<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>2
<FILENAME>exh_4-2.txt
<DESCRIPTION>STOCK OPTION PROGRAM
<TEXT>
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                    GLOBAL PHILIPS STOCK OPTION PROGRAM 2006

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                    GLOBAL PHILIPS STOCK OPTION PROGRAM 2006










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                              TERMS AND CONDITIONS
                                       OF
                    GLOBAL PHILIPS STOCK OPTION PROGRAM 2006

                                    ARTICLE 1
                                   DEFINITIONS

In this Global Philips Stock Option Program 2006 the following definitions shall
apply:

1.  Closing Price         :   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.

2.  Custody  Account      :   a  custody  account  maintained  in the name of an
                              Option Holder other than a Nominee Account.

3.  Date of Grant         :   the  date at which  the  Options  shall be  deemed
                              granted to the Option  Holder  under the  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 2006.
                              The  relevant  Date of Grant  with  respect to any
                              grant hereunder shall be determined by Philips.

4.  Employing Company     :   any company  within the Philips group of companies
                              and such other company as Philips may from time to
                              time designate or approve.

5.  Grant Price           :   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.

6.  Nominee Account       :   a  custody  account  maintained  in the name of an
                              Option  Holder  established  by  an  administrator
                              designated by Philips.

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7.  Option                :   a right  granted by Philips  under the  Program to
                              acquire  one  Share   subject  to  the  terms  and
                              conditions hereof.

8.  Option Holder         :   a person holding any Options.

9.  Option Period         :   the  term  for  which  an  Option  is  granted  as
                              specified in Article 3.

10. Philips               :   Koninklijke Philips Electronics N.V.

11. Program               :   this Global Philips Stock Option Program 2006.

12. Share                 :   a common share of Philips.


                                    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

1.    Options shall not be exercisable  before the third anniversary of the Date
      of Grant. Unvested or lapsed Options cannot be exercised.

2.    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.

3.    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

1.    Except as otherwise  provided in Article 4.2, 4.3 and 4.4 hereof,  in 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 of its subsidiaries unless Philips  determines,  in
      its sole discretion, otherwise in writing. Any such determination shall be
      final,  conclusive  and binding and may be subject to such  conditions  as
      Philips may determine appropriate.

2.    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.

3.    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

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      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.

4.    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  remain
      exercisable  in accordance  with the terms and conditions of this Program,
      provided  that the Option  Period  will expire upon the earlier of (a) ten
      (10)  years as from  the  Date of Grant or (b) five (5)  years as from the
      date of such termination.

      Upon  termination of the employment of the Option Holder with the Divested
      Business,  the  terms of  Article  4.1,  4.2 and 4.3 shall  apply  mutatis
      mutandis,  it being  expressly  understood that in case such Option Holder
      becomes  re-employed  by  any  Employing  Company  immediately  upon  such
      termination,  any Options held by the Option Holder at such time shall not
      be forfeited,  but shall remain exerciseable for the remainder of the term
      of such Options as determined pursuant to this Article 4.4, subject to the
      terms and conditions of this Program.


                                    ARTICLE 5
                               NON-TRANSFERABILITY

The Options are strictly personal, and may not be assigned,  transferred (except
that,  in case of death of the  Option  Holder  during the  Option  Period,  any
Options  held by the  Option  Holder at the date of his death  shall pass to his
heirs or legatees),  pledged,  hypothecated, or otherwise encumbered or disposed
of in any manner.  The Option Holder may not engage in any  transactions  on any
exchange on the basis of any Options. Any violation of the terms of this Article
5 will cause the Options to become  immediately  null and void  without  further
notice and without the Option Holder being entitled to any compensation.


                                    ARTICLE 6
                               EXERCISE OF OPTIONS

1.    In order to exercise  Options,  which are  exercisable in accordance  with
      this Program,  the Option Holder must notify Philips in accordance  with a
      procedure determined by Philips. The notice shall state:
      a. the Date of Grant of the Options he wishes to exercise;
      b. if applicable,  the confirmation  that the Option Holder wants to limit
         the Option Period pursuant to Article 3.2;

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      c. the number of Options to be exercised; and
      d. whether Shares to be obtained upon such exercise:
         (i)  be sold, on behalf of the Option Holder as soon as possible.  Upon
              such sale, the aggregate  revenue of the Shares sold upon exercise
              of the Options  less the Grant Price  multiplied  by the number of
              such Options, and further costs, will be paid to the Option Holder
              in accordance with a procedure determined by Philips; or
         (ii) be delivered to the Option  Holder as provided for in the Articles
              6.3, 6.4 and 6.5.
         In case the Option  Holder elects to have the Shares to be delivered to
         him,  his notice  shall be  accompanied  by the  payment in full of the
         Grant Price,  multiplied  by the number of Options so being  exercised.
         Such payment shall be made: (a) in cash, (b) through  simultaneous sale
         through a broker of Shares  acquired on  exercise,  subject to it being
         permitted  under the  applicable  regulations,  (c) through  additional
         methods  prescribed  by  Philips  or (d) by a  combination  of any such
         method.

2.    Philips  may  require an Option  Holder to  maintain a Nominee  Account in
      connection  with this  Program.  Nothing  contained in this Program  shall
      obligate  Philips  to  establish  or  maintain  or cause to  establish  or
      maintain a Nominee Account for any Option Holder.

3.    Subject to the terms and conditions of this Program,  if the Option Holder
      elects the Share to be  delivered  to him upon  exercise  as  provided  in
      Article 6.1.d (ii), Philips will deliver a Share to an Option Holder on or
      as soon as reasonably  practicable  after the exercise of an Option. In no
      event shall Philips have any obligation to deliver any Shares to an Option
      Holder prior to the exercise of any Options.

4.    If the Option Holder elects to have Shares to be delivered to him pursuant
      to Article 6.1.d (ii), such Shares will be credited to the Nominee Account
      except if an Option Holder (i) requests Philips to credit such Shares to a
      Custody Account or (ii) does not maintain a Nominee Account at the date of
      delivery of such Shares. In case (i) or (ii) as described in the foregoing
      sentence applies, the Option Holder shall be responsible to notify Philips
      in accordance  with a procedure  (including  the period for  notification)
      established by Philips on the details relating to such Custody Account. In
      case Philips  determines in its sole discretion that the Option Holder has
      failed to notify  Philips  in  accordance  with such  procedure,  then the
      Option Holder shall be deemed to have  requested  Philips to sell or cause
      to sell such Shares.

5.    Except as may be  approved  otherwise  in  writing  by Philips in its sole
      discretion,  in  case  an  Option  Holder  is no  longer  employed  by any
      Employing Company for any reason whatsoever,  the Option Holder (or his or
      her legal  representatives)  shall  withdraw  all Shares  credited  to the
      Option


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      Holder's  Nominee  Account  within  two  (2)  months  of the  date of such
      termination.   In  case  the   Option   Holder   (or  his  or  her   legal
      representatives,  as the case may be) fails to comply  with the  foregoing
      obligation,  then the Option Holder (or his or her legal  representatives)
      shall be deemed to have  requested  Philips  to sell or cause to sell such
      Shares.

6.    Each Option Holder shall comply with any applicable "insider trading" laws
      and  regulations  and the Philips' Rules of Conduct with respect to Inside
      Information.


                                    ARTICLE 7
                                CAPITAL DILUTION

Philips may make equitable  adjustment or substitution of (a) the number or kind
of Shares subject to the Options, and/or (b) the Grant Price, as it, in its sole
discretion,  deems equitable to reflect any significant corporate event of or by
Philips,  for example a 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 effect of the  adjustment  or  substitution  shall be to  preserve  both the
aggregate  difference  and the  aggregate  ratio between the Grant Price and the
fair market value of the Shares to be acquired upon exercise of the Options. The
Option Holder shall be notified promptly of such adjustment or substitution.

                                    ARTICLE 8
                                 COSTS AND TAXES

1.    All costs of delivering any Shares to the Option Holder's  Nominee Account
      upon  exercise  of any  Options  shall be borne by  Philips.  All costs of
      delivering  any Shares  under this Program to an Option  Holder's  Custody
      Account and any other costs  connected  with the Shares  shall be borne by
      the Option Holder.

2.    Any  and  all  taxes,   duties,   levies,   charges  or  social   security
      contributions ("Taxes") which arise under any applicable national,  state,
      local or  supra-national  laws,  rules  or  regulations,  whether  already
      effective on the Date of Grant or becoming effective  thereafter,  and any
      changes or modifications  therein and termination thereof which may result
      for the Option Holder in connection with this Program (including,  but not
      limited to, the grant,  the ownership  and/or the exercise of the Options,
      and/or the  delivery,  ownership  and/or  the sale of any Shares  acquired
      under this  Program)  shall be for the sole risk and account of the Option
      Holder.

3.    Philips and its subsidiaries shall have the right to deduct or cause to be
      deducted  from any  salary  payment or other sums due by Philips or any of
      its

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      subsidiaries  to an Option  Holder,  or  requiring  the  Option  Holder or
      beneficiary of the Option Holder, to pay to Philips an amount necessary to
      settle  any Taxes  determined  by  Philips  necessary  to be  withheld  in
      connection with this Program (including,  but not limited to, the grant of
      the Options or the delivery of any Shares under this Program).

4.    Philips  shall not be required to deliver any Shares and Philips may delay
      (or cause to be delayed) the transfer of any Shares from a Nominee Account
      to a Custody Account,  until Philips has received an amount, or the Option
      Holder  has made such  arrangements,  required  by  Philips  necessary  to
      satisfy  any  withholding  of any  Taxes  and any costs to be borne by the
      Option Holder in connection with this Program as determined by Philips.


                                    ARTICLE 9
                                CASH ALTERNATIVE

Upon  receipt of a notice,  as referred to in Article 6.1 hereof to exercise any
Option,  Philips may advise an Option Holder resident outside the Netherlands to
request  in  writing an amount in cash as an  alternative  to Shares.  Upon such
request  the Option  Holder is entitled to receive an amount in Euros or in U.S.
Dollars,  as indicated by the Option  Holder,  equal to the Closing Price on the
date of receipt of such request minus the Grant Price,  multiplied by the number
of Options so being exercised.  Further, any costs to be paid and any applicable
Taxes shall be deducted from the amount to be received by the Option Holder.  If
on the date of receipt of the notice  Shares  have not been  traded on  Euronext
Amsterdam the Closing Price will be that of the first subsequent  trading day on
Euronext  Amsterdam.  The same  method is being  used for  calculating  the cash
amount  to which  heirs  and  legatees  of an  Option  Holder  are  entitled  in
accordance with Article 4.3.


                                   ARTICLE 10
                               GENERAL PROVISIONS

1.    Philips shall have the authority to interpret this Program,  to establish,
      amend, and rescind any rules and regulations  relating to this Program, to
      determine  the  terms  and  conditions  of  any  agreements  entered  into
      hereunder, and to make all other determinations necessary or advisable for
      the administration of this Program.  Philips may delegate the authority to
      practice  administrative  and  operational  functions  with respect to the
      Program to officers or employees of subsidiaries of Philips and to service
      providers.

2.    No Option  Holder  shall have any  rights or  privileges  of  shareholders
      (including  the right to receive  dividends  and to vote) with  respect to
      Shares to be delivered  pursuant to the exercise of any Options until such
      Shares

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      are actually  delivered to such Option Holder in accordance with Article 6
      of this  Program.  The Shares  delivered  shall  carry the same  rights as
      common  shares of Philips  traded on  Euronext  Amsterdam  or the New York
      Stock  Exchange,  as  applicable,  on the day on which  these  Shares  are
      delivered.

3.    The (value of) Options granted to, or Shares acquired by, an Option Holder
      pursuant to such Options  under this Program  shall not be  considered  as
      compensation in determining an Option Holder's  benefits under any benefit
      plan of an  Employing  Company,  including  but not limited to, group life
      insurance,  long-term  disability,  family  survivors,  or any retirement,
      pension or savings plan.

4.    Nothing  contained  in this  Program  or in any  grant  made or  agreement
      entered into pursuant hereto shall confer upon any Option Holder any right
      to be retained employed with any Employing  Company,  or to be entitled to
      any  remuneration  or benefits  not set forth in this Program or interfere
      with or limit in any way with the right of any Employing Company or any of
      its  subsidiaries  to  terminate  such Option  Holder's  employment  or to
      discharge or retire any Option Holder at any time.

5.    If a  provision  of  this  Program  is  deemed  illegal  or  invalid,  the
      illegality  or  invalidity  shall not affect the  remaining  parts of this
      Program,  this  Program  shall be  construed  as if the illegal or invalid
      provisions had not been included in this Program.

6.    Where the context requires,  words in either gender shall include also the
      other gender.

7.    This Program  shall be governed by and  construed in  accordance  with the
      laws of The  Netherlands,  without regard to its principles of conflict of
      laws.

                                    o o o o o



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