Annual Salaries and Equity Compensation for Named Executive Officers The Board of Directors of the Registrant established the annual salaries and monthly stock option allowances for 2013 for the Registrant's Named Executive Officers as follows:

                                                                    ANNUAL STOCK
                                                                       OPTION         MONTHLY STOCK
             NAME AND POSITION                   ANNUAL SALARY        ALLOWANCE      OPTION ALLOWANCE
Reed Hastings, Chief Executive Officer and     $     2,000,000     $   2,000,000     $      166,667
Chairman of the Board
David Wells, Chief Financial Officer                   770,000           330,000             27,500
Ted Sarandos, Chief Content Officer                  2,200,000         1,800,000            150,000
Neil Hunt, Chief Product Officer                     1,750,000         1,250,000            104,167
David Hyman, General Counsel                           848,000           552,000             46,000

Each Named Executive Officer, like all of the Registrant's employees who receive stock options as part of his or her compensation package, may request that a portion of their annual salary be awarded in equity. The number of options to be granted is determined by the following formula: the monthly dollar amount of the stock option allowance / ([Fair Market Value on the date of grant] * 0.20). Each monthly grant shall be made on the first trading day of the month, shall be fully vested upon grant and shall be exercisable at a strike price equal to the Fair Market Value (as defined in the Registrant's 2011 Stock Plan) on the date of grant. The options will be subject to the terms and conditions of the 2011 Stock Plan and will be administered on a non-discretionary basis without further action by the Registrant's Board of Directors, provided that only the Board may change the amount or terms of future grants. These stock options are granted fully vested and can be exercised up to ten (10) years following the date of grant regardless of employment status. In addition, each Named Executive Officer, like all of the Registrant's employees, receives an additional $10 thousand in annual compensation not reflected above that may be used to defray the cost of health benefits previously paid by the Registrant. Any portion of this allowance not utilized towards the cost of health care benefits will be paid as salary. Registrant does not currently provide a program of performance bonuses for its Named Executive Officers.