dIRECTORS’ REPORT COnTInUEd Remuneration Report (Audited)  (continued) C. Service Agreements 26 Karoon Gas Australia Ltd  Annual Report 2011 The options have been granted subject to continued employment with the Company but are not subject to the individual meeting  pre-determined performance criteria (for example, profitability and sales targets), given the Company is still in the exploration and  evaluation phase of activities. Options have vesting periods of zero to four years, dependent upon the tranche of options being granted and the time elapsed  between formal approval and issue of options. Further information on options is set out in Note 27 of the financial statements. The Board has prepared a policy in relation to an individual limiting his or her exposure to risk in relation to securities (including options). Amounts disclosed for remuneration of Directors, other key management personnel and other Group executive exclude insurance premiums paid by the Company in respect of directors’ and officers’ liability insurance contracts, as the contracts do  not specify premiums paid in respect of individual Directors and officers. Information relating to insurance contracts is set out in  this Directors’ Report. Remuneration and other terms of employment for the Executive Chairman, Executive Director, Chief Financial Officer, other key  management personnel and other Group executive are formalised in either service agreements or employment contracts. Each  of these agreements provide for the provision of benefits including health insurance, car allowances and participation, when  eligible, in the Company’s ESOP or other share options. Other major provisions of the agreements relating to remuneration are  set out below. Base Salary  (Including Post  Notice/  Share Employment Benefit  Termination Termination Option  Entitlements)  Name  Term  Expiry  Period  Payments  Related Entity  Eligible  Amount Executive Directors  Mr Robert Hosking From Ongoing  In writing  Change  Ropat Nominees Yes  $500,000 ^ 1 May 2011, 6 months  of control: Pty Ltd  ongoing  one year  Hosking  Superannuation  Fund  Mr Mark Smith  From In writing  Change  IERS (Australia)  Yes  $500,000 ^ 1 May 2011,  6 months  of control:  Pty Ltd ongoing  Ongoing  one year  Bonnie Doon Superannuation  Fund  Other key management personnel (Group) Mr Scott Hosking  Ongoing  Ongoing  In writing  Change  Yes  $275,000 3 months  of control:  one year  Mr Tim Hosking  From Ongoing  In writing  Change  Yes  $407,800  1 December 2010, 3 months  of control:  ongoing  one year  Mr Lino Barro  Ongoing  Ongoing  In writing  Change  Barro  Yes  $310,500 3 months  of control:  Superannuation one year Fund  Details of existing contracts between the Group and the Executive Directors, other key management personnel and other Group  executives are as follows: 