SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES
PURSUANT TO SECTION 12(b) OR (g) OF THE
SECURITIES EXCHANGE ACT OF 1934
GOLD RESERVE CORPORATION
(Exact name of registrant as specified in its charter)
Montana
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(State of incorporation or organization)
81-0266636
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(I.R.S. Employee Identification Number)
601 West Riverside Avenue
1940 Seafirst Financial Center
Spokane, Washington
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(Address of principal executive offices)
99201
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(Zip Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class to be Registered: Rights to purchase common shares
Name of Each Exchange on Which Each Class is to be Registered:
NASDAQ Small-Cap System
The Toronto Stock Exchange
Securities to be registered pursuant to Section 12(g) of the Act:
None
(Title of Class)
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Item 1. Description of Registrant's Securities to Be Registered.
(a) ADOPTION OF SHAREHOLDER RIGHTS PLAN
Effective June 16, 1997, the Board of Directors of Gold Reserve
Corporation (the "Corporation") authorized the issuance of one
common share purchase right (a "Right") for each common share
(the "Common Shares"), of the Corporation outstanding at the
close of business on June 16, 1997, (the "Record Time"). Each
Right entitles the registered holder to purchase from the
Corporation one Common Share of the Corporation, upon the terms
and subject to the conditions set forth in a Shareholder Rights
Plan Agreement dated as of April 2, 1997 (the "Rights
Agreement"), between the Corporation and Montreal Trust Company
of Canada, as Rights Agent (the "Rights Agent").
Each outstanding Common Share on June 16, 1997, will entitle the
holder thereof to receive one Right. In addition, the
Corporation will issue one Right for each Common Share that
becomes outstanding between the Record Time and the Separation
Time as defined in the Rights Agreement (or the earlier
expiration or redemption of the Rights).
As of June 16, 1997, there were 22,814,021 Common Shares
outstanding. Also as of June 16, 1997, there were 4,169,011
Common Shares reserved for issuance upon the exercise of options
granted or eligible to be granted under the Corporation's three
stock option plans.
The terms and conditions governing the Rights are set forth in
the Rights Agreement filed herewith as Exhibit 1 and are
summarized below.
The Rights have certain anti-takeover effects. The Rights will
cause substantial dilution to a person or group that attempts to
acquire the Corporation without proceeding by way of a "Permitted
Bid" as defined in the Rights Agreement. The Rights should not
interfere with any merger or other business combination approved
by the Board of Directors and the shareholders of the Corporation
since the Board of Directors may, at its option and with
shareholder approval, at any time prior to the occurrence of a
"Flip-in Event" (as defined below), redeem all but not less than
all the then outstanding Rights at a redemption price of $0.00001
per Right.
The Rights Plan is designated to give adequate time for the
Corporation's shareholders to properly assess a bid without undue
pressure and allow competing bids to emerge. The Rights Plan
will also give the Corporation's Board of Directors time to
consider alternatives designed to allow shareholders to receive
full and fair value for their Common Shares and to provide the
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shareholders with equal treatment in a take-over bid. The Rights
Plan is also intended to address the jurisdictional gap between
the securities laws of Canada and those of the United States,
which could form the basis for unequal treatment of shareholders.
The Rights Plan will enhance the ability of the Board of
Directors to negotiate with an acquiror on behalf of all of the
shareholders. The Rights are not intended to prevent all
takeovers and should not affect any prospective offeror willing
to make a Permitted Bid.
(b) SUMMARY OF TERMS AND CONDITIONS OF THE RIGHTS
The following is a general summary of the terms of the Rights
Agreement governing the Rights as attached hereto as Exhibit 1.
Capitalized terms used in this summary have the meaning given to
them in the Rights Agreement.
GENERAL. The Rights are issued pursuant to the Rights Agreement
between the Corporation and the Rights Agent. Each Right
entitles the registered holder thereof to purchase from the
Corporation one Common Share at the price of $70.00 per share,
subject to adjustments, at any time after the Separation Time.
If a Flip-in Event occurs, each Right will entitle the
registered holder to receive one Common Share at 50% of the
average closing price of the Common Shares on the principal stock
exchange on which the Common Shares are listed during the
preceding 20 trading days. The Rights are not exercisable until
the Separation Time.
TRADING OF RIGHTS. Until the Separation Time, the Rights will be
evidenced by the outstanding certificates for Common Shares and
the Rights may be transferred with, and only with, the Common
Shares. Until the Separation Time (or earlier termination or
expiration of the Rights), the surrender for transfer of a
certificate representing Common Shares will also constitute the
transfer of the Rights associated with the Common Shares
represented by the certificate. As soon as practicable following
the Separation Time, separate certificates evidencing the Rights
("Rights Certificates") will be mailed to holders of record of
Common Shares as of the close of business at the Separation Time
and the separate Rights Certificates will thereafter evidence the
Rights.
SEPARATION TIME. The Rights will separate and trade apart from
the Common Shares and become exercisable at the Separation Time.
"Separation Time" is defined generally to mean the close of
business on the tenth trading day, or such earlier or later
business day as may be determined by the Board of Directors,
following the earlier to occur of (i) the "Stock Acquisition
Date" (which is generally the date that a Person, together with
its Affiliates and Associates and anyone with whom it is acting
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in concert, acquires 20% or more of the Voting Shares of the
Corporation and thereby becomes an "Acquiring Person") or (ii)
the commencement of, or first public announcement of the
intention of any person (other than the Corporation or any
subsidiary of the Corporation) to commence, a Take-over Bid
(other than a Permitted Bid or Competing Permitted Bid).
FLIP-IN EVENT. Following the date that a transaction in or
pursuant to which a person has become an Acquiring Person has
occurred (a "Flip-in Event"), a Right will convert into the right
to purchase, upon exercise, one Common Share of the Corporation
at 50% of the average closing price of the Common Shares on the
principal stock exchange on which the Common Shares are listed
during the preceding 20 trading days. However, any Rights
Beneficially Owned by an Acquiring Person (including such
person's Associates and Affiliates and persons with whom it is
acting in concert), or by any direct or indirect transferees of
such a person, will be void. A Flip-in Event would not be caused
by an Exempt Acquisition, a Permitted Bid Acquisition, a Pro Rata
Acquisition or a Voting Share Reduction, each as defined in the
Rights Agreement.
PERMITTED BID AND COMPETING PERMITTED BID. A "Permitted Bid" and
a "Competing Permitted Bid" are defined in the Rights Agreement.
Essentially, a Permitted Bid is a Take-over Bid made by a way of
a formal bid in compliance with applicable securities legislation
in any jurisdiction where 5% or more of the Voting Shares are
held, subject to any exemption ordered or granted for purposes of
uniformity or otherwise, and which also complies with certain
additional provisions, including the following:
(i) the Take-over Bid is made for all Voting Shares to all
holders of record of Voting Shares as registered on the
books of the Corporation and the Take-over Bid does not
expire until at least 60 days following the date the Take-
over Bid is made; and
(ii) the Take-over Bid provides that no Voting Shares will be
taken up or paid for pursuant to the Take-over Bid unless
the Voting Shares of Independent Shareholders deposited or
tendered to the Bid and not withdrawn, constitute at least
50 percent of the Voting Shares outstanding.
REDEMPTION. At any time prior to the later of the occurrence of
a Flip-in Event, the Board of Directors, with shareholder
approval, may redeem the Rights in whole (but not in part) at a
redemption price of $0.00001 per Right, subject to appropriate
adjustment in certain events. The redemption of the rights by
the Board of Directors may be made effective at such time, on
such basis and with such conditions as the Board of Directors may
establish.
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WAIVER. The Board of Directors may, prior to the occurrence of a
Flip-in Event, determine to waive the application of the Flip-in
Event provisions to a bid made by way of take-over bid circular
to all shareholders (an "Exempt Acquisition") that would
otherwise be subject to those provisions. The Board of Directors
may also waive the application of the Flip-in Event provisions to
a Flip-in Event where the Acquiring Person became such by
inadvertence and where such Acquiring Person has reduced his
Beneficial Ownership of Voting Shares such that at the time of
waiver he is no longer an Acquiring Person and may also waive the
application of the Flip-in Event Provisions where the Acquiring
Person has entered into an agreement with the Corporation to
reduce its Beneficial Ownership within a specified period of time
so as no longer to be an Acquiring Person.
AMENDMENTS. The Corporation may from time to time amend the
provisions of the Rights Agreement and the Rights in order to
make such changes as the Board of Directors, acting in good
faith, may determine are necessary or desirable. Such amendments
will be effective on adoption by the Board, but will require
ratification at the next meeting of shareholders to remain in
effect, except that any amendment, variation or deletion made on
or after the later of the Stock Acquisition Date and the
Separation Time which would materially adversely affect the
interests of the holders of Rights generally may not be made
without the prior consent of such holders given at a meeting of
the holders, and will not be effective until such consent is
given.
The Board of Directors, acting in good faith, may also amend the
Rights Agreement from time to time in any of the following ways,
in which case shareholder ratification will not be required: (A)
in order to make such changes as may be necessary or desirable as
a result of any change in any applicable legislation or
regulations or the published policies of securities regulatory
authorities or in the interpretation or administration thereof
and which do not adversely affect the interests of holders of
Rights to a greater extent than is reasonably required in order
to reflect such change; or (B) in order to cure any ambiguity or
to correct or supplement any provision contained herein which may
be inconsistent with any of the other provisions herein or
otherwise defective or impractical; or (C) in order to increase
or decrease the Exercise Price of $70 (as previously adjusted, if
applicable) at any time prior to the Separation Time.
PROTECTION AGAINST DILUTION. The Exercise Price, the number and
kind of securities subject to purchase upon exercise of each
Right and the number of Rights outstanding are subject to
adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or
reclassification of, the Common Shares (ii) upon the grant to
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holders of Common Shares of certain rights or warrants to
subscribe for Common Shares or convertible securities at less
than the current market price of the Common Shares or (iii) upon
distribution to holders of Common Shares of evidences of
indebtedness, cash (excluding regular periodic cash dividends).
RIGHTHOLDER NOT A SHAREHOLDER. Until a Right is exercised, the
holder thereof, as such, will have no rights as a shareholder of
the Corporation including, without limitation, the right to vote
or to receive dividends.
DECLARATION AS TO NON-CANADIAN AND NON-U.S. HOLDERS. If in the
opinion of the Board of Directors (who may rely upon the advice
of counsel) any action or event contemplated by the Rights
Agreement would require compliance with the laws of a
jurisdiction outside Canada or the United States, the Board of
Directors acting in good faith may take such actions as it deems
appropriate to ensure that such compliance is not required. Any
obligation of the Corporation or action or event contemplated by
the Rights Agreement is subject to applicable law and to the
receipt of any requisite approval or consent of any governmental
or regulatory authority.
TERM. Generally, the Rights Agreement and the Rights issued
thereunder will terminate in 2000, unless the Corporation's
shareholders, at their annual meeting held in 2000, approves the
reconfirmation of the Rights Agreement. If that reconfirmation is
so approved, the Rights Agreement and the Rights issued
thereunder will terminate in July 2002.
The description of the Rights set forth herein may be included in
a form of prospectus subsequently filed by the Corporation
pursuant to Rule 424(b) under the Securities Act of 1933, in
which case such prospectus shall be deemed to be incorporated by
reference into the registration statement to which it pertains.
A copy of the Shareholder Rights Plan Agreement between the
Corporation and the Rights Agent specifying the terms of the
Rights, which includes as Attachment 1 the Form of Rights
Certificate, is attached hereto as Exhibit 1 and is incorporated
herein by reference. The foregoing description of the Rights
does not purport to be complete and is qualified in its entirety
by reference to such Exhibit 1.
Item 2. Exhibits.
No. Document
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1 Shareholder Rights Plan Agreement dated as of April 2, 1997,
which includes, Attachment 1 thereto, the form of Rights
Certificate (incorporated by reference to Schedule B to the
Corporation's definitive proxy statement, as filed with the
Securities and Exchange Commission, with respect to the
Corporation's annual meeting of shareholders on June 5,
1997).
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SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration
statement to be signed on its behalf by the undersigned, thereto duly
authorized.
Dated: May 15, 1998 GOLD RESERVE CORPORATION
By: s/ Robert A. McGuinness
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Robert A McGuinness, Vice President
Finance and CFO
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