

	Shares of Common Stock		Exchangeable Shares of Gran Tierra Exchangeco Inc.		Exchangeable Shares of Gran Tierra Goldstrike Inc.
Balance, December 31, 2016	390,807,194		4,812,592		3,387,302
Shares repurchased and canceled	(7,704,381	)	—		—
Exchange of exchangeable shares	2,088,229		(389,816	)	(1,698,413	)
Balance, December 31, 2017	385,191,042		4,422,776		1,688,889
Options exercised	549,189		—		—
Shares repurchased and canceled	(4,772,869	)	—
Exchange of exchangeable shares	6,111,665		(4,422,776	)	(1,688,889	)
Balance, December 31, 2018	387,079,027		—		—
Shares repurchased and canceled	(20,097,471	)	—		—
Balance, December 31, 2019	366,981,556		—		—

The Company’s authorized share capital consists of 595,000,000 shares of capital stock, of which 570,000,000 was designated as Common Stock, par value $0.001 per share and 25,000,000 as Preferred Stock, par value $0.001 per share.

On July 5, 2018, Gran Tierra Exchangeco Inc., a wholly-owned subsidiary of the Company, redeemed all of its outstanding exchangeable shares which were acquired for purchase consideration of one share of Gran Tierra common stock for each exchangeable share. On July 9, 2018, the Company retired and canceled one share of Special A Voting Stock and one share of Special B Voting Stock, which held voting rights in connection with those exchangeable shares. As a result, no shares of Special A Voting Stock and Special B Voting Stock remain outstanding.

The holders of shares of Common Stock are entitled to one vote for each share on all matters submitted to a stockholder vote and are entitled to share in all dividends that the Company’s Board of Directors, in its discretion, declares from legally available funds. The holders of Common Stock have no pre-emptive rights, no conversion rights, and there are no redemption provisions applicable to the shares.

In 2019, the Company implemented a share repurchase program (the “2019 program”) through the facilities of the Toronto Stock Exchange ("TSX") and eligible alternative trading platforms in Canada. Under the 2019 program, the Company is able to purchase at prevailing market prices up to 19,353,951 shares of Common Stock, representing approximately 5% of the issued and outstanding shares of Common Stock as of March 1, 2019. The 2019 program was scheduled to expire on March 12, 2020, or earlier if the 5% share maximum is reached. The 2019 program expired when the 5% share maximum was reached in September 2019.The weighted average price per share under the 2019 program was $1.85 per share. All shares purchased were canceled subsequent to the repurchase.

During the year ended December 31, 2019, the Company repurchased 20,097,471 shares of Common Stock at a weighted average price of $1.87 per share. Of the shares repurchased, 743,520 shares at a weighted average price of $2.34 per share were repurchased under 2018 share purchase program implemented in 2018 with similar terms to that of the 2019 program.

The Company has an equity compensation program in place for its executives, employees and directors. Executives and employees are given equity compensation grants that vest based on a recipient's continued employment and in the case of Performance Share Units (“PSUs”), the number of units that vest is dependent upon the achievement of certain key performance measures. Equity settled awards consist 80% of PSUs and 20% of stock options. The Company’s stocked based compensation awards outstanding as at December 31, 2019, include PSUs, deferred share units (“DSUs”), and stock options.

In accordance with the 2007 Equity Incentive Plan, as amended, the Company’s Board of Directors is authorized to issue options or other rights to acquire shares of the Company’s Common Stock. On June 27, 2012, the shareholders of Gran Tierra approved an amendment to the Company’s 2007 Equity Incentive Plan, which increased the Common Stock available for issuance thereunder from 23,306,100 shares to 39,806,100 shares.



	PSUs		DSUs	Stock Options
	Number of Outstanding Share Units		Number of Outstanding Share Units	Number of Outstanding Stock Options		Weighted Average Exercise Price /Stock Option ($)
Balance, December 31, 2018	9,004,661		684,893	9,034,412		$	3.18
Granted	6,355,214		567,101	2,943,990		2.04
Exercised	(2,725,877	)	—	—		—
Forfeited	(1,262,631	)	—	(1,213,170	)	3.61
Expired	—		—	(152,360	)	5.27
Balance, December 31, 2019	11,371,367		1,251,994	10,612,872		$	2.78
Vested and exercisable, at December 31, 2019				6,469,699		$	3.14
Vested, or expected to vest, at December 31, 2019 through the life of the options				10,445,530		$	2.79

Stock-based compensation expense for the year ended December 31, 2019, was $1.4 million (December 31, 2018 - $8.3 million; December 31, 2017 - $9.8 million) and was primarily recorded in G&A expenses.

At December 31, 2019, there was $6.7 million (December 31, 2018 - $9.2 million) of unrecognized compensation cost related to unvested PSUs and stock options which is expected to be recognized over a weighted average period of 1.7 years. The weighted-average remaining contractual term of options vested, or expected to vest, at December 31, 2019 was 2.3 years.

PSUs entitle the holder to receive, at the option of the Company, either the underlying number of shares of the Company's Common Stock upon vesting of such units or a cash payment equal to the value of the underlying shares. PSUs will cliff vest after three years, subject to the continued employment of the grantee. Upon vesting, the underlying number of Common Shares or the cash payment equivalent to their value may range from zero to 200% of the number of PSU's vested, based on the Company’s performance with respect to the applicable performance targets. As at December 31, 2019, 2.4 million (December 31, 2018 - 2.7 million) of PSU's had vested and will be settled in cash. The performance targets for the PSUs outstanding as at December 31, 2019, were as follows:

The compensation cost of PSUs is subject to adjustment based upon the attainability of these performance targets. No settlement will occur with respect to the portion of the PSU award subject to each performance target for results below the applicable minimum threshold for that target. PSUs in excess of the target number granted will vest and be settled if performance exceeds the targeted performance goals. The Company currently intends to settle the PSUs in cash.

DSUs entitle the holder to receive, either the underlying number of shares of the Company's Common Stock upon vesting of such units or, at the option of the Company, a cash payment equal to the value of the underlying shares. Once a DSU is vested, it is immediately settled. During the year ended December 31, 2019, DSUs were granted to directors and will vest 100% at such time the grantee ceases to be a member of the Board of Directors. The Company currently intends to settle the DSUs in cash.

Each stock option permits the holder to purchase one share of Common Stock at the stated exercise price. The exercise price equals the market price of a share of Common Stock at the time of grant. Stock options generally vest over three years. The term of stock options granted starting in May of 2013 is five years or three months after the grantee’s end of service to the Company, whichever occurs first. Stock options granted prior to May of 2013 continue to have a term of ten years or three months after the end of the grantee’s service to the Company, whichever occurs first.

For the year ended December 31, 2019, no stock options were exercised and no cash proceeds were received (2018 – 549,189 options exercised and shares issued; 2017 – no options exercised and no shares issued).

At December 31, 2019, the weighted average remaining contractual term of outstanding stock options was 2.3 years, (exercisable stock options - 1.3 years).

The fair value of each stock option award is estimated on the date of grant using the Black-Scholes option pricing model based on assumptions noted in the following table:



	Year Ended December 31,
	2019		2018		2017
Dividend yield (per share)	Nil		Nil		Nil
Volatility	48% to 54%		51% to 55%		51% to 53%
Weighted average volatility	51	%	54	%	52	%
Risk-free interest rate	1.49% to 2.54%		2.18% to 3.00%		1.75% to 2.10%
Expected term	4-5 years		4-5 years		4-5 years

The weighted average grant date fair value for options granted in the year ended December 31, 2019, was $0.89 (2018 - $1.15; 2017 - $1.11). The weighted average grant date fair value for options vested in the year ended December 31, 2019, was $1.10 (2018 - $1.23; 2017 - $1.31). The total fair value of stock options vested during year ended December 31, 2019, was $1.9 million (2018 - $2.8 million; 2017 - $2.5 million).



	Year Ended December 31,
	2019		2018		2017
Weighted Average number of common and exchangeable shares outstanding	376,495,306		390,930,453		396,683,593
Shares issuable pursuant to stock options	87,204		4,207,542		—
Shares assumed to be purchased from proceeds of stock options	(74,698	)	(3,832,516	)	—
Shares issuable on conversion of Convertible Notes	—		35,814,393		—
Weighted average number of diluted common and exchange shares outstanding	376,507,812		427,119,872		396,683,593

For the year ended December 31, 2019, 9,465,737 options, on a weighted average basis, (2018 - 5,354,545 options; 2017 - 9,681,304 options) were excluded from the diluted loss per share calculation as the options were anti-dilutive.