Apple 2011 Annual Report Download - page 90

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Customer and Business
Relationships
Business Conduct
The way we do business worldwide
July 2011
5
Are business meals, travel, and
entertainment considered gifts?
Yes. Anything of value given or received is
considered a gift.
Can I avoid these rules if I pay for gifts to
customers or business associates myself?
No. If the gift is given for business reasons and
you are representing Apple, the gift rules
apply.
Giving and Receiving Business Gifts
Employees may not give or receive gifts or entertainment to or from current or potential
vendors, suppliers, customers, or other business associates unless all of the following
conditions are met:
• Nominal value. The value of the gift is less than US$150. Exceptions must be approved
by your Vice President (for Vice President–
level employees, exceptions must be approved
by your manager).
• Customary. The item is a customary business gift and would not embarrass Apple if
publicly disclosed. Cash is never an acceptable gift. Giving or receiving cash is viewed as
a bribe or kickback and is always against Apple policy.
• No favored treatment. The purpose of the gift is not to obtain special or favored
treatment.
• Legal. Giving or accepting the gift is legal in the location and under the circumstances
where given.
• Recipient is not a government official. Never provide a gift, including meals,
entertainment, or other items of value, to a U.S. or foreign government official without
checking with Government Affairs in advance. See page 7 for more information on gifts to
government officials.
This policy does not preclude Apple as an organization from receiving and evaluating
complimentary products or services. It is not intended to preclude Apple from giving
equipment to a company or organization, provided the gift is openly given, consistent with
legal requirements, and in Apple’s business interests. The policy also does not preclude the
attendance of Apple employees at business-related social functions, if attendance is
approved by management and does not create a conflict of interest.
Important Note: Certain departments (e.g., Operations and Retail) have more restrictive gift
policies, which may prohibit giving or receiving gifts altogether. Employees in those
departments must adhere to those stricter policies.
What is an example of a kickback?
Apple provides discounts to certain customers.
However, if a customer gets an inappropriate
discount, and a sales representative gets a
payment in return, this is a kickback.
What is an example of a side deal?
In a sales environment, a side deal may
involve a guarantee to accept back unsold
products or other special agreements to
encourage certain customers to place larger
orders. Such a side deal, whether written or
oral, can impact Apple’s potential liability with
respect to that transaction and may make it
inappropriate for Apple to recognize revenue
on the products sold, affecting the accuracy of
Apple’s books and records. Side deals or side
letters made outside of Apple’s formal
contracting and approvals process are strictly
prohibited.
Kickbacks
Kickbacks are payments or items of value given to individuals in connection with the
purchase or sale of products or services, typically for providing a discount in a sales
agreement. Employees are prohibited from giving or receiving kickbacks.
Side Deals or Side Letters
All of the terms and conditions of agreements entered into by Apple must be formally
documented. Contract terms and conditions define the key attributes of Apple’s rights,
obligations, and liabilities and can also dictate the accounting treatment given to a
transaction. Making business commitments outside of the formal contracting process,
through side deals, side letters, or otherwise, is unacceptable. You should not make any oral
or written commitments that create a new agreement or modify an existing agreement without
approval through the formal contracting process. In particular, all commitments must have
visibility to Finance so Apple can ensure it is properly accounting for each transaction. If you
have knowledge of any side deal, side letter, or agreement made outside of the formal
contracting process, you should report it immediately to your manager, your Human
Resources representative, or the Legal Department. You may also contact the Business
Conduct Helpline.