Unable to change/add/delete File Permission

Hi guys,

Consider the following :-

\\server1\site\divisionfolder\teamfolder1

I've given the "Full" privilege to one of my users to "userfolder1" folder that resides on a W2K3 machine so that they can assign the rights to their subordinates on their own.

Still, that user can't modify the folder permissions for other users. (Add/Delete button was grayed out)