Notes to the Consolidated Financial Statements  Cardno Limited and its Controlled Entities for the year ended 30 June 2010 23. ISSUED CAPITAL OF CARDNO LIMITED CONTINUED  The fair values of rights granted during the year with a total shareholder return performance hurdle, have been calculated  using a Monte-Carlo simulation valuation model taking into account price volatility, risk free interest rates and comparator  company shareholder return performance. The fair value of rights with the EPS growth hurdle was calculated using a  Black-Scholes model taking into account price volatility, risk free interest rates and the dividend yield.  The model inputs for the fair value of rights granted during the year ended 30 June 2010 include share price of $5.03  (22 October 2009) and $4.07 (2 December 2009) at grant date, expected price volatility of 42%, expected dividend  spread of 8.00% and risk free interest rate of 5.25% (22 October 2009) and 4.61% (2 December 2009).  The rights are subject to performance hurdles being 50% of the Rights, may vest, on a sliding scale, dependent on  relative total shareholder return performance and 50% of the Rights, may vest, on a sliding scale, dependent on earnings  per share growth. The EPS performance hurdle tranche of the rights vest on a sliding scale depending on EPS growth  averaged over 3 years.  Shares are issued under the ESAP (made in accordance with thresholds set out in plans approved by shareholders at  the 2009 AGM). It provides employees with the opportunity to acquire shares in the Company for no consideration as a  bonus component of their remuneration. Employees with 12 months service or greater who have worked an average of  100 hours or more per month are entitled to $1,000 of shares each year and employees with 6 to 12 months service are  entitled to $500 of shares each year. Employees who work part time, who have greater than 12 months service and who  have worked more than 600 hours per year are also entitled to $500 of shares each year. Shares issued under ESAP  rank equally with other fully paid ordinary shares from the date of issue.  Shares are issued in the name of the participating employee and are subject to a restriction period. The shares are  restricted under the plan until the earlier of three years from the date of acquisition or the date they cease to be an  employee. Once the restriction period is lifted the shares can be traded as fully paid ordinary shares. The ESAP has no  conditions that could result in the recipient forfeiting ownership of shares. The foreign currency translation reserve comprises all foreign exchange differences arising from the translation of the  financial statements of foreign Group entities where their functional currency is different to the presentation currency of  the reporting entity as well as from the translation of liabilities that hedge the Company’s net investment in a foreign  subsidiary.  Foreign Currency Translation 24. RESERVES  Employee Share Acquisition Plans (“ESAP”)  Movements in rights throughout the year were as follows:  Grant Date  Exercise  Date  Expiry Date  Performance  Hurdle  Fair  Value at  Grant  Date  $  Number of  Rights at  Beginning  of Year  Rights  Granted  Rights  Lapsed  Rights  Vested  Not  Exercised  Number of  Rights as  at 30 June  2010  22 October  2009  22 October  2012  22 October  2013  EPS Growth  3.96  -  67,500  -  -  67,500  TSR 3.19 - 67,500 - - 67,500 2 December  2009  2 December  2012  2 December  2013  EPS Growth  3.20  -  112,000  -  -  112,000  TSR 2.30 - 112,000 - - 112,000 Total expense recognised $95,899 (2009: NIL)  Page 51 of 80 