10:08 LENOVO GROUP<00992> - Announcement (4) president of the Group from 1999 to 2000 and did not hold any directorship in other listed public companies in the last three years. As at the date of this announcement, no service contract has been entered into by him with the Company. Mr Zhu was not appointed for a specific term, but is subject to retirement by rotation and re-election at the annual general meetings of the Company in accordance with the Articles of Association. Mr Zhu will receive such director's fee and other remuneration as the Board may determine from time to time pursuant to the power given to it under the Articles of Association or otherwise granted to the Board by the Shareholders. In determining the director's fee and remuneration for Mr Zhu, the Board will take into account the level of remuneration paid to a non-executive director of comparable companies, time and responsibilities committed and assumed by Mr Zhu in attending to the affairs of the Company and the recommendations given by the remuneration committee of the Board. The Company will make an announcement when the director's fee and remuneration of Mr Zhu is fixed. According to the register maintained by the Company pursuant to section 352 of the SFO as of 30 April 2005, Mr Zhu was interested in 3,720,000 Shares and no underlying Shares in respect of share options granted under the share option scheme of the Company. Mr Zeng Maochao has confirmed that his resignation was due to personal reason and there are no matters or disagreements with the Board that need to be brought to the attention of Shareholders. The Board wishes to express their appreciation for the valuable contribution of Mr Liu and Mr Zeng during their leadership and directorship with the Company and to welcome the appointment of Mr Yang as the new Chairman and Mr Ward and Mr Zhu to join the Board. Change of Chief Executive Officer Following the appointment of Mr Yang Yuanqing as the Chairman of the Board, Mr Yang resigned from the position of the Chief Executive Officer of the Company, and Mr Stephen Maurice Ward, Jr. has been appointed as the new Chief Executive Officer of the Company with effect from the Initial Closing to replace Mr Yang. Appointment of Board Observers IBM has nominated Mr Robert W Moffat, Jr. and Mr Henry WK Chow to sit on the Board as observers with effect from the Initial Closing. Mr Moffat and Mr Chow will have the rights to attend all meetings of the Board and any committee of the Board. As Mr Moffat and Mr Chow are not Directors, accordingly they will have no right to vote and may not exercise any other rights of a Director at such meetings. The purpose of appointing board observers is to ensure co-ordination of the strategic relationship between IBM and the Company. IBM will not appoint any Director. The Company Agreement provides that the board observer shall maintain all information obtained from the Board confidential and shall observe all internal guidelines of the Company applicable to the Directors and insider dealing rules including the SFO and the Model Code for Securities Transactions by Directors of Listed Issuers under the Listing Rules. The Board may withhold information from the board observers if there is a potential conflict of interests. In the event of a breach of confidentiality by a board observer, the Company may bring legal action against IBM including seeking a court order of specific performance to prevent the board observer from any unauthorized disclosure of confidential material. With the confidentiality protection afforded by the provisions of the Company Agreement, the Board believes that the participation of board observers from IBM should be beneficial to the Company as the board observers would bring valuable expertise and management experience in the global information technology industry to the Company. Mr Robert W Moffat, Jr. joined IBM in 1978 and has been appointed as a senior vice president of Integrated Supply Chain of IBM since February 2002. He leads IBM's end-to-end supply chain operations, including procurement, systems manufacturing, logistics and customer fulfilment processes for IBM worldwide. Mr Moffat has spent the majority of his career in the personal computer business during which he has held a number of executive positions with IBM, including general manager of manufacturing, fulfilment and procurement initiatives and vice president of finance and planning. Mr Moffat has not entered into any service contract with the Company and has not previously held any positions with the Company or any of its subsidiaries. Mr Moffat has confirmed that he does not have any family relationships with any Director and senior management of the Company nor did he hold directorship in other listed public companies in the last three years. Mr Moffat has confirmed that he did not have any interests in the shares of the Company within the meaning of Part XV of the SFO as of 30