**Exhibit 1.1**

 

ARTICLES OF ASSOCIATION of

**Koninklijke KPN N.V.**

**(“Royal KPN N.V.”),**

with its registered office in ‘s-Gravenhage.

 

21 April 2005

 

Office translation of the complete text of the Articles of AssociationofKoninklijke KPN N.V.(“Royal KPN N.V.”), with its registered office in ‘s-Gravenhage, as they readafter the deed of amendment, executed on 21 April 2005 before G.W.Ch. Visser, civil law notary inAmsterdam, in respect of which a ministerial statement of no objections was granted on 20 April 2005, under numberNV 348845.

 

In preparing the attached document, an attempt has been made totranslate asliterally aspossible without jeopardizing the overall continuity of the text. Inevitably, however, differences may occur intranslation, and if they do, the Dutchtext will govern by law.

 

In the attached document, Dutch legal concepts are expressed in Englishterms andnot in theiroriginal Dutch terms; the concepts concerned may not be identical to concepts described by the English terms assuch terms may be understood under thelaws of other jurisdictions.

 

Koninklijke KPN N.V. is registered with the Trade Register of theChamber ofCommerce forHaaglanden under number 02045200.

 

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CHAPTER I

 

Definitions.

 

Article 1.

 

In these articles of association the following terms shall have themeanings as assignedbelow:

 

a.                                       general meeting: the body formed byshareholders with voting rights and others holding voting rights;

 

b.                                      general meeting of shareholders: the meetingof shareholders and other persons entitledto attend meetings;

 

c.                                       depositary receipts: depositary receipts forshares in the company;

 

d.                                      distributable part of the shareholders’equity: that part of the shareholders’ equity which exceeds the paid and called capital plus the reserveswhich are required to be held bylaw;

 

e.                                       auditor: a “*registeraccountant*”or other auditor referred to in section 393 of Book 2 of the Netherlands Civil Code or an organisation in which such auditors work together;

 

f.                                         the annual meeting: the general meeting of shareholdersconvened to consider thefinancial statements and annual report;

 

g.                                      subsidiary:

 

•                                          a legal entity in which the company or one ormore of its subsidiaries, pursuantto an agreement with other persons entitled to vote or otherwise, can exercise, solely or jointly, more thanone-half of the voting rights atthe general meeting of members or shareholders of that legal entity;

 

•                                          a legal entity of which the company or one ormore of its subsidiaries is amember or shareholder and, pursuant to an agreement with other persons entitled to vote or otherwise, canappoint or dismiss, solely or jointly,more than one-half of the members of the Board of Management or the Supervisory Board, if all personsentitled to vote were to casttheir vote;

 

all this subject to theprovisions of paragraphs 3 and 4 of section 24a ofBook 2 of the Netherlands Civil Code.

A company operating underits own name, for the debts of which the companyor one or more subsidiaries is fully liableas a partner towards its creditors, shall be treated as a subsidiary;

 

h.                                      group company: a legal entity or companywithin the meaning of section 24bof Book 2 of the Netherlands Civil Code which is united with the company in one group;

 

i.                                          dependent company:

 

•                                          a legal person to which the company or one ormore dependent companies, solelyor jointly and for its or their own account, contribute(s) at least one-half of the issued capital;

 

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•                                          a partnership, a (business) undertaking ofwhich has been registered in thecommercial register and for which the company or a dependent company is fully liable as a partner towardsthird parties for all liabilities;

 

j.                                          Official Price List: the Official Price Listof Euronext Amsterdam N.V. or anofficial publication replacing it;

 

k.                                       Rules relating to Securities (*Fondsenreglement*): the Rules relating toSecurities of the stock exchange(Euronext Amsterdam) maintained by Euronext Amsterdam N.V.

 

l.                                          Necigef: *NederlandsCentraal Instituut voor Giraal Effectenverkeer B.V.*: the Netherlands central securities depository(*centraal instituut*) as referred to in the Securities Bank Giro Transfer Act (*Wet giraal effectenverkeer*);

 

m.                                    Necigef-beneficiary: in respect of ordinaryshares, a participant (*deelgenoot*) in the collective deposit (*verzameldepot*) of ordinary shares of aNecigef-participant, all withinthe meaning of the Securities Bank Giro Transfer Act;

 

n.                                      Necigef-participant: an institution which isan associated institution (*aangesloten instelling*) within the meaningof the Securities Bank Giro TransferAct;

 

o.                                      Necigef Global Certificate: the one singleshare certificate representing all bearerordinary shares in issue from time to time referred to in article 6, paragraph 2, of these articles ofassociation;

 

p.                                      works council: the works council of thecompany’s business or of the business of a dependent company. If there is more than one works council, the powers of the works council under thesearticles of association shall be exercised by each of these works councils separately; with regard to a nomination as referred to in article 28, section A,paragraph 3, the powers shall be exercisedby these works councils jointly. If a central works council has been instituted for the business orbusinesses involved, the powers of the works council under these articles of association shall accrue to thecentral works council.

 

CHAPTER II

 

Name, registered office, structure and object.

 

Article 2. Name and seat.

 

1.                                       The name of the company is: Koninklijke KPNN.V.

 

2.                                       In dealings with other countries the companymay also use the name: Royal KPNN.V. or another translation of that name.

 

3.                                       Its registered office is situated in‘s-Gravenhage.

 

Article 3. Structure.

 

The company is a ‘large company’. The sections 158 to 164 inclusive ofBook 2 ofthe NetherlandsCivil Code shall be applicable.

 

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Article 4. Object.

 

The objects of the company are:

 

a.                                       to participate in and to manage otherenterprises and companies, among such,companies that operate in the field of the transmitting, storing and converting of information, as well as tomanage and dispose of information;

 

b.                                      to let its subsidiaries carry out theconcessions or licenses that are granted by the government in the field mentioned under a;

 

c.                                       to manage and finance subsidiaries, groupcompanies, dependent companies andparticipations, among which to guarantee the debts of those companies and participations,

 

and further to engage in any activity which may be related orconductive to the objectssetout hereinabove.

 

CHAPTER III

 

Capital and shares. Registers.

 

Article 5. Authorised capital. Classes of shares.

 

1.                                       The authorised capital amounts to one billionnine hundred twenty million Euro(EUR 1,920,000,000.—).

 

2.                                       The authorised capital is divided into:

 

a.                                       four billion (4,000,000,000) common shares oftwenty-four Euro cent (EUR0.24);

 

b.                                      one (1) special share of forty-eight Eurocent (EUR 0.48);

 

c.                                       three billion nine hundred ninety-ninemillion nine hundred ninety-nine thousandnine hundred ninety-eight (3,999,999,998) preference shares B of twenty-four Euro cent (EUR 0.24).

 

3.                                       With due observance of the provisions ofarticle 6, paragraph 10, the ordinary shares may, at the choice of the shareholder, be registered shares or bearer shares. The special share and thepreference shares B shall be registered shares.

 

4.                                       Where the terms “shares” and “shareholders”are used in these articles of association they shall, unless the context indicates otherwise, be taken to mean all classes of shares referred to inparagraph 2 and their holders.

 

Article 6. Bearer ordinary shares: Necigef Global Certificate.

 

1.                                       On the occasion of the issuance of ordinaryshares any person entitled to receive such share may submit a written request to the company for a registered ordinary share. In the absence of such arequest, the person entitled to suchshare shall obtain a bearer ordinary share in conformity with the provisions of this article 6.

 

2.                                       All bearer ordinary shares in issue from timeto time shall be represented by onesingle share certificate (the “Necigef Global Certificate”).

 

3.                                       The company shall have the Necigef GlobalCertificate kept in safe custody byNecigef for the benefit of the Necigef-beneficiaries.

 

4.                                       The company shall confer a right to a bearerordinary share on a person by (i)having Necigef enable the company to add an ordinary share to the Necigef Global Certificate, and (ii) by the entitledperson designating a Necigef-participant

 

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that will accordingly credithim as Necigef-beneficiary in suchNecigef-participant’s collective deposit of ordinary shares in thecompany.

 

5.                                       Without prejudice to the provisions inarticle 44, paragraph 4, of these Articles of Association, Necigef shall be irrevocably charged with themanagement of the Necigef GlobalCertificate and be irrevocably authorised on behalf of the Necigef-beneficiaries to perform allacts in respect of the shares concerned,including acceptance and delivery and lending cooperation in the crediting and debiting of the NecigefGlobal Certificate.

 

6.                                       No individual bearer ordinary share shall bedelivered.

 

7.                                       Unless delivery of bearer ordinary shareswithin the meaning of article 26 of the Securities Bank Giro Transfer Act (*Wetgiraal effectenverkeer*) has been made impossible in accordance with the provisions of article 6,paragraph 10, aNecigef-beneficiary may at any time require the conversion of one or more bearer ordinary shares, up to themaximum number he is entitled to, intoregistered ordinary shares. Such conversion of one or more ordinary shares is only allowed to the maximum numberfor which he is Necigef-beneficiary and shall require (i) the transfer by deed of the shares concerned by Necigef to the Necigef-beneficiary, (ii)the company acknowledging the transferof the shares concerned, (iii) Necigef enabling the company to have the ordinary shares debited from the NecigefGlobal Certificate, (iv) the Necigef-participantconcerned debiting the Necigef-beneficiary accordingly as a participant in its collective deposit ofordinary shares in the company, and(v) the company effecting the entry of the Necigef-beneficiary’s name in the company’s register of shareholders asholder of the registered ordinary sharesconcerned.

 

8.                                       A holder of registered ordinary shares may atany time require the conversion ofsuch ordinary shares into bearer ordinary shares. Conversion of one or more registered ordinary shares shallrequire (i) the transfer of the shares concerned by the shareholder to Necigef, (ii) the company acknowledging the transfer of the shares concerned, (iii)Necigef enabling the company to havethe ordinary shares credited to the Necigef Global Certificate, (iv) theNecigef-participant crediting theshareholder accordingly as Necigef-beneficiary in its collective deposit of ordinary shares in the Company, and(v) the company effecting the deletionof the shareholder’s name as holder of the shares concerned in the company’s register of shareholders.

 

9.                                       For the purpose of application of theprovisions of these Articles of Association, shareholders shall be understood to include Necigef-beneficiaries.

 

10.                                 The company may, pursuant to a resolution ofthe Board of Management that hasbeen approved by the Supervisory Board, make the delivery of bearer ordinary shares within the meaning ofarticle 26 of the Securities BankGiro Transfer Act (*Wet giraaleffectenverkeer*) impossible. This resolution cannot be invoked against a Necigef-beneficiaryuntil six months after

 

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the resolution was publishedin at least one nationally distributed dailynewspaper and in the Official Price List. Thecompany may, pursuant to a resolutionof the Board of Management that has been approved by the Supervisory Board, revoke the resolution to make deliveryimpossible, in which casedelivery shall be possible as of the day following the day of publication of the revocation in at least one nationallydistributed daily newspaper and inthe Official Price List.

 

Article 7.

* *

*Has been deleted.*

 

Article 8.

* *

*Has been deleted.*

 

Article 9.

* *

*Has been deleted.*

 

Article 10. Depositary receipts for shares.

 

1.                                       The company may cooperate towards the issueof depositary receipts for its shares.

 

2.                                       If such an issue has been effected, theholders of the depositary receipts shallhave the rights conferred by law upon the holders of depositary receipts, including:

 

a.                                       the right to attend and to address thegeneral meeting of shareholders, inaccordance with article 44;

 

b.                                      the right to take note of documents that areavailable for inspection by shareholdersas referred to in articles 66 and 67.

 

Article 11. Registers for shareholders.

 

1.                                       No share certificates shall be issued for theordinary registered shares, for thespecial share and for the preference shares B.

 

2.                                       The Board of Management shall keep a registerin which are entered the namesand addresses of all holders of the special share and the ordinary registered shares, indicating the class of shares.

 

3.                                       The Board of Management shall also keep aseparate register in which are enteredthe names and addresses of all holders of preference shares B.

 

4.                                       Each holder of one or more registered sharesand each person holding a rightof usufruct or pledge on one or more of such shares is obliged to notify the company in writing of his address.

 

5.                                       All entries and notes in a register shall besigned by a member of the Board ofManagement and by a member of the Supervisory Board, or by a person authorised thereto by the Board of Managementwith the approval of the SupervisoryBoard.

 

6.                                       Article 50 shall also be applicable to theregisters.

 

7.                                       Extracts from a register shall benon-negotiable.

 

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CHAPTER IV

 

Issue of shares.

 

Article 12. Competent body.

 

1.                                       Shares shall be issued pursuant to aresolution of the Board of Management. The resolution shall be subject to the approval of the SupervisoryBoard and the holder of thespecial share. The scope of authority of the Board of Management shall be determined by a resolution of thegeneral meeting of shareholdersand relate at most to all unissued shares of the authorised capital, as applicable now or at any time in thefuture. The duration of this authority shall be determined by a resolution of the general meeting ofshareholders and shall notexceed a period of five years.

 

2.                                       Designation of the Board of Management as thebody competent to issue sharesmay be extended by the articles of association or by a resolution of the general meeting for a period notexceeding five years in each case. The resolution of the general meeting thereto shall be subject to theapproval of the holder of thespecial share. The number of shares which may be issued shall be determined at the time ofdesignation. Designation pursuant to the articles of association may be withdrawn by an amendment to thearticles of association.Designation by resolution of the general meeting cannot be withdrawn unless determined otherwise at thetime of designation.

 

3.                                       Upon termination of the authority of theBoard of Management, the issue of sharesshall thenceforth require a resolution of the general meeting, save where another corporate body has beendesignated by the general meeting.

 

4.                                       A resolution by the general meeting to issueshares or to designate another bodyas the body competent to issue such shares, may only be taken upon a proposal of the Board of Management subjectto the approval of the Supervisory Board.The resolution of the general meeting shall be subject to the approval of the holder of the special share.A resolution of the general meeting to designate another corporate body can only be effected if it isdetermined thereto that everyresolution to issue shares of that body shall be subject to the approval of the Supervisory Board andthe holder of the special share.

 

5.                                       The issue of preference shares B pursuant toa resolution of a body other thanthe general meeting as a result of which the amount of preference shares B issued would exceed one hundred percent (100%) of the amount ofother shares issued may only take place with the prior approval of the general meeting, granted from case to case.

 

6.                                       In the event of an issue of preference sharesB pursuant to a resolution of a bodyother than the general meeting as a result of which the amount of preference shares B issued does not exceed onehundred per cent (100%) of the amountof other shares issued, a general meeting of shareholders shall be convened within four weeks of the issue atwhich the reasons for the issue shallbe explained.

 

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7.                                       The provisions of paragraphs 1 to 6 inclusiveshall be applicable *mutatis**mutandis*to the granting of rights to subscribe toshares, but shall not be applicable to the issue of shares to persons exercising a previously granted right to subscribe to shares.

 

8.                                       In the event of an issue of preference sharesB, a general meeting of shareholders shall be convened, to be held not later than two years after the date on which preference shares B were issued forthe first time. The agenda for thatmeeting shall include a resolution relating to the repurchase or cancellation of the preference shares B. If the resolutionto be adopted in respect of thisitem on the agenda does not extend to the repurchase or cancellation of the preference shares B, a general meeting ofshareholders shall be convened andheld, in each case within two years of the previous meeting, the agenda of which meetings shall include a resolutionrelating to the repurchase orcancellation of the preference shares B, until such time as no more preference shares B remain issued. Theforegoing provisions of this paragraph shall not be applicable to preference shares B issued pursuant to a resolution of the general meeting.

 

9.                                       Article 51 shall also be applicable to theissue of shares and the granting of rights to subscribe to shares.

 

Article 13. Share issue terms. Pre-emptive right.

 

1.                                       The price and other terms of issue shall bedetermined at the time of the resolutionto issue shares. Save as provided inarticle 53, paragraph 1, the issue priceshall not be less than par.

 

2.                                       Each holder of ordinary shares shall have apre-emptive right to any issue of ordinaryshares pursuant to the provisions of article 52. The same shall apply to the granting of rights to subscribe toordinary shares.

 

3.                                       The pre-emptive right may be restricted orexcluded by a resolution of the Boardof Management. The resolution shall be subject to the approval of the Supervisory Board and the holder of thespecial share. The authority vested in the Board of Management shall terminate on the date of terminationof the authority of the Board ofManagement to issue shares. Paragraphs1 to 4 inclusive of article 12 shall be applicable *mutatis mutandis*.

 

4.                                       Article 52 shall also be applicable to theissue terms and the pre-emptive right,respectively.

 

Article 14. Paying up on shares.

 

1.                                       On subscription to each ordinary share andthe special share, payment must bemade of its nominal value and, if an ordinary share is subscribed to at a higher amount, the difference between suchamounts, without prejudice to theprovisions of article 53, paragraph 1.

 

2.                                       On subscription to each preference share B,paying up must be made of at leastone-quarter of its nominal value.

 

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3.                                       Further paying up on preference B sharesshall not be made until a call for suchpaying up is made by the company. Calls for further paying up shall be made pursuant to a resolution of the Board ofManagement. The resolution issubject to the approval of the Supervisory Board.

 

4.                                       Paying up on preference shares B and on thespecial share may be made onlyin cash. Paying up on ordinary shares must be made in cash, insofar as another form of contribution has not beenagreed to.

 

5.                                       The Board of Management shall be authorised,without the prior approval of thegeneral meeting, to perform legal acts relating to non-cash contributions for ordinary shares and the other legal actsreferred to in section 94 of Book 2of the Netherlands Civil Code.

 

6.                                       Articles 53 and 54 shall also be applicableto paying up on shares and non-cash contributions, respectively.

 

CHAPTER V

 

Shares in the company’s own capital and depositary receipts therefor.

 

Article 15. Acquisition.

 

1.                                       The company may acquire fully paid up sharesin its own capital or depositary receiptstherefor, but may only do so for no consideration or if:

 

a.                                       the distributable part of the shareholders’equity is at least equal to the purchaseprice, and

 

b.                                      the nominal value of the shares in itscapital or depositary receipts thereforwhich the company acquires, holds or holds as pledgee or which are held by a subsidiary company doesnot exceed one-tenth of theissued capital.

 

2.                                       The company may acquire shares in its owncapital or depositary receipts thereforfor the purpose of transferring the same to employees of the company or of a group company under a schemeapplicable to such employees.

 

3.                                       Shares in the company’s own capital shall beacquired or disposed of pursuant toa resolution of the Board of Management.

 

A resolution to acquire ordispose of shares in its own capital amounting tomore than one per cent (1%) of the issuedcapital of ordinary shares shall be subject to the approval of the holder of the special share; all withoutprejudice to the provisions ofarticle 25 paragraph 2 under A.a and article 56, paragraph 3.

 

4.                                       On shares in the capital of the company heldby the company, or for which thecompany holds the depositary receipts thereof, no distributions shall be made for the benefit of the company. Sharesor depositary receipts thereof onwhich, pursuant to this paragraph 4, no distribution shall be made for the benefit of the company shall not be countedwhen calculating allocation and entitlementsto profits.

 

5.                                       Articles 55 to 62 inclusive shall also beapplicable to shares in the company’s own capital or depositary receipts therefor.

 

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CHAPTER VI

 

Reduction of capital.

 

Article 16.

 

1.                                       The general meeting may, but only on aproposal of the Board of Management with the approval of the Supervisory Board, resolve to reduce theissued capital:

 

a.                                       by a cancellation of shares; or

 

b.                                      by a reduction of the nominal amount of theshares by amendment of thearticles of association.

 

2.                                       A resolution to cancel may only relate to:

 

a.                                       shares held by the company itself or forwhich it holds the depositary receipts;or

 

b.                                      all preference shares B, all ordinary sharesor the special share, in all caseswith repayment.

 

3.                                       A resolution to cancel the special shareshall only be adopted with the prior approval of the holder of the special share.

 

4.                                       Any partial repayment on shares or releasefrom the obligation to pay up shallonly be permitted in order to implement a resolution to reduce the nominal amount of the shares. Such arepayment or release must be made:

 

a.                                       in respect of all shares; or

 

b.                                      in respect of all preference shares B or allordinary shares.

 

5.                                       The provisions of article 63 shall also beapplicable to the reduction of capital.

 

CHAPTER VII

 

Transfer of the special share. Transfer of the registered shares.Restricted rights.

 

Article 17. Transfer of the special share.

 

1.                                       The special share can be transferred to thecompany.

 

2.                                       Any transfer other than that to the companycan only be effected with the approvalof the Board of Management and the Supervisory Board.

 

3.                                       The transfer must take place within threemonths after the approval has been granted.The approval shall be deemed to have been granted if the Board of Management and the Supervisory Board, havinginformed the applicant of therefusal of the request, do not simultaneously inform the applicant of one or more prospective buyers who are prepared topurchase the special share againstpayment in cash. The company itself can be designated as a prospective buyer.

 

4.                                       The transfer of the special share to thecompany or to another prospective buyeras referred to in paragraph 3 shall take place against a purchase price that equals the nominal value of the specialshare.

 

5.                                       If the special share is transferred withoutthe approval of the Board of Management and the Supervisory Board, the rights granted to the holder of the special share as such in the articles ofassociation shall terminate.

 

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Article 18. Transfer of registered shares. Restricted rights.

 

1.                                       A transfer of a registered share or of anrestricted right thereto shall require a deed of transfer drawn up for that purpose and, save when the companyitself is a party to the legalact, acknowledgement in writing by the company of the transfer.

 

Acknowledgement must begiven in the instrument or by a dated statementembodying such acknowledgement on theinstrument or on a copy or extract thereofduly authenticated by a civil-law notary or by the transferor. Service of such instrument, copy or extract on thecompany shall be deemed as acknowledgement. If the transfer relates to preference shares B which have not been paid up in full, the acknowledgementmay be given only if the instrument of transfer bears an officially recorded or otherwise fixed date.

 

2.                                       A pledge may be also established on a sharewithout acknowledgement by thecompany or service of an instrument on the company. In such cases, section 239 of Book 3 of the Netherlands Civil Codeshall be applicable *mutatis**mutandis*whereby acknowledgement by the company orservice of an instrument on thecompany shall replace the notification referred to in paragraph 3 of that section.

 

3.                                       The acknowledgement shall be signed with dueobservance of the provisions onrepresentation of article 24.

 

Article 19. Usufruct. Pledge.

 

1.                                       The shareholder shall have the right to voteon shares subject to a usufruct orpledge. The usufructuary or the pledgee shall, however, have the right to vote if so provided upon the establishment ofthe usufruct or pledge. A shareholderwithout the right to vote and a usufructuary or a pledgee with the right to vote shall have the rightsconferred by law upon the holders of depositary receipts issued for shares with the cooperation of acompany. A usufructuary orpledgee without the right to vote shall not have the rights referred to in the preceding sentence.

 

2.                                       The shareholder shall have the rightsattaching to the share on which an usufruct has been established with respect to the acquisition of shares,provided that he shallcompensate the usufructuary for the value of these rights to the extent that the latter is entitled theretounder his right of usufruct.

 

CHAPTER VIII

 

Management.

 

Article 20. Board of Management.

 

1.                                       The management of the company shall be formedby a Board of Management consistingof a number of members to be determined by the Supervisory Board at three or more members.

 

2.                                       The Supervisory Board shall appoint achairman from among the members ofthe Board of Management.

 

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Article 21. Appointment, resignation, suspension and dismissal.

 

1.                                       The Supervisory Board shall appoint themembers of the Board of Management. It shall notify the general meeting of shareholders of an intendedappointment.

 

2.                                       A member of the Board of Management shallresign no later than at the time ofclosure of the general meeting of shareholders following the day four years after his last appointment and shall bequalified for re-appointment.

 

3.                                       The notification to appoint or re-appointshall contain an explanation of the reasons for the proposed appointment orre-appointment. In case of an intended re-appointment the performance of the candidate as a member of the Board of Management shall be taken intoaccount.

 

4.                                       The Supervisory Board shall not dismiss amember of the Board of Management untilthe general meeting has been consulted on the intended dismissal. The Supervisory Board shall permit the memberof the Board of Management whoit intends to dismiss, to be heard before the general meeting of shareholders regarding the intendeddismissal.

 

5.                                       The Supervisory Board can suspend a member ofthe Board of Management.

 

6.                                       A suspension may be extended on one or moreoccasions, but is not to last fora total of more than three months. If no decision has been made to set aside the suspension or dismiss such memberby the end of that period the suspensionshall be set aside.

 

7.                                       Section 158, paragraph 10 of Book 2 of theNetherlands Civil Code shall alsoapply to the appointment and dismissal of the members of the Board of Management.

 

Article 22. Remuneration.

 

1.                                       The company has a policy on the remunerationof the Board of Management. Thepolicy shall be proposed by the Supervisory Board and adopted by the general meeting. The policy onremuneration shall in any case include the subjects referred to in sections 383c, 383d and 383e of Book 2of the Netherlands Civil Codeinsofar as they regard issues related to the Board of Management. The policy on remunerationshall be offered for inspection tothe works council in writing at the same time on which it is offered to the generalmeeting of shareholders.

 

2.                                       The remuneration and further terms ofemployment of the Board of Management shall be determined by the Supervisory Board, with due observance of thepolicy referred to in paragraph 1.

 

3.                                       If the remuneration of the Board ofManagement also consists of schemes under which shares or rights to subscribe for shares are granted, theSupervisory Board shall submit aproposal in respect of these schemes to the general meeting for approval. The proposal must as aminimum state the number ofshares or rights to subscribe for shares that can be granted to the Board of Management and the conditions forthe granting and amending

 

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thereof. The lack ofapproval by the general meeting shall not affect the authorityof the Supervisory Board to represent thecompany.

 

Article 23. Management duties. Decision-making. Allocation of tasks.

 

1.                                       Subject to the restrictions imposed by thearticles of association, the Board ofManagement shall be charged with the management of the company.

 

2.                                       The Board of Management shall resolve with anabsolute voting majority. In theevent the votes are equally divided, the chairman of the Board of Management shall have a casting vote.

 

3.                                       The Board of Management shall draw up by-lawscontaining further regulations onthe procedure of holding meetings and decision-making by the Board of Management, and its operatingprocedures. Such by-laws shall require the approval of the Supervisory Board.

 

4.                                       In allocating its duties, the Board ofManagement may determine the tasks forwhich each member of the Board of Management bears special responsibility.The allocation of tasks shall requirethe approval of the Supervisory Board.

 

Article 24. Representation.

 

1.                                       The Board of Management represents Thecompany. Representative authority shallalso vest in:

 

a.                                       the chairman of the Board of Management, or

 

b.                                      two other members of the Board of Management,acting jointly.

 

2.                                       The Board of Management may appoint attorneyswith general or restricted powerto represent the company. Any such appointment may be withdrawn at any time. All such officers shallrepresent the company with due observance of the restrictions imposed on their powers. Their titles shall bedetermined by the Board ofManagement.

 

3.                                       In the event of a conflict of interestbetween the company and a member of the Board of Management, the company shall be represented by a member of the Board of Management or a member of theSupervisory Board appointed bythe Supervisory Board for this purpose.

 

Article 25. Approval of resolutions of the Board of Management.

 

1.                                       Resolutions of the Board of Managemententailing a significant change in theidentity or character of the company or its business are subject to theapproval of the general meeting,including in any case:

 

a.                                       the transfer of (nearly) the entire businessof the company to a third party;

 

b.                                      entering into or breaking off long-termco-operation of the company or asubsidiary with an other legal entity or company or as fully liable partner in a limited partnership or generalpartnership, if this co-operation ortermination is of major significance for the company;

 

c.                                       acquiring or disposing of participatinginterests in the capital of a companyat a value of at least one third of the sum of the assets of the

 

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company as shown on itsbalance sheet plus explanatory notes or, ifthe company prepares a consolidated balancesheet, as shown on its consolidatedbalance sheet plus explanatory notes, according to the last adopted financial statements of thecompany, by the company or a subsidiary.

 

2.                                       Without prejudice to the other provisions ofthese articles of association as tothat subject, the approval of the Supervisory Board shall be required for:

 

A.                                   Resolutions of the Board of Managementrelating to:

 

a.                                       the issue and acquisition of shares of thecompany and debt instruments issuedby the company or of debt instruments issued by a limited partnership (*commanditairevennootschap*) or a generalpartnership (*vennootschap onder firma*)in respect of which the companyis a general partner with full liability;

 

b.                                      cooperation in the issue of depositaryreceipts for shares in the company;

 

c.                                       application for listing or withdrawal oflisting on any stock exchange ofthe securities referred to under a and b;

 

d.                                      the entering into or termination of long-termcooperation of the company or adependent company with any other company or legal entity or as fully liable partner in a limited partnership or general partnership if such cooperation ortermination is of fundamental importanceto the company;

 

e.                                       the acquisition of a participation worth atleast a quarter of the value ofthe issued capital plus reserves according to the company’s balance sheet plus explanatory notes, by thecompany or a dependent companyin the capital of another company, and any substantial increase or decrease of such a participation;

 

f.                                         investments requiring an amount equal to atleast a quarter of the company’sissued capital plus reserves according to its balance sheet plus explanatory notes;

 

g.                                      a proposal to amend the articles ofassociation;

 

h.                                      a proposal to dissolve the company;

 

i.                                          a petition for bankruptcy or a request forsuspension of payments (*surséance van betaling*);

 

j.                                          the termination of the employment of aconsiderable number of thecompany’s employees or of a dependent company’s employees simultaneously or within a short period oftime;

 

k.                                       a significant change in the employmentconditions of a considerable numberof the company’s employees or of a dependent company’s employees;

 

l.                                          a proposal to reduce the issued capital ofthe company;

 

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B.                                     • Insofar not already subject to A mentionedhereinabove - the resolutions ofthe Board of Management, against which the chairman has cast his vote in the voting of the Board ofManagement.

 

3.                                       Without prejudice to the provisions ofparagraphs 1 and 2, the approval of the Supervisory Board shall be required for resolutions of the Board of Management:

 

a.                                       to exercise the right to vote on shares inKPN Telecom B.V. with respect toa proposal to issue shares by that company;

 

b.                                      to sell shares in KPN Telecom B.V..

 

4.                                       Without prejudice to the provisions ofparagraphs 1 up to and including 3, the approval of both the Supervisory Board and the holder of thespecial share shall be requiredfor resolutions of the Board of Management:

 

a.                                       to exercise the right to vote on shares inKPN Telecom B.V. with respect toa proposal to:

 

•                                          dissolve that company,

 

•                                          a merger or demerger (*splitsing*), within the meaning of Part 7 of Book 2 of the Netherlands Civil Code,

 

•                                          acquisition of its own shares,

 

•                                          amendment of the articles of associationrelating to the competence ofits general meeting concerning the subjects referred to hereinabove in this sub-paragraph;

 

b.                                      to make capital expenditures which wouldreduce the shareholders’ equityof the company below thirty percent (30%) of the total capital according to its consolidated balance sheet.

 

5.                                       The Supervisory Board is authorised tosubject further resolutions of the ManagementBoard to its approval in addition to those indicated in paragraphs 2, 3 and 4. All such other resolutions mustbe clearly specified in writingand the Management Board must be informed of these in writing.

 

6.                                       The lack of approval of the general meetingfor a resolution as referred to in paragraph1 or of the Supervisory Board or the holder of the special share, respectively, for a resolution as referred toin the paragraphs 2, 3, 4 and 5, shallnot affect the authority of the Board of Management and its members to represent the company.

 

Article 26. Absence or inability to act.

 

In the event of the absence or inability to act of a member of theBoard of Management,theremaining members shall be charged temporarily with the management of the company. In the event of the absenceor inability to act of all the membersof the Board of Management, the Supervisory Board shall be charged temporarily with the management of the companyand shall have the authority to delegatethe management of the company temporarily to one or more persons, whether or not members of the SupervisoryBoard.

 

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CHAPTER IX

 

Supervisory Board.

 

Article 27. Number of members. Profile. Eligibility.

 

1.                                       The company shall have a Supervisory Boardconsisting of natural persons only.The Supervisory Board shall have at least five and at most nine members.  Ifthere are fewer than five members of the Supervisory Board, the Board shall proceed without delay to fill upits number of members.

 

2.                                       The Supervisory Board shall draw up a profilewith respect to its size and composition,taking into account the company’s type of business, its activities and the required expertise and background ofthe members of the Supervisory Board.

 

The Supervisory Board shalldiscuss the profile in the general meeting ofshareholders and with the works council, forthe first time at the occasion of adoptionand subsequently at each amendment thereof.

 

3.                                       The number of members of the SupervisoryBoard shall be determined by theSupervisory Board, with due observance of the provisions of paragraphs 1 and 2.

 

4.                                       The position of a member of the SupervisoryBoard may not be held by:

 

a.                                       persons employed by the company;

 

b.                                      persons employed by a dependent company;

 

c.                                       officers and persons employed by anemployees’ organisation customarily involved in the establishment of the terms of employment of the persons referred to under a. and b.

 

Article 28. Appointment. Resolutions passed in the General Meeting ofShareholders.

 

Section A. Appointment.

 

1.                                       Notwithstanding the provision of paragraph 6,members of the Supervisory Boardare appointed by the general meeting on a nomination of the Supervisory Board. The Supervisory Board shallsimultaneously inform the general meetingand the works council of the nomination. The nomination will state the reasons on which it is based.

 

2.                                       The general meeting and the works council mayrecommend persons to the SupervisoryBoard to be nominated as a member of the Supervisory Board. The Supervisory Board shall inform them intime, when, why and in accordance withwhat profile a vacancy has to be filled in its midst. In case the stronger right of recommendation (*versterkt recht van aanbeveling*), asreferred to in paragraph 3,applies, the Supervisory Board shall announce that as well.

 

3.                                       With regard to one third of the total numberof members of the Supervisory Board,the Supervisory Board shall put a person recommended by the works council on the nomination, unless theSupervisory Board objects to the recommendation because it suspects that the recommended person shall be unsuitable for the exercise of the duties of a member ofthe Supervisory Board

 

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or that the SupervisoryBoard shall not be composed properly in case of appointmentin accordance with the recommendation. If thenumber of members of theSupervisory Board cannot be divided by three, the closest lower number that can be divided by three shall betaken into account in order to establishthe number of members of the Supervisory Board for which the stronger right of recommendation applies.

 

4.                                       A recommendation or nomination as referred toabove in this article 28 shall includethe name of the person who is recommended or nominated and the information as referred to in section 142,paragraph 3 of Book 2 of the NetherlandsCivil Code. The Supervisory Board is entitled to set a reasonable time within which all the recommendationswill have to be made.

 

The recommendation andnomination to appoint or re-appoint shall containan explanation of the reasons for theproposed appointment or re-appointment. In case of re-appointment, the performance in the past period of the candidate as a member of theSupervisory Board shall be taken into account.

 

5.                                       If the Supervisory Board objects to arecommendation as referred to in paragraph3, it shall inform the works council of its objection and state the reasons therefor. The Supervisory Board shallforthwith enter into consultation withthe works council in order to reach agreement on the recommendation. If the Supervisory Board establishes that noagreement can be reached, arepresentative of the Supervisory Board designated for that purpose shall request the Enterprise Chamber (*Ondernemingskamer*) of the Amsterdam Court of Appeal to declare the objectionwell-founded. The request shall not be filed before the lapse of four weeks after the consultation with theworks council has started. TheSupervisory Board shall put the recommended person on the nomination if the Enterprise Chamberdeclares the objection un-founded. Ifthe Enterprise Chamber declares the objection well-founded, the works council can make a new recommendationin accordance with the provision of paragraph 3.

 

6.                                       The general meeting can, by an absolutemajority of the votes cast, representing at least one third of the issued capital, reject the nomination. If ata general meeting less than onethird of the issued capital was represented, a new meeting can be convened where the nomination can be rejected by an absolute majority of the votes cast. TheSupervisory Board shall then prepare a new nomination. Paragraphs 2, 3, 4 and 5 shall apply. If the general meeting does not appoint the nominated personand does not resolve to reject thenomination, the Supervisory Board shall appoint the nominated person.

 

Section B. Decision-making in the general meeting of shareholders.

 

7.                                       The making of a recommendation as referred toin article 28 under A. as wellas the resolution to appoint, can be discussed in one and the same 

 

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general meeting ofshareholders, provided that the following provisions of thisarticle 28 under B. are observed.

 

8.                                       The agenda for the meeting shall include atleast the following items for discussion:

 

a.                                       notice of the time at which a vacancy willarise and the reason for its occurrenceand in accordance with what profile the vacancy must be filled;

 

b.                                      opportunity for the general meeting to make arecommendation;

 

c.                                       on the condition precedent that norecommendation for another person shallbe made by the general meeting: the announcement by the Supervisory Board of the name of the person it wishes tonominate;

 

d.                                      on the condition precedent that norecommendation for another person shallbe made by the general meeting: proposal to appoint the proposed person.

 

9.                                       The name of the person whom the SupervisoryBoard wishes to nominate and theinformation as referred to in paragraph 4 shall be stated in the convocation of the general meeting of shareholders or inan agenda which is madeavailable at the company’s office for inspection, in which case the convocation shall refer to this agenda.

 

10.                                 The convocation of this meeting may not takeplace until it is certain:

 

a.                                       that the central works council has eithermade a recommendation as referredto in paragraph 2 or, when applicable, - paragraph 3, or has given notice that it shall not make such recommendation,or that a reasonable period oftime in which to make a recommendation as determined by the Supervisory Board, has lapsed; and

 

b.                                      if the central works council made arecommendation as referred to in paragraph2 or, - where applicable - in paragraph 3, the Supervisory Board has nominated the recommended person.

 

Article 29. Retirement. Suspension. Dismissal.

 

1.                                       A member of the Supervisory Board shallresign no later than at the time of closure of the general meeting following the day four years after hislast appointment and bequalified for re-appointment, in accordance with the provisions of article 28.

 

A member of the SupervisoryBoard shall be dismissed and suspended inthe manner defined in section 161, paragraphs 2 and 3 of Book 2 of the Netherlands Civil Code.

 

2.                                       The members of the Supervisory Board shallresign periodically in accordance witha rotation plan to be drawn up by the Supervisory Board. An alteration to the rotation plan cannot imply that anincumbent member of the SupervisoryBoard shall resign against his will before the period for which he was appointed has expired.

 

3.                                       The general meeting can, by an absolutemajority of the votes cast, representing

 

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at least one third of theissued capital, take a vote of no confidencein (*‘hetvertrouwen opzeggen in’*) the Supervisory Board. The reasons for theresolution must be stated. Theresolution cannot regard members of the Supervisory Board appointed by the Commercial Division ofthe Amsterdam Court of Appeal inaccordance with paragraph 5.

 

4.                                       A resolution referred to in paragraph 3 shallnot be passed until after the Boardof Management has notified the central works council of the proposed resolution and the reasons therefore. Thenotification shall be made at leastthirty days before the general meeting of shareholders is held at which the proposal is discussed. If the centralworks council defines a position on the proposal, the Board of Management shall inform the Supervisory Boardand the general meeting thereof. Thecentral works council can have its position explained in the general meeting of shareholders.

 

5.                                       The resolution referred to in paragraph 3shall result in the immediate resignation of the members of the Supervisory Board. In that case the Board of Management shall forthwith request theCommercial Division of the Amsterdam Court of Appeal to temporarily appoint one or more members of the Supervisory Board. The Commercial Divisionshall determine the consequences ofthe appointment.

 

6.                                       The Supervisory Board shall take action tothe effect that, within the term statedby the Commercial Division, a new Supervisory Board is constituted in accordance with the provisions of article28.

 

Article 30. Remuneration.

 

The remuneration for each member of the Supervisory Board shall bedeterminedby the generalmeeting.

 

Article 31. Duties and powers.

 

1.                                       The duties of the Supervisory Board shall bethe supervision of the policy of theBoard of Management and the general course of affairs of the company and the enterprise connected therewith. Itshall assist the Board of Management with advice. In the performance of their duties the members of theSupervisory Board shall beguided by the interest of the company and the enterprise connected therewith.

 

2.                                       The Board of Management shall provide theSupervisory Board in good timewith the information necessary for the performance of its duties.

 

3.                                       At least once a year, the Board of Managementshall inform the Supervisory Boardof the main aspects of the strategic policy, the general and financial risks and the company’s management andauditing systems in writing.

 

4.                                       The Supervisory Board shall have access tothe company’s buildings and premisesand shall be entitled to inspect the company’s books and documents. The Supervisory Board may appoint one or morepersons from among its number oran expert to exercise these powers. The Supervisory

 

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Board may also otherwisecall upon the assistance of experts. The costs ofsuch experts shall be borne by the company.

 

Article 32. Working procedures and decision-making. Committees.

 

1.                                       The Supervisory Board shall appoint fromamong its midst a chairman and oneor more vice-chairmen who shall substitute for the former in his absence. Theboard shall appoint a secretary from among its midst or from outside and shall make a provision for thesubstitution for the secretary.

 

2.                                       In the absence of the chairman and thevice-chairman (vice-chairmen) at a meeting,the meeting itself shall designate a chairman.

 

3.                                       The Supervisory Board shall meet whenever thechairman, or two other membersof the Supervisory Board, or the Board of Management so requests.

 

4.                                       Minutes shall be kept by the secretary of theproceedings of meetings of the SupervisoryBoard. The minutes shall be adopted by the Supervisory Board at the same meeting or at a subsequentmeeting.

 

5.                                       All resolutions of the Supervisory Boardshall be passed by absolute majority of the votes cast.

 

6.                                       The Supervisory Board may only pass validresolutions at a meeting if the majorityof the members of the Supervisory Board are present or represented at the meeting.

 

7.                                       A member of the Supervisory Board may havehimself represented by a fellow memberholding a written proxy. By ‘written proxy’ shall be understood a proxy transmitted by any accepted means ofcommunication and received inwriting. A member of the Supervisory Board may not act as proxy on behalf of more than one fellow member of theSupervisory Board.

 

8.                                       The Supervisory Board may also adoptresolutions without holding a meeting, provided the proposal in question has been submitted to all members of the Supervisory Board and none has objectedto this form of decision-making.

 

A report shall be drawn upby the secretary of a resolution adopted in this way, enclosing the replies received, andshall be signed by the chairman and the secretary. In the minutes of the subsequent meeting of theSupervisory Board, this form ofdecision-making shall be stated.

 

9.                                       The Supervisory Board shall meet togetherwith the Board of Management wheneverthe Supervisory Board or the Board of Management so requests.

 

10.                                 The Supervisory Board shall draw up by-lawscontaining further regulations onthe procedure for holding meetings and decision-making by the Supervisory Board, and its operating procedures.

 

11.                                 The Supervisory Board may, without prejudiceto its responsibilities, designate oneor more committees from among its members, who shall have the responsibilities specified by the SupervisoryBoard.

 

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12.                                 Thecomposition of any such committee shall be determined by the Supervisory Board.

 

13.                                 Thegeneral meeting may additionally remunerate the members of the committee(s) fortheir services.

 

Article 33.Indemnity.

 

1.                                       Thecompany shall indemnify and hold harmless each member of the Board ofManagement and each member of the Supervisory Board (each of them, for thepurpose of this article 33 only, the “Director”) against any and allliabilities, claims, judgements, fines and penalties (the “Claims”), incurredby the Director as a result of any threatened, pending or completed action,investigation or other proceeding, whether civil, criminal or administrative (the“Action”), brought by any party other than the company itself or its groupcompanies, in relation to acts or omissions in or related to his capacity as aDirector. Claims will include derivative actions brought on behalf of thecompany or its group companies against the Director and claims by the company(or one of its group companies) itself for reimbursement for claims by thirdparties on the ground that the Director was jointly liable toward that thirdparty in addition to the company.

 

2.                                       TheDirector will not be indemnified with respect to Claims in so far as they relateto the gaining in fact of personal profits, advantages or remuneration to whichhe was not legally entitled, or if the Director shall have been adjudged to beliable for wilful misconduct (*opzet*) orintentional recklessness (*bewuste roekeloosheid*).

 

3.                                       Anyexpenses (including reasonable attorneys’ fees and litigation costs) (together the“Expenses”) incurred by the Director in connection with any Action, shall bereimbursed by the company, but only upon receipt of a written undertaking bythat Director that he shall repay such Expenses if a competent Court shoulddetermine that he is not entitled to be indemnified. Expenses shall be deemedto include any tax liability which the Director may be subject to as a resultof his indemnification.

 

4.                                       Alsoin case of an Action against the Director by the company itself or its groupcompanies, the company will advance to the Director his reasonable attorneys’fees and litigation costs but only upon receipt of a written undertaking bythat Director that he shall repay such fees and costs if a competent Courtshould resolve the Action in favour of the company rather than the Director.

 

5.                                       TheDirector shall not admit any personal financial liability vis-à-vis third parties,nor enter into any settlement agreement, without the company’s prior writtenauthorisation. The company and the Director shall use all reasonable endeavoursto cooperate with a view to agreeing on the defence of any Claims but in theevent that the company and the Director would fail to

 

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reach suchagreement, the Director shall comply with all directions given by the companyin its sole discretion.

 

6.                                       Theindemnity contemplated by this article 33 shall not apply to the extent Claimsand Expenses are reimbursed by insurers.

 

7.                                       Incase of amendment of this article 33, the indemnity provided thereby shallnevertheless continue to apply to Claims and/or Expenses incurred in relationto the acts or omissions by the Director during the periods in which thisclause was in effect.

 

8.                                       Theprovisions of this Article 33 shall apply to the members of the Board of Managementand the members of the Supervisory Board in office as such on twenty-first dayof April two thousand and five, as well as the members of the Board of Managementand the members of the Supervisory Board who are appointed as such after thisdate.

 

CHAPTER X

 

Financialstatements and annual report. Profit.

 

Article 34.Financial year. Financial statements and annual report. Adoption.

 

1.                                       Thefinancial year shall coincide with the calendar year.

 

2.                                       Eachyear, within five months after the end of the financial year, save where thisperiod is extended by a maximum of six months by the general meeting on accountof special circumstances, the Board of Management shall prepare the financialstatements and shall lay them open for inspection by the shareholders at theoffice of the company. Within that period the Board of Management shall alsopresent the annual report.

 

3.                                       Withinthe period referred to in paragraph 2, the Board of Management shall send thefinancial statements to the central works council as well.

 

4.                                       Thefinancial statements shall be signed by the members of the Board of Managementand of the Supervisory Board. If the signature of one or more of them is missing,this shall be stated and reasons shall be given.

 

5.                                       Annually,the Supervisory Board shall prepare a report, that shall be added to thefinancial statements and the annual report. The provisions of paragraphs 2 and3 shall apply by analogy.

 

6.                                       Thegeneral meeting shall adopt the financial statements.

 

7.                                       Inthe general meeting of shareholders where the resolution to adopt the financialstatements is passed, a proposal to release the members of the Board ofManagement from liability for the exercise of the management and a proposal torelease the members of the Supervisory Board from liability for the exercise ofthe supervision of the management, insofar as the exercise of such duties isreflected in the financial statements or otherwise disclosed to the generalmeeting prior to the adoption of the financial statements, shall be brought upfor discussion as two separate items. The scope of a release from liabilityshall be subject to limitations by virtue of the law.

 

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8.                                       Articles64 to 67 inclusive shall also be applicable to the financial statements and theannual report.

 

Article 35.Dividends. Reservations.

 

1.                                       Outof the profit - the surplus on the statement of income - earned in the past financialyear shall first be paid, if possible, a dividend on the special share of sevenpercent (7%) of the nominal value of that share, and a dividend on thepreference shares B of which the percentage is equal to the average of thetwelve months EURIBOR (Euro Interbank Offered Rate) – weighted to the number ofdays over which the payment occurs – increased by one (1). The dividend shallbe calculated according on a proportionate basis if the preference shares Binvolved are issued in the course of the financial year. If the twelve monthsEURIBOR is no longer fixed at any time, the dividend percentage shall be equalto the arithmetic mean of the average effective yields of the fivelongest-dated state loans, as calculated by the Central Bureau of Statisticsand published in the Official Price List, over the last twenty stock-exchangebusiness days before the date of issue, plus a premium, to be determined by theBoard of Management and subject to the approval of the Supervisory Board, of atleast one-quarter of a percentage point and at most one percentage point,depending on the prevailing market conditions.

 

If thedistribution on the preference shares B for any financial year as referred toin the preceding paragraph cannot be made or cannot be made in full because theprofit does not permit it, the deficit shall be distributed at the expense ofthe distributable part of the shareholders’ equity.

 

The dividendon preference shares B shall be calculated on the paid-up part of the nominalvalue.

 

2.                                       TheBoard of Management shall then subject to the approval of the Supervisory Boarddetermine what part of the profit remaining after the application of paragraph1 is to be appropriated to reserves.

 

3.                                       Thepart of the profit remaining after the appropriation to reserves shall be atthe disposal of the general meeting, provided that no further distributions canbe made on the special share and on the preference shares B.

 

4.                                       Ifa loss is sustained in any year, no dividend shall be distributed for that year.No dividend may be paid in subsequent years until the loss has been compensatedby profits. The general meeting may, however, resolve on a proposal of theBoard of Management which has received the approval of the Supervisory Board tocompensate the loss out of the distributable part of the shareholders’ equityor also to distribute a dividend out of the distributable part of theshareholders’ equity.

 

5.                                       TheBoard of Management may resolve to distribute an interim dividend. Such aresolution shall be subject to the approval of the Supervisory Board.

 

6.                                       Article68 shall also be applicable to distributions to shareholders.

 

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Article 36.Distributions in shares and distributions charged to the reserves.

 

1.                                       TheBoard of Management may resolve that all or part of the dividend on ordinaryshares shall be paid in shares in the company instead of cash. The resolutionof the Board of Management thereto shall be subject to the approval of theSupervisory Board and of the holder of the special share.

 

2.                                       Thegeneral meeting may resolve, on a proposal of the Board of Management which hasreceived the approval of the Supervisory Board, and the holder of the specialshare, to charge distributions to holders of ordinary shares to the distributablepart of the shareholders’ equity. All or part of these distributions may alsobe paid in shares in the company instead of cash.

 

Article 37.Payments.

 

An announcement of dividendsand other distributions becoming payable shall be made in accordance witharticle 46.

 

CHAPTER XI

 

Generalmeetings of shareholders.

 

Article 38.Annual meeting.

 

1.                                       Theannual meeting shall be held each year within six months after the end of thefinancial year.

 

2.                                       Theagenda for that meeting shall include the following items:

 

a.                                       theannual report;

 

b.                                      adoptionof the financial statements;

 

c.                                       releasefrom liability of members of the Board of Management;

 

d.                                      releasefrom liability of members of the Supervisory Board;

 

e.                                       determinationof dividend;

 

f.                                         ifapplicable, appointment of members of the Supervisory Board and notification ofintended appointments of members of the Board of Management, and of expectedvacancies in the Supervisory Board;

 

g.                                      anyother proposals put forward by the Supervisory Board or the Board of Managementand announced pursuant to article 40, such as a proposal to designate a bodycompetent to issue shares or to authorise the Board of Management to cause thecompany to acquire its own shares or depositary receipts therefor.

 

Article 39.Other meetings.

 

Other general meetings ofshareholders shall be held as often as the Board of Management or theSupervisory Board considers it necessary, without prejudice to the provisionsof sections 110, 111 and 112 of Book 2 of the Netherlands Civil Code.

 

Article 40.Notice convening a meeting. Agenda.

 

1.                                       Generalmeetings of the shareholders shall be convened by the Supervisory Board or theBoard of Management.

 

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2.                                       Noticeconvening a meeting shall be given no later than on the fifteenth day prior tothat of the meeting.

 

3.                                       Thenotice convening a meeting shall state the subjects to be considered or it shallstate that the shareholders may inspect the same at the office of the company,without prejudice to the provisions of article 63, paragraph 6, and article 47,paragraph 3.

 

4.                                       Thenotice convening a meeting shall state the requirements for admittance to themeetings as described in article 44.

 

5.                                       Thenotice convening a meeting shall be given in the manner stated in article 46.

 

6.                                       Mattersnot stated in the notice convening the meeting may be further announced, subjectto the time limit pertaining to the convocation of meetings, in the mannerstated in article 46.

 

7.                                       Unlessthe notice convening the meeting includes the contents of all the documentswhich according to the law or the articles of association shall be available toshareholders for inspection in connection with the meeting to be held, thesedocuments shall be made available to shareholders free of charges in Amsterdamat an admitted establishment (*toegelaten instelling*)by Euronext Amsterdam N.V., to be designated in the notice convening the meetingor at another payment office as referred to in the Rules relating to Securities.

 

8.                                       Holdersof shares representing alone or in the aggregate at least one percent (1%) ofthe issued capital, or alone or in the aggregate, at least a value of fiftymillion euros (EUR 50,000,000) according to the Official Price List, have theright to request to the Board of Management or the Supervisory Board to placeitems on the agenda of the general meeting of shareholders. These requests haveto be honoured by the Board of Management or the Supervisory Board on thecondition:

 

a.                                       thatgrave interests of the company do not dictate otherwise; and

 

b.                                      thatthe request has been filed in writing with the Board of Management or thechairman of the Supervisory Board, at least sixty days prior to the date of thegeneral meeting of shareholders.

 

9.                                       Theterm “shareholders” in this article shall include usufructuaries and pledgeesin whom the voting rights on shares are vested.

 

Article 41.Venue of meetings.

 

The general meetings ofshareholders shall be held in Groningen, Amsterdam or The Hague.

 

Article 42.Chairmanship.

 

1.                                       Thegeneral meetings of shareholders shall be presided over by the chairman of theSupervisory Board or, in his absence, by a vice-chairman of that board; in theevent that the latter is (are) also absent, the members of the SupervisoryBoard present shall appoint a chairman from their midst.

 

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TheSupervisory Board may appoint another chairman for a general meeting ofshareholders.

 

2.                                       Ifthe chairman of a meeting has not been appointed in accordance with paragraph1, the meeting itself shall appoint a chairman. Until that moment, a member ofthe Board of Management designated thereto by the Board of Management shallsubstitute as chairman.

 

Article 43.Minutes.

 

1.                                       Minutesshall be kept of the proceedings of each general meeting of shareholders by asecretary appointed by the chairman. The minutes shall be adopted by thechairman and the secretary and shall be signed by them in witness thereof.

 

2.                                       TheSupervisory Board or the chairman may determine that a notarial record shall bemade of the proceedings of the meeting. Such a record shall be cosigned by thechairman.

 

Article 44.Rights to attend meetings. Admission.

 

1.                                       Eachshareholder who is entitled to vote and each usufructuary or pledgee of shares inwhom voting rights are vested shall be entitled to attend the general meetingof shareholders, to address the meeting and to exercise his voting rights. Inthe case of ordinary registered shares, the intention to attend the meetingmust be notified to the Board of Management in writing. Such notification mustbe received by the Board of Management not later than on the date stated in thenotice convening the meeting.

 

2.                                       Therights to take part in the meeting pursuant to paragraph 1 may be exercised bya person holding a written or electronic proxy, provided that in the case ofordinary shares such proxy has been received by the Board of Management nolater than on the date stated in the notice convening the meeting.

 

3.                                       Ifthe voting rights in respect of a share are vested in the usufructuary or pledgeeinstead of in the shareholder, the shareholder shall also be entitled to attendthe general meeting of shareholders and to address the meeting, provided thatin the case of ordinary registered shares the Board of Management has beennotified of the shareholder’s intention to attend the meeting in accordancewith paragraph 1. Paragraph 2 shall be applicable *mutatis mutandis*.

 

4.                                       Withrespect to the voting rights and the right to participate in meetings attached toordinary bearer shares, the company shall apply by analogy the provisions ofSections 88 and 89 Book 2 of of the Dutch Civil Code and recognise as ashareholder the person named in a written statement from a Necigef-participantas a Necigef-beneficiary, entitled to a given number of ordinary bearer sharesbelonging to such Necigef-participant’s collective deposit of ordinary bearershares in the company and remainaining thus entitled until the close of themeeting.

 

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A holder ofordinary bearer shares or his proxy shall only have admittance to the meetingif the foregoing statement has been deposited not later than on the date statedin the notice convening the meeting at the place mentioned therin. The receiptissued once such statement has been deposited shall give admittance to themeeting. The foregoing provisions of this paragraph 4 shall apply *mutatis mutandis* to each pledgee or usufructuary of ordinarybearer shares in whom voting rights are vested or their proxy.

 

5.                                       TheBoard of Management is authorised to determine in the notice convening themeeting that for all or certain types of shares, for the application of section117, subsections 1 and 2, of Book 2 of the Netherlands Civil Code, the personsthat are entitled to attend and address meetings and to vote are the personswho have those rights on a determined day (“date of registration”) and areentered as such in a register (or one or more parts thereof) that has beendesignated for that purpose by the Board of Management, irrespective of who islegally entitled to those shares or depositary receipts for those shares at thetime of the meeting. In this matter the provisions of paragraph 1 to 4 alsoapply similarly on the understanding that the statement of the Necigef-participantas referred to in paragraph 4 must show that on the relevant date ofregistration the person named is the participant in the number of sharesspecified.

 

6.                                       Thedate stated in the notice convening the meeting as referred to in paragraphs 1,2, 4 and 5 shall not be earlier than the seventh day before that of the meetingor at some time, so much earlier as will be allowed by law.

 

7.                                       Eachnominal amount of twenty-four Eurocent (EUR 0.24) shall bear the entitlement tocast one vote.

 

8.                                       Eachperson entitled to vote or his proxy shall sign the attendance list.

 

9.                                       Themembers of the Supervisory Board and the members of the Board of Managementshall have an advisory vote at the general meeting of shareholders.

 

10.                                 Thechairman shall decide whether persons other than those who shall be admitted inaccordance with the above provisions of this article shall be admitted to themeeting.

 

Article 45.Voting.

 

1.                                       Allresolutions for which no greater majority is required by law or the articles ofassociation shall be passed by an absolute majority of the votes cast.

 

2.                                       Ifin an election of persons an absolute majority is not obtained, there shall bea second free ballot. If again an absolute majority is not obtained, further ballotsshall be held until either one person obtains an absolute majority or there isa tie in a ballot between two persons.

 

Such furthervoting (not including the second free ballot) shall be between the personsvoted upon in the preceding ballot with the exclusion of the person obtainingthe lowest number of votes in that preceding ballot. If more 

 

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than oneperson obtained the lowest number of votes in the preceding ballot, lots shallbe drawn to decide which of those persons is to withdraw from the next ballot.In the event of a tie in a ballot between two persons, lots shall be drawn todecide which of the two is elected.

 

3.                                       Inthe event of a tie in a vote on matters other than the election of persons, theproposal shall be rejected.

 

4.                                       Allvoting shall be oral. The chairman may, however, determine that voting shall bein writing. In the case of the election of persons, any person present who isentitled to vote may demand that voting shall be in writing. Voting in writingshall take place by means of unsigned sealed ballot papers.

 

5.                                       Abstentionsand invalid votes shall be counted as not cast.

 

6.                                       Votingby acclamation shall be possible if none of the persons present and entitled tovote objects thereto.

 

7.                                       Theprovisions of article 69 shall also apply to the general meeting ofshareholders.

 

CHAPTER XII

 

Convocationsand notifications.

 

Article 46.

 

1.                                       Allnotices convening general meetings of shareholders, all announcements relatingto dividends and other distributions and all other notifications to shareholdersshall be given by publication in a nationally distributed daily newspaper andin the Official Price List, without prejudice to the provisions of article 52,paragraph 3.

 

2.                                       Theexpression “shareholders” in paragraph 1 shall include usufructuaries andpledgees in whom the voting rights on shares are vested as well as the holdersof the depositary receipts for shares as referred to in article 10.

 

3.                                       Noticeconvening general meetings of shareholders to the holder of the special shareshall be given by means of a letter.

 

CHAPTER XIII

 

Amendment ofthe articles of association, statutory merger and dissolution.

 

Article 47.Amendment of the articles of association. Merger. Demerger. Dissolution.

 

1.                                       Aresolution of the general meeting to amend the articles of association, to mergeor demerge within the meaning of Part 7 of Book 2 of the Netherlands Civil Codeor to dissolve the company may only be adopted on a proposal of the Board ofManagement which is approved by the Supervisory Board.

 

2.                                       Theapproval of the holder of the special share is required for:

 

a.                                       aresolution of the general meeting or of the Board of Management to merge ordemerge in the meaning of Part 7 of Book 2 of the Netherlands Civil Code;

 

b.                                      aresolution of the general meeting to dissolve the company;

 

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c.                                       aresolution of the general meeting to amend the articles of association if theamendment concerns:

 

•                                          article4 (Object) insofar as it relates to carrying out the concessions or licenses,

 

•                                          article5 (Authorised capital, Classes of shares), if it relates to the creation of anew class of shares or profit sharing certificates or other corporate rightswhich entitle to the result and/or capital of the company, or the cancellationof the special share or the preference shares B,

 

•                                          article12 (Competent body), insofar as it relates to the approval of the holder of thespecial share,

 

•                                          article13 (Competence to restrict or exclude the pre-emptive right), insofar as itrelates to the approval of the holder of the special share,

 

•                                          article15, paragraph 3 (Acquisition of shares in the company’s own capital), insofaras it relates to the approval of the holder of the special share,

 

•                                          article17 (Transfer of the special share),

 

•                                          article25, paragraph 4 (Approval of Board of Management resolutions), insofar as itrelates to the approval of the holder of the special share,

 

•                                          article36 (Distribution in shares and distributions charged to the reserves), insofaras it relates to the approval of the holder of the special share,

 

•                                          ingeneral: amendments which are prejudicial or detrimental to or incompatiblewith the statutory rights attached to the special share,

 

•                                          thissecond paragraph of article 47.

 

3.                                       Ifa proposal to amend the articles of association or to dissolve the company isto be put to the general meeting, this must in all cases be stated in thenotice convening the general meeting of shareholders or announcedsubsequently as referred to in article 40, paragraph 6, and, in the case of an amendmentto the articles of association, simultaneously a copy of the proposal includingthe verbatim text of the proposed amendment must be deposited for inspection atthe office of the company and must be made available free of charge toshareholders and to the persons referred to in article 46, paragraph 2, untilthe end of the meeting.

 

Article 48.Liquidation.

 

1.                                       Inthe event of dissolution of the company pursuant to a resolution of the generalmeeting, the members of the Board of Management shall be charged with theliquidation of the business of the company and the Supervisory Board with thesupervision thereof.

 

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2.                                       Duringliquidation the provisions of the articles of association shall remain in forceas far as possible.

 

3.                                       Outof the surplus remaining after settlement of the debts shall first bedistributed to the holders of the special share and the preference shares B thenominal amount paid up on these shares and any amount still owed by way ofdividend to which these shares entitle, insofar as this has not beendistributed in previous years. If the balance is not sufficient thereto, thedistribution shall be made in proportion to the amounts paid up on thoseshares. The remainder shall be distributed to the holders of ordinary shares inproportion to the aggregate nominal value of their ordinary shares.

 

4.                                       Theliquidation shall otherwise be subject to the provisions of Part 1 of Book 2 ofthe Netherlands Civil Code.

 

CHAPTER XIV

 

Statutoryrequirements.

 

Article 49.General.

 

1.                                       Thischapter sets forth the statutory requirements of a compulsory nature, containedin Book 2 of the Netherlands Civil Code as they apply to the company on thetwenty-first day of April two thousand and five. The transcription is neitherverbatim nor complete.

 

2.                                       Thesections put in brackets are sections of Book 2 of the Netherlands Civil Code.

 

Article 50.Share registers (Section 85).

 

1.                                       Eachregister shall record the date on which the shareholders acquired the shares,the date of acknowledgement or service of the instrument of transfer and theamount paid up on each share.

 

2.                                       Partof the register of holders of ordinary shares may be kept outside the Netherlandsin compliance with applicable legislation or pursuant to the rules of anexchange.

 

3.                                       Ineach register the names and addresses of persons who have a right of usufruct orpledge in respect of shares recorded therein shall be recorded, stating whichof the rights attached to the shares are vested in them pursuant to article 19,paragraph 1. The registers shall regularly be kept up-to-date. A record shallalso be made in the register of holders of preference shares B of the grant ofeach release from liability for any paying up not yet made.

 

4.                                       Uponrequest and at no cost, the Board of Management shall provide shareholders, usufructuariesand pledgees with an extract from the register in respect of their rights to ashare. If the share is subject to a right of usufruct or a right of pledge, theextract shall state the person in whom the rights referred to in article 19,paragraph 1, are vested.

 

5.                                       TheBoard of Management shall deposit the registers at the office of the companyfor inspection by the shareholders and by the usufructuaries and pledgees inwhom the rights referred to in article 19, paragraph 1, are 

 

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vested. All ofthis shall not apply to the part of the register for ordinary shares referredto in paragraph 2. The information in respect of shares which have not beenpaid up in full shall be available for public inspection; a copy or an extractof such information shall be provided at no more than cost.

 

Article 51.Issue of shares and rights to subscribe to shares (Section 96).

 

1.                                       Fora resolution of the general meeting to issue shares or to designate a corporatebody as referred to in article 12 to be valid, a prior or simultaneous resolutionof approval by each group of holders of shares of the same class whose rightsare prejudiced as a result of the issue, shall be required.

 

2.                                       Withineight days after a resolution of the general meeting to issue shares or designatea corporate body, the company shall deposit the full text of the resolution inquestion at the office of the commercial register.

 

3.                                       Withineight days after each issue of shares, the company shall report the same to theoffice of the commercial register stating the number and class.

 

4.                                       Thepreceding provisions of this article shall apply *mutatismutandis* to the granting of rights to subscribe to shares, but shallnot apply to the issue of shares to a person exercising a previously acquiredright to subscribe to shares.

 

Article 52.Issue terms. Pre-emptive rights (Sections 96a and 97).

 

1.                                       Ifan announcement is made as to the amount to be issued and only a lesser amountcan be placed, the latter amount shall be placed only if the conditions ofissue expressly provide therefor.

 

2.                                       Eachholder of ordinary shares shall have a pre-emptive right on any issue ofordinary shares pro rata to the aggregate amount of his ordinary shares. Heshall, however, have no pre-emptive right in respect of shares issued for anon-cash contribution. He shall also have no pre-emptive right in respect ofshares issued to employees of the company or of a group company.

 

3.                                       Noticeof any issue in respect of which there is a pre-emptive right and the periodduring which such right can be exercised shall be published in the StateGazette (*Staatscourant*) and in a nationallydistributed daily newspaper.

 

4.                                       Thepre-emptive right may be exercised during a period of at least two weeks afterthe date of publication of such notice in the State Gazette.

 

5.                                       Ifa proposal to restrict or exclude the pre-emptive right is put to the general meeting,the reasons for the proposal and the selection of the intended issue priceshall be explained in writing.

 

6.                                       Ifless than one-half of the issued capital is represented at the meeting, amajority of at least two-thirds of the votes cast shall be required for aresolution of a general meeting to restrict or exclude the pre-emptive right orto designate a corporate body authorised to do so.

 

Within eightdays after the resolution, the full text thereof shall be deposited at theoffice of the commercial register.

 

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7.                                       Onthe grant of rights to subscribe to ordinary shares, the holders of ordinary sharesshall have a pre-emptive right; paragraphs 2 to 6 inclusive shall apply *mutatis mutandis*. Shareholders shall have no pre-emptiveright in respect of shares to be issued to a person who exercises a previouslyacquired right to subscribe to shares.

 

Article 53.Paying up on shares (Sections 80, 80a).

 

1.                                       Personswho are professionally engaged in the placing of shares for their own accountmay be permitted, by agreement, to pay less than the nominal amount for theshares subscribed to by them, provided that not less than ninety-four percent(94%) of such amount is paid in cash on subscription to the shares at thelatest.

 

2.                                       Payingup in cash for shares must be made in Netherlands currency, unless the companyagrees to paying up in a foreign currency.

 

3.                                       Ifpaying up on shares is made in a foreign currency, the obligation to pay up shallbe fulfilled to the extent of the sum for which the amount being paid up isfreely convertible into Netherlands currency. The basis of determination shallbe the rate of exchange on the date of paying up. The company may demand thatpaying up is made at the rate of exchange on a fixed date within two monthsbefore the last date on which paying up must be made, provided the shares ordepositary receipts shall, upon issue, be listed without delay on an exchangeoutside the Netherlands.

 

4.                                       Withintwo weeks after paying up is made in a foreign currency, the company shalldeposit at the office of the commercial register a statement as referred to insection 93a, paragraph 6 of Book 2 of the Netherlands Civil Code.

 

Article 54.Non-cash contribution (Sections 80b and 94b).

 

1.                                       Ifa non-cash contribution has been agreed, a valuation of such contribution oneconomic standards must be possible. A right to the performance of work orservices may not be contributed.

 

2.                                       Anon-cash contribution must be made without delay after subscription to a share.

 

3.                                       Thecompany shall prepare a description of the non-cash contribution, stating thevalue attributed thereto and the methods of valuation employed, as prescribedby section 94a, subsection 1 of Book 2 of the Netherlands Civil Code. Thedescription must relate to the condition of the contribution on a date noearlier than five months before the date on which the shares are subscribed to.The members of the Board of Management shall sign the description; if thesignature of one or more of them is missing this shall be stated, giving thereason therefor.

 

4.                                       Anauditor must issue a certificate in respect of the description of thecontribution pursuant to section 94a, paragraph 2 of Book 2 of the Netherlands CivilCode.

 

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5.                                       Adescription and auditor’s certificate shall not be required in the casereferred to in section 94b, paragraph 3 of Book 2 of the Netherlands Civil Code.

 

6.                                       Withineight days after the date on which the shares were subscribed to, the auditor’scertificate in respect of the contribution or a copy thereof shall be depositedat the office of the commercial register stating the names of the contributorsand the amount of the part of the issued capital paid up in that manner.

 

7.                                       Theprovisions of paragraphs 3, 4 and 6 shall not apply to the extent that the contributionconsists of shares or depositary receipts issued for shares or rightsconvertible into shares or profit sharing certificates of another legal entityfor which the company has made a public offer, provided such securities or partthereof are listed on a stock exchange or are regularly traded over-the-counter.

 

Article 55.Subscription by the company to its own shares to be issued (Section 95).

 

1.                                       Thecompany may not subscribe to its own shares to be issued.

 

2.                                       Sharesto which the company subscribes in breach of the preceding paragraph shalldevolve on the date of subscription on the members of the Board of Managementjointly. Each of them shall be jointly and severally liable for the paying upin full on such shares with statutory interest as from that date.

 

3.                                       Ifa person subscribes to a share in his own name but for the account of the company,he shall be deemed to subscribe to the same for his own account.

 

Article 56.Acquisition by the company of its own shares or depositary receipts therefor(Section 98).

 

1.                                       Theacquisition by the company of shares in its capital which are not fully paid upor depositary receipts therefor shall be null and void.

 

2.                                       Forthe purposes of article 15, paragraph 1 sub a, the amount of the shareholders’ equityaccording to the last adopted balance sheet shall be determined less thepurchase price of shares in the capital of the company or depositary receiptstherefor and distributions to others from profits or reserves due by it and itssubsidiaries after the balance sheet date. If more than six months have elapsedsince the end of the financial year without the financial statements beingadopted, then an acquisition in accordance with article 15, paragraph 1, shallnot be permitted.

 

3.                                       Anacquisition for consideration can only take place if the general meeting hasauthorised the Board of Management thereto. This authorisation shall remainvalid for not more than eighteen months.

 

The generalmeeting must specify in the authorisation the number of shares or depositaryreceipts therefor which may be acquired, the manner in which they may beacquired and the limits within which the price must be set.

 

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4.                                       Noauthorisation as referred to in the preceding paragraph shall be required forthe acquisition of shares or depositary receipts therefor as referred to in article15, paragraph 2. Such shares or depositary receipts therefor must be listed onan exchange.

 

5.                                       Article15 paragraph 1 and the paragraphs 1, 2 and 3 of this article shall not apply toshares which the company acquires by universal succession of title.

 

Article 57.Consequences of wrongful acquisition (Section 98a).

 

1.                                       Anacquisition of shares in breach of article 15, paragraph 1 and article 56, paragraphs2 and 3 shall be null and void. The members of the Board of Management shall bejointly and severally liable to a bona fide transferor who sustains any loss asa result of such nullity.

 

2.                                       Bearershares or depositary receipts for shares which the company has acquired inbreach of article 15, paragraph 1 and article 56, paragraphs 2 and 3, shall,simultaneously with the acquisition, devolve on the members of the Board ofManagement jointly. Each of them shall be jointly and severally liable tocompensate the company for the purchase price and the statutory interest thereonas from such date.

 

3.                                       Thecompany may, jointly with its subsidiaries, hold shares in its capitalexceeding one-tenth of the issued share capital for no more than three yearsafter it has acquired its own shares or depositary receipts therefor for noconsideration or by universal succession of title; its own shares or depositaryreceipts therefor which it holds as pledgee shall be included in suchcalculation. Any shares or depositary receipts held by the company in excess ofthe amount permitted shall devolve on the members of the Board of Management jointlyat the end of the last day of such three-year period. Each of them shall bejointly and severally liable to compensate the company for the value of theshares or depositary receipts at such date with statutory interest as from suchdate.

 

4.                                       Thepreceding paragraph shall apply *mutatis**mutandis* to each of its own shares or depositary receiptstherefor which is not fully paid up, which has been acquired by the company byuniversal succession of title and which it has not disposed of or cancelledwithin three years thereafter.

 

5.                                       Thethird paragraph shall apply *mutatis mutandis*to each of its own shares or depositary receipts therefor which the company hasacquired pursuant to paragraph 2 of article 15 without the authorisation of thegeneral meeting and which it holds for one year.

 

Article 58.Acquisition for the company’s account (Section 98b).

 

If a third party, in its ownname, acquires shares in the capital of the company or depositary receiptstherefor for the company’s account, it must immediately transfer the same tothe company against payment. The second paragraph of article 57 shall apply *mutatis mutandis*.

 

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Article 59.Financing and guarantees (Section 98c).

 

1.                                       Thecompany may not grant loans, provide collateral, guarantee the price, binditself jointly and severally or otherwise with or for third parties for the purposeof the subscription to or acquisition of shares in its own capital or depositaryreceipts therefor by third parties. This prohibition shall also extend to itssubsidiaries.

 

2.                                       Thisprohibition shall not apply if shares or depositary receipts are acquired by orfor the account of employees of the company or of a group company. 

 

Article 60.Subsidiaries (Sections 98, 98c and 98d).

 

1.                                       Asubsidiary may not, for its own account, subscribe or cause the subscription toshares in the capital of the company. Subsidiaries may only acquire or causethe acquisition of such shares or depositary receipts therefor for their ownaccount insofar as the company itself may acquire its own shares or receiptstherefor pursuant to articles 15 and 56, without prejudice to the provisions ofparagraph 5 of article 57.

 

2.                                       Inthe event of a breach of the preceding paragraph, the members of the Board ofManagement shall be jointly and severally liable to compensate the subsidiaryfor the purchase price with statutory interest thereon as from the date of thesubscription to or acquisition of the shares or depositary receipts therefor.Payment of the compensation shall be made against the transfer of such sharesor depositary receipts.

 

A member ofthe Board of Management need not pay any compensation for the purchase price ifhe can prove that the company cannot be held responsible for such subscriptionor acquisition.

 

3.                                       Asubsidiary may,

 

a.                                       afterit has become a subsidiary, or

 

b.                                      after,as a subsidiary, it has acquired shares or depositary receipts therefor in thecapital of the company for no consideration or by universal succession oftitle,

 

not jointlywith the company and its other subsidiaries hold or cause to be held for itsown account shares or depositary receipts constituting more than one-tenth ofthe issued capital for no more than three years. The members of the Board ofManagement shall be jointly and severally liable to compensate the subsidiaryfor the value of any shares or depositary receipts in excess of the permittedamount which it holds or causes to be held at the end of the last day of suchthree years, with statutory interest thereon as from that date onwards. Paymentof the compensation shall be made against the transfer of the shares ordepositary receipts. A member of the Board of Management need not pay suchcompensation if he can prove that the company cannot be held responsible forthe fact that the shares or depositary receipts are still being held.

 

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Article 61.Pledge of the company’s own shares or depositary receipts therefor (Section89a).

 

The company may accept a pledgeof its own shares or depositary receipts therefor only if:

 

a.                                       theshares to be pledged are fully paid up,

 

b.                                      thenominal amount of its own shares and the depositary receipts therefor to bepledged to it and of those already held and pledged to it do not together amountto more than one-tenth of the issued capital and,

 

c.                                       thegeneral meeting has approved the pledge agreement.

 

Article 62.Voting rights in respect of the company’s own shares (Sections 118 and 24d).

 

1.                                       Novote may be cast at a general meeting of shareholders in respect of a sharebelonging to the company or a subsidiary thereof or in respect of a share forwhich either of them holds the depositary receipts.

 

The votingrights of usufructuaries and pledgees of shares belonging to the company andits subsidiaries shall, however, not be excluded if the usufruct or pledge wasestablished before the share became the property of the company or a subsidiarythereof. No vote may be cast by the company or a subsidiary thereof in respectof a share to which it has a right of usufruct or pledge.

 

2.                                       Whendetermining the extent to which the shareholders vote, are present or arerepresented or to which the share capital is contributed or represented, noaccount shall be taken of shares in respect of which the law provides that novote may be cast.

 

Article 63.Reduction of capital (Sections 99 and 100).

 

1.                                       Aresolution of the general meeting to reduce the capital shall designate the sharesto which the resolution applies and shall make provisions for theimplementation of the resolution.

 

2.                                       Anyreduction of the nominal amount of the shares without repayment and without arelease of the obligation to pay up must be made proportioned to all shares ofthe same class. Such requirement of proportionality may be waived if allshareholders concerned so agree.

 

3.                                       Anypartial repayment on shares or a release of the obligation to pay up must bemade proportional to all shares concerned. Such requirement of proportionalitymay be waived if all shareholders concerned so agree.

 

4.                                       Aresolution of the general meeting to reduce the capital shall require a prior orsimultaneous resolution of approval by each group of shareholders of the sameclass whose rights are prejudiced.

 

5.                                       Aresolution of the general meeting to reduce the capital shall require a majorityof at least two-thirds of the votes cast if less than one-half of the issued capitalis represented at the meeting. This provision shall apply *mutatis mutandis*to a resolution as referred to in paragraph 4.

 

6.                                       Theconvening notice or further announcement as referred to in article 40, paragraph6, in respect of a general meeting of shareholders at which a resolution

 

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referred to inthis article is to be taken shall state the object of the reduction of capitaland the manner of implementation. 

 

Simultaneously,a copy of the proposal to reduce the capital, containing the proposed amendmentverbatim, must be deposited at the office of the company for inspection by andcopies must be made available free of charge to shareholders and holders ofdepositary receipts, until the end of the meeting.

 

7.                                       Theresolutions of the general meeting referred to in this article shall bedeposited at the office of the commercial register and a notice of the deposit shallbe published in a nationally distributed daily newspaper.

 

8.                                       Thecompany must provide security for, or otherwise guarantee, the payment of theclaim of any creditor who demands the same, failing which the oppositionreferred to in the following paragraph shall be upheld. This shall not apply ifthe payment of the creditor’s claim is sufficiently secured or if the financialcondition of the company provides sufficient security that the claim shall bepaid.

 

9.                                       Aresolution to reduce the issued capital shall not take effect as long asopposition may be instituted as referred to in section 100, paragraph 3 of Book2 of the Netherlands Civil Code. If opposition has been instituted on time, theresolution shall take effect only upon the withdrawal of the opposition or uponan order setting aside the opposition becoming enforceable. The deed ofamendment of the articles of association required for the reduction of the capitalmay not be executed prior thereto.

 

10.                                 Nosecurity as referred to in section 100, paragraph 4, of Book 2 of the NetherlandsCivil Code needs to be provided if the company, on account of losses incurred,reduces its capital to an amount which is not less than its shareholders’equity, in which case the resolution shall take immediate effect.

 

Article 64.Financial statements and annual report (Section 101 and Part 9 of Book 2 of theNetherlands Civil Code).

 

1.                                       Thefinancial statements shall be signed by the members of the Board of Managementand the members of the Supervisory Board; if one or more of their signatures ismissing, this shall be stated, giving the reasons therefor.

 

2.                                       Part9 of Book 2 of the Netherlands Civil Code shall also apply to the financial statementsand the annual report.

 

Article 65.Auditor (Section 393).

 

1.                                       Thecompany shall assign an auditor to audit the financial statements.

 

2.                                       Thegeneral meeting is empowered to make such assignment. If no such assignment ismade by that meeting, the Supervisory Board or, if there are no members of theBoard in office or if it fails to make an assignment, the Board of Managementshall be empowered to do so.

 

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The assignmentmay be withdrawn at any time by the general meeting and by the person who madethe assignment; assignments made by the Board of Management may also bewithdrawn by the Supervisory Board.

 

3.                                       Theauditor shall report on his audit to the Supervisory Board and the Board ofManagement.

 

4.                                       Theauditor shall convey the results of his audit in a report attesting to the financialstatements giving a true and fair view.

 

5.                                       Thefinancial statements may not be adopted if the general meeting has been unableto take cognisance of the auditor’s report, unless section 393, paragraph 6 ofBook 2 of the Netherlands Civil Code has been applied.

 

Article 66.Deposition at the office of the company (Section 102).

 

1.                                       Thefinancial statements as prepared, the annual report and the information to beadded pursuant to section 392, paragraph 1 of Book 2 of the Netherlands CivilCode must be available at the office of the company from the date of noticeconvening the annual meeting. Shareholders and holders of depositary receiptsmay inspect the documents there and obtain a copy thereof free of charge.

 

2.                                       Untilthe deposition referred to in article 67, paragraph 1, has taken place, thedocuments, insofar as the same must be published after adoption, may also beinspected by any third party, who may obtain a copy thereof at no more thancost.

 

Article 67.Publication (Sections 103 and 394).

 

1.                                       Thefinancial statements must be published within eight days after adoption. Publicationshall be made by depositing a copy drawn up entirely in the Dutch language, orif such a text has not been prepared, a copy in French, German or English, atthe office of the commercial register which is held by the Chamber of Commerceauthorized under the 1996 Trade Register Act (*Handelsregisterwet1996*). The date of adoption must be annotated on the copy.

 

2.                                       Ifthe financial statements have not been adopted in conformity with the statutoryprovisions within seven months from the end of the financial year, the Board ofManagement shall publish the financial statements as prepared in the mannerprovided in paragraph 1 without delay; it shall be stated on the financialstatements that the same have not yet been adopted.

 

3.                                       Ifthe general meeting has extended the period for preparation of the financial statementspursuant to article 33, paragraph 2, the preceding paragraph shall take effecttwo months after the end of such extended period.

 

4.                                       Simultaneouslywith and in the same manner as the financial statements, a copy of the annualreport and of the other information referred to in section 392 of Book 2 of theNetherlands Civil Code shall be published in the same language.

 

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The precedingsentence shall not apply, except for the information referred to in paragraphsa, c, f and g of section 392, paragraph 1, if the documents are kept for publicinspection at the office of the company and a complete or partial copy thereofis obtainable on request at no more than cost. The company shall file a noticeof this fact for registration in the commercial register.

 

5.                                       Thecompany shall publish its half-yearly and quarterly figures as soon as the sameare available. This obligation shall not apply as long as such figures are madeavailable only to the members of the Board of Management and the SupervisoryBoard and, if the company has established a works council, to such workscouncil.

 

Article 68.Distributions to shareholders (Sections 103, 104 and 105).

 

1.                                       Distributionsto shareholders may only be made up to a maximum of the distributable part ofthe shareholders’ equity.

 

2.                                       Adeficit may be offset against a statutory reserve only to the extent permitted bylaw.

 

3.                                       Anydistribution of profits shall be made after the adoption of the financial statementsfrom which it appears that the same is permitted.

 

4.                                       Interimdistributions may only be made if the requirement of the first paragraph hasbeen met as evidenced by an interim statement of assets and liabilities. Thisshall relate to the condition of such assets and liabilities on a date noearlier than the first day of the third month preceding the month in which theresolution to distribute an interim dividend is published. It shall be preparedon the basis of generally accepted valuation methods. The amounts to bestatutorily reserved shall be included in such statement of assets andliabilities. It shall be signed by the members of the Board of Management; ifone or more of their signatures is missing, this shall be stated, giving thereason therefor. The statement of assets and liabilities shall be deposited atthe office of the commercial register within eight days after the day on whichthe resolution to distribute an interim dividend is published.

 

5.                                       Resolutionsto make interim and other distributions shall be published without delay.

 

6.                                       Aclaim of a shareholder in respect of a distribution shall be statutebarred on theexpiration of five years.

 

Article 69.General meetings of shareholders (Sections 13 and 117).

 

1.                                       Themembers of the Supervisory Board and the members of the Board of Managementshall, in that capacity, have an advisory vote at the general meeting of shareholders.

 

2.                                       Theruling pronounced by the chairman at the meeting in respect of the outcome of avote shall be decisive. The same shall apply to the contents of a resolutionpassed, to the extent that the vote related to a proposal not made in writing.If, however, immediately after the ruling is pronounced, its correctness

 

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is contested,another vote shall be taken if so desired by the majority of the meeting or, ifthe original vote was not taken by roll-call or by ballot, by someone presentwho was entitled to vote. As a result of such new vote, the legal consequencesof the original vote shall lapse.

 

Transitoryprovisions.

 

1.                                       Sharecertificates for bearer shares, in issue on the sixth day of December twothousand one shall, up to the same nominal amount, be registered on the NecigefGlobal Certificate against surrender of the share certificates (CF-certificates)provided with simplified dividend sheets. After the thirty-first day of Marchtwo thousand and two rights to dividends and other distributions attached tobearer shares, in issue on the sixth day of December two thousand one, can onlybe exercised if the bearer shares concerned have been surrender in accordancewith the foregoing provisions of this paragraph.

 

2.                                       TheBoard of Management can issue duplicates for documents as referred to inparagraph 1 of this article which are damaged, lost, stolen or destroyed. Forthis issuance the Board of Management may stipulate conditions including givingguarantees and charging costs to the applicant. Upon issuing duplicates theoriginal documents shall be deemed worthless vis-à-vis the company. The newdocument shall clearly state that it is a duplicate.

 

3.                                       Theprovisions of article 6 paragraph 6 shall first come into effect six monthsafter the purport of these provisions has been published in at least onenational newspaper.

 

- 0 - 0 - 0 - 0 - 0 -

 

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