Apple (AAPL)

2. Independent Compensation Committee Determines All Executive Compensation

The Compensation Committee determines all compensation for the named executive officers. All three Compensation Committee members are independent directors under the applicable NASDAQ and SEC rules. Each fiscal year, the Compensation Committee conducts an evaluation of each named executive officer to determine if changes in the officer’s compensation are appropriate based on the considerations described below. Mr. Jobs does not participate in the Compensation Committee’s deliberations or decisions with regard to his compensation. At the Compensation Committee’s request, Mr. Jobs reviews with the Compensation Committee the performance of the other named executive officers. The Compensation Committee gives considerable weight to Mr. Jobs’ evaluation of the other named executive officers because of his direct knowledge of each officer’s performance and contributions. No other named executive officer has any input into executive compensation decisions. For each officer, the Compensation Committee members independently determine each component of compensation based on their collective assessment of the officer’s performance as well as the Company’s overall financial performance.

2. Independent Compensation Committee Determines All Executive Compensation

The Compensation Committee determines all compensation for the named executive officers. All three Compensation Committee members are independent of the Company’s management. During the first quarter of each fiscal year, the Compensation Committee conducts an evaluation of each named executive officer to determine if any changes in the officer’s compensation are appropriate based on the considerations described below. The CEO does not participate in the Compensation Committee’s deliberations or decision with regard to his compensation. At the Compensation Committee’s request, the CEO reviews with the Compensation Committee the performance of the other four named executive officers, but no other named executive officer has any input into executive compensation decisions. The Compensation Committee gives considerable weight to the

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CEO’s evaluation of the other named executive officers because of his direct knowledge of each officer’s performance and contributions. For each officer, the Compensation Committee members independently determine each component of compensation based on their collective assessment of the officer’s performance as well as the Company’s overall financial performance.