorporated by reference herein.
4.3 Amendment to Articles of Incorporation of the Company, dated
June 16, 1997*
4.4 Bylaws of the Company, as amended, dated March 4, 1993
(incorporated by reference to Exhibit No. 3.2 to the
Company's Annual Report on Form 10-K for the year ended
December 31, 1992)
<PAGE>
Exhibit
Number Description
------- -----------------------------------------------------------
4.5 Shareholder Rights Plan Agreement, dated April 2, 1997
between the Company and Montreal Trust Company of Canada as
rights agent (incorporated by reference to Schedule B to the
Company's Proxy Statement for Annual Meeting of
Shareholders, SEC File No. 001-08372, dated April 14, 1997)
5.1 Form of Opinion of Winston & Cashatt*
23.1 Consent of Coopers & Lybrand, L.L.P.*
23.2 Consent of Winston &Cashatt (included in Exhibit 5.1)*
24.1 Power of attorney (see signature pages of Registration
Statement)*
________________
* Filed herewith.
Item 9. Undertakings.
----------------------
(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:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
Registration Statement. Notwithstanding the
foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of
securities offered would not exceed that which
was registered) and any deviation from the low
or high end of the estimated maximum offering
range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in
volume and price represent no more than 20%
change in the maximum aggregate offering price
set forth in the "Calculation of Registration
Fee" table in the effective Registration
Statement;
<PAGE>
(iii) 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; provided, however, that
paragraphs (a)(1)(i) and (a)(1)(ii) do not apply
if the Registration Statement is on Form S-3,
Form S-8 or Form F-3, and the information
required to be included in a post-effective
amendment by those paragraphs is contained in
periodic reports filed with or furnished to the
Commission by the Registrant pursuant to Section
13 or Section 15(d) of the Exchange Act that are
incorporated by reference 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.
(3) To remove from registration by means of a post-
effective amendment any of the securities being
registered which remain unsold at the termination of
the offering.
(b) 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 Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee
benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) 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.
(c) 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 Commission such
indemnification is against public policy as
expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for
<PAGE>
indemnification against such liabilities (other
than the payment by 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.
<PAGE>
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, on June 10, 1998.
GOLD RESERVE CORPORATION
By: /s/ Rockne J. Timm
---------------------------------------------
Name: ROCKNE J. TIMM
Title: President and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated. Each person whose signature
appears below hereby authorizes and appoints Rockne J. Timm as his
attorney-in-fact to sign on his behalf individually and in the
capacity stated below all amendments and post-effective amendments to
this Registration Statement as that attorney-in-fact may deem
necessary or appropriate.
<TABLE>
<CAPTION>
Signature Title Date
-------------------------------- ------------------------------------------ ---------------
<S> <C> <C>
/s/ Rockne J. Timm President, Chief Executive Officer and
-------------------------------- Director (Principal Executive Officer) June 10, 1998
ROCKNE J. TIMM
/s/ Robert A. McGuinness Vice President of Finance and Chief
-------------------------------- Financial Officer (Principal Financial
ROBERT A. McGUINNESS and Accounting Officer) June 10, 1998
/s/ A. Douglas Belanger Executive Vice President, Secretary and
-------------------------------- Director June 10, 1998
A. DOUGLAS BELANGER
/s/ James P. Geyer Senior Vice President and Director June 10, 1998
--------------------------------
JAMES P. GEYER
/s/ James H. Coleman Director June 10, 1998
--------------------------------
JAMES H. COLEMAN
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
-------------------------------- ------------------------------------------ ---------------
<S> <C> <C>
/s/ Patrick D. McChesney Director June 10, 1998
--------------------------------
PATRICK D. McCHESNEY
/s/ Chris D. Mikkelsen Director June 10, 1998
--------------------------------
CHRIS D. MIKKELSEN
/s/ Jean Charles Potvin Director June 10, 1998
--------------------------------
JEAN CHARLES POTVIN
</TABLE>
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description
-------- ------------------------------------------------------------
4.1 Gold Reserve 1997 Equity Incentive Plan
4.2 Articles of Incorporation of the Registrant, as amended on
July 16, 1973. Filed as Exhibit E to the Registrant's
Registration Statement on Form 10 dated July 20, 1982 and
incorporated by reference herein.
4.3 Amendment to Articles of Incorporation of the Company, dated
June 16, 1997
4.4 Bylaws of the Company, as amended, dated March 4, 1993
(incorporated by reference to Exhibit No. 3.2 to the Company's
Annual Report on Form 10-K for the year ended December 31,
1992)
4.5 Shareholder Rights Plan Agreement, dated April 2, 1997 between
the Company and Montreal Trust Company of Canada as rights
agent (incorporated by reference to Schedule B to the Company's
Proxy Statement for Annual Meeting of Shareholders, SEC File
No. 001-08372, dated April 14, 1997)
5.1 Form of Opinion of Winston & Cashatt
23.1 Consent of Coopers & Lybrand, L.L.P.
23.2 Consent of Winston &Cashatt (included in Exhibit 5.1)
24.1 Power of attorney (see signature pages of Registration
Statement)
<PAGE>
EXHIBIT 5.1
June 8, 1998
Gold Reserve Corporation
601 West Riverside Avenue, Suite 1940
Spokane, Washington 99201
Gentlemen:
Gold Reserve Corporation, a Montana corporation (the "Company"), has
filed with the Securities and Exchange Commission (the "Commission") a
registration statement (the "Registration Statement") on Form S-8
under the Securities Act of 1933, as amended (the "Act"). The
Registration Statement covers up to (i) 4,108,889 shares of the
Company's common stock, no par value per share (including the
preferred stock purchase rights attaching to such stock pursuant to
that certain Rights Agreement dated April 2, 1997 between the Company
and Montreal Trust Company of Canada, the "Common Stock"), which shall
be issued pursuant to the Gold Reserve 1997 Equity Incentive Plan (the
"Plan"), and (ii) such additional shares of Common Stock as may become
issuable pursuant to the anti-dilution provisions of the Plan (all
such shares collectively referred to as the "Securities").
In rendering this opinion we have examined such corporate records,
documents and instruments of the Company and such certificates of
public officials, have received such representations from officers of
the Company, and have reviewed such questions of law as in our
judgment are necessary, relevant or appropriate to enable us to render
the opinion expressed below. In such examination, we have assumed the
genuineness of all signatures, the authenticity of all corporate
records, documents and instruments submitted to us as originals, the
conformity to original documents of all documents submitted to us as
conformed, certified or photostatic copies thereof, and the
authenticity of the originals of such photostatic, certified or
conformed copies.
Based upon such examination and review and upon representations made
to us by officers of the Company, we are of the opinion that upon
issuance and delivery of the Securities in accordance with the terms
and conditions of the Plan, and upon receipt by the Company of the
full consideration for the Securities as determined pursuant to the
Plan, the Securities will be legally issued, fully paid and
nonassessable shares of Common Stock of the Company.
This firm consents to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that
we come within the category of persons whose consent is required by
Section 7 of the Act or the rules and regulations of the Commission
thereunder.
Respectfully submitted,
S/ Winston & Cashatt
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement of Gold Reserve Corporation on Form S-8 of our report, which
includes an explanatory paragraph concerning a change in accounting
for impairment of long-lived assets in 1996, dated February 23, 1998,
except for Note 9 as to which the date is March 3, 1998, on our audits
of the consolidated financial statements of Gold Reserve Corporation.
/s/ Coopers & Lybrand L.L.P.
Spokane, Washington
June 8, 1998
<PAGE>
EXHIBIT 4.1
Gold Reserve Corporation
1997 Equity Incentive Plan
SECTION 1. ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN
--------------------------------------------------------------
ESTABLISHMENT. Gold Reserve Corporation, a Montana (state) corporation
(the "Company") hereby establishes the "1997 EQUITY INCENTIVE PLAN "
(the "Plan") for its key employees, directors and consultants. The
Plan permits the grant of Stock Options, Stock Appreciation Rights and
Restricted Stock.
PURPOSE. The Purpose of the Plan is to advance the interests of the
Company and its Subsidiaries and promote continuity of management by
encouraging and providing key employees, directors and consultants
with the opportunity to acquire an equity interest in the Company and
to participate in the increase in shareholder value as reflected in
the growth in the price of the shares of the Company's Stock and by
enabling the Company to attract and retain the services of key
employees, directors, and consultants upon whose judgment, interest,
skills, and special effort the successful conduct of its operations is
largely dependent.
EFFECTIVE DATE. The Plan shall become effective on the date it is
adopted by the Board of the Company, subject to the approval by the
affirmative vote of the majority of shareholders present and voting at
a duly held meeting of shareholders or by written consent of the
majority of outstanding shareholders.
SECTION 2. DEFINITIONS, CONSTRUCTION
-------------------------------------
DEFINITIONS. Whenever used herein, the following terms shall have
their respective meanings set forth below:
a) "ACT" means the Securities Exchange Act of 1934, as amended.
b) "BOARD" means the Board of Directors of the Company, which shall
determine all matters concerning Options, Restricted Stock and
Stock Appreciation Rights granted to Eligible Directors.
c) "CHANGE IN CAPITALIZATION" means any increase or reduction in the
number of shares of Stock, or any change (including, but not
limited to, a change in value) in the shares of Stock or exchange
of shares of Stock for a different number or kind of shares or
other securities of the Company or any other corporation or other
entity, by reason of a reclassification, recapitalization, merger,
consolidation, reorganization, spin-off, split-up, issuance of
warrants, rights or debentures, change in the exercise price or
<PAGE>
conversion price under any warrants, rights or debenture as a
result of any event, stock dividend, stock split or reverse stock
split, extraordinary dividend, property dividend, combination or
exchange of shares or otherwise.
d) A "CHANGE IN CONTROL" means an event or series of events after the
Effective Date by which (i) any "person" or "group" (as such terms
are used in Section 13(d) and 14(d) of the Act) becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Act),
directly or indirectly, of more than 50% of the aggregate voting
power of all the capital Stock of the Company normally entitled to
vote in the election of directors or (ii) during any period of two
consecutive calendar years, individuals who at the beginning of
such period constituted the Board (together with any new directors
whose election by the Board or whose nomination for election by
the Company's stockholders was approved by a vote of at least a
majority of the directors then still in office who either were
directors at the beginning of such period or whose election or
nomination was previously so approved) cease for any reason to
constitute a majority of the directors then in office.
e) "CODE" means the Internal Revenue Code of 1986, as amended.
f) "COMMITTEE" means a committee of the Board designated to
administer the Plan. If no Committee is designated or is
administering the Plan, all references to the Committee herein
shall refer to the Board.
g) "COMPANY" means Gold Reserve Corporation, a Montana corporation,
and any successors thereto.
h) "DISABILITY" means the inability to engage in any substantial
activity by reason of any medically determinable, physical or
mental impairment that can be expected to result in death or that
has lasted or can be expected to last for a continuous period of
not less than 12 months.
i) "ELIGIBLE PARTICIPANT" means any key employee, director or
consultant designated by the Committee as eligible to participate
in the Plan pursuant to Section 3.
j) "FAIR MARKET VALUE" means the closing sales price or the United
States Dollar equivalent of the closing sales price at which a
share of the Stock is reported to have traded on the day
immediately preceding the grant date as reported on the Principal
Market for the Stock; and if there is no trade on such date, the
Fair Market Value means the closing sales price or the United
States Dollar equivalent of the closing sales price on the most
recent date previous to such grant date as reported on the
Principal Market for the Stock. If no Fair Market Value has been
established in accordance with the foregoing, Fair Market Value
shall be the value established by the Board in good faith and, in
the case of an incentive stock option, in accordance with Section
422 of the Code.
<PAGE>
k) "OPTION" means the right to purchase Stock at a stated price for a
specified period of time. For purposes of the Plan an Option may
be either (i) an "incentive stock option" within the meaning of
Section 422 of the Code or (ii) a "nonstatutory stock option."
l) "OPTION AGREEMENT" means the agreement evidencing the grant of an
Option as described in Section 6.
m) "OPTION PRICE" means the price at which Stock may be purchased
pursuant to an Option.
n) "OPTIONEE" means a person to whom an Option has been granted under
the Plan.
o) "PARTICIPANT" means an Eligible Employee, Director or a Consultant
who has been granted and, at the time of reference, holds an
Option, Restricted Stock or Stock Appreciation Right.
p) "PERIOD OF RESTRICTION" means the period during which shares of
Restricted Stock are subject to restrictions pursuant to Section 9
of the Plan.
q) "PRINCIPAL MARKET FOR THE STOCK" means the exchange on which the
majority of the Stock was traded over the last twelve months. This
includes The Toronto Stock Exchange ("TSE"), the NASDAQ Electronic
Interdealer Quotation System ("NASDAQ System") or, in the event
the Company lists its shares in the future, a national U.S.
securities exchange.
r) "RESTRICTED STOCK" means Stock granted pursuant to Section 9 of
the Plan.
s) "STOCK" means the Common Stock of the Company, par value of $.0001
per share.
t) "STOCK APPRECIATION RIGHT" means the right to receive the increase
in the value of Stock subject to an Option in lieu of purchasing
such Stock.
u) "SUBSIDIARY" means any present or future subsidiary of the
Company, as defined in Section 424(f) of the Code.
All numbers except when otherwise indicated by the context, the
singular shall include the plural, and the plural shall include the
singular.
<PAGE>
SECTION 3. ELIGIBILITY AND PARTICIPATION
----------------------------------------
ELIGIBILITY AND PARTICIPATION. Eligible Participants in the Plan shall
be selected by the Committee from among those officers, directors,
employees, and consultants of the Company and its Subsidiaries who, in
the opinion of the Committee, are in a position to contribute
materially to the Company's continued growth and development and to
its long-term financial success. The maximum number of shares for
which Options may be granted to any one person in any year is 300,000
shares. In addition, the total number of shares reserved for issuance
to any one person pursuant to options cannot exceed 5% of shares
outstanding.
SECTION 4. STOCK SUBJECT TO PLAN
--------------------------------
NUMBER. The total number of new shares of Stock subject to issuance
under the Plan is 2,000,000. In addition, any shares subject to
options previously issued under existing plans that as a result of
forfeiture to the Company become subject to reissuance shall be
reissued and administered pursuant to the Plan. The shares to be
delivered under the Plan will consist of authorized but unissued
Stock.
UNUSED STOCK; UNEXERCISED RIGHTS. If any shares of Stock are subject
to an Option, which for any reason expires or is terminated
unexercised as to such shares, or any shares of Stock subject to a
Restricted Stock grant made under the Plan are re-acquired by the
Company pursuant to Section 9 of the Plan, such shares shall again
become available for issuance under the Plan.
EXERCISE OF STOCK APPRECIATION RIGHT. Whenever a Stock Appreciation
Right is exercised and payment of the amount determined in Section 8
is made in cash, the shares of Stock allocable to the portion of the
Option surrendered may again be the subject of Options or Restricted
Stock hereunder. Whenever a Stock Appreciation Right is exercised and
payment of the amount determined in Section 8 is made in shares of
Stock, only the net shares issued upon exercise of the Stock
Appreciation Right will be deemed utilized in the Plan.
ADJUSTMENT IN CAPITALIZATION.
a) In the event of a Change in Capitalization, the Committee shall
conclusively determine the appropriate adjustments, if any, to (i)
the maximum number and class of shares of Stock or other
securities with respect to which Options or Restricted Stock may
be granted under the Plan; (ii) the number and class of shares of
Stock or other securities which are subject to outstanding Options
or Restricted Stock granted under the Plan, and the purchase price
therefor, if applicable, and (iii) the maximum number of shares of
Stock or other securities with respect to which Options or Stock
Appreciation Rights may be granted during the term of the Plan.
<PAGE>
b) Any such adjustment in the shares of Stock or other securities
subject to outstanding incentive stock options (including any
adjustments in the purchase price) shall be made in such a manner
as not to constitute a modification as defined by Section
424(h)(3) of the Code and only to the extent otherwise permitted
by Sections 422 and 424 of the Code.
c) If, by reason of a Change in Capitalization, a grantee of
Restricted Stock shall be entitled to, or an Optionee shall be
entitled to exercise an Option with respect to new, additional or
different shares of Stock or securities, such new, additional or
different shares shall thereupon be subject to all of the
conditions, restrictions and performance criteria which were
applicable to the Restricted Stock or Stock subject to the
Option, as the case may be, prior to such Change in
capitalization.
SECTION 5. DURATION OF PLAN
---------------------------
DURATION OF PLAN. The Plan shall remain in effect, subject to the
Board's right to earlier terminate the Plan pursuant to Section 12
hereof, until all Stock subject to the Plan shall have been purchased
or acquired pursuant to the provisions hereof. Notwithstanding the
foregoing, no Option, Stock Appreciation Right or Restricted Stock may
be granted under the Plan on or after the tenth anniversary of the
Effective Date.
SECTION 6. OPTION GRANTS
------------------------
GRANT OF OPTIONS. Subject to Section 4 and 5, Options may be granted
to Eligible Participants and Eligible Directors at any time and from
time to time as determined by the Committee, as the case may be. The
Committee shall have complete discretion consistent with the terms of
the Plan in determining whether to grant Options, the number of
Options to be granted, and whether an Option is to be an incentive
stock option within the meaning of Section 422 of the Code or a
nonstatutory stock option. Nothing in this Section 6 of the Plan shall
be deemed to prevent the grant of nonstatutory stock options in excess
of the maximum established by Section 422 of the Code.
OPTION AGREEMENT. Each Option shall be evidenced by an Option
Agreement that shall specify the type of Option granted, the Option
Price, the duration of the Option, the number of shares of Stock to
which the Option pertains and such other provisions as the Committee
or the Board, as the case may be, shall determine.
OPTION PRICE. The Option Price for each Option shall be determined by,
or in the manner specified by, the Committee or the Board provided
that (i) subject to Section 4, Options with respect to no more than
250,000 shares of Stock may have an Option Price that is less than the
<PAGE>
Fair Market Value of the Stock on the date the Option is granted and
(ii) in the case of an incentive stock option, no Option shall have an
Option Price that is less than the Fair Market Value of the Stock on
the date the Option is granted (110% of Fair Market Value in the case
of an incentive stock option granted to any person who owns Stock
possessing more than 10% of the total combined voting power of all
classes of Stock of the Company or any Subsidiary, known as a "Ten
Percent Stockholder").
DURATION OF OPTIONS. Each Option shall have a maximum duration of ten
years from the time it is granted, except that an incentive stock
option granted to a Ten Percent Stockholder shall have a maximum
duration of five years from the time it is granted.
EXERCISE OF OPTIONS. Each Option granted under the Plan shall be
exercisable at such times and be subject to such restrictions and
conditions as the Committee or the Board, as the case may be, shall in
each instance approve. Such restrictions and conditions need not be
the same for each Participant.
SECTION 7. TERMS AND CONDITIONS APPLICABLE TO ALL OPTIONS
---------------------------------------------------------
PAYMENT. The Option Price shall be payable to the Company in full upon
exercise of an Option either (i) in cash or its equivalent, (ii) at
the discretion of the Committee or the Board, as the case may be, by
tendering shares of Stock held by the Optionee for more than six
months having a Fair Market Value at the time of exercise equal to the
Option Price, (iii) by a combination of (i) and (ii), or (iv) cash-
less exercise methods which are generally permitted by law, whereby a
broker sells the shares to which the Option relates or holds such
shares as collateral as may be the case. The proceeds from any such
payments shall be added to the general funds of the Company and shall
be used for general corporate purposes. Where payment for the exercise
of an Option is made as provided in (ii) above, only the net shares
issued upon exercise of the Option will be deemed utilized in the Plan
The Company may from time to time or at any time advance funds to
holders of Options granted under the Plan on a short-term basis solely
for the purpose of enabling such holders to exercise their Options.
All such advances will be evidenced in writing, will provide for the
payment of interest on terms then prevailing and will be secured by
pledges of the common Stock issuable upon the exercise of the Options
and if such common stock is to be resold, the proceeds of such sale.
It is presently anticipated that no such advance will remain
outstanding for more than a period of thirty days.
RESTRICTIONS ON STOCK TRANSFERABILITY. The Committee or the Board, as
the case may be, may impose such restrictions on any shares of Stock
acquired pursuant to the exercise of an Option under the Plan as it
may deem advisable, including, without limitation, restrictions under
applicable federal securities law, under requirements of any stock
exchange upon which such shares of Stock are then listed and under any
blue sky or state securities laws applicable to such shares.
<PAGE>
TERMINATION DUE TO RETIREMENT. The Option Agreement may provide that
if the employment of the Optionee is terminated, or if the
directorship of the Optionee expires, for a reason other than for
Cause or following a Change in Control, any outstanding Options
granted to the Optionee which are then exercisable shall continue to
be exercisable at any time prior to the earlier of the expiration date
of the Options and one year after the date of termination, and any
Options not then exercisable shall terminate immediately, subject to
such exceptions (which shall be set forth in the Option Agreement) as
the Committee or the Board may, in its sole discretion, approve.
TERMINATION DUE TO DEATH OR DISABILITY. The Option Agreement may
provide that the rights of an Optionee under any then outstanding
Option granted to the Optionee pursuant to the Plan if the employment
or directorship of the Optionee is terminated by reason of death or
Disability shall survive for up to the earlier of the expiration date
of the Options or one year after such death or Disability.
TERMINATION OF EMPLOYMENT FOR CAUSE. Anything contained herein to the
contrary notwithstanding, if the termination of an Optionee's
employment with the Company is as a result of or caused by the
Optionee's theft or embezzlement from the Company, the violation of a
material term or condition of his or her employment, the disclosure by
the Optionee of confidential information of the Company, conviction of
the Optionee of a crime of moral turpitude, the Optionee's stealing
trade secrets or intellectual property owned by the Company, any act
by the Optionee in competition with the Company, or any other act,
activity or conduct of the Optionee which in the opinion of the
Committee is adverse to the best interests of the Company, then any
Options and any and all rights granted to such Optionee thereunder, to
the extent not yet effectively exercised, shall become null and void
effective as of the date of the occurrence the event which results in
the Optionee ceasing to be an employee or director of the Company, and
any purported exercise of an Option by or on behalf of said Optionee
shall following such date shall be of no effect.
TRANSFERABILITY AND EXERCISABLITY OF OPTIONS. Neither the whole nor
any part of any incentive option shall be transferable by the Optionee
or by operation of law during such Optionee's lifetime. An incentive
option may be exercised during the lifetime of the Optionee only by
the Optionee. At such Optionee's death an Option or any part thereof
shall only be transferable by such Optionee's will or by the laws of
descent and distribution. Any incentive option, and any and all rights
granted to an Optionee thereunder, to the extent not theretofore
effectively exercised, shall automatically terminate and expire upon
any sale, transfer or hypothecation, or any attempted sale, transfer
or hypothecation of such Option or rights, or upon the bankruptcy or
insolvency of the Optionee. Any nonstatutory option granted hereunder
may be transferred to the extent provided by the Committee in the
nonstatutory option agreement or duly executed amended nonstatutory
option agreement. Transfer of a nonstatutory option shall not effect
the applicability of the original terms of the Option Agreement,
including the termination of employment provisions included herein.
<PAGE>
SECTION 8. STOCK APPRECIATION RIGHTS
------------------------------------
STOCK APPRECIATION RIGHTS. The Committee or the Board, as the case may
be, may, in its discretion, in connection with the grant of an Option,
grant to the Optionee Stock Appreciation Rights, the terms and
conditions of which shall be set forth in an agreement. A Stock
Appreciation Right shall cover the same shares of Stock covered by the
Option (or such lesser number of shares of Stock as the Committee or
the Board may determine) and shall, except as provided in this Section
8, be subject to the same terms and conditions as the related Option.
Stock Appreciation Rights shall be subject to the following terms and
provisions:
a) A Stock Appreciation Right may be granted either at the time of
grant, or at any time thereafter during the term of the Option if
related to a nonstatutory stock option; or only at the time of
grant if related to an incentive stock option.
b) A Stock Appreciation Right will entitle the holder of the related
Option upon exercise of the Stock Appreciation Right, to surrender
such Option or any portion thereof to the extent unexercised, and
to receive payment of an amount determined by multiplying (i) the
excess of the weighted average trading price on the Principal
Market for the Stock for the five (5) trading days immediately
preceding the date of exercise of such Stock Appreciation Right
over the Option Price under the related Option, by (ii) the number
of shares as to which such Stock Appreciation Right has been
exercised. Notwithstanding the foregoing, the agreement evidencing
the Stock Appreciation Right may limit in any manner the amount
payable with respect to any Stock Appreciation Right.
c) A Stock Appreciation Right will be exercisable at such time or
times and only to the extent that a related Option is exercisable,
and will not be transferable except to the extent that such
related Option may be transferable. A Stock Appreciation Right
granted in connection with an incentive stock option shall be
exercisable only if the Fair Market Value of the Stock on the date
of exercise exceeds the Option Price in the related Option.
d) Upon the exercise of a Stock Appreciation Right, the related
Option shall be canceled to the extent of the number of shares of
Stock as to which the Stock Appreciation Right is exercised, and
upon the exercise of an Option granted in connection with a Stock
Appreciation Right, the Stock Appreciation Right shall be canceled
to the extent of the number of shares of Stock as to which the
Option is exercised or surrendered.
e) A Stock Appreciation Right may be exercised by an Optionee only by
a written notice delivered in person or by mail to the Secretary
of the Company at the Company's principal executive office,
specifying the number of shares of Stock with respect to which the
Stock Appreciation Right is being exercised. The Optionee shall
<PAGE>
deliver the agreement evidencing the Stock Appreciation Right
being exercised and the agreement evidencing any related Option to
the Secretary of the Company who shall endorse thereon a notation
of such exercise and return such agreement to the Optionee.
f) Payment of the amount determined under Subsection (b) may be made
by the Company in the discretion of the Committee or the Board, as
the case may be, solely in whole shares of Stock in a number
determined at their Fair Market Value on the date preceding the
date of exercise of the Stock Appreciation Right or solely in
cash, or in a combination of cash and Stock. If payment is made in
Stock and the amount payable results in a fractional share,
payment for the fraction share will be made in cash.
g) No Stock Appreciation Right may be exercised within three months
after it is granted.
h) Subject to the terms of the Plan, the Committee or the Board, as
the case may be, may modify outstanding awards of Stock
Appreciation Rights or accept the surrender of outstanding awards
of Stock Appreciation Rights (to the extent not exercised) and
grant new awards in substitution for them. Notwithstanding the
foregoing, no modification of an award of Stock Appreciation
Rights shall adversely alter or impair any rights or obligations
under the agreement granting such Stock Appreciation Rights
without the Optionee's consent.
SECTION 9. RESTRICTED STOCK
---------------------------
GRANT OF RESTRICTED STOCK. Subject to Sections 4 and 5, the Committee
or the Board, as the case may be, at any time and from time to time,
may grant Restricted Stock under the Plan to such Eligible
Participants and in such amounts as it determines in its sole
discretion, but not in excess of 500,000 shares. Each grant of
Restricted Stock shall be made pursuant to a written agreement which
shall contain such restrictions, terms and conditions as the Committee
or the Board may determine in its discretion. Restrictions upon
Restricted Stock shall be for such period or periods (herein called
"Period(s) of Restriction") and on such terms and conditions as the
Committee or the Board may, in its discretion, determine.
TRANSFERABILITY. Except as provided in this Section 9, the shares of
Restricted Stock granted hereunder may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated for such
period of time as shall be determined by the Committee or the Board,
as the case may be, and shall be specified in the Restricted Stock
grant, or upon earlier satisfaction of other conditions set forth in
the Restricted Stock grant.
<PAGE>
OTHER RESTRICTIONS. The Committee or the Board, as the case may be,
may impose such other restrictions on any shares of Restricted Stock
granted to any Participant pursuant to the Plan as it may deem
advisable including, without limitation, restrictions under applicable
federal or state securities laws, and shall legend the certificates
representing Restricted Stock to give appropriate notice of such
restrictions.
CERTIFICATE LEGEND. In addition to any legends placed on certificates
pursuant to Section 9 hereof, each certificate representing shares of
Restricted Stock granted pursuant to the Plan shall bear the following
legend:
"The sale or other transfer of the shares of Stock represented by
this certificate, whether voluntary, involuntary or by operation of
law, is subject to certain restrictions on transfer set forth in
Gold Reserve Corporation's 1997 Equity Incentive Plan and
Restricted Stock agreement dated ___________ [TO BE COMPLETED WITH
THE DATE OF GRANT]. A copy of the Plan and such Restricted Stock
agreement may be obtained from the Secretary of Gold Reserve
Corporation"
REMOVAL OF RESTRICTIONS. Except as otherwise provided in this
Section 9, shares of Restricted Stock covered by each Restricted
Stock grant made under the Plan shall become freely transferable by
the Participant after the last day of the Period of Restriction.
Once the shares are released from the restrictions, the Participant
shall be entitled to have the legend required by Section 9 removed
from his Stock certificate.
VOTING RIGHTS. During the Period of Restriction, Participants
holding shares of Restricted Stock granted hereunder may exercise
full voting rights with respect to those shares.
DIVIDENDS AND OTHER DISTRIBUTIONS. During the period of restriction,
Participants holding shares of Restricted Stock granted hereunder
shall be entitled to receive all dividends and other distributions
paid with respect to those shares while they are so held. If any
such dividends or distributions are paid in shares of Stock, such
shares shall be subject to the same restrictions as the shares of
Restricted Stock with respect to which they were paid.
SECTION 10. BENEFICIARY DESIGNATION
-----------------------------------
BENEFICIARY DESIGNATION. Subject to Sections 7 and 9, each Participant
may, from time to time, name any beneficiary or beneficiaries (who may
be named contingently or successively) to whom any benefit under the
Plan is to be paid in case of the Participant's death before he or she
receives any or all of such benefit. Each designation will revoke all
prior designations by the same Participant, shall be in a form
<PAGE>
prescribed by the Committee and will be effective only when filed by
the Participant in writing with the Committee during the life time of
the Participant. In the absence of any such designation, benefits
remaining unpaid at the Participant's death shall be paid to the
estate of the Participant.
SECTION 11. RIGHTS OF PARTICIPANTS
----------------------------------
EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's
employment, directorship or service at any time nor confer upon any
Participant any right to continue in the employ or service or as a
director of the Company. No person shall have a right to be selected
as an Eligible Participant or, having been so selected, to be selected
again as an Optionee or recipient of Restricted Stock. The preceding
sentence shall not be construed or applied so as to deny a person any
participation in the Plan solely because he or she was a Participant
in connection with a prior grant of benefits under the Plan.
SECTION 12. ADMINISTRATION; POWERS AND DUTIES OF THE COMMITTEE AND THE
BOARD
----------------------------------------------------------------------
ADMINISTRATION. The Committee shall be responsible for the
administration of the Plan as it applies to Eligible Participants
other than directors, and the Board shall be responsible for the
administration of the Plan as it applies to Eligible Directors,
subject to Section 2. The Committee, by majority action thereof, is
authorized to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to the Plan, to provide for conditions
and assurances deemed necessary or advisable to protect the interests
of the Company, and to make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent
not contrary to the express provision of the Plan. Determinations,
interpretations, or other actions made or taken by the Committee
pursuant to the provisions of the Plan shall be final and binding and
conclusive for all purposes and upon all persons whomsoever. No member
of the Committee shall be personally liable for any action,
determination or interpretation made or taken in good faith with
respect to the Plan, and all members of the Committee shall be fully
indemnified by the Company with respect to any such action,
determination or interpretation.
CHANGE IN CONTROL. Without limiting the authority of the Committee as
provided herein, the Committee, either at the time Options or shares
of Restricted Stock are granted, or, if so provided in the applicable
Option Agreement or Restricted Stock grant, at any time hereafter,
shall have the authority to take such actions as it deems advisable,
including the right to accelerate in whole or in part the
exercisability of Options and/or to reduce the Period of Restriction
upon a Change in Control. The Option Agreement and Restricted Stock
<PAGE>
grants approved by the Committee may contain provisions which, if
there is a Change in Control, accelerate the exercisability of Options
and/or the Period of Restriction automatically or at the discretion of
the Committee or if the Change in Control is approved by a majority of
the members of the Board or depending such other criteria as the
Committee may specify. Nothing herein shall obligate the Committee to
take any action upon a Change in Control.
AMENDMENT, MODIFICATION AND TERMINATION OF PLAN. The Board may, at any
time and from time to time, modify, amend, suspend or terminate the
Plan in any respect. Amendments to the Plan shall be subject to
stockholder approval to the extent required to comply with any
exemption to the short swing-profit provisions of Section 16 (b) of
the Exchange Act pursuant to rules and regulations promulgated
thereunder, with the exclusion for performance-based compensation
under Code Section 162 (m), or with the rules and regulations of any
securities exchange on which the Shares are listed. The Board may also
modify or amend the terms and conditions of any outstanding Award,
subject to the consent of the holder and consistent with the
provisions of the Plan. No amendment, modification or termination of
the Plan shall in any manner adversely affect any Option, Stock
Appreciation Right or Restricted Stock theretofore granted to any
Participant under the Plan, without the consent of that Participant.
INTERPRETATION. Unless otherwise expressly stated in the relevant
Agreement, any grant of Options, Stock Appreciation Rights or
performance-vesting Restricted Stock is intended to be performance-
based compensation and therefore not subject to the deduction
limitation set forth in Section 162(m)(4)(C) of the Code .
SECTION 13. TAX WITHHOLDING
---------------------------
TAX WITHHOLDING. At such times as a Participant recognizes taxable
income in connection with the receipt of shares, securities, cash or
property hereunder (a "Taxable Event"), the Participant shall pay to
the Company an amount equal to the federal, state and local income
taxes and other amounts as may be required by law to be withheld by
the Company in connection with the Taxable Event (the "Withholding
Taxes"). Prior to the issuance, or release from escrow, of such shares
or the payment of such cash Company shall have the right to deduct
from any payment of cash to a Participant an amount equal to the
Withholding Taxes in satisfaction of the obligation to pay Withholding
Taxes. In satisfaction of his obligation to pay Withholding Taxes to
the Company, the Participant may make a written election (the "Tax
Election"), which may be accepted or rejected in the discretion of the
Committee, to have withheld a portion of the shares of Stock then
issuable having an aggregate Fair Market Value, on the date preceding
the date of such issuance, equal to the Withholding Taxes.
<PAGE>
SECTION 14. REQUIREMENTS OF LAW
-------------------------------
REQUIREMENTS OF LAW. The granting of Options or Restricted Stock, and
the issuance of shares of Stock upon the exercise of an Option shall
be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities
exchanges as may be required.
GOVERNING LAW. The Plan, and all agreements hereunder, shall be
construed in accordance with and governed by the laws of the State of
Washington without giving effect to the choice of law principles
thereof, except to the extent that such law is preempted by federal
law.
LISTING, ETC. Each Option or share of Restricted Stock is subject to
the requirement that, if at any time the Committee or the Board, as
the case may be, determines, in its discretion, that the listing,
registration or qualification of Stock issuable pursuant to the Plan
is required by any securities exchange or under any state or federal
law, or the consent or approval of any governmental regulatory body is
necessary or desirable as a condition of, or in connection with, the
grant of an Option or the issuance of Stock, no Options or Restricted
Stock shall be granted or payment made or shares of Stock issued, in
whole or in part, unless such listing, registration, qualification,
consent or approval has been effected or obtained free of any
conditions which are unacceptable to the Committee or the Board,
acting in good faith.
RESTRICTION ON TRANSFER. Notwithstanding anything contained in the
Plan or any Agreement to the contrary, if the disposition of Stock
acquired pursuant to the Plan is not covered by a then current
registration statement under the Securities Act of 1933, as amended,
and is not otherwise exempt from such registration, such Stock shall
be restricted against transfer to the extent required by said Act, and
Rule 144 or other regulations thereunder. The Committee or the Board,
as the case may be, may require anyone receiving Stock pursuant to an
Option or Restricted Stock granted under the Plan, as a condition
precedent to receiving such Stock, to represent and warrant to the
Company in writing that such Stock is being acquired without a view to
any distribution thereof and will not be sold or transferred other
than pursuant to an effective registration thereof under said Act or
pursuant to an exemption applicable under said Act, or the rules and
regulations promulgated thereunder. The certificates evidencing any
shares of such Stock shall be appropriately legend to reflect their
status as restricted securities.
<PAGE>
EXHIBIT 4.3
348259
STATE OF MONTANA
FILED
JUN 16 1997
SECRETARY OF STATE
ARTICLES OF AMENDMENT
OF
GOLD RESERVE CORPORATION
Pursuant to the provisions of the Montana Business Corporation Act,
the following Articles of Amendment to Articles of Incorporation are
submitted for filing.
ARTICLE I
---------
The name of this corporation is Gold Reserve Corporation (the
"Company").
ARTICLE 11
----------
The amendments to the Articles of Incorporation of the Company, as
adopted, are as follows:
"Article V as heretofore amended and restated is amended to read in
its entirety as follows:
ARTICLE V
---------
AUTHORIZED SHARES
The total number of shares of all classes of stock which this
corporation shall have authority to issue is 500,000,000 shares
consisting of (a) 480,000,000 shares of common stock, no par value per
share (the "Common Stock"), and (b) 20,000,000 shares of preferred
stock, no par value per share, (the "Preferred Stock").
The designations, relative rights, preferences and limitations of the
shares of Common Stock and Preferred Stock are as follows:
A. COMMON STOCK.
VOTING. The holders of Common Stock shall at all times vote as one
class, with each holder of record entitled to one vote for each
share held. A holder of shares of Common Stock shall have the
right to cumulate his votes.
<PAGE>
DIVIDENDS. Each issued and outstanding share of Common Stock shall
entitle the holder thereof to receive dividends (whether payable
in cash, stock or otherwise), when, as and if declared by the
board of directors of this corporation out of funds legally
available therefore, subject, however, to the right of preferred
shareholders to first receive dividends payable with respect to
the Preferred Stock.
LIQUIDATION DISSOLUTION OR WINDING UP. In the event of any
liquidation, dissolution or winding up of the affairs of this
corporation, whether voluntary or involuntary, each issued and
outstanding share of Common Stock shall entitle the holder of
record thereof to receive ratably and equally all the assets and
funds of this corporation available for distribution to its
shareholders, whether from capital or surplus, subject, however,
to the rights of preferred shareholders to first receive such
assets and funds with respect to the Preferred Stock.
MERGER, CONSOLIDATION. ETC. Upon the merger or consolidation of
this corporation (in a merger or consolidation in which
shareholders of this corporation receive cash or securities of any
other person or entity upon such merger or consolidation), or upon
the sale or other disposition of all or substantially all of the
properties and assets of this corporation as an entirety to any
person or entity, the aggregate consideration therefore payable to
the shareholders of this corporation, if any, shall be distributed
as if such merger, consolidation, sale or other disposition were a
distribution in liquidation, dissolution or winding up of the
affairs of this corporation.
PREEMPTIVE RIGHTS. A holder of shares of Common Stock shall not be
entitled to preemptive rights to acquire additional shares of
capital stock of this corporation.
B. PREFERRED STOCK.
BOARD DETERMINATION OF CERTAIN CHARACTERISTICS. The board of
directors of this corporation is hereby authorized, subject to the
limitations prescribed by law and the provisions hereof, at its
option, from time to time to divide all or any part of the
Preferred Stock into series thereof; to establish from time to
time the number of shares to be included in any such series; to
fix the designations, powers, preferences and rights of the shares
of each such series and the qualifications, limitations or
restrictions thereof; and to determine variations, if any, between
any series so established as to all matters, including, but not
limited to, the determination of the following:
(a) the number of shares constituting each such series and the
distinctive designation of such series;
(b) the rate of dividend, if any, and whether dividends shall be
cumulative or noncumulative;
<PAGE>
(c) the voting power of holders of such series, if any,
including, without limitation, the vote or fraction of vote
to which such holder may be entitled, the events upon the
occurrence of which such holder may be entitled to vote, and
any restrictions or limitations upon the right of such
holder to vote, except on such matters as may be required by
law;
(d) whether or not such series shall be redeemable and, if so,
the terms and conditions of such redemption, including the
date or dates after which the shares constituting such
series shall be redeemable and the amount per share payable
in case of redemption, which amount may vary under different
conditions and at different redemption dates;
(e) the extent, if any, to which such series shall have the
benefit of any sinking fund provisions for redemption or
repurchase of shares;
(f) the rights, if any, of such series in the event of the
dissolution of this corporation or upon any distribution of
the assets of this corporation, including, with respect to
the voluntary or involuntary liquidation, dissolution or
winding up of this corporation, the relative rights of
priority, if any, of payment of shares of such series;
(g) whether or not the shares of such series shall be
convertible and, if so, the terms and conditions on which
shares of such series shall be so convertible; and
(h) such other powers, designations, preferences and relative
participating, optional or other special rights, and such
qualifications, limitations or restrictions thereon as are
permitted by law."
ARTICLE III
-----------
The amendment provides for no exchange, reclassification or
cancellation of issued shares.
ARTICLE IV
----------
The amendment was adopted on June 5, 1997.
<PAGE>
ARTICLE V
---------
The amendment was duly approved by the holders of common stock of the
Company, being the only class of capital stock of the Company then
outstanding, at the annual meeting of shareholders held on June 5,
1997. The number of shares of common stock of the Company outstanding
as of the record date established for the meeting and entitled to vote
was 22,813,02 1; the holders of 11,477,619 of such shares,
constituting 50.31 percent of the outstanding shares and a quorum,
were present at the meeting in person or by proxy; 9,554,499 of such
shares, being a majority of the shares present at the meeting in
person or by proxy, were voted in favor of the amendment, 1,015,025
shares were voted against the amendment and 452,0006 shares abstained
from voting. The amendment was therefore approved in accordance with
the provisions of Section 35-1-227 and Section 35-1-528 of the Montana
Business Corporation Act.
IN WITNESS WHEREOF, the Company has caused these Articles of Amendment
to be executed on this 13th day of June, 1997.
GOLD RESERVE CORPORATION
By S/ Mary E. Smith
------------------------
MARY E. SMITH, Secretary
<PAGE>
