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Corporate HRM/Management Conditions &
Remuneration
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Global Philips Stock
Option Program 2008
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GLOBAL PHILIPS
STOCK OPTION PROGRAM 2008
Corporate HRM/Management Conditions &
Remuneration
TERMS AND CONDITIONS
OF
GLOBAL PHILIPS STOCK OPTION PROGRAM
2008
Article 1
Definitions
In this Global Philips Stock Option Program 2008
the following definitions shall apply:
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1.
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Closing Price
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the price of a Share with dividend, if any, at
the closing of the Official Segment of Euronext Amsterdam
N.V.’s stock market (“Euronext Amsterdam”) as
published in the Official Price List of this stock exchange.
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2.
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Custody Account
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a custody account maintained in the name of an
Option Holder.
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3.
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Date of Grant
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the date at which the Options shall be deemed
granted to the Option Holder pursuant to this Program. The Dates
of Grant shall be the same dates as the dates of publication of
the Philips’ annual and/or quarterly results over the
financial year 2008. The relevant Date of Grant with respect to
any grant hereunder shall be determined by Philips.
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4.
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Employing Company
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any company within the Philips group of
companies and such other company as Philips may from time to
time designate or approve.
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5.
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Grant Price
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the price to be paid by the Option Holder to
acquire a Share upon exercising an Option. Such price will be
equal to the Closing Price on the applicable Date of Grant.
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6.
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Option
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a right granted by Philips under the Program to
acquire one Share subject to the terms and conditions
hereof.
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7.
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Option Holder
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a person holding any Options under this
Program.
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8.
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Option Period
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the term for which an Option is granted as
specified in Article 3.
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9.
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Philips
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Koninklijke Philips Electronics N.V.
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10.
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Program
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this Global Philips Stock Option Program
2008.
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11.
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Share
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a common share of Philips.
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12.
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Share Price
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The price of a Share with dividend, if any, at
the Amsterdam Euronext Stock Exchange or the New York Stock
Exchange, whichever is applicable, at the moment of exercise of
an Option in accordance with Article 9 of this Program.
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Article 2
Acquisition of Options
Options may be
granted to an eligible individual, subject to the (acceptance by
such individual of the) terms and conditions of this Program and
any other Philips’ policies or guidelines that may apply
to such individual. Any Options offered to any such individual
and the terms and conditions governing such Options shall be
deemed accepted by such individual with effect from the
applicable Date of Grant in case Philips has not received, in
accordance with a procedure established by Philips, a notice of
rejection of such Options within fourteen (14) days of the
notice of grant of the Options or such later date as may be
determined by Philips.
Article 3
Restrictions on Exercise and Option
Period
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1.
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Options shall not be exercisable before the third
anniversary of the Date of Grant. Unvested or lapsed Options cannot
be exercised.
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2.
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The Option Period is in principle ten (10) years
commencing on the Date of Grant, subject to this Article 3.2 and
Article 4. Upon request of an Option Holder exercising Options
pursuant to Article 6, the Option Period for the Options being
exercised will be limited to the period from the Date of Grant up
to, and including, the date Philips receives the above request in
accordance with a procedure established by Philips, provided that
the Option Period is at least three (3) years.
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3.
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Options may in principle only be exercised (subject
to a minimum of ten (10) units) at the last day of the prevailing
Option Period, subject to this Article 3 and Article 4.
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Article 4
Termination of Employment
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1.
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Except as otherwise provided in Article 4.2, 4.3
and 4.4 hereof, i n case an Option
Holder is no longer employed by any Employing Company as a result
of the termination of such Option Holder’s employment with an
Employing Company for any reason whatsoever during the applicable
Option Period, any Options held by such Option Holder at the date
of such termination shall be forfeited effective as of the date of
termination of such Option Holder's employment with the Employing
Company without the Option Holder being entitled to any
compensation or any obligation on the part of Philips or any
Employing Company unless
Philips determines, in its sole discretion, otherwise in writing.
Any such
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determination shall be final, conclusive and
binding and may be subject to such conditions as Philips may
determine appropriate.
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2.
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In case an Option Holder is no longer employed by
any Employing Company during the applicable Option Period as a
result of the termination of such Option Holder’s employment
with an Employing Company for reasons of (i) disablement, (ii)
retirement or (iii) the expiration of a temporary contract of
employment, provided such temporary contract of employment has not
been extended one or more times, any Options held by such Option
Holder at the date of termination shall remain exercisable in
accordance with Article 3, provided that in such case the Option
Period will expire upon the earlier of (a) ten (10) years from the
Date of Grant or (b) five (5) years from the date of such
termination. For the purpose of this Program, an Option
Holder’s employment shall be deemed terminated as a result of
“retirement” if such Option Holder’s employment
is terminated and such Option Holder satisfies at the date of such
termination the eligibility requirements to receive an immediate
(early) retirement benefit under an (early) retirement plan of an
Employing Company under which such Option Holder was covered,
provided (i) payment of such (early) retirement benefit commences
immediately following such termination, and provided further (ii)
that if such Option Holder is covered by an US retirement plan,
such Option Holder must have at least five years of service with an
US Employing Company and have attained the age of fifty-five (55)
years.
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3.
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In case an Option Holder is no longer employed by
any Employing Company during the applicable Option Period as a
result of the termination of such Option Holder’s employment
with an Employing Company for reasons of (i) death or (ii) legal
incapacity of the Option Holder, the Options shall remain
exercisable during the Option Period in accordance with Article 3,
provided that in such case the Option Period will expire upon the
earlier of (a) ten (10) years from the Date of Grant or (b) five
(5) years from the date of such termination. In the event that the
remaining Option Period as from the date of termination is less
than twelve (12) months, then such Options shall be exercisable for
a period of twelve (12) months as of the date of such termination
and the Option Period shall be deemed extended accordingly,
provided that the Options shall only be exercisable in the manner
as set forth in Article 9.
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4.
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In case the employment of an Option Holder with any
Employing Company is terminated as a result of the sale or other
divestment of a business, subsidiary, division or other business
unit of Philips or subsidiary or any part thereof (“Divested
Business”) and the Option Holder remains employed by the
Divested Business upon such transfer, any Options held by such
Option Holder at the date of such termination shall re
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