As filed with the Securities and Exchange
Commission on April 2, 1999 Registration No. 333-56495
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST EFFECTIVE AMENDMENT NO. 1
TO
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
GOLD RESERVE INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Canada N/A
-------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
926 West Sprague Avenue
Suite 200
Spokane, Washington 99201
---------------------------------------- --------------------
(Address of principal executive offices) (Zip Code)
GOLD RESERVE INC. 1997 EQUITY INCENTIVE PLAN
----------------------------------------------
(Full title of the plan)
ROCKNE J. TIMM
926 West Sprague Avenue
Suite 200
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
EXPLANATORY NOTES
Reorganization of GR-Montana to Canada
--------------------------------------
On February 3, 1999, the stockholders of Gold Reserve Corporation
("GR-Montana"), a Montana corporation, approved the Agreement and Plan
of Merger (the "Merger Agreement") by and among GR-Montana, Gold
Reserve Inc. ("GR-Canada"), a Yukon corporation, and GR Merger Corp.
("Merger Sub"), a Montana corporation, pursuant to which Merger Sub
merged with and into GR-Montana and GR-Montana became a wholly-owned
subsidiary of GR-Canada (the "Merger"). The Merger became effective
February 4, 1999. Pursuant to the terms of the Merger Agreement, the
Gold Reserve 1997 Equity Incentive Plan approved by the stockholders
of GR-Montana on June 5, 1997, as amended in the Merger, was assumed
by GR-Canada (the "1997 Plan") and the options that have or will be
granted under the 1997 Plan may be exercised in accordance with their
terms for Class A common shares, no par value per share, of GR-Canada
("GR-Canada Class A Shares").
Consolidation of Registration Statements
----------------------------------------
This registration statement ("Registration Statement") relates to the
registration of the following securities: up to 4,108,889 GR-Canada
Class A Shares (including the stock purchase rights attaching thereto)
issuable under the 1997 Plan. A total of 4,397,386 shares were
registered on the following registration statements of GR-Montana
assumed by GR-Canada pursuant to the Merger 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). Options and restricted stock are no longer being
issued under the predecessor plans. Shares subject to stock options
previously existing under the predecessor plans that as a result of
forfeiture to GR-Canada again become subject to reissuance are
reissued and administered pursuant to the 1997 Plan. A total of
2,108,889 shares previously registered under such registration
statements remain unsold and have not been issued under the
predecessor plans and, pursuant to Instruction E to Form S-8 and the
telephonic interpretation of the Securities and Exchange Commission
(the "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 Gold Reserve KSOP Plan registered under the Registration Statement
on Form S-8 (Registration No. 033-61113), as amended, are carried
forward to, or deemed covered by, the Registration Statement filed
hereby.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
---------------------------------------
The following documents filed by GR-Montana and GR-Canada, as
successor issuer, are hereby incorporated by reference into this
Registration Statement. All documents subsequently filed by GR-Canada
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) GR-Montana's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) GR-Montana's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998;
(c) GR-Montana's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1998;
(d) GR-Montana's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1998;
(e) Current Report on Form 8-K filed February 5, 1999 of GR-Canada;
and
(f) The description of GR-Canada's Common Stock as contained in GR-
Canada's Registration Statement on Form 8-A, dated December 1,
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 director or officer of GR-Canada is insured
or indemnified in any manner against liability which such officer of
director may incur in such capacity is Section 126 of the Yukon
Business Corporations Act and Sections 7.02 through 7.04 of GR-
Canada's Bylaws. Taken together, the statutory and bylaw provisions
generally allow GR-Canada to indemnify its directors or officers
against liability and expenses provided the officer or director
seeking indemnity (1) was substantially successful on the merits in
the defense of the action or proceeding, (2) (a) acted honestly and in
good faith with a view to the best interest of GR-Canada and (b) in
the case of a criminal or administrative action or proceeding that is
enforced by a monetary penalty, the officer or director had reasonable
grounds for believing the conduct was lawful, and (3) is fairly and
reasonably entitled to indemnity.
YUKON LAW
Section 126 of the Yukon Business Corporation Act is set forth in its
entirety as follows:
126.(1) Except in respect of an action by or on behalf of the
corporation or body corporate to procure a judgment in its
favour, a corporation may indemnify a director or officer of
the corporation, a former director or officer of the
corporation or a person who acts or acted at the
corporation's request as a director or officer of a body
corporate of which the corporation is or was a shareholder or
creditor, and his heirs and legal representatives, against
all costs, charges and expenses, including an amount paid to
settle an action or satisfy a judgment, reasonably incurred
by him in respect of any civil, criminal or administrative
action or proceeding to which he is made a party by reason of
being or having been a director or officer of that
corporation or body corporate, if
(a) he acted honestly and in good faith with a view to the
best interests of the corporation, and
(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he
had reasonable grounds for believing that his conduct
was lawful.
(2) A corporation may with the approval of the Supreme Court
indemnify a person referred to in subsection (1) in respect
of an action by or on behalf of the corporation or body
corporate to procure a judgment in its favour, to which he is
made a party by reason of being or having been a director or
an officer of the corporation or body corporate, against all
costs, charges and expenses reasonably incurred by him in
connection with the action if he fulfils the conditions set
out in paragraphs (1)(a) and (b).
(3) Notwithstanding anything in this section, a person referred
to in subsection (1) is entitled to indemnity from the
corporation in respect of all costs, charges and expenses
reasonably incurred by him in connection with the defence of
any civil, criminal or administrative action or proceeding to
which he is made a party by reason of being or having been a
director or officer of the corporation or body corporate, if
the person seeking indemnity
(a) was substantially successful on the merits in his
defence of the action or proceeding,
(b) fulfills the conditions set out in paragraphs (1)(a) and
(b), and
(c) is fairly and reasonably entitled to indemnity.
(4) A corporation may purchase and maintain insurance for the
benefit of any person referred to in subsection (1) against
any liability incurred by him
(a) in his capacity as a director or officer of the
corporation, except when the liability relates to his
failure to act honestly and in good faith with a view to
the best interests of the corporation, or
(b) in his capacity as a director or officer of another body
corporate if he acts or acted in that capacity at the
corporation's request, except when the liability relates
to his failure to act honestly and in good faith with a
view to the best interests of the body corporate.
(5) A corporation or a person referred to in subsection (1) may
apply to the Supreme Court for an order approving an
indemnity under this section and the Supreme Court may so
order and make any further order it thinks fit.
(6) On an application under subsection (5), the Supreme Court may
order notice to be given to any interested person and that
person is entitled to appear and be heard in person or by
counsel.
SECTIONS 7.02 THROUGH 7.04 OF GR-CANADA'S BYLAWS ARE SET FORTH IN
THEIR ENTIRETY AS FOLLOWS:
7.02 LIMITATION OF LIABILITY
Subject to the Act, no director or officer, or former
director or officer, of the Corporation shall be liable for
the acts, receipts, neglects or defaults of any other
director or officer or employee, or for the joining in any
receipt or act for conformity, or for any loss or damage or
expense happening to the Corporation through the
insufficiency or deficiency of title to any property acquired
by the Corporation or for or on behalf of the Corporation or
for the insufficiency or deficiency of any security in or
upon which any of the money of or belonging to the
Corporation shall be placed or invested, or for any loss or
damage arising from the bankruptcy, insolvency or tortious
act of any person, firm or corporation including any person,
firm or corporation with whom or with which any moneys,
securities or effects shall be lodged or deposited, or for
any loss, conversion, misapplication or misappropriation of
or any damage resulting from any dealing with any moneys,
securities or other assets of or belonging to the Corporation
or for any other loss, damage or misfortune whatsoever which
may happen in the execution of the duties of his respective
office or trust or in relation thereto unless the same shall
happen by or through his failure to exercise the powers and
to discharge the duties of his office honestly and in good
faith with a view to the best interest of the Corporation and
to exercise the care, diligence and skill that a reasonably
prudent person would exercise in comparable circumstances.
Any repeal or modification of the foregoing provisions of
this paragraph 7.02 shall not adversely affect any limitation
on the personal liability of a director or officer of the
Corporation arising from an act or omission occurring prior
to the time of such repeal or amendment. In addition to the
circumstances in which a director or officer of the
Corporation is not personally liable as set forth in the
foregoing provisions of this paragraph 7.02, a director or
officer shall not be liable to the Corporation or its
sareholders to such further extent as permitted by any law
hereafter enacted, including, without limitation, any
subsequent amendment to the Act.
7.03 INDEMNITY
Subject to the Act, the Corporation shall indemnify a
director or officer, a former director or officer, and a
person who acts or acted at the Corporation's request as a
director or officer of a body corporate of which the
Corporation is or was a shareholder or creditor, and his
heirs and legal representatives, against all costs, charges
and expenses, including any amount paid to settle an action
or satisfy a judgement, reasonably incurred by him in respect
of any civil, criminal or administrative action or proceeding
to which he is made a party by reason of being or having been
a director or officer of the Corporation or such body
corporate, if:
(a) he acted honestly and in good faith with a view to the
best interests of the Corporation; and
(b) in the case of a criminal or administrative action or
proceeding that is enforced by a monetary penalty, he
had reasonable grounds for believing his conduct was
lawful.
The Corporation shall indemnify the directors and officers of
the Corporation to the fullest extent permitted by law. The
Corporation may indemnify any employee or agent of the
Corporation to the fullest extent permitted by law. In
addition to the circumstances in which a director or officer
of the Corporation is indemnified as set forth in the
foregoing provisions of this paragraph 7.03, a director or
officer shall be indemnified by the Corporation to such
further extent as permitted by any law hereafter enacted,
including, without limitation, any subsequent amendment to
the Act.
7.04 INSURANCE
The Corporation may, subject to and in accordance with the
Act, purchase and maintain insurance for the benefit of any
director or officer, or former director or officer, of the
Corporation as such against any liability incurred by him.
The Corporation may provide such insurance to directors and
officers regardless of whether such directors and officers
are indemnified pursuant to paragraph 7.03 above.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not Applicable.
Item 8. Exhibits
--------
Exhibit
Number Description
------- -------------------------------------------------------------
4.1 Gold Reserve Inc. 1997 Equity Incentive Plan*
4.2 Restated Articles of Incorporation of GR-Canada, filed
November 20, 1998 (incorporated by reference to Exhibit No.
3.1 to GR-Canada's Registration Statement on Form S-4
(Registration No. 333-68061) filed with the Commission on
November 27, 1998)
4.3 Bylaws of GR-Canada (incorporated by reference to Exhibit No.
3.2 to GR-Canada's Registration Statement on Form S-4
(Registration No. 333-68061) filed with the Commission on
November 27, 1998)
4.4 Rights Agreement, dated as of October 5, 1998, between
GR-Canada and Montreal Trust Company of Canada (incorporated
by reference to Exhibit No. 4.3 to GR-Canada's Registration
Statement on Form S-4 (Registration No. 333-68061) filed with
the Commission on November 27, 1998)
4.5 Form of Certificate for the GR-Canada Class A Shares
(incorporated by reference to Exhibit 4.4 to GR-Canada's
Registration Statement on Form S-4 (Registration No.
333-68061) filed with the Commission on November 27, 1998)
23.1 Consent of Pricewaterhouse Coopers LLP*
24.1 Power of attorney (incorporated by reference to the signature
page of the originally filed Registration Statement on Form
S-8 (Registration No. 333-56495) filed with the Commission on
June 10, 1998)
*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;
(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
Securities Exchange Act of 1934, as amended (the
"Exchange Agent"), 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.
(4) If the Registrant is a foreign private issuer, to file a
post-effective amendment to the Registration Statement
to include any financial statements required by Rule
3-19 of this chapter at the start of any delayed
offering or throughout a continuous offering. Financial
statements and information otherwise required by Section
10(a)(3) of the Securities Act need not be furnished,
provided, that the Registrant includes in the
prospectus, by means of a post-effective amendment,
financial statements required pursuant to this paragraph
(a)(4) and other information necessary to ensure that
all other information in the prospectus is at least as
current as the date of those financial statements.
Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective
amendment need not be filed to include financial
statements and information required by Section 10(a)(3)
of the Securities Act or Rule 3-19 of this chapter if
such financial statements and information are 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 Form F-3.
(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 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.
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 April 1, 1999.
GOLD RESERVE INC.
By: /s/ Rockne J. Timm
------------------------------------
ROCKNE J. TIMM
Chairman of the Board, 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.
Signature Title Date
-------------------------------- ------------------------------------------ ---------------
/s/ Rockne J. Timm Chairman of the Board, President, Chief
-------------------------------- Executive Officer and Director (Principal
ROCKNE J. TIMM Executive Officer) April 1, 1999
* Vice President of Finance and Chief
-------------------------------- Financial Officer (Principal Financial and
ROBERT A. McGUINNESS Accounting Officer) April 1, 1999
*
-------------------------------- Executive Vice President and Director April 1, 1999
A. DOUGLAS BELANGER
*
-------------------------------- Senior Vice President and Director April 1, 1999
JAMES P. GEYER
*
-------------------------------- Director April 1, 1999
JAMES H. COLEMAN
Signature Title Date
-------------------------------- ------------------------------------------ ---------------
*
-------------------------------- Director April 1, 1999
PATRICK D. McCHESNEY
*
-------------------------------- Director April 1, 1999
CHRIS D. MIKKELSEN
*
-------------------------------- Director April 1, 1999
JEAN CHARLES POTVIN
*By: /s/ Rockne J. Timm
--------------------------
ROCKNE J. TIMM
Attorney-in-Fact April 1, 1999
EXHIBIT INDEX
Exhibit
Number Description
------- ---------------------------------------------------------
4.1 Gold Reserve Inc. 1997 Equity Incentive Plan*
4.2 Restated Articles of Incorporation of GR-Canada, filed
November 20, 1998 (incorporated by reference to Exhibit No.
3.1 to GR-Canada's Registration Statement on Form S-4
(Registration No. 333-68061) filed with the Commission on
November 27, 1998)
4.3 Bylaws of GR-Canada (incorporated by reference to Exhibit
No. 3.2 to GR-Canada's Registration Statement on Form S-4
(Registration No. 333-68061) filed with the Commission on
November 27, 1998)
4.4 Rights Agreement, dated as of October 5, 1998, between
GR-Canada and Montreal Trust Company of Canada (incorporated
by reference to Exhibit No. 4.3 to GR-Canada's Registration
Statement on Form S-4 (Registration No. 333-68061) filed
with the Commission on November 27, 1998)
4.5 Form of Certificate for the GR-Canada Class A Shares
(incorporated by reference to Exhibit 4.4 to GR-Canada's
Registration Statement on Form S-4 (Registration No.
333-68061) filed with the Commission on November 27, 1998)
23.1 Consent of Pricewaterhouse Coopers LLP*
24.1 Power of attorney (incorporated by reference to the
signature page of the originally filed Registration
Statement on Form S-8 (Registration No. 333-56495) filed
with the Commission on June 10, 1998)
*Filed herewith.
EXHIBIT 4.1
-----------
First Amended and Restated Gold Reserve Inc.
1997 Equity Incentive Plan
(formerly the Gold Reserve Corporation 1997 Equity Incentive Plan)
SECTION 1. ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN
ESTABLISHMENT. Gold Reserve Inc., a Yukon corporation (the
"Company"), the parent company of Gold Reserve Corporation, a Montana
corporation hereby adopts and assumes the "1997 EQUITY INCENTIVE PLAN"
(the "Plan") originally established by Gold Reserve Corporation, as
amended in this First Amendment and Restatement, for the key
employees, directors and consultants of the Company and its
Subsidiaries. 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 and its Subsidiaries 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, as amended hereby, 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. The
original Plan was effective January 30, 1997.
SECTION 2. DEFINITIONS, CONSTRUCTION
DEFINITIONS. Whenever used herein, the following terms shall have
their respective meanings set forth below:
a) "Act" means the Securities Act (Ontario), 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
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 of persons
acting "jointly or in concert" (as such terms are used in Section
1 and 91 of the Act) becomes the "beneficial owner" (as defined in
Section 90 of 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 U.S. 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 Inc., a Yukon 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.
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 Class A Common Shares of the Company, no par
value 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.
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 of Stock subject
to options previously issued under existing plans of Gold Reserve
Corporation, a wholly owned subsidiary of the Company, that as a
result of forfeiture become subject to reissuance under the terms of
such plans, shall be reissued and administered pursuant to the Plan.
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.
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
original Effective Date.
SECTION 6. OPTION GRANTS
GRANT OF OPTIONS. Subject to Sections 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 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 or a
Subsidiary 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) cashless 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 or a Subsidiary 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 or a Subsidiary 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 Shares issuable upon the exercise of the
Options and if such Shares are 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 provincial securities law, under applicable U.S. federal
securities law, under requirements of any stock exchange upon which
such shares of Stock are then listed and under any U.S. blue sky or
state securities laws applicable to such shares.
TERMINATION DUE TO RETIREMENT. The Option Agreement may provide that
if the employment of the Optionee is terminated due to the Retirement
(as hereinafter defined) of the Optionee, or if the directorship of
the Optionee expires, any then outstanding options under the Plan may
be exercised at any time prior to the earlier of the expiration date
of the Options or twelve (12) months after the date of retirement.
For purposes of the Plan, Retirement shall mean any termination of
employment with the Company occurring after the completion of ten (10)
years of service with the Company and the attainment of age sixty (60)
by the Optionee.
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 or a Subsidiary is as a result of or
caused by the Optionee's theft or embezzlement from the Company or a
Subsidiary, the violation of a material term or condition of his or
her employment, the disclosure by the Optionee of confidential
information of the Company or a Subsidiary, conviction of the Optionee
of a crime of moral turpitude, the Optionee's stealing trade secrets
or intellectual property owned by the Company or a Subsidiary, any act
by the Optionee in competition with the Company or a Subsidiary, 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 or a Subsidiary, 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 or a Subsidiary, and any purported
exercise of an Option by or on behalf of said Optionee shall following
such date shall be of no effect.
INVOLUNTARY TERMINATION OF EMPLOYMENT. Options granted under the Plan
after the Effective Date of this Amended and Restated Plan may be
exercised at any time prior to the earlier of the expiration date of
the Options or within thirty (30) days after the involuntary
termination of employment (as hereinafter defined) of the Optionee
with the Company, but the options may not be exercised for more than
the number of shares, if any, as to which the options were exercisable
by the Optionee immediately prior to such termination of employment,
as determined by reference to the terms and conditions specified at
the time such options were granted. For purposes of the Plan,
involuntary termination of employment shall mean any termination of an
Optionee's employment with the Company by reason of the discharge,
firing or other involuntary termination of an Optionee's employment by
action of the Company other than an involuntary termination for cause
as described in the paragraph above.
VOLUNTARY TERMINATION OF EMPLOYMENT. Options granted under the Plan
after the Effective Date of this Amended and Restated Plan may be
exercised at any time prior to the earlier of the expiration date of
the Options or within ninety (90) days after the voluntary termination
of employment (as hereinafter defined) of the Optionee with the
Company, but the options may not be exercised for more than the number
of shares, if any, as to which the options were exercisable by the
Optionee immediately prior to such termination of employment, as
determined by reference to the terms and conditions specified at the
time such options were granted. For purposes of the Plan "Voluntary
Termination of Employment" shall mean any voluntary termination of
employment with the Company by reason of the Optionee's quitting or
otherwise voluntarily leaving the Company's employ other than a
voluntary termination of employment by reason of Retirement or
voluntary termination of employment constituting a termination for
cause as described above.
TRANSFERABILITY AND EXERCISABILITY 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.
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 cancelled 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
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 fractional 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.
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
provincial, U.S. 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
Inc.'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 Inc."
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 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 or any Subsidiary 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 or any Subsidiary. 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 its Subsidiaries, 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
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 U.S. Exchange Act of 1934, as amended 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 or, if instructed by the Committee or its delegate, the
Subsidiary that employs the Participant an amount equal to the
Canadian or U.S. federal, state and local income taxes and other
amounts as may be required by law to be withheld by the Company or, if
instructed by the Committee or its delegate, the Subsidiary that
employs the Participant 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, or, if instructed by the COMMITTEE
or its delegate, the Subsidiary that employs the Participant, 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.
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 Province
of Ontario without giving effect to the choice of law principles
thereof.
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 U.S. 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 legended to
reflect their status as restricted securities.
Notwithstanding anything contained in the Plan or any agreement to the
contrary, stock issued pursuant to the Plan in reliance on an
exemption from the prospectus requirements of the securities
legislation of a province of Canada may be subject to restrictions on
transfer.
EXHIBIT 23.1
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CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration
statement of Gold Reserve, Inc. on Form S-8 (File No. 333-56495) of
our report on Gold Reserve Corporation, which includes an explanatory
paragraph related to a change in accounting for the 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 as of
December 31, 1997 and 1996, and for the years ended December 31, 1997,
1996 and 1995.
/s/PricewaterhouseCoopers LLP
Spokane, Washington
April 1, 1999
