Retention Units

The Company maintains the Gold Reserve Director and Employee Retention Plan. Each unit (the “Retention Units”) granted to a participant entitles such person to receive a cash payment equal to the fair market value of one Gold Reserve Class A common share: (1) on the date the unit was granted or (2) on the date any such participant becomes entitled to payment, whichever is greater. Units previously granted under the plan become fully vested upon: (1) collection of Award proceeds from the ICSID arbitration process and/or sale of mining data and our agreement to distribute a substantial majority of the proceeds to our shareholders or, (2) the event of a change of control.  A “Change of Control”, as it relates to the Retention Plan, has the same meaning as defined in the Change of Control agreements. As of June 30, 2017 an aggregate of 1,457,500 units had been granted to directors and executive officers of the Company and 315,000 units had been granted to other employees.  In June 2017, as a result of the collection of proceeds related to the Mining Data, the Retention Units vested and the Company accrued a liability of $7.7 million which was paid out to the participants in late August 2017.