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EXHIBIT 10.3
 
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December 7, 2010

 
PERSONAL & CONFIDENTIAL
Duncan Nightingale
c/o Gran Tierra Energy Inc
300, 625-11th Avenue SW
Calgary, AB T2R 0E1

Dear Duncan:

RE: EXPATRIATE ASSIGNMENT TO GRAN TIERRA ENERGY COLOMBIA LTD. (“GTEC”)

We are very pleased that you are willing and able to take on an expatriate
assignment in the Bogota office of GTEC. In accordance with our discussions,
this letter summarizes the terms and conditions of that assignment. You will
remain an employee of Gran Tierra Energy Inc. (“GTEI”), but will be seconded to
GTEC, and will be considered on an international assignment to Bogota, Colombia.
Please note that this assignment is conditional on you being granted all
necessary permits and approvals to work in Colombia, including a valid Work
Permit and Residency Visa by the applicable Colombia authorities. This
assignment is also conditional on you complying with all Canadian and Colombia
laws and regulations, including all tax and security laws and regulations.

 
1.
EFFECTIVE DATE – January 1st, 2011

 
 
2.
POSITION – Senior Manager, Planning & Project Management.  The position
description is attached.  This is the same position description you discussed
with Dana Coffield, Julian Garcia and I.

 
 
3.
DURATION – The duration of this assignment will be for a period at the
discretion of GTEI, up to a maximum of 36 months.  If you and GTEI agree, your
assignment in Bogota may extend beyond December  31, 2013.  However, in that
event, you will automatically convert to local compensation, terms and
conditions of employment effective January 01, 2014, and none of the expatriate
compensation outlined in this letter will be continued after December 31, 2013.

 
 
4.
REPORTING TO: The President of GTEC. As a secondee to GTEC, you are required as
a term of your employment to comply with all policies, practices and security
protocols that apply to the employees and staff of GTEC.

 
 
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5.
COMPENSATION –

 
A. Your base salary of CDN$ 236,900.00 remains the same.   Your base salary will
be reviewed on an annual basis as part of the normal salary planning
process.   A hypothetical tax, as explained below in section 8 will be deducted
from this base pay
 
B. Your eligibility and Short Term Incentive Bonus (STI) target of 50% of base
salary remains the same.  A hypothetical tax rate of 39% will be deducted from
any bonus paid because this is the highest marginal tax bracket for
Alberta.  This 39% STI tax deduction is in addition to the hypothetical tax
referenced below in section 8.
 
C. Your eligibility for the Long Term Incentive Plan (LTIP) remains the
same.  You are responsible for all taxation implications with respect to your
LTIP.

 
D. We have created an employee Benefits plan approximately equivalent to what
you received under the GTE Canada Group Benefits Plan immediately prior to your
assignment date.  A unique Benefits plan for yourself has been created with
Norfolk Mobility Benefits of Calgary.  The premiums will be fully paid by the
company.  A summary of your employee benefits coverage provided through Norfolk
Mobility Benefits will be provided.
 
E. Out-of-country health care coverage provided through Medex 360.
 
F. Hardship Location Payment of 20% of annual base salary, to be reviewed
annually.
 
G. Goods and Services Differential of CDN$41, 664 per year, to be reviewed
annually.
 
H. Vacation of 5 weeks per year.
 
I. Leased company vehicle with escort driver trained in security and approved by
GTEC security personnel and management.
 
J. A club membership at the El Rancho Club is provided by GTEI and is valued at
USD$12,700 per year..
 
Attached please find the AIRINC International Compensation Worksheet which
illustrates your compensation package.
 
These compensation components are based on the currently existing terms and
conditions applicable to employees of your position in Canada and Colombia and
will be reviewed annually. GTEI retains the right to amend, change or
discontinue any policy or program as it deems necessary. The changes will apply
to you in the same manner as they apply to other employees.
 
 
6.
BOGOTA ACCOMMODATION – GTEI will provide an accommodation allowance of CDN$
7853/month.  This accommodation allowance is to be used by you to lease a fully
furnished two bedroom apartment in Bogota.  The apartment must be chosen in
conjunction with and approved by GTEC security personnel and management. You are
responsible for paying for all accommodation costs relating to the apartment,
including rent, electricity, gas, water, condominium fees, telephone,
television, and internet.  GTEI’s only obligation in this regard is to pay you
the accommodation allowance.

 
 
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7.
CALGARY PROPERTY MANAGEMENT FEES - GTEI will pay your property management fees
in Calgary to a maximum of 16% of the gross rent each month for the duration of
your expatriate assignment in Bogota.  In addition, GTEI will pay a one time
lease management fee of CDN$500.00 and a one time advertisement fee of up to
CDN$500.00.

 
 
8.
TAXATION– GTEI will ensure that your income tax obligations with respect to your
GTEI sourced income are no greater or less than they would have been had you
remained employed on your existing financial terms in Calgary.  This will be
achieved through:  1) a deduction of a hypothetical income tax from your
assignment income, and 2) the payment by GTEI of your tax liabilities on all
company income subject to Canadian and Colombian taxation. The tax equalization
will be calculated on the basis of information provided by Ernst and Young.

 
As noted above, a 39% hypothetical tax will be deducted from any STI payments
made to you, and is over and above the hypothetical tax deducted on your behalf.
 
As noted above, you are responsible for all taxation implications associated
with your LTIP.  LTIP tax considerations are over and above the hypothetical tax
deducted on your behalf.
 
At the end of each calendar year, Ernst and Young will prepare Canada and
Colombia income tax filings for you as required, and prepare a tax
reconciliation with the intention of keeping you tax equalized to Canada for the
duration of your assignment.  GTEI does not assume any responsibility for any
other personal taxes you may be liable for in Canada, Colombia, or any other
jurisdiction.  You will be expected to cooperate with Ernst and Young fully and
in a timely basis in filing tax returns.
 
 
9.
HOME VISITS – For personal use, you will be provided CDN$6000 to be used for
airfare to Calgary per 12 month period. In case of immediate family medical
emergencies, you will be provided with additional return airfares to Calgary or
equivalent.

 
 
10.
BOGOTA SETTLEMENT ALLOWANCE – You will receive a settlement allowance of one
month’s current base salary. In the event that you request to terminate your
Bogota assignment or your employment with GTEI is terminated for cause within
one year from January 1, 2011, this settlement allowance will be prorated for
the portion of the one year period that you we engaged in the assignment and the
balance will be payable to GTEI and may be offset against any funds owed by GTEI
to you.

 
 
11.
SHIPPING – As you will be on assignment on a single status basis you are not
expected to move any furniture, etc.  Only your clothing and other personal
effects will be shipped to Bogota on air freight by GTEI, to a maximum weight of
150 kg.

 
 
12.
LANGUAGE TRAINING - You will be provided with Spanish language training in
Bogota to a maximum of  USD$11,200 per year.

 
 
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13.
REPATRIATION – At the end of your assignment, you will be relocated back to
Calgary. You will be provided with a business class airfare and all your
clothing and personal effects (excluding furniture, appliances, etc.) will be
shipped to Calgary, to a maximum air shipment weight of 150 kg.   A
re-settlement allowance of 50% of one month’s base salary will be paid to you at
that time.

 
This is the entire agreement between you and GTEI for this temporary assignment
to Bogota. If you have any questions, please contact me.
 
 
Sincerely,
 
/s/ Shane O’Leary
 
Shane O’Leary
Chief Operating Officer
 

I accept the above terms and conditions: /s/ Duncan Nightingale  Date December
7, 2010
 
 
 
Attached:                      Position Description
AIRINC International Compensation Worksheet
 
 
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