General

Plan Name . Philips North America Nonqualified Stock Purchase Plan.

Effective Date . April 1, 2017.

Definitions

“Administrator” : A third party appointed by the Committee to provide administrative services for the Plan.

“Affiliate” : Present or future subsidiary of the Company, where the Company owns directly or indirectly at least 80% of the subsidiary.

“Board” : The Board of Managers of Philips North America LLC.

“Code” : Internal Revenue Code of 1986, as amended.

“Committee” : 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.

“Common Shares” : Common shares of Koninklijke Philips N.V.

“Company” : Koninklijke Philips N.V.

“Contribution Account” : A Participant’s accumulated payroll deductions in a Participation Period.

“Earnings” : Earnings include a Participant’s cash compensation received during the Participation Period from salary and wages.

Salary and wages include overtime pay, bonuses (except as provided below), holiday pay, vacation pay, patent awards for any calendar year, commissions, shift differential premiums, short-term disability payments and salary, overtime and bonuses (pursuant to a division sale) which are paid as part of the normal arrears pay cycle. Any amounts paid to a Participant as compensation for services will not fail to be treated as Earnings under the Plan merely because the compensation is not includible in the Participant’s gross income due to the location of the services. Additionally, a Participant’s compensation for services will not fail to be treated as Earnings under the Plan merely because those amounts are paid by an Employer with respect to which all compensation paid to the Participant by such Employer is excluded from gross income.

Salary and wages exclude bonuses (whether discretionary or contractual) exceeding 100% of a Participant’s annual base salary in effect at the time bonuses are paid.

Salary and wages also do not include: expense allowances or reimbursements; deferred compensation; lump sum severance and accrued vacation payments; amounts realized from the exercise of non-statutory stock options (other than a statutory option defined in Section 1.421-1(b) of the Department of Labor Regulations); amounts realized when restricted stock or other property held by a Participant either becomes freely transferable or is no longer subject to a substantial risk of forfeiture; amounts realized from the sale, exchange, or other disposition of stock acquired under a statutory stock option; other amounts that receive tax benefits; cash payments received for waiving employer-sponsored medical or dental benefit plans (including any matching contributions relating thereto); distributions from any long-term incentive plan; perquisites; long-term disability payments; special payments such as moving and living allowances, sign-on bonuses, retainers, lump sum stay bonuses and similar special payments; and any long-term key employee compensation program. (See Appendix A for applicable definition for Philips Canada employees which replaces the foregoing definition.)

“Eligible Employee” : Each U.S. based salaried or hourly Full-Time Employee who is employed by an Employer and with respect to whom salary deductions can be administered, other than an Excluded Employee. For purposes of this Plan, the term “employee” 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.

“Employer” : Employer includes Philips Canada, Philips North America LLC and any Affiliate in the U.S. which is designated by Philips North America LLC from time to time (i) as a participating employer in its company-sponsored tax-qualified defined contribution plan or (ii) as an Employer under this Plan. (See Appendix A for applicable definition for Philips Canada employees.) Effective as

“Employer Contribution” : The amount contributed by a Participant’s Employer to a Participant’s Contribution Account pursuant to this Plan.

“Exchange Act” : The U.S. Securities Exchange Act of 1934, as amended, and all rules and regulations thereunder.

“Excluded Employee” : Those employees of any Employer who shall, from time to time, be ineligible to participate in the Plan, as determined by the Committee in accordance with the terms and conditions of the Plan and as specified herein.

“Full-Time Employee” : Any employee of an Employer who is regularly scheduled to work a minimum of thirty (30) hours per week and at least 1,500 hours per calendar year. The employment of a Full-Time Employee is referred to herein as “Full-Time Employment.” (See Appendix A for applicable definition for Philips Canada employees.)

“NYSE” : New York Stock Exchange.

“Participant” : An Eligible Employee who has enrolled in the Plan pursuant to procedures set out in the Plan.

“Participation Period” : Each three-month period beginning each January 1, April 1, July 1 and October 1.

“Philips Canada” : Philips Electronics Ltd. and Canadian Affiliates (as defined in Appendix A).

“Plan” : This Philips North America Stock Purchase Plan (as amended and restated as of April 1, 2017).

“Plan Year” : The 12-month period beginning each August 1.

“Purchase Date(s)” : The date (or dates) on which purchases on the open market for a Participation Period for the purposes of the Plan are settled, it being understood that the Administrator will acquire the Common Shares on behalf of Participants on the third Trading Date after the close of the applicable Participation Period; provided, however, that if acquiring all of the Common Shares on the third Trading Date would cause the Administrator to exceed the conditions of Rule 10b-18 of the Exchange Act or violate any other provisions of the Securities Act or Exchange Act, then the Administrator shall purchase the Common Shares as soon thereafter as practicable.

“Purchase Price” : The average cost of the Common Shares purchased on the Purchase Date(s) for the Participation Period.

“Retirement” : Termination of employment on account of retirement if entered as such in the Participant’s electronic personnel record.

“Securities Act” : The U.S. Securities Act of 1933, as amended, and all rules and regulations thereunder.

“Trading Date” : Each date on which stocks in the U.S. are traded on the NYSE.

“Share Account” : A Participant’s accumulated Common Shares purchased under the Plan, held by the Administrator.

“Share Purchase Right” : A Participant’s right to apply the cash balance in his or her Contribution Account to the purchase of Common Shares in accordance with the terms of the Plan.

Participation

Eligibility . Each Eligible Employee may become a Participant as soon as administratively possible following Full-Time Employment, except that Eligible Employees covered by a collective bargaining agreement will only be eligible in accordance with such collective bargaining agreement. (See Appendix A for applicable definition for Philips Canada employees.) Subject to the other terms and conditions of the Plan, each Eligible Employee may enroll as a Participant upon attaining eligibility.

Enrollment . As part of enrollment, each Eligible Employee shall authorize payroll deduction from Earnings. 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.

Re-hire . A person who returns to active employment with an Employer as an Eligible Employee following termination of employment or Retirement may re-enroll in the Plan as soon as administratively possible following re-hire. An Eligible Employee who has voluntarily discontinued payroll deductions may re-enroll in the Plan at any time.

Termination of Participation

Voluntary Discontinuance . Participants may discontinue payroll deductions by making a request to change their payroll deductions to the Administrator. This discontinuance in payroll deductions for a Participation Period will take effect as soon as administratively possible. Following such discontinuance any balance in the Participant’s Contribution Account at the end of the Participation Period shall be used to purchase Common Shares.

Employment Termination, Transfer to a Nonparticipating Affiliate or Death . Payroll deductions cease upon employment termination, transfer to a nonparticipating Affiliate or death of a Participant during a Participation Period and each such Participant 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 first pay period that follows the end of the Participation Period in which the termination occurs.

Retirement . Payroll deductions cease at Retirement. The balance credited to the Participant’s Contribution Account shall be used to purchase Common Shares on the Purchase Date of the Participation Period in which Retirement occurs.

Unpaid Leave of Absence . 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 Purchase Date for the Participation Period in which the unpaid leave of absence begins. If an Eligible Employee returns from an unpaid leave of absence to Full-Time Employment, that Eligible Employee will be automatically re-enrolled in the Plan at the prior authorized deduction level, and payroll deductions will take effect as soon as administratively possible, unless changed by the Eligible Employee or otherwise limited under the terms of the Plan.

Sale of Shares . A Participant may sell any Common Shares in the Plan at any time without restriction, other than as may be restricted by insider trading rules.

Dissolution, Merger, and Consolidation . 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, any balance in the Participant’s Contribution Account at that time shall be refunded without interest to the Participant by the first pay period that follows the end of the Participation Period in which the dissolution, liquidation, merger or consolidation occurs, unless the Committee in its sole discretion determines otherwise.

Available Shares

Available Shares . Common Shares available for purchase by Participants under the Plan will be authorized and issued Common Shares acquired by the Administrator on behalf of Participants, through the facilities of NYSE for the purposes of the Plan. The acquisition of Common Shares shall comply with applicable laws, Rule 10b-18 of the Exchange Act, and NYSE rules.

Purchasing Shares.

Contribution Accounts . Payroll deductions authorized by the Participant shall be credited to the Participant’s Contribution Account, without interest. All Contribution Accounts will be maintained by the Administrator. Amounts credited to a Participant’s Contribution Account as of a Purchase Date(s) shall be used to purchase Common Shares for the Participant on the Purchase Date(s) at the Purchase Price.

Dividends . The Company is entitled, in its sole discretion, to determine the manner in which any dividend on any Common Shares acquired by a Participant pursuant to this Plan is paid to such Participant. Any dividend to be paid to such Participant in cash shall be reinvested upon their distribution (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 for a Participant at the prevailing market price. For greater certainty, no Employer Contribution shall be made in respect of purchases of Common Shares by a Participant using dividends. In the event a dividend is paid in cash, such dividend shall first be declared in Euros, but will be paid in U.S. dollars converted at the U.S. Dollar/Euro rate fixed by the European Central Bank on a date to be announced by the Company.

Employee Contributions . Participants may contribute any whole percentage between 1 percent and 10 percent of their 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 or her Contribution Account for all Participation Periods during any calendar year. Notwithstanding the foregoing, the Employer may cause a Participant’s payroll deduction to be decreased to 0%. The Committee will establish procedures for making changes in the level of payroll deductions.

Employer Contributions . Each Employer shall contribute to a Participant’s Contribution Account for each Participation Period such amount so that 15 percent of the Purchase Price for each Common Share purchased under the Plan for a Participant is funded by the Employer Contribution. The Employer may, with sixty (60) days’ notice to Eligible Employees, change such percentage for the Employer Contribution.

Share Certificates . As soon as reasonably practicable following each Purchase Date, Common Shares purchased under this Plan shall be credited to the Participant’s Share Account. Physical delivery of share certificates will be provided to Participants upon request.

Amendment and Termination

Amendment . The Board or the Committee may amend the Plan, at any time. Participants will receive timely notice of any amendments to the Plan. No amendment shall be made which adversely affects Participants’ entitlements under this Plan with respect to employee contributions which have been made prior to the date of such amendment.

Termination . 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 deductions and, at its discretion, apply any balances remaining in Participants’ 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.

General Provisions

Administration . 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:

establish rules and procedures for Plan administration not inconsistent with the terms of the Plan document (including, but not limited to, procedures pursuant to which the Company may withhold or debit Common Shares held in a Participant’s Share Account in an amount (based on the fair market value of such Common Shares as of the date such Common Shares are withheld or debited) sufficient to cover all expenses incurred in connection with administration of such account, notwithstanding that thereby the balance of Common Shares in a Participant’s Share Account may be reduced to zero and the Participant’s Share Account terminated);

interpret terms and provisions of the Plan;

determine all questions arising under the Plan, including correction of any defect, omission or inconsistency of the Plan;

amend or terminate the Plan, including amending the Plan to reflect changes in applicable law; and

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.

Rights not Transferable . Participants may not transfer Share Purchase Rights granted under the Plan. 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 under Section 4.1. Share Purchase Rights may be exercised only by the Participant or by the Participant’s legal representative during the Participant’s lifetime.

No Contract of Employment . 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.

Tax Withholding . Taxable income attributable to the Employer Contribution 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 A for applicable definition for Philips Canada employees which replaces the foregoing two sentences.)

Applicable Law . The purchase and delivery of 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, if deemed necessary or appropriate by the Company. Certificates of Common Shares purchased hereunder may be legended, as the Company deems appropriate.

Severability . 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.

Effective as of January 1, 2019, Section 2.15 of the Plan is amended in its entirety to read as follows:

Effective as of January 1, 2019, Section 4.5 of the Plan is amended in its entirety to read as follows:

Sale of Shares . A Participant may sell any Common Shares in the Plan at any time without restriction, other than as may be restricted by insider trading rules. Effective as of January 1, 2019, a Participant who terminates employment has one hundred eighty (180) days from his termination of employment or Retirement to sell or transfer the Common Shares in the Participant’s Share Account. If no action is taken by such a Participant within such time period, the Administrator will automatically sell any Common Shares in the Share Account on the Participant’s behalf as soon as administratively possible after the end of the 180-day period. Notwithstanding the foregoing, Participants who experienced a termination of employment or Retirement prior to January 1, 2019, and are not listed as deceased in the Administrator’s systems shall have a one-time window beginning on January 1, 2019 and ending on April 1, 2019, to sell or transfer the Common Shares in their Share Accounts, at the end of the which any remaining Common Shares in their Share Accounts will be sold by the Administrator. (The changes to this Section 4.5 effective as of January 1, 2019, shall not apply for Philips Canada employees until specifically adopted for Philips Canada employees by the Committee.)

An Award may be granted to an eligible individual, subject to (the acceptance by such individual of) the terms and conditions of such Award and any other Philips’ policies or guidelines that may apply from time to time to such individual. An Award offered to any such individual and the terms and conditions governing such Award shall be deemed accepted by such individual with effect from the Date of Grant in case Philips has not received, in accordance with a procedure established by Philips, a notice of rejection of such Award within fourteen (14) days of the notice of grant or such later date as may be determined by Philips.

At the end of the Performance Period, the Supervisory Board will determine in its sole discretion the extent to which the Performance Conditions have been achieved and will calculate the number of Shares (if any) that will vest for the relevant period.

Subject to the provisions of Article 2.2 and 2.4 an Award will vest based on two equally weighted Performance Conditions:

50% of an Award will vest 0% - 200% depending on Relative TSR. The vesting levels for Relative TSR are outlined in the table below, which results in zero vesting for performance below the 40th percentile and 200% vesting for performance levels above the 75th percentile:

TSR Philips

Vesting%

50% of an Award will vest 0% - 200% depending on EPS Growth. The vesting levels for EPS Growth are outlined in the table below:

The Supervisory Board shall have the discretionary authority to determine:

The adjustments to be made for changes in accounting principles/policies and/or whether any further adjustments in extraordinary circumstances (e.g. impairments, restructuring activities, pension items, M&A transactions and costs, currency fluctuations) with a significant impact should be made and the number of Shares outstanding used for the calculation of EPS Growth;

The composition – including any amendment thereof – of the Philips Peer Group and the vesting levels for Relative TSR from time to time, taking into account the parameters set by the Shareholders Meeting;

Whether any unforeseen circumstances justify an adjustment of the vesting levels of the Performance Conditions considering circumstances that were not foreseen at the Date of Grant, and

To what extent and how any determination(s) made under a, b and c shall impact (the achievement of) the Performance Conditions of the relevant Award.

Except as otherwise provided in this Article 3, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for any reason whatsoever prior to the applicable Vesting Date, such Participant’s Awards shall be forfeited effective as of the date of termination of such Participant’s employment with the Employing Company without the Participant being entitled to any compensation or any obligation on the part of Philips or any Employing Company unless Philips determines, in its sole discretion, otherwise in writing to the Participant in question. Any such determination shall be final, conclusive and binding and may be subject to such conditions as Philips may determine appropriate.

In case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of:

death or

legal incapacity,

Subject to Article 3.4, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of:

disablement or

retirement

In case – in the reasonable opinion of Philips – a Participant

Breaches the non-competition obligations ; or

Within one year from the date of termination, directly or indirectly on his own behalf or in the service or on behalf of others, solicits or attempts to solicit, divert or hire away any person employed by Philips or any Employing Company or any customer of Philips or any Employing Company; or

Disparages the Employing Company or the Employing Company’s officers, directors or employees, in any manner likely to be harmful to any of them or their business, business reputation or personal reputation; provided that the Participant may respond fully and accurately to any questions, inquiry or request for information when required by legal process.

Philips may require a Participant to maintain a personal brokerage account in connection with this Plan. Nothing contained in this Plan shall obligate Philips to establish or maintain or cause to establish or maintain a Nominee Account for any Participant.

Subject to the terms and conditions of this Plan, and further to the Participants tax election, Philips will deliver Shares pursuant to an Award to a Participant on or as soon as reasonably practicable after the relevant Vesting Date. In no event shall Philips have any obligation to deliver any Shares to a Participant prior to the relevant Vesting Date.

Any Shares to be delivered pursuant to Article 5.2 will be credited to the Nominee Account or a personal brokerage account.

Except as may be otherwise approved in writing by Philips in its sole discretion, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company, the Participant (or his or her estate or legal representatives, as the case may be) shall withdraw all Shares credited to the Participant’s Nominee Account within:

one hundred and eighty (180) days of the date of such termination, or

five (5) years from the date of such termination in case of the termination of such Participant’s employment with an Employing Company for reasons of:

death,

legal incapacity,

disablement or

retirement.

Each Participant shall comply with any applicable “insider trading” laws and regulations and the Philips’ Rules of Conduct with respect to Inside Information.

All costs of delivering any Shares under this Plan to a Participant’s Nominee Account and any other costs connected with the Shares shall be borne by the Participant.

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

Philips and any other Employing Company shall have the right to deduct or withhold (or cause to be deducted or withheld) from any salary payment or other sums due by Philips or any other Employing Company to Participant, or requiring the Participant or beneficiary of the Participant, to pay to Philips an amount necessary to settle any Taxes and any costs determined by Philips necessary to be withheld in connection with this Plan (including, but not limited to, the grant of the Award or the delivery of any Shares under this Plan).

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

Philips is herewith irrevocably authorized by the Participant to sell (part of) Participant’s Shares credited to a Nominee Account and to maintain such part of the proceeds of this sale as payment to Philips necessary to satisfy any withholding of any Taxes and any costs to be borne by the Participant in connection with this Plan as determined by Philips.

Philips shall have the authority to: i) interpret this Plan, ii) establish, amend, and rescind any terms and conditions of this Plan including any rules and regulations relating to this Plan and/or establish supplements to comply with or suit country specific requirements, iii) determine the terms and conditions of any agreements entered into hereunder, and iv) make all other determinations necessary or advisable. The terms and conditions of this Plan including any rules and regulations relating to this Plan, including any supplements thereto, in force from time to time are published on the website of Philips or its global plan administrator and apply to all previous and future Awards granted under this Plan. Philips may delegate the authority to practice administrative and operational functions with respect to the Plan to officers or employees of subsidiaries of Philips and to service providers.

Philips may in its sole discretion but acting in good faith, resolve to recoup some or all of such incentive compensation—including any benefits derived therefrom—in all appropriate cases (taking into account all relevant factors, including whether the assertion of a recoupment claim may in its opinion prejudice the interests of Philips and its group companies in any related proceeding or investigation), granted to an individual under these terms and conditions, if:

Equity-based incentive compensation under these terms and conditions has been granted and/or has vested on the basis of incorrect financial or other data; or

In assessing the extent to which the Performance Conditions and/or any other condition imposed on the award was satisfied, such assessment was based on an error, inaccurate or misleading information or assumptions and that such error, information or assumptions would have resulted or did in fact result either directly or indirectly in that Award vesting (or being capable of vesting) to a greater degree than would have been the case had that error not been made; or

There are circumstances which would warrant Philips or the Employing Company summarily dismissing (or requesting in court the termination of the employment of) that individual – for instance on the basis of article 677 or 685 Dutch Civil Code – (whether or not Philips or the Employing Company has chosen to do so) where such circumstances arose in the period from the Date of Grant to the Vesting Date; or

That individual was involved in, or directly or indirectly responsible for a serious violation of the Philips General Business Principles or applicable law; or

The Employing Company or the business unit in which the relevant individual works/worked, or for which he was responsible, suffered a material failure of risk management, or

Something which occurred in the period from the Date of Grant to the Vesting Date has a sufficiently significant impact on the reputation of Philips or the group members to justify the operation of a recoupment claim.

No Participant shall have any rights or privileges of shareholders (including the right to receive dividends and to vote) with respect to Shares to be delivered pursuant to Awards until such Shares are actually delivered to such Participant in accordance with Article 5 of this Plan.

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

Nothing contained in this Plan or in any Award made or agreement entered into pursuant hereto shall confer upon any Participant any right to be retained in employment with any Employing Company, or to be entitled to any remuneration or benefits not set forth in this Plan or interfere with or limit in any way with the right of any Employing Company to terminate such Participant’s employment or to discharge or retire a Participant at any time.

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

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

The English version of this Plan is leading. If there is a discrepancy between the contents of a translation and the English version of this Plan, the English version of this Plan prevails.

After approval of the Long-Term Incentive Plan (consisting of a Global Philips Performance Share Plan) for the Board of Management by the Shareholders Meeting, this Plan will take effect as per January 1, 2017.

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

In contrast with Article 3.2 and 3.3 in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of

death,

legal incapacity,

disablement or

retirement,

In contrast with Article 5.4, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company, the Participant (or his or her estate or legal representatives, as the case may be) shall sell all Shares credited to the Participant’s Nominee Account within one hundred and eighty (180) days of the date of such termination irrespective of the reason of such termination. In case the Participant (or his or her estate or legal representatives, as the case may be) fails to comply with the foregoing obligation, then Philips reserves the right to sell the Shares on behalf of the Participant and Philips is herewith irrevocably authorized to such sale.

An Award may be granted to an eligible individual, subject to (the acceptance by such individual of) the terms and conditions of such Award and any other Philips’ policies or guidelines that may apply from time to time to such individual. An Award offered to any such individual and the terms and conditions governing such Award shall be deemed accepted by such individual with effect from the Date of Grant in case Philips has not received, in accordance with a procedure established by Philips, a notice of rejection of such Award within fourteen (14) days of the notice of grant or such later date as may be determined by Philips.

At the end of the Performance Period, the Supervisory Board will determine in its sole discretion the extent to which the Performance Conditions have been achieved and will calculate the number of Shares (if any) that will vest for the relevant period. In doing so the Supervisory Board shall have a discretionary authority, and shall be entitled to take into account such facts and circumstances as it deems appropriate in the context of such determination, an appropriate remuneration of the Participant, and/or in the interest of Philips. Furthermore the so-called ultimum remedium clause of article 2: 135 sub 2 of the Dutch Civil Code shall apply. Any such determination shall be conclusive and binding.

Subject to the provisions of Article 2.2 and 2.4 an Award will vest based on two equally weighted Performance Conditions:

50% of an Award will vest 0%—200% depending on Relative TSR. The vesting levels for Relative TSR are outlined in the table below, which results in zero vesting for performance below the 40th percentile and 200% vesting for performance levels above the 75th percentile:

TSR Philips

Vesting %

50% of an Award will vest 0% - 200% depending on EPS Growth. The vesting levels for EPS Growth are outlined in the table below:

The Supervisory Board shall have the discretionary authority to determine:

The adjustments to be made for changes in accounting principles/policies and/or whether any further adjustments in extraordinary circumstances (e.g. impairments, restructuring activities, pension items, M&A transactions and costs, currency fluctuations) with a significant impact should be made and the number of Shares outstanding used for the calculation of EPS Growth;

The composition – including any amendment thereof – of the Philips Peer Group and the vesting levels for Relative TSR from time to time, taking into account the parameters set by the Shareholders Meeting;

Whether any unforeseen circumstances justify an adjustment of the vesting levels of the Performance Conditions considering circumstances that were not foreseen at the Date of Grant, and

To what extent and how any determination(s) made under a, b and c shall impact (the achievement of) the Performance Conditions of the relevant Award.

Except as otherwise provided in this Article 3, in case a Participant is no longer assigned by any Employing Company as a result of the termination of such Participant’s assignment with an Employing Company for any reason whatsoever prior to the applicable Vesting Date, such Participant’s Awards shall be forfeited effective as of the date of termination of such Participant’s assignment with the Employing Company without the Participant being entitled to any compensation or any obligation on the part of Philips or any Employing Company unless the Supervisory Board determines, in its sole discretion, otherwise in writing to the Participant in question. Any such determination shall be final, conclusive and binding and may be subject to such conditions as the Supervisory Board may determine appropriate.

In case a Participant is no longer assigned by any Employing Company as a result of the termination of such Participant’s assignment with an Employing Company for reasons of:

death or

legal incapacity,

Subject to Article 3.4, in case a Participant is no longer employed/assigned by any Employing Company as a result of the termination of such Participant’s assignment with an Employing Company for reasons of:

disablement or

retirement or

the expiration of agreement of assignment (“overeenkomst van opdracht”),

In case – in the reasonable opinion of Philips – a Participant

Breaches the non-competition obligations; or

Within one year from the date of termination, directly or indirectly on his own behalf or in the service or on behalf of others, solicits or attempts to solicit, divert or hire away any person employed by Philips or any Employing Company or any customer of Philips or any Employing Company; or

Disparages the Employing Company or the Employing Company’s officers, directors or employees, in any manner likely to be harmful to any of them or their business, business reputation or personal reputation; provided that the Participant may respond fully and accurately to any questions, inquiry or request for information when required by legal process.

Philips may require a Participant to maintain a personal brokerage account in connection with this Plan. Nothing contained in this Plan shall obligate Philips to establish or maintain or cause to establish or maintain a Nominee Account for any Participant.

Subject to the terms and conditions of this Plan, and further to the Participants tax election, Philips will deliver Shares pursuant to an Award to a Participant on or as soon as reasonably practicable after the relevant Vesting Date. In no event shall Philips have any obligation to deliver any Shares to a Participant prior to the relevant Vesting Date.

Any Shares to be delivered pursuant to Article 5.2 will be credited to the Nominee Account or a personal brokerage account.

Except as may be otherwise approved in writing by Philips in its sole discretion, in case a Participant is no longer employed/assigned by any Employing Company as a result of the termination of such Participant’s assignment with an Employing Company, the Participant (or his or her estate or legal representatives, as the case may be) shall withdraw all Shares credited to the Participant’s Nominee Account within:

one hundred and eighty (180) days of the date of such termination, or

five (5) years from the date of such termination in case of the termination of such Participant’s assignment with an Employing Company for reasons of:

death,

legal incapacity,

disablement,

retirement or

the expiration of any agreement of assignment.

Each Participant shall comply with any applicable “insider trading” laws and regulations and the Philips’ Rules of Conduct with respect to Inside Information.

All costs of delivering any Shares under this Plan to a Participant’s Nominee Account and any other costs connected with the Shares shall be borne by the Participant.

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

Philips and any other Employing Company shall have the right to deduct or withhold (or cause to be deducted or withheld) from any salary payment or other sums due by Philips or any other Employing Company to Participant, or requiring the Participant or beneficiary of the Participant, to pay to Philips an amount necessary to settle any Taxes and any costs determined by Philips necessary to be withheld in connection with this Plan (including, but not limited to, the grant of the Award or the delivery of any Shares under this Plan).

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

Philips is herewith irrevocably authorized by the Participant to sell (part of) Participant’s Shares credited to a Nominee Account and to maintain such part of the proceeds of this sale as payment to Philips necessary to satisfy any withholding of any Taxes and any costs to be borne by the Participant in connection with this Plan as determined by Philips.

Philips shall have the authority to: i) interpret this Plan, ii) establish, amend, and rescind any terms and conditions of this Plan including any rules and regulations relating to this Plan and/or establish supplements to comply with or suit country specific requirements, iii) determine the terms and conditions of any agreements entered into hereunder, and iv) make all other determinations necessary or advisable. The terms and conditions of this Plan including any rules and regulations relating to this Plan, including any supplements thereto, in force from time to time are published on the website of Philips or its global plan administrator and apply to all previous and future Awards granted under this Plan. Philips may delegate the authority to practice administrative and operational functions with respect to the Plan to officers or employees of subsidiaries of Philips and to service providers.

The Supervisory Board may in its sole discretion but acting in good faith, resolve to recoup some or all of such incentive compensation -including any benefits derived therefrom- in all appropriate cases (taking into account all relevant factors, including whether the assertion of a recoupment claim may in its opinion prejudice the interests of Philips and its group companies in any related proceeding or investigation), granted to an individual under these terms and conditions, if:

Equity-based incentive compensation under these terms and conditions has been granted and/or has vested on the basis of incorrect financial or other data; or

In assessing the extent to which the Performance Conditions and/or any other condition imposed on the award was satisfied, such assessment was based on an error, inaccurate or misleading information or assumptions and that such error, information or assumptions would have resulted or did in fact result either directly or indirectly in that Award vesting (or being capable of vesting) to a greater degree than would have been the case had that error not been made; or

There are circumstances which would warrant Philips or the Employing Company summarily dismissing (or requesting in court the termination of the employment of) that individual – for instance on the basis of article 677 or 685 Dutch Civil Code – (whether or not Philips or the Employing Company has chosen to do so) where such circumstances arose in the period from the Date of Grant to the Vesting Date; or

That individual was involved in, or directly or indirectly responsible for a serious violation of the Philips General Business Principles or applicable law; or

The Employing Company or the business unit in which the relevant individual works/worked, or for which he was responsible, suffered a material failure of risk management, or

Something which occurred in the period from the Date of Grant to the Vesting Date has a sufficiently significant impact on the reputation of Philips or the group members to justify the operation of a recoupment claim.

No Participant shall have any rights or privileges of shareholders (including the right to receive dividends and to vote) with respect to Shares to be delivered pursuant to Awards until such Shares are actually delivered to such Participant in accordance with Article 5 of this Plan.

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

Nothing contained in this Plan or in any Award made or agreement entered into pursuant hereto shall confer upon any Participant any right to be retained in assignment with any Employing Company, or to be entitled to any remuneration or benefits not set forth in this Plan or interfere with or limit in any way with the right of any Employing Company to terminate such Participant’s assignment or to discharge or retire a Participant at any time.

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

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

The English version of this Plan is leading. If there is a discrepancy between the contents of a translation and the English version of this Plan, the English version of this Plan prevails.

After approval of this Plan by the Shareholders Meeting, the Plan will take effect as per January 1, 2017.

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

An Award may be granted to an eligible individual, subject to (the acceptance by such individual of) the terms and conditions of such Award and any other Philips’ policies or guidelines that may apply from time to time to such individual. An Award offered to any such individual and the terms and conditions governing such Award shall be deemed accepted by such individual with effect from the Date of Grant in case Philips has not received, in accordance with a procedure established by Philips, a notice of rejection of such Award within fourteen (14) days of the notice of grant or such later date as may be determined by Philips.

At the end of the Performance Period, the Supervisory Board will determine in its sole discretion the extent to which the Performance Conditions have been achieved and will calculate the number of Shares (if any) that will vest for the relevant period. In doing so the Supervisory Board shall have a discretionary authority, and shall be entitled to take into account such facts and circumstances as it deems appropriate in the context of such determination, an appropriate remuneration of the Participant, and/or in the interest of Philips. Furthermore the so-called ultimum remedium clause of article 2: 135 sub 2 of the Dutch Civil Code shall apply. Any such determination shall be conclusive and binding.

Subject to the provisions of Article 2.2 and 2.4 an Award will vest based on two equally weighted Performance Conditions:

50% of an Award will vest 0% - 200% depending on Relative TSR. The vesting levels for Relative TSR are outlined in the table below, which results in zero vesting for performance below the 40th percentile and 200% vesting for performance levels above the 75th percentile:

TSR Philips

Vesting%

50% of an Award will vest 0% - 200% depending on EPS Growth. The vesting levels for EPS Growth are outlined in the table below:

The Supervisory Board shall have the discretionary authority to determine:

The adjustments to be made for changes in accounting principles/policies and/or whether any further adjustments in extraordinary circumstances (e.g. impairments, restructuring activities, pension items, M&A transactions and costs, currency fluctuations) with a significant impact should be made and the number of Shares outstanding used for the calculation of EPS Growth;

The composition – including any amendment thereof – of the Philips Peer Group and the vesting levels for Relative TSR from time to time, taking into account the parameters set by the Shareholders Meeting;

Whether any unforeseen circumstances justify an adjustment of the vesting levels of the Performance Conditions considering circumstances that were not foreseen at the Date of Grant, and

To what extent and how any determination(s) made under a, b and c shall impact (the achievement of) the Performance Conditions of the relevant Award.

Except as otherwise provided in this Article 3, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for any reason whatsoever prior to the applicable Vesting Date, such Participant’s Awards shall be forfeited effective as of the date of termination of such Participant’s employment with the Employing Company without the Participant being entitled to any compensation or any obligation on the part of Philips or any Employing Company unless Philips determines, in its sole discretion, otherwise in writing to the Participant in question. Any such determination shall be final, conclusive and binding and may be subject to such conditions as Philips may determine appropriate.

In case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of:

death or

legal incapacity,

Subject to Article 3.4, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of:

disablement,

retirement or

the expiration of any temporary contract of employment,

In case – in the reasonable opinion of Philips – a Participant

Breaches the non-competition obligations ; or

Within one year from the date of termination, directly or indirectly on his own behalf or in the service or on behalf of others, solicits or attempts to solicit, divert or hire away any person employed by Philips or any Employing Company or any customer of Philips or any Employing Company; or

Disparages the Employing Company or the Employing Company’s officers, directors or employees, in any manner likely to be harmful to any of them or their business, business reputation or personal reputation; provided that the Participant may respond fully and accurately to any questions, inquiry or request for information when required by legal process.

Philips may require a Participant to maintain a personal brokerage account in connection with this Plan. Nothing contained in this Plan shall obligate Philips to establish or maintain or cause to establish or maintain a Nominee Account for any Participant.

Subject to the terms and conditions of this Plan, and further to the Participants tax election, Philips will deliver Shares pursuant to an Award to a Participant on or as soon as reasonably practicable after the relevant Vesting Date. In no event shall Philips have any obligation to deliver any Shares to a Participant prior to the relevant Vesting Date.

Any Shares to be delivered pursuant to Article 5.2 will be credited to the Nominee Account or a personal brokerage account.

Except as may be otherwise approved in writing by Philips in its sole discretion, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company, the Participant (or his or her estate or legal representatives, as the case may be) shall withdraw all Shares credited to the Participant’s Nominee Account within:

one hundred and eighty (180) days of the date of such termination, or

five (5) years from the date of such termination in case of the termination of such Participant’s employment with an Employing Company for reasons of:

death,

legal incapacity,

disablement,

retirement or

the expiration of any temporary contract of employment.

Each Participant shall comply with any applicable “insider trading” laws and regulations and the Philips’ Rules of Conduct with respect to Inside Information.

All costs of delivering any Shares under this Plan to a Participant’s Nominee Account and any other costs connected with the Shares shall be borne by the Participant.

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

Philips and any other Employing Company shall have the right to deduct or withhold (or cause to be deducted or withheld) from any salary payment or other sums due by Philips or any other Employing Company to Participant, or requiring the Participant or beneficiary of the Participant, to pay to Philips an amount necessary to settle any Taxes and any costs determined by Philips necessary to be withheld in connection with this Plan (including, but not limited to, the grant of the Award or the delivery of any Shares under this Plan).

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

Philips is herewith irrevocably authorized by the Participant to sell (part of) Participant’s Shares credited to a Nominee Account and to maintain such part of the proceeds of this sale as payment to Philips necessary to satisfy any withholding of any Taxes and any costs to be borne by the Participant in connection with this Plan as determined by Philips.

Philips shall have the authority to: i) interpret this Plan, ii) establish, amend, and rescind any terms and conditions of this Plan including any rules and regulations relating to this Plan and/or establish supplements to comply with or suit country specific requirements, iii) determine the terms and conditions of any agreements entered into hereunder, and iv) make all other determinations necessary or advisable. The terms and conditions of this Plan including any rules and regulations relating to this Plan, including any supplements thereto, in force from time to time are published on the website of Philips or its global plan administrator and apply to all previous and future Awards granted under this Plan. Philips may delegate the authority to practice administrative and operational functions with respect to the Plan to officers or employees of subsidiaries of Philips and to service providers.

Philips may in its sole discretion but acting in good faith, resolve to recoup some or all of such incentive compensation -including any benefits derived therefrom- in all appropriate cases (taking into account all relevant factors, including whether the assertion of a recoupment claim may in its opinion prejudice the interests of Philips and its group companies in any related proceeding or investigation), granted to an individual under these terms and conditions, if:

Equity-based incentive compensation under these terms and conditions has been granted and/or has vested on the basis of incorrect financial or other data; or

In assessing the extent to which the Performance Conditions and/or any other condition imposed on the award was satisfied, such assessment was based on an error, inaccurate or misleading information or assumptions and that such error, information or assumptions would have resulted or did in fact result either directly or indirectly in that Award vesting (or being capable of vesting) to a greater degree than would have been the case had that error not been made; or

There are circumstances which would warrant Philips or the Employing Company summarily dismissing (or requesting in court the termination of the employment of) that individual – for instance on the basis of article 677 or 685 Dutch Civil Code – (whether or not Philips or the Employing Company has chosen to do so) where such circumstances arose in the period from the Date of Grant to the Vesting Date; or

That individual was involved in, or directly or indirectly responsible for a serious violation of the Philips General Business Principles or applicable law; or

The Employing Company or the business unit in which the relevant individual works/worked, or for which he was responsible, suffered a material failure of risk management, or

Something which occurred in the period from the Date of Grant to the Vesting Date has a sufficiently significant impact on the reputation of Philips or the group members to justify the operation of a recoupment claim.

No Participant shall have any rights or privileges of shareholders (including the right to receive dividends and to vote) with respect to Shares to be delivered pursuant to Awards until such Shares are actually delivered to such Participant in accordance with Article 5 of this Plan.

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

Nothing contained in this Plan or in any Award made or agreement entered into pursuant hereto shall confer upon any Participant any right to be retained in employment with any Employing Company, or to be entitled to any remuneration or benefits not set forth in this Plan or interfere with or limit in any way with the right of any Employing Company to terminate such Participant’s employment or to discharge or retire a Participant at any time.

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

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

The English version of this Plan is leading. If there is a discrepancy between the contents of a translation and the English version of this Plan, the English version of this Plan prevails.

After approval of the Long-Term Incentive Plan (consisting of a Global Philips Performance Share Plan) for the Board of Management by the Shareholders Meeting, this Plan will take effect as per January 1, 2017.

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

Except as otherwise provided in this Article 3, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for any reason whatsoever prior to the applicable Delivery Date, such Participant’s Restricted Share Rights shall be forfeited effective as of the date of termination of such Participant’s employment with the Employing Company without the Participant being entitled to any compensation or any obligation on the part of Philips or any Employing Company unless Philips determines, in its sole discretion, otherwise in writing. Any such determination shall be final, conclusive and binding and may be subject to such conditions as Philips may determine appropriate.

In case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of:

death or

legal incapacity,

Subject to Article 3.4, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of:

disablement or

retirement

In case – in the reasonable opinion of Philips – a Participant

Breaches the non-competition obligations; or;

Within one year from the date of termination, directly or indirectly on his own behalf or in the service or on behalf of others, solicits or attempts to solicit, divert or hire away any person employed by Philips or any Employing Company or any customer of Philips or any Employing Company; or

Disparages the Employing Company or the Employing Company’s officers, directors or employees, in any manner likely to be harmful to any of them or their business, business reputation or personal reputation; provided that the Participant may respond fully and accurately to any questions, inquiry or request for information when required by legal process.

Philips may require a Participant to maintain a personal brokerage account in connection with this Plan. Nothing contained in this Plan shall obligate Philips to establish or maintain or cause to establish or maintain a Nominee Account for any Participant.

Subject to the terms and conditions of this Plan, and further to the Participants tax election, Philips will deliver a Share pursuant to a Restricted Share Right to a Participant on or as soon as reasonably practicable after the relevant Delivery Date. In no event shall Philips have any obligation to deliver any Shares to a Participant prior to the relevant Delivery Date.

Any Shares to be delivered pursuant to Article 5.2 will be credited to the Nominee Account or a personal brokerage account.

Except as may be otherwise approved in writing by Philips in its sole discretion, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company, the Participant (or his or her estate or legal representatives, as the case may be) shall withdraw all Shares credited to the Participant’s Nominee Account within:

one hundred and eighty (180) days of the date of such termination, or

five (5) years from the date of such termination in case of the termination of such Participant’s employment with an Employing Company for reasons of:

death,

legal incapacity,

disablement or

retirement.

Each Participant shall comply with any applicable “insider trading” laws and regulations and the Philips’ Rules of Conduct with respect to Inside Information.

All costs of delivering any Shares under this Plan to a Participant’s Nominee Account and any other costs connected with the Shares shall be borne by the Participant.

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

Philips and any other Employing Company shall have the right to deduct or withhold (or cause to be deducted or withheld) from any salary payment or other sums due by Philips or any other Employing Company to Participant, or requiring the Participant or beneficiary of the Participant, to pay to Philips an amount necessary to settle any Taxes and any costs determined by Philips necessary to be withheld in connection with this Plan (including, but not limited to, the grant of the Restricted Shares Rights or the delivery of any Shares under this Plan).

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

Philips is herewith irrevocably authorized by the Participant to sell (part of) Participant’s Shares credited to a Nominee Account and to maintain such part of the proceeds of this sale as payment to Philips necessary to satisfy any withholding of any Taxes and any costs to be borne by the Participant in connection with this Plan as determined by Philips.

Philips shall have the authority to: i) interpret this Plan, ii) establish, amend, and rescind any terms and conditions of this Plan including any rules and regulations relating to this Plan and/or establish supplements to comply with or suit country specific requirements, iii) determine the terms and conditions of any agreements entered into hereunder, and iv) make all other determinations necessary or advisable. The terms and conditions of this Plan including any rules and regulations relating to this Plan, including any supplements thereto, in force from time to time are published on the website of Philips or its global plan administrator and apply to all previous and future Restricted Share Rights granted under this Plan. Philips may delegate the authority to practice administrative and operational functions with respect to the Plan to officers or employees of subsidiaries of Philips and to service providers.

Philips may in its sole discretion but acting in good faith, resolve to recoup some or all of such incentive compensation -including any benefits derived therefrom – in all appropriate cases (taking into account all relevant factors, including whether the assertion of a recoupment claim may in its opinion prejudice the interests of Philips and its group companies in any related proceeding or investigation), granted to an individual under these terms and conditions, if:

Equity-based incentive compensation under these terms and conditions has been granted and/or has vested on the basis of incorrect financial or other data; or

There are circumstances which would warrant Philips or the Employing Company summarily dismissing (or requesting in court the termination of the employment of) that individual – for instance on the basis of article 677 or 685 Dutch Civil Code – (whether or not Philips or the Employing Company has chosen to do so) where such circumstances arose in the period from the Date of Date of Grant to the Delivery Date; or

That individual was involved in, or directly or indirectly responsible for a serious violation of the Philips General Business Principles or applicable law; or

The Employing Company or the business unit in which the relevant individual works/worked, or for which he was responsible, suffered a material failure of risk management, or

Something which occurred in the period from the Date of Grant to the Delivery Date has a sufficiently significant impact on the reputation of Philips or the group members to justify the operation of a recoupment claim.

No Participant shall have any rights or privileges of shareholders (including the right to receive dividends and to vote) with respect to Shares to be delivered pursuant to Restricted Share Rights until such Shares are actually delivered to such Participant in accordance with Article 5 of this Plan.

The (value of) Restricted Share Rights granted to, or Shares acquired by, a Participant pursuant to such Restricted Share Right under this Plan shall not be considered as compensation in determining a Participant’s benefits under any benefit plan of an Employing Company, including but not limited to, group life insurance, long-term disability, family survivors, or any retirement, company pension or savings plan.

Nothing contained in this Plan or in any grant made or agreement entered into pursuant hereto shall confer upon any Participant any right to be retained in employment with any Employing Company, or to be entitled to any remuneration or benefits not set forth in this Plan or interfere with or limit in any way with the right of any Employing Company to terminate such Participant’s employment or to discharge or retire a Participant at any time.

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

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

The English version of this Plan is leading. If there is a discrepancy between the contents of a translation and the English version of this Plan, the English version of this Plan prevails.

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

In contrast with Article 3.2 in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of

death or

legal incapacity,

In contrast with Article 3.3 in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of

disablement or

retirement,

In contrast with Article 5.4, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company, the Participant (or his or her estate or legal representatives, as the case may be) shall sell all Shares credited to the Participant’s Nominee Account within one hundred and eighty (180) days of the date of such termination irrespective of the reason of such termination. In case the Participant (or his or her estate or legal representatives, as the case may be) fails to comply with the foregoing obligation, then Philips reserves the right to sell the Shares on behalf of the Participant and Philips is herewith irrevocably authorized to such sale.

Business Day

Date of Grant

Delivery Date

Employing Company

Nominee Account

Participant

Philips

Plan

Restricted Share Right

Except as otherwise provided in this Article 3, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for any reason whatsoever prior to the applicable Delivery Date, such Participant’s Restricted Share Rights shall be forfeited effective as of the date of termination of such Participant’s employment with the Employing Company without the Participant being entitled to any compensation or any obligation on the part of Philips or any Employing Company unless Philips determines, in its sole discretion, otherwise in writing. Any such determination shall be final, conclusive and binding and may be subject to such conditions as Philips may determine appropriate.

In case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of:

death or

legal incapacity,

Subject to Article 3.4, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company for reasons of:

disablement,

retirement or

the expiration of any temporary contract of employment,

In case – in the reasonable opinion of Philips – a Participant

Breaches the non-competition obligations; or;

Within one year from the date of termination, directly or indirectly on his own behalf or in the service or on behalf of others, solicits or attempts to solicit, divert or hire away any person employed by Philips or any Employing Company or any customer of Philips or any Employing Company; or

Disparages the Employing Company or the Employing Company’s officers, directors or employees, in any manner likely to be harmful to any of them or their business, business reputation or personal reputation; provided that the Participant may respond fully and accurately to any questions, inquiry or request for information when required by legal process.

Philips may require a Participant to maintain a personal brokerage account in connection with this Plan. Nothing contained in this Plan shall obligate Philips to establish or maintain or cause to establish or maintain a Nominee Account for any Participant.

Subject to the terms and conditions of this Plan, and further to the Participants tax election, Philips will deliver a Share pursuant to a Restricted Share Right to a Participant on or as soon as reasonably practicable after the relevant Delivery Date. In no event shall Philips have any obligation to deliver any Shares to a Participant prior to the relevant Delivery Date.

Any Shares to be delivered pursuant to Article 5.2 will be credited to the Nominee Account or a personal brokerage account.

Except as may be otherwise approved in writing by Philips in its sole discretion, in case a Participant is no longer employed by any Employing Company as a result of the termination of such Participant’s employment with an Employing Company, the Participant (or his or her estate or legal representatives, as the case may be) shall withdraw all Shares credited to the Participant’s Nominee Account within:

one hundred and eighty (180) days of the date of such termination, or

five (5) years from the date of such termination in case of the termination of such Participant’s employment with an Employing Company for reasons of:

death,

legal incapacity,

disablement,

retirement or

the expiration of any temporary contract of employment.

Each Participant shall comply with any applicable “insider trading” laws and regulations and the Philips’ Rules of Conduct with respect to Inside Information.

All costs of delivering any Shares under this Plan to a Participant’s Nominee Account and any other costs connected with the Shares shall be borne by the Participant.

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

Philips and any other Employing Company shall have the right to deduct or withhold (or cause to be deducted or withheld) from any salary payment or other sums due by Philips or any other Employing Company to Participant, or requiring the Participant or beneficiary of the Participant, to pay to Philips an amount necessary to settle any Taxes and any costs determined by Philips necessary to be withheld in connection with this Plan (including, but not limited to, the grant of the Restricted Shares Rights or the delivery of any Shares under this Plan).

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

Philips is herewith irrevocably authorized by the Participant to sell (part of) Participant’s Shares credited to a Nominee Account and to maintain such part of the proceeds of this sale as payment to Philips necessary to satisfy any withholding of any Taxes and any costs to be borne by the Participant in connection with this Plan as determined by Philips.

Philips shall have the authority to: i) interpret this Plan, ii) establish, amend, and rescind any terms and conditions of this Plan including any rules and regulations relating to this Plan and/or establish supplements to comply with or suit country specific requirements, iii) determine the terms and conditions of any agreements entered into hereunder, and iv) make all other determinations necessary or advisable. The terms and conditions of this Plan including any rules and regulations relating to this Plan, including any supplements thereto, in force from time to time are published on the website of Philips or its global plan administrator and apply to all previous and future Restricted Share Rights granted under this Plan. Philips may delegate the authority to practice administrative and operational functions with respect to the Plan to officers or employees of subsidiaries of Philips and to service providers.

Philips may in its sole discretion but acting in good faith, resolve to recoup some or all of such incentive compensation -including any benefits derived therefrom- in all appropriate cases (taking into account all relevant factors, including whether the assertion of a recoupment claim may in its opinion prejudice the interests of Philips and its group companies in any related proceeding or investigation), granted to an individual under these terms and conditions, if:

Equity-based incentive compensation under these terms and conditions has been granted and/or has vested on the basis of incorrect financial or other data; or

There are circumstances which would warrant Philips or the Employing Company summarily dismissing (or requesting in court the termination of the employment of) that individual – for instance on the basis of article 677 or 685 Dutch Civil Code – (whether or not Philips or the Employing Company has chosen to do so) where such circumstances arose in the period from the Date of Date of Grant to the Delivery Date; or

That individual was involved in, or directly or indirectly responsible for a serious violation of the Philips General Business Principles or applicable law; or

The Employing Company or the business unit in which the relevant individual works/worked, or for which he was responsible, suffered a material failure of risk management, or

Something which occurred in the period from the Date of Grant to the Delivery Date has a sufficiently significant impact on the reputation of Philips or the group members to justify the operation of a recoupment claim.

No Participant shall have any rights or privileges of shareholders (including the right to receive dividends and to vote) with respect to Shares to be delivered pursuant to Restricted Share Rights until such Shares are actually delivered to such Participant in accordance with Article 5 of this Plan.

The (value of) Restricted Share Rights granted to, or Shares acquired by, a Participant pursuant to such Restricted Share Right under this Plan shall not be considered as compensation in determining a Participant’s benefits under any benefit plan of an Employing Company, including but not limited to, group life insurance, long-term disability, family survivors, or any retirement, company pension or savings plan.

Nothing contained in this Plan or in any grant made or agreement entered into pursuant hereto shall confer upon any Participant any right to be retained in employment with any Employing Company, or to be entitled to any remuneration or benefits not set forth in this Plan or interfere with or limit in any way with the right of any Employing Company to terminate such Participant’s employment or to discharge or retire a Participant at any time.

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

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

The English version of this Plan is leading. If there is a discrepancy between the contents of a translation and the English version of this Plan, the English version of this Plan prevails.

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