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Santos Non-executive Director Share Plan

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					Santos Limited
ABN 80 007 550 923


Non-Executive Director Share Plan
Rules
                               Santos Limited
                             ABN 80 007 550 923
                Non-Executive Director Share Plan Rules


1   Interpretation and Definitions

    1.1   Definitions
          In these rules:
          Allocation Date means each date determined by the Board as an allocation date
          for the purposes of this Plan;
          Allocation Price means, unless the Board determines otherwise:
          (a)    if the Shares are issued by the Company, the weighted average price of
                 Shares on the ASX during the one week period up to and including the
                 Allocation Date; or
          (b)    if the Shares are acquired, the price paid for the Shares acquired for the
                 purposes of this Plan (which may, at the Board’s discretion, include or
                 exclude any stamp duty, brokerage or other costs associated with the
                 acquisition of the Shares);
          ASX means ASX Limited ABN 98 008 624 691;
          Board means the board of directors of the Company from time to time;
          Company means Santos Limited ABN 80 007 550 923;
          Fees means:
          (a)    the gross amount (exclusive of the statutory minimum superannuation
                 contribution or superannuation guarantee charge contribution) payable by
                 or on behalf of the Company by way of fees to a non-executive director for
                 his or her services as a director or as a member of any standing committee
                 of the Board and includes any part of that fee paid in kind, but excludes
                 any additional and special remuneration paid out of the funds of the
                 Company for any extra services performed or special exertions made by
                 the non-executive director pursuant to the Company’s constitution; or
          (b)    such other amount as the Board determines for the purposes of this Plan;
          Listing Rules means the official Listing Rules of the ASX as they apply to the
          Company from time to time;
          Participating Amount means an amount equivalent to the amount a
          non-executive director has agreed to sacrifice in accordance with rule 2.1;
          Participating Non-Executive Director means a director of the Company who is
          not employed in a full time executive capacity by the Company or a Subsidiary
          and who elects to participate in this Plan;
          Participation Period means unless the Board determines otherwise, each period
          from 1 January to the next occurring 31 December (inclusive) except:
          (a)    the first Participation Period is from 1 July 2007 until 31 December 2007;
                 and

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          (b)    the first Participation Period for a Participating Non-Executive Director
                 who is appointed a Participating Non-Executive Director after 1 July 2007,
                 is from the date of appointment of that Participating Non-Executive
                 Director until the next occurring 31 December;
          Plan means the Santos Limited Non–Executive Director Share Plan as set out in
          these rules, subject to any amendments or additions made under rule 5(d);
          Restricted Share means a Share allocated in accordance with the Plan subject to
          restrictions under rule 4;
          Share means a fully paid ordinary share in the capital of the Company;
          Subsidiary has the meaning given in section 9 of the Corporations Act; and
          Transfer includes sell, transfer, create a trust, alienate the right to exercise the
          vote attached to any Share or otherwise deal with a Share, and procuring any such
          event if a Share is held beneficially for a Participating Non-Executive Director.

    1.2   Interpretation
          In the Plan, the following rules apply unless a contrary intention appears:
          (a)    headings are for convenience only and do not affect the interpretation of
                 the Plan unless the context requires otherwise;
          (b)    any reference in the Plan to any enactment or the Listing Rules includes a
                 reference to that enactment or those Listing Rules as from time to time
                 amended, consolidated, re-enacted or replaced and to all regulations or
                 instruments issued under it;
          (c)    any words denoting the singular include the plural and words denoting the
                 plural include the singular;
          (d)    any words denoting one gender include the other gender; and
          (e)    where any word or phrase is given a definite meaning in the Plan, any part
                 of speech or other grammatical form of that word or phrase has a
                 corresponding meaning.


2   Participation

    2.1   Agreement to participate
          (a)    Each Participating Non-Executive Director agrees to participate in the
                 Plan.
          (b)    Each Participating Non-Executive Director may, prior to the
                 commencement of a Participation Period, nominate a percentage of Fees
                 that he or she elects to sacrifice and that will constitute the Participating
                 Amount for the purposes of the Plan.
          (c)    If the Board determines that Participating Non-Executive Directors must
                 apply a minimum percentage of Fees under the Plan, any Participating
                 Non-Executive Director who wishes to participate or continue to
                 participate in the Plan must elect to participate to the prescribed extent or
                 not participate in the Plan at all.


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    2.2   Variation
          A Participating Non-Executive Director may, subject to the Participating Amount
          being at least equal to the minimum amount applicable under rule 2.1, vary his or
          her election to sacrifice Fees in relation to any future Participation Period at any
          time prior to the end of the then current Participation Period. Any variation to the
          election to sacrifice made under this rule will take effect from the beginning of the
          Participation Period commencing after the variation to the election to sacrifice is
          made until a further variation to the election to sacrifice is effected under this rule.

    2.3   Method of participation
          By making an election to participate, each Participating Non-Executive Director
          agrees to forgo their future entitlement to the Participating Amount from his or
          her Fees before becoming entitled to those Fees.


3   Allocation of Shares

    3.1   Allocation
          Subject to this rule, on each Allocation Date:
          (a)    either:
                 (1)       the Company must issue to, or on behalf of, each Participating
                           Non-Executive Director the number of whole Shares that may be
                           acquired at the Allocation Price by applying the Participating
                           Amount; or
                 (2)       the Company must acquire, or procure the acquisition, on behalf of
                           each Participating Non-Executive Director, that number of whole
                           Shares (disregarding any fractional entitlement) determined by
                           dividing the Participating Amount by the Allocation Price;
          (b)    if the Board determines that the allocation of shares would result in the
                 Company breaching its constitution, any law or rule of the ASX or is
                 otherwise inappropriate in the circumstances, the Board may defer the
                 allocation of shares until a more suitable time or pay the director a cash
                 amount equal to the Participating Amount for that Participation Period.

    3.2   Ceasing to hold office
          (a)    If a Participating Non-Executive Director ceases to hold office, or has
                 announced his or her intention to retire from office, in a period between
                 Allocation Dates, the Company is not obliged to allocate any Shares to, or
                 on behalf of, the Participating Non-Executive Director in accordance with
                 this rule 3 on the next occurring Allocation Date.
          (b)    Where the Company chooses not to allocate any Shares under rule 3.2(a),
                 the Company will pay or procure the payment to the Participating Non-
                 Executive Director a cash amount equal to any part of the Participating
                 Amount in relation to that period to which the Participating Non-Executive
                 Director would have been entitled to Fees under the constitution had he or
                 she not agreed to forgo that amount.


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          (c)    Where a Participating Non-Executive Director ceases to hold office
                 pursuant to section 206A(2) of the Corporations Act, that director forfeits
                 all interest in Shares allocated in the 3 years preceding the cessation of
                 office under this Plan and appoints the Company Secretary as his or her
                 attorney to effect a transfer of those shares on his or her behalf and the
                 director will have no further title or interest in those Shares.

    3.3   Transaction costs
          The Company is authorised, but not required, to bear all brokerage, commission,
          stamp duty or other transaction costs payable in relation to the acquisition of
          Shares by the Participating Non-Executive Directors under the Plan.

    3.4   Rights attaching to Shares
          Any Share allocated to, or on behalf of, a Participating Non-Executive Director
          will rank equally in all respects with other issued Shares and carry all rights
          attaching to Shares as from the Allocation Date in respect of dividends (except as
          to dividends payable by reference to a record date that is earlier than the date the
          Shares are issued), rights issue, bonus issue or other rights.


4   Restriction on Transfer of Shares

    4.1   Restrictions
          The Board may implement any procedure it considers appropriate to restrict a
          Participating Non-Executive Director from Transferring any Shares allocated to,
          or on behalf of, the Participating Non-Executive Director for as long as those
          Shares are Restricted Shares.

    4.2   No Transfer
          A Participating Non-Executive Director must not Transfer any Shares allocated in
          accordance with the Plan while they are Restricted Shares.

    4.3   Restriction period
          A Share allocated to a Participating Non-Executive Director under the Plan will
          be a Restricted Share until the earlier of:
          (a)    the date on which the Participating Non-Executive Director ceases to be a
                 director of the Company; or
          (b)    the date which is 10 years from the Allocation Date (or such other period
                 as the Board may prospectively determine shall apply to either all future or
                 any particular Shares allocated to non-executive directors under this Plan);
                 or
          (c)    if, after the second anniversary of the Allocation Date, an application is
                 made by a Participating Non-Executive Director to the Board for the
                 cessation of the restriction period on exceptional grounds, and the Board,
                 in its discretion, determines that any or all restrictions applying to the
                 Participating Non-Executive Director's Shares cease, the date so
                 determined by the Board.

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          In this clause 4.3, the grounds upon which a Participating Non-Executive Director
          may apply to have restrictions lifted that could be considered by the Board as
          exceptional includes where the director is assessed to pay tax on shares allocated
          under the Plan or other circumstances of financial hardship.

    4.4   Lapse of restrictions
          When a Share ceases to be a Restricted Share, all restrictions on Transferring that
          Share provided in or under these rules will cease.


5   General
    (a)   The Plan will be administered by the Board which has the power to:
          (1)    determine procedures for administration of the Plan consistent with these
                 rules;
          (2)    resolve conclusively all questions of fact or interpretation arising in
                 connection with the Plan;
          (3)    delegate to any one or more persons for such period and on such
                 conditions as the Board may determine, the exercise of any of its powers
                 or discretions arising under the Plan; and
          (4)    waive any breach of a provision of the Plan.
    (b)   The Board has a general discretion to resolve in a specific case, for reasons
          including, without limitation, financial hardship and sickness, that:
          (1)    a Participating Non-Executive Director is exempted from participation in
                 the Plan; or
          (2)    the Participation Amount (if any) is lowered for a Participating Non-
                 Executive Director,
          for a period and subject to any conditions that the Board may decide.
    (c)   The Board may at any time by resolution and by notice to Participating Non-
          Executive Directors, suspend or terminate the Plan. The rules including, without
          limitation, rule 4, will continue to operate with respect to any Shares allocated
          subject to the Plan prior to the date the Plan was suspended or terminated by the
          Board.
    (d)   Subject to the Listing Rules, the Board may at any time and from time to time by
          resolution amend all or any of these rules provided that the amendment does not
          affect the beneficial entitlement of any person to any Shares allocated under the
          Plan before the date of the variation.
    (e)   The rules and conditions of this Plan are governed by the laws of South Australia
          and the Commonwealth of Australia.




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Description: Santos Non-executive Director Share Plan