Document:

Filed by sedaredgar.com - TAG Oil Ltd. - Exhibit 4.4

TAG OIL LTD. 
(the “Company”) 

2008 SHARE OPTION PLAN 

Dated for Reference December 21, 2007 

 

ARTICLE 1 
PURPOSE AND INTERPRETATION 

Purpose 

1.1                    
The purpose of this Plan will be to advance the interests of the Company by
encouraging equity participation in the Company through the acquisition of
Common Shares of the Company. It is the intention of the Company that this Plan
will at all times be in compliance with the rules and policies of the TSX
Venture Exchange (or “TSX Venture”) (the “TSX Venture Policies”) and any
inconsistencies between this Plan and the TSX Venture Policies whether due to
inadvertence or changes in TSX Venture Policies will be resolved in favour of
the latter. 

Definitions 

1.2                    
In this Plan 

Affiliate means a company that
is a parent or subsidiary of the Company, or that is controlled by the same
entity as the Company; 

Associate has the meaning
assigned by the Securities Act; 

Board means the board of
directors of the Company or any committee thereof duly empowered or authorized
to grant options under this Plan; 

Change of Control includes
situations where after giving effect to the contemplated transaction and as a
result of such transaction:

(i)          
any one Person holds a sufficient number of voting shares of the Company or
resulting company to affect materially the control of the Company or resulting
company, or, 

(ii)          
any combination of Persons, acting in concert by virtue of an agreement,
arrangement, commitment or understanding, hold in total a sufficient number of
voting shares of the Company or its successor to affect materially the control
of the Company or its successor,

where such Person or combination of
Persons did not previously hold a sufficient number of voting shares to affect
materially control of the Company or its successor. In the 

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absence of evidence to the contrary,
any Person or combination of Persons acting in concert by virtue of an
agreement, arrangement, commitment or understanding, holding more than 20% of
the voting shares of the Company or its successor is deemed to materially affect
the control of the Company or its successor; 

Common Shares means common
shares without par value in the capital of the Company providing such class is
listed on the TSX Venture; 

Company means the Corporation
named at the top hereof and includes, unless the context otherwise requires, all
of its subsidiaries or affiliates and successors according to law; 

Consultant means a Person or
Consultant Company, other than an Employee, Officer or Director that:

(i)          
provides on an ongoing bona fide basis, consulting, technical, managerial or
like services to the Company or an Affiliate of the Company, other than services
provided in relation to a Distribution; 

(ii)          
provides the services under a written contract between the Company or an
Affiliate and the Person or the Consultant Company; 

(iii)          
in the reasonable opinion of the Company, spends or will spend a significant
amount of time and attention on the business and affairs of the Company or an
Affiliate of the Company; and 

(iv)          
has a relationship with the Company or an Affiliate that enables the Person or
Consultant Company to be knowledgeable about the business and affairs of the
Company; 

Consultant Company means for a
  Person consultant, a company or partnership of which the Person is an employee,
  shareholder or partner;

Directors means the directors of
the Company as may be elected from time to time; 

Discounted Market Price has the
meaning assigned by Policy 1.1 of the TSX Venture Policies; 

Disinterested Shareholder
Approval means approval by a majority of the votes cast by all the Company’s
shareholders at a duly constituted shareholders’ meeting, excluding votes
attached to shares beneficially owned by Service Providers or their Associates;

Distribution has the meaning
assigned by the Securities Act, and generally refers to a distribution of
securities by the Company from treasury; 

Effective Date for an Option
means the date of grant thereof by the Board; 

- 3 - 

Employee means:

(a)           a
Person who is considered an employee under the Income Tax Act (i.e. for whom
income tax, employment insurance and CPP deductions must be made at source);

(b)           a
Person who works full-time for the Company or its subsidiary providing services
normally provided by an employee and who is subject to the same control and
direction by the Company over the details and methods of work as an employee of
the Company, but for whom income tax deductions are not made at source; or 

(c)           a
Person who works for the Company or its subsidiary on a continuing and regular
basis for a minimum amount of time per week providing services normally provided
by an employee and who is subject to the same control and direction by the
Company over the details and methods of work as an employee of the Company, but
for whom income tax deductions need not be made at source; 

Exercise Price means the amount
payable per Common Share on the exercise of an Option, as determined in
accordance with the terms hereof;

Expiry Date means the day on
which an Option lapses as specified in the Option Commitment therefor or in
accordance with the terms of this Plan; 

Insider means

(i)           an
insider as defined in the TSX Venture Policies or as defined in securities
legislation applicable to the Company; 

(ii)          
an Associate of any person who is an Insider by virtue of §(i) above; 

Investor Relations Activities
has the meaning assigned by Policy 1.1 of the TSX Venture Policies, and means
generally any activities or communications that can reasonably be seen to be
intended to or be primarily intended to promote the merits or awareness of or
the purchase or sale of securities of the Company; 

Listed Shares means the number
of issued and outstanding shares of the Company that have been accepted for
listing on the TSX Venture Exchange and OTCBB and any subsequent exchange, but
excluding dilutive securities not yet converted into Listed Shares; 

Management Company Employee
means a Person employed by another Person or a corporation providing management
services to the Company which are required for the ongoing successful operation
of the business enterprise of the Company, but excluding a corporation or Person
engaged primarily in Investor Relations Activities; 

NEX means a separate board of
TSX Venture for companies previously listed on TSX Venture or the Toronto Stock
Exchange which have failed to maintain compliance with the ongoing financial
listing standards of those markets; 

- 4 - 

Officer means a duly appointed
senior officer of the Company; 

Option means the right to
purchase Common Shares granted hereunder to a Service Provider; 

Option Commitment means the
notice of grant of an Option delivered by the Company hereunder to a Service
Provider and substantially in the form of Schedule A hereto; 

Optioned Shares means Common
Shares that may be issued in the future to a Service Provider upon the exercise
of an Option; 

Optionee means the recipient of
an Option hereunder; 

OTCBB means the OTC Bulletin Board,
  a regulated quotation service that displays real-time quotes, last-sale prices
  and volume information in over-the-counter equity securities.

Outstanding Shares means at the
relevant time, the number of outstanding Common Shares of the Company from time
to time; 

Participant means a Service
Provider that becomes an Optionee; 

Person means a company or an
individual; 

Plan means this Share Option
Plan, the terms of which are set out herein or as may be amended; 

Plan Shares means the total
number of Common Shares which may be reserved for issuance as Optioned Shares
under the Plan as provided in §2.2; 

Regulatory Approval means the
approval of the TSX Venture and any other securities regulatory authority that
may have lawful jurisdiction over the Plan and any Options issued hereunder;

Securities Act means the
Securities Act, R.S.B.C. 1996, c. 418, as amended from time to time; 

Service Provider means a Person
who is a bona fide Director, Officer, Employee, Management Company Employee or
Consultant, and also includes a company, of which 100% of the share capital is
beneficially owned by one or more Person Service Providers; 

Share Compensation Arrangement
means any Option under this Plan but also includes any other stock option, stock
option plan, employee stock purchase plan or any other compensation or incentive
mechanism involving the issuance or potential issuance of Common Shares to a
Service Provider; 

Shareholders Approval means
approval by a majority of the votes cast by eligible shareholders at a duly
constituted shareholders’ meeting; 

TSX Venture means the TSX
Venture Exchange and any successor thereto; and 

- 5 - 

TSX Venture Policies means the
rules and policies of the TSX Venture as amended from time to time. 

Other Words and Phrases 

1.3                    
Words and Phrases used in this Plan but which are not defined in the Plan, but
are defined in the TSX Venture Policies, will have the meaning assigned to them
in the TSX Venture Policies. 

Gender 

1.4                    
Words importing the masculine gender include the feminine or neuter, words in
the singular include the plural, words importing a corporate entity include
individuals, and vice versa. 

ARTICLE 2 
SHARE OPTION PLAN 

Establishment of Share Option Plan 

2.1                    
There is hereby established a Share Option Plan to recognize contributions made
by Service Providers and to create an incentive for their continuing assistance
to the Company and its Affiliates.

Maximum Plan Shares 

2.2                    
The maximum aggregate number of Plan Shares that may be reserved for issuance
under the Plan is 10% of the Company’s issued and outstanding Common
Shares at any time, unless this Plan is amended pursuant to the requirements of
the TSX Venture Policies. 

Eligibility 

2.3                    
Options to purchase Common Shares may be granted hereunder to Service Providers
from time to time by the Board. Service Providers that are corporate entities
will be required to undertake in writing not to effect or permit any transfer of
ownership or option of any of its shares, nor issue more of its shares (so as to
indirectly transfer the benefits of an Option), as long as such Option remains
outstanding, unless the written permission of the TSX Venture and the Company is
obtained. 

Options Granted Under the Plan 

2.4                    
All Options granted under the Plan will be evidenced by an Option Commitment in
the form attached as Schedule A, showing the number of Optioned Shares, the term
of the Option, a reference to vesting terms, if any, and the Exercise Price.

2.5                    
Subject to specific variations approved by the Board, all terms and conditions
set out herein will be deemed to be incorporated into and form part of an Option
Commitment made hereunder. 

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Limitations on Issue 

2.6                    
Subject to §2.9, the following restrictions on issuances of Options are
applicable under the Plan: 

(a)           no
Service Provider can be granted an Option if that Option would result in the
total number of Options, together with all other Share Compensation Arrangements
granted to such Service Provider in the previous 12 months, exceeding 5% of the
Listed Shares (unless the Company is classified as a Tier 1 Company by the TSX
Venture and has obtained Disinterested Shareholder Approval under §2.9(a)(iii)
to do so); 

(b)           no
Options can be granted under the Plan if the Company is designated “Inactive”
(as defined in TSX Venture Policies) by the TSX Venture; 

(c)          
the aggregate number of Options granted to Service Providers conducting Investor
Relations Activities in any 12-month period must not exceed 2% of the Listed
Shares, calculated at the time of grant, without the prior consent of TSX
Venture; and 

(d)          
the aggregate number of options granted to any one Consultant in any 12-month
period must not exceed 2% of the Listed Shares, calculated at the time of grant,
without the prior consent of TSX Venture. 

Options Not Exercised 

2.7                    
In the event an Option granted under the Plan expires unexercised or is
terminated by reason of dismissal of the Optionee for cause or is otherwise
lawfully cancelled prior to exercise of the Option, the Optioned Shares that
were issuable thereunder will be returned to the Plan and will be eligible for
re-issue. 

Powers of the Board 

2.8                    
The Board will be responsible for the general administration of the Plan and the
proper execution of its provisions, the interpretation of the Plan and the
determination of all questions arising hereunder. Without limiting the
generality of the foregoing, the Board has the power to 

(a)          
allot Common Shares for issuance in connection with the exercise of Options;

(b)          
grant Options hereunder; 

(c)          
subject to Regulatory Approval, amend, suspend, terminate or discontinue the
Plan, or revoke or alter any action taken in connection therewith, except that
no general amendment or suspension of the Plan will, without the written consent
of all Optionees, alter or impair any Option previously granted under the Plan
unless as a result of a change in TSX Venture Policies or the Company’s tier
classification thereunder; 

(d)          
delegate all or such portion of its powers hereunder as it may determine to one
or more committees of the Board, either indefinitely or for such period of time
as it may specify, and thereafter each such committee may exercise the powers
and discharge the 

- 7 - 

duties of the Board in respect of the
Plan so delegated to the same extent as the Board is hereby authorized so to do;
and 

(e)          
may in its sole discretion amend this Plan (except for previously granted and
outstanding Options) to reduce the benefits that may be granted to Service
Providers (before a particular Option is granted) subject to the other terms
hereof. 

Terms or Amendments Requiring Disinterested Shareholder
Approval 

2.9                    
The Company will be required to obtain Disinterested Shareholder Approval prior
to any of the following actions becoming effective: 

(a)          
the Plan, together with all of the Company’s previously established and
outstanding stock option plans or grants, could result at any time in: 

(i)          
the aggregate number of shares reserved for issuance under stock options granted
to Insiders exceeding 10% of the Listed Shares;

(ii)          
the number of Optioned Shares issued to Insiders within a one-year period
exceeding 10% of the Listed Shares; or,

(iii)          
in the case of a Tier l Company only, the issuance to any one Optionee, within a
12-month period, of a number of shares exceeding 5% of Listed Shares; or 

(b)          
any reduction in the Exercise Price of an Option previously granted to an
Insider. 

ARTICLE 3 
TERMS AND CONDITIONS OF OPTIONS 

Exercise Price 

3.1                    
The Exercise Price of an Option will be set by the Board at the time such Option
is allocated under the Plan, and cannot be less than the Discounted Market
Price. 

Term of Option 

3.2                    
An Option can be exercisable for a maximum of 10 years from the Effective Date
for a Tier 1 Company, or five years from the Effective Date for a Tier 2, NEX or
OTCBB Company. 

Option Amendment 

3.3                    
Subject to §2.9(b), the Exercise Price of an Option may be amended only if at
least six (6) months have elapsed since the later of the date of commencement of
the term of the Option, the date the Company’s shares commenced trading on the
TSX Venture, or the date of the last amendment of the Exercise Price. 

- 8 - 

3.4                    
An Option must be outstanding for at least one year before the Company may
extend its term, subject to the limits contained in §3.2. 

3.5                    
Any proposed amendment to the terms of an Option must be approved by the TSX
Venture prior to the exercise of such Option. 

Vesting of Options 

3.6                    
Subject to §3.7, vesting of Options is otherwise at the discretion of the Board,
and will generally be subject to: 

(a)          
the Service Provider remaining employed by or continuing to provide services to
the Company or any of its subsidiaries and Affiliates as well as, at the
discretion of the Board, achieving certain milestones which may be defined by
the Board from time to time or receiving a satisfactory performance review by
the Company or its subsidiary or affiliate during the vesting period; or 

(b)          
remaining as a Director of the Company or any of its subsidiaries or Affiliates
during the vesting period. 

3.7                    
If the Company is a Tier 2 Company and the Plan Shares exceed 10% of the Listed
Shares, any Options granted under the Plan will vest in accordance with the
vesting schedule attached as Schedule B and may be exercised only after vesting.

Vesting of Options Granted for Investor Relations Activities

3.8                    
Subject to §3.7, Options granted to Consultants conducting Investor Relations
Activities will vest: 

(a)          
over a period of not less than 12 months as to 25% on the date that is three
months from the date of grant, and a further 25% on each successive date that is
three months from the date of the previous vesting; or 

(b)          
such longer vesting period as the Board may determine. 

Variation of Vesting Periods 

3.9                    
At the time an Option is granted which carries vesting provisions, the Board may
vary such vesting provisions provided in §3.7 and §3.8, subject to Regulatory
Approval. 

Optionee Ceasing to be Director, Employee or Service
Provider 

3.10                    
No Option may be exercised after the Service Provider has left the employ/office
or has been advised his services are no longer required or his service contract
has expired, except as follows: 

(a)           in
the case of the death of an Optionee, any vested Option held by him at the date
of death will become exercisable by the Optionee’s lawful personal
representatives, heirs 

- 9 - 

or executors until the earlier of one
year after the date of death of such Optionee and the date of expiration of the
term otherwise applicable to such Option; 

(b)           in
the case of a Tier 1 Company, Options granted to any Service Provider must
expire within 90 days after the date the Optionee ceases to be employed with or
provide services to the Company, but only to the extent that such Optionee was
vested in the Option at the date the Optionee ceased to be so employed or to
provide services to the Company;

(c)           in
the case of a Tier 2, NEX or OTCBB Company, Options granted to a Service
Provider conducting Investor Relations Activities must expire within 30 days of
the date the Optionee ceases to conduct such activities, but only to the extent
that such Optionee was vested in the Option at the date the Optionee ceased to
conduct such activities,

(d)           in
the case of a Tier 2, NEX or OTCBB Company, Options granted to an Optionee other
than one conducting Investor Relations Activities must expire within 90 days
after the Optionee ceases to be employed with or provide services to the
Company, but only to the extent that such Optionee was vested in the Option at
the date the Optionee ceased to be so employed or to provide services to the
Company; and 

(e)           in
the case of an Optionee being dismissed from employment or service for cause,
such Optionee’s Options, whether or not vested at the date of dismissal will
immediately terminate without right to exercise same. 

Non Assignable 

3.11                    
Subject to §3.10(a), all Options will be exercisable only by the Optionee to
whom they are granted and will not be assignable or transferable. 

Adjustment of the Number of Optioned Shares 

3.12                    
The number of Common Shares subject to an Option will be subject to adjustment
in the events and in the manner following: 

(a)           in
the event of a subdivision of Common Shares as constituted on the date hereof,
at any time while an Option is in effect, into a greater number of Common
Shares, the Company will thereafter deliver at the time of purchase of Optioned
Shares hereunder, in addition to the number of Optioned Shares in respect of
which the right to purchase is then being exercised, such additional number of
Common Shares as result from the subdivision without an Optionee making any
additional payment or giving any other consideration therefor; 

(b)           in
the event of a consolidation of the Common Shares as constituted on the date
hereof, at any time while an Option is in effect, into a lesser number of Common
Shares, the Company will thereafter deliver and an Optionee will accept, at the
time of purchase of Optioned Shares hereunder, in lieu of the number of Optioned
Shares in respect of which the right to purchase is then being exercised, the
lesser number of Common Shares as result from the consolidation; 

- 10 - 

(c)           in
the event of any change of the Common Shares as constituted on the date hereof,
at any time while an Option is in effect, the Company will thereafter deliver at
the time of purchase of Optioned Shares hereunder the number of shares of the
appropriate class resulting from the said change as an Optionee would have been
entitled to receive in respect of the number of Common Shares so purchased had
the right to purchase been exercised before such change; 

(d)           in
the event of a capital reorganization, reclassification or change of outstanding
equity shares (other than a change in the par value thereof) of the Company, a
consolidation, merger or amalgamation of the Company with or into any other
company or a sale of the property of the Company as or substantially as an
entirety at any time while an Option is in effect, an Optionee will thereafter
have the right to purchase and receive, in lieu of the Optioned Shares
immediately theretofore purchasable and receivable upon the exercise of the
Option, the kind and amount of shares and other securities and property
receivable upon such capital reorganization, reclassification, change,
consolidation, merger, amalgamation or sale which the holder of a number of
Common Shares equal to the number of Optioned Shares immediately theretofore
purchasable and receivable upon the exercise of the Option would have received
as a result thereof. The subdivision or consolidation of Common Shares at any
time outstanding (whether with or without par value) will not be deemed to be a
capital reorganization or a reclassification of the capital of the Company for
the purposes of this §3.12(d); 

(e)           an
adjustment will take effect at the time of the event giving rise to the
adjustment, and the adjustments provided for in this Section are cumulative;

(f)          
the Company will not be required to issue fractional shares in satisfaction of
its obligations hereunder. Any fractional interest in a Common Share that would,
except for the provisions of this §3.12(f), be deliverable upon the exercise of
an Option will be cancelled and not be deliverable by the Company; and 

(g)           if
any questions arise at any time with respect to the Exercise Price or number of
Optioned Shares deliverable upon exercise of an Option in any of the events set
out in this §3.12, such questions will be conclusively determined by the
Company’s auditors, or, if they decline to so act, any other firm of Chartered
Accountants, in Vancouver, British Columbia (or in the city of the Company’s
principal executive office) that the Company may designate and who will have
access to all appropriate records and such determination will be binding upon
the Company and all Optionees. 

ARTICLE 4 
COMMITMENT AND EXERCISE PROCEDURES

Option Commitment 

4.1                    
Upon grant of an Option hereunder, an authorized officer of the Company will
deliver to the Optionee an Option Commitment detailing the terms of such Options
and upon such delivery the Optionee will be subject to the Plan and have the
right to purchase the Optioned Shares at the Exercise Price set out therein
subject to the terms and conditions hereof. 

- 11 - 

Manner of Exercise 

4.2                    
An Optionee who wishes to exercise his Option may do so by delivering 

(a)           a
written notice to the Company specifying the number of Optioned Shares being
acquired pursuant to the Option; and 

(b)          
cash or a certified cheque payable to the Company for the aggregate Exercise
Price for the Optioned Shares being acquired. 

Delivery of Certificate and Hold Periods 

4.3                    
As soon as practicable after receipt of the notice of exercise described in §4.2
and payment in full for the Optioned Shares being acquired, the Company will
direct its transfer agent to issue a certificate to the Optionee for the
appropriate number of Optioned Shares. Such certificate issued will bear a
legend stipulating any resale restrictions required under applicable securities
laws. Further, if the Company is a Tier 2, NEX or OTCBB Company, or the Exercise
Price is set below the then current market price of the Common Shares on the TSX
Venture, the certificate will also bear a legend stipulating that the Optioned
Shares are subject to a four-month TSX Venture hold period commencing the date
of the Option Commitment. 

ARTICLE 5 
GENERAL 

Employment and Services 

5.1                    
Nothing contained in the Plan will confer upon or imply in favour of any
Optionee any right with respect to office, employment or provision of services
with the Company, or interfere in any way with the right of the Company to
lawfully terminate the Optionee’s office, employment or service at any time
pursuant to the arrangements pertaining to same. Participation in the Plan by an
Optionee will be voluntary. 

No Representation or Warranty 

5.2                    
The Company makes no representation or warranty as to the future market value of
Common Shares issued in accordance with the provisions of the Plan or to the
effect of the Income Tax Act (Canada) or any other taxing statute
governing the Options or the Common shares issuable thereunder or the tax
consequences to a Service Provider. Compliance with applicable securities laws
as to the disclosure and resale obligations of each Participant is the
responsibility of such Participant and not the Company. 

Interpretation 

5.3                    
The Plan will be governed and construed in accordance with the laws of the
Province of British Columbia. 

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Amendment of the Plan 

5.4                    
The Board reserves the right, in its absolute discretion, to at any time amend,
modify or terminate the Plan with respect to all Common Shares in respect of
Options which have not yet been granted hereunder. Any amendment to any
provision of the Plan will be subject to any necessary Regulatory Approvals
unless the effect of such amendment is intended to reduce (but not to increase)
the benefits of this Plan to Service Providers. 

 

SCHEDULE A 

SHARE OPTION PLAN 

OPTION COMMITMENT 

Notice is hereby given that, effective this ________ day of
________________, __________ (the “Effective Date”) TAG OIL LTD. (the
“Company”) has granted to ___________________________________________ (the
“Service Provider”) , an Option to acquire ______________ Common Shares
(“Optioned Shares”) up to 5:00 p.m. Vancouver Time on the __________ day of
____________________, __________ (the “Expiry Date”) at a Exercise Price of
Cdn$____________ per share. 

At the date of grant of the Option, the Company is classified
as a Tier ____ company under TSX Venture Policies. 

Optioned Shares will vest and may be exercised as follows: 

____________ In accordance with the vesting provisions
set out in Schedule B of the Plan 

or

____________ As follows:

The grant of the Option evidenced hereby is made subject to the
terms and conditions of the Company’s Share Option Plan, the terms and
conditions of which are hereby incorporated herein. 

To exercise your Option, deliver a written notice specifying
the number of Optioned Shares you wish to acquire, together with cash or a
certified cheque payable to the Company for the aggregate Exercise Price, to the
Company. A certificate for the Optioned Shares so acquired will be issued by the
transfer agent as soon as practicable thereafter and will bear a minimum four
month non-transferability legend from the date of this Option Commitment. [A
Tier 1 Company may grant stock options without a hold period, provided the
exercise price of the options is set at or above the market price of the
Company’s shares rather than below.] 

The Company and the Service Provider represent that the Service
Provider under the terms and conditions of the Plan is a bona fide [EMPLOYEE/
CONSULTANT/MANAGEMENT COMPANY EMPLOYEE] __________________________________ of
the Company, entitled to receive Options under TSX Venture Exchange Policies.

TAG OIL LTD. 

_______________________________________________
Authorized
Signatory 

SCHEDULE B 

SHARE OPTION PLAN 

VESTING SCHEDULE 

	1. 	
      Options granted pursuant to the Plan to Directors,
      Officers and all Employees and Consultants employed or retained by the
      Company for a period of more than six months at the time the Option is
      granted will vest as follows:

	 	 	 
		(a) 	
      1/3 of the total number of Options granted will vest six
      months after the date of grant;

	 	 	 
		(b) 	
      a further 1/3 of the total number of Options granted will
      vest one year after the date of grant; and

	 	 	 
		(c) 	
      the remaining 1/3 of the total number of Options granted
      will vest eighteen months after the date of grant.

	 	 	 
	2. 	
      Options granted pursuant to the Plan to an Employee or a
      Consultant who has been employed or retained by the Company for a period
      of less than six months at the time the Option is granted will vest as
      follows:

	 	 	 
		(a) 	
      1/3 of the total number of Options granted will vest one
      year after the date of grant;

	 	 	 
		(b) 	
      a further 1/3 of the total number of Options granted will
      vest eighteen months after the date of grant; and

	 	 	 
		(c) 	
      the remaining 1/3 of the total number of Options granted
      will vest two years after the date of grant.

	 	 	 
	3. 	
      Options granted to Consultants retained by the Company
      pursuant to a short term contract or for a specific project with a finite
      term, will be subject to such vesting provisions determined by the Board
      of Directors of the Company at the time the Option Commitment is made,
      subject to Regulatory Approval.

	 	 	 
	4. 	
      Options granted to Service Providers involved in Investor
      Relations Activities shall vest in accordance with Section 3.10 of the
      Plan.Filed by sedaredgar.com - TAG Oil Ltd. - Exhibit 4.16

CONSULTING AGREEMENT 

This Agreement made effective as of the 1st day of
July, 2008. 

BETWEEN: 

TAG OIL LTD., a company
incorporated under the laws of 
British Columbia and having an office at
Suite 1407, 1050 Burrard 
Street, Vancouver, British Columbia V6Z 2S3 

(the “Company”) 

AND: 

PACIFIC REACH MANAGEMENT LTD.,
a company duly 
incorporated under the laws of British Columbia and having an

office at <> 

(the “Consultant”) 

WHEREAS: 

(A)          
The Company wishes to have the Consultant perform various consulting and
advisory services on strategic matters for the Company (the “Consulting
Services”); and

(B)           Consultant
is experienced and wishes to provide the Consulting Services to the Company;

WITNESSETH that the parties mutually agree as
follows:

PART 1 

INTERPRETATION 

Definitions 

1.1                    
In this Agreement: 

(a)           “Agreement”
means this agreement; 

(b)          
“Board” means the board of directors of the Company; 

(c)           “Business”
means the acquisition, exploration and development of oil and gas properties in
the SE Asian area any other material business carried on from time to time by
the Company; 

(d)          
“Cause” means the circumstances if the Consultant: 

- 2 - 

(i)           is
adjudicated to be bankrupt, 

(ii)           is
convicted of any indictable offence; 

(iii)           commits
an act of gross misconduct, wilful negligence or fraud in respect of the
responsibilities or duties required to be performed under this Agreement, or to
be undertaken or required to be undertaken in accordance with the provisions of
this Agreement; or 

(iv)          
engages in any conduct which is intentional and materially injurious to the
Business;

(e)          
“Change of Control” means: 

(i)           the
acquisition by any “offeror” (as defined in s. 92(1) of the Securities
Act (British Columbia) of beneficial ownership of more than 20% of the
outstanding voting securities of the Company, by means of a takeover bid or
otherwise; 

(ii)           any
consolidation or merger of the Company in which the Company is not the
continuing or surviving company or pursuant to which shares of the Company would
be converted into cash, securities or other property, other than a merger of the
Company in which shareholders immediately prior to the merger have the same
proportionate ownership of stock of the surviving company immediately after the
merger; 

(iii)          
any sale, lease, exchange or other transfer (in one transaction or a series of
related transaction) of all or substantially all of the assets of the
Company;

(iv)          
the approval by the shareholders of the Company of any plan of liquidation or
dissolution of the Company; or 

(v)           the
Incumbent Directors cease to constitute a majority of the Board; 

(f)          
“Confidential Information” means any information which is non public,
confidential or proprietary in nature relating to the Company or its Business
including without limitation business plans, financial data, transactions or
other affairs of the Company and analyses, compilations, forecasts,
documentation, software, and technical information, in oral, written, electronic
or any other form. Confidential Information does not include information that is
or becomes generally available to the public without fault of the Consultant or
that the Consultant can establish, through written records, was in his
possession prior to its disclosure in connection with the Consultant’s
engagement; 

(g)          
“Fee” means the fee set out in section 3.3 herein;

(h)          
“Good Reason” means any circumstance in which the Consultant is induced
by actions of the Company to terminate its employment other than on a purely
voluntary basis, and without limiting the generality of the foregoing will
include: 

- 3 - 

(i)           a
reduction or diminution in the level of responsibility, title or office of the
Consultant; 

(ii)           a
reduction in the compensation level of the Consultant, taken as a whole;

(iii)           forced
relocation to another geographic location; or 

(iv)          
the failure of the Company or any successor company to maintain substantially
similar employment terms with the Consultant after a Change of Control as were
in existence prior to the Change of Control; 

(i)           “Incumbent
Director” means any member of the Board who was a member of the Board prior
to the occurrence of the transaction, transactions or elections giving rise to a
Change of Control and any successor to an Incumbent Director who was recommended
or elected or appointed to succeed an Incumbent Director by the affirmative vote
of a majority of the Incumbent Directors then on the Board; and 

(j)           “Term”
means the term of this Agreement as set out in section 3.1. 

Interpretation 

1.2                     For
the purposes of this Agreement, except as otherwise expressly provided herein:

(a)          
“this Agreement” means this Agreement as it may from time to time be
supplemented or amended and in effect; 

(b)           the
words “herein”, “hereof” and “hereunder” and other words of similar import refer
to this Agreement as a whole and not to any particular section, subsection,
paragraph or other subdivision; 

(c)          
the singular of any term includes the plural and vice versa and the use of any
term is equally applicable to any gender and where applicable a body corporate;

(d)          
the word “or” is not exclusive and the word “including” is not limiting (whether
or not non-limiting language such as “without limitation” or “but not limited
to” or other words of similar import is used with reference thereto); 

(e)           all
references to currency means Canadian currency except where otherwise expressly
stated; and 

(f)          
the headings to the sections, subsections and paragraphs of this Agreement are
inserted for convenience only and do not form a part of this Agreement and are
not intended to interpret, define or limit the scope, extent or intent of this
Agreement or any provision hereof. 

- 4 - 

PART 2 

ENGAGEMENT 

Services 

2.1                     The
Company hereby retains the Consultant for its Consulting Services and Consultant
hereby undertakes to perform the Consulting Services for the Company on a
part-time basis upon and subject to the terms and conditions of this Agreement.

Duties 

2.2                     The
Consultant’s principle duties and responsibilities will be to provide Consulting
Services to assist with the strategic advice and planning matters of the
Business. 

General Duties 

2.3                     During
the term of this Agreement, the Consultant will:

(a)          
diligently perform its duties arising under this Agreement to the best of his
skill and ability, and 

(b)          
attend to its duties on a part-time basis as necessary, as reasonably required
by the Company. 

PART 3 

TERM AND COMPENSATION

Term 

3.1                    
The Consultant will commence the Consulting Services hereunder on July 1, 2008
and will continue on an on-going basis (the “Term”), subject to Part 5. 

Compensation 

3.2                    
The Company will compensate the Consultant for the Consulting Services
throughout the Term in an amount equal to $90,000 per annum, payable monthly
(the “Fee”). The Consultant hereby acknowledges that the Consultant is
responsible for remitting its own taxes and any contributions required by law to
be remitted in connection with the Fee, and the Company will have no
responsibility in respect of any failure by the Consultant to properly remit
such amounts when due, and the Consultant agrees to indemnify and save the
Company harmless from and against assessments, losses or penalties actually
incurred by the Company in this respect. 

3.3                    
The Consultant will be reimbursed for all reasonable travel and other
out-of-pocket expenses actually and properly incurred by the Consultant from
time to time in 

- 5 - 

connection with carrying out the Consultant Services hereunder.
For all such expenses the Consultant will supply the Company with appropriate
invoices or statements in respect of which the Consultant seeks reimbursement.

PART 4 

CONFIDENTIALITY

Confidential Information 

4.1                    
The Consultant acknowledges that in the course of carrying out, performing and
fulfilling its duties with the Company it has had and will continue to have
access to and be entrusted with Confidential Information concerning the present
and contemplated projects, prospects and opportunities of the Company, and that
the disclosure of any such Confidential Information to the competitors of the
Company or to the general public would be highly detrimental to the best
interests of the Company. The Consultant further acknowledges and agrees that
the right to maintain such detailed Confidential Information constitutes a
proprietary right which the Company is entitled to protect. Accordingly, the
Consultant covenants and agrees with the Company that it will not (either during
the continuance of its engagement with the Company or at any time thereafter)
disclose any of such Confidential Information to any person nor shall the
Consultant use the same for any purpose other than those for the benefit of the
Company.

Return of Confidential Information 

4.2                    
The Consultant will on demand return to the Company all documentation (in any
paper or electronic medium) containing Confidential Information in the
possession of the Consultant or in respect of which the Consultant may exercise
control. 

PART 5 

TERMINATION 

Resignation 

5.1                     The
Consultant may at any time terminate this Agreement for any cause or reason, or
without any cause or reason, by giving to the Company one months’ prior written
notice of such termination and upon the expiry of such notice, this Agreement
shall terminate. In such event the Consultant will not be entitled to any
payment on account of such termination, other than such amounts due to the
Consultant under this Agreement in respect of the period ending on the date of
termination. 

Termination for Cause 

5.2                     The
Company may on written notice immediately terminate the engagement of the
Consultant for any reason which constitutes Cause, and in such event the
Consultant will not 

- 6 - 

be entitled to any payment on account of such termination,
other than such amounts due to the Consultant under this Agreement in respect of
the period ending on the date of termination. 

Termination without Cause 

5.3                    
The Company may terminate the engagement of the Consultant at any time without
Cause by giving to the Consultant one months’ written notice of such termination
and upon the expiry of such written notice, this Agreement will terminate. 

Termination for Good Reason 

5.4                     The
Consultant may terminate this Agreement for Good Reason by giving to the Company
one months’ written notice of such termination and upon the expiry of such
written notice, this Agreement will terminate. 

Termination on Change of Control 

5.5                    The
Consultant may terminate this Agreement upon any Change of Control by giving to
the Company written notice of such termination and this Agreement will
terminate. 

Payment upon Termination 

5.6                     In
the event of the termination of this Agreement under sections 5.3, 5.4 or 5.5,
the Company will pay to the Consultant a lump sum amount equal to $15,000 prior
to the expiry of such written notice, or such other amount as may be agreed to
by both parties. 

Return of Property 

5.7                    
On termination of this Agreement for any reason, the Consultant agrees to return
to the Company, as they may direct, all Company property including all written
information, tapes, discs or memory devices and copies thereof, and any other
material on any medium in his possession or control pertaining to the Business,
without retaining any copies or records of any Confidential Information
whatsoever. The Consultant will also return any keys, pass cards, identification
cards or other property belonging to the Company. 

No Reduction of Amounts Owed 

5.8                    
The amounts payable to the Consultant hereunder will not be reduced in any
respect in the event that the Consultant will secure or will not reasonably
pursue alternative employment following termination of this Agreement. 

PART 6 

OTHER BUSINESS ACTIVITIES 

6.1                    
It is recognized that the Consultant has other business activities to which it
devotes up to approximately 80% of its time and attention. It is expected the
Consultant will use its best efforts not to have these activities interfere with
the performance of the Consulting 

- 7 - 

Services in accordance with this Agreement and will devote
appropriate time and energy to the business and affairs of the Company. 

PART 7 

GENERAL 

Counterpart 

7.1                     This
Agreement and any other writing delivered pursuant to this Agreement may be
executed in any number of counterparts with the same effect as if all parties to
this Agreement or such other writing had signed the same document and all
counterparts will be construed together and will constitute one and the same
instrument. 

Governing Laws 

7.2                     This
Agreement will be interpreted under and is governed by the laws of the Province
of British Columbia and the laws of Canada that are applicable and the courts of
the Province of British Columbia will have exclusive jurisdiction to entertain
any action arising under this Agreement and the parties hereby attorn to the
jurisdiction of those courts. 

Assistance 

7.3                     The
parties must render all such assistance to one another as may reasonably be
required to enable the provisions of the Agreement expeditiously to be given
effect and the parties agree that they and each of them will execute all
documents and do all acts and things within their respective powers to carry out
and/or implement the provisions or intent of this Agreement. 

Notice 

7.4                     All
notices required to be given by any party under this Agreement shall be in
writing and shall be delivered by hand or properly addressed prepaid registered
post or facsimile addressed to a party at its address set out on Page 1 of this
Agreement or such other address as a Party may from time to time designate in
writing. 

7.5                     Any
notice given shall be deemed to have been delivered: 

(a)           in
the case of delivery by ordinary prepaid registered post, three business days
after posting; or 

(b)           in
the case of transmission by facsimile, upon receipt by the sender of a
transmission report showing transmission free of error. 

- 8 - 

Entire Agreement 

7.6                      This
Agreement constitutes the whole agreement between the parties and supersedes any
and every prior agreement of understanding between the Company and the
Consultant whether oral or written or partly oral and partly written and except
as herein expressly provided no prior agreement shall be referred to or
considered in any proceedings or disputes between parties to assist in or
determining the interpretation of the Agreement or to determine the rights,
obligations and privileges of the parties, or otherwise. 

Amendments 

7.7                    
 No modification of this Agreement will be valid unless in writing and
signed by the parties hereto. 

Further Assurances 

7.8                    
 Each party will make, execute and do so cause to be made, executed or done
all necessary agreements, deeds and acts which may be necessary to protect,
secure or otherwise ensure compliance between them with the terms of this
Agreement. 

Assignment and Enurement 

7.9                     
This Agreement will be binding upon and will enure to the benefit of the parties
and their respective successors and permitted assigns; provided that this
Agreement will not be assigned, in whole or in part, by either party to any
other person, firm or Company, without the prior written consent of the other
party. 

Non-Waiver 

7.10                    
No waiver of any breach of any term of this Agreement will be effective unless
that waiver is in writing and signed by the party against whom that waiver is
claimed. No waiver of any breach will be or be deemed to be a waiver of any
other or subsequent breach. 

Severability 

7.11                    
If any provision or portion of this Agreement is determined to be invalid or
unenforceable for any reason, then that provision or portion will be severed
from this Agreement and the rest of this Agreement will remain in full force and
effect. 

Survival

7.12                    
The Company and the Consultant expressly acknowledge and agree that the
provisions of this Agreement, which by their express or implied terms extend
beyond the termination of the Consultant’s employment hereunder, or beyond the
termination of this Agreement, shall continue in full force and effect
notwithstanding the termination of the Consultant’s employment or the
termination of this Agreement for any reason. 

- 9 - 

Independent Legal Advice 

7.13                    
The Consultant acknowledges that it has been advised to obtain independent legal
advice with respect to the terms of this Agreement prior to its execution and
has, to the extent thought necessary, obtained such advice and understands the
terms and rights and obligations under this Agreement. 

IN WITNESS WHEREOF this Agreement has been executed by
the parties on the 9th day of September, 2008. 

 

TAG OIL LTD. 

Per:    /s/Garth
Johnson                                                                                           

          Authorized
Signatory 

 

	SIGNED, SEALED AND DELIVERED by 	 )	
	PACIFIC REACH MANAGEMENT LTD. in 	 )	
	the presence of: 	 )	
	  	 )	
	  	 )	/s/Alex Guidi 
	/s/Giuseppe Perone
    	 )	PACIFIC REACH MANAGEMENT 
	Witness 	 )	LTD. 
	  	 )	
	  	 )	
	Name 	 )	
	  	 )	
	  	 )	
	  	 )	
	Address 	 )	
	  	 )	
	  	 )	
	  	 )

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