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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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<SEC-DOCUMENT>0000891836-08-000050.txt : 20080319
<SEC-HEADER>0000891836-08-000050.hdr.sgml : 20080319
<ACCEPTANCE-DATETIME>20080319172555
ACCESSION NUMBER:		0000891836-08-000050
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		2
CONFORMED PERIOD OF REPORT:	20080331
FILED AS OF DATE:		20080319
DATE AS OF CHANGE:		20080319

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			KONINKLIJKE PHILIPS ELECTRONICS NV
		CENTRAL INDEX KEY:			0000313216
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (NO COMPUTER EQUIP) [3600]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			P7
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-05146-01
		FILM NUMBER:		08700167

	BUSINESS ADDRESS:	
		STREET 1:		BREITNER CENTER
		STREET 2:		AMSTELPLEIN 2
		CITY:			AMSTERDAM
		STATE:			P7
		ZIP:			1096 BC
		BUSINESS PHONE:		31 20 59 77777

	MAIL ADDRESS:	
		STREET 1:		BREITNER CENTER
		STREET 2:		AMSTELPLEIN 2
		CITY:			AMSTERDAM
		STATE:			P7
		ZIP:			1096 BC

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PHILIPS ELECTRONICS N V
		DATE OF NAME CHANGE:	19930727

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	PHILIPS NV
		DATE OF NAME CHANGE:	19910903
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>sc0021.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>Form 6-K</TITLE>
</HEAD>
<BODY STYLE="FONT-FAMILY:'TIMES NEW ROMAN';FONT-SIZE:12.0PT;">







<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-BOTTOM:24PT;FONT-SIZE:12.0PT;" ALIGN="CENTER">
<FONT STYLE="font-size:12pt"><B>SECURITIES AND EXCHANGE COMMISSION</B><BR> </FONT>
<FONT STYLE="font-size:10pt"><B>WASHINGTON, DC 20549</B> </FONT></P>
<P></P>

<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-BOTTOM:24PT;FONT-SIZE:12.0PT;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">_______________</FONT></P>
<P></P>

<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-BOTTOM:24PT;FONT-SIZE:12.0PT;" ALIGN="CENTER"><FONT STYLE="TEXT-TRANSFORM:UPPERCASE;FONT-SIZE:14.0PT;">
<B>FORM 6-K</B></FONT></P>
<P></P>

<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-BOTTOM:24PT;FONT-SIZE:12.0PT;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">
<B>REPORT
OF FOREIGN PRIVATE ISSUER<BR>
PURSUANT TO RULE 13a-16 OR 15d-16<BR>
OF THE SECURITIES EXCHANGE ACT OF 1934</B></FONT></P>
<P></P>

<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:8.0PT;"><A NAME=booktmp></A>
<B>For the Month of March 2008<BR><BR>
Commission File Number: 001-05146-01</B></FONT></P>
<P></P>

<P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><B><FONT STYLE="FONT-FAMILY:'HELVETICA';FONT-SIZE:14.0PT;">KONINKLIJKE
PHILIPS ELECTRONICS N.V.</FONT></B></P>
<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="CENTER"><FONT STYLE="FONT-FAMILY:'HELVETICA';FONT-SIZE:8.0PT;"><B>(Exact
name of registrant as specified in charter)</B></FONT></P>
<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="CENTER"><B><FONT STYLE="FONT-FAMILY:'HELVETICA';FONT-SIZE:10.0PT;">Royal
Philips Electronics</FONT></B><BR>
<FONT STYLE="FONT-FAMILY:'HELVETICA';FONT-SIZE:8.0PT;"><B>(Translation of registrant&#146;s name into English)</B></FONT></P>
<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="CENTER"><B><FONT STYLE="FONT-FAMILY:'HELVETICA';FONT-SIZE:10.0PT;">The
Netherlands</FONT></B><BR>
<FONT STYLE="FONT-FAMILY:'HELVETICA';FONT-SIZE:8.0PT;"><B>(Jurisdiction of incorporation or organization)</B></FONT></P>
<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="CENTER"><B><FONT STYLE="FONT-FAMILY:'HELVETICA';FONT-SIZE:10.0PT;">Breitner
Center, Amstelplein 2, 1096 BC Amsterdam, The Netherlands</FONT></B><BR>
<FONT STYLE="FONT-FAMILY:'HELVETICA';FONT-SIZE:8.0PT;"><B>(Address of principal executive offices)</B></FONT></P>
<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Indicate
by check mark whether the registrant files or will file annual reports under cover<BR>
Form 20-F or Form 40-F.</FONT></P>
<P></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=600 ALIGN="CENTER">
<TR>
     <TD WIDTH="117" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">Form 20-F</FONT></P></TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="BORDER-BOTTOM:SOLID 0.5PT BLACK; PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">X</FONT></P></TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="117" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">Form 40-F</FONT></P></TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="BORDER-BOTTOM:SOLID 0.5PT BLACK; PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
</TR>
</TABLE>

<P></P>

 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1).</FONT></P>
<P></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=600 ALIGN="CENTER">
<TR>
     <TD WIDTH="117" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">Yes</FONT></P></TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="BORDER-BOTTOM:SOLID 0.5PT BLACK; PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="117" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">No</FONT></P></TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="BORDER-BOTTOM:SOLID 0.5PT BLACK; PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">X</FONT></P></TD>
</TR>
</TABLE>

 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:12.0PT;" ALIGN="JUSTIFY"><FONT STYLE="FONT-SIZE:10.0PT;">
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7).</FONT></P>
<P></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=600 ALIGN="CENTER">
<TR>
     <TD WIDTH="117" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">Yes</FONT></P></TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="BORDER-BOTTOM:SOLID 0.5PT BLACK; PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="117" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">No</FONT></P></TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="BORDER-BOTTOM:SOLID 0.5PT BLACK; PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">X</FONT></P></TD>
</TR>
</TABLE>

 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Indicate
 by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.</FONT></P>
<P></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=600 ALIGN="CENTER">
<TR>
     <TD WIDTH="117" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">Yes</FONT></P></TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="BORDER-BOTTOM:SOLID 0.5PT BLACK; PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="117" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">No</FONT></P></TD>
     <TD WIDTH="75" VALIGN="TOP" STYLE="BORDER-BOTTOM:SOLID 0.5PT BLACK; PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">X</FONT></P></TD>
</TR>
</TABLE>

<PAGE>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:12pt">KONINKLIJKE PHILIPS
ELECTRONICS N.V. </FONT> </P>

<P><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Koninklijke
Philips Electronics N.V. (the &#147;Company&#148;) recently amended its Nonqualified Stock
Purchase Plan (the &#147;Amended Plan&#148;), which was originally filed as Exhibit 4.1 to
their Registration Statement on Form S-8 (File No. 333-39204), filed with the Securities
and Exchange Commission on June 13, 2000. </FONT> </P>

<P><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Amended Plan is a voluntary stock purchase plan which was originally established for
eligible U.S.-based employees of certain subsidiaries of the Company and which has now
been extended to certain executives of certain subsidiaries of the Company as well as
Canadian-based employees of certain subsidiaries of the Company. The Amended Plan makes
available to eligible employees the right to purchase shares of the Company&#146;s common
stock at a discount. The common stock of the Company is quoted on several stock exchanges
including the Amsterdam Stock Exchange and the New York Stock Exchange (&#147;NYSE&#148;). </FONT> </P>

<P><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
foregoing description of the Amended Plan does not purport to be complete and is qualified
in its entirety by reference to such plan, a copy of which is filed as Exhibit 99.1 hereto
and is incorporated herein by reference, and which is also hereby incorporated by
reference into the Company&#146;s Registration Statement on Form S-8 (File No.
333-140784), filed with the Securities and Exchange Commission on February 20, 2007. </FONT> </P>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:12pt">INDEX TO EXHIBITS </FONT> </P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=600>
<TR>
     <TD WIDTH="88" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-BOTTOM:6PT;BORDER-BOTTOM:SOLID 0.5PT; " ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">Exhibit No.</FONT></P></TD>
     <TD WIDTH="501" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-BOTTOM:6PT;BORDER-BOTTOM:SOLID 0.5PT; " ALIGN="JUSTIFY"><FONT STYLE="FONT-SIZE:10.0PT;">Description</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="88" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:3.0PT;" ALIGN="CENTER"><FONT STYLE="FONT-SIZE:10.0PT;">99.1</FONT></P></TD>
     <TD WIDTH="501" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:3.0PT;" ALIGN="JUSTIFY"><FONT STYLE="FONT-SIZE:10.0PT;">
Royal Philips Electronics Nonqualified Stock Purchase Plan</FONT></P></TD>
</TR>
</TABLE>

<P></P>



<PAGE>

<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="CENTER"><FONT STYLE="TEXT-TRANSFORM:UPPERCASE;FONT-SIZE:12.0PT;"><B>SIGNATURES</B></FONT></P>
<P></P>

<P><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:10pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized. </FONT> </P>

<P></P>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=800>
<TR>
     <TD WIDTH="353" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="447" COLSPAN="3" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="JUSTIFY"><FONT STYLE="FONT-SIZE:10.0PT;">KONINKLIJKE PHILIPS ELECTRONICS N.V.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="253" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="447" COLSPAN="3" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
</TR>
<TR>
     <TD WIDTH="253" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="447" COLSPAN="3" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
</TR>
<TR>
     <TD WIDTH="253" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="JUSTIFY"><FONT STYLE="FONT-SIZE:10.0PT;">&nbsp;</FONT> <FONT STYLE="FONT-SIZE:10.0PT;">&nbsp;</FONT></P></TD>
     <TD WIDTH="35" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="JUSTIFY"><FONT STYLE="FONT-SIZE:10.0PT;">By:</FONT></P></TD>
     <TD WIDTH="412" VALIGN="TOP" STYLE="BORDER-BOTTOM:SOLID 0.5PT BLACK; PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">/s/ E.P.Coutinho</TD>
</TR>
<TR>
     <TD WIDTH="253" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;">&nbsp;</TD>
     <TD WIDTH="35" VALIGN="TOP" STYLE="PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="JUSTIFY"><FONT STYLE="FONT-SIZE:10.0PT;">&nbsp;</FONT></P></TD>
     <TD COLSPAN=2 VALIGN="TOP" STYLE="BORDER-TOP:NONE; PADDING:0.00IN 0.07IN 0.00IN 0.07IN;"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="JUSTIFY"><FONT STYLE="FONT-SIZE:10.0PT;">E.P.
Coutinho<BR>General Secretary</FONT></P></TD>
</TR>
</TABLE>
<BR><BR>

<P ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:10pt">March 17, 2008 </FONT> </P>

<P></P>




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>ex_99-1.htm
<DESCRIPTION>NONQUALIFIED STOCK PURCHASE PLAN
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY STYLE="FONT-FAMILY:'TIMES NEW ROMAN';FONT-SIZE:12.0PT;">


<P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;FONT-SIZE:12.0PT;" ALIGN="RIGHT"><B><FONT STYLE="COLOR:#000000;">Appendix
A</FONT></B></P>
<P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="CENTER"><B><FONT STYLE="COLOR:#000000;">Plan
Specifications for Koninklijke Philips Electronics N.V.<BR>
Nonqualified Stock Purchase Plan</FONT></B></P>

<HR SIZE=3 NOSHADE>
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Plan Item</FONT></B></P></TD>
     <TD WIDTH="415" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT; MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Specifications</FONT></B></P></TD>
</TR>
</TABLE>
<HR SIZE=2 NOSHADE>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:6PT;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Plan Name</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Koninklijke Philips Electronics N.V. Nonqualified Stock Purchase Plan</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Effective Date</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">August 1, 2000</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Definitions</FONT></B></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT></B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Affiliate</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Present or future subsidiary corporation of the Company, where the Company owns directly or indirectly at least 50% of the
subsidiary corporation.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Board</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Board of Management of the Company</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Closing Price</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Last trade of Common Shares on the NYSE for a Trading Date.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Code</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Internal Revenue Code of 1986, as amended.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Committee</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Committee of not less than 3, nor more than 5 members appointed by the Board or its designee and responsible for
administration of the Plan.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Common Shares</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Common shares of Koninklijke Philips Electronics N.V.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Company</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Koninklijke Philips Electronics N.V.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Contribution Account</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">A participant's accumulated payroll deductions in a Participation Period.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Disability</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Participant leaves active employment of Employer on account of a condition that would be treated as a total and
permanent disability under Code section 22(e)(3).  (See Appendix B for applicable definition for Philips Canada employees which replaces the foregoing definition).</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Earnings&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Earnings include a Participant's cash compensation received during the Participation Period from salary and wages.</FONT></P></TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Salary and wages include overtime pay, bonuses (except as provided below), holiday pay, vacation pay, and short-term disability
payments.</FONT></P></TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Earnings include salary deferrals pursuant to Code sections 125 and 401(k).</FONT></P></TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Earnings exclude bonuses exceeding 100% of a participant's annual base salary in effect at the time bonuses are paid.  Earnings
 also do not include expense reimbursements, deferred compensation, lump sum severance payments, stock options, money received for declining medical or dental coverage, patent and similar awards, distributions from any long-term incentive plan,
 perquisites, long-term disability payments, payments made from an Accident and Sickness program, or any long-term key employee compensation program.  (See Appendix B for applicable definition for Philips Canada  employees which replaces the foregoing
definition).</FONT></P></TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:12pt">A-1 </FONT> </P>

<PAGE>

<HR SIZE=3 NOSHADE>
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Plan Item</FONT></B></P></TD>
     <TD WIDTH="415" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT; MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Specifications</FONT></B></P></TD>
</TR>
</TABLE>
<HR SIZE=2 NOSHADE>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Eligible Employee&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Each U.S. based salaried or hourly Full-time Employee other than an Excluded Employee who is employed by an Employer.  For
 purposes of this Plan, the term &#147;employee&#148; includes only persons treated as such on the Employer's payroll and personnel records at the time such determination is made.  Persons treated by the Employer as contingent workers (including
 independent contractors, third-party payroll workers, employees of consulting firms and temporary help agencies, even if leased employees within the meaning of Section 414(n)(2) of the Code) at the time of the determination of the person's status are
specifically excluded.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Eligibility status at the time of a determination of a person's employment status shall not be changed as a result of the
 retroactive re-classification of the person's employment status.  Therefore, notwithstanding anything else herein to the contrary, any person treated as a contingent worker on the payroll and personnel records of the Employer at the time the
 determination is made shall in no event be retroactively eligible for participation in the plan during the period covered by such determination.  (See Appendix B for applicable definition for Philips Canada employees which replaces the foregoing
definition</FONT><FONT STYLE="FONT-SIZE:10.0PT;">.)</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Employer&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Employers may include the Company and each subsidiary which adopts the Plan for the benefit of its Eligible
Employees with the approval of the Board.  As of December 21, 2007, the following are Employers:</FONT></P></TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">U.S. Philips Corporation</FONT></P></TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Philips Holding USA Inc.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Philips Electronics North America Corporation</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Philips Semiconductors Inc.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Philips Electronics Ltd.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;"><A NAME=AAA></A>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Excluded Employee</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Those employees of any Employer </FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">who</FONT>
 <FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">shall</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">,</FONT> <FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">from time to time, be ineligible to participate in the Plan, as determined</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">by the Committee</FONT> <FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">in accordance with the terms and conditions </FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">of the Plan and as specified herein.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Exercise Date</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Last Trading Date of the applicable Participation Period.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Exercise Price</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">85 percent of the Closing Price on the Exercise Date of the applicable Participation Period.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Full-time Employee</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Any employee scheduled to work at least 1,000 hours per calendar year.  (See Appendix B for applicable definition
for Philips Canada employees which replaces the foregoing definition</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">.)</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">NYSE</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">New York Stock Exchange</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Participant</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">An Eligible Employee who has enrolled in the Plan pursuant to procedures set out in the Plan.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Participation Period</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Each three-month period beginning each January 1, April 1, July 1 and October 1, with the exception of the first
Participation Period which will consist of the two-month period beginning August 1, 2000.</FONT></P></TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:12pt">A-2 </FONT> </P>

<PAGE>

<HR SIZE=3 NOSHADE>
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Plan Item</FONT></B></P></TD>
     <TD WIDTH="415" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT; MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Specifications</FONT></B></P></TD>
</TR>
</TABLE>
<HR SIZE=2 NOSHADE>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP" STYLE="BACKGROUND:#FFFFFF;"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10.0PT;">&#147;</FONT><FONT STYLE="FONT-SIZE:10.0PT;">Philips Canada</FONT>
<FONT STYLE="FONT-SIZE:10.0PT;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP" STYLE="BACKGROUND:#FFFFFF;"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Philips Electronics Ltd. and </FONT><FONT STYLE="FONT-SIZE:10.0PT;">Canadian </FONT><FONT STYLE="FONT-SIZE:10.0PT;">Affiliates
(as defined in Appendix B).</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Plan</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">This Philips Electronics North America Corporation Stock Purchase Plan</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Plan Year</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Shall mean the 12-month period beginning each August 1.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Retirement</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Termination of employment on or after the first day of the month in which Participant commences a retirement
benefit.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Trading Date</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Each date on which stocks in the United States are traded on the NYSE.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#147;</FONT>
<FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Share Purchase Right</FONT><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&#148;</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Right to apply the cash balance in each Eligible Employee's Contribution Account to the purchase of Common Shares in accordance
with the terms of the Plan.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Participation</FONT></B></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Eligibility</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Each Eligible Employee may become a Participant as soon as administratively practical following full-time
 employment, except that Eligible Employees covered by a collective bargaining agreement (Union Employees) will be eligible upon acceptance of the plan offering by their respective union leadership.  (See Appendix B for applicable definition for Philips
Canada employees which replaces the foregoing definition).</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Enrollment</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Subject to the other terms and conditions of the Plan, each Eligible Employee may enroll as a Participant upon attaining
eligibility.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">As part of enrollment, each Eligible Employee shall authorize payroll deduction from Earnings.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Enrollment and payroll deduction shall remain in effect for subsequent Participation Periods, unless changed by the Eligible
Employee or otherwise limited under the terms of the Plan.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Payroll deduction percent changes may be made at any time during the Participation Period.  See <B>Termination of Participation</B>
section below for further information on a voluntary discontinuance of deductions.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Re-hire</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">A person who returns to active employment with an Employer as an Eligible Employee following termination of
employment, retirement or Disability may re-enroll in the Plan on the first day of the month following 30 days of full-time employment.  An Eligible Employee who has voluntarily discontinued payroll deductions may re-enroll in the Plan at any time.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Termination of Participation</FONT></B></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Voluntary Discontinuance</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Participants may discontinue payroll deductions for a Participation Period by requesting a change to zero payroll
 deductions.  Following such discontinuance any balance in the Participant's Contribution Account at the end of the Participation Period </FONT><FONT STYLE="FONT-SIZE:10.0PT;">shall be used to</FONT> <FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">purchase
stock. Following such discontinuance, the Participant may sell the Common Shares held in the Contribution Account.</FONT></P></TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:12pt">A-3 </FONT> </P>

<PAGE>

<HR SIZE=3 NOSHADE>
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Plan Item</FONT></B></P></TD>
     <TD WIDTH="415" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT; MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Specifications</FONT></B></P></TD>
</TR>
</TABLE>
<HR SIZE=2 NOSHADE>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employment Termination, Transfer<BR>to a Nonparticipating Affiliate,<BR>Death, or Layoff</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">A Participant who terminates employment with the Company and its Affiliates during a Participation Period will be
 deemed to have discontinued Plan participation on the first day of such Participation Period.  Any balance in the Participant's Contribution Account at that time shall be refunded without interest to the Participant by the 15<SUP>th</SUP> day of the month following the month of termination.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Retirement</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Payroll deductions cease at Retirement.   The balance credited to the Participant's Contribution Account shall be used to
purchase Common Shares on the Exercise Date of the Participation Period in which Retirement occurs.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Disability</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Payroll deductions cease at Disability. The balance credited to the Participant's Contribution Account shall be
used to purchase Common Shares on the Exercise Date for the Participation Period in which Disability occurs.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Unpaid Leave of Absence</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Payroll deductions cease when the Participant begins an unpaid leave of absence.  The balance credited to the
Participant's Contribution Account shall be used to purchase Common Shares on the Exercise Date for the Participation Period in which the unpaid leave of absence begins.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Sale of Shares</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">A participant may sell any shares in the Plan at any time without restriction, other than as may be restricted by
insider trading rules.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Available Shares</FONT></B></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Authorized Shares</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Initially, 1,000,000 Common Shares shall be available for purchase under the Plan.  Such shares will be authorized
and issued Common Shares held in the Company's treasury or acquired by the Company for the purposes of the Plan.  Any change in the aggregate number of shares offered must have shareholder approval.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">If the total number of Common Shares to be purchased on an Exercise Date exceeds the maximum number of shares
 available for the Participation Period, the balance credited to the Participant's Contribution Account shall be refunded without interest to the Participant by the 30th of the month following the end of the Participation Period in which the shortfall
occurs.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Changes in Capitalization</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Common Shares available under the Plan and the Exercise Price may be adjusted by the Board to reflect any increase
 or decrease in the number of issued Common Shares resulting from any subdivision or consolidation of shares, the payment of any stock dividend, or other increases or decreases in the number of outstanding Common Shares effected without the receipt of
consideration.  Adjustments shall be made in the sole discretion of the Board, whose decision shall be final and binding.</FONT></P></TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:12pt">A-4 </FONT> </P>

<PAGE>

<HR SIZE=3 NOSHADE>
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Plan Item</FONT></B></P></TD>
     <TD WIDTH="415" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT; MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Specifications</FONT></B></P></TD>
</TR>
</TABLE>
<HR SIZE=2 NOSHADE>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Dissolution, Merger, and Consolidation</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Upon dissolution or liquidation of the Company or upon a merger or consolidation of the Company or a subsidiary or
 division of the Company in which the Company or the relevant subsidiary or division is not the surviving corporation, each Participant who holds Share Purchase Rights under the Plan shall be entitled to receive at the next Exercise Date the same cash,
securities, and/or property which a holder of Common Shares was entitled to upon and at the time of such transaction.  The Board shall take whatever action is deemed reasonably necessary to assure that Participants receive the benefits described here.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Purchasing Shares</FONT></B></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Accounts</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Payroll deductions authorized by the Participant shall be credited to the Participant's Contribution Account,
 without interest.  The Contribution Account will be maintained by the Plan's outside administrator.  Amounts credited to the Participant's Contribution Account as of an Exercise Date shall be used to purchase Common Shares for the Participant on the
Exercise Date at the Exercise Price.  </FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Any dividends will be reinvested annually (after withholding of applicable Dutch tax) into the Participant's
 Contribution Account and the net amount (after withholding tax) used to purchase additional Common Shares at the prevailing market price.  Dividends are first declared in euros, but will be paid to participants in U.S. dollars converted at the rate of
exchange on the Amsterdam Stock Exchange at the close of business on a date announced by the Company (which is typically the day preceding the Annual General Meeting of the Company's Shareholders).</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Contributions</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Any whole percentage between 1 percent and 10 percent of Earnings.  No Eligible Employee shall be permitted to
 contribute more than a total of $20,000 ($20,000 Canadian dollars for Canadian employees) of payroll deductions to his Contribution Account for all Participation Periods during any calendar year.  This contribution is limited, not withstanding the
foregoing, to the extent necessary to comply with section 423(b)(8) of the Code, the Company may cause a participant&#146;s payroll deduction to be decreased to 0%.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.6IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Periods During the Calendar Year</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">The Committee will establish procedures for making changes in the level of payroll deductions.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.6IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Share Certificates</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">As soon as reasonably practicable following each Exercise Date, Common Shares purchased under this Plan shall be
 credited to an account in the Participant's name with the Plan's outside administrator designated by the Committee. Physical delivery of stock certificates to the Participant is not required, but is permitted upon payment of a fee, which is subject to
change.</FONT></P></TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:12pt">A-5 </FONT> </P>

<PAGE>

<HR SIZE=3 NOSHADE>
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Plan Item</FONT></B></P></TD>
     <TD WIDTH="415" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT; MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Specifications</FONT></B></P></TD>
</TR>
</TABLE>
<HR SIZE=2 NOSHADE>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Amendment and Termination</FONT></B></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Amendment</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">The Company, the Board, or the Committee may amend the Plan.  However, no amendment may:</FONT></P></TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Increase the aggregate number of Common Shares which may be issued under the Plan without approval from the Board; or </FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Add new Employers without the approval of the Board or delete participation by an Employer without the approval of either the
Board or the affected Employer.</FONT></P></TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">The Company, the Board, or the Committee may suspend or terminate the Plan at any time.  If the Plan is suspended or
 terminated, the Committee shall give notice to affected Participants, terminate all payroll deduction and, at its discretion, apply any balances remaining in the Contribution Accounts to the purchase of Common Shares or pay Participants any balances
(without interest) remaining in their Contribution Accounts as soon as practicable following the termination of the Plan.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">General Provisions</FONT></B></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP">&nbsp;</TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Administration</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">The Committee shall be responsible for the administration of the Plan.  The Committee shall have full authority to
administer the Plan (except the power to designate an Affiliate as an Employer) including authority to:</FONT></P></TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Establish rules and procedures for Plan administration not inconsistent with the terms of the Plan document;</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Interpret terms and provisions of the Plan;</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Determine all questions arising under the Plan, including correction of any defect, omission or inconsistency of the Plan;</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Amend or terminate the Plan, including amending the Plan to reflect changes in applicable law; and</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">&#149;</P></TD>
     <TD WIDTH="386" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10.0PT;">Delegate administrative responsibilities under the Plan, including the responsibility to keep records of individual benefits,
but not its power to amend or terminate the Plan.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Rights not Transferable</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Participants may not transfer Share Purchase Rights granted under the Plan, except by will or by the laws of
 descent and distribution.  No Share Purchase Right shall be subject to execution, attachment, or similar process.  Any attempt to assign, transfer, attach, or otherwise dispose of any Share Purchase Right shall be null and void and may be treated, at the
discretion of the committee, as notice of Voluntary Discontinuance. Share Purchase Rights may be exercised only by the Participant or by the Participant's legal representative during the Participant's lifetime.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Shareholder Rights</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Participants do not have any rights of shareholders with respect to Common Shares issuable pursuant to the Share
Purchase Rights granted under the Plan until a certificate is issued to the Participant or the transfer agent for the Common Shares reflects the Participant's ownership in its ledger or other appropriate record of stock ownership.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No Contract of Employment</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Nothing in the Plan shall be deemed to give any Eligible Employee the right to be retained in the service of the
Company or any Employer, or to interfere in any way with the right of the Company or any Employer or to discharge or retire any Eligible Employee at any time.</FONT></P></TD>
</TR>
</TABLE>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:12pt">A-6 </FONT> </P>

<PAGE>

<HR SIZE=3 NOSHADE>
<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Plan Item</FONT></B></P></TD>
     <TD WIDTH="415" VALIGN="TOP"><P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:3PT; MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Specifications</FONT></B></P></TD>
</TR>
</TABLE>
<HR SIZE=2 NOSHADE>

<TABLE BORDER=0 CELLSPACING=0 CELLPADDING=0 WIDTH=638>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Tax Withholding</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Taxable income attributable to the discount will be subject to income tax, FICA and other applicable withholding
 and such amounts will be deducted from the Participant's next available paycheck following the purchase of Common Shares.  Alternative withholding arrangements may be made in unusual circumstances.  (See Appendix B for applicable definition for Philips
Canada employees </FONT><FONT STYLE="FONT-SIZE:10.0PT;">which replaces the foregoing two sentences).</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Application of Funds</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Proceeds received by the Company from the sale of Common Shares will be available and used for general corporate
purposes.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Applicable Law</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">The obligation to sell and deliver Common Shares shall be subject to all applicable laws, regulations, rules and
 approvals, including, but not limited to, effectiveness of a registration statement under the Securities Act of 1933, if deemed necessary or appropriate by the Company.  Certificates of Common Shares issued hereunder may be legended, as the Company deems
appropriate.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">Questions relating to the validity, construction, and administration of the Plan shall be determined under the laws
of the State of New York.</FONT></P></TD>
</TR>
<TR>
     <TD WIDTH="223" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="28" VALIGN="TOP">&nbsp;</TD>
     <TD WIDTH="386" VALIGN="TOP">&nbsp;</TD>
</TR>

<TR>
     <TD WIDTH="223" VALIGN="TOP"><P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:-22.3PX;MARGIN-LEFT:0.3IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Severability</FONT></P></TD>
     <TD WIDTH="415" COLSPAN="2" VALIGN="TOP"> <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-SIZE:10PT;COLOR:#000000;">If a provision of the Plan is deemed illegal or invalid, the illegality or invalidity shall not affect the remaining
parts of the Plan.  The Plan shall be construed and enforced as if the illegal or invalid provision had not been included in the Plan.</FONT></P></TD>
</TR>
</TABLE>
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<P></P>

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 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT; MARGIN-BOTTOM:3PT;FONT-SIZE:12.0PT;" ALIGN="CENTER"><B>APPENDIX
 B &#150; Plan Specifications for Philips Canada Employees</B></P>

<P></P>

 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:24.0PT;" ALIGN="LEFT">In addition to the
 &#147;Plan Specifications&#148; in Appendix A, the following definitions and specifications apply to participants
 employed by Philips Canada. All defined terms used herein shall have the respective meanings set forth below
 under &#147;Definitions&#148;, and all defined terms used herein and not defined below shall retain the meaning
 assigned to them in Appendix&nbsp;A.  </P>
 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:15.0PT;" ALIGN="LEFT"><B><FONT STYLE="COLOR:#000000;">Participation</FONT></B></P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT">Full-Time
Employees (except as specifically indicated below), of Philips Electronics
Ltd. and Canadian Affiliates (&#147;Philips
Canada&#148;)
who are based in Canada are eligible to
participate in the Plan beginning on
the first day of the first month immediately following
a period of
90 days during which time such employee was at
all times considered a Full-Time Employee (the &#147;90
Day Requirement&#148;),
which determination shall be made in the sole discretion of the Committee. For
purposes of determining whether a Full-Time Employee has satisfied the 90 Day Requirement, the Committee shall
take into account all service terms of such Full-Time Employees, which were rendered prior to the date on which
Philips Electronics Ltd. adopted the Plan (the &#147;Adoption
Date&#148;); provided, however, that this
sentence shall only apply to individuals who are Full-Time Employees as of the Adoption Date. </P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="COLOR:#000000;">Philips
 Canada employees covered under a collective agreement will only be eligible to participate in this </FONT>P<FONT STYLE="COLOR:#000000;">lan
 at such time as their participation has been negotiated by Philips Canada and their bargaining unit.</FONT></P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT">Excluded Employees
 are not eligible to participate in the Plan.</P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:24.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">For
 purposes of application of the Plan to Participants</FONT> <FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">employed
 by Philips Canada, the following definitions found in Appendix A of the Plan </FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">or
 herein </FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">shall be read as follows:</FONT></P>
 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:15.0PT;" ALIGN="LEFT"><B><I><FONT STYLE="COLOR:#000000;FONT-FAMILY:'TIMES NEW ROMAN';">Definitions</FONT></I></B></P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">&#147;</FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">Canadian
 Affiliate</FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">&#148;</FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">:
 Present or future affiliat</FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">ed corporations of the Company </FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">carrying
 on business in and from Canada, registered and resident in Canada</FONT>
 <FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">and in which the </FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">Company
 owns directly or </FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">indirectly at least 50% of the </FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">affiliated
 corporation.</FONT></P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="COLOR:#000000;">&#147;Disability&#148;:&nbsp;A Participant will be considered to have a disability if such
Participant is considered to
have a &#147;disability&#148; under the
applicable plan in which it participates or
under which the Participant
is covered for purposes of receiving
disability
coverage or benefits,
whether such plan is provided by
Philips Canada or any
Canadian governmental
agency or body. </FONT></P>

<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" STYLE="font-size:12pt">B-1 </FONT> </P>

<PAGE>

 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="COLOR:#000000;">&#147;</FONT><FONT STYLE="COLOR:#000000;">Earnings</FONT><FONT STYLE="COLOR:#000000;">&#148;</FONT><FONT STYLE="COLOR:#000000;">:
 Earnings include salary, bonus payment (the bonus payments must be </FONT>made pursuant to
 <FONT STYLE="COLOR:#000000;">a formalized, written individual bonus plan) and commission.</FONT> Earnings
 <FONT STYLE="COLOR:#000000;">does not include any other forms of compensation such as, overtime, group bonus
 plans, profit sharing or improvement plans, vacation pay, expense reimbursements, severance payments, payments in
 lieu of notice, stock options, deferred compensation, distributions from any long term incentive plan,
 perquisites, long term disability payments, payments from an accident or sickness program, whether paid by
 Philips Canada or by any applicable government or regulatory organization such as workers compensation, monetary
 or non monetary performance or seniority awards, etc.</FONT></P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT">&#147;Eligibility&#148;:
 Each Eligible Employee may become a Participant on the first day of the first month immediately following a
 period of 90 days during which time such employee was at all times considered a Full-Time Employee, which
 determination shall be made in the sole discretion of the Committee, except that an Eligible Employee covered
 under a collective agreement will only be eligible for participation in this Plan at such time as their
 participation has been negotiated by Philips Canada and their bargaining unit.</P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT">&#147;Eligible
 Employee&#148;: Each Canadian based Full-Time Employee, whether paid on an hourly or salaried basis.</P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT">&#147;Full-Time
 Employee&#148;: An employee of Philips Canada who is regularly scheduled to work at least 37.5 hours per week,
 who is not a temporary or contract employee, nor a unionized employee.</P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT">&#147;Philips Canada&#148;:
 Philips Electronics Ltd. and its Canadian Affiliates.</P>
 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:15.0PT;" ALIGN="LEFT"><B><I><FONT STYLE="COLOR:#000000;">General
 Provisions</FONT></I></B></P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><B>Tax Withholding</B> </P>
 <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT">On the date of
 purchase of shares, a Participant would owe ordinary income tax on the difference between the closing market
 price per share and what the Participant actually pays for each share in the program.  Taxes are withheld from
 the Participant&#146;s next available paycheque after the purchase date.  Both the benefit per share and the tax
 withheld are reflected on that cheque and included in the year-end T-4 and Releve 1 (Quebec taxpayers only)
 statement.</P>
 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:15.0PT;" ALIGN="LEFT"><B><I><FONT STYLE="COLOR:#000000;">Currency</FONT></I></B></P>
 <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="COLOR:#000000;">As
 the Company&#146;s stock trades in U.S. dollars, payroll deductions will be converted to U.S. dollars at the
 prevailing rate at the time of purchase of the shares. In addition to changes in stock price, there is also a
 currency risk.  Because the Company&#146;s shares trade in U.S. dollars, the value
 of the shares will fluctuate in relation to the Canadian dollar.</FONT></P>

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<PAGE>

 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:15.0PT;" ALIGN="LEFT"><B><I><FONT STYLE="COLOR:#000000;">Certain
 Canadian Federal and Provincial Income Tax Consequences</FONT></I></B></P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:24.0PT;" ALIGN="LEFT"><FONT STYLE="COLOR:#000000;">The
 following tax discussion is for general guidance and may change over time. Participants are advised to consult
 their tax advisor for more detailed information. </FONT></P>
 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:15.0PT;" ALIGN="LEFT"><B><I><FONT STYLE="COLOR:#000000;">Purchasing
 Shares</FONT></I></B></P>
 <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">When
 shares are purchased, the 15% discount is taxable as ordinary income and is subject to federal and provincial
 income taxes as well as CPP/QPP.  Taxes will be automatically withheld from the Participants&#146; next available
 paycheque following the stock purchase in accordance with their regular tax withholding elections.  If a
 Participant is not actively receiving a paycheque he/she will receive a net zero paycheque to reflect the taxes.
 The ordinary income amount will be included in the T-4 and Releve 1 (Quebec taxpayers only) statement for the
 year.</FONT></P>
 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:15.0PT;" ALIGN="LEFT"><B><FONT STYLE="COLOR:#000000;FONT-FAMILY:'TIMES NEW ROMAN';">Reinvested
 Dividends</FONT></B></P>
 <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="COLOR:#000000;FONT-FAMILY:'TIMES NEW ROMAN';">Participants
 will be subject to Canadian income tax on reinvested dividends in the year the dividends are issued.
 Non-resident tax of 15% will be withheld on reinvested dividends in the year the dividends are issued.
 Participants will be issued the appropriate tax form on or around February 28 of the following year covering the
 dividend and the non-resident tax deducted.  The deducted non-resident tax can normally be used as a credit
 against Canadian taxes owing in respect of the reinvested dividends.  The tax credit may be claimed when filing
 the personal income tax return in April of the following year.</FONT></P>
 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:15.0PT;" ALIGN="LEFT"><B><FONT STYLE="COLOR:#000000;FONT-FAMILY:'TIMES NEW ROMAN';">Selling
 Shares</FONT></B></P>
 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">When
 Participants sell their shares, Canada Revenue Agency (CRA) requires Participants to report these activities on
 their annual tax return. Any further gain/loss after the purchase of these shares will be taxed as a capital gain
 or loss.  <BR><BR>A capital gain occurs when a Participant sells stock for a higher price than the adjusted cost base
 of the stock.</FONT></P>

 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">A
 capital loss occurs when a Participant sells stock for a lower price than the adjusted cost base </FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">o</FONT><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">f
 the stock.</FONT></P>

 <P STYLE="MARGIN-TOP:0PT; TEXT-INDENT:0PX; MARGIN-LEFT:0IN;MARGIN-BOTTOM:12.0PT;" ALIGN="LEFT"><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">In
 general, the adjusted cost base of a particular share will be the weighted average purchase price for all the
 Philips Canada shares owned by a Participant, both within the Participant&#146;s account and outside of it
 (except for shares held in any trusteed accounts like RRSPs).  For example, if the Participant purchased 10
 shares for $30.00 in one  Participation  Period and then purchased 5 shares at $40.00 in the next  Participation
 Period, the adjusted cost base for each share following the second  Participation  Period would be $33.33 (i.e.
 [(10 x $30.00) + (5 x $40.00)] &divide; 15).</FONT></P>

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<PAGE>

 <P STYLE="TEXT-INDENT:0PX; MARGIN-LEFT:0IN; MARGIN-TOP:12PT;MARGIN-BOTTOM:3.0PT;" ALIGN="LEFT"><B><FONT STYLE="COLOR:#000000;">Canadian
 Securities Laws</FONT></B></P>
 <P STYLE="MARGIN-BOTTOM:0PT; MARGIN-TOP:0PT; TEXT-INDENT:0PX;MARGIN-LEFT:0.0IN;" ALIGN="LEFT"><FONT STYLE="FONT-FAMILY:'TIMES NEW ROMAN';">Participation
 in the Plan is voluntary and is subject to the conditions set forth herein and in Appendix A.  Shares acquired
 under the Plan by employees of Philips Canada may only be sold through the facilities of the New York Stock
 Exchange.</FONT></P>
<P></P>
<P></P>
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