TransGlobe Energy Corporation: Exhibit 10.1 - Filed by newsfilecorp.com






Exhibit 10.1
TransGlobe Energy Corporation Amended and
Restated Stock Option Plan

TRANSGLOBE ENERGY CORPORATION 

AMENDED AND RESTATED
STOCK OPTION PLAN

Effective as of May 9, 2007

     The Board of Directors of
TransGlobe Energy Corporation ("TransGlobe" or the "Corporation")
has established a stock option plan (the "Plan") governing the issuance
of stock options (the "Options") to directors, officers and employees of
the Corporation or subsidiaries of the Corporation and persons or corporations
who provide services to the Corporation or its subsidiaries on an on-going
basis, or have provided or are expected to provide a service or services of
considerable value to the Corporation or its subsidiaries. 

     The terms and conditions of the Plan
for issuance of Options are as follows:

	1. 	Purposes 


The principal purposes of the Plan
are:

	 	(a) 	
      to retain and attract qualified directors, officers,
      employees and service providers which the Corporation and its Subsidiaries
      require;

	 	 	 
	 	(b) 	
      to promote a proprietary interest in the Corporation and
      its Subsidiaries;

	 	 	 
	 	(c) 	
      to provide an incentive element in compensation;
    and

	 	 	 
	 	(d) 	
      to promote the profitability of the Corporation and its
      Subsidiaries.




	2. 	
      Defined Terms

	 	 	 
		
      Where used herein, the following terms shall have the
      following meanings, respectively:

	 	 	 
		(a) 	
      "Blackout Period" means the period of time when,
      pursuant to any policies of the Corporation, any securities of the
      Corporation may not be traded by certain persons as designated by the
      Corporation, including any holder of an Option;

	 	 	 
		(b) 	
      "Board" means the board of directors of the
      Corporation;

	 	 	 
		(c) 	
      "Common Shares" means the common shares of the
      Corporation or, in the event of an adjustment contemplated by Article 13
      hereof, such other Common Shares to which a Participant may be entitled
      upon the exercise of an Option as a result of such adjustment;

	 	 	 
		(d) 	
      "Corporation" means TransGlobe Energy Corporation,
      and includes any successor corporation thereof;

	 	 	 
		(e) 	
      "Exchange" means the Toronto Stock Exchange or, if
      the Common Shares are not then listed and posted for trading on the
      Toronto Stock Exchange, on such stock exchange in Canada on which such
      shares are listed and posted for trading as may be selected for such
      purpose by the Board;

	 	 	 
		(f) 	
      "Insider" shall have the meaning set out in the
      Company Manual of the Exchange, as may be amended from time to
  time;








		(g) 	
      "Market Price" per Common Share at any date shall
      be as defined as the five-day volume weighted average trading price of the
      Common Shares prior to the date of grant;

	 	 	 	 
		(h) 	
      "Option" means an option to purchase Common Shares
      granted by the Board to Participants, subject to the provisions contained
      herein;

	 	 	 	 
		(i) 	
      "Option Price" means the price per share at which
      Common Shares may be purchased under the Option, as the same may be
      adjusted in accordance with Articles 4 and 13 hereof;

	 	 	 	 
		(j) 	
      "Participants" means persons, firms or
      corporations:

	 	 	 	 
			(i) 	
      who are employees (full-time or part-time), officers or
      directors of the Corporation or its Subsidiaries, or who are providing
      services to the Corporation or its Subsidiaries on an on- going basis, or
      have provided or are expected to provide a service or services of
      considerable value to the Corporation or its Subsidiaries; or

	 	 	 	 
			(ii) 	
      subject to applicable laws, a person investing in
      (including lending money to) TransGlobe who is considered by The Toronto
      Stock Exchange to be an insider or an associate of an insider or otherwise
      not acting at arm's length to TransGlobe and thus not entitled to receive
      warrants which would otherwise be granted by TransGlobe in connection with
      such investment in TransGlobe ("Investor"); and

	 	 	 	 
			(iii) 	
      in the case of (i) or (ii) above, who the Board of
      Directors of the Corporation determines should receive Options.

	 	 	 	 
				
      Options may also be granted to corporations which are
      controlled by a Participant. Unless the context otherwise requires, the
      term Participant as used herein, shall include any such
  corporation.

	 	 	 	 
		(k) 	
      "Plan" means the stock option plan of the
      Corporation, as the same may be amended or varied from time to
  time;

	 	 	 	 
		(l) 	
      "Security Based Compensation Arrangements" shall
      have the meaning as set out in the Company Manual of the Exchange, as may
      be amended from time to time;

	 	 	 	 
		(m) 	
      "Subsidiary" means a person or company considered
      to be a subsidiary entity of another person or company as described in
      Section 1.1 of Ontario Securities Commission Rule 45-501.

	 	 	 	 
	3. 	
      Administration of the Plan

	 	 	 	 
		(a) 	
      The Plan shall be administered by the Board. The
      Corporation shall effect the grant of Options under the Plan, in
      accordance with determinations made by the Board pursuant to the
      provisions of the Plan as to:

	 	 	 	 
			(i) 	
      Participants to whom Options will be granted;
  and

	 	 	 	 
			(ii) 	
      the number of Common Shares which shall be the subject of
      each Option;

	 	 	 	 
				
      by the execution and delivery of instruments in writing
      in form approved by the Board.

	 	 	 	 
		(b) 	
      The Board may, from time to time, adopt such rules and
      regulations for administering the Plan as it may deem proper and in the
      best interests of the Corporation and may, subject to applicable law,
      delegate its powers hereunder to administer the Plan to a committee of the
      Board.








	4. 	Granting of Options 


     The Board from time to time shall
grant Options to Participants. The grant of Options will be subject to the
conditions contained herein and may be subject to additional conditions
determined by the Board from time to time.

     The number of Common Shares that
may be issued pursuant to the exercise of Options awarded under the Plan and all
other Security Based Compensation Arrangements of the Corporation is 10% of the
Common Shares outstanding from time to time, subject to the following
limitations:

	 	(a) 	
      the number of Common Shares reserved for issuance to any
      one person under the Plan, together with all other Security Based
      Compensation Arrangements of the Corporation, shall not exceed 5% of the
      outstanding issue of Common Shares;

	 	 	 
	 	(b) 	
      the number of Common Shares reserved for issuance to
      Insiders, at any time, under all Security Based Compensation Arrangements,
      shall not exceed 10% of the outstanding issue of Common Shares, and the
      number of Common Shares issued to Insiders, within any one year period,
      under all Security Based Compensation Arrangements, shall not exceed 10%
      of the outstanding issue of Common Shares;

	 	 	 
	 	(c) 	
      the number of Common Shares reserved for issuance to any
      one Insider and such Insider's associates pursuant to the Plan, and all
      other Security Based Compensation Arrangements of the Corporation, shall
      not exceed 5% of the outstanding issue of Common Shares;

	 	 	 
	 	(d) 	
      the number of Common Shares reserved for issuance to
      Consultants pursuant to the Plan, and all other Security Based
      Compensation Arrangements of the Corporation, shall not exceed 2% of the
      outstanding issue of Common Shares;

	 	 	 
	 	(e) 	
      the number of Common Shares reserved for issuance to any
      single Consultant under the Plan, and all other Security Based
      Compensation Arrangements of the Corporation, within any one-year period,
      shall not exceed 1% of the outstanding issue of Common Shares;
  and

	 	 	 
	 	(f) 	
      the maximum number of Common Shares issuable at any time
      to directors of the Corporation who are not officers or employees of the
      Corporation under all Security Based Compensation Arrangements shall be
      limited to 2% of the issued and outstanding Common
  Shares.



     Common Shares in respect of which
Options are not exercised shall be available for subsequent Options. No
fractional Common Shares may be purchased or issued under this Plan. For the
purposes of this section, "outstanding issue" is determined on the basis of the
number of Common Shares that are outstanding immediately prior to the issuance
in question, excluding Common Shares issued pursuant to Security Based
Compensation Arrangements over the preceding one-year period.

     The Option Price shall be fixed
by the Board but under no circumstances shall any Option Price at the time of
the grant be lower than the Market Price per Common Share.

     The term of Options granted shall
be determined by the Board in its discretion, to a maximum of 10 years from the
date of the grant of the Option. The vesting period or periods within this
period during which an Option or a portion thereof may be exercised by a
Participant shall be determined by the Board.

	5. 	Exercise Price 


     The exercise price of each Stock
Option shall be determined in the discretion of the Board of Directors of the
Corporation at the time of the granting of the Stock Option, provided that the
exercise price shall not be lower than the Market Price.

	6. 	Term and Conditions of Options



     The following general provisions shall
apply to all Options granted by the Corporation (subject to such additional limitations as may be determined by the Board and set forth in
the definitive option agreement between the Corporation and the
Participant):




	 	(a) 	
      The latest date on which an option may be exercised will
      be the tenth anniversary of the date the option was granted.

	 	 	 
	 	(b) 	
      Options granted to each optionee under the Plan will
      become vested and exercisable at such time or times as may be established
      by the Board at the time of grant.

	 	 	 
	 	(c) 	
      If the expiry date of any Option falls within any
      Blackout Period or within ten business days following the end of any
      Blackout Period (the "Restricted Options"), then the expiry date of
      such Restricted Options shall, without any further action, be extended to
      the date that is ten business days following the end such Blackout Period.
      The foregoing extension applies to all Options whatever the date of grant
      and shall not be considered an extension of the term of the Options as
      referred to in Section 17 hereof.

	 	 	 
	 	(d) 	
      Any exercise of an option must be in writing, signed by
      the proper person and delivered or mailed to TransGlobe, accompanied by
      any documents required by the Board and payment in full as provided below
      for the number of Common Shares for which the option is
  exercised.

	 	 	 
	 	(e) 	
      An optionee will have no rights as a shareholder of
      TransGlobe with respect to any Common Shares covered by any option until
      such time as and to the extent only that such option has been
      exercised.

	 	 	 
	 	(f) 	
      If any optionee ceases to be eligible for a grant of
      options under this plan for any reason (a "Termination"), except
      the death of an optionee or by reason of retirement pursuant to an
      established retirement policy of the Board and except in the case of
      options granted to Investors as such, all options granted to the optionee
      under the Plan and then held by the optionee will, to the extent such
      options were exercisable immediately prior to Termination, continue to be
      exercisable by the optionee for a period of 30 days following Termination
      or until the expiration date of the option if earlier.

	 	 	 
	 	(g) 	
      If Termination is by reason of retirement pursuant to an
      established retirement policy of the Board, all options held by the
      retiring optionee will become vested and exercisable, to the extent not
      already vested and exercisable, immediately prior to retirement, and they
      continue to be exercisable until their original expiration date.

	 	 	 
	 	(h) 	
      Except in the case of options granted to Investors as
      such, in the event of the death of an optionee all options granted to the
      optionee under the Plan and held by the optionee immediately before death
      will, to the extent such options were exercisable at that time, continue
      to be exercisable by the legal representative of the optionee for a period
      of 6 months following the death of the optionee or until the expiration
      date of the option if earlier. After such time, the options will
      terminate.

	 	 	 
	 	(i) 	
      The Corporation's retirement policy for directors is that
      if a director either resigns or agrees not to be re-nominated by
      management for election at the next annual general meeting, then so long
      as the director has served as director of the Corporation or of one of its
      subsidiaries for at least two years, then such director's Options shall
      not terminate thirty days following the time such director ceases to be a
      director but, rather, shall continue until the earlier of the expiration
      date of the option and one year following the time such director ceases to
      be a director.



     In addition, but limiting the
generality of the foregoing or the discretion of the Board, the Board of
Directors may determine:

	 	(a) 	
      that a Stock Option is exercisable only during the term
      of employment of the Participant receiving it or during such term and for
      a limited period of time after termination of
employment;








	 	(b) 	
      that a Stock Option can be exercisable for a period of
      time or for its remaining term after the death, disability or incapacity
      of an Participant;

	 	 	 
	 	(c) 	
      that only a portion of a Stock Option is exercisable in a
      specified period;

	 	 	 
	 	(d) 	
      that the unexercised portion of a Stock Option is
      "cumulative" so that any portion of a Stock Option exercisable (but not
      exercised) in a specified period may be exercised in subsequent periods
      until the Stock Option terminates; or

	 	 	 
	 	(e) 	
      that a Stock Option may provide for early exercise and/or
      termination or other adjustment in the event of a death of a
  person;



and other appropriate terms in other circumstances, such as if
the Corporation shall resolve to sell all or substantially all of its assets, to
liquidate or dissolve, or to merge, amalgamate, consolidate or be absorbed with
or into any other corporation, if a take-over bid is made for Common Shares of
the Corporation, or if any change of control of the Corporation occurs, subject
to the provisions of Section 12 with respect to Unsolicited Offers (as
hereinafter defined).

	7. 	
      Additional Provisions Concerning U.S. Optionees

	 	 	 
		(a) 	
      Options granted to an Employee subject to personal income
      tax under the United States Internal Revenue Code (the "Code"),
      (such Employee referred to in this Section as a "U.S. Employee"),
      will be Incentive Options as that term is defined in the Code.

	 	 	 
		(b) 	
      Options granted to an optionee who is subject to personal
      income tax under the Code who is not an Employee will not be Incentive
      Options, and any written agreement with such an optionee for a grant of
      options under the Plan will state that the options granted thereunder are
      Non-Qualifying Options for U. S. income tax purposes.

	 	 	 
		(c) 	
      In addition to the terms and conditions of options
      granted under the Plan listed in Section 6 above, options granted to a
      U.S, Employee will be subject to the following terms and
  conditions:




	 	(i) 	
      options will be designated in the written option
      agreement between the U.S. Employee and TransGlobe as Incentive Options;
      and

	 	 	 
	 	(ii) 	
      if the U.S. Employee is directly or indirectly the
      beneficial owner of 10% or more of the combined voting power of all
      classes of shares in the capital of TransGlobe or a Subsidiary at the time
      an option is granted to the U.S. Employee, the exercise price of such
      option will be equal to at least 110% of the Market Price of TransGlobe's
      Common Shares.




	 	(d) 	
      If a U.S. Employee is granted options under the Plan, the
      written option agreement with the U.S. Employee will contain
      acknowledgements by the U.S. Employee that:

	 	 	 	 	 
	 		(i) 	
      notwithstanding a designation of options granted to a
      U.S. Employee as Incentive Options, to the extent that the aggregate
      Market Price of the Common Shares subject to options which are exercisable
      for the first time by any U.S. Employee during any calendar year exceeds
      US $100,000, such excess options will not be treated as Incentive Options;
      and

	 	 	 	 	 
	 		(ii) 	
      in order for options granted under the Plan to be treated
      as Incentive Options:

	 	 	 	 	 
	 			(A) 	
      Common Shares purchased on the exercise of an option must
      not be sold or otherwise disposed of within 2 years from the date the
      option was granted, or within 1 year from the date the option was
      exercised, and








	 	(B) 	
      the U.S. Employee must maintain his status as a U.S.
      Employee at all times during the period beginning on the date the option
      is granted and ending on the date 30 days before the date the option is
      exercised.




	 	(e) 	
      The acknowledgement of the U. S. Employee in (d)(ii)B
      above does not confer upon the U.S. Employee any right with respect to
      continuation of his employment relationship with TransGlobe, nor will it
      interfere in any way with TransGlobe's right to terminate his employment
      relationship at any time, with or without
cause.




	8. 	Non-Assignability 


     Options shall not be assignable
or transferable by the Participants, except for a limited right of assignment to
allow the exercise of Options by an Participant's legal representative in the
event of death or incapacity, subject to the terms upon which the Stock Option
is granted.

	9. 	Payment of Exercise Price 


     Except as provided in Section 10,
all Common Shares issued pursuant to the exercise of a Stock Option shall be
paid for in full by cash, bank draft or money order at the time of exercise of
the Stock Option and prior to the issue of the shares. All Common Shares of the
Corporation issued in accordance with the foregoing shall be issued as fully
paid and non-assessable Common Shares.

	10. 	Surrender of Options in Lieu of Exercise
  


     Where the Common Shares are
listed and posted for trading on the Toronto Stock Exchange, the Board of
Directors may from time to time in its sole discretion, permit Options to be
surrendered, unexercised to the Corporation in consideration of the receipt by
the holder of such Options of an amount (the "Settlement Amount") equal
to the excess, if any, of the aggregate fair market value of the shares (based
on the Market Price (as hereinafter defined) of the Common Shares on the Toronto
Stock Exchange on the trading day immediately preceding the Surrender Date as
herein defined) able to be purchased pursuant to the vested and exercisable
portion of such Options on the date of surrender (the "Surrender Date"),
over the aggregate Exercise Price for those Common Shares pursuant to those
Options. The Settlement Amount is payable in cash, Common Shares or a
combination thereof, as the Board of Directors may from time to time in its
discretion determine. For greater certainty, those Common Shares underlying the
unexercised Options that are the subject of retirement in consideration for a
Settlement Amount, are deemed to be included in the number of total Common
Shares for which Options may be granted under the Plan.

	11. 	Non-Exercise 


     If any Stock Option granted
pursuant to the Plan is not exercised for any reason whatsoever, the shares
reserved and authorized for issuance pursuant to such Stock Option shall revert
to the Plan and shall be available for other Options, however, at no time shall
there by outstanding Options exceeding in the aggregate the number of Common
Shares of the Corporation reserved for issuance pursuant to Options under this
Plan.

	12. 	Change of Control 


     Notwithstanding the terms of this
Plan, where an Unsolicited Offer for the Common Shares is made, all unexercised
and unvested outstanding Options granted under the Plan shall vest and become
immediately exercisable in respect of any and all Common Shares for which the
holder of Options has not exercised the Options (notwithstanding that an
agreement relating to the grant of Options states that those Options are
exercisable only during a later period or year).

     For the purposes hereof, an
"Unsolicited Offer" means an Offer in respect of which neither the Board
of Directors of the Corporation nor management of the Corporation solicited,
sought out, or otherwise arranged for the offeror party to make such Offer. For
the purposes hereof, "Offer" means an offer made generally to the holders of Common Shares in one or more jurisdictions to acquire, directly
or indirectly, the Common Shares and which is in the nature of a "takeover bid"
as defined in the Securities Act (Alberta) and, where the Common Shares
are listed and posted for trading on a stock exchange, not exempt from the
formal bid requirements of the Securities Act (Alberta). Any Stock Option
remaining unexercised following the earlier of the withdrawal of such
Unsolicited Offer and the expiry of such Unsolicited Offer in accordance with
its terms again becomes subject to the original terms of the agreement relating
to the grant of Options as if the Unsolicited Offer had not been made.




	13. 	Adjustment in Certain Circumstances
  


     In the event:

	 	(a) 	
      of any change in the Common Shares of the Corporation
      through subdivision, consolidation, reclassification, amalgamation, merger
      or otherwise; or

	 	 	 
	 	(b) 	
      of any stock dividend to holders of Common Shares of the
      Corporation (other than such stock dividends issued at the option of
      shareholders of the Corporation in lieu of substantially equivalent cash
      dividends); or

	 	 	 
	 	(c) 	
      that any rights are granted to holders of Common Shares
      to purchase Common Shares of the Corporation at prices substantially below
      fair market value; or

	 	 	 
	 	(d) 	
      that as a result of any recapitalization, merger,
      consolidation or otherwise the Common Shares of the Corporation are
      converted into or exchangeable for any other
shares;



then in any such case the Board of Directors of the Corporation
may make such adjustment in the Plan and in the Options granted under the Plan
as the Board of Directors of the Corporation may in its sole discretion deem
appropriate to prevent substantial dilution or enlargement of the rights granted
to, or available for, holders of Options, and such adjustments may be included
in the Options.

	14. 	Expenses 


All expenses in connection with the Plan shall be borne by the
Corporation.

	15. 	Compliance with Laws 


     The Corporation shall not be
obliged to issue any shares upon exercise of Options if the issue would violate
any law or regulation or any rule of any governmental authority or stock
exchange. The Corporation shall not be required to issue, register or qualify
for resale any shares issuable upon exercise of Options pursuant to the
provisions of a prospectus or similar document, provided that the Corporation
shall notify The Toronto Stock Exchange or any other stock exchange on which the
shares of the Corporation are listed and any other appropriate regulatory bodies
in Canada of the existence of the Plan and the issuance and exercise of
Options.

     Transactions under the plan are
intended to comply with all relevant provisions of law, including, without
limitation, the United States Securities Act of 1933 and the regulations
thereunder, all applicable conditions of Rule 16b-3 or its successors under
Section 16 of the United States Securities Exchange Act of 1934, the Securities
Act and the regulations thereunder of the province in which TransGlobe is
resident and the provinces in which optionees may reside, and the requirements
of The Toronto Stock Exchange, the Nasdaq Stock Market, Inc. ("NASDAQ"),
and any other stock exchange or market upon which the Common Shares may then be
listed or quoted (together, the "Applicable Laws"). To the extent any
provision of the Plan or action by the Board fails to so comply, it will be
deemed null and void, to the extent permitted by law and deemed advisable by the
Board.

     TransGlobe will not be obligated
to issue and deliver any Common Shares pursuant to the exercise of any option
until, in the opinion of TransGlobe's counsel, all Applicable Laws have been
complied with. Without limiting the generality of the foregoing, TransGlobe may
require from the person exercising the option such investment representation,
undertaking or agreement, if any, as counsel for TransGlobe may consider
necessary in order to comply with the Applicable Laws.





	16. 	Form of Stock Option Agreement



     All Options shall be issued by
the Corporation in a form which meets the general requirements and conditions
set forth in this Plan and the requirements of the Exchange or such other
exchange on which the shares of the Corporation are listed from time to
time.

	17. 	
      Amendments and Termination of Plan

	 	 	 	 
		(a) 	
      Subject to the restrictions set out in this Section 17,
      the Board may, without shareholder approval:

	 	 	 	 
			(i) 	
      amend or discontinue the Plan or any Options granted
      hereunder at any time;

	 	 	 	 
			(ii) 	
      reduce the percentage number of Common Shares which may
      be issued under the Plan;

	 	 	 	 
			(iii) 	
      reduce the exercise price of any outstanding Options not
      held by Insiders;

	 	 	 	 
			(iv) 	
      alter the vesting provisions relating to the Options;
      and

	 	 	 	 
			(v) 	
      alter the surrender rights set out in the
  Plan;



provided any amendment to the Plan that
requires approval of the Exchange may not be made without such approval.

	 	(b) 	
      Without the prior approval of the shareholders, as
      may be required by the Exchange, the Board may NOT:

	 	 	 	 
	 		(i) 	
      make any amendment to the Plan to increase the percentage
      of Common Shares issuable on exercise of outstanding Options at any time
      pursuant to Section 4 hereof;

	 	 	 	 
	 		(ii) 	
      reduce the exercise price of any outstanding Options held
      by insiders;

	 	 	 	 
	 		(iii) 	
      extend the term of any outstanding Option beyond the
      original expiry date of such Option, except in accordance with an
      extension to include a Blackout Period;

	 	 	 	 
	 		(iv) 	
      make any amendment to Section 4(b) to increase the
      maximum limit on the number of securities that may be reserved for
      issuance and are issued to Insiders to greater than the 10% thresholds
      within the designated time periods;

	 	 	 	 
	 		(v) 	
      make any amendment to Section 4(f) to increase the
      maximum number of Common Shares issuable to directors who are not officers
      or employees of the Corporation under Security Based Compensation
      Arrangements;

	 	 	 	 
	 		(vi) 	
      make any amendment to the Plan that would permit a
      Participant to transfer or assign Options to a new beneficial Participant
      other than in the case of death of the Participant; or

	 	 	 	 
	 		(vii) 	
      make any amendment to this Section
17.



     In addition, no amendment to
the Plan or Options granted pursuant to the Plan may be made without the consent
of the Participant, if it adversely alters or impairs any Option previously
granted to such Participant under the Plan.

	18. 	Administration of the Plan and Regulation
  


     The Plan will be administered by the
Board of Directors of TransGlobe (the "Board"). The Board may delegate
the administration of the Plan to a committee, in which case
all references to the "Board" hereunder will refer to the committee, except only
the Board of Directors may allot shares and specify the price at which they are
to be issued. The Board will have authority, consistent with the Plan:




	 	(a) 	
      to issue options priced in accordance with the formula
      set forth in this Plan;

	 	 	 
	 	(b) 	
      to prescribe the form of certificate evidencing grants of
      options to Canadian optionees and the form of agreement evidencing grants
      of options to US optionees and the form of certificate evidencing grants
      of options to Investors (as defined hereafter) as such (which may be in
      the form of a warrant) and any other instruments required under the Plan
      and to change such forms from time to time;

	 	 	 
	 	(c) 	
      to adopt, amend and rescind rules and regulations for the
      administration of the Plan, provided however, that except as specified in
      Section 13, no amendment which would increase the maximum number of Common
      Shares for which options may be granted will be made by the Board without
      the approval of shareholders and regulatory authorities under Applicable
      Laws; and

	 	 	 
	 	(d) 	
      to interpret and administer the Plan and to decide all
      questions and settle all controversies that may arise in connection with
      the Plan, all of which decisions of the Board will be final and
      conclusive.




	19. 	Tax Consequences of Plan 


     Notwithstanding Section 7,
TransGlobe does not assume responsibility for the income or other tax
consequences for optionees or persons eligible under the Plan and they are
advised to consult with their own tax advisors.

	20. 	Applicable Law 


This Plan shall be governed by and construed in accordance with
the laws in force in the Province of Alberta.

	21. 	Stock Exchange 


     To the extent applicable, the
issuance of any shares of the Corporation pursuant to Options issued pursuant to
this Plan is subject to approval of the Plan by the Toronto Stock Exchange or
other stock exchange upon which the Corporation's Common Shares are listed, and
the Plan shall be subject to the ongoing requirements of such exchange.