
			Shares of Common Stock
Balance, December 31, 2018			387,079,027
Shares repurchased and cancelled			(20,097,471)
Balance, December 31, 2019 and 2020			366,981,556
Options exercised			162,944

Balance, December 31, 2021			367,144,500

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

The Company has an equity compensation program for its executives, employees, and directors. Executives and employees are given equity compensation grants that vest based on a recipient’s continued employment. In the case of Performance Share Units (“PSUs”), the number of units that vest is dependent upon the achievement of specific key performance measures. Equity

settled awards consist of 80% of PSUs and 20% of stock options. The Company’s stock-based compensation awards outstanding as at December 31, 2021, 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. On June 2, 2021, 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 39,806,100 shares to 54,806,100 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, 2020	23,273,404	4,067,897	15,444,949	$	1.50
Granted	13,428,840	1,642,867	5,889,310	0.80
Exercised	(1,639,926)	—	(162,944)	0.62
Forfeited	(4,697,122)	—	(1,998,558)	1.14
Expired	—	—	(1,324,035)	3.17
Balance, December 31, 2021	30,365,196	5,710,764	17,848,722	$	1.20
Vested and exercisable, at December 31, 2021			7,534,488	$	1.66
Vested, or expected to vest, at December 31, 2021 through the life of the options			17,394,842	$	1.21

For the year ended December 31, 2021, Stock-based compensation expense was $8.4 million (2020 - $1.2 million; 2019 - $1.4 million) and was recorded in G&A expenses.

At December 31, 2021, there was $11.8 million (December 31, 2020 - $5.9 million; December 31, 2019 - $6.7 million) of unrecognized compensation cost related to unvested PSUs and stock options to be recognized over a weighted average period of 1.6 years. The weighted average remaining contractual term of options vested, or expected to vest, at December 31, 2021, is 3.0 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 grantee’s continued employment. Upon vesting, the underlying number of Common Shares or the cash payment equivalent to their value may range from nil 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, 2021, 4.4 million (December

31, 2020 - 2.7 million) of PSUs had vested and will settle in cash. The performance targets for the PSUs outstanding as at December 31, 2021, were as follows:

i.50% of the award is subject to targets relating to the total shareholder return (“TSR”) of the Company against a group of peer companies;

ii.2019 and 2020 awards: 25% of the award is subject to targets relating to net asset value (“NAV”) of the Company per share, and NAV is based on before tax net present value discounted at 10% of proved plus probable reserves;

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. In excess of the target number granted, PSUs 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, 2021, 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 and vest over three years. The term of the stock options granted is five years or three months after the grantee’s end of service to the Company, whichever occurs first.

For the year ended December 31, 2021, 162,944 stock options were exercised, and $0.1 million cash proceeds were received (year ended December 31, 2020, and 2019, no options exercised and no cash proceeds received).

At December 31, 2021 and 2020, the weighted average remaining contractual term for outstanding and exercisable stock options was 3.0 and 3.2 years, respectively, and for exercisable stock options was 2.2 and 1.9 years, respectively.

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,

2021

2020

2019

Dividend yield (per share)

Nil

Volatility

71% to 80%

50% to 69%

48% to 54%

Weighted average volatility

Risk-free interest rate

0.4% to 0.9%

0.3% to 1.7%

1.5% to 2.5%

Expected term

4 - 5 years

5 years

4 - 5 years

The weighted average grant date fair value for options granted in the year ended December 31, 2021 was $0.47 (2020 - $0.29; 2019 - $0.89) per option. The weighted average grant date fair value for options vested in the year ended December 31, 2021 was $0.52 (2020 - $0.79; 2019 - $1.10) per option. The total fair value of stock options vested during year ended December 31, 2021 was $2.1 million (2020 and 2019 - $1.9 million for each year).


	Year Ended December 31,
	2021	2020	2019
Weighted average number of common shares outstanding	367,022,903	366,981,556	376,495,306
Shares issuable pursuant to stock options	1,592,092	—	87,204
Shares assumed to be purchased from proceeds of stock options	(741,606)	—	(74,698)
Weighted average number of diluted common shares outstanding	367,873,389	366,981,556	376,507,812

For the year ended December 31, 2021, 15,559,816 options were excluded from the diluted earnings (loss) per share calculation as the options were anti-dilutive (2020 - all options ; 2019 - 9,465,737 options)