Document:

exv4wxfy

 

Exhibit 4(f)

Employment
contract between the Company and Mr. T.W.H.P. van Deursen

 

Employment
contract between the Company
and Mr. T.W.H.P. van Deursen 

The following contract is the employment contract of Mr. T.W.H.P. van Deursen, containing
the terms and conditions of his employment with effect from April 1, 2006 subject to appointment
by the General Meeting of Shareholders of the Company.

1. Commencement of employment

You will enter the employment of Royal Philips Electronics as a member of the Board of Management
with effect from April 1, 2006 subject to appointment by the General Meeting of Shareholders of the
Company.

The Supervisory Board undertakes to submit to the General Meeting of Shareholders to be held on
March 30, 2006 a proposal for your appointment as a member of the Board of Management and Executive
Vice-President of Royal Philips Electronics as of April 1, 2006.

The Contract of Employment between you and Royal Philips Electronics, dated March 20, 2003 will
cease to exist as of April 1, 2006.

The terms and conditions stated in this letter agreement and its annexes replace all terms and
conditions laid down in previous employment agreements 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 two years commencing on April 1, 2006 and shall terminate
ipso jure, without any notice
being required, on April 1, 2008.

	B.	 	No later than six months before April 1, 2008 the parties will discuss a possible extension
of the Contract.

	C.	 	Both parties shall have the right to terminate this agreement before April 1, 2008 or before
any later expiration date as indicated above 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 April 1, 2008, 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

 

 

 

			
	Employment contract between the Company and Mr T.W.H.P. van Deursen
	 	2
	 	 	 
	 

	 	 	compensation in the amount of one month of salary as mentioned in paragraph 3 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
April 1, 2008. 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 11. If the maximum of one
year’s salary would be manifestly unreasonable if the Contract is terminated before April 1,
2008, you shall be eligible for a once-only payment not exceeding twice your annual salary as
mentioned in paragraph 3.
	 
	E.	 	In case of termination of the Contract you will resign ultimately per the effective date of
the termination of the Contract as member of the Board of Management.

3. Salary 

Your annual salary as of April 1, 2006 shall amount to EUR 550,000 (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. 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 90% of
your annual salary if the stretch targets are realized (=150% score).The actual pay out of the
annual incentive is determined by multiplying the annual incentive score by the Group Incentive
Multiplier (varies from 0.8 to 1.2), which is based on the financial annual incentive target
Economic Profit Realized of the Philips Group. So the overall maximum annual incentive amount to be
realized can be 108% of your annual salary.

5. 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.

 

 

 

			
	Employment contract between the Company and Mr T.W.H.P. van Deursen
	 	3
	 	 	 
	 

As a member of the Board of Management you are in principle eligible to participate in
such plan. For the year 2006 you will be granted 10,000 restricted share rights and 30,000
stock
options under the April grant.

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, all restricted
share rights 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 share rights granted before
the starting date of this Contract.

6. Pension Rights 

You are entitled to a pension in conformity with the conditions contained in the Pension
Regulations of the Stichting Philips Pensioenfonds, subject to the following deviations:

	•	 	the gross pensionable salary as of April 1, 2006 will be
set at EUR 480,000. The 10% increase
in the gross basis and eventual allowances as laid down in article 3. of the
pension regulations of the “Stichting Philips Pensioenfonds” do not apply to members of the
Board of Management;

	•	 	the pension basis is found by deducting from the gross basis
such part of the members’ income
as is deemed per April 1 to be covered by statutory pension provisions, the
so-called franchise;

	•	 	with reference to the supplementary pension arrangement laid
down in our letter of November
22,1999, for you the gross basis as laid down in article 3. of the pension regulations of the
“Stichting Philips Pensioenfonds” is your annual gross salary increased by 10%.

For further information, please refer to Annex A.

7. 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 of EUR 2,475 excl. VAT at the moment of ordering of the lease
car. In case the monthly lease price exceeds the standard lease price of EUR 2,475, 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. Your current personal
contribution – if any – will be recalculated.

8. Allowances

	•	 	For business entertainment expenses:

With respect to your position within the Company you are be eligible for a fixed allowance for
business expenses. Currently the tax-free allowance in your case is EUR 23,920 per annum. This
sum is meant to enable you amongst others to recoup the expenses you incur in entertaining
guests on behalf of the Company.

 

 

 

			
	Employment contract between the Company and Mr T.W.H.P. van Deursen
	 	4
	 	 	 
	 

	•	 	For the use of a home for representative purposes:

Members of the Board of Management are be eligible for a fixed allowance of Euro 6,800 tax-free
to cover 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.

9. 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.

10. 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. Details of this
arrangement are given in Annex B.
	 
	•	 	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.

11. Industrial disability 

The present Company policy for Executives with regard to industrial disability is that 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 6 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 T.W.H.P. van Deursen
	 	5
	 	 	 
	 

12. Holidays 

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

13. Rules governing Internal and External directorships 

For the rules with respect to directorships, which may be amended from time to time, we
refer to Annex C.

14. 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 (Annex D). The Compliance Officer with respect to inside
information will contact you, as you are designated as “Qualified Insider”.

15. General Terms of Employment of Philips 

Annex E 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, Annex E will be
signed by you.

16. General Business Principles 

For the General Business Principles, which apply to you, we refer to Annex F-1. In
Annexes F-2 and F-3 you will find the Financial Code of Ethics and the Purchasing Code of
Ethics, which are applicable to you.

17. Personnel Registration

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

18. 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 Annex E and return them to [contact detail ommitted], Secretary Remuneration Committee, Royal
Philips Electronics, HBT 10.19, P.O. Box 77900, 1070 MX Amsterdam, the Netherlands.

 

 

 

			
	Employment contract between the Company and Mr T.W.H.P. van Deursen
	 	6
	 	 	 
	 

Needless to say, you may contact [contact detail ommitted] if you require further
information about these arrangements.

Looking forward to receiving your reply, I remain

	 	 	 
	With kind regards,

	 	Agreed and signed:
	 
	 	 
	W. de Kleuver

	 	T.W.H.P. van Deursen
	(Chairman Supervisory Board)
	 	 

 

 

 

			
	Employment contract between the Company and Mr T.W.H.P. van Deursen
	 	7
	 	 	 
	 

Enclosures 

Annex A – Pension Plan

Annex B
– Accident Insurance

Annex C – Rules Governing Internal and External Directorships

Annex D – Rules of Conduct with respect to Inside Information

Annex E – Philips General Terms of Employment

Annex F – General Business Principles, Financial Code of Ethics and Purchasing Code of Ethicsexv4wxgy

 

Exhibit 4(g)

Employment
contract between the Company and Mr. F.A. van Houten

 

Employment
contract between the Company
and Mr F.A. van Houten 

The following contract is the employment contract of Mr F.A. van Houten, containing the
terms and conditions of his employment with effect from April 1, 2006 subject to appointment by
the General Meeting of Shareholders of the Company.

1. Commencement of employment 

You will enter the employment of Royal Philips Electronics as a member of the Board of
Management with effect from April 1, 2006 subject to appointment by the General Meeting of
Shareholders of the Company.

The Supervisory Board undertakes to submit to the General Meeting of Shareholders to be held on
March 30, 2006 a proposal for your appointment as a member of the Board of Management and Executive
Vice-President of Royal Philips Electronics as of April 1, 2006.

The
Contract of Employment between you and Royal Philips Electronics, dated July 17, 2003 and the
amendment of October 12, 2004 will cease to exist as of
April 1, 2006. The terms and conditions stated
in this letter agreement and its annexes replace all terms and conditions laid down in previous
employment agreements 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, 2006 and shall terminate ipso jure, without any notice
being required, on April 1, 2010.

	B.	 	No later than six months before April 1, 2010 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 April 1, 2010 or before
any later expiration date as indicated above 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.

 

 

 

			
	Employment contract between the Company and Mr F.A. van Houten
	 	2
	 	 	 
	 

	D.	 	If the Contract is terminated at the request of the Company
before April 1, 2010, 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 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 11. If the maximum of one year’s salary would be manifestly
unreasonable if the Contract is terminated before April 1, 2010, you shall be eligible for a
once-only payment not exceeding twice your annual salary as mentioned in paragraph 3.

	E.	 	In case of termination of the Contract you will resign ultimately per the effective date
of the termination of the Contract as member of the Board of Management.

3. Salary 

Your
annual salary as of April 1, 2006 shall amount to EUR 525,000 (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. 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 90% of
your annual salary if the stretch targets are realized (=150% score).The actual pay out of the
annual incentive is determined by multiplying the annual incentive score by the Group Incentive
Multiplier (varies from 0.8 to 1.2), which is currently based on the financial annual incentive
target Economic Profit Realized of the Philips Group. So the overall maximum annual incentive
amount to be realized can be 108% of your annual salary.

 

 

 

			
	Employment contract between the Company and Mr F.A. van Houten
	 	3
	 	 	 
	 

5. 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.
For the year 2006 you will be granted 10,000 restricted share rights and 30,000 stock options under
the April grant.

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, all restricted
share rights 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 share rights granted before
the starting date of this Contract.

6. Pension Rights 

You are entitled to a pension in conformity with the conditions contained in the Philips
Executives Pension Plan of’Stichting Philips Pensioenfonds”.This plan is a combination of average
pay (annual accrual percentage: 1.25%) and defined contribution (employer contribution: 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”.

7. 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 of EUR 2,475 excl. VAT at the moment of ordering of the lease
car. In case the monthly lease price exceeds the standard lease price of EUR 2,475, 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. Your current personal
contribution – if any – will be recalculated.

8. Allowances 

	•	 	For business entertainment expenses:

With respect to your position within the Company you are be eligible for a fixed allowance for
business expenses. Currently the tax-free allowance in your case is
EUR 23,920 per annum. This
sum is meant to enable you amongst others to recoup the expenses you incur in entertaining
guests on behalf of the Company.

 

 

 

			
	Employment contract between the Company and Mr F.A. van Houten
	 	4
	 	 	 
	 

	•	 	For the use of a home for representative purposes:

Members of the Board of Management are be eligible for a fixed allowance of Euro 6,800 tax-free
to cover 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.

9. 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.

10. 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. Details of this
arrangement are given in Annex A.
	 
	•	 	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.

11. Industrial disability 

The present Company policy for Executives with regard to industrial disability is that 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 6 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 F.A. van Houten
	 	5
	 	 	 
	 

12. Holidays 

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

13. Rules governing Internal and External directorships 

For the rules with respect to directorships, which may be amended from time to time, we refer
to Annex B.

14. 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 (Annex C).The Compliance Officer with respect to inside
information will contact you, as you are designated as “Qualified Insider”.

15. General Terms of Employment of Philips 

Annex D 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,Annex D will be
signed by you.

16. General Business Principles 

For the General Business Principles, which apply to you, we refer to Annex E-1. In Annexes
E-2 and E-3 you will find the Financial Code of Ethics and the Purchasing Code of Ethics, which
are applicable to you.

17. Personnel Registration 

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

18. 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 Annex D and return them to [contact detail ommitted], Secretary Remuneration
Committee, Royal Philips Electronics, HBT 10.19, P.O. Box 77900,1070 MX Amsterdam, the
Netherlands.

 

 

 

			
	Employment contract between the Company and Mr F.A. van Houten
	 	6
	 	 	 
	 

Needless to say, you may contact [contact detail ommitted] if you require further information about
these arrangements.

Looking forward to receiving your reply, I remain

	 	 	 
	With kind regards,

	 	Agreed and signed:
	 
	 	 
	W. de Kleuver

	 	F.A. van Houten
	(Chairman Supervisory Board)
	 	 

	 
	 

 

 

 

			
	Employment contract between the Company and Mr F.A. van Houten
	 	7
	 	 	 
	 

Enclosures 

Annex A – Accident Insurance

Annex B – Rules Governing Internal and External Directorships

Annex C – Rules of Conduct with respect to Inside Information

Annex D – Philips General Terms of Employment

Annex E – General Business Principles, Financial Code of Ethics and Purchasing Code of Ethics

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