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## Cardno Limited and its Controlled Entities for the year ended 30 June 2010 

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The options outstanding at 30 June 2010 have not vested, are not exercisable at 30 June 2010 and have an exercise price in the range of $3.35 to $7.71. 

The options issued prior to FY2010 are subject to a performance hurdle and will not vest unless there has been at least a 5% improvement per year (compounded) in the earnings per share of the Company over the vesting periods. 

The options issued during FY2010 are subject to a performance hurdle and to vest the Company must achieve earnings per share (EPS) growth in accordance with the following scale: 

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The fair values of options granted during the year has been calculated using the Black-Scholes model, taking into account price volatility, risk free interest rates and the dividend yield. 

##  Rights 

At the 2009 AGM the Board proposed, upon recommendations by an independent consultant to the Remuneration Committee, the introduction of performance rights alongside changes to the vesting criteria and hurdles. 

The plan operates by granting a right to acquire an ordinary share at nil consideration at a predetermined time in the future. During the 2010 financial year 359,000 rights with a grant date fair value of $1,098,625 were issued with a vesting period of three years from the grant date. 

Each right is convertible to one ordinary share. All rights expire on the earlier of their expiry date or termination of the employee’s employment. The rights may be exercised at any time during a one-year period ending thirty-six months after the date the rights are issued if performance hurdles have been met. 

There are no voting or dividend rights attached to the rights. Voting rights and dividends will be attached to the ordinary shares issued when the rights have been exercised. 

