Exhibit 4.2


           ROYAL PHILIPS ELECTRONICS CORPORATE STOCK OPTION PLAN 2001

1.   PURPOSE

     The purpose of the Royal Philips  Electronics  Corporate  Stock Option Plan
     2001  (the  "Plan")  is to  enhance  the  ability  of  Koninklijke  Philips
     Electronics  N.V.  (for use in English:  Royal  Philips  Electronics)  (the
     "Company"), and any participating division,  subsidiary or affiliate of the
     Company  selected by the Board of  Management  (a  "Division")  to attract,
     motivate and retain members of the Company's  Group  Management  Committee,
     Philips Executives,  certain excellently performing top and high potentials
     and  key-employees  world-wide  and to  provide  (new)  employees  with  an
     interest in the Company parallel to that of the Company's shareholders.

2.   DEFINITIONS

     (a)  "Board  of  Management"  shall  mean the  Board of  Management  of the
          Company  which shall  administer  the Plan and  perform the  functions
          specified in Section 3 hereof.

     (b)  "Fair Market  Value" per share as of a particular  date shall mean the
          price of a Share with  dividend in Euro, if any, at the closing of the
          Official Segment of Euronext  Amsterdam N.V.'s stock market ("Euronext
          Amsterdam"),  reported  on  the  relevant  date  as  published  in the
          Official Price List of Euronext  Amsterdam.  The Supervisory  Board or
          the Board of  Management,  as the case may be, may  determine the Fair
          Market Value in US Dollars,  using the rate of Euro/US Dollar exchange
          on Euronext  Amsterdam at the close of business on the relevant  date.
          In the event that the Shares are not traded on Euronext  Amsterdam  on
          the relevant  date,  the Fair Market Value shall be  determined by the
          Supervisory Board in its reasonable discretion.

     (c)  "Option" shall mean a non-statutory option to purchase stock.

     (d)  "Option  Period"  shall have the meaning set forth in Section  5(b) of
          the Plan.

     (e)  "Participant"  shall mean a person selected to participate in the Plan
          in accordance with Section 4.

     (f)  "Shares" shall mean the common shares of the Company.

     (g)  "Supervisory  Board" shall mean the  Supervisory  Board of the Company
          which shall administer the Plan and perform the functions specified in
          Section 3 hereof.

3.   ADMINISTRATION

     The Plan shall be  administered  by the  Supervisory  Board or the Board of
     Management,  as the case may be, or such other person or persons designated
     by the  Supervisory  Board  or the  Board  of  Management,  subject  to the
     provisions below.

     (a)  The Supervisory Board or the Board of Management,  as the case may be,
          shall (i) approve the selection of  Participants,  (ii)  determine the
          number of Shares  subject to Options,  up to an  aggregate  number not
          exceeding the number of Shares approved for the Plan from time to time
          by the Company's Board of Management, Supervisory Board and meeting of
          its priority shareholders, and not previously issued or delivered upon
          the exercise of Options or subject to unexercised outstanding Options,
          (iii)  determine  the  terms  and  conditions  of any  Option  granted
          hereunder  (including,   but  not  limited  to,  any


                                       1

<PAGE>


          restriction  and  forfeiture  conditions on such Option) and (iv) have
          the authority to interpret the Plan, to establish,  amend, and rescind
          any rules and regulations relating to the Plan, to determine the terms
          and provisions of any agreements  entered into hereunder,  and to make
          all other determinations necessary or advisable for the administration
          of the Plan;  provided,  however,  that the Supervisory Board shall be
          solely  responsible for the selection of Participants  who are members
          of  the  Company's  Board  of  Management  or  the  Group   Management
          Committee,  and the number of, and terms and conditions applicable to,
          Options granted to such members under the Plan. The Supervisory  Board
          or the  Board  of  Management,  as the case may be,  may  correct  any
          defect, supply any omission or reconcile any inconsistency in the Plan
          or in any  Option  in the  manner  and to the  extent  it  shall  deem
          desirable.

     (b)  Any action of the  Supervisory  Board,  the Board of Management or its
          designee  shall be  final,  conclusive  and  binding  on all  persons,
          including the Company, Division and its shareholders, Participants and
          persons claiming rights from or through a Participant.

     (c)  The Supervisory Board or the Board of Management,  as the case may be,
          may  delegate to officers or  employees of the Company or Division and
          to  service  providers,  the  authority,  subject to such terms as the
          Supervisory  Board  or the  Board of  Management,  as the case may be,
          shall determine,  to perform administrative  functions with respect to
          the Plan and Option agreements.

     (d)  Members of the  Supervisory  Board,  the Board of  Management  and any
          officer or employee of the Company or Division acting at the direction
          of, or on behalf of, the Supervisory  Board or the Board of Management
          shall not be personally  liable for any action or determination  taken
          or made in good faith  with  respect  to the Plan,  and shall,  to the
          extent  permitted  by law, be fully  indemnified  by the Company  with
          respect to any such action or determination.

4.   ELIGIBILITY

     Individuals  eligible  to receive  Options  under the Plan shall be persons
     selected by the Supervisory Board or the Board of Management.

5.   OPTIONS

     Options may be granted under the Plan  commencing as of the Effective  Date
     and from time to time thereafter in such form as the  Supervisory  Board or
     the Board of Management,  as the case may be, may from time to time approve
     pursuant to terms set forth in an Option  agreement.  The Supervisory Board
     or the Board of Management,  as the case may be, may alter or waive, at any
     time,  any term or condition of an Option that is not  mandatory  under the
     Plan.

     (a)  Exercise  Price.  The  purchase  price per share of Stock  purchasable
          under an Option  shall be not less than 100% of the Fair Market  Value
          of the Stock on the date of the grant of the Option  specified  in the
          Option agreement.

     (b)  Option Period. The term of each Option shall be 10 years from the date
          the Option is granted (the "Option Period").

     (c)  Exercisability. In the sole discretion of the Supervisory Board or the
          Board of  Management,  as the case may be,  Options  granted under the
          Plan may be designated as "Performance  Options" or "Ordinary Options"
          and shall become  exercisable  as provided


                                       2

<PAGE>


          in the terms  and  conditions  of the  Performance  Options  or of the
          Ordinary Options, respectively subject to Section 6.

     (d)  Method of  Exercise.  Options  may be  exercised,  in whole or in part
          (subject to a minimum of 10 Shares of Stock), by giving written notice
          of  exercise  to the  Company  specifying  the  number of Shares to be
          purchased.  Such notice shall be accompanied by the payment in full of
          the  Exercise  Price in  accordance  with any  method set forth in the
          Option agreement.

     (e)  In the event that an Option  expires or is  terminated  without  being
          exercised  in full,  including  in cases of  forfeiture,  such  Shares
          subject to such Option shall  thereafter be again  available for grant
          pursuant to the Plan.

6.   FORFEITURE

     Options shall be subject to  termination  and forfeiture as provided in the
     Option agreement applicable to an Option.  Notwithstanding  anything in the
     Plan to the contrary, the Supervisory Board or the Board of Management,  as
     the case may be, may provide in any Option  agreement  that in the event of
     termination for cause of an employee or former employee (including, without
     limitation,  any  conduct  prejudicial  to or  materially  adverse  to  the
     business of the Company or a Division) the  Supervisory  Board or the Board
     of  Management,  as the case may be,  may  cancel  any  outstanding  Option
     granted to such employee or former employee,  in whole or in part,  whether
     or not vested.

     Such  cancellation  shall  be  effective  as of the date  specified  by the
     Supervisory Board or the Board of Management.  The determination of whether
     an employee or former  employee has engaged in a serious  breach of conduct
     shall be determined by the Supervisory  Board or the Board of Management in
     good  faith and in its sole  discretion,  and such  determination  shall be
     binding and conclusive on the employee or former employee.

7.   WITHHOLDING

     The Company  shall have the right to cause to be deducted  from any payment
     to be  made  the  amount  of any  taxes  required  by  law  to be  withheld
     therefrom,  or to require a  Participant  to pay to the Company in cash any
     amount  required  to be withheld  prior to the  issuance or delivery of any
     Shares under the Plan.

8.   NON-TRANSFERABILITY

     No Option shall be assignable or transferable by the Participant  otherwise
     than by will or the laws of descent and distribution,  and Options shall be
     exercisable, during the Participant's lifetime, only by the Participant (or
     by the  Participant's  legal  representatives).  Any  infringement  of this
     principle  will cause the  Options  to become  null and void,  without  the
     Option Holder being entitled to any compensation.

9.   NO RIGHT TO EMPLOYMENT

     Nothing  contained in the Plan or in any Option under the Plan shall confer
     upon any employee any right with respect to the  continuation of employment
     with the Company or Division, or interfere in any way with the right of the
     Company or Division  to  terminate  such  employment  at any time.  Nothing
     contained  in the Plan shall  confer upon any  employee or other person any
     claim or right to any Option or Shares.


                                       3



<PAGE>

10.  GOVERNMENTAL COMPLIANCE

     Each Option under the Plan shall be subject to the  requirement  that if at
     any time the Supervisory Board or the Board of Management,  as the case may
     be, shall determine that the listing,  registration or qualification of any
     Shares issuable or deliverable  thereunder upon any securities  exchange or
     under any  Federal,  state or other law,  or the consent or approval of any
     governmental  regulatory  body,  is  necessary  or desirable as a condition
     thereof,  or in  connection  therewith,  no such Option may be exercised or
     Shares   issued   or   delivered   unless   such   listing,   registration,
     qualification,  consent or  approval  shall have been  effected or obtained
     free of any conditions not acceptable to the Supervisory Board or the Board
     of Management.

     In the sole discretion of the Supervisory Board or the Board of Management,
     as the case may be,  the  provisions  of this Plan may be  supplemented  by
     provisions set forth in a Schedule (or  Schedules) to the Plan  established
     in respect of a country or jurisdiction, to the extent that it is necessary
     or desirable in order to comply with local law in such  jurisdiction  or in
     order to  obtain  favorable  tax,  accounting  or other  treatment  in such
     jurisdiction.

11.  ADJUSTMENTS

     In the event of any change in the outstanding Shares by reason of any stock
     dividend  or  split,  recapitalization,  merger,  consolidation,  spin-off,
     combination  or  exchange  of  shares  or other  corporate  change,  or any
     distribution  to holders of Shares other than regular cash  dividends,  the
     number  or kind of  Shares  available  for  Options  under  the Plan may be
     adjusted by the Supervisory Board or the Board of Management as it shall in
     its sole  discretion  deem  equitable  and the  number  and kind of  Shares
     subject to any outstanding  Options granted under the Plan and the purchase
     price  thereof  may be adjusted  by the  Supervisory  Board or the Board of
     Management as it shall in its sole  discretion  deem  equitable to preserve
     the value of such Options.

12.  AMENDMENT

     The Supervisory  Board or the Board of Management,  as the case may be, may
     amend,  modify,  suspend  or  terminate  the  Plan or any  portion  thereof
     (including  Schedules) at any time,  provided  that,  except as provided in
     Section  11, no  amendment  shall be made which would  reduce the  exercise
     price specified in the Plan.

13.  GENERAL PROVISIONS

     (a)  Except as otherwise  provided by the Supervisory Board or the Board of
          Management in the applicable  Option  agreement,  a Participant  shall
          have no rights as a shareholder  with respect to any Shares subject to
          Options until such Shares have been  transferred  appropriately to the
          Participant  and,  subject to Section 11, no adjustment  shall be made
          for dividends or distributions or other rights in respect of any Share
          for which the  record  date is prior to the date on which  Participant
          shall become the holder of record thereof.

     (b)  The  Plan  and all  agreements  hereunder  shall  be  governed  by and
          construed in accordance with the laws of The  Netherlands,  subject to
          the terms of the applicable  Option  agreement,  without regard to the
          principles of conflict of laws.

     (c)  Where the context  requires,  words in either gender shall include the
          other gender.


                                       4

<PAGE>


     (d)  The value of Options (or Shares  purchased  upon  exercise of Options)
          under the Plan shall not be considered as  compensation in determining
          a  Participant's  benefits  under any benefit plan of the Company or a
          Division,  including,  but  not  limited  to,  group  life  insurance,
          long-term disability, family survivors, or any retirement,  pension or
          savings plan.

     (e)  Any schedules to this Plan, which reflect more specific terms relating
          to Performance Options or Ordinary Options, shall be considered a part
          of this Plan and are hereby incorporated into this Plan by reference.

14.  TERM OF PLAN

     Subject to earlier termination  pursuant to Section 12, the Plan shall have
     a term of 10 years from the Effective Date.

15.  EFFECTIVE DATE

     The Plan shall be effective as of 8 February 2001 (the "Effective Date").


                                       5