Apple (AAPL)

The Company’s Statement in Opposition to Proposal No. 7

The Board recommends a vote AGAINST Proposal No. 7.

The Board takes environmental sustainability very seriously, and the Company has made significant progress in reducing the environmental impact of the Company’s operations and products, as described in the Company’s statement in opposition to Proposal No. 6, above. However, the Board does not believe a Board committee dedicated to this issue is necessary, nor would it be more effective than the Company’s current and ongoing efforts.

The Board authorizes and directs Company management to make environmental considerations an integral part of the Company’s business practices. The Company’s commitment to protecting the environment, health and safety of the Company’s employees, customers and the global communities where the Company operates is expressed not only in the Company’s code of ethics (available at www.apple.com/investor) but also in the

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Company’s Environmental Health and Safety Policy Statement and the Supplier Code of Conduct, both of which are available at the Company’s Apple and the Environment website at www.apple.com/environment.

The Company’s management team regularly provides status reports to the entire Board on matters related to sustainability. The Board believes that management has performed exceptionally well in this area, and is confident that the Company will continue to lead the industry in increasing energy efficiency, reducing carbon emissions, and eliminating toxic materials from its products.

Vote Required

Approval of Proposal No. 7 requires the affirmative vote of (i) a majority of the shares present or represented by proxy and voting at the Annual Meeting and (ii) a majority of the shares required to constitute the quorum.

Recommendation of the Board

The Company’s Statement in Opposition to Proposal No. 5

The Board of Directors recommends a vote AGAINST Proposal No. 5.

The Board recognizes that executive compensation is a key corporate governance issue and has carefully considered the proposal and the issues associated with shareholder ratification of executive compensation. While the Board generally supports enhancing the dialogue between shareholders and the Board, it does not believe that it is in the best interests of the Company’s shareholders to provide for shareholder ratification of executive compensation and recommends a vote against this proposal for the following reasons.

The Compensation Committee of the Board, consisting entirely of independent directors, is responsible for maintaining an executive compensation program designed to attract, motivate and retain the most highly talented and experienced leadership for the Company. This program is discussed in detail in this Proxy Statement in the section entitled “Executive Compensation—Compensation Discussion and Analysis.” The program is carefully designed around various components of compensation, including base salaries, incentive bonuses and equity awards, and the Compensation Committee reviews and approves annually the compensation for all executive officers of the Company. In addition, the Compensation Committee engages an independent compensation consulting firm (see the section entitled “D. Executive Compensation Program Design and Implementation—5. The Role of Consultants” under “Executive Compensation—Compensation Discussion and Analysis” above) to help it design compensation packages in a manner that effectively serves the interests of the shareholders by providing appropriate incentives to executive officers and allowing the Company to remain competitive with its peers. Executive compensation practices are influenced by a wide range of complex factors, including changes in strategic goals, changing economic and industry conditions, accounting requirements and tax laws, evolving governance trends and the competitive compensation practices of other companies. As a result, it is important that the Compensation Committee retain the flexibility to select the appropriate incentives so that the Company can continue to attract and retain executives of outstanding ability and motivate them to achieve superior performance.

An advisory vote would not provide the Compensation Committee with any meaningful insight into specific shareholder concerns regarding executive compensation that it could address when considering the Company’s remuneration policies. Other means of communicating concerns to the Board and/or the Compensation Committee are already available to shareholders. Any shareholder may communicate specific concerns directly with the Board and/or the Compensation Committee if the shareholder disagrees with the Company’s compensation policies by following the instructions provided in this Proxy Statement in the section entitled

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“Communications with the Board” under “Directors” above. This process allows shareholders to voice concerns about executive compensation before decisions are made, as opposed to merely voting on the results of the decisions. The Annual Meeting also provides a forum for shareholders to enter into a dialogue with the Company on a variety of matters, including executive compensation issues.

The Compensation Committee exercises great care in determining and disclosing executive compensation. The Board believes that an advisory resolution would not have any legal consequence on any compensation arrangement. Rather, adopting this practice could negatively affect shareholder value by creating the impression among the Company’s executives that their compensation opportunities could be limited or negatively affected by this practice, and it may very well constrain the Compensation Committee’s efforts to recruit and retain exceptional executives who will focus on the Company’s long-term performance and results. The Board does not believe the advisory vote will enhance governance practices or improve communication with shareholders, or that it is in the best interest of the Company’s shareholders.

It is widely expected that the U.S. Congress, in its new session, will enact legislation requiring shareholder advisory votes on executive compensation. Consequently, it would be premature for the Company to take action at this time to implement a shareholder advisory vote procedure. The Board believes that the Company and its shareholders are best served by monitoring legislative developments and promptly adopting any new practices related to executive compensation and shareholder advisory votes that are mandated by law or regulation.

Accordingly, the Board does not believe an advisory vote on executive compensation is in the best interests of the Company and its shareholders and recommends a vote against Proposal No. 5.

The Company’s Statement in Opposition to Proposal No. 4

The Board of Directors recommends a vote AGAINST Proposal No. 4.

The Board appreciates the importance of environmental sustainability and recognizes the Company’s responsibility to minimize the environmental impact of the Company’s operations and products. However, the Board does not believe a dedicated board committee is an effective way for the Company’s practices and goals to continually evolve and improve in response to changing conditions. Instead, the establishment and operation of an additional and redundant committee would distract the Board from its other responsibilities to the Company and its shareholders while adding little value to the Company’s existing commitment to environmental sustainability, as evidenced by the Company’s established policies, practices and procedures described below.

The Board already authorizes and directs Company management to make environmental considerations an integral part of the Company’s business practices. Four areas of particular attention are product and packaging design, responsible manufacturing, energy efficiency and recycling. The Company’s commitment to protecting the environment, health and safety of the Company’s employees, customers and the global communities where the Company operates is expressed not only in the Company’s code of ethics (available at www.apple.com/investor) but also in the Company’s Environmental Health and Safety Policy Statement and the Supplier Code of Conduct, both of which are available at the Company’s environment website at www.apple.com/environment/.

Every year, the Company has set and met important goals to phase out environmentally relevant substances, create recycling programs worldwide and improve energy efficiency. The following examples represent some of the important milestones achieved by the Company in its quest for environmental responsibility:

Additional milestones demonstrating the Company’s thirty-year track record of delivering environmental excellence at all phases of the product life cycle can be seen at http://www.apple.com/environment/.

In addition to the Company’s Product Environmental Specifications and Materials Safety Data Sheets, which educate customers about specific environmental issues as they relate to the Company’s products and provide important information about the substances contained in certain Company products, the Company has

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enhanced the communication of its environmental measures to the Company’s stakeholders. In a letter, entitled “A Greener Apple” (available at www.apple.com/hotnews/agreenerapple/), Steve Jobs describes an industry leading program for the removal of toxic chemicals from the Company’s new products and the recycling of the Company’s old products. For example, the Company plans to eliminate the use of polyvinyl chloride (PVC), brominated flame retardants (BFRs), and arsenic in the displays of its products by the end of 2008. The Company intends to provide such updates of the Company’s efforts and accomplishments at least annually.

The existing governance framework has produced a strong commitment to environmental issues and progress that is evident in the Company’s practices and policies. The Board believes that Company management continues to be in the best position to assess and evaluate the operation of the Company’s businesses with respect to environmental sustainability issues. Management consults with the Board when necessary to keep the Board informed of environmental developments to enable the Board to exercise its oversight responsibilities and to receive direction. The Board does not believe a board committee on environmental sustainability is in the best interests of the Company’s shareholders when a need for the additional time and expense required for the establishment and operation of such a board has not been demonstrated. Accordingly, the Board recommends a vote against the resolution.