Lenovo 2011 Annual Report Download - page 55

2010/11 Annual Report Lenovo Group Limited
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DIRECTORS’ REPORT
Management Contracts
No contracts concerning the management and administration of the whole or any substantial part of the business of the Company
were entered into or existed during the year.
Major Customers and Suppliers
During the year, the Group sold less than 9 percent of its goods and services to its five largest customers. The percentages of
purchases for the year attributable to the Group’s major suppliers are as follows:
The largest supplier 26 percent
Five largest suppliers combined 36 percent
None of the directors of the Company, their associates or any shareholder (which to the knowledge of the directors owns more
than 5 percent of the Company’s share capital) had an interest in the major suppliers noted above.
Directors’ Rights to Acquire Shares or Debentures
Share Option Schemes
At the Extraordinary General Meeting of the Company held on March 25, 2002, the shareholders of the Company approved the
adoption of a new share option scheme (“New Option Scheme”) and the termination of the old share option scheme (“Old Option
Scheme”). Although no further options may be granted under the Old Option Scheme, all remaining provisions will remain in force
to govern the exercise of all the options previously granted.
1. Old Option Scheme
The Old Option Scheme was adopted on January 18, 1994 and was terminated on April 26, 2002. The Old Option Scheme
was designed to provide qualified employees with appropriate incentives linked to share ownership. Only employees, including
directors, of the Group could participate in the Old Option Scheme. Total number of options must not exceed 10 percent of
the issued share capital of the Company. The maximum entitlement of any individual participant thereunder must not exceed
2.5 percent of the shares in issue. The exercise price for options was determined based on not less than 80 percent of the
average closing price of the listed ordinary shares for the 5 trading days immediately preceding the date of grant. Options
granted were exercisable at any time during a period of 10 years.
As at March 31, 2011, the total number of shares which may be issued on the exercise of the outstanding options granted
thereunder is 28,670,000 ordinary shares, representing approximately 0.29 percent of the issued share capital of the
Company as at the date of this report.
2. New Option Scheme
(a) Purpose
The New Option Scheme became effective on April 26, 2002. It serves as a way of providing incentives to and attracting
qualified participants for better performance of the Group by allowing them to participate in increases in the value of the
Company.
(b) Qualified participants
1. (i) any employee or officer, executive or non-executive director (or persons proposed to be appointed as such)
of the Group;
(ii) any consultant, professional or other adviser to the Group;
(iii) any director, executive and senior officer of any associated company of the Company; and
(iv) the trustee of any trust pre-approved by the directors of which the beneficiary (or in case of discretionary
trust, the discretionary objects) include any of the above-mentioned persons; and
2. (i) any customer, supplier, agent, partner, distributor, professional or other advisers of, or consultants or
contractors to, the Group; and
(ii) the trustee of any trust pre-approved by the directors of which the beneficiary (or in case of discretionary
trust, the discretionary objects) include any of the above-mentioned persons.
(c) Maximum number of shares
As at March 31, 2011, the maximum number of ordinary shares available for issue under the New Option Scheme is
110,968,051 shares, representing approximately 1.11 percent of the issued share capital of the Company as at the date
of this report.