Annual Report 200438
in a position to affect shareholder
returns. It is intended that
participants will generally
comprise the senior executives
and a small number of high
potential middle managers of the
Company. 
Options and rights to shares
issued under these Plans to senior
executives are linked to the longer
term performance of the Company
and are only exercisable following
the satisfaction of performance
hurdles that are designed to
maximise shareholder wealth. 
The amount of the award, and
correspondingly the proportion of
remuneration at risk, varies
between executives according to
their respective levels of seniority
and responsibility. 
The rules of the SESPP and SESOP
were both approved by
shareholders in 1997 and again in
2000. 
Having regard to contemporary
best practice, the LTI program is
designed to drive superior
executive performance and to
reward only superior Company
performance, linked to an
appropriate performance
benchmark. The benchmark
assesses actual Company
performance in terms of long-term
comparative growth of the
Company and resulting
shareholder value. 
Company performance is measured
over a three year period based on
the Company’s Total Shareholder
Return (TSR) relative to one or
more comparator groups as
determined by the Board at the
commencement of the
performance period including,
without limitation, any
combination of the ASX 100,
energy companies in ASX 100, the
ASX Energy Index and
international E&P companies. If
performance is below the 50th
percentile, no award is made. A
proportionate award is made for
performance between the 50th to
75th percentile and the maximum
award is made for performance at
or above the 75th percentile. 
In relation to the current financial
year, awards may be taken only in
the form of shares pursuant to
SESPP or, at the election of an
executive, options pursuant to
SESOP, details of which are
described in Notes 18(c) and
18(d) of the financial statements.
In future periods, awards may be
taken in the form of rights over
shares pursuant to SESPP or
options granted under SESOP, at
the election of executives. 
Rights to shares and options are
granted at no cost to the
executives with the number of
shares awarded being determined
by dividing the amount of the
award by the volume weighted
average price of the Company’s
shares over the five business days
up to and including the award
date. The number of options
awarded is of equivalent value
calculated by an independent
expert based on an acceptable
valuation method. The exercise
price of the options is the volume
weighted average price of the
Company’s shares over the five
business days up to and including
the award date. 
The Board intends that LTI awards
be made on an annual basis using
a three year measurement period
for the applicable performance
hurdles. However, the Board
reserves the right to suspend or
modify the LTI program in light of
circumstances appropriate to the
Company from time to time. 
The maximum number of shares
that may be issued under all of
the Company’s executive and
employee share and option plans
cannot exceed the limit of 5% of
the issued capital, as approved by
shareholders at the 2000 AGM. 
(c) Specified Executives of the
Santos Group
The following persons were the six
executives with the greatest
authority for the strategic
direction and management of the
Santos Group (“Specified
Executives”) during the financial
year receiving the highest
remuneration: 
All Specified Executives are
employed by the Company. 
The Specified Executives are
entitled to a termination payment
in the event of termination of
their service agreement by the
Company without cause. They are
entitled to three months’ notice,
excepting for Mr P C Wasow who is
entitled to six months’ notice, or
payment in lieu of that notice,
plus three weeks for each year of
continuous service, pro rata for
part thereof, and capped at a
maximum of sixty-five weeks of
total fixed remuneration, less
notional value of superannuation