CAR GROUP LIMITED — AGM Information 2016

Sep 26, 2016

carsales.com Limited ABN 91 074 444 018 Registered Office: Level 4, 449 Punt Road, Richmond, Victoria, 3121

Notice of Annual General Meeting

Notice is hereby given that the Annual General Meeting of Shareholders of carsales.com Limited will be held in Victoria on Friday, 28 October 2016, in the La Trobe Ballroom, Level 1, Sofitel Melbourne on Collins at 25 Collins Street, Melbourne, at 1.00 p.m. (Melbourne time).

Ordinary Business

Please note that the default option for receiving your Annual Report is now online. To access your online Annual Report please visit http://shareholders.carsales.com.au and click on 'Financial Reports' on the left hand side of the screen. You have the option of receiving, free of charge, a printed copy of the Annual Report. Please contact Computershare on 1300 651 575 (or outside Australia +613 9415 4694) or logon to www.investorcentre.com, click on 'Update My Details' then 'Communication Options' and complete your details to receive a printed copy of the Annual Report.

Financial Report and Directors' and Auditor's Reports

$1.$ To receive, consider and adopt the Financial Report, including the Directors' declaration, the related Directors' Report and Auditor's Report of the Group for the year ended 30 June 2016 (contained in the 2016 Annual Report).

Remuneration Report

To receive, consider and adopt the Remuneration Report for the year ended 30 June 2016 (contained in the 2016 Annual Report) by passing the following resolution:-

"That the Remuneration Report that forms part of the Directors' Report of the Group for the financial year 2. ended 30 June 2016 be adopted."

Election and re-election of Directors

To consider and if thought fit, pass the following resolutions:-

• 1. "That Ms Kim Anderson, being a Director of the Company who retires by rotation, and being eligible under the Company's constitution, is re-elected as a Director of the Company."
• 1. "That Ms Edwina Gilbert, who was appointed as a Director of the Company effective on 27 April 2016, and being eligible under the Company's constitution, be approved as a Director of the Company."

Special Business

Grant of deferred short term incentive performance rights and long term incentive share options and performance rights to the Managing Director, Mr Greg Roebuck

To consider and if thought fit, pass the following resolutions to be voted on separately:-

• 5a. "That, for the purpose of ASX Listing Rule 10.14 and for all other purposes, approval be and is hereby given, to the grant of up to 12,155 Performance Rights over shares in the Company to Mr Greg Roebuck, in accordance with the terms of the Company's Option Plan and as set out in the Explanatory Memorandum below."
• 5b. "That, for the purpose of ASX Listing Rule 10.14 and for all other purposes, approval be and is hereby given, to the grant of up to 349,587 Options and Performance Rights over shares in the Company to Mr Greg Roebuck, in accordance with the terms of the Company's Option Plan and the Company's long term incentive arrangements as set out in the Explanatory Memorandum below."

Other Business

To deal with any other business which may be brought forward in accordance with the Company's constitution and the Corporations Act.

During the Annual General Meeting, a presentation covering the status of the Group will be made by Mr Greg Roebuck (Managing Director). Shareholders will be able to put questions to the Directors. Tea and coffee will be served from 12.30 p.m. (Melbourne time).

By order of the Board.

Nicole Birman Company Secretary 27 September 2016

TERMS:

Capitalised terms used in this Notice of AGM (including those used in the items set out in this Notice of AGM) have, unless otherwise defined, the same meanings as set out in the Explanatory Memorandum.

VOTING EXCLUSION STATEMENT:

$1.$ Resolution 2

• (a) In accordance with the Corporations Act, a member of the Company's KMP whose remuneration is included in the Remuneration Report, and closely related parties of a KMP, will not be eligible to vote on Resolution 2, except as provided in paragraph (b) below.
• (b) A person described in paragraph 1(a) may vote on Resolution 2 if the vote is not cast on behalf of a person described in that paragraph and the person
• votes as a proxy for a person who is entitled to vote, in accordance with the directions on the $(i)$ proxy form: or
• $(ii)$ is the Chairman of the Annual General Meeting, voting as a proxy for a person who is entitled to vote, and the appointment of the Chairman as proxy:
  • $(A)$ does not specify the way the proxy is to vote on the resolutions; and
  • $(B)$ expressly authorises the Chairman to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the Company's KMP.

$2.$ Resolutions 5a and 5b

In accordance with the ASX Listing Rules the Company will, except as provided in paragraph 3 below, disregard any votes cast on Resolutions 5a and 5b, by the Managing Director, Mr Greg Roebuck, or any associate of Mr Greg Roebuck and any other Director and their respective associates (except if ineligible to participate in the employee incentive scheme in respect of which approval is sought). Mr Greg Roebuck is the only Director currently eligible to participate in the Company's Option Plan.

As Mr Greg Roebuck is a member of the Company's KMP, in accordance with the Corporations Act, a vote must not be cast on either of these resolutions by him or any other KMP, or a closely related party of Mr Greg Roebuck or any other KMP, acting as a proxy if the proxy form does not specify the way the proxy is to vote on these resolutions. However, the Company will not disregard any proxy votes cast on either of these resolutions by a member of the Company's KMP if the KMP is the Chairman of the Annual General Meeting acting as a proxy and the appointment expressly authorises the Chairman to exercise the proxy even though these resolutions are connected with the remuneration of Mr Greg Roebuck.

• $3.$ The Company will not disregard a vote if it is cast:
• (a) by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
• (b) by the Chairman of the Annual General Meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

REQUIRED VOTING MAJORITY - CORPORATIONS ACT:

Items 2 to 5b (inclusive)

In accordance with section 249HA of the Corporations Act for each of these resolutions to be effective -

• not less than 28 days' written notice specifying the intention to propose the resolutions has been given; and
• each resolution must be passed by more than 50% of all the votes cast by Shareholders entitled to vote on the resolutions (whether in person or by proxy, attorney or representative).

On a show of hands, every Shareholder has one vote and, on a poll, every Shareholder has one vote for each Ordinary Share held, subject to the voting exclusions set out in the Voting Exclusion Statement above.

NOTES:

Proxies and corporate representatives

• Pursuant to regulation 7.11.37 of the Corporations Regulations 2001, the Board has determined that the $1.$ shareholding of each Shareholder for the purposes of ascertaining the voting entitlements for the Annual General Meeting will be as it appears in the share register at 7.00 p.m. (Melbourne time) on Wednesday, 26 October 2016 ("Effective Time").
• $2.$ All Shareholders at the Effective Time are entitled to attend the Annual General Meeting and may appoint a proxy for that purpose.
• $3.$ A Shareholder who is entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the Shareholder appoints two proxies and the appointment does not specify the proportion or number of the Shareholder's votes each proxy may exercise, each proxy may exercise one half of the Shareholder's votes. If the Shareholder appoints two proxies, neither may vote on a show of hands if both proxies are present at the Annual General Meeting.
• $\overline{4}$ . A proxy need not be a Shareholder of the Company.
• $5.$ The proxy form must be signed by the Shareholder or the Shareholder's attorney. Proxies given by corporations must be executed in accordance with the Corporations Act.
• 1. A corporation which is a Shareholder of the Company may appoint a representative to act on its behalf at the Annual General Meeting. Appointments of representatives must be received in accordance with paragraph 7 below at any time before the Annual General Meeting or at the meeting or any adjournment of the Annual General Meeting.
• Proxies and powers of attorney granted by Shareholders must be received by the Company by no $7.$ later than 1.00 p.m. (Melbourne time) on Wednesday, 26 October 2016. To be valid, a duly completed proxy form and the power of attorney or other authority (if any) under which it is signed (or an attested copy of it) must be:
• (a) given electronically, by visiting www.investorvote.com.au and following the instructions provided but a proxy cannot be appointed online if appointed under power of attorney or similar authority; or
• (b) deposited with the Company's share registry, Computershare Investor Services PO Box 242 Melbourne, VIC 3001; or
• successfully transmitted by facsimile to 1800 783 447 (within Australia), +613 9473 2555 (c) (outside Australia); or
• $(d)$ deposited at the registered office of carsales.com Limited at Level 4, 449 Punt Road, Richmond, Vic. 3121: or
• given electronically by intermediary online custodians, by visiting www.intermediaryonline.com. (e)
• $\mathsf{R}$ If a Shareholder has any specific questions in relation to the above, please contact the Shareholder information line on 1300 651 575 or from overseas +613 9415 4694 not later than 48 hours before the holding of the Annual General Meeting or any adjournment of that Annual General Meeting.

Explanatory Memorandum

This Explanatory Memorandum contains information relevant to the business referred to in the Notice of AGM of carsales.com Ltd ABN 91 074 444 018 (hereafter the "Company"). The Directors recommend that you read this document prior to the Annual General Meeting.

All capitalised terms used in this Explanatory Memorandum have the meanings set out in the Glossary of Terms located at the end of this document.

Further details relating to each of the resolutions is set out below.

Item 1 Financial Report and Directors' and Auditor's Reports

The Corporations Act requires the Financial Report, Directors' Report and Auditor's Report of the Group, prepared on a consolidated single entity basis, for the most recent financial year to be laid before the Annual General Meeting. While this item of business does not require a formal resolution to be put to Shareholders, the Chairman will give Shareholders a reasonable opportunity to ask questions and make comments on these reports and on the business, operations and management of the Group.

In accordance with the Corporations Act, the Chairman will also give Shareholders the opportunity to ask the Auditor questions relevant to the Auditor's Report or conduct of the audit. If a Shareholder wishes to put written questions to the Auditor, a Shareholder is entitled to submit questions relevant to the content of the Auditor's Report or the conduct of the audit, in writing, to the Company, up to five business days prior to the Annual General Meeting. The Company will pass the questions on to the Auditor prior to the Annual General Meeting. The Auditor may, but is not obligated to, answer any written or oral questions that are put to it by Shareholders.

A copy of the Financial Report, Directors' Report and Auditor's Report is available on the Company's website, http://shareholders.carsales.com.au, by clicking "Financial Reports" on the left hand side of the screen. You have the option of receiving, free of charge, a printed copy of these reports. Please contact Computershare on 1300 651 575 (or from overseas +613 9415 4694) if you wish to receive a printed copy of these reports.

Item 2 Remuneration Report

The Remuneration Report (which forms part of the Directors' Report in the 2016 Annual Report) contains information in relation to a number of issues relating to remuneration policy and its relationship to the Company's performance. As required pursuant to the Corporations Act, a resolution will be put to Shareholders to adopt the Remuneration Report. Shareholders should be aware that the vote on this resolution is advisory only and is not binding on the Board.

If 25% or more of the votes cast on this resolution are against adoption of the Remuneration Report, the Company will be required to consider, and report to Shareholders on, what action (if any) has been taken to address Shareholders' concerns at next year's annual general meeting.

Directors' Recommendation

The Directors unanimously recommend Shareholders vote in favour of adopting the Remuneration Report. As stated in the Notice of AGM, each of the KMPs whose remuneration is included in the Remuneration Report and closely related parties of those KMPs are not eligible to vote on this Resolution, except as stated in the Notice of AGM.

The Chairman intends to vote all available proxies in favour of the adoption of the Remuneration Report.

Item 3 Re-election of Director: Ms Kim Anderson

In accordance with the Company's constitution and ASX Listing Rules 14.4 and 14.5, Ms Kim Anderson's position as Director requires confirmation. Accordingly, Ms Anderson retires by rotation and being eligible, offers herself for re-election.

Ms Anderson has been a Director of the Company since 2010. Ms Anderson is the former CEO and founder of Reading Room Inc/Bookstr.com, a community/social networking site for readers, a Non Executive Director of WPP AUNZ, former Fellow of the University of Sydney Senate and former Director of The Sax Institute. Ms Anderson has more than 30 years of experience in various advertising and media executive positions within companies such as Southern Star Entertainment, PBL and Ninemsn.

Directors' Recommendation

The Directors, other than Ms Anderson, recommend that Shareholders vote in favour of resolution 3. Ms Anderson makes no recommendation in relation to resolution 3.

The Chairman intends to vote all available proxies in favour of the re-election of Ms Anderson.

Approval of Director: Ms Edwina Gilbert Item 4

In accordance with the Company's constitution and ASX Listing Rules 14.4 and 14.5. Ms Edwina Gilbert's position as Director requires confirmation. Accordingly Ms Gilbert, who was appointed as a Director effective on 27 April 2016, retires and being eligible, offers herself for election.

Ms Gilbert holds a Bachelor of Laws and Bachelor of Arts from Sydney University and practiced commercial law before moving into the automotive industry in 2003. Ms Gilbert is currently Dealer Principal of Gillen Motors and a Director of the Phil Gilbert Motor Group, managing 200 staff with two brands in two busy metropolitan locations. Ms Gilbert was the Chair of the Hyundai NSW Dealer Council and a member of the Hyundai National Dealer Council from 2010 - 2015.

Directors' Recommendation

The Directors, other than Ms Gilbert, recommend that Shareholders vote in favour of resolution 4. Ms Gilbert makes no recommendation in relation to resolution 4.

The Chairman intends to vote all available proxies in favour of the election of Ms Gilbert.

Grant of deferred short term incentive Performance Rights and long term incentive Options and Item 5 Performance Rights to the Managing Director Mr Greg Roebuck

Resolutions 5a and 5b set out in the Notice of AGM seek Shareholder approval of the deferred short term incentive ("DSTI") and long term incentive ("LTI") arrangements for Mr Greg Roebuck (being the Managing Director and Chief Executive Officer of the Company) under the rules of the Company's Option Plan for the purpose of ASX Listing Rule 10.14. These resolutions will be put to, and voted on, separately by Shareholders. Further details of these proposed individual grants are noted below. As stated in the Notice of AGM, Mr Roebuck is the only Director entitled to participate in the Option Plan.

There are currently 241,170,855 Shares on issue at the date of the Notice of AGM and the Options and Performance Rights proposed to be granted to Mr Roebuck, if approved by Shareholders, will represent approximately 0.15% of the current issued Shares.

Mr Roebuck currently holds 742,889 Options and Performance Rights issued under the Company's Option Plan and previously approved by Shareholders at the Company's annual general meetings and directly and indirectly, through entities associated with him, holds 3,841,902 Shares. At the date of the Notice of AGM, Mr Roebuck has a relevant interest in 1.6% of the total voting rights of the Company. If Shareholders approve the issue of these Options and Performance Rights to Mr Roebuck and all the currently held Options and Performance Rights issued to him vest and are exercised,

Mr Roebuck's relevant interest in the Company will increase by approximately 0.5% to 2.1%, based on the issued capital of the Company as at the date of the Notice of AGM. No loans have been, or will be, granted to Mr Roebuck in relation to his participation in the DSTI and LTI arrangements and Mr Roebuck is prohibited from entering into hedging transactions or arrangements in respect of these Options and Performance Rights.

As at the date of the Notice of AGM, no other Director or associate of a Director is eligible to participate in the Option Plan and no other person who requires approval to participate in the Option Plan under ASX Listing Rule 10.14 has been, or will be, issued with Options or Performance Rights unless Shareholder approval is obtained.

Directors' Recommendation

The Directors, other than Mr Roebuck, considered the nature of Mr Roebuck's position in overseeing the management of the Group's operations and strategy and unanimously recommend that Shareholders vote in favour of resolutions 5a and 5b.

As stated in the Notice of AGM, Mr Roebuck, his associates and closely related parties and each other KMP and their respective closely related parties are not eligible to vote on this resolution, except as stated in the Notice of AGM.

The Chairman intends to vote all available proxies in favour of the grant of Options and Performance Rights to Mr Roebuck.

Item 5a Deferred Short Term Incentive ("DSTI")

The structure of Mr Roebuck's remuneration package includes the following components:

• Base Salary (including superannuation and other allowances)
• STI (cash based award)
• DSTI (Performance Rights based award)
• LTI (Options and Performance Rights based award)

The STI award is a cash based award paid in the form of an annual cash payment on the achievement of particular objectives (see page 35 of the 2016 Annual Report for further details about the structure and objectives included in the STI program).

If Shareholder approval is received, the Board will grant up to 12,155 Performance Rights to Mr Roebuck as a DSTI. Each Performance Right will have a \$0 exercise price. The terms on which these Performance Rights will be issued to Mr Roebuck are summarised below.

The value of the Performance Rights was calculated using the Black-Scholes option pricing model which takes into account certain facts and makes certain assumptions as explained on page 90 of the 2016 Annual Report. The assumption inputs used in the Black-Scholes model are reviewed each year by an independent external consultant. The value of this award is \$120,000.

The Board believes the grant of the Performance Rights to Mr Roebuck is consistent with the Company's remuneration policies and objectives, reflects good market practice in remuneration and effectively aligns the interests of Mr Roebuck with those of the Company and its Shareholders.

The key terms of this Performance Rights award, subject to Shareholder approval, are summarised as follows:

The Performance Rights will be issued to Mr Roebuck for no cash consideration as soon as possible after the Annual General Meeting (but no later than 12 months after the Annual General Meeting).

carsales ocom ltd

• The vesting of the 12,155 Performance Rights is subject to the achievement of a financial year ending 30 June 2017 ("FY2017") earnings per share ("EPS") target. The Board, in considering appropriate performance targets, believes EPS is the most effective measure in ensuring alignment with the interests of shareholders.
• EPS will be calculated by dividing the net profit after tax attributable to equity holders of the Company during the relevant period by the weighted average number of Ordinary Shares outstanding during the relevant period.
• The minimum and maximum EPS target for the Performance Rights to vest has been set by the Board. In setting the EPS target, the Board has considered the historical earnings performance of the Company, forward looking market consensus earnings expectations, the overall purpose of the award and the long term best interests of the Company. The Board believes that the growth target that has been set is appropriate.
• The Company will publish in the FY2017 Annual Report the minimum and maximum EPS target that was applicable to the grant, along with the actual EPS achieved by the Company.
• Performance Rights will not be capable of exercise if at the testing date (referred to below) the minimum targeted growth rate has not been achieved.
• Performance Rights will be capable of exercise if at the testing date the EPS target has been achieved or exceeded as follows:
• If the EPS achieved is equal to the minimum target, 70% of the Performance Rights will be $\Omega$ capable of exercise:
• If the EPS achieved is between the minimum and maximum targets, vested Performance $\circ$ Rights will be capable of exercise on a pro-rata basis between 70% and 100%; and
• If the EPS achieved is equal to or exceeds the maximum target, 100% of the Performance Rights will be capable of exercise.
• The performance conditions applying to the Performance Rights will be tested at 30 June 2017.
• The exercise price of a Performance Right is \$0.
• Subject to the performance conditions being satisfied, Performance Rights may, unless otherwise waived by the Board, be exercised after the Board releases the 2018 Annual Report to the ASX.
• Vested and unexercised Performance Rights and Performance Rights which have not vested, will, subject to the Board's discretion, automatically lapse if Mr Roebuck ceases to be employed by the Company.
• Any Shares issued on the vesting of these Performance Rights will be held in trust by the trustee of the carsales.com Employee Share Trust ("Trust"), CPU Share Plans Pty Limited, on the terms and conditions of the Plan and the trust deed establishing the Trust.
• Shares to be allocated to Mr Roebuck on vesting of any of these Performance Rights may be satisfied by the issue of new Shares or acquired on market. All new Shares issued will rank, in all respects, equally with all other Shares and the Company will apply for quotation of the new Shares on ASX.
• If there is a reorganisation of the Company's capital, the Performance Right terms will be adjusted, pursuant to the ASX Listing Rules, to the extent necessary to reflect the effects of the reorganisation.
• EPS targets exclude any corporate activity associated with mergers and acquisitions, corporate or capital reorganisations completed after the issue of this notice.

Item 5b Long Term Incentive ("LTI")

If Shareholder approval is received, the Board will grant up to 260,825 Options and 88,762 Performance Rights to Mr Roebuck.

The key general terms of these Options and Performance Rights, subject to Shareholder approval, are summarised as follows:

The performance conditions applying to the Options and Performance Rights will be tested at 30 June 2019.

carsales o com ltd

• The exercise price of each vested Option is \$12.23 being the volume weighted average price of the Company's Shares for the 21 days prior to 1 July 2016. The exercise price of each Performance Right is \$0.
• Subject to the performance conditions being satisfied, Options and Performance Rights may, unless otherwise waived by the Board, be exercised after the Board releases the 2019 Annual Report to the ASX.
• Vested and unexercised Options and Performance Rights, and Options and Performance Rights which have not vested will, subject to the Board's discretion, automatically lapse if Mr Roebuck ceases to be employed by the Company.
• Any Shares issued on the vesting and exercise of these Options and Performance Rights will be held in trust by the trustee of the Trust, CPU Share Plans Pty Limited, on the terms and conditions of the Option Plan and the trust deed establishing the Trust.
• Shares to be allocated to Mr Roebuck on vesting and exercise of any Options and Performance Rights may be satisfied by the issue of new Shares, Shares acquired on market or in specific circumstances in cash. All new Shares issued will rank, in all respects, equally with all other Shares and the Company will apply for quotation of the new Shares on ASX.
• If there is a reorganisation of the Company's capital, the Options and Performance Rights terms will be adjusted, pursuant to the ASX Listing Rules, to the extent necessary to reflect the effects of the reorganisation.
• The Options and Performance Rights will be issued to Mr Roebuck for no cash consideration as soon as possible after the Annual General Meeting (but no later than 12 months after the Annual General Meeting).

Over the past several years a number of shareholders have sought for the Company to add an additional performance metric to the LTI plan. The Board believes that the most appropriate performance metric for the judgement of management performance continues to be Earnings Per Share (EPS). However the Board also recognises the importance in achieving alignment with market practice in remuneration as far as practical and has this year decided to introduce a second performance measure being Relative Total Shareholder Return (RTSR).

Earnings Per Share (EPS) Measure

Outlined below are the terms of the EPS measure within the LTI plan.

The value of the Options and Performance Rights were calculated using the Black-Scholes option pricing model which takes into account certain facts and makes certain assumptions as explained on page 90 of the 2016 Annual Report. The assumption inputs used in the Black-Scholes model are reviewed annually by an independent external consultant. The value of this award is \$900,000.

The key terms of this measure are summarised as follows:

• The vesting of up to 189,474 Options and 56,303 Performance Rights is subject to the achievement of an EPS target.
• EPS will be calculated by dividing the net profit after tax attributable to equity holders of the Company during the relevant period by the weighted average number of Ordinary Shares outstanding during the relevant period.
• The minimum and maximum EPS target for the Options and Performance Rights have been set by the Board. In determining the EPS target, the Board has considered the historical earnings performance of the Company, forward looking market consensus earnings expectations, the overall purpose of the award and the long term best interests of the Company. The Board believes that the minimum growth target that has been set is appropriate.
• The Company will publish in the FY2019 Annual Report the minimum and maximum EPS target that was applicable to the grant, along with the actual EPS achieved by the Company in that relevant year.
• Options and Performance Rights will not be capable of exercise if at the testing date (referred to below) the minimum targeted EPS has not been achieved.

carsales ocom ltd

• Options and Performance Rights will be capable of vesting and exercise if at the testing date the EPS target has been achieved or exceeded as follows:
• If the EPS achieved is equal to the minimum target, 70% of the Options and Performance Rights will be capable of exercise;
• If the EPS achieved is between the minimum and maximum targets, vested Options $\circ$ and Performance Rights will be capable of exercise on a pro-rata basis between 70% and 100%: and
• If the EPS achieved is equal to or exceeds the maximum target, 100% of the Options and $\circ$ Performance Rights will be capable of exercise.
• EPS targets exclude any corporate activity associated with mergers and acquisitions, corporate or capital reorganisations completed after the issue of this notice.

Relative Total Shareholder Return (RTSR) Measure

Outlined below are the terms of the RTSR measure within the LTI plan.

The value of the Options and Performance Rights was calculated using a Monte Carlo valuation model and has been calculated by an independent external consultant. The value of this part of the award is \$300,000.

The key terms of this measure are summarised as follows:

• The vesting of 71,351 Options and 32,459 Performance Rights is subject to the achievement of an RTSR target.
• The RTSR component will vest if the Company's relative TSR performance is equal to or greater than the median comparator group of companies at the end of the third year's performance period in accordance with the vesting conditions below:
• If the relative ranking against the comparator group is below the 50^th percentile, no $\circ$ Performance Rights or Options will be capable of exercise;
• If the relative ranking against the comparator group is at the $50^th$ percentile, 50% $\Omega$ Performance Rights or Options will be capable of exercise;
• If the relative ranking against the comparator group is between the 50^th percentile and the $\Omega$ 75^th percentile, Performance Rights or Options will be capable of exercise on a straight line pro rata basis from 50% to 100%; and
• If the relative ranking against the comparator group is at or above the 75^th percentile, 100% $\circ$ Performance Rights or Options will be capable of exercise.
• The comparator group used in the relative TSR calculation is the ASX200 as at 30 June 2016. The Company has selected this comparator group as there are not enough similar domestic peers of appropriate size and risk profile to make a customised comparator group meaningful. However, the Company will regularly review this comparator group to ensure the most relevant group is used.

carsales ocom ltd

Glossary of Terms

Annual General Meeting	means the Annual General Meeting of the Company to be held at 1.00 p.m. (Melbourne time), Friday, 28 October, 2016 and "AGM" has the same meaning.
ASX Listing Rules	means the listing rules of the ASX Limited ACN 008 624 691 (also referred to as "ASX"), as amended from time to time.
Auditor	means PricewaterhouseCoopers.
Auditor's Report	means the report of the Auditor regarding its audit of the Group which accompanies the Financial Report.
Board	means the board of Directors of the Company.
Chairman	means the individual acting as chairman of the AGM.
Company	means carsales.com Limited (ABN 91 074 444 018).
Corporations Act	means the Corporations Act 2001 (Cth).
Director	means a director of the Company.
Directors' Report	means the report of the Directors of the Company contained in the 2016 Annual Report.
Effective Time	means 7.00 p.m. (Melbourne time) on Wednesday, 26 October 2016.
Explanatory Memorandum	means this memorandum which provides details of the business to be heard at the Annual General Meeting.
Financial Report	means the annual financial report of the Group for the year ending on 30 June 2016.
Group	means the Company and its controlled entities.
KMP	has the meaning given to that term in the Financial Report.
Notice of AGM	means the notice of the Annual General Meeting of the Company accompanying this Explanatory Memorandum (and the term "Notice" has the same meaning).
Option Plan	means the option plan of the Company.
Option	means the right to acquire an Ordinary Share, subject to satisfaction of performance hurdles and other vesting conditions as determined by the Board, in accordance with the terms of the Option Plan.
Ordinary Share	means a fully paid ordinary share in the capital of the Company.
Performance Right	means the right to acquire an Ordinary Share, subject to satisfaction of performance hurdles and other vesting conditions as determined by the Board, in accordance with the terms of the Option Plan.
Remuneration Report	means the remuneration report of the Group that forms part of the Directors' Report accompanying the Notice of AGM.
Shareholder	means a holder of one or more Shares.
Shares	means fully paid ordinary shares in the capital of the Company.

Lodge your vote:

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Proxy Form

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to indicate your directions Please mark

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STEP1 Appoint a Proxy to Vote on Your Behalf

I/We being a member/s of carsales.com Limited hereby appoint

the Chairman of the Meeting	ીર્ે PLEASE NOTE: Leave this box blank if vou have selected the Chairman of the Meeting. Do not insert your own name(s).
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or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the Meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, and to the extent permitted by law, as the proxy sees fit) at the Annual General Meeting of carsales.com Limited to be held at the La Trobe Ballroom, Level 1, Sofitel Melbourne on Collins, 25 Collins Street, Melbourne on Friday, 28 October 2016 at 1:00pm (Melbourne time) and at any adiournment or postponement of that Meeting.

Chairman authorised to exercise undirected proxies on remuneration related resolutions: Where I/we have appointed the Chairman of the Meeting as my/our proxy (or the Chairman becomes my/our proxy by default), I/we expressly authorise the Chairman to exercise my/our proxy on Items 2, 5a & 5b (except where I/we have indicated a different voting intention below) even though Items 2, 5a & 5b are connected directly or indirectly with the remuneration of a member of key management personnel, which includes the Chairman.

Important Note: If the Chairman of the Meeting is (or becomes) your proxy you can direct the Chairman to vote for or against or abstain from voting on Items 2, 5a & 5b by marking the appropriate box in step 2 below.

STEP₂

Fix PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your Items of Business behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

			oainst betain
Item 2	Remuneration Report
Item $3$	Re-election of Director: Ms Kim Anderson
Item 4	Approval of Director: Ms Edwina Gilbert
Item 5a	Grant of Performance Rights to Mr Greg Roebuck
Item 5b	Grant of Options and Performance Rights to Mr Greg Roebuck

The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business. In exceptional circumstances, the Chairman of the Meeting may change his/her voting intention on any resolution, in which case an ASX announcement will be made.

Individual or Securityholder 1	Securityholder 2		Securityholder 3
Sole Director and Sole Company Secretary	Director			Director/Company Secretary
Contact Name		Contact Daytime Telephone		Date