Apple (AAPL)

1. Base Salary Adjustments

Effective in fiscal 2009, the Compensation Committee determined that it was appropriate to increase the base salaries for a number of the members of the executive team, including the following named executive officers: Messrs. Oppenheimer, Cook and Mansfield. This was the first salary adjustment for the named executive officers since October 2005 other than a promotion-related increase for Mr. Fadell in 2006 and annual increases for Mr. Mansfield before he became a member of the executive team in May 2008. These salary adjustments primarily relate to the business impact of each officer’s position in addition to individual performance factors. The Compensation Committee also considered the relative competitiveness of the executive team’s total cash compensation as compared to that of the peer companies. With the assistance of F.W. Cook, the Compensation Committee determined that the total cash compensation for certain members of the executive team was below the median of the peer companies despite the Company’s superior performance. In addition, as

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discussed in the section entitled “F. Fiscal 2009 Compensation Decisions—3. Tony Fadell Agreement” below, Mr. Fadell’s base salary was decreased in connection with his new role as Special Advisor to the Chief Executive Officer.