DIRECTORS' REPORT CONTINUED Service agreements  SHARE OPTIONS GRANTED TO DIRECTORS AND THE MOST HIGHLY REMUNERATED OFFICERS  SHARES UNDER OPTION  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. No option holder has any right under the options to participate in any other share issue of the  Company or of any other entity. 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:  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.  Super Cheap Auto Group Limited  For the period from incorporation to 26 June 2004 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. Directors  Options granted R E Thorn Managing Director 1,000,000 Other executives of Super Cheap Auto Group Limited  P A Birtles Chief Financial Officer and Company Secretary  200,000 Issue  Date options  Exercise price of  granted  date  shares   option 19 May 2004  1 July 2005  $1.97  July 2006  19 May 2004  1 July 2007  $1.97  250,000 1,200,000 The options were granted under the Super Cheap Auto Executive Option Plan on 19 May 2004. Unissued ordinary shares of Super Cheap Auto Group Limited under option at the date of this report  are as follows:  SUPER CHEAP AUTO GROUP LIMITED ANNUAL REPORT 2004 45