NOTES TO THE FINANCIAL STA TEMENTS for the year ended 31 December 2004 (a) Santos Executive Share Plan (b) Santos Employee Share Acquisition Plan Annual Report 2004 62 The Santos Employee Share Acquisition Plan was approved by sharehold ers at the Annual General Meeting on 15 May 1997 and its continuation, with amendment, approved at the Annual General Meeting on 5 May 2000. Broadly, permanent eligible employees with at least a minimum period of  service determined by Directors as at the offer date (one year of completed service for issues so far) are entitled to acquire shares under this Plan. Ex ecutives participating in the Santos Executive Share Option Plan (refer note 18(d)) or in the Executive Long Term Incentive Plan in 2004, casual employees and Directors of the Company are excluded from participating in this Plan. Employees are not eligible to participate under the Plan while th ey are resident overseas unless the Board decides otherwise. The Plan provides for grants of fully paid ordinary shares in the capital of  the Company up to a value determined by the Board which, to date, has been $1,000 per annum per eligible employee. A trustee is funded by the Santos Group to acquire shares directly from the Company or on market. The shares are then held by the trustee on behalf of eligible employees who have made applications under the Plan. The employee’s ownership of shares allocated under the Plan, and his or h er right to deal with them, are subject to restrictions until the earlier of the expiration of the restriction period determined by the Board (bein g three years) and the time when he or she ceases to be an employee. Participants are entitled to instruct the trustee as to the exercise of votin g rights, receive dividends and participate in bonus and rights issues during the restriction period. Shares are granted to eligible employees at no cost to the employee. The Santos Executive Share Plan was approved by shareholders at a gener al meeting held on 22 December 1987. Under the terms of the Plan, shares were initially issued as partly pai shares, paid to one cent. While partly paid, the Plan Shares are not transferable, carry no voting right and no entitlement to dividend but ar e entitled to participate in any bonus or rights issue. Shares were issued principally on: 22 December 1987; 7 February an 5 December 1989; and 24 December 1990. In 1997 the Board determined that the Plan be discontinued and, accordingly, there has been no furth er issues of shares under the Plan. At the beginning of the financial year there were 231,000 Plan Shares on issue. During the financial year 50,000 Plan Shares were fully paid and aggregate proceeds of $138,200 received by the Company. As at 31 December 2004 there were 181,000 Plan Shares outstanding. The market price of the Company’s ordinary shares on 31 December 2004 was $8.48 (2003: $6.87). Consolidated Santos Ltd 2004 2003 2004 2003 18. Contributed Equity $million $million $million $million Share capital 585,520,675 (2003: 584,475,013) ordinary shares, fully paid 1,557.2 1,550.8 1,557.2 1,550.8 181,000 (2003: 231,000) ordinary shares, paid to one cent – – – – Nil (2003: 3,500,000) reset convertible preference shares – 342.3 – 342.3 6,000,000 (2003: nil) redeemable convertible preference shares 581.8 – 581.8 – 2,139.0 1,893.1 2,139.0 1,893.1 Movement in fully paid ordinary shares 2004 2003 2004 2003 Note Number of shares $million $million Balance at the beginning of the year 584,475,013 582,782,293 1,550.8 1,542.5 Santos Executive Share Plan (a) 50,000 35,750 0.1 0.1 Santos Employee Share Acquisition Plan (b) 157,014 254,106 1.3 1.5 Santos Employee Share Purchase Plan (c) 123,648 152,864 0.9 1.0 Shares issued on exercise of options (d) 715,000 1,250,000 4.1 5.7 Balance at the end of the year 585,520,675 584,475,013 1,557.2 1,550.8 Movement in reset convertible preference shares Balance at the beginning of the year 3,500,000 3,500,000 342.3 342.3 Transfer to redeemable convertible preference shares – – 7.7 – Shares redeemed (f) (3,500,000) – (350.0) – Balance at the end of the year – 3,500,000 – 342.3 Movement in redeemable convertible preference shares Balance at the beginning of the year – – – – Shares issued (g) 6,000,000 – 600.0 – Share issue cost – – (10.5) – Transfer from reset convertible preference shares – – (7.7) – Balance at the end of the year 6,000,000 – 581.8 –