Dark Blue Sea

Executives & Non Executives Remuneration Policy

1. Introduction

The Board recognise that to prosper, the Company must be able to attract, motivate and retain key executives and non executive directors. Therefore the Board has structured the remuneration of executives and non executive directors to achieve this result.

Remuneration of executives and non executive directors is determined, structured and reviewed in accordance with this Policy.

2. Key Principles

The key principles that underpin Dark Blue Sea's Remuneration Policy are:
(a) remuneration must reflect the market in which the Company operates;
(b) key performance indicators will apply to deliver results to the Company;
(c) remuneration is to be linked to the creation of value to shareholders; and
(d) remuneration is to reward both financial and non financial performance.

3. Executive Remuneration

3.1 Aim of Remuneration Policy

To achieve its goals in relation to executive staff, the remuneration Policy is designed to:

• encourage executives to align their interests with those of shareholders and trading members;
• align individual and team reward with business performance in both the short term and long term;
• encourage executives to perform to their fullest capacity;
• be business focused and flexible;
• be competitive and cost effective in each relevant employment market; and
• be internally consistent.

3.2 Content of Remuneration Packages

Remuneration will incorporate fixed and variable pay performance elements with both a short term and long term focus.

Remuneration packages may contain any or all of the following:

• Annual salary based on conditions and the relevant market - with provision to recognise the value of the individuals' personal performance and their ability and experience;
• Equity participation pursuant to the Employee Option Plan which was approved by shareholders; and
• Other benefits such as holidays, sickness benefits, superannuation payments, long service benefits and motor vehicles.

3.3 Setting Remuneration and Review

Each year, the Chief Executive Officer will review the remuneration of all executives (other than the Chief Executive Officer).

The review of executives will take into account individual performance, comparative remuneration in the market and where appropriate, external advice.

Executive remuneration is set at levels and structured to attract, motivate, reward and retain good performers to drive the business effectively.

The remuneration of the Chief Executive Officer will be annually reviewed by the members of the Board. The Board will gather and review relevant information, comparative remuneration, individual performance and, if required, obtain external advice.

4. Non Executive Director Remuneration

4.1 Introduction

The Board's focus is on long term strategic direction and overall performance of the Company. As a consequence, non executive director remuneration is not directly related to short term results, instead it is related to long term performance.

4.2 Determination of Non Executive Director Remuneration

Remuneration of non executive directors is determined with regard to the Company's need to maintain appropriately experienced and qualified Board members and in accordance with competitive pressures in the marketplace. The Remuneration Policy is designed:

• to attract and retain directors;
• to motivate directors to achieve the Company's business objectives; and
• to align the interests of directors with the long term interests of shareholders.

The Board accepts that, given the size of the Company, directors' fees and associated costs must not place an inappropriate burden on the Company's finances. However, the Company operates in a complex market and the duties and obligations of directors are increasing at an increasing rate.

4.3 Extra Duties and Expenses

From time to time, the Board may ask individual directors to devote extra time or to undertake extra duties. Directors who undertake these tasks at the Board's direction may receive extra amounts. Directors are also to be reimbursed for expenses associated with undertaking their duties.

4.4 Review

Each year, the Board reviews the total amount of directors' remuneration. At the Company's Annual General Meeting, shareholders are asked to consider, and if they think it appropriate, approve any recommended increase in directors' fees. Pursuant to the Company's Constitution, the total amount of remuneration paid to non executive directors must not exceed the maximum amount the shareholders authorise at general meeting.

4.5 Retirement Benefits

Other than compulsory superannuation contributions made by the Company, non executive directors are not entitled to any additional retirement benefits.

Adopted by the Board on 28 June, 2004

Gregory John Platz
Chief Financial Officer