EX-4.C








Exhibit 4
(c)




Employment contract between the Company and G. Dutiné.



96









 
















Employment contract between the Company and Mr G.H.A. Dutiné



The following contract is the employment contract of Mr G.H.A. Dutiné containing the terms
of employment and other arrangements that apply with effect from April 1, 2010 as a member of
the Board of Management of Royal Philips Electronics (“Koninklijke Philips Electronics N.V.”
hereinafter also referred to as “the Company”).





	1.	 	Continuation of employment




Your employment with the Company as a member of the Board of Management will be continued
after March 31, 2010 subject to appointment by the General Meeting of Shareholders of the Company.



The Supervisory Board (hereinafter also referred to as “the Supervisory Board”) undertakes to
submit to the General Meeting of Shareholders to be held on March 25, 2010 a proposal for your
re-appointment as a member of the Board of Management and Global Head of Markets and Innovation as
of April 1, 2010.



In the event of such re-appointment the terms and conditions stated in this letter agreement
and its annexes replace all terms and conditions laid down in your contract of employment dated
January 29, 2007 and all oral and written understandings reached with you and any company
belonging to the Philips Group.





	2.	 	Duration of employment
	 
	A.	 	The contract of employment (hereinafter referred to as the “Contract”) with the
Company connected with your membership of the Board of Management shall be entered
into for a period of four years commencing on April 1, 2010 and shall terminate ipso jure,
without any notice being required, on March 31, 2014.
	 
	B.	 	No later than six months before March 31, 2014 the parties will discuss a possible
extension of the Contract. The parties agree that the Company at least every four years
will review whether your position, and subsequent Contract, will be continued. The
Contract will ultimately be terminated at the first day of the month following the month
in which you have reached the age of 62.5.
	 
	C.	 	Both parties shall have the right to terminate this agreement before March 31, 2014 or
before any later Contract expiration against the end of a calendar month. In this respect,
you will adhere to a written notice period of three months and the Company will give no
less than six months prior written notice.
	 
	D.	 	If the Contract is terminated at the request of the Company before March 31, 2014, or
before any other expiration date if the Contract has been renewed, other than for a
compelling reason (“dringende reden”), within the meaning of Dutch labour law, we agree
with you already now that in that case you shall be entitled to an once-only payment by
way of compensation in the amount of one month of salary as mentioned in paragraph 3







 









 








			
	Employment contract between the Company and Mr G.H.A. Dutiné
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	 	 	for every full year of service within the Philips Group, provided that the maximum is the
lower of (a) twelve months, and (b) the number of months to serve before the first day
of the month following the month in which you reach the age of 62.5. You shall not be
entitled to such payment if the Contract is terminated immediately following a period in
which the Company made industrial disability payments to you under paragraph 13.
	 
	E.	 	In case of termination of the Contract you will resign ultimately per the effective date of
such termination as member of the Board of Management.






	3.	 	Salary




Your annual salary as of April 1, 2010 amounts to EUR 625,000 (gross), which amount
includes mandatory holiday allowances, to be paid in twelve monthly instalments.



Annual review and subsequent upwards adjustment, if any, of your annual salary, will be
determined at the discretion of the Supervisory Board of the Company on the proposal of the
Remuneration Committee of the Supervisory Board (hereinafter also referred to as “the
Remuneration Committee”). You shall be informed in writing, on behalf of the Supervisory Board,
of any salary increases awarded to you in this way. Only salary increases determined and approved
by the Supervisory Board will replace the salary amount mentioned above.





	4.	 	Application of 30%-rule




The “so-called 30%-ruling” will continue to be applicable to you under the current tax
regulations. The 30% ruling allows the Company to pay to you approximately 30% of practically all
remuneration in the form of a tax-free compensation for so-called “extra territorial costs”.
Consequently, your legal and taxable wage is reduced by the same percentage. So your total
remuneration is for approximately 30% paid as a tax-free cost compensation and for approximately
70% as taxable wage.



The termination or amendment of the 30%-ruling will not result in any financial obligation on
the part of the Company.





	5.	 	Annual Incentive




In addition to the salary referred to under paragraph 3, you shall be eligible each year
for an annual incentive. This incentive shall be determined annually by the Supervisory Board
on the advice of the Remuneration Committee.



The annual incentive to be awarded relates to the preceding financial year and is based on
criteria to be determined annually. You shall be notified in writing of these annual
incentive targets.



The on-target (= 100% score) annual incentive amount to be realized by you is currently set by
the Supervisory Board at 60% of your annual salary as mentioned under paragraph 3. It can become
120% of your annual salary if the stretched targets are realized (= 200% score).





	6.	 	Long Term Incentive Plan




The Supervisory Board, within the framework approved by the Company’s General Meeting of
Shareholders and on the advice of the Remuneration Committee, can decide by discretion to grant
Royal Philips Electronics restricted share rights, stock options and/or other equity related
incentives to members of the Board of Management
on a year-to-year basis. The conditions of such incentives, if any, are also approved by the
General Meeting of Shareholders and may be changed on a yearly basis.



As a member of the Board of Management you are in principle eligible to participate in such
plan. In April 2010 you will be eligible for a grant of restricted share rights and stock
options







 









 








			
	Employment contract between the Company and Mr G.H.A. Dutiné
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according to the level applicable to members of the Board of Management.


For the period you will be a member of the Board of Management you will not be eligible to
participate in any other Philips share purchase or equity related scheme than approved by the
Supervisory Board for members of the Board of Management.



The Long Term Incentive Plan is designed to stimulate long-term investment in Philips shares. To
further align the interests of members of the Board of Management and shareholders, restricted
shares shall be retained for a period of at least five years or until at least the end of
employment, if this period is shorter. The same applies for restricted shares granted before the
starting date of this Contract. In line with the Share Ownership Guidelines on the attached CD-rom,
you are required to hold at least 24,000 shares.





	7.	 	Claw-back




If any of the Company’s financial statements are (required to be) restated, resulting from
errors, omission, or fraud, the Supervisory Board may (in its sole discretion, but acting in good
faith), direct that the Company recover all or a portion of any Annual Incentive made to you with
respect to any fiscal year of the Company the financial results of which are negatively affected by
such statement. This right also applies in other cases of any Annual Incentive having been made to
you on the basis of incorrect financial or other data.



If equity-related incentive has been awarded to you on the basis of incorrect financial or other
data, the Supervisory Board may, in its sole discretion but acting in good faith, resolve to
recoup some or all of such incentive compensation in all appropriate cases (taking into account
all relevant factors, including whether the assertion of a recoupment claim may in its opinion
prejudice the interests of the Company in any related proceeding or investigation), granted to
you, if and to the extent that:





	•	 	the size of the equity-related incentive was calculated based upon the achievement of
certain financial or other data that were subsequently reduced or changed due to a
correction thereof resulting from errors, omissions, fraud or otherwise, and
	 
	•	 	the size of such incentive that would have granted to you, had the financial or other data
been properly reported would have been lower than the size actually granted.






	8.	 	Pension Rights




You are entitled to a pension in conformity with the conditions contained in the Philips
Executives Pension Plan of “Stichting Philips Pensioenfonds” further specified in the letter
dated June 28, 2006. The pension plan is a combination of average pay (annual accrual percentage:
currently 1.25%) and defined contribution (employer contribution: currently 20%). The target
retirement age under this plan is 62.5. No employee contribution is required.



The pension base is your annual gross salary, as mentioned in paragraph 3 hereof, minus the
offset (so-called “franchise”).



For further information, please refer to the plan rules with “Stichting Philips Pensioenfonds” and
the chapter benefits on the attached CD-rom.




9. Company Car



You are entitled to a leased company car according to the conditions valid for Philips
Executives. In principle, a personal contribution is not required if the monthly lease price does
not exceed the standard lease price at the moment of ordering of the lease car. In case the
monthly lease price exceeds the standard lease price, a personal contribution for the private use
of the car has to be paid. You are not entitled to conclude a new lease agreement before the
expiration date of the present lease agreement.






 









 








			
	Employment contract between the Company and Mr G.H.A. Dutiné
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	10.	 	Allowances






	•	 	For business entertainment expenses
	 
	 	 	With respect to your position within the Company you may be eligible for a fixed
allowance for business entertainment expenses. Currently the tax-free allowance in your
case is EUR 24,050 per annum. This sum is meant to enable you amongst others to cover
the expenses you incur in entertaining business guests on behalf of the Company.
	 
	•	 	For the use of a home for representative purposes
	 
	 	 	Members of the Board of Management may be eligible for a fixed allowance of EUR 6,807
tax-free to cover the use of their own home for representative purposes.





The above-mentioned allowances will be paid at the end of each quarter.


Parties agree that changes in fiscal legislation could make it necessary or desirable for
the Company to change the above arrangements.





	11.	 	Senior Executive Ambassador Program




You are invited to participate in the Senior Executive Ambassador Program to use
Philips products that will be made available to you at your home.





	12.	 	Insurances






	•	 	Accident insurance
	 
	 	 	You will be covered by a 24-hours accident insurance policy. The maximum sum insured is
three times your gross annual salary as mentioned under paragraph 3. We refer you to the
chapter benefits on the attached CD-rom.
	 
	•	 	Directors and Officers Liability Insurance
	 
	 	 	You will be covered by a Directors and Officers liability insurance with regard to
“wrongful acts”. As of the date hereof, under the terms of the policy, “wrongful acts”
include any actual or alleged breach of trust, breach of duty, neglect, error, misstatement,
misleading statement, omission or other act wrongfully committed by the Assured or any
matter claimed against them solely by reason of their being a member of the Board of
Management.






	13.	 	Industrial disability




For a maximum period of three years from the start of disablement, but at the very latest up
to the end of the Contract, the balance between your annual salary, as stated in paragraph 3, at
the start of the total disability and the aggregate amount of any statutory allowance distributed
because of your total disablement together with possible allowances distributed for the same
reason by “Stichting Philips Pensioenfonds” as referred to in paragraph 8 of this letter, will —
subject to your compliance with the Company’s directives — be paid by the Company.



The Company shall not be bound by the aforesaid obligation if you have a claim against third
parties in respect of your disablement. Upon surrender to the Company of such claim — in so far as
it relates to loss of salary — an amount equal to the aforesaid balance shall — but for no longer
than the period stated in the foregoing paragraph — be paid by the Company in advance.



However, should this policy change, the new policy will apply in full to you. No concessions will
be made if the new policy is less favorable than the present policy.







 









 








			
	Employment contract between the Company and Mr G.H.A. Dutiné
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	14.	 	Holidays




The holiday entitlement for members of the Board of Management is 25 working days per
calendar year.





	15.	 	Rules governing Internal and External directorships




For the rules with respect to directorships, which may be amended from time to time, we
refer to the chapter contractual rules of conduct on the attached CD-rom.





	16.	 	Rules of Conduct with respect to Inside Information




The Philips’ Rules of Conduct with respect to Inside Information, which may be amended from
time to time, are applicable to you (chapter contractual rules of conduct on the attached
CD-rom). The Compliance Officer with respect to Inside Information will contact you, as you are
designated as “Qualified Insider”.





	17.	 	General Terms of Employment of Philips




The chapter contractual rules of conduct on the attached CD-rom contains the General Terms
of Employment of the Philips Group, which also apply to you.



As evidence of your approval of the contents of the General Terms of Employment, a hard copy of
these terms will be signed by you.





	18.	 	General Business Principles




For the General Business Principles, the Financial Code of Ethics and the Supply Management
Code of Ethics, which apply to you, we refer to the chapter contractual rules of conduct on the
attached CD-rom.





	19.	 	Personnel Registration




Your data will be recorded in one or more personnel registration systems.





	20.	 	Applicable law




All terms of the employment and this Contract are governed by the laws of the Netherlands.



Parties agree that all the above compensation elements are subject to the corporate governance
framework applicable to members of the Board of Management and can be changed, abolished or
replaced by other elements at any time at the sole discretion of the Supervisory Board of the
Company.



If you agree to these proposals, you are requested to sign both the enclosed copy of this
letter and the General Terms of Employment of Philips and return them to the Secretary
Remuneration Committee, Royal Philips Electronics, HBT 10.19, P.O. Box 77900, 1070 MX
Amsterdam, the Netherlands.



Needless to say, you may contact the Secretary of the Remuneration Committee if you require
further information about these arrangements.



Looking forward to receiving your reply, we remain
 With kind regards,








 









 








			
	Employment contract between the Company and Mr G.H.A. Dutiné
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J-M. Hessels




(Chairman Supervisory Board)




Agreed and signed:




G.H.A. Dutiné



Annexes:





	•	 	CD-rom
	 
	•	 	General Terms of Employment of Philips