All executives that received grants of performance rights during the financial year ended 30 June 2021 received performance rights that were issued under the 2019 Performance Rights Plan (‘2019 PRP’). STI Plan The key features of the STI grant for the financial year ended 30 June 2021 (‘FY21 award’) are outlined in the table below: Participation All executives. Participation in the STI Plan is at the discretion of the Board of Directors on the recommendation of the People, Culture and Governance Committee. STI Opportunity The STI opportunity level of each executive is a pre‑determined proportion of an executives’ total remuneration. The quantum of performance rights received is determined by dividing the STI opportunity for each employee by Karoon’s weighted average share price in the 20‑trading day period leading up to the first day of the performance period. The STI opportunity available to an executive is between 25%‑33.33% of total remuneration dependant on seniority in the Group. The Board calculates the incentive value and establishes a maximum number of performance rights ’At Risk’ at the beginning of the period. It is noted that, in respect of: • the former Managing Director it was decided, given his retirement occurred part way through the financial year, that an at‑risk pro rata cash STI (as opposed to an STI to be received in performance rights) would be available (with no Deferral Period); and • in respect of the current Chief Executive Officer and Managing Director it was decided, given his appointment occurred part way through the financial year, that an at‑risk pro rata cash STI (as opposed to an STI to be received in performance rights) would be available. Form of Incentive Executives receive performance rights.The quantum of performance rights received was determined by dividing the STI opportunity for each executive by the six month weighted average share price at the beginning of the test period. Maximum amount of performance rights available were determined in connection with the finalisation of the 30 June 2020 audited accounts and remained ’At Risk’ until tested during July 2021 and the satisfaction of retention conditions to be met on 1 July 2022. Performance rights do not have a strike price. Each performance right provides the participant with the right to receive one fully paid ordinary share in Karoon, or its equivalent value, for no consideration. Under the rules of the PRP, ordinary shares issued as a result of the exercise of vested and converted performance rights may be issued as new ordinary shares, ordinary shares acquired on‑market or an equivalent value in cash at Karoon’s discretion. Performance Period 1 year. Deferral Period Vested performance rights are subject to a retention period of 12 months, being the continuation of employment, immediately following the satisfaction of performance conditions. Karoon Energy Ltd 57 Annual Report 2021