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## DIRECTORS' REPORT CONTINUED 

Super Cheap Auto Group Limited For the period from incorporation to 26 June 2004 

## Service agreements 

Remuneration and other terms of employment for the Managing Director are formalised in a service agreement. The agreement provides for the provision of performance-related cash bonuses, other benefits including car allowances and participation, when eligible, in the Super Cheap Auto Executive Option Plan. 

R E Thorn, Managing Director 

• Term of agreement – 5 years commencing 1 July 2004 

• Base salary, inclusive of superannuation, for the year ended 30 June 2005 of $550,000 to be reviewed annually by the Board Nomination and Remuneration Committee. 

## SHARE OPTIONS GRANTED TO DIRECTORS AND THE MOST HIGHLY REMUNERATED OFFICERS 

Options over unissued ordinary shares of Super Cheap Auto Group Limited granted during or since the end of the financial year to any of the directors or the five most highly remunerated officers of the company and consolidated entity as part of their remuneration were as follows: 

<img src='content_image/89254.jpg'>

The options were granted under the Super Cheap Auto Executive Option Plan on 19 May 2004. 

## SHARES UNDER OPTION 

Unissued ordinary shares of Super Cheap Auto Group Limited under option at the date of this report are as follows: 

<img src='content_image/89255.jpg'>

No option holder has any right under the options to participate in any other share issue of the Company or of any other entity. 

The amounts disclosed for emoluments relating to options above is the assessed fair value at grant date of options granted to executive directors and other executives, allocated equally over the period from grant date to vesting date. Fair values at grant date are independently determined using a Black- Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non tradeable nature of the option, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. 

