SUPPLIER DIVERSITY

Lexmark’s supplier diversity program is founded on the Company’s values of mutual respect, corporate citizenship and integrity. Diverse businesses comprise a vital segment of the economy, and healthy diverse businesses are therefore advantageous to our financial performance and our community. Lexmark sets goals annually to increase contracting opportunities for eligible minority suppliers. These goals are reviewed to determine if they are attainable and represent a meaningful contribution to Lexmark’s supplier diversity program. We strive to encourage and afford opportunities to minority suppliers, while ensuring that we receive the highest-quality products and services at the most economical costs. All Lexmark employees are encouraged to take an active role in the support of the supplier diversity program by ensuring that all vendors are encouraged and given an opportunity to do business with Lexmark.

SUPPLIER RESPONSIBILITY

Lexmark’s membership and participation in the Electronics Industry Code of Conduct (EICC) has further strengthened our organizational efforts in support of human rights, labor standards and other CSR values. The EICC is a code of best practices adopted and implemented by some of the world’s major electronics brands and their suppliers to improve conditions in the electronics supply chain. The code sets forth performance, compliance, auditing and reporting guidelines across five areas of social responsibility including labor, health and safety, environment, management systems and ethics policies. In accordance with EICC guidelines, beginning in 2008 Lexmark requested third-party audits for a number of its Tier 1 suppliers to monitor compliance in these areas.

Lexmark works with countless direct and indirect suppliers. Approximately 100 suppliers account for the majority of Lexmark's direct spend. All Lexmark suppliers are required to comply with Lexmark's supplier code of conduct which addresses human rights. In addition to this requirement, the human rights performances of a portion of Lexmark suppliers are being more deeply screened.

In 2010, approximately 200 Lexmark suppliers (275 suppliers make up about 80 percent of our spend and our top 100 suppliers make up about 66 percent of our spend), including those that are global key and strategic suppliers, those whose 2009 spend was over $1M (U.S. dollars) and those that are Lexmark critical part suppliers, were asked to complete the Electronic Industry Citizenship Coalition (EICC) Self Assessment Questionnaire (SAQ) using the Electronic Tool for Accountable Supply Chains (E-TASC). E-TASC is a Web-based data collection and analysis tool that helps companies collect, manage and analyze social and environmental responsibility data from suppliers.