EX-99.D.4

Exhibit (d)(4)

December 20, 2007

Geoffrey C. Waters
[at the address in the Schedule]

Re: Employment Agreement

Dear Geoff:

This is your Employment Agreement (this “Agreement”) with Philips Holding USA Inc., a Delaware corporation (the “Company”). It sets forth the terms of your employment with the Company.

1. Employment.

Some of the terms of your employment are in the attached schedule (your “Schedule”), which is part of this Agreement.

This Agreement is being entered into in connection with and as a condition to the Agreement and Plan of Merger, dated December 20, 2007, among Respironics Inc., a Delaware corporation (“Respironics”), the Company, and Moonlight Merger Sub, Inc., a Delaware corporation (the “Merger Agreement”). The Agreement shall become effective, and your employment under this Agreement will (a) begin on the Acceptance Date (as defined in the Merger Agreement) after payment of the Executive Payment (as defined in that certain Letter Agreement between you and Respironics, dated December 20, 2007 (the “Letter Agreement”)) (the “Start Date”) and (b) end at the close of business on the earlier of (1) the end of the Compensation Period stated in the Schedule or (2) the effective date of early termination of your employment. Once effective, this Agreement supersedes and terminates any earlier agreements, written or oral, with respect to the subject matter of this Agreement, including your Amended and Restated Employment Agreement, dated August 29, 2007 (the “Prior Employment Agreement”), and any other agreements or arrangements you have with Respironics, relating to the subject matter herein provided, however, this Agreement shall not affect (a) any vested benefits under any Respironics benefit plan in effect immediately prior to the Acceptance Time (as defined in the Merger Agreement) or (b) acceleration and payment of your stock options pursuant to the Merger Agreement.

However, if the Merger Agreement or your employment with Respironics terminates for any reason before the merger occurs, all of the provisions of this Agreement will terminate and there will be no liability of any kind under this Agreement. You agree to remain employed by Respironics until the consummation of the merger contemplated in the Merger Agreement. References in

this Agreement to “your employment” are to your employment under this Agreement.

You will be employed in the position stated in your Schedule to this Agreement. The Company may change your position from time to time, including by transferring you to an affiliate of the Company. You will have the authority, responsibilities and reporting relationships that correspond to and are commensurate with your position, including any particular authority, responsibilities and reporting relationships that the Company’s Board of Directors (the “Board”) or any officer of the Company to whom you report may reasonably assign to you from time to time.

You agree to execute and comply with the Company’s “Simply Right” Book and the Employee Ethics and Intellectual Property Agreement which are attached hereto.

2. Your Compensation and Benefits.

1. Salary. During your employment, you will receive an annual base salary (your “Salary”). Your Salary is stated in your Schedule. Your Salary will be paid in accordance with the Company’s normal payroll practices and will be subject to annual review beginning in 2008.

2. Annual Bonus. In accordance with the Company’s prevailing bonus policies, you will be eligible to receive an annual cash bonus (your “Annual Bonus”) for each fiscal year of the Company ending during your employment. The amount of your Annual Bonus will be determined by the Company in accordance with your Schedule.

3. Initial Restricted Stock Grant. You will be awarded restricted shares of Koninklijke Philips Electronics N.V., (“Koninklijke”) common stock (your “Initial Restricted Stock”). The number of shares of Initial Restricted Stock to be awarded to you is stated in the Schedule. The vesting schedule for your Initial Restricted Stock is stated in the Schedule. Your Initial Restricted Stock will be subject to the terms of the Global Philips Long-Term Incentive Plan (the “LTIP”) and to the terms of your award agreement under it.

4. Initial Stock Option Grant. You will be awarded options in respect of Koninklijke common stock (your “Initial Stock Options”). The number of Initial Stock Options to be awarded to you is stated in the Schedule. The vesting schedule for your Initial Stock Options is stated in the Schedule. Your Initial Stock Options will be subject to the terms of LTIP and to the terms of your award agreement under it.

5. Cash Retention Bonus. You will be eligible to receive a special cash retention bonus (your “Cash Retention Bonus”) equal to the amount set forth in the Schedule. You will receive your Cash Retention Bonus on the timeline outlined in the Schedule only if you are an employee of the Company on the applicable date of payment. Additionally, you shall receive your remaining Cash Retention Bonus payments if you are involuntarily terminated by the Company without “Cause” (as defined in the Schedule). You shall not receive any portion of your Cash Retention Bonus if you cease to be an employee of the Company prior to the second

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anniversary of your Start Date if the Company terminates your employment for Cause or if your employment terminates as a result of your voluntary resignation for any reason.

6. Other Benefits. During your employment, you will be entitled to participate in such employee benefit plans and insurance programs offered by the Company to its executive employees in accordance with the eligibility requirements for participation in those programs. Additionally, you shall receive the Other Benefits listed in the Schedule.

3. Severance Benefits.

If your employment is terminated by the Company without Cause before the end of the Compensation Period stated in the Schedule, then, subject to your execution and delivery within 30 days of the date of your termination of the Company’s then standard severance agreement applicable to similarly situated employees which will contain reasonable and customary provisions, including, without limitation, general releases, and non-competition, non-solicitation, non-disparagement, confidentiality and conflict of interest provisions substantially similar to those set forth in the Simply Right Book and Employee Ethics and Intellectual Property Agreement attached hereto (any conflicting terms in such severance agreement shall be modified to reflect the terms of the Agreement), the Company will provide you with the Severance Benefits described in your Schedule.

The Severance Benefits shall not be paid if the Company terminates your employment for Cause or as a result of your death or physical or mental disability, the end of the Compensation Period is reached, or you cease to be an employee of the Company as a result of your voluntary resignation for any reason other than termination without Cause (as defined in the Schedule). For purposes of this Agreement, you shall be deemed disabled, if by reason of a physical or mental illness or medical condition you have been unable to render the services required of you under this Agreement for a period of 180 days in any 12-month period determined by an independent physician mutually agreed upon by the parties.

4. Proprietary Information

1. Definition. “Proprietary Information” means confidential or proprietary information, knowledge or data concerning (i) the Company or its affiliates businesses, strategies, operations, financial affairs, organizational matters, personnel matters, budgets, business plans, marketing plans, studies, policies, procedures, products, ideas, processes, software systems, trade secrets and technical know-how and (ii) any matter relating to clients of the Company or its affiliates or other third parties having relationships with the Company or its affiliates. Proprietary Information includes (i) confidential information regarding any aspect of your tenure as an employee of the Company, (ii) the names, addresses, and phone numbers and other information concerning clients and prospective clients of the Company or its affiliates. In addition, Proprietary Information may include information furnished to you orally or in writing (whatever the form or storage medium) or gathered by inspection, in each case before or after the date of this Agreement. However, Proprietary Information does not include information (i) that was or becomes generally available to the public, other than as a result of a disclosure by you, directly or indirectly, or (ii) that you can establish

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was independently developed or obtained by you without reference to any Proprietary Information.

2. Use and Disclosure. You will obtain or create Proprietary Information in the course of your involvement in the Company’s or its affiliate’s activities and may already have Proprietary Information. You agree that the Proprietary Information is the exclusive property of the Company, and that, during your employment, you will use and disclose Proprietary Information only for the Company’s benefit and in accordance with any restrictions placed on its use or disclosure by the Company. After your employment, you will not use or disclose any Proprietary Information. In addition, nothing in this Agreement will operate to weaken or waive any rights that the Company may have under statutory or common law, or any other agreement, to the protection of trade secrets, confidential business information and other confidential information.

3. Limitations. Nothing in this Agreement prohibits you from providing truthful testimony or information concerning the Company to governmental, regulatory or self-regulatory authorities or otherwise as required by law. Also, the parties (and their respective employees, representatives and agents) may disclose to any and all persons, without any limitation of any kind, the tax treatment and tax structure of this Agreement and all materials of any kind (including opinions and other tax analysis) that are provided to either party related to such tax treatment and structure.

5. Ongoing Restrictions on Your Activities

1. General Effect. This Section 5 applies during your employment with the Company under this Agreement and for a 12-month period after the end of your employment with the Company under this Agreement. This Section uses the following defined terms: “Competitive Enterprise” means any business enterprise that either (i) engages in any material activity that competes anywhere with any activity engaged in by Respironics as of the date of termination, or (ii) holds a 5% or greater equity, voting or profit participation interest in any enterprise that engages in such a competitive activity.

“Client” means any client, supplier, distributor or prospective client, suppler or distributor of the Company or its affiliates to whom you provided services, or for whom you transacted business, or whose identity became known to you in connection with your relationship with or employment by the Company or its affiliates.

“Solicit” means any direct or indirect communication of any kind, regardless of who initiates it, that in any way invites, advises, encourages or requests any person to take or refrain from taking any action. A general employment advertisement by an entity of which you are a part is excluded from the definition of Solicit.

2. Your Importance to the Company and the Effect of this Section 5. You acknowledge that:

(a) In the course of your involvement in the Company’s activities, you will have access to Proprietary Information and the Company’s client

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base and will benefit from the goodwill associated with the Company. On the other hand, in view of your access to Proprietary Information and your importance to the Company, if you compete with the Company or its affiliates for some time after your employment, the Company will likely suffer significant harm. In return for the benefits you will receive from the Company and to induce the Company to enter into this Agreement, and in light of the potential harm you could cause the Company, you agree to the provisions of this Section 5. The Company would not have entered into this Agreement or the Merger Agreement if you did not agree to this Section 5.

(b) In light of Section 5.2(a), if you breach any provision of this Section 5, the loss to the Company would be material but the amount of loss would be uncertain and not readily ascertainable.

(c) This Section 5 limits your ability to earn a livelihood in a Competitive Enterprise and your relationships with Clients. You acknowledge, however, that complying with this Section 5 will not result in severe economic hardship for you or your family.

3. Non-Competition. During your employment with the Company under this Agreement and for a 12-month period after the end of your employment with the Company under this Agreement, you will not directly or indirectly:

(a) hold a 5% or greater equity, voting or profit participation interest in a Competitive Enterprise; or

(b) act as a director, officer, employee, partner, consultant, agent, advisor, lender or guarantor of a Competitive Enterprise:

(i) that is substantially related to any activity that you were engaged in,

(ii) that is substantially related to any activity for which you had direct or indirect managerial or supervisory responsibility, or

(iii) that calls for the application of specialized knowledge or skills substantially related to those used by you in your activities;

in each case, for the Company or its affiliates at any time during the year before the end of your employment (or, if earlier, the year before the date of determination).

4. Non-Solicitation of Clients. During your employment with the Company under this Agreement and for a 12-month period after the end of your employment with the Company under this Agreement, you will not:

(a) Solicit any Client to transact business with a Competitive Enterprise or to reduce or refrain from doing any business with the Company and its affiliates (excluding any business that is not a material activity of the Company or its affiliates),

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(b) transact business with any Client that would cause you to be a Competitive Enterprise or that would cause any Client to reduce or refrain from doing any business with the Company or its affiliates, or

5. Non-Solicitation of Employees. During your employment with the Company under this Agreement and for a 12-month period after the end of your employment with the Company under this Agreement, you will not attempt to Solicit anyone who is then an employee of the Company or its affiliates (or who was an employee of the Company or any of its affiliates within the prior three (3) months) to resign from the Company and its affiliates or to apply for or accept employment with any Competitive Enterprise, except that you may Solicit your administrative assistant.

6. Injunctive Relief

You acknowledge that the Company may be caused irreparable injury in the event of a breach of this Section 5 and that money damages may not be an adequate remedy, and further agree that the Company shall be entitled to seek injunctive relief (in addition to its other remedies at law) to have the provisions of this Section 5 enforced (without the requirement to post a bond). It is hereby acknowledged that the provisions of this Section 5 are for the benefit of the Company and that the Company may enforce the provisions of this Section 5 and only the Company can waive the rights hereunder with respect to its confidential information, Clients and employees.

7. Notice to New Employers. Before you accept employment with any other person or entity while any of Sections 5.3, 5.4 or 5.5 is in effect, you will provide the prospective employer with written notice of the provisions of this Section 5 and will deliver a copy of the notice to the Company.

6. No Public Statements or Disparagement

You agree, for yourself and others acting on your behalf, that you (and they) will not intentionally disparage publicly, or make negative public statements about the Company or any of its incumbent or former officers, directors, agents, consultants, employees, successors and assigns that negatively affect the Company. Nothing in this provision shall prohibit you from testifying truthfully in response to a subpoena or other lawfully issued legal process.

7. Disputes

Subject to Section 5.6, this Section 7 applies to any controversy or claim between you and the Company or its affiliates arising out of or relating to or concerning this Agreement or any aspect of your employment with the Company, its affiliates or Respironics or the termination of that employment (together, an “Employment Matter”).

Subject to the provisions of Section 5.6 and this Section 7, any Employment Matter will be finally settled by arbitration in Boulder County,

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Colorado administered by the American Arbitration Association under its Commercial Arbitration Rules then in effect. However, the rules will be modified in the following ways: (i) the decision must not be a compromise but must be the adoption of the submission by one of the parties, (ii) each arbitrator will agree to treat as confidential evidence and other information presented, (iii) a decision must be rendered within 15 business days of the parties’ closing statements or submission of post-hearing briefs and (iv) the arbitration will be conducted before a panel of three arbitrators, one selected by you within 10 days of the commencement of arbitration, one selected by the Company in the same period and the third selected jointly by these arbitrators (or, if they are unable to agree on an arbitrator within 20 days of the commencement of arbitration, the third arbitrator will be appointed by the American Arbitration Association).

You and the Company agree that there will be no punitive damages payable as a result of any Employment Matter and agree not to request punitive damages. The arbitrator may award attorney’s fees and costs of the arbitration to the prevailing party.

You or the Company may bring an action or special proceeding in a state or federal court of competent jurisdiction sitting in Boulder County, Colorado to enforce any arbitration award under this Section 7.

You and the Company irrevocably submit to the exclusive jurisdiction of any state or federal court located in Boulder County, Colorado over any Employment Matter that is not otherwise arbitrated or resolved according to Section 7. Each of us hereby waives, and agrees not to assert, as a defense that either of us, as appropriate, is not subject thereto or that the venue thereof may not be appropriate. We each hereby agree that mailing of process or other papers in connection with any such action or proceeding in any manner as may be permitted by law shall be valid and sufficient service thereof.

To the extent permitted by law, you and the Company waive any and all rights to a jury trial with respect to any Employment Matter.

This Agreement will be governed by and construed in accordance with the law of the State of New York.

8. Section 280G

This Section 8 shall apply if the payments and benefits provided to you pursuant to the terms of this Agreement, the Letter Agreement, the Prior Employment Agreement, or otherwise, in connection with the tender offer and/or merger provided for in the Merger Agreement, would be subject to the excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the “Code”) as a result of the Payment being required to be taken into account under Section 280G(b)(2) of the Code (such excise tax, together with any interest and penalties, are hereinafter referred to as the “Excise Tax”). It is the intention of the Company and you in applying this Section 8 that you receive the maximum net after-tax benefit from this Agreement. To effectuate said intention, the Company and you agree that the amount of any payment or benefit described in this Agreement shall be payable only if: (i) the net amount that would be retained by you after deduction of all taxes applicable to the payment or benefit, including the

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Excise Tax, is greater than (ii) the net amount that would be retained by you after deduction of all taxes applicable to the payment or benefit after the payment or benefit is reduced to the maximum amount which you may receive without becoming subject to the Excise Tax. If the amount described in clause (ii) of the previous sentence is greater than the amount described in clause (i), then you agree that such payment or benefit you are entitled to receive under this Agreement shall be reduced to the maximum amount that you may receive without causing the payment or benefit to be subject to the Excise Tax (any such reduction in payments or benefits shall be referred to herein as a “Cutback”).

Subject to the provisions of this Section 8, all determinations required to be made under this Section 8, including the determination of whether a Cutback is required and of the amount of any such Cutback, shall be made by PricewaterhouseCoopers LLP (or if they are unwilling or unable to serve Deloitte & Touche USA LLP) (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and you and shall be made on the basis of substantial authority. If the Accounting Firm determines that a Cutback is required under this Section 8, it shall furnish you with a written opinion that it is “more likely than not”, or such higher standard as adopted by the Treasury Department from time to time, that the Cutback is so required. Any determination by the Accounting Firm meeting the requirements of this Section 8 shall be binding on the Company and you, subject only to this Section 8. The fees and disbursements of the Accounting Firm in performing the determinations under this Section shall be borne solely by the Company. Notwithstanding the foregoing, the parties acknowledge that, prior to the Start Date, the Accounting Firm will prepare a good faith estimate of Excise Tax implications of payments and benefits that are provided to you under this Agreement on or before the Start Date.

9. General Provisions.

The Company may withhold from any payment due hereunder any taxes that are required to be withheld under any law, rule or regulation.

The parties agree that this Agreement is intended to comply with the requirements of Section 409A of the Code and the regulations promulgated thereunder (“Section 409A”) or an exemption from Section 409A. In the event that after execution of this Agreement either party makes a determination inconsistent with the preceding sentence, it shall promptly notify the other party of the basis for its determination. The parties agree to renegotiate in good faith the terms of this Agreement if you determine that this Agreement as structured would have adverse tax consequences to you. Notwithstanding anything in this Agreement to the contrary, if you are a “specified employee” as described in Section 409A and the Treasury Regulations thereunder, and any amount to which you would otherwise be entitled during the first six months following your separation of service that constitutes nonqualified deferred compensation within the meaning of Section 409A and that is therefore not exempt from Section 409A as involuntary separation pay or a short-term deferral, will be accumulated and paid (without interest) on the first business day of the seventh month following the date of your separation from service. For purposes of this Agreement, each amount to be paid or benefit to be provided hereunder shall be construed as a separate identified payment for purposes of Section 409A.

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This Agreement is personal to you and without the prior written consent of the Company shall not be assignable by you otherwise than by will or the laws of descent and distribution. The Company may assign this Agreement to any of its affiliates at any time, provided that the Company shall remain jointly liable for the obligations of any assignee hereunder. This Agreement shall inure to the benefit of and be enforceable by your legal representatives. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. It is the parties’ intention that this Agreement not be construed more strictly with regard to you or the Company. Upon becoming effective on the Start Date (and after payment of the Executive Payment (as defined in the Letter Agreement)), this Agreement shall supersede any other employment or severance agreement or arrangements or similar rights you may have with the Company, Respironics or any of their affiliates (and you shall not be eligible for severance benefits under any other plan, program or policy of the Company).

Certain capitalized terms used herein have the meanings set forth in the Schedule hereto.

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10.

Acknowledgement.

YOU ACKNOWLEDGE THAT YOU HAVE HAD THE OPPORTUNITY TO CONSULT LEGAL COUNSEL CONCERNING THIS AGREEMENT, THAT YOU HAVE READ AND UNDERSTAND THIS AGREEMENT, THAT YOU ARE FULLY AWARE OF THIS AGREEMENT’S LEGAL EFFECT, AND THAT YOU HAVE ENTERED INTO THIS AGREEMENT FREELY BASED ON YOUR OWN JUDGMENT AND NOT ON ANY REPRESENTATION OR PROMISES OTHER THAN THOSE CONTAINED IN THIS AGREEMENT.


		Philips Holding USA Inc.

		By:		/s/ Michael J. Spahn

		Name:		MICHAEL J. SPAHN
		Title:		VICE PRESIDENT


Accepted and Agreed
as of the date hereof

/s/ Geoffrey C. Waters
Geoffrey C. Waters

[Signature Page to Geoffrey C. Waters’ Employment Agreement]

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Geoffrey C. Waters Employment Agreement Schedule
(This Schedule constitutes part of the Employment Agreement)


		Geoffrey C. Waters
Name and address for notices		[Address on file with the Company]

Notice Address for the Company		Philips Holding USA Inc. c/o Michael Spahn 3000 Minuteman Road Andover, MA 01810

Position		You shall initially be employed as General Manager, International Group.

Compensation Period		Your Compensation Period will end on the second anniversary of your Start Date.

Salary		Your annual Salary will be $306,000, subject to increase but not decrease.

Annual Bonus		You will be eligible to receive an Annual Bonus with a target level equal to 60% of your Salary (100% of target) and a maximum Annual Bonus equal to 120% of your Salary. The actual amount of the Annual Bonus you shall be entitled to receive shall be based upon achievement of the yearly goals set by the Company and shall be paid at the same time bonuses are normally paid by the Company.

Initial Restricted Stock		Provided that you are employed by the Company on the relevant grant date, you will be awarded 10,000 shares of restricted stock of Koninklijke common stock on each of (i) the first grant date possible under the LTIP following your Start Date and (ii) the first grant date possible under the LTIP following the first anniversary of your Start Date.

		Your Initial Restricted Stock will vest in three equal installments on the first, second and third anniversaries of the date of grant.

Initial Stock Options		Provided that you are employed by the Company on the relevant grant date, you will be awarded 30,000 options on shares of Koninklijke common stock on each of (i) the first grant date possible under the LTIP following your Start Date and (ii) the first grant date possible under the LTIP following the first anniversary of your Start Date.

		Your Initial Stock Options will (i) have an exercise price as determined on the date of grant and (ii) vest on the third anniversary of the date of grant.


		Geoffrey C. Waters
Name and address for notices		[Address on file with the Company]

Cash Retention Bonus		If you remain employed by the Company through the second anniversary of your Start Date, you will receive a Cash Retention Bonus of $500,000. Such payment will be made within 30 days of the second anniversary date. If you are terminated by the Company without Cause, your Cash Retention Bonus shall be paid to you within 30 days of your date of termination.

Other Benefits		Additionally, you will receive for 3 years after the termination of your employment for any reason continuation of medical and dental insurance coverage at a level substantially similar to the medical and dental insurance coverage enjoyed by you prior to your termination of employment.

Definition of Cause		“Cause” means your: (i) willful refusal to perform the duties and responsibilities reasonably assigned to you pursuant to Section 1 of the Agreement, (ii) engagement in illegal conduct or in gross misconduct, in either case, that causes material financial or reputational harm to the Company or its affiliates, (iii) commission or conviction of, or plea of guilty or nolo contendere to, a felony, (iv) material breach of the Company’s written code of conduct and business ethics or (v) willful attempt to obstruct or failure to cooperate with any investigation authorized by the Board or any governmental or self-regulatory entity. With respect to subclauses (iv) and (v), the Company agrees to give you notice and an opportunity to timely cure any breach which is susceptible to cure (as reasonably determined by the Company). “Cause” will not include any action which you took upon the written advice of legal counsel of the Company.

		Additionally, if your principal place of employment is relocated more than 25 miles from Boulder, CO then you may choose to continue your employment under the terms and conditions set forth in this Agreement or you may choose to treat such relocation as a termination by the Company without Cause. If you do not provide the Company with written notification of your choice within 30 days following receipt by you of written notice of such relocation from the Company, you will lose the right to treat the relocation as a termination by the Company without Cause and will be deemed to have chosen to continue your employment under the terms and conditions set forth in this Agreement. If you choose to treat such a relocation as a termination by the Company without Cause it will be deemed to be a termination


		Geoffrey C. Waters
Name and address for notices		[Address on file with the Company]

		without Cause for all purposes of this Agreement and Schedule, including without limitation in respect of your entitlement to Severance Benefits.

Severance Benefits		If you are terminated by the Company without Cause prior to the end of your Compensation Period, you shall receive the following benefits:

(1) An amount equal to the sum of (i) your base Salary for the remainder of the Compensation Period and (ii) a pro-rated bonus for the current fiscal year (determined at 100% of target) through the date of termination. This amount shall be payable in a cash lump sum within 30 days of your termination date.

(2) To the extent it is not already paid, any remaining amounts due pursuant to your Cash Retention Bonus. If applicable, these amounts shall be payable in a cash lump sum within 30 days of your termination date.


		You understand and agree that if you are terminated for Cause or resign for any reason, you will not receive the aforementioned payments and benefits.

Notices		Except as otherwise provided herein, all notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (a) hand delivered or (b) mailed by certified mail, proper postage prepaid, return receipt requested, or (c) sent via overnight delivery service or courier, delivery acknowledgment requested, or (d) via any other delivery service with proof of delivery at the address for such party set forth on this Schedule or such other address or to such other person as either party hereto shall have last designated by notice to the other party.