TransGlobe Energy Corporation

Charter of Board of Directors Governance

Our Charter of Board of Directors Governance outlines the specific roles and duties of the Company's Directors.

GENERAL BOARD RESPONSIBILITIES

It is the responsibility of the Board of Directors to diligently oversee the direction and management of the Company while adhering to the highest ethical standards. Specific responsibilities are as follows:

Strategic Planning & Budgets

• Meet at least annually in a strategy session to review and adopt the Company's strategic business plan.
• Review and adopt the Company's corporate objectives, financial plans and budgets.
• Review corporate performance against strategic plans, corporate objectives, financial plans and budgets.

Risk Management

• Identify and review the business risks of the Company and insure that systems are in place to monitor and manage such risks.
• Ensure that the risks are appropriate, thoroughly understood and studied and are in line with achieving our corporate goals.

Communication Review

• Review annually the Company’s Corporate Disclosure Policy and ensure that it is being followed.

Executive Personnel

• Approve the hiring of senior officers.
• Establish, and review annually, job descriptions for executive officers.
• Monitor and measure senior officers’ performances. 
• Ensure all executive officers have current employment, non-competition and confidentiality agreements.
• Review major Company organizational and staffing issues.
• Succession planning for the CEO and other key officers.

Systems Integrity

• Ensure that the Company maintains appropriate internal controls and management information systems.
• Ensure that the Company, its executives and employees conduct themselves in an ethical manner and in compliance with laws, regulations, audit and accounting principles and the Company’s own governing policies.
• Ensure that the Board of Directors has free and full access to management regarding all matters of compliance and performance.
• Ensure that Company has adopted a code of ethics for the company’s principal executive officer, senior financial officers and all employees. Review the Company code of ethics annually and approve amendments by a simple majority of the Board of Directors.

Material Transactions

• Review and approve any material transactions outside of the corporatebudget, including but not limited to long term contracts, licenses or obligations which will outlive an individual's relationship with the Company.

Whistleblower Mechanism

• Adopt and review annually a mechanism through which employees and others can directly and anonymously contact the Board with concerns about conduct which the employee reasonably believes constitutes fraud or some other violation of law. The mechanism must include procedures for responding to, and keeping of records of, any such expressions of concern.

BOARD STRUCTURE AND FUNCTION

Composition of the Board of Directors

• Ensure that the majority of Directors are “independent” as defined by the Company's governing regulatory bodies.

Annual Disclosure of Directors

• Publicly disclose conclusions as to the independence of the directors as defined by the Company's governing regulatory bodies.

Nominating and Assessing Directors

• Appoint a Governance and Nominating Committee to nominate new board members as required and assess current directors’ performances.
• Review promptly the continued Board membership of any director whose employment or professional status has materially changed.

Position of Chairman of the Board

• Ensure the Chairman of the Board is an independent director.

Board Evaluation

• Review and assess its own performance in fulfilling its duties outlined in this charter and any other duties charged to the Board, including the performance of individual directors.

Examination of Size of Board

• Annually review the size of the Board and the impact of that size on the effectiveness of the Board.
• Consider whether it is appropriate to reduce or increase the size of the Board.

Compensation of Directors

• Annually review the adequacy and form of all compensation paid Directors.
• Consider that compensation should reflect responsibilities and risk.

Composition of Board Committees

• Consider that Board committees should generally consist of outside directors.
• Ensure that the directors on all committees be independent and unrelated directors.
• Review the independence of all directors with respect to various regulatory requirements and ability to serve on any Committee.

Governance and Nominating Committee

• Assign general responsibility for governance to the Governance and Nominating Committee.
• General Board to review annually the Governance and Nominating Committee Charter and, when necessary, suggest changes to its Charter, to be ratified by the entire Board.
• Ensure proper orientation for new directors.

Audit Committee

• Assign general responsibility to the Audit Committee to oversee (1) the integrity of the Company’s financial statements and its financial reporting and disclosure practices, (2) the soundness of the Company’s systems of internal controls regarding finance and accounting compliance, and (3) the appointment, compensation, independence and performance of the Company’s auditors.
• Ensure that all committee members are independent.
• General Board to review the Audit Committee Charter annually and, when necessary, suggest changes to its Charter, to be ratified by the entire Board.
• Nominate a Financial Expert to the Board of Directors and appoint to the Audit Committee.

Reserves Committee

• Assign general responsibility to the Reserves Committee to oversee (1) the integrity of the oil and gas reserves of the Company, (2) compliance by the Company with legal and regulatory requirements related to reserves, and (3) qualifications, independence and performance of the Company’s independent Reserves evaluators, and performance of the Company’s procedures for providing information to the independent Reserves evaluator.
• General Board to review the Reserves Committee Charter annually and, when necessary, suggest changes to its Charter, to be ratified by the entire Board.

Compensation Committee

• Assign general responsibility for senior executive compensation to the Compensation Committee, including a review of compensation and performance in relation to Corporate Objectives.
• Produce annually a report on executive compensation for inclusion in Company’s annual management information circular.
• General Board to review the Compensation Committee Charter annually and, when necessary, suggest changes to its Charter, to be endorsed by the entire Board.
• Review annually the Company's incentive stock option plan.
• Approve all grants under the Company's incentive stock option plan.

Outside Advisors for Directors

• Ensure that individual directors are permitted to engage outside advisors at the Company’s expense.

General

• Perform such other functions as prescribed by law and in the Company’s By-laws.

Amendments to Charter of Director Governance and Expectations

• Annually review this Charter and propose amendments to be ratified by a simple majority of the Board of Directors.