Share Capital | Share Capital The Company’s authorized share capital consists of 595,000,002 shares of capital stock, of which 570 million are designated as Common Stock, par value $0.001 per share, 25 million are designated as Preferred Stock, par value $0.001 per share, and two shares are designated as special voting stock, par value $0.001 per share. As at December 31, 2015 , outstanding share capital consists of 273,442,799 shares of Common Stock of the Company, 4,933,177 exchangeable shares of Gran Tierra Exchangeco Inc., (the "Exchangeco exchangeable shares") and 3,638,889 exchangeable shares of Gran Tierra Goldstrike Inc. (the "Goldstrike exchangeable shares"). The Exchangeco exchangeable shares were issued upon the acquisition of Solana. The Goldstrike exchangeable shares were issued upon the business combination between Gran Tierra Energy Inc., an Alberta corporation, and Goldstrike, Inc., which is now the Company. The redemption date for the Exchangeco exchangeable shares and the Goldstrike exchangeable shares is a date to be established by the applicable Board of Directors. On July 22, 2015, the Company announced that it intended to implement a new share repurchase program (the “2015 Program”) through the facilities of the Toronto Stock Exchange ("TSX"), the NYSE MKT and eligible alternative trading platforms in Canada and the United States. The Company received regulatory approval from the TSX to commence the 2015 Program on July 27, 2015. The Company is able to purchase at prevailing market prices up to 13,831,866 shares of Common Stock, representing 4.98% of the issued and outstanding shares of Common Stock as of July 21, 2015. Shares purchased pursuant to the 2015 Program will be canceled. The 2015 Program will expire on July 29, 2016, or earlier if the 4.98% share maximum is reached. The 2015 Program may be terminated by the Company at any time, subject to compliance with regulatory requirements. As such, there can be no assurance regarding the total number of shares that may be repurchased under the 2015 Program. During 2015, the Company repurchased 4.6 million shares at an average price of $2.19 for total proceeds of $10.0 million . Shares of Common Stock Exchangeable Shares of Gran Tierra Exchangeco Inc. Exchangeable Shares of Gran Tierra Goldstrike Inc. Balance, December 31, 2014 276,072,351 5,595,118 4,524,627 Options exercised 390,000 — — Shares repurchased and canceled (4,567,136 ) — — Exchange of exchangeable shares 1,547,595 (661,857 ) (885,738 ) Shares canceled (11 ) (84 ) — Balance, December 31, 2015 273,442,799 4,933,177 3,638,889 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. Holders of exchangeable shares have substantially the same rights as holders of shares of Common Stock. Each exchangeable share is exchangeable into one share of Common Stock of the Company. Restricted Stock Units and Stock Options In accordance with the 2007 Equity Incentive Plan, 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. The Company grants time-vested RSUs to certain officers, employees and consultants. RSUs 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 shares or a cash payment equal to the value of the underlying shares. The Company's practice is to settle RSUs in cash. Additionally, the Company grants options to purchase shares of Common Stock to certain directors, officers, employees and consultants. Each option permits the holder to purchase one share of Common Stock at the stated exercise price. At the time of grant, the exercise price equals the market price. Options and RSUs generally vest over three years. The Company does not expect to repurchase any shares in the open market to settle any such exercises. The term of options granted starting May 2013 is five years or three months after the grantee’s end of service to the Company, whichever occurs first. Options granted prior to May 2013 continue to have a term of ten years or three months after the grantee’s end of service to the Company, whichever occurs first. Once an RSU is vested, it is immediately settled and considered to be at the end of its term. 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, 2015 2014 2013 Dividend yield (per share) Nil Nil Nil Volatility 46% to 50% 39% to 42% 42% to 54% Weighted average volatility 48 % 41 % 53 % Risk-free interest rate 1.20% to 1.68% 0.78% to 1.45% 0.3% to 0.7% Expected term 4-5 years 4-5 years 4-5 years The following table provides information about RSU and stock option activity for the year ended December 31, 2015 : RSUs Options Number of Outstanding Share Units Number of Outstanding Options Weighted Average Exercise Price $/Option Balance, December 31, 2014 1,236,963 13,790,220 $ 5.93 Granted 1,041,450 5,346,260 3.08 Exercised (531,012 ) (390,000 ) 1.85 Forfeited (731,944 ) (1,394,445 ) (5.63 ) Expired — (4,500,478 ) (6.78 ) Balance, December 31, 2015 1,015,457 12,851,557 $ 4.60 Exercisable, at December 31, 2015 7,784,678 $ 5.17 Vested, or expected to vest, at December 31, 2015, through the life of the options 12,494,309 $ 4.63 For the year ended December 31, 2015 , 390,000 shares of Common Stock were issued for cash proceeds of $0.7 million upon the exercise of 390,000 stock options ( 2014 – 3,029,853 ; 2013 – 1,306,317 ). For the year ended December 31, 2015 , the Company paid $1.7 million to cash settle RSUs ( 2014 - $3.4 million and 2013 - $ nil ). At December 31, 2015 , the weighted average remaining contractual term of outstanding stock options was 3.3 years and of exercisable stock options was 2.7 years. The weighted average grant date fair value for options granted in the year ended December 31, 2015 , was $1.24 ( 2014 - $2.47 ; 2013 - $2.62 ). The weighted average grant date fair value for options vested in the year ended December 31, 2015 , was $2.38 ( 2014 - $3.63 ; 2013 - $3.94 ). The total fair value of stock options vested during year ended December 31, 2015 , was $6.8 million ( 2014 - $12.4 million ; 2013 - $12.4 million ). The amounts recognized for stock-based compensation were as follows: (Thousands of U.S. Dollars) Year Ended December 31, 2015 2014 2013 Compensation costs for stock options $ 2,263 $ 6,976 $ 8,418 Compensation costs for RSUs 629 2,559 2,936 2,892 9,535 11,354 Less: Stock-based compensation costs capitalized (159 ) (1,815 ) (2,436 ) Stock-based compensation costs expensed $ 2,733 $ 7,720 $ 8,918 At December 31, 2015 , there was $3.9 million ( December 31, 2014 - $4.8 million ) of unrecognized compensation cost related to unvested stock options and RSUs which is expected to be recognized over a weighted average period of 1.5 years. The weighted-average remaining contractual term of options vested, or expected to vest, at December 31, 2015 was 3.2 years. Weighted Average Shares Outstanding Year Ended December 31, 2015 2014 2013 Weighted average number of common and exchangeable shares outstanding 285,333,869 284,715,785 282,808,497 Shares issuable pursuant to stock options — — 12,041,260 Shares assumed to be purchased from proceeds of stock options — — (8,721,860 ) Weighted average number of diluted common and exchangeable shares outstanding 285,333,869 284,715,785 286,127,897 For the year ended December 31, 2015 , 13,432,287 options, on a weighted average basis, ( 2014 - 15,621,890 options; 2013 - 4,217,082 options) were excluded from the diluted loss per share calculation as the options were anti-dilutive. |