United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
(Amendment No. 1)
(Mark One)
x
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended: December 31, 2011
OR
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to
Commission file number:
001-31819
GOLD RESERVE INC.
(Exact name of Registrant as specified in its charter)
Yukon Territory, Canada NA
(Jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
926 West Sprague Avenue, Suite 200, Spokane, Washington 99201
(Address of principal executive offices) Zip Code
(509) 623-1500
(Registrant’s Telephone, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
|
Name of each exchange on which registered
|
Class A common shares, no par value per share
Preferred share purchase rights
|
The TSX Venture Exchange – Tier 2
NYSE Amex
|
Securities registered or to be registered pursuant to Section 12(g) of the Act: (Title of Class)
None
Indicate by check mark if the registrant is a well-seasoned issuer, as defined in Rule 405 of the Securities Act.
¨
Yes
x
No
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act.
¨
Yes
x
No
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
x
Yes
¨
No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
x
Yes
¨
No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
¨
Accelerated filer
x
Non-accelerated filer
¨
Smaller reporting company
¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
¨
Yes
x
No
Aggregate market value of the voting and non-voting common equity (which consists of Class A Common Shares and Equity Units) held by non-affiliates of the registrant as of June 30, 2011 (the last business day of the registrant’s most recently completed second fiscal quarter), computed by reference to the closing sale price of the registrant’s common stock on the NYSE Amex on such date ($2.53): $82,331,384. As of March 14, 2012, 59,746,472 Class A common shares, no par value per share, and 500,236 Class B common shares, no par value per share, were issued and outstanding.
Table
of Contents
Cautionary
Statement Regarding Forward-Looking Statements
PART
III
Item
10. Directors, Executive Officers and Corporate Governance
Item
11. Executive Compensation
Item
12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholders Matters
Item
13. Certain Relationships and Related Transactions and Director
Independence
Item
14. Principal Accounting Fees and Services
Item
15. Exhibits, Financial Statement Schedules
Signatures
EXPLANATORY NOTE
The
purpose of this Annual Report on Form 10-K/A is to amend Part III, Items 10
through 14 of Gold Reserve Inc.’s ( the “Company”) Annual Report on Form 10-K
for the year ended December 31, 2011, which was filed with the U.S. Securities
and Exchange Commission (the “SEC”) on March 15, 2012 (the “2011 10-K”), to
include information previously omitted from the 2011 10-K in reliance on
General Instruction G to Form 10-K, which provides that registrants may
incorporate by reference certain information from a definitive proxy statement
filed with the SEC within 120 days after the end of the fiscal year.
The
Company determined as of June 30, 2011 (the last business day of its most
recently completed second fiscal quarter), that less than 50 percent of its
outstanding voting securities were directly or indirectly held of record by
residents of the United States. Because the share ownership percentage of
United States residents of the Company is less than 50% and the Company is
organized under the laws of the Yukon Territory, the Company is a “foreign
private issuer” pursuant to Rule 3b-4 under the Securities Exchange Act of
1934, as amended The Company previously reported as a foreign private issuer
for many years prior to its annual report on Form 10-K for the fiscal year
ended December 31, 2009, as during 2009 its shareholder composition changed
such that more than 50 percent of its outstanding voting securities were
directly or indirectly held of record by residents of the United States. Now
that the Company’s United States resident ownership ratio has returned below 50
percent, the Company will return to foreign private issuer reporting for
administrative ease and as a cost-savings measure.
Foreign
private issuers are not required to file definitive proxy statements with the
SEC pursuant to Regulation 14A. Instead, we will furnish a copy of our
Canadian Proxy Statement/Information Circular to the SEC under cover of Form
6-K. Because furnished documents cannot be incorporated by reference, the
reference on the cover of the Annual Report on Form 10-K to the incorporation
by reference of the registrant’s definitive proxy statement into Part III of
the Annual Report has been deleted. Further, for purposes of this Annual Report
on Form 10-K/A, and in accordance with Rule 12b-15 under the Exchange Act,
Items 10 through 14 of our 2011 10-K have been amended and restated in their
entirety. Except as stated herein, this Form 10-K/A does not reflect events
occurring after the filing of the Form 10-K on March 30, 2012 and no attempt
has been made in this Annual Report on Form 10-K/A to modify or update other
disclosures as presented in the 2011 10-K. Accordingly, this Form 10-K/A should
be read in conjunction with our filings with the SEC subsequent to the filing
of the Form 10-K.
In
addition, as required by Rule 12b-15 under the Securities Exchange Act of 1934,
as amended (the “Exchange Act”), new certifications by our principal executive
officer and principal financial officer are filed as exhibits to this Annual
Report on Form 10-K/A.
Cautionary
Statement Regarding Forward-Looking Statements
The information presented or
incorporated by reference in this Annual Report on Form 10-K/A contains both
historical information and forward-looking statements (within the meaning of
Section 27A of the Securities Act, Section 21E of the Exchange Act and the
Securities Act (Ontario)) that may state our intentions, hopes, beliefs,
expectations or predictions for the future.
In this report, forward-looking
statements are necessarily based upon a number of estimates and assumptions
that, while considered reasonable by us at this time, are inherently subject to
significant business, economic and competitive uncertainties and contingencies
that may cause the Company’s actual financial results, performance, or
achievements to be materially different from those expressed or implied herein.
Forward-looking
statements involve risks and uncertainties, as well as assumptions that may
never materialize, prove incorrect or materialize other than as currently
contemplated which could cause our results to differ materially from those
expressed or implied by such forward-looking statements. The words “believe,” “anticipate,”
“expect,” “intend,” “estimate,” “plan,” “may,” “could” and other similar
expressions that are predictions of or indicate future events and future trends
which do not relate to historical matters, identify forward-looking statements.
Any such forward-looking statements are not intended to give any assurances as
to future results. Numerous factors could cause actual results to differ
materially from those in the forward-looking statements as more fully described
in “Part I - Item 1A. Risk Factors” of the 2011 10-K.
Investors are cautioned not to put
undue reliance on forward-looking statements, and investors should not infer
that there has been no change in our affairs since the date of this report that
would warrant any modification of any forward-looking statement made in this
document, other documents filed periodically with securities regulators or
documents presented on our website. All subsequent written and oral
forward-looking statements attributable to us or persons acting on our behalf
are expressly qualified in their entirety by this notice. We disclaim any
intent or obligation to update publicly or otherwise revise any forward-looking
statements or the foregoing list of assumptions or factors, whether as a result
of new information, future events or otherwise, subject to our disclosure
obligations under applicable rules promulgated by the SEC.
PART III
Item 10. Directors,
Executive Officers and Corporate Governance
The following information with respect to the business
experience of the members of the Board of Directors has been supplied by the
director or obtained from our records.
Rockne
J. Timm
, 66, a director since 1984.
Mr. Timm’s principal occupation is Chief Executive Officer of the Company, a
position he has held since 1988. Mr. Timm has also served as President and
Chairman of the Board from 1988 until January 2004. Mr. Timm is Chairman of
the Executive Committee. He has been a director and executive officer of the
Company’s Venezuelan and other subsidiaries since 1992 and he is President and
director of Great Basin Energies, Inc. since 1981 and MGC Ventures, Inc. since
1989. Mr. Timm resides in Spokane, Washington, USA.
Key attributes, experience and skills
: As Chief Executive Officer of the Company since
1988 Mr. Timm has considerable institutional knowledge of the Company and its
activities in Venezuela. He has over 28 years experience in the mining
industry which is a key component of our Board’s collective experience. He has
served as the chief financial officer of an operating gold mining company and
director and chief financial officer of a development stage company which
provides additional experience and skills that are helpful to the Board. It is
these attributes that lead the Board to conclude that Mr. Timm should continue to
serve as a director of the Company.
A. Douglas Belanger
, 58, a director since August 1988. Mr. Belanger’s principal
occupation is President of the Company, a position he has held since January
2004. Mr. Belanger has also served as Executive Vice President from 1988
through January 2004. He has been a director and executive officer of the
Company’s Venezuelan and other subsidiaries since 1992 and is Executive Vice
President and director of Great Basin Energies Inc. since 1984 and MGC
Ventures, Inc. since 1997. Mr. Belanger resides in Spokane, Washington, USA.
Key attributes,
experience and skills
: Mr. Belanger
has extensive experience as a director of public companies and in the areas of
corporate governance and compliance, which includes his history as a gold
mining analyst for two major Canadian investment banks and a policy analyst for
the Canadian federal government. He also has several years’ experience as a
field geologist with various major Canadian mining companies. It is these
attributes that lead the Board to conclude that Mr. Belanger should continue to
serve as a director of the Company.
James P. Geyer
,
60, a director of the Company since June 1997. He held the position of Senior
Vice President of the Company from January 1997 to August of 2010. Mr. Geyer’s
principal occupation is Vice President, North America for Stonegate Agricom
Ltd. and President of Paris Hills Agricom Inc. (a subsidiary of Stonegate
Agricom Ltd.). Mr. Geyer is also a director and member of the environmental,
health and safety committee and audit committee of Thompson Creek Metals
Company Inc. Mr. Geyer resides in Spokane, Washington, USA.
Key attributes, experience and skills
: Mr. Geyer is a mining engineer with over 30 years
in the mining industry with open pit and underground mining experience adding
to the Board’s collective experience. He has served as the vice president of
operations of a gold mining company with responsibility for six producing gold
mines and several development projects. It is these attributes that lead the
Board to conclude that Mr. Geyer should continue to serve as a director of the
Company.
Non-executive Directors
The Board has determined that each of the following
members of the Board satisfy the definition of “independent director” as established
in the NYSE Amex listing standards and SEC rules.
James H. Coleman, Q.C.
, 61, a director of the Company since February 1994
and chairman since 2004. The principal occupation of
Mr. Coleman, Q.C., is as a Partner with the law firm
of Norton Rose LLP, of Calgary. He is also a director
of Great Basin Energies Inc. since 1996, MGC Ventures,
Inc. since 1997; Anterra Energy Inc. since 2007, Salamander Energy Plc. since
2008, Energold Drilling Corp. since 1994, Sulliden Exploration, Inc, since
2005, and Avion Gold Corporation, since January 2011. Mr. Coleman resides in Calgary, Alberta, Canada.
Key attributes, experience and skills
: Mr.
Coleman has been involved in banking, corporate, securities, mining and oil and
gas transactions in Canada, the United States, Europe, Central and South
America, Africa and Asia. He has also been involved in a number of large
divestments and acquisitions, corporate reorganizations and major financings
within the energy sector. As a director of a number of public companies,
including mining and oil and gas companies, Mr. Coleman has chaired various
independent committees of public companies relating to corporate, governance
and securities matters. In addition to his work in the legal and business
sectors, Mr. Coleman is also a member of the Rocky Mountain Mineral Law
Foundation and the Prospectors and Developers Association of Canada.
It is these attributes that lead the Board to conclude
that Mr. Coleman should continue to serve as a director of the Company.
Patrick D. McChesney
, 62, a director since 1988 and Chief Financial Officer of the Company
from 1988 to 1993. He is a director of Great Basin Energies, Inc. since 2002
and MGC Ventures, Inc. since 1989. Mr. McChesney’s principal occupation is
chief financial officer of Foothills Auto Group, an automobile dealership group
based in Spokane, Washington, a position he has held since 2005. Mr. McChesney
resides in Spokane, Washington, USA.
Key attributes, experience and skills
: Mr. McChesney was a certified public accountant and
a financial officer of an operating gold mining company and has been president
and a director of a company that manufactured automated test equipment for the
semiconductor industry. He has been involved in the mining industry since 1983
and has considerable knowledge regarding the Company’s activities in Venezuela and currently serves on the audit and compensation committees. It is these
attributes that lead the Board to conclude that Mr. McChesney should continue
to serve as a director of the Company.
Chris D. Mikkelsen
, 60, a director since 1997. He is a certified public accountant and
since 1976, Mr. Mikkelsen’s principal occupation has been as a principal in the
certified public accounting firm of McDirmid, Mikkelsen & Secrest, P.S.,
based in Spokane, Washington. He has been a director of Great Basin Energies,
Inc. and MGC Ventures, Inc. since 1997. Mr. Mikkelsen resides in Spokane, Washington, USA.
Key attributes, experience and skills
: Mr. Mikkelsen has an extensive background in
providing operational and tax advice to a wide variety of clients and
businesses. He is actively involved as a board member in local charitable and
civic organizations. He has considerable knowledge of the Company and
currently serves on the audit and compensation committees. It is these
attributes that lead the Board to conclude that Mr. Mikkelsen should continue
to serve as a director of the Company.
Jean Charles Potvin
, 58, a director since
November 1993 and currently serves on the audit and compensation committees.
Mr. Potvin’s principal occupation is as director and Chairman of Vaaldiam
Mining Ltd. and as a director and President of Flemish Gold Corp. He is also a
director and President of BRC Minerals Ltd., a company exploring for iron and
gold in northeastern Brazil. Mr. Potvin resides in Toronto, Ontario, Canada.
Key attributes, experience and skills
. Mr. Potvin is also a director and a member of the
audit committee of Azimut Exploration Ltd and Geomega Resources Ltd, both
publicly listed mineral exploration companies. He is also a director of Rukwa
Minerals, a privately held company. Mr. Potvin holds a Bachelor of Science
degree in Geology from Carleton University and an MBA from the University of Ottawa. He spent nearly 14 years as a mining investment analyst for a large
Canadian investment brokerage firm (Burns Fry Ltd., now BMO Nesbitt Burns
Inc.). It is these attributes that lead the Board to conclude that Mr. Potvin
should continue to serve as a director of the Company.
Other Executive Officers
Robert A.
McGuinness, 56 -
Vice
President of Finance, Chief Financial Officer
Mr.
McGuinness’ principal occupation with the Company is as Vice President of
Finance since March 1993 and Chief Financial Officer since June 1993. He also
serves as Vice President of Finance, Chief Financial Officer and Treasurer of
Great Basin Energies, Inc. and MGC Ventures, Inc. Mr. McGuinness resides in Spokane, Washington, USA.
Mary E. Smith, 59
- Vice President of Administration and
Secretary
Ms. Smith’s principal occupation with the
Company is as Vice President of Administration since January 1997 and Secretary
since June 1997. She also serves as Vice President of Administration and
Secretary of Great Basin Energies Inc. and MGC Ventures, Inc. Ms. Smith resides
in Spokane, Washington, USA.
Involvement in Certain Legal Proceedings
Cease Trade Orders or Bankruptcies
Mr. Coleman served as a non-executive
director of McCarthy Corporation Plc. from 1993 to March 2003, which proposed a
voluntary arrangement with its creditors pursuant to the legislation of the United Kingdom.
The following table represents the Directors and the
committees on which they serve.
Director
|
Executive
Committee
|
Audit
Committee
|
Compensation Committee
|
Nominating
Committee
|
Rockne
J. Timm
|
Chair
|
|
|
|
A.
Douglas Belanger
|
X
|
|
|
|
James
P. Geyer
|
|
|
|
|
James H. Coleman, Q.C.
|
X
|
|
|
X
|
Patrick
D. McChesney
|
|
X
|
X
|
|
Chris
D. Mikkelsen
|
|
Chair
|
Chair
|
X
|
Jean
Charles Potvin
|
|
X
|
X
|
X
|
Section 16 Beneficial Ownership Reporting
Compliance
Section 16(a)
of the Exchange Act requires the Company’s directors and executive officers,
and persons who beneficially own more than ten percent (10%) of a registered
class of the Company’s equity securities, to file with the SEC initial reports
of ownership and reports of changes in ownership of the Company’s equity
securities. Officers, directors and greater than 10% stockholders are required
by SEC regulations to furnish the Company with copies of all Section 16(a)
reports they file. Based solely on its review of the copies of such forms
received by it, or written representations from certain reporting persons that
no Forms 5 were required for those persons, the Company believes that all
reporting requirements under Section 16(a) for the fiscal year ended
December 31, 2011, were met in a timely manner by its directors, executive
officers, and greater than ten percent (10%) beneficial owners.
Code
of Conduct and Ethics
The Board has
adopted the Gold Reserve Inc. Code of Conduct and Ethics which can be found at
www.goldreserveinc.com under Investor Relations – Corporate Governance and is
available in print to any Shareholder who requests it from the Company by
writing to us at Gold Reserve Inc., 926 W. Sprague Ave. Suite 200, Spokane, WA 99201, Attn: Investor Relations.
CORPORATE GOVERNANCE
Board
Leadership Structure
Currently,
the positions of Chairman of the Board and Chief Executive Officer are
separate. Our Board does not have a policy on whether these roles should be
separate or combined, but believes that the most effective leadership model for
the Company at this time is to have these roles separated. Our current
Chairman is independent and is responsible for providing leadership to the
Board. In addition, having a separate Chairman and Chief Executive Officer
allows Board members to raise issues without involving senior management,
allows the Chairman to serve as a liaison between the Board and senior
management, and allows the Chief Executive Officer to devote his time and focus
to the management of the Company. The Board retains flexibility to determine
whether these roles should be separate or combined in one individual in the
future.
Risk
Oversight
The
various committees of the Board assist the Board in its responsibility for
oversight of risk management. In particular, the Audit Committee focuses on
major financial risk exposures, the steps management has taken to monitor and
control such risks, and, if appropriate, discusses with the independent auditor
the guidelines and
policies governing the process by
which senior management and the relevant departments of the Company assess and
manage the Company’s financial risk exposure and operational/strategic risk.
We believe this arrangement maximizes the risk oversight benefit while
providing for an appropriate leadership structure.
Communication
with Board Members
Any
Shareholder or other interested party that desires to communicate with the
Board of Directors or any of its specific members, including the chairman or
the non-management directors as a group, should send their communication to the
Secretary, Gold Reserve Inc., 926 W. Sprague Avenue, Suite 200, Spokane, Washington 99201. All such communications will be forwarded to the appropriate
members of the Board.
NOMINATING COMMITTEE
INFORMATION
Nominating
Committee Charter
The
Nominating Committee currently has no written charter.
Membership
and Role of the Nominating Committee
The
Nominating Committee is composed of the following three (3) directors:
James
H. Coleman / Chris D. Mikkelsen / Jean Charles Potvin
The Board had
determined each member of the Nominating Committee satisfies the definition of
“independent director” as established in the NYSE Amex listing standards and
SEC rules.
The Nominating
Committee assists the Board in fulfilling its responsibilities with respect to
the composition of the Board, including recommending candidates for election or
appointment as director of the Company.
In
considering and identifying new candidates for Board nomination, the Board,
where relevant, addresses succession and planning issues; identifies the mix of
expertise and qualities required for the Board; assesses the attributes new
directors should have for the appropriate mix to be maintained; arranges for
each candidate to meet with the Board Chair and the CEO; recommends to the
Board as a whole proposed nominee(s) and arranges for their introduction to as
many Board members as practicable; and encourages diversity in the composition
of the Board.
AUDIT
COMMITTEE INFORMATION
Audit Committee Charter
The Audit Committee of the Board
operates within a written mandate, as approved by the Board, which describes
the Committee’s objectives and responsibilities. The full text of the Audit
Committee Charter, as amended as of April 2011 may be found at www.goldreserveinc.com: investor
relations/governance.
Membership
and Role of the Audit Committee
The
Audit Committee consists of Chris D. Mikkelsen (Chairman), Jean Charles Potvin,
and Patrick D. McChesney. The Board has determined each member of the Audit
Committee to be “independent” and “financially literate” as such terms are
defined under Canadian securities laws. Further, each member of the Audit
Committee satisfies the definition of “independent director” as established in
the NYSE Amex listing standards and SEC rules. In addition, each member of the
Audit Committee is financially literate and the Board has determined that Chris
D. Mikkelsen qualifies as an audit committee “financial expert” as defined by
SEC and NYSE rules. The Board has made these determinations based on the
education and experience of each member of the Committee.
The
Audit Committee met four times during 2011 at which attendance, in person or by
phone, averaged 100%. The Audit Committee’s principal functions are to assist
the Board in fulfilling its oversight responsibilities, and to specifically
review: (i) the integrity of our financial statements; (ii) the independent
auditor’s qualifications and independence; (iii) the performance of our system
of internal audit function and the independent auditor; and (iv) our compliance
with laws and regulations, including disclosure controls and procedures. During
2011, the Audit
Committee worked with management, our
internal auditor and our independent auditor to address Sarbanes-Oxley Section
404 internal control requirements.
The
Audit Committee reviews our financial reporting process on behalf of the Board.
Management has the primary responsibility for the financial statements, the
reporting process and maintaining an effective system of internal control over
financial reporting. Our independent auditors are engaged to audit and express
opinions on the conformity of our financial statements to accounting principles
generally accepted in the United States, and the effectiveness of our internal
control over financial reporting.
AUDIT COMMITTEE REPORT
The
Audit Committee has reviewed and discussed the audited financial statements of
the Company for the year ended December 31, 2011, together with the related
results of management’s assessment of the internal control over financial reporting
with management and the independent auditor. The Audit Committee has discussed
with the independent auditor the matters required to be discussed by Statement
of Auditing Standards No. 61 (Communication with Audit Committees), as amended.
In addition, the Audit Committee has received the written disclosures and the
letter from the independent auditors required by applicable requirements of the
Public Company Accounting Oversight Board for independent auditor
communications with Audit Committees concerning independence, as may be
modified or supplemented, and has discussed with the independent auditor the
independent auditor’s independence. The Audit Committee meets with the internal
auditor and independent auditor, with and without management present, to
discuss the results of their examinations, their evaluations of our internal
controls, and the overall quality of our financial reporting. The Audit
Committee has considered whether the independent auditor’s provision of
non-audit services to us is compatible with the auditor’s independence.
Based
on the Audit Committee’s review and discussions noted above, the Audit
Committee recommended to the Board that our audited financial statements be
included in the Annual Report for the fiscal year ended December 31, 2011, for
filing with the SEC.
THE
AUDIT COMMITTEE
Chris
D. Mikkelsen, Chairman
Jean
Charles Potvin
Patrick
D. McChesney
Item 11. Executive
Compensation
eXECUTIVE COMPENSATION
Compensation Discussion and Analysis
Compensation
Committee
The Company’s compensation program was administered
during 2011, and has and will continue to be administered in 2012, by the
Compensation Committee of the Board (the “Compensation Committee”), composed of
Mr. Mikkelsen, Mr. Potvin and Mr. McChesney. The Compensation Committee met
four times during 2011. While serving on the Compensation Committee, each of
the members attended all four meetings.
The Board had determined that each member of the
Compensation Committee satisfied the definition of “independent director” as
established in the NYSE Amex listing standards and SEC rules. The Compensation
Committee currently has no written charter.
The function of the Compensation Committee is to
evaluate the Company’s performance and the performance of the Chief Executive
Officer, the Chief Financial Officer and each of the next three most highly
compensated executive officers (collectively, the “Named Executive Officers”).
The Compensation Committee approves the cash and equity-based compensation of
the Named Executive Officers and submits such approvals to the full Board for
ratification. The Board has complete discretion over the amount and
composition of each Named Executive Officer’s compensation. Compensation
matters relating to the directors were administered by the full Board.
Compensation matters relating to each Named Executive Officer that is a member
of the Board were administered by the Compensation Committee.
Compensation Program
Philosophy
The goal of the compensation program is to attract,
retain and reward employees and other individuals who contribute to both the
immediate and the long-term success of the Company. Contributions are largely
measured subjectively, and are rewarded through cash and equity-based
compensation.
The following
objectives are considered in setting the compensation programs for the Named
Executive Officers:
·
Set compensation and
incentive levels that reflect competitive market practices for similar
experience and similar size companies; and
·
Encourage stock
holdings to align the interests of the Named Executive Officers with those of
Shareholders.
The Company evaluates the extent to which strategic
and business goals are met and measures individual performance, albeit
subjectively, and the degree to which teamwork and Company objectives are
promoted. The Company strives to achieve a balance between the compensation
paid to a particular individual and the compensation paid to other employees
and executives having similar responsibilities within the Company. The Company
also strives to ensure that each employee understands the components of his or
her salary, and the basis upon which it is determined and adjusted.
There is currently no policy requiring officer or
director ownership of shares of the Company.
Compensation
Elements and Rationale for Pay Mix Decisions
To reward both short and long-term performance in the
compensation program and in furtherance of the Company’s compensation
objectives noted above, the Company’s executive compensation philosophy
includes the following two principles.
Compensation
levels should be competitive
A competitive compensation program is vital to the
Company’s ability to attract and retain qualified senior executives. The
Company regularly assesses peer group data to ensure that the compensation
program is competitive.
Incentive compensation should balance short and
long-term performance
To reinforce the importance of balancing strong
short-term annual results and long-term viability and success, Named Executive
Officers may receive both short and long-term incentives. Short-term incentives
focus on the achievement of certain objectives for the upcoming year, while
stock options and restricted stock awards create a focus on share price
appreciation over the long term.
Compensation Benchmarking
The Company in the past established base salaries by
using an extensive internal survey of base salaries paid to officers of mining
companies with similar experience, similar size mining projects, small to
medium size producing companies and other development stage mining companies
with large mining projects. The companies considered in our internal survey
were:
Copper
Mountain Mining Corporation
|
Gabriel
Resources Ltd.
|
Mines
Management, Inc.
|
NovaGold
Resources Inc.
|
Coeur
d’Alene Mines Corporation
|
Crystallex
International Corporation
|
Hecla
Mining Company
|
Rusoro
Mining Ltd.
|
Revett
Minerals Inc.
|
|
All
of the participants of the internally generated survey are listed on the NYSE
Amex, the Toronto Stock Exchange or TSX-Venture Exchange. The Company believes
that the survey is a very good representation of average salaries paid to
officers of comparable mining companies and a good basis on which to make
comparisons to the Company. The data was obtained from publicly available
information.
Components of
Executive Compensation
The components of executive compensation are as
follows:
Base Salary
.
The administration of the
program requires the Compensation Committee to review annually the base salary
of each Named Executive Officer of the Company and to consider various factors,
including individual performance, experience, length of time in position,
future potential, responsibility, and the executive’s current salary in
relation to the executive salary range at other mining companies. These factors
are considered subjectively and none are accorded a specific weight.
Bonuses.
In addition to base salary, the
Compensation Committee from time-to-time recommends to the Board payments of
discretionary bonuses to executives and selected employees. Such bonuses are
based on the same criteria and determined in a similar fashion as described
above.
Equity
. The Compensation Committee from
time-to-time recommends to the Board grants of options and/or restricted stock
awards to executives and selected employees. These grants are to motivate the
executives and selected employees to achieve goals that are consistent with the
Company’s business strategies, to create Shareholder value and to attract and
retain skilled and talented executives and employees. These factors are
considered subjectively and none are accorded a specific weight when granting
awards. In addition, the Compensation Committee annually determines the
contribution to the KSOP Plan for allocation to individual participants.
Participation in and contributions to the KSOP Plan by individual employees,
including officers, is governed by the terms of the KSOP Plan. See “Equity Incentive
Plans – KSOP Plan”.
Chief
Executive Officer’s Compensation
It is the responsibility of the Compensation Committee
to review and recommend to the Board for ratification the compensation package
for the Chief Executive Officer based on the same factors listed above that are
used in determining the base salaries for the other Named Executive Officers.
The Compensation Committee has not developed specific
quantitative or qualitative performance measures or other specific criteria for
determining the compensation of the Company’s Chief Executive Officer,
primarily because the Company does not yet have a producing mine or other
operations from which such quantitative data can be derived.
The determination of the Chief Executive Officer’s
compensation in 2011 was based on an internal survey of other companies
previously listed, was subjective, and based on the progress of the proceedings
relating to the resolution of the investment dispute with Venezuela, and the pursuit of new corporate opportunities.
Other Named Executive Officers’ Compensation
In determining the compensation of the other Named
Executive Officers, the compensation during 2011 was also based on an internal
survey of other companies, was subjective, and based on the progress of the
proceedings relating to the resolution of the investment dispute with Venezuela, and the pursuit of new corporate opportunities. Generally, the Compensation
Committee considers prior compensation and equity grants when considering
current compensation
.
Change of Control
Agreements
The Company maintains Change of Control Agreements
with each of the Named Executive Officers
which
were implemented by the Board to induce the Named Executive Officers to remain
with the Company and continue their involvement in the then ongoing development
of the Brisas project and more recently, resolution of the investment dispute
with Venezuela and the pursuit of new corporate opportunities. A “Change of
Control” means one or more of the following: the acquisition by any individual,
entity or group, of beneficial ownership of the Company of 25 percent of the
voting power of the outstanding Common Shares; a change in the composition of
the Board that causes less than a majority of the current directors of the
Board to be members of the incoming board; reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company; liquidation or dissolution of the Company; or any other
event the Board reasonably determines constitutes a Change of Control. Change
of Control benefits become payable under the terms of the Change of Control
agreements if, within 12 months following a Change of Control, the employee’s
employment is terminated by the Company or the surviving or successor entity
without cause or the employee voluntarily terminates his/her employment for
reasons specified under the respective Change of Control Agreement. Such reasons
include a substantial alteration in the nature or status of employment
responsibilities or a reduction in compensation or benefits.
The
Board believes these individuals’ familiarity and long-standing involvement
with the Brisas project are important assets to the Company and their continued
employment is important to resolve the dispute with Venezuela. The Board
believes that the loss of their continued services could have a detrimental
impact on the successful outcome of the arbitration, the potential settlement
of the dispute with Venezuela, and the successful sale of assets associated
with the Brisas Project. See “Termination and Change of Control Benefits”.
SUMMARY COMPENSATION TABLE
The amount related to Share Awards and Option Awards
does not necessarily represent the value of the shares when vesting occurs, the
value of the options when exercised, or value the employee may realize from the
sale of the shares.
Name and Principal Position
|
|
Salary
$
|
Cash
Bonus
$
|
Share Awards
(1)
|
Option Awards
(2)
|
All Other
Compensation
(3)
$
|
Total Compensation
$
|
#
|
$
|
#
|
$
|
Rockne J. Timm
Chief Executive Officer
|
2011
|
300,000
|
17,885
|
-
|
-
|
480,000
|
669,023
|
32,499
|
1,019,407
|
2010
|
300,000
|
-
|
100,000
|
181,000
|
-
|
-
|
24,500
|
505,500
|
2009
|
300,000
|
64,643
|
66,000
|
49,500
|
66,000
|
38,991
|
7,350
|
460,484
|
Robert A. McGuinness
Vice President Finance
and CFO
|
2011
|
180,000
|
6,923
|
-
|
-
|
190,000
|
264,821
|
32,499
|
484,243
|
2010
|
180,000
|
-
|
70,000
|
126,700
|
-
|
-
|
24,500
|
331,200
|
2009
|
180,000
|
38,861
|
45,000
|
33,750
|
45,000
|
26,585
|
7,350
|
286,546
|
A. Douglas Belanger
President
|
2011
|
270,000
|
19,212
|
-
|
-
|
455,000
|
634,178
|
32,499
|
955,889
|
2010
|
270,000
|
-
|
95,000
|
171,950
|
-
|
-
|
24,500
|
466,450
|
2009
|
270,000
|
58,179
|
65,000
|
48,750
|
65,000
|
38,400
|
7,350
|
422,679
|
Douglas E. Stewart
Vice President – Project Development
(4)
|
2011
|
106,250
|
25,827
|
-
|
-
|
168,000
|
234,158
|
5,821
|
372,056
|
2010
|
170,000
|
-
|
70,000
|
126,700
|
-
|
-
|
24,500
|
321,200
|
2009
|
170,000
|
25,932
|
40,000
|
30,000
|
40,000
|
23,631
|
7,350
|
256,913
|
Mary E. Smith
Vice President Administration and Secretary
|
2011
|
119,000
|
3,433
|
-
|
-
|
168,000
|
234,158
|
32,499
|
389,090
|
2010
|
119,000
|
-
|
60,000
|
108,600
|
-
|
-
|
19,726
|
247,326
|
2009
|
119,000
|
22,054
|
45,000
|
33,750
|
45,000
|
26,585
|
5,486
|
206,875
|
(1)
For Share Awards, the number represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. No Share Awards were granted to Named Executive Officers during 2011.
(2)
For Option Awards, the number represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The weighted average grant date fair value of options granted in 2011 was calculated at $1.23. For a description of the assumptions used in valuing the awards granted in 2011 and 2009, please see Note 9 to the Consolidated Financial Statements in the Company’s Annual Report for the year ended December 31, 2011.
(3)
Represents the Company’s contribution in the form of cash and stock allocated to the KSOP Plan.
(4)
Mr. Stewart resigned his position of Vice President Project Development effective August 15, 2011.
GRANTS OF PLAN-BASED AWARDS
Outstanding Share Awards and Option Awards
The following table sets forth information concerning each plan-based award granted for the fiscal year ended December 31, 2011 to the Named Executive Officers. See Option Exercises and Stock Vested – Equity Incentive Plan. No shares of restricted stock were granted to Named Executive Officers during 2011.
Name
|
Grant
Date
|
Award
Granted
|
All Other Option Awards:
Number of Securities Underlying Options (#) (1)
|
Exercise or Base Price of Option Awards ($/Sh)
(2)
|
Full Grant Date Fair Value
($) (3)
|
Rockne J. Timm
Chief Executive Officer
|
1/3/2011
|
Stock Options
|
480,000
|
1.82
|
669,023
|
Robert A. McGuinness
Vice President Finance and CFO
|
1/3/2011
|
Stock Options
|
190,000
|
1.82
|
264,821
|
A. Douglas Belanger
President
|
1/3/2011
|
Stock Options
|
455,000
|
1.82
|
634,178
|
Douglas E. Stewart
Former Vice President – Project Development
|
1/3/2011
|
Stock Options
|
168,000
|
1.82
|
234,158
|
Mary E. Smith
Vice President Administration and Secretary
|
1/3/2011
|
Stock Options
|
168,000
|
1.82
|
234,158
|
(1)
Stock options were awarded pursuant to the Equity Incentive Plan. The options vest in increments of 25% each on January 3, 2011, December 1, 2011, December 1, 2012, and December 1, 2013.
(2)
The exercise price is based on the volume weighted average price on the Principal market (NYSE-Amex) for the five trading days immediately preceding the grant date.
(3)
For Full Grant Date Fair Value, the number represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The weighted average grant date fair value of options granted in 2011 was calculated at $1.23
.
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table sets forth information concerning all outstanding stock options to acquire Class A Shares granted to the Named Executive Officers as of December 31, 2011:
|
Option Awards
|
Name
|
Grant
Date
|
Number of securities Underlying Unexercised Options (#) Exercisable
|
Number of securities Underlying Unexercised Options (#)
Un-exercisable
|
Option Exercise Price ($)
|
Option Expiration Date
|
Market Value of Unexercised Options ($) (1)
|
Rockne J. Timm
Chief Executive Officer
|
12/5/2008
|
245,000
|
-
|
0.29
|
12/5/2013
|
614,950
|
3/18/2009
|
66,000
|
-
|
0.73
|
3/18/2014
|
136,620
|
1/3/2011
|
240,000
|
240,000
|
1.82
|
1/3/2016
|
470,400
|
Total
|
|
551,000
|
240,000
|
|
|
1,221,970
|
|
Robert A. McGuinness
Vice President Finance and CFO
|
12/5/2008
|
81,668
|
-
|
0.29
|
12/5/2013
|
204,987
|
3/18/2009
|
45,000
|
-
|
0.73
|
3/18/2014
|
93,150
|
1/3/2011
|
95,000
|
95,000
|
1.82
|
1/3/2016
|
186,200
|
Total
|
|
221,668
|
95,000
|
|
|
484,337
|
|
A. Douglas Belanger
President
|
12/5/2008
|
213,336
|
-
|
0.29
|
12/5/2013
|
535,473
|
3/18/2009
|
65,000
|
-
|
0.73
|
3/18/2014
|
134,550
|
1/3/2011
|
227,500
|
227,500
|
1.82
|
1/3/2016
|
445,900
|
Total
|
|
505,836
|
227,500
|
|
|
1,115,923
|
|
Mary E. Smith
Vice President Administration and Secretary
|
12/5/2008
|
65,000
|
-
|
0.29
|
12/5/2013
|
163,150
|
3/18/2009
|
45,000
|
-
|
0.73
|
3/18/2014
|
93,150
|
1/3/2011
|
84,000
|
84,000
|
1.82
|
1/3/2016
|
164,640
|
Total
|
|
194,000
|
84,000
|
|
|
420,940
|
(1)
The “Market Value of Unexercised Options Exercisable” was calculated by determining the difference between the market value of the securities underlying the option at the end of the financial year and the exercise price of such options. At December 31, 2011, the closing price of the Class A Shares on the NYSE Amex was $2.80.
OPTION EXERCISES AND STOCK VESTED
The following table sets forth information regarding the vesting of previously granted restricted stock and stock options exercised by the Named Executive Officers during 2011.
|
Option Awards
|
Stock Awards
(1)
|
Name
|
Number of Shares Acquired on Exercise (#)
|
Value Realized on Exercise
($)
|
Number of Shares Acquired on Vesting (#)
|
Value Realized on Vesting
($)
|
Rockne J. Timm
Chief Executive Officer
|
-
|
-
|
100,000
|
236,500
|
Robert A. McGuinness
Vice President Finance and CFO
|
-
|
-
|
70,000
|
165,550
|
A. Douglas Belanger
President
|
-
|
-
|
95,000
|
224,675
|
Douglas E. Stewart
Former Vice President – Project Development
|
105,334
|
165,675
|
50,000
|
102,300
|
Mary E. Smith
Vice President Administration and Secretary
|
-
|
-
|
60,000
|
141,900
|
(1)
The shares of restricted stock for Mr. Stewart vested on May 1, 2011 and November 1, 2011. For Messrs. Timm, McGuinness and Belanger and Ms. Smith, the shares vested on June 1, 2011 and December 7, 2011. The value was calculated by multiplying the total number of restricted shares vesting times the closing price of the shares on the NYSE Amex on those dates.
Equity Incentive Plans
The Company presently has two equity incentive plans,
the 1997 Equity Incentive Plan and the 2008 Venezuelan Equity Incentive Plan, as amended and restated (collectively the “Equity
Plans”). The Equity Plans were adopted by the Board for the employees,
officers, directors and consultants of the Company and its subsidiaries and
permit the grant of stock options, which are exercisable for Class A Common
Shares of the Company, as well as restricted Class A Common Shares of the
Company. The Equity Plans were previously approved by shareholders of the
Company, however the 2008 Venezuelan Equity Incentive Plan will not be submitted
to shareholders of the Company for re-approval in 2011 and has since been
suspended with respect to new grants.
The 1997 Equity Incentive Plan:
The following table sets forth certain information
regarding the 1997 Equity Incentive Plan as of December 31, 2011:
Plan Category
|
Number of securities
to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number of securities
remaining available for future issuance under 1997 Equity Incentive Plan
|
1997 Equity Incentive
Plan approved by Shareholders
|
3,526,852
|
$1.26
|
2,427,569
|
Equity compensation
plans not approved by Shareholders
|
-
|
|
-
|
Total
|
3,526,852
|
|
2,427,569
|
As of April 27, 2012, options for the purchase of
5,119,852 Class A Shares remained outstanding under the 1997 Equity Incentive
Plan. Since inception, 4,579,850 shares of restricted stock have been granted
from the 1997 Equity Incentive Plan and no Stock Appreciation Rights (“SARs”)
have been granted. Currently, there are 657,500 shares of restricted stock
issued under the 1997 Equity Incentive Plan that have not yet vested.
The 2008 Venezuelan Equity Incentive Plan:
The following table sets forth certain information
regarding the 2008 Venezuelan Equity Incentive Plan (“Venezuelan Plan”) as of
December 31, 2011:
Plan Category
|
Number of securities
to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average
exercise price of outstanding options, warrants and rights
|
Number of securities
remaining available for future issuance under the Venezuelan Plan
(1)
|
Venezuelan Plan
approved by Shareholders
|
1,658,336
|
$1.75
|
-
|
Equity compensation
plans not approved by Shareholders
|
-
|
-
|
-
|
Total
|
1,658,336
|
|
-
|
(1)
The
Venezuelan Plan
was not submitted to Shareholders for renewal and has been suspended with
respect to new grants.
As of April 27, 2012, options for the purchase of
1,658,336 Class A Shares remained outstanding under the Venezuelan Plan. Since
inception, 271,000 restricted shares have been granted from the Venezuelan Plan
and no SARs have been granted.
The Equity Plans were established to provide
incentives to qualified parties to increase their proprietary interest in the
Company and thereby encourage their continuing association with the Company.
The Equity Plans are administered by the directors of the Company and a
committee established pursuant to the terms of the Plans.
KSOP Plan
The Company’s subsidiary, Gold Reserve
Corporation, maintains a KSOP Plan for the benefit of eligible employees. The
KSOP Plan consists of two components– a salary reduction component (401(k)) and
stock ownership component (ESOP). Eligible employees are those who have been
employed for a period in excess of one year and who have worked at least 1,000
hours during the year in which any allocation is to be made.
Employee contributions to the 401(k) component of the KSOP Plan are
limited in each year to the total amount of salary reduction the employee
elects to defer during the year, which is limited in 2012 to $17,000 ($22,500
limit for participants who are 50 or more years of age, or who turn 50 during
2012).
Employer contributions, stated as a percentage of eligible compensation,
are determined each year by the Board and allocations are made in the form of
Class A Shares or by cash. The number of Class A Shares released for
allocation is determined by multiplying the total eligible compensation by the
contribution percentage approved by the Board and dividing that number by the
average price of the Class A Shares remaining in the KSOP Plan for
distribution. Employer contributions do not represent pension compensation.
The employer contributions are disclosed under “Executive Compensation –
Summary Compensation Table”, under the column “All Other Compensation.” All
contributions, once made to the individual’s account under the KSOP Plan, are
thereafter self-directed.
Total employer and employee annual contributions to an employee
participating in both the 401(k) and ESOP components of the KSOP Plan are
limited (in 2012) to a maximum of $50,000 ($55,500 limit for participants who
are 50 or more years of age or who turn 50 during 2012). The annual dollar
limit is an aggregate limit which applies to all contributions made under this
plan or any other cash or deferral arrangements. For KSOP
Plan year
2012 the Company has adopted a “Safe Harbor” contribution of 3% of eligible
compensation.
Distributions from the KSOP Plan are not permitted before the
participating employee reaches the age of 59 and six months, except in the case
of death, disability, termination of employment by the Company or financial
hardship. The employee stock ownership component of the KSOP Plan is qualified
under Sections 421 and 423 of the U.S. Internal Revenue Code of 1986, as
amended.
Allocated contributions to eligible KSOP Plan participants (11
participants for 2011) for plan years 2011, 2010, and 2009 were $237,919,
$175,174, and $57,292, respectively. Contributions were made in the form of
cash for 2009 and 2010 and a combination of cash and stock for 2011. As of
December 31, 2011, no Class A Shares remained in the KSOP Plan to be allocated
to KSOP Plan participants.
Retention Units
The
Company presently has a Director and Employee Retention Plan (the “Retention
Plan”) for the primary purposes of: (1) attracting and retaining directors,
management and personnel with the training, experiences, and ability to enable
them to make a substantial contribution to the success of the business of the
Company, (2) to motivate participants by means of growth-related incentives to
achieve long range goals, (3) to further the identity of interests of
participants with those of the Company’s shareholders through equity-based
incentive opportunities and (4) to allow each participant to share in the value
of the Company following the grant of retention units.
Under
the Retention Plan, the Board or a committee thereof may grant retention units
(the “Units”) to directors and certain key employees of the Company or its subsidiaries.
Individuals become eligible to participate if the Board or a committee thereof
determines that the individual can assist the Company in achieving corporate
milestones, influence the growth of the Company, or that the individual’s
performance warrants further incentive or reward. Current participants in the
Retention Plan include all directors, officers, and certain other employees,
all of whom have signed award agreements.
The
current vesting of the Units is based upon the occurrence of certain major
corporate milestones: 50% upon successfully financing the Brisas project and
50% upon placing the Brisas project into production. The Units also become
fully vested and payable upon a change of control. The Board has considered,
but has not yet acted upon, alternative vesting provisions for the Units to
more adequately reflect the current business objectives of the Company.
Subject
to a vesting provision, each Unit granted to participating directors and
employees entitles such persons to receive a cash payment equal to the fair
market value of one Class A Share (a) on the date the Unit was granted or (b)
on the date any such participant becomes entitled to payment, whichever is
greater.
No Units were granted to directors, executive
officers, or employees in 2011. Upon Mr. Stewart’s resignation as Vice
President - Project Development, 150,000 Units previously granted to Mr.
Stewart under the Retention Plan were forfeited. As of December 31, 2011, an
aggregate of 1,457,500 unvested Units have been granted to directors and
executive officers; 315,000 Units have been granted to other employees. The
aggregate value of the outstanding awards as of December 31, 2011 was
$7,694,200.
TERMINATION AND
CHANGE OF CONTROL BENEFITS
Termination of Employment, Change in Responsibilities and Employment
Contracts
At this time, there are no written employment
agreements between the Company and the Named Executive Officers.
The Company maintains Change of Control Agreements
with each of the Named Executive Officers, which were implemented by the Board
to induce the Named Executive Officers to remain with the Company in the event
of a change of control. The Board believes these individuals’ familiarity and
long-standing involvement with the Brisas project are important assets to the
Company and their continued employment is important to resolve the dispute with
Venezuela. The Board believes that the loss of their continued services could
have a detrimental impact on the successful outcome of the arbitration, potential
settlement of the dispute, and the successful sale of assets associated with
the Brisas Project.
Existing
Change of Control Arrangements with Executive Officers
Beginning in 2003, the
Company entered into Change of Control Agreements
with each of the Named
Executive Officers and three other employees.
Other than as
disclosed herein, no other executive officers, directors or affiliates of the
Company have Change of Control Agreements with the Company.
A Change of Control means one or more of the following:
the acquisition by any individual, entity or group, of beneficial ownership of
the Company of 25 percent of the voting power of the outstanding Common Shares;
a change in the composition of the Board that causes less than a majority of
the current directors of the Board to be members of the incoming board;
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Company; liquidation or dissolution of
the Company; or any other event the Board reasonably determines constitutes a
Change of Control.
Pursuant to the Change of
Control Agreements, in the event of a Change of Control each participant is
entitled to, among other things, continue employment with the Company and, if
the participant's employment is terminated within 12 months following the
Change of Control for any reason other than termination by the Company for
cause, such participant will be entitled to receive, among other things:
·
An amount equal to 24
times his or her monthly salary (36 times for Mr. Timm and Mr. Belanger),
determined as of the date immediately prior to termination or the Change of
Control, whichever is greater (the Change of Control time period of 24 months
compared to 36 months is based primarily on seniority of position and
responsibility and length of service with the Company);
·
An amount equal to two
years of the Company’s KSOP contributions (based upon the maximum allowable
allocation pursuant to applicable law and the participant's annual salary
immediately prior to his or her termination date or the Change of Control,
whichever is greater);
·
An amount equal to the
aggregate of all bonuses received during the 12 months prior to his or her
termination date, plus any amounts required to be paid in connection with unpaid
vacation time;
·
A payment equal to two
times the monthly premium for maintenance of health, life, accidental death and
dismemberment, and long term disability insurance benefits for a period of 36
months;
·
Cause all equity awards
or equity-based awards (including options and restricted shares) granted to the
participant to become fully vested and unrestricted;
·
At the election of the
participant, the buy-out of the cash value of any unexercised options based
upon the amount by which the weighted average trading price of the Class A
Shares for the last five days preceding the date the participant makes such
election exceeds the exercise price of the options; and
·
A payment equal to the
value of the participant's vested retention units in accordance with the Retention
Plan.
As further discussed in the
following two paragraphs, the participants are entitled to receive certain
"gross-up payments" (that is, an excess parachute gross-up payment
and a deferred compensation gross-up payment) if payments that he or she
receives are subject to the excise tax under Code Section 4999 on excess
parachute payments or the additional tax and interest factor tax under Code
Section 409A on deferred compensation. The intent of these gross-up payments is
to put the participant in the same position, after tax, that he or she would
have been in if the payments that the participant received had not been subject
to the excise and additional taxes.
The Change of Control
Agreements also provide for a gross-up payment if any payment made to or for
the benefit of a participant (“Excess Parachute Payment”) would be subject to
the excise tax imposed by Code Section 4999, or any interest or penalties are
incurred by the participant with respect to such excise tax. The Company will
pay to the participant an additional payment (“Excess Parachute Gross-Up
Payment”) in an amount such that after payment by the participant of all taxes
on the Excess Parachute Gross-Up Payment, the participant retains an amount of
the Excess Parachute Gross-Up Payment equal to the excise tax (and any interest
or penalties) imposed upon the participants Excess Parachute Payment.
The Change of Control
Agreements further provide for a gross-up payment if any payment made to or for
the benefit of a participant (“Deferred Compensation Payment”) would be subject
to the additional tax or additional interest on any underpayment of tax imposed
by Code Section 409A, or any interest or penalties are incurred by the
participant with respect to such additional tax or underpayment of tax. The
Company will pay to the participant an additional payment (“Deferred
Compensation Gross-Up Payment”) in an amount such that after payment by the
participant of all taxes on the Deferred Compensation Gross-Up Payment, the
participant retains an amount of the Deferred Compensation Gross-Up Payment
equal to the additional tax and additional interest on any underpayment of tax
(and any interest or penalties) imposed upon the participant’s Deferred
Compensation Payment.
Payments may be delayed six months
under Code Section 409A. In the event of such a delay, the delayed payments
will be made to a rabbi trust. Upon the completion of the six-month delay
period, the payments held in the rabbi trust will be paid to the participant
plus interest at the prime rate. The Company will pay all costs associated with
the rabbi trust.
Participants would have been entitled to collectively
receive an aggregate of approximately $14,886,636 if a Change of Control had
occurred on December 31, 2011. This amount assumes all persons with Change of
Control Agreements elect the buy-out of their options as described above. For
purposes of such calculation, Gold Reserve assumed the election was made on
December 31, 2011, which resulted in share price of $2.80 per share. This
amount was determined exclusive of any gross-up payments, which payments could
be substantial depending on the tax position of each individual.
The
following table represents the estimated payout for employees (6) holding
Change of Control Agreements at December 31, 2011. These amounts were
determined exclusive of any gross-up payments, which could be substantial
depending on the tax position of each individual.
Name
|
Compensation ($)
(1)
|
Payout of Stock Options ($)
(2)
|
Payout of Retention Units ($)
(3)
|
Total
|
Rockne J. Timm
|
1,362,716
|
1,221,970
|
1,502,000
|
4,086,686
|
Robert A. McGuinness
|
677,779
|
484,337
|
589,000
|
1,751,116
|
A. Douglas Belanger
|
1,307,889
|
1,115,923
|
1,502,000
|
3,925,812
|
Mary E. Smith
|
493,735
|
420,940
|
524,400
|
1,439,075
|
Total Named Executive Officers
|
3,842,119
|
3,243,170
|
4,117,400
|
11,202,689
|
|
|
|
|
|
Other participants
|
822,802
|
1,494,545
|
1,366,800
|
3,684,147
|
Total
|
4,664,921
|
4,737,715
|
5,484,200
|
14,886,836
|
(1)
Represents the estimated payout as of December 31, 2011 of the associated salary, vacation, KSOP contribution, bonus and insurance.
(2)
Represents the payout of stock options.
(3)
Represents the payment associated with the value of the Retention Unit on December 31, 2011 and does not include 500,000 retention units for non-employee directors equal to $2,210,000.
DIRECTOR COMPENSATION
Summary Director Fee Tables
During 2011, the Board agreed to pay $36,000 to each non-employee director in quarterly installments of $9,000 per quarter, payable on April 15, 2011, July 15, 2011, October 14, 2011, and January 13, 2012. In addition, they were granted 36,000 Class A Shares, to vest in installments of 9,000 each on April 15, 2011, July 15, 2011, October 14, 2011 and January 13, 2012. Mr. Coleman received $101,171 for his role as Chairman.
The amount related to Share Awards and Option Awards does not necessarily represent the value of the shares when vesting occurs, the value of the options when exercised, or value the director may realize from the sale of the shares.
|
Fees Earned or Paid in Cash
|
Share Awards
(4)
|
Option Awards
(5)
|
Total Compensation
|
Name
|
$
|
Director
$
(3)
|
#
|
$
|
#
|
$
|
$
|
James H. Coleman
(1)
|
101,171
|
36,000
|
36,000
|
62,280
|
120,000
|
167,256
|
366,707
|
James P. Geyer
(2)
|
4,687
|
36,000
|
36,000
|
62,280
|
120,000
|
167,256
|
270,223
|
Patrick D. McChesney
|
-
|
36,000
|
36,000
|
62,280
|
120,000
|
167,256
|
265,536
|
Chris D. Mikkelsen
|
-
|
36,000
|
36,000
|
62,280
|
120,000
|
167,256
|
265,536
|
Jean Charles Potvin
|
-
|
36,000
|
36,000
|
62,280
|
120,000
|
167,256
|
265,536
|
(1)
Represents cash fees earned as Chairman during the year.
(2) Represents fees for consulting services.
(3) Represents cash fees granted as director during the year.
(4) For Share Awards, the number represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The value was computed by multiplying the Share Award times the grant date fair value of $1.73 per share, the price of the Common Shares on the grant date of February 17, 2011.
(5) For Option Awards, the number represents the aggregate grant date fair value computed in accordance with FASB ASC Topic 718. The weighted average grant date fair value of options granted in 2011 was calculated at $1.23.
Directors of the Company received no additional compensation for serving on Board committees or for attendance at the Board or committee meetings.
Unrelated to his director services, the Company has entered into an arrangement with Mr. Geyer to provide consulting services on an as needed basis at a fixed rate of $1,250 per day, charged on an hourly basis, with no set minimum or maximum number of hours. During 2011 Mr. Geyer was paid $4,687.50 for consulting services.
The following
table sets forth information concerning all outstanding stock options to
acquire Class A Shares and unvested restricted shares granted to the Directors
as of December 31, 2011:
|
Option Awards
|
Stock Awards
|
Name
|
Grant
Date
|
Number of securities Underlying
Unexercised Options (#) Exercisable
|
Number of securities Underlying
Unexercised Options (#)
Un-exercisable
|
Option Exercise Price ($)
|
Option Expiration Date
|
Market Value of Unexercised Options ($)
(1)
|
Number of Shares or Units of Stock That
Have Not Vested (#) (2)
|
Market Value of Shares or Units of
Stock That Have Not Vested ($) (3)
|
James H. Coleman
|
12/5/2008
|
53,336
|
-
|
0.29
|
12/5/2013
|
133,873
|
-
|
-
|
3/18/2009
|
35,000
|
-
|
0.73
|
3/18/2014
|
72,450
|
-
|
-
|
1/3/2011
|
60,000
|
60,000
|
1.82
|
1/3/2016
|
117,600
|
-
|
-
|
2/17/2011
|
-
|
-
|
|
|
-
|
9,000
|
25,200
|
Total
|
|
148,336
|
60,000
|
|
|
323,923
|
9,000
|
25,200
|
|
Chris D. Mikkelsen
|
12/5/2008
|
53,336
|
-
|
0.29
|
12/5/2013
|
133,873
|
-
|
-
|
3/18/2009
|
35,000
|
-
|
0.73
|
3/18/2014
|
72,450
|
-
|
-
|
1/3/2011
|
60,000
|
60,000
|
1.82
|
1/3/2016
|
117,600
|
-
|
-
|
2/17/2011
|
-
|
-
|
|
|
-
|
9,000
|
25,200
|
Total
|
|
148,336
|
60,000
|
|
|
323,923
|
9,000
|
25,200
|
|
Patrick D. McChesney
|
12/5/2008
|
53,336
|
-
|
0.29
|
12/5/2013
|
133,873
|
-
|
-
|
3/18/2009
|
35,000
|
-
|
0.73
|
3/18/2014
|
72,450
|
-
|
-
|
1/3/2011
|
60,000
|
60,000
|
1.82
|
1/3/2016
|
117,600
|
-
|
-
|
2/17/2011
|
-
|
-
|
|
|
-
|
9,000
|
25,200
|
Total
|
|
148,336
|
60,000
|
|
|
323,923
|
9,000
|
25,200
|
|
J.C. Potvin
|
12/5/2008
|
53,336
|
-
|
0.29
|
12/5/2013
|
133,873
|
-
|
-
|
3/18/2009
|
35,000
|
-
|
0.73
|
3/18/2014
|
72,450
|
-
|
-
|
1/3/2011
|
60,000
|
60,000
|
1.82
|
1/3/2016
|
117,600
|
-
|
-
|
2/17/2011
|
-
|
-
|
|
|
-
|
9,000
|
25,200
|
Total
|
|
148,336
|
60,000
|
|
|
323,923
|
9,000
|
25,200
|
|
James P. Geyer
|
12/5/2008
|
83,336
|
-
|
0.29
|
12/5/2013
|
209,173
|
-
|
-
|
3/18/2009
|
62,500
|
-
|
0.73
|
3/18/2014
|
129,375
|
-
|
-
|
1/3/2011
|
60,000
|
60,000
|
1.82
|
1/3/2016
|
117,600
|
-
|
-
|
2/17/2011
|
-
|
-
|
|
|
-
|
9,000
|
25,200
|
Total
|
|
205,836
|
60,000
|
|
|
456,148
|
9,000
|
25,200
|
(1)
The “Market Value of Unexercised
Options” was calculated by determining the difference between the market value
of the securities underlying the option at the end of the financial year and
the exercise price of such options. At December 31, 2011, the closing price of
the Class A Shares on the NYSE Amex was $2.80.
(2)
Represents the number of unvested
restricted shares at December 31, 2011.
(3)
The “Market or payout value” was
calculated by multiplying the total number of unvested restricted shares times
$2.80, the closing price of the Class A Shares on the NYSE Amex on December 31,
2011.
Directors and Officers Insurance
The Company carries directors and officers’ liability
insurance which is subject to a total aggregate limit of $20,000,000 and
deductibles of up to $250,000 for each claim. The annual premium for the latest
policy period was $284,800.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The
Compensation Committee is currently comprised of Messrs. McChesney, Mikkelsen
and Potvin. The Compensation Committee is responsible for establishing and
administering the compensation philosophy, policies, and plans for the Company’s
non-employee directors and executive officers.
The
Compensation Committee hereby reports as follows:
1.
The Compensation Committee has
reviewed and discussed the “Compensation Discussion and Analysis” with
management; and
2.
Based upon such review, the
related discussions and such other matters deemed relevant and appropriate by
the Compensation Committee, the Compensation Committee has recommended to the
Board that the “Compensation Discussion and Analysis” be included in this
Circular to be delivered to Shareholders.
Report
submitted by Compensation Committee of the Board
Chris D. Mikkelsen
Jean Charles Potvin
Patrick D. McChesney
Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Stockholders
Matters
Security Ownership of Management
The following table discloses the number
and percentage of the Common Shares beneficially owned by each director and
executive officer named in the Circular and by all directors and officers as a
group, as of April 27, 2012.
Name of Beneficial Owner
|
Amount
(1)
|
Percent of Class
|
Rockne J. Timm
(2) (3)
Washington, USA
Chief Executive Officer and Director
|
1,976,624
|
3.2%
|
A. Douglas Belanger
(2) (3)
Washington, USA
President and Director
|
2,144,071
|
3.5%
|
James P. Geyer
Washington, USA
Director
|
617,037
|
1.0%
|
James H.
Coleman, Q.C.
(2) (3)
Alberta, Canada
Non-Executive
Chairman and Director
|
469,986
|
*
|
Patrick D. McChesney
(2) (3)
Washington, USA
Director
|
319,093
|
*
|
Chris D. Mikkelsen
(2) (3)
Washington, USA
Director
|
606,977
|
1.0%
|
Jean Charles
Potvin
Ontario, Canada
Director
|
443,540
|
*
|
Robert A. McGuinness
(2)
(3)
Washington, USA
Vice President Finance and
CFO
|
480,919
|
*
|
Mary E. Smith
(2) (3)
Washington, USA
Vice President
Administration and Secretary
|
435,647
|
*
|
Directors and officers as a
group
|
7,493,894
|
11.9%
|
*Indicates less than 1%
(1)
Includes Common Shares issuable pursuant to options exercisable as of
April 27, 2012 or exercisable within 60 days of April 27, 2012 as follows: Mr.
Timm 684,960; Mr. Belanger 633,676; Mr. Geyer 236,436; Mr. Coleman 178,936; Mr.
McChesney 178,936; Mr. Mikkelsen 178,936; Mr. Potvin 178,936; Mr. McGuinness
259,748; and Ms. Smith 230,720. These numbers also include unvested, restricted
shares held that carry full voting rights as follows: Mr. Timm 100,000 shares;
Mr. Belanger 100,000 shares; Mr. Geyer 27,000 shares; Mr. Coleman 27,000
shares; Mr. McChesney 27,000 shares;
Mr. Mikkelsen
27,000 shares; Mr. Potvin 27,000 shares; Mr. McGuinness 75,000 shares; and Ms.
Smith 60,000 shares.
The number includes
direct ownership of Common Shares as follows: Mr. Timm 1,123,164 shares; Mr.
Belanger 1,410,395 shares; Mr. Geyer 353,601 shares; Mr. Coleman 264,050
shares; Mr. McChesney 113,157 shares; Mr. Mikkelsen 401,041 shares; Mr. Potvin 237,604 shares; Mr. McGuinness 146,171
shares; and Ms. Smith 144,927 shares. The amount for Mr. Timm also includes
indirect beneficial ownership of 68,500 shares owned by his daughter and
grandchildren.
(2)
Messrs. Timm, Belanger, Coleman, McChesney, Mikkelsen, McGuinness, and
Ms. Smith are directors and/or officers of Great Basin Energies, Inc., which
owns 491,192 Common Shares, or 0.8% of the outstanding Common Shares. The
foregoing individuals beneficially own 18%, 11.7%, 4.5%, 3%, 2.6%, 1.5%, and
1.5%, respectively, of the outstanding common shares of Great Basin Energies,
Inc. and may be deemed indirectly to have an interest in the Company through
their respective management positions and/or ownership interests in Great Basin
Energies, Inc. Each of the foregoing individuals disclaims any beneficial
ownership of the Common Shares owned by Great Basin Energies, Inc. and such
Common Shares are not included in this total.
(3)
Messrs. Timm, Belanger, Coleman, McChesney, Mikkelsen, McGuinness, and
Ms. Smith are directors and/or officers of MGC Ventures, Inc., which owns
258,083 Common Shares, or 0.4% of the outstanding Common Shares. The foregoing
individuals beneficially own 18.9%, 19.1%, 7.7%, 5.9%, 4.2%, 2.1%, and 1.8%,
respectively, of the outstanding common shares of MGC Ventures, Inc. and may be
deemed indirectly to have an interest in the Company through their respective
management positions and/or ownership interests in MGC Ventures, Inc. Each of
the foregoing individuals disclaims any beneficial ownership of the Common
Shares owned by MGC Ventures, Inc. and such Common Shares are not included in
this total.
Security Ownership of Certain Beneficial Owners
To the knowledge of the directors and
executive officers of the Company, as of April 27, 2012, the only persons,
firms or corporations that beneficially owned, directly or indirectly, or
exercised control or direction over more than 5% of the voting rights attached
to the Common Shares were:
Shareholder Name and
Address
|
Number of Common
Shares Held
|
Percentage of Common
Shares Issued
(3)
|
|
West Face Capital, Inc.
2 Bloor Street East, Suite 810
P.O. Box 85
Toronto, Ontario M4W 1A8
|
9,630,000
(1)
|
16.0%
|
Steelhead Partners, LLC
1301 First Avenue, Suite 201
Seattle, WA 98101
|
11,707,979
(2)
|
19.4%
|
|
(1)
|
Based
on Schedule 13D/A filed by West Face Capital, Inc. with the Securities and
Exchange Commission (“SEC”) on June 30, 2010. West Face Capital, Inc.
reports an additional 1,754,509 shares related to our convertible notes that
it holds as being beneficially owned for purposes of its Schedule 13D/A.
However, as the Company has the option to deliver cash for any such
convertible notes, we do not include that number in this table.
|
(2)
|
The
number of Common Shares held is based on Schedule 13G filed by Steelhead
Partners, LLC filed with the SEC on February 9, 2012. Steelhead Partners, LLC
reports an additional 7,555,969 shares related to our convertible notes. As
the Company has the option to deliver cash for any such convertible notes,
these shares are not considered as being beneficially owned and therefore are
not included in this table.
|
(3)
|
Based
on the number of shares outstanding on April 19, 2012.
|
|
|
|
|
Securities Authorized for Issuance Under Equity
Compensation Plans
The Company currently has two equity incentive plans:
the 1997 Equity Incentive Plan, as amended and restated, and the 2008
Venezuelan Equity Incentive Plan, as amended and restated (collectively the “Equity
Plans”). The Equity Plans were adopted by the Board for the employees,
officers, directors and consultants of the Company and its subsidiaries and
permit the grant of stock options, which are exercisable for Class A Common
Shares of the Company, as well as restricted Class A Common Shares of the
Company. The Equity Plans were previously approved by shareholders of the
Company, however the 2008 Venezuelan Equity Incentive Plan was not submitted to
shareholders of the Company for re-approval in 2011 and has since been
suspended with respect to new grants.
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
|
Weighted-average exercise price of outstanding options, warrants and rights
|
Number of securities remaining available for future issuance under 1997 Equity Incentive Plan
|
1997 Equity Incentive Plan approved by Shareholders
|
3,526,852
|
$1.26
|
2,427,569
|
Venezuelan Plan approved by Shareholders
|
1,658,336
|
$1.75
|
-
|
Total
|
3,526,852
|
|
2,427,569
|
As of April 27, 2012, options for the purchase of 5,119,852 Class A Shares remained outstanding under
the 1997 Equity Incentive Plan. Since inception, 4,579,850 shares of restricted stock have been granted from the 1997 Equity Incentive Plan and no Stock Appreciation Rights (“SARs”) have been granted. Currently, there are 657,500 shares of restricted stock issued under the 1997 Equity Incentive Plan that have not yet vested. The Venezuelan Plan was not submitted to Shareholders for renewal and has been suspended with respect to new grants.
Item 13. Certain Relationships and Related Transactions and Director Independence
INDEBTEDNESS OF DIRECTORS, EXECUTIVE OFFICERS AND SENIOR OFFICERS OTHER THAN
SECURITIES
PURCHASE PROGRAMS
No director, executive officer or senior officer, or associate or affiliate of any such director, executive officer or senior officer, is or at any time since the beginning of the most recently completed financial year of the Company was indebted to the Company.
RELATED PERSON TRANSACTIONS
None of the directors, officers of the Company, nor any person or corporation owning more than 5% of any class of voting securities of the Company, nor any associates or affiliates of any of them, nor any other informed person, had or has any material interest in any transaction since the commencement of the Company’s last financial year or in any proposed transaction which has materially affected or would materially affect the Company or any of its subsidiaries, other than noted below.
MGC Ventures, Inc.
Messrs. Timm, Belanger, Coleman, McGuinness, McChesney, and Mikkelsen and Ms. Smith are also officers and/or directors and shareholders of MGC Ventures, Inc.; Mr. Geyer and Mr. Potvin are also shareholders of MGC Ventures, Inc. MGC Ventures, Inc. owned 258,083 Common Shares at December 31, 2011. During the last three years, the Company sublet a portion of its office space to MGC Ventures for $6,000 per year.
Great Basin Energies, Inc.
Messrs. Timm, Belanger, Coleman, McGuinness, McChesney, and Mikkelsen and Ms. Smith are also officers and/or directors and shareholders of Great Basin Energies, Inc.; Mr. Geyer and Mr. Potvin are also shareholders of Great Basin Energies, Inc. Great Basin owned 491,192 Common Shares of the Company at December 31, 2011. During the last three years, the Company sublet a portion of its office space to Great Basin for $6,000 per year.
Policies and Procedures Regarding Related Person Transactions
The Company has adopted a Related Person Transaction Approval Policy that is administered by the Board. The policy applies to any transaction or series of transactions in which the Company or a subsidiary is a participant, the amount involved exceeds $120,000, and a related person has a direct or indirect material interest. Under the Policy, Company management determines whether a transaction requires review by the Board, and transactions requiring review are referred to the Board for approval, ratification or other action. Based on its consideration of all of the relevant facts and circumstances, the Board decides whether or not to approve such transactions and approves only those transactions that are in the best interests of the Company. If the Company becomes aware of an existing
transaction with a
related person that has not been approved under this Policy, the matter is
referred to the Board. The Board then evaluates all options available,
including ratification, revision or termination of such transaction.
Item 14. Principal
Accounting Fees and Services
External Auditor Service Fees
Fees paid to the Company’s independent external
auditor, PricewaterhouseCoopers LLP, for the fiscal years ended December 31,
2011 and 2010 are detailed in the following table:
Fee Category
|
Year Ended 2011
|
Year Ended 2010
|
Audit
(1)
|
$99,966
|
$77,655
|
Audit
related
(2)
|
26,286
|
28,496
|
Tax
(3)
|
8,007
|
8,083
|
All
other fees
|
2,066
|
-
|
Total
|
$136,325
|
$114,234
|
All fees for
services performed by the Company’s external auditors during 2011 were
pre-approved by the Audit Committee.
(1) Audit fees were for professional
services rendered by PricewaterhouseCoopers LLP for the audit of the Company’s
annual financial statements.
(2) Audit-related fees were for the
review of the Company’s quarterly financial statements and services provided in
respect of other regulatory-required auditor attest functions associated with
government audit reports, registration statements, prospectuses, periodic
reports and other documents filed with securities regulatory authorities or
other documents issued in connection with securities offerings.
(3) Tax fees were for services outside
of the audit scope and represented consultations for tax compliance and
advisory services relating to common forms of domestic and international
taxation.
Pre-approval Policies and Procedures
The Company’s Audit Committee has adopted policies and
procedures for the pre-approval of services performed by the Company’s external
auditors, with the objective of maintaining the independence of the external
auditors. The Company’s policy requires that the Audit Committee pre-approve
all audit, audit-related, tax and other permissible non-audit services to be
performed by the external auditors, including all engagements of the external
auditors with respect to the Company’s subsidiaries. Prior approval of
engagements for services other than the annual audit may, as required, be
approved by the Chair of the Committee with the provision that such approvals
be brought before the full Committee at its next regular meeting. The Company’s
policy sets out the details of the permissible non-audit services consistent
with the independence requirements of the United States Sarbanes-Oxley Act of
2002 and the Canadian independence standards for auditors. The Chief Financial
Officer presents the details of any proposed assignments of the external
auditor for consideration by the Audit Committee. The procedures do not include
delegation of the Audit Committee’s responsibilities to management of the
Company.
Item 15. Exhibits and Financial Statement Schedules
(a) The
following documents are filed as part of this report or incorporated by
reference:
1. No financial
statements are filed with this amended report on Form 10-K.
2. All
financial statement schedules called for by Form 10-K are omitted because they
are inapplicable.
3. The exhibits of the
Company listed below under Item 15(b).
(b)
Exhibits.
Exhibit
Number Exhibit
31.1 Certificate
of Gold Reserve Inc. Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*
31.2 Certificate
of Gold Reserve Inc. Vice President-Finance pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002*
SIGNATURES
Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
GOLD RESERVE INC.
By:
/s/ Rockne J. Timm
Rockne J. Timm
Chief Executive Officer
April 30, 2012
EXHIBIT 31.1
Rule 13a-14(a) / 15d-14(a)
Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
I, Rockne J. Timm, Chief
Executive Officer, certify that:
1.
I
have reviewed this Amendment to the Annual Report on Form 10-K of Gold Reserve
Inc.; and
2. Based on my knowledge, this report does
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report.
April 30, 2012 /s/
Rockne J. Timm
Rockne
J. Timm
Chief
Executive Officer
EXHIBIT 31.2
Rule 13a-14(a) / 15d-14(a)
Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
I, Robert A. McGuinness,
Chief Financial Officer, certify that:
1.
I
have reviewed this Amendment to the Annual Report on Form 10-K of Gold Reserve
Inc.; and
2. Based on my knowledge, this report does
not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under
which such statements were made, not misleading with respect to the period
covered by this report;
April 30, 2012 /s/
Robert A. McGuinness
Robert A. McGuinness
Chief Financial Officer
Gold Reserve (AMEX:GRZ)
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