Document:

<PAGE>

                               December 15, 1999

Mr. R. Blake Young
5301 Jessamine
Bellaire, TX   77401

Dear Blake:

        Set forth below are the terms of your employment (the "Agreement")
with Dynegy Inc. (hereinafter referred to collectively as "Dynegy" or the
"Company").

        1.      TITLE AND DUTIES

                Your title shall be Senior Vice President and Chief
Information Officer, Dynegy Inc. You shall have such duties as may be
delegated from time to time by your immediate supervisor.  You will be
employed at Dynegy's headquarters in Houston, Texas.  You shall devote your
full time, energy and skill to the performance of your duties for Dynegy, and
will exercise due diligence and reasonable care in the performance of such
duties.

        2.      TERM

                (a) Unless earlier terminated as provided for herein, the
term of this Agreement will be for three (3) years, beginning on the
Effective Date and ending on the third anniversary of the Effective Date
(such period, as extended pursuant to the next succeeding sentence, if
applicable, the "Term").  The Term shall automatically be extended for
additional one (1) year periods unless either the Company or you provides
written notice sixty (60) days prior to the date on which this Agreement
would otherwise be automatically extended that such party is electing not to
so extend the Term.  The term "Effective Date" means the date of closing of
the proposed merger of Dynegy Inc. and Illinova Corporation pursuant to that
certain merger agreement dated as of June 14, 1999, as amended.

                (b) If your employment with Dynegy is terminated due to your
voluntary resignation or by the Company for "cause", this Agreement shall
terminate immediately (except for the confidentiality, non-competition and
non-solicitation provisions of Paragraph 4 and the provisions of Paragraphs 5
and 6), and the Company shall have no further obligation to you except for
the payment of amounts due before the date of such termination.  You further
agree that the benefits which you have received from the execution of this
Agreement through the date of such termination constitute sufficient
consideration for your obligations pursuant to Paragraph 4, notwithstanding
the fact that the Company has no further obligation to you except for the
payment of amounts due before the date of such termination.

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Mr. R. Blake Young
December 15, 1999
Page 2

                For purposes of this Agreement, you may be terminated for
"cause" as a result of (i) your refusal to implement or adhere to lawful
policies or lawful directives of the Board of Directors of Dynegy (the "Board
of Directors") or your immediate supervisor; (ii) serious misconduct,
dishonesty or disloyalty, directly related to the performance of duties for
the Company or gross negligence in the performance of your duties for the
Company; (iii) your being convicted (or entering into a plea bargain
admitting or not contesting criminal guilt) in any felony criminal
proceeding; (iv) drug or alcohol abuse; (v) continued failure to perform your
duties under this Agreement which is not cured within 10 days after written
notice of such failure is provided to you by Dynegy; or (vi) any other
material breach of this Agreement by you that is not cured within ten (10)
days after written notice of such breach is delivered to you from the Company.

                (c) If your employment is terminated during the Term of this
Agreement due to resignation following "constructive termination" (as defined
below) or for any other reason other than your voluntary resignation, death,
disability, or discharge for cause, you shall receive as your sole
compensation in lieu of further payments to you pursuant to Paragraph3 hereof
(i) a lump sum amount equal to the product of (x) 2.99 and (y) the greater of
(a) the average annual Base Salary and incentive compensation, whether payable
in cash or stock options, you were paid by the Company for the highest three
(3) calendar years preceding the calendar year in which your employment is
terminated (or such shorter period as you have actually been employed by the
Company), or (b) your Base Salary and target bonus amount for the year in
which your employment is terminated; (ii) a lump sum amount equal to the
present value, as determined by the Board of Directors in its sole and
absolute discretion, of the benefits to be provided to you in Paragraph 3(e)
of this Agreement and such other perquisites (if any) being provided to you
on the date of your termination, as if you were still employed for the
remainder of the Term of this Agreement, with regard to those benefits to be
provided to you during the Term of this Agreement, and as if you had
completed the Term of this Agreement with regard to those benefits to be
provided to you upon completion of the Term of this Agreement; (iii) any
employee stock options granted to you prior to or during the Term of this
Agreement shall become vested as of the date of resignation due to such
constructive termination or discharge not for cause, and you shall have the
right to exercise any such vested options through the end of the Term of this
Agreement or one year from the date of termination, whichever is later; and
(iv) for a period of thirty-six (36) months from the date of resignation due
to such constructive discharge or discharge due not for cause, all health and
welfare benefits the Company was maintaining for you and your family as of
the date of such resignation or discharge.

                For purposes of this Agreement a "constructive termination"
shall be deemed to have occurred in the event that (i) your Base Salary as
defined in Paragraph 3(a), bonus compensation under Paragraph 3(b), target
range of annual option grants under Paragraph 3(c) or other compensation as
described in Paragraph 3(e) is reduced; (ii) a significant diminution in your
responsibilities, authority or scope of duties is effected, and such
diminution is made without your written consent (without regard to whether or
not any change is made to your title); (iii) the Company materially breaches
this Agreement, or (iv) the relocation of the Company's principal executive
offices to a location, or the Company requires you to be based, outside a
fifty (50) mile radius from the city limits of Houston, Texas.  Any
resignation by you as a result of

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Mr. R. Blake Young
December 15, 1999
Page 3

assertion of a constructive termination shall be communicated by delivery to
the Board of Directors of the Company within thirty (30) days from the
commencement of such constructive termination by written notice setting forth
the grounds therefor, during which period the Company shall be entitled to
cure or remedy the matters set forth in such notice to your reasonable
satisfaction.

        Unless you withdraw such notice prior to the expiration of such
thirty (30) day period, such resignation shall take effect upon the
expiration of thirty days from the date of the delivery of such notice.  Any
other resignation by you shall be communicated by thirty days' advance
written notice.

        If you die, or become disabled and cannot perform your duties, your
employment hereunder shall be terminated and: (i) you (or your estate) shall
be entitled to the Base Salary (as defined in Paragraph 3(a)) payable to you
hereunder for twelve (12) months following the month in which you die or
become disabled, plus the amount of any target bonus as described in
Paragraph 3(b) for the year of death or disability, prorated for the period
of twelve (12) months following the date of death or disability; (ii) you (or
your estate) shall receive, for a period of twenty-four (24) months from the
date of your death or disability, all health insurance and health benefits
that the Company was maintaining for you and/or your estate and for your
family as of the date of your death or disability; and (iii) any employee
stock options granted to you during the Term of this Agreement shall become
vested as of the date of your death or disability.  For purposes of this
Agreement, you shall be disabled as of the first date on which you become
eligible to receive disability benefits under the Company's long-term
disability plan (or Social Security disability benefits at a time when the
Company does not maintain a long-term disability plan or such plan is not
available to you).

                (d) Unless otherwise specified herein, all payments under
this Agreement shall be paid in a lump sum, less applicable withholding
taxes, within thirty (30) days following your termination.

        3.      COMPENSATION

                (a) Each year during the Term hereof, you will be paid a base
salary of $250,000 per annum ("Base Salary"), payable in accordance with the
Company's payroll guidelines.

                Increases may be made to your Base Salary at the discretion
of the Board of Directors based upon your individual performance.

                (b) You shall be a participant in the Company's Incentive
Compensation Plan.  As part of Dynegy's incentive compensation program, you
will have the opportunity to earn a target bonus in an amount equal to 70% of
your Base Salary and a maximum cash award in an amount equal to 140% of your
Base Salary, dependent upon certain financial or performance objectives,
determined in accordance with such program, and by the Board.  To the extent
any incentive compensation in excess of the maximum cash amount referenced
above is payable under the Incentive Compensation Plan in any year to you,
the Company will pay you any such

<PAGE>

Mr. R. Blake Young
December 15, 1999
Page 4

amounts in noncash equivalents (e.g., stock options or restricted securities
of the Company) of equal value, as determined by the Board of Directors in
its sole and absolute discretion.  At your election, in lieu of paying you
all or part of such incentive compensation bonus, the Company will allow you
to direct that all or part of such incentive compensation shall be allocated
by the Company to, or expended directly for, charitable contributions of your
selection.

                (c) Upon the closing of the proposed merger of Dynegy and
Illinova Corporation pursuant to that certain merger agreement dated as of
June 14, 1999, as amended (the "Dynegy/Illinova merger"), you will receive
(x) a cash bonus of $55,000, (y) stock option grants pursuant to the Company's
Long-Term Incentive Plan ("LTIP") with a value equal to 100% of your Base
Salary and (z) discounted stock option grants under the Employee Equity Option
Plan ("EEOP"; and, together with LTIP, the "Stock Option Plans") with an
in-the-money value equal to $500,000.  Your EEOP options shall become 60%
vested and exercisable on the third anniversary of the Effective Date.  Each
year during the Term of this Agreement, you will be eligible to receive stock
option grants in accordance with requirements and provisions of the Company's
LTIP.  The current target range for annual option grants for your position is
a median of 100% and a 75th percentile of 160% of your Base Salary. You
recognize that any value of an award of "market" options under the LTIP is a
projected value, which is subject to the future performance of the Company
stock, and that there is no guarantee that the actual value of such options
will achieve that value.  "Projected Value" means that at the end of the five
years from the date of grant, assuming an increase in market price of 15% per
annum during the five years, the stock option may be exercised to obtain the
stated value in excess of the exercise price.  These options are subject to
the vesting, forfeiture and other terms and conditions of the respective
Stock Option Plan, except as specifically provided to the contrary in this
Agreement.

                (d) Upon the Effective Date, any EEOP or other options
granted to you prior to November 1, 1999 shall become vested as of the date
of closing of the Dynegy/Illinova merger.

                (e) You will be entitled to participate in Dynegy's benefits
programs for senior management executives, including, without limitation,
Dynegy's deferred compensation plan for executives.  In addition, the Company
may provide other perquisites as approved by the Dynegy Board of Directors in
its sole discretion.  Pursuant to the terms of Dynegy's vacation policy you
will be entitled to four (4) weeks per year of paid vacation.

        4.      CONFIDENTIALITY/NONCOMPETE/NONSOLICITATION

                You recognize and acknowledge that:

                (a) You will have access to certain information concerning
the Company that is confidential and proprietary and constitutes valuable and
unique property of the Company. You agree that you will not at any time,
either during or after your employment, disclose to others, use, copy or
permit to be copied, except pursuant to your duties on behalf of the Company
or its successors, assigns or nominees, any secret or confidential
information of the Company (whether or not developed by you) without the
prior written consent of the Board of Directors of the Company.  The term
"secret or confidential information of the Company"

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Mr. R. Blake Young
December 15, 1999
Page 5

(sometimes referred to herein as "Confidential Information") shall include,
without limitation, the Company's plans, strategies, potential acquisitions,
costs, prices, systems for buying, selling, and/or trading natural gas,
natural gas liquids, crude oil, coal, and electricity, client lists, pricing
policies, financial information, the names of and pertinent information
regarding suppliers, computer programs, policy or procedure manuals, training
and recruiting procedures, accounting procedures, the status and content of
the Company's contracts with its suppliers or clients, or servicing methods
and techniques at any time used, developed, or investigated by the Company,
before or during your tenure of employment to the extent any of the foregoing
are (i) not generally available to the public and (ii) maintained as
confidential by the Company.  You further agree to maintain in confidence any
confidential information of third parties received as a result of your
employment and duties with the Company.

                (b) At the termination of your employment you will deliver to
the Company, as determined appropriate by the Company, all correspondence,
memoranda, notes, records, client lists, computer systems, programs, or other
documents and all copies thereof made, composed or received by you, solely or
jointly with others, and which are in your possession, custody, or control at
such date and which are related in any manner to the past, present, or
anticipated business of the Company.

                (c) To protect and safeguard the Company's trade secrets and
Confidential Information and also the Company's goodwill with its suppliers
and clients, for that period of time following the termination of your
employment for any reason other than pursuant to Paragraph 2(c) above (E.G.
in the event of a termination pursuant to the first paragraph of Paragraph
2(c), the  non-compete obligations imposed by this Paragraph 4(c) terminate)
through the expiration of the Term or twenty-four (24) months from the date
of termination, whichever is earlier, you will not, within a 50 mile radius
of any location where the Company had an office at any time during the Term
hereof or any location where a client or supplier of the Company (which is a
material client or supplier at any time during the Term hereof) had an office
at any time during the Term hereof, without the prior written consent of the
Board of Directors of the Company, directly or indirectly, engage in or be
interested in (as owner, partner, shareholder, employee, director, agent,
consultant or otherwise), any business which is a competitor of the Company,
as hereinafter defined.  For purposes of this Agreement, a "competitor of the
Company" is any entity, including without limitation a corporation, sole
proprietorship, partnership, joint venture, syndicate, trust or any other
form of organization or a parent, subsidiary or division of any of the
foregoing, which, during such period or the immediately preceding fiscal year
of such entity, was engaged in the unregulated marketing, gathering,
transportation or processing of natural gas or derivatives of natural gas or
other hydrocarbons or electricity.  For purposes of this paragraph, the
following entities shall not be deemed to be competitors of the Company: (i)
a Local Distribution Company ("LDC") to the extent that any purchases or
sales by such LDC are only for consumption on its system; (ii) a natural gas
producer to the extent that such producer sells only its own production or
production of other working interest owners in wells in which it owns an
interest; (iii) a natural gas pipeline company in the jurisdictional aspects
of its business, i.e., other than a nonjurisdictional marketing affiliate or
production affiliate (except as to such production affiliates own production
as described in clause (ii) of this Paragraph 4(c)), or (iv) an integrated
regulated electric and/or

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Mr. R. Blake Young
December 15, 1999
Page 6

gas utility, as long as the utility does not engage in the unregulated
marketing of its generation or power trading other than that related to the
generation and power marketing allocated to its own service areas.  The terms
of this Paragraph 4(c) shall not apply to your present or future investments
in the securities of companies listed on a national securities exchange or
traded on the over-the-counter market to the extent such investments do not
exceed one percent (1%) of the total outstanding shares of such company.

                (d) For a period of twenty-four (24) months after the
expiration or termination of your employment for whatever reason other than
pursuant to Paragraph 2(c) above or for a period of twelve months following
the termination of your employment pursuant to Paragraph 2(c) above, you
shall not solicit, raid, entice, encourage or induce any person who was an
employee of the Company at the time of your termination, or any of its
subsidiaries or affiliated companies, to become employed by any person, firm
or corporation, and you shall not approach any such employee for such purpose
or authorize or knowingly approve the taking of such actions by any other
person, firm or corporation or assist any such person, firm or corporation in
taking such action.

                (e) You agree that the foregoing restrictions contain
reasonable limitations as to the time, geographical area, and scope of
activity to be restrained and that these restrictions do not impose any
greater restraint than is necessary to protect the goodwill and other
legitimate business interests of the Company, including but not limited to
the protection of Confidential Information.  You also agree that the general
public shall not be harmed by enforcement of this Paragraph 4. Should any
provision in this Paragraph 4 be held unreasonably broad with respect to the
restrictions as to time, geographical area, or scope of activity to be
restrained, any such restriction shall be construed by limiting and reducing
it to the extent necessary to render it reasonable, and as so construed, such
provision shall be enforced.

                Accordingly, you consent and agree that if you violate any of
the provisions of this Paragraph 4, the Company and its subsidiaries and
affiliated companies would sustain irreparable harm and, therefore, in
addition to any other remedies which the Company may have under this
Agreement or otherwise, the Company shall be entitled to an injunction from
any court of competent jurisdiction restraining you from committing or
continuing any such violation of this Paragraph.  You acknowledge that
damages at law would not be an adequate remedy for violation of this
Paragraph 4, and you therefore agree that the provisions of this Paragraph 4
may be specifically enforced against you in any court of competent
jurisdiction.  Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedies available to the Company for such breach or
threatened breach, including the recovery of damages from you.

        5.      INDEMNIFICATION

                If, at any time during or after the Term of this Agreement,
you are made a party to, or are threatened to be made a party in, any civil,
criminal or administrative action, suit or proceeding by reason of the fact
that you are or were a director, officer, employee, or agent of the Company,
or of any other corporation or any partnership, joint venture, trust or other
enterprise for which you served as such at the request of the Company, then
you shall be indemnified by the Company, to the fullest extent permitted
under applicable law, against

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Mr. R. Blake Young
December 15, 1999
Page 7

expenses actually and reasonably incurred by you or imposed on you in
connection with, or resulting from, the defense of such action, suit or
proceeding, or in connection with, or resulting from, any appeal therein if
you acted in good faith and in a manner you reasonably believed to be in or
not opposed to the best interest of the Company, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe your
conduct was unlawful, except with respect to matters as to which it is
adjudged that you are liable to the Company or to such other corporation,
partnership, joint venture, trust or other enterprise for gross negligence or
willful misconduct in the performance of your duties. As used herein, the
term "expenses" shall include all obligations actually and reasonably
incurred by you for the payment of money, including, without limitation,
attorney's fees, judgments, awards, fines, penalties, taxes and amounts paid
in satisfaction of a judgment or in settlement of any such action, suit or
proceeding, except amounts paid to the Company or such other corporation,
partnership, joint venture, trust or other enterprise by you.  The foregoing
indemnification provisions shall be in addition to any other rights to
indemnification to which you may be entitled.

        6.      ARBITRATION

                The parties hereto may attempt to resolve any dispute
hereunder informally via mediation or other means. Otherwise, any controversy
or claim arising out of or relating to this Agreement, or any breach thereof,
shall, except as provided in Paragraph 4, be adjusted only by arbitration in
accordance with the rules of the American Arbitration Association, and
judgment upon such award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.  The arbitration shall be held in the city
of Houston, Texas, or such other place as may be agreed upon at the time by
the parties to the arbitration.  The arbitrator(s) shall, in their award,
allocate between the parties the costs of arbitration, which shall include
reasonable attorneys' fees of the parties, as well as the arbitrators' fees
and expenses, in such proportions as the arbitrator(s) deem just; PROVIDED
HOWEVER, notwithstanding the above, in the event you are the prevailing
party, then the Company agrees to reimburse you for all such costs of
arbitration, including, but not limited to attorneys' fees and expenses
reasonably incurred by you; PROVIDED FURTHER, notwithstanding the above, in
the event the Company is the prevailing party, then the total costs of
arbitration, including but not limited to attorneys' fees reasonably incurred
by the Company and arbitrators' fees and expenses that may be allocated to
you by the arbitrator(s) shall not in any event exceed Twenty-Five Thousand
Dollars ($25,000). Notwithstanding the foregoing, you shall be entitled to
seek specific performance in a court of competent jurisdiction of your right
to be paid your full compensation until your separation from employment,
during the pendency or dispute of any controversy arising under or in
connection with this Agreement.

        7.      OTHER PROVISIONS

                (a) THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, EXCLUDING ANY
CONFLICTS OF LAW, RULE OR PRINCIPLE THAT MIGHT OTHERWISE REFER TO THE
SUBSTANTIVE LAW OF ANOTHER JURISDICTION.

                (b) Except as otherwise indicated, this Agreement is not
assignable without the written authorization of both parties; provided that
the Company shall cause this Agreement

<PAGE>

Mr. R. Blake Young
December 15, 1999
Page 8

to be assumed by any entity to which the Company transfers substantially all
of its stock or assets or to any entity which is a successor to the Company
by reorganization, incorporation, merger or similar business combination.

                (c) Except as otherwise provided herein, the provisions of
Paragraphs 4, 5 and 6 of this Agreement shall survive the termination of this
Agreement.

                (d) All payments to you under this Agreement will be subject
to the withholding of all applicable employment taxes and income taxes;
provided, however, that at your request the parties hereto will use
reasonable efforts to explore alternatives to allow the Company to make
charitable contributions on behalf of the employee by redirecting a portion
of your annual bonuses to charitable organization(s) chosen by you in
accordance with Paragraph 3(b).

                (e) This Agreement supersedes all previous employment
agreements, written or oral, between the Company and you.  This Agreement may
be amended only by written amendment duly executed by both parties or their
legal representatives and authorized by action of the Board.  Except as
otherwise specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision
of this Agreement to be performed by such other party shall be deemed a
waiver of a subsequent breach of such condition or provision or a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time.

                (f) Any notice or other communication required or permitted
pursuant to the terms of this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
mail, first class, postage prepaid and registered with return receipt
requested, addressed to the intended recipient at his or its address set
forth below and, in the case of a notice or other communication to the
Company, directed to the attention of the Board of Directors with a copy to
the Secretary of the Company, or to such other address as the intended
recipient may have theretofore furnished to the sender in writing in
accordance herewith, except that until any notice of change of address is
received, notices shall be sent to the following addresses:

       IF TO YOU:                             IF TO THE COMPANY:
       R. Blake Young                         Dynegy Inc.
       5301 Jessamine                         1000 Louisiana, Suite 5800
       Bellaire, TX 77401                     Houston, TX 77002
                                              Attn: Executive Vice President and
                                                    Chief Financial Officer

                (g) If any one or more of the provisions or parts of a
provision contained in this Agreement shall for any reason be held to be
invalid, illegal or unenforceable in any respect, such invalidity or
unenforceability shall not affect any other provision or part of a provision
of this Agreement, but this Agreement shall be reformed and construed as if
such invalid or illegal or unenforceable provision or part of a provision had
never been contained herein and such

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Mr. R. Blake Young
December 15, 1999
Page 9

provisions or part thereof shall be reformed so that it would be valid, legal
and enforceable to the maximum extent permitted by law.

                (h) Neither you nor the Company will make or authorize any
public statement disparaging the other in its or his business interests and
affairs.  Notwithstanding the foregoing, neither party shall be (i) required
to make any statement which it or he believes to be false or inaccurate, or
(ii) restricted in connection with any litigation, arbitration or similar
proceeding or with respect to its response to any legal process.  The
provisions in this Paragraph 7(h) shall survive the termination of your
employment hereunder, irrespective of the reason therefor.

                (i) The waiver by the Company of breach of any provision of
this Agreement by you shall not operate or be construed as a waiver of any
subsequent breach by you.  The waiver by you of a breach of any provision of
this Agreement by the Company shall not operate or be construed as a waiver
of any subsequent breach by the Company.

                (j) You shall not be required to mitigate damages (or the
amount of any compensation provided under this Agreement to be paid)
following your termination of employment, by seeking employment or otherwise.

                (k) If any provision of this Agreement as applied to either
party or to any circumstances shall be adjudged by a court of competent
jurisdiction to be void or unenforceable, the same shall in no way affect any
other provision of this Agreement or the validity or enforceability of this
Agreement.

                (l) The section headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.

                (m) This Agreement may be executed in one or more
counterparts, which shall, collectively and separately, constitute one
agreement.

                (n) Notwithstanding anything to the contrary set forth in
this Agreement, the Company may cause any of its subsidiaries for which you
render services to pay or otherwise satisfy, in whole or in part, some or all
of the Company's obligations hereunder.

                If the foregoing reflects your understanding of the terms of
your employment with the Company, please execute each copy of this letter in
the space provided below.

                                        DYNEGY INC.

                                        By:
                                             ___________________________
                                        Name:   John U. Clarke
                                        Title:  Executive Vice President and
                                                Chief Financial Officer

<PAGE>

Mr. R. Blake Young
December 15, 1999
Page 10

AGREED AND ACCEPTED this
____ day of December, 1999

___________________________
       R. Blake YoungPrepared by MERRILL CORPORATION www.edgaradvantage.com

   Exhibit 4.1  

AGREEMENT ON PRINCIPLES TNT POST GROUP

[Afspraken op Hoofdlijnen TNT Post Groep] 

	1.
	The State of the Netherlands, (the "State"), represented in this matter by:

	(a)
	The
Minister of Transport and Public Works and

	(b)
	The
Minister of Finance; 

and

	2.
	TNT Post Group N.V., ("TNT Post Group"), with its registered office in The Hague (after amendment of its Articles of Association:
Amsterdam), represented by Mr A.J. Scheepbouwer, chairman of the Management Board. 

WHEREAS:  

	a.
	prior
to the flotation of Koninklijke PTT Nederland NV ("KPN") in 1994, the State and KPN set out the principal results of their consultations in the form of an "Agreement on
Principles" dated 12 May 1993 (hereinafter referred to as the "Agreement on Principles");

	b.
	as
a refinement of the Agreement on Principles and the "Record of arrangements made with KPN on 10 March 1993 to solve the balance problem resulting from the
imposition of value added tax on assigned telecom services" between the State and KPN, the State and KPN concluded the "Further Agreement concerning Loan A, Loan B and Related Subjects" dated
22 December 1993 (hereinafter referred to as the "Further Agreement on Loans");

	c.
	in
accordance with an agreement concluded between the State and KPN dated 28 March 1994 (hereinafter referred to as the "Amended Agreement on Principles"), the
Agreement on Principles terminated on the date of publication of the prospectus for the first tranche. The arrangements referred to in section II of the Amended Agreement on Principles did not
take effect until the date of publication of the prospectus for the placement of shares, with the exception of Articles 1 and 4.1 of the Amended Agreement on Principles, which took effect on
28 March 1994;

	d.
	as
a refinement of the Agreement on Principles and the Amended Agreement on Principles, the State and KPN concluded the following agreements:

	(i)
	the
determination agreement dated 31 March 1994 (the "Determination Agreement");

	(ii)
	the
call option agreement preference shares A dated 3 June 1994 (the "Agreement Prefs A KPN"); 

	e.
	as
a further refinement of the Amended Agreement on Principles, the Minister of Transport and Public Works agreed with KPN that an announcement should be made of the intended
application of Article 11(2) of the Telecommunications Act [WTV], which announcement was included in the Netherlands
Government Gazette [Nederlandse Staatscourant] of 3 June 1994 (hereinafter referred to as the "Telecom
Announcement");

	f.
	in
a letter dated 4 February 1994, KPN also confirmed to the Minister of Transport and Public Works that it would not abuse the provisions of Article 11 of the
WTV as described in the KPN Flotation Bill;

	g.
	in
a letter dated 4 May 1994, the State confirmed to the Amsterdam Stock Exchange: (i) that it would not exercise the rights attaching to the Special
Share—either wholly or partly—with the aim of serving the interests of KPN in order to protect KPN against the undesirable acquisition of a 

1

 

holding
interest and (ii) that the option on preference shares A up to 51% would not be exercised—either wholly or partly—with the aim of serving the interests of KPN in
order to protect KPN against the undesirable acquisition of a holding interest and that the State would also not exercise the option on
preference shares A up to 331/3%—either wholly or partly—with the aim of serving the interests of KPN in order to protect KPN against the undesirable acquisition
of a holding interest; 

	h.
	the
intention is that KPN shall be demerged in such a way that the postal, distribution and logistical activities will be split off from KPN (hereinafter referred to as the
"Demerger");

	i.
	immediately
after the Demerger the intention is to effectuate a legal merger between PTT Post Holding N.V. (the present holding company of PTT Post B.V.) as the acquired company and
TNT Post Group, as the acquiring company;

	j.
	the
State and KPN have entered into consultations on amending and supplementing the existing arrangements between them, insofar as this is necessary or desirable in the context of
the Demerger;

	k.
	in
the context of the Demerger, the State and TNT Post Group entered into consultations on drawing up arrangements similar to those which the State currently has with KPN;

	l.
	the
consultations between the State and TNT Post Group have led to the present Agreement on Principles TNT Post Group (hereinafter referred to as "Agreement TNT Post Group"). 

ARTICLE 1  

    The agreements and arrangements summarised in the preamble to this Agreement TNT Post Group (with the exception of the present Agreement TNT Post Group itself)
do not apply to TNT Post Group. 

ARTICLE 2  

    Insofar as they concern the relationship between the State and TNT Post Group, TNT Post Group shall submit to the State, before they are published, the
prospectus to be drawn up for TNT Post Group and the official publications in the media in the context of the Demerger, in good time for the State to be able to comment on them if it should so desire. 

ARTICLE 3  

	3.1
	The
State shall acquire the Special Share referred to in the Articles of Association of TNT Post Group (hereinafter referred to as the "Special Share in TNT Post Group"). The rights
attaching to the Special Share in TNT Post Group are set out in the draft Articles of Association of TNT Post Group as included in Annex I. The State
shall not dispose of or encumber the said Special Share in TNT Post Group without the consent of TNT Post Group.

	3.2
	The
State shall also hold an interest in the capital of TNT Post Group. The State has the intention not to reduce that interest before 2004 to a percentage of less than
331/3 percent of the voting capital (the "Minimum Interest in TNT Post Group") plus one (1) voting Special Share in TNT Post Group. Once the interest of the State has been
reduced to the Minimum Interest in TNT Post Group, the State shall not dispose of or encumber further shares without the consent of TNT Post Group without having agreed with TNT Post Group on the
anti-takeover measures which are to be included in TNT Post Group's Articles of Association.

	3.3
	Any
placements by the State of its interest in TNT Post Group shall be effectuated in proper consultation with TNT Post Group. 

2

 
	3.4
	The
State, as holder of ordinary shares in TNT Post Group and as holder of the Special Share in TNT Post Group, hereby confirms that, at the general meeting of TNT Post Group
shareholders, it will support any proposal that may be made annually by the Management Board of TNT Post Group with a view to designating the Management Board as the body that shall be authorised, for
a maximum period of five years, to issue shares and to restrict or exclude the statutory pre-emption rights, without prejudice to the provisions of Article 4 of this Agreement TNT
Post Group. 

ARTICLE 4  

	4.1
	TNT
Post Group shall conclude with the State the agreements included as Annex II to the Agreement TNT Post Group
(hereinafter referred to as "Agreement Prefs A TNT Post Group"), setting out the conditions on which the State can subscribe to preference shares A in TNT Post Group. 

The
State and TNT Post Group shall conclude a further agreement, to be determined in accordance with Annex III to this Agreement TNT Post Group
(hereinafter referred to as the "TNT Post Group Determination Agreement"), which shall indicate the total nominal value up to which TNT Post Group shall have the right to issue ordinary shares, with
due observance of the following provisions of this Article. 

	4.2
	Within
two working days of a written request by TNT Post Group to that effect, the holder of the Special Share in TNT Post Group shall consent to:

	a.
	the
issuing of preference shares to the TPG Protection Foundation referred to in Article 5;

	b.
	the
issuing of shares in TNT Post Group in the case of a stock dividend involving the choice for shareholders between a cash dividend and dividend in stock, without such consent in
any way affecting the choice to be made by the State as a shareholder in TNT Post Group. 

	4.3
	The
holder of the Special Share in TNT Post Group shall not consent to an issue of ordinary shares (other than in the case mentioned in Article 4.2 (b)) if (i) such an
issue is to take place, or if the intention to effectuate such an issue is to be made public by TNT Post Group, within a period of nine months prior to a proposed placement of ordinary shares held by
the State in TNT Post Group and (ii) the State, furthermore, reasonably expects that its interests involved in the placement of Shares would be damaged by such an issue. 

In
the case of demonstrably significant reasons, the holder of the Special Share in TNT Post Group, at the written request of TNT Post Group, shall consent to an issue of ordinary shares (other than
in the case mentioned in Article 4.2 (b)) if such an issue is to take place, or if the intention to effectuate such an issue is to be made public by TNT Post Group, within a period of nine
months prior to a proposed placement of ordinary shares held by the State in TNT Post Group. 

Without
prejudice to the foregoing, TNT Post Group shall be free to announce an issue of shares within the aforementioned period of nine months if (a) such an issue is to take place entirely,
or almost entirely, in exchange for shares in one or more companies with which TNT Post Group or one of its group companies has concluded a joint venture, merger or acquisition agreement, or
(b) the announcement relates to a private issue (other than an issue as referred to in (a)) and the State reasonably does not expect that the announcement will damage its interests in the
placement of shares. 

	4.4
	Within
eight working days of a written request by TNT Post Group to that effect, the holder of the Special Share in TNT Post Group shall consent to an issue of ordinary shares if
the financial 

3

 

conditions
and particulars of that issue cannot be reasonably considered by the State to be detrimental to the interests of shareholders in TNT Post Group in general. 

	4.5
	In
issuing shares, TNT Post Group shall in all cases consider the long-term financial interests of the State as holder of a substantial interest in the share capital of
TNT Post Group.

	4.6
	Share
issues as referred to in the present Article 4 shall be taken to include the allocation of shares by TNT Post Group in the case of a merger or demerger, as referred to
in Title 7 of Book 2 of the Dutch Civil Code [BW], in cases where TNT Post Group or one of its group companies is
the acquiring legal entity. 

ARTICLE 5  

    TNT Post Group shall conclude agreements with the TPG Protection Foundation [Stichting Bescherming TNT Post
Groep] (the "TPG Protection Foundation") in accordance with Annex IV (hereinafter referred to as "Agreement Prefs B
TNT Post Group"). 

ARTICLE 6  

    TNT Post Group shall conclude an agreement with the State in accordance with Annex V (hereinafter referred to
as "Loan Agreement TNT Post Group") by virtue of which agreement TNT Post Group and the State shall make further arrangements as to (the repayment of) Loan A and Loan B insofar as these shall have
passed to TNT Post Group in the context of the Demerger. 

ARTICLE 7  

    With the exception of the arrangements set out in Article 2 of this Agreement TNT Post Group, the arrangements contained in this Agreement TNT Post
Group are entered into on the suspensive condition of the execution of the notarial deed whereby the Demerger will be effectuated. 

THUS
SIGNED IN TRIPLICATE IN THE HAGUE

on 23 June 1998 

The
Minister of Transport and Public Works 

Ms A.
Jorritsma-Lebbink 

The
Minister of Finance 

Mr
G. Zalm 

TNT
Post Group N.V. 

Mr
A.J. Scheepbouwer 

REPRESENTATION PURSUANT TO

RULE 306 OF REGULATION 5-T  

    This document represents a fair and accurate English translation of the Dutch language document. 

	

 	
 	

By: /S/ JEROEN BRABERS
	 	 	    

	 	 	  Name: Jeroen Brabers

  Title: General Counsel, TNT Post Group N.V.

4

   CALL OPTION AGREEMENT PREFERENCE SHARES A

IN TNT POST GROUP N.V.

[Overeenkomst Optie Preferente Aandelen A

in TNT Post Groep N.V.] 

The
undersigned: 

	1.
	The State of the Netherlands, (the "State"), represented in this matter by:

	a.
	the
Minister of Transport and Public Works and

	b.
	the
Minister of Finance; 

and

	2.
	TNT Post Group N.V., ("TNT Post Group"), with its registered office in The Hague (after amendment of its Articles of Association:
Amsterdam), represented by Mr A.J. Scheepbouwer, chairman of the Management Board. 

WHEREAS:  

	I
	on
the occasion of the intended demerger of Koninklijke PTT Nederland NV ("KPN"), whereby the postal, distribution and logistical activities will be split off from KPN (hereinafter
referred to as the "Demerger"), the State will acquire shares in TNT Post Group;

	II
	the
Articles of Association of TNT Post Group allow for the issuing of preference shares A in the capital of TNT Post Group;

	III
	on
23 June 1998 the Parties signed the "Agreement on Principles TNT Post Group", which determines that the State and TNT Post Group shall conclude the Agreement Prefs
A TNT Post Group setting out the conditions on which the State can subscribe to preference shares A in TNT Post Group (hereinafter referred to as "preference shares A");

	IV
	the
Parties wish to conclude the agreement referred to in the foregoing on the suspensive condition stated in the present Agreement. 

HAVE AGREED AS FOLLOWS:  

Article 1.  

    TNT Post Group grants the State the right to subscribe to preference shares A, at any time, on the occasion of or after every issue of shares by TNT Post Group
and on or after every allocation of shares on the occasion of a merger or demerger as referred to in Title 7 of Book 2 of the Dutch Civil Code [BW], in order to enable the
State to hold voting shares in TNT Post Group up to a total of 331/3 percent of the voting capital, not counting the Special Share. 

Article 2.  

	2.1
	The
State shall also have the right to subscribe to preference shares A up to the sum required for it to hold 51 percent of the voting capital, with due observance of the following
provisions set out in this Article.

	2.2
	The
State shall only be entitled to exercise the right to subscribe to preference shares A in the case referred to in Article 2.1 after it has informed TNT Post Group and the
TPG Protection Foundation [Stichting Bescherming TNT Post Groep] (the "Foundation") in writing of its intention to do so and if,
within four working days, either TNT Post Group has not informed the State in writing that it intends to allocate preference shares B to the Foundation on the grounds of a placement agreement between
TNT Post Group and the Foundation, or the Foundation has 

1

 

informed the State in writing that it intends to make use of its option right under the terms of the option agreement between TNT Post Group and the Foundation. Should TNT Post Group or the Foundation
provide the State with a written statement as referred to in the previous sentence, the option right referred to in this Article 2 shall be suspended and may only be exercised with due
observance of Article 2.3. 

	2.3
	Should
TNT Post Group or the Foundation not make use of their rights under the terms of the agreements referred to in Article 2.2, or not do so in full, the State shall then
still be entitled to exercise its option right in whole or in part.

	2.4
	With
due observance of the foregoing, the State shall only exercise the option right referred to in this Article if it reasonably believes that a party as defined in the Major
Holdings in Listed Companies Disclosure Act (1996) [Wet melding zeggenschap, WMZ] has acquired or will acquire an interest
subject to an obligation to disclose, as referred to in the WMZ, in TNT Post Group which is larger than 10 percent, regardless of whether that party has notified its acquisition, unless that interest
is or will be less than 15 percent and has been accumulated with the consent of TNT Post Group. A party as referred to above shall be taken to include a number of parties who, given their common
activities, can be assumed to have entered into any form of arrangement with respect to their participation in TNT Post Group. 

Article 3.  

	3.1
	When
the preference shares A to be issued under the terms of Articles 1 and 2 are issued, it shall not be necessary for more than 25 percent of the nominal value to be paid.

	3.2
	The
said preference shares A shall confer the right to a prorated dividend for the year of issue from the date on which payment has taken place.

	3.3
	After
a period of one year has elapsed since the date of issue, the State shall have the right to require of TNT Post Group that a proposal be made at the general meeting of
shareholders that the preference shares A held by the State should be cancelled, in which case the sum to be paid back to the State shall immediately be loaned by the State to TNT Post Group on the
conditions and provisions applying to loans referred to in the Agreement concerning Loan A, Loan B and Related Subjects concluded between the State and TNT Post Group on 23 June 1998, as
they shall apply to the instalment for the year 2003.

	3.4
	After
a period of two years has elapsed since the date of issue, the State shall have the right to require of TNT Post Group that a proposal be made at the general meeting of
shareholders that the
preference shares A held by the State should be cancelled, with cash repayment of the sum paid for the shares and with the obligation to make further payments being waived. 

Article 4  

    The State shall be entitled to exercise separately the option rights granted to it under the terms of the present Agreement and specified in Articles 1 and 2
respectively. 

2

 

Article 5  

    This Agreement is entered into on the suspensive condition of the execution of the notarial deed whereby the Demerger will be effectuated. 

Signed
in The Hague on 23 June 1998 

The
Minister of Transport and Public Works 

Ms A.
Jorritsma-Lebbink 

The
Minister of Finance 

Mr
G. Zalm 

TNT
Post Group N.V. 

Mr
A.J. Scheepbouwer 

REPRESENTATION PURSUANT TO

RULE 306 OF REGULATION 5-T  

    This document represents a fair and accurate English translation of the Dutch language document. 

	

 	
 	

By: /S/ JEROEN BRABERS
	 	 	    

	 	 	  Name: Jeroen Brabers

  Title: General Counsel, TNT Post Group N.V.

3

   CALL OPTION AGREEMENT PREFERENCE SHARES B

IN TNT POST GROUP N.V.

[Overeenkomst Optie Preferente Aandelen B

in TNT Post Groep N.V.] 

The
undersigned, 

	1.
	TNT Post Group N.V., ("TNT Post Group" or the "Company"), with its registered office in The Hague (after amendment of its
Articles of Association: Amsterdam), represented by Mr A.J. Scheepbouwer, chairman of the Management Board, 

and

	2.
	Stichting Bescherming TNT Post Groep (TPG Protection Foundation) ("the Foundation"), with its registered office in
Amsterdam, represented by Dr A. Maas. 

    Whereas: 

	I
	the
intention is that Koninklijke PTT Nederland NV ("KPN") shall be demerged in such a way that its postal, distribution and logistical activities will be hived off to TNT Post Group
(hereinafter referred to as the "Demerger"); 
	II
	in
the context of the Demerger there will be, amongst other things, an initial public offering of ordinary shares in TNT Post Group on the Official Market of the Amsterdam
Exchanges, as specified in the prospectus dated 26 May 1998; 
	III
	the
Articles of Association of TNT Post Group allow for the issuing of preference shares B in the capital of TNT Post Group; 
	IV
	the
prospectus dated 26 May 1998 also states the intention of such a share issue: 

"These
arrangements have been entered into to prevent, delay or complicate attempts at an unsolicited take-over, including transactions in shareholders might otherwise receive premium for
their shares over then current market price." 

	V
	pursuant
to its Articles of Association, the Management Board of TNT Post Group has been authorised for a period of 18 months, concluding (unless it is extended) on
28 December 1999, to proceed to issue all as yet unissued shares in the present or future authorized share capital, subject to the approval of the Supervisory Board and of the holder of
the Special Share, as provided for in Articles 12 and 70 of the Articles of Association of TNT Post Group; 
	VI
	TNT
Post Group and the Foundation have consulted on the allocation of preference shares B to the Foundation on the basis of a right to subscribe to shares to be granted to the
Foundation by TNT Post Group; 
	VII
	the
Parties wish to determine how and on what conditions the said option right shall be exercised by the Foundation; 
	VIII
	the
Supervisory Board of TNT Post Group and the State, in its capacity as future holder of the Special Share, have approved the granting of this option. 

have agreed as follows:  

Article 1  

    TNT Post Group hereby grants the Foundation the right to subscribe to preference shares B in the capital of TNT Post Group, viz. the right in each case to
subscribe to preference shares B up to a maximum of the issued share capital in ordinary shares, preference shares A and the Special Share, all as issued prior to the exercise of the option, minus one
share. 

1

 

Article 2  

    The maximum referred to in Article 1 shall be reduced by the shares already allocated to the Foundation upon its exercising an option. 

Article 3  

	3.1
	Each
option shall be exercised by the Foundation giving notice to TNT Post Group, stating the number of preference shares B to be subscribed to. 
	3.2
	Immediately
upon receipt of the said notification, TNT Post Group shall allocate the stated number of preference shares B to the Foundation. 
	3.3
	The
shares shall be issued at par and paid for in cash. When the share issue takes place, it shall not be necessary for more than 25 percent of the nominal value to be paid. 
	3.4
	The
Foundation shall submit a copy of the notification to the State of the Netherlands. 

Article 4  

    The option rights acquired shall not be disposed of. 

Article 5  

    The Foundation shall exercise its voting rights attaching to the preference shares B to which it subscribes in a completely independent manner in accordance
with its objects as stated in its Articles of Association. 

Article 6  

	6.1
	After
a period of two years has elapsed since the date of issue, the State shall have the right to require of TNT Post Group that a proposal be made at the general meeting of
shareholders that the preference shares B held by the State should be cancelled, with cash repayment of the sum paid for the shares and with the obligation to make further payments being waived. 
	6.2
	Should
the Foundation be obliged, within a period of two years after the share issue, to pay off the credit it has acquired in order to finance payment for the shares, it shall also
have the right to require that a proposal for cancellation be made in accordance with Article 6.1. 

Article 7  

    Either Party may terminate the present Agreement, before the option is exercised, by giving written notification to the other Party, at three months notice. 

Article 8  

    This Agreement is entered into on the suspensive condition of the execution of the notarial deed whereby the Demerger will be effectuated. 

Signed
in The Hague on 23 June 1998 

TNT
Post Group N.V. 

Mr
A.J. Scheepbouwer 

Stichting
Bescherming TNT Post Groep 

Dr
A. Maas 

2

 
REPRESENTATION PURSUANT TO

RULE 306 OF REGULATION 5-T  

    This document represents a fair and accurate English translation of the Dutch language document. 

	

 	
 	

By: /S/ JEROEN BRABERS
	 	 	    

	 	 	  Name: Jeroen Brabers

  Title: General Counsel, TNT Post Group N.V.

3

 
PUT OPTION AGREEMENT PREFERENCE SHARES B

IN TNT POST GROUP N.V.

[Overeenkomst Plaatsing Preferente Aandelen B

in TNT Post Groep N.V.] 

The
undersigned, 

	1.
	TNT Post Group N.V. ("TNT Post Group" or the "Company"), with its registered office in The Hague (after amendment of its
Articles of Association: Amsterdam), represented by Mr A.J. Scheepbouwer, chairman of the Management Board,

	2.
	Stichting Bescherming TNT Post Groep (TPG Protection Foundation) ("the Foundation"), with its registered office in
Amsterdam, represented by Dr A. Maas. 

Whereas: 

	I
	the
intention is that Koninklijke PTT Nederland NV ("KPN") shall be demerged in such a way that its postal, distribution and logistical activities will be hived off to TNT Post Group
(hereinafter referred to as the "Demerger");

	II
	in
the context of the Demerger there will be, amongst other things, an initial public offering of ordinary shares in TNT Post Group on the Official Market of the Amsterdam
Exchanges, as specified in the prospectus dated 26 May 1998;

	III
	the
Articles of Association of TNT Post Group allow for the issuing of preference shares B in the capital of TNT Post Group;

	IV
	the
prospectus dated 26 May 1998 also states the intention of such a share issue: 

"These
arrangements have been entered into to prevent, delay or complicate attempts at an unsolicited take-over, including transactions in shareholders might otherwise receive premium for
their shares over then current market price." 

	V
	pursuant
to its Articles of Association, the Management Board of TNT Post Group has been authorised for a period of 18 months, concluding (unless it is extended) on
28 December 1999, to proceed to issue all as yet unissued shares in the present or future authorized share capital, subject to the approval of the Supervisory Board and of the holder of
the Special Share, as provided for in Articles 12 and 70 of the Articles of Association of TNT Post Group;

	VI
	TNT
Post Group and the Foundation have consulted on the allocation of preference shares B to the Foundation;

	VII
	the
Parties now wish to determine how and on what conditions the said allocation shall take place; 

have agreed as follows:  

Article 1  

	1.1
	Whenever
TNT Post Group shall issue preference shares, the Foundation shall subscribe to a number of preference shares to be determined by TNT Post Group, up to a maximum of the
share capital (including ordinary shares, preference shares A, the Special Share and the preference shares B which have already been issued) as issued prior to the share issue, or as many more as the
Parties shall decide at the time in mutual consultation.

	1.2
	The
Foundation shall not be obliged to subscribe to the preference shares B if and insofar as it does not have the resources to furnish the amount to be paid on the occasion of the
share issue. 

4

 
	1.3
	It
shall also not be obliged to subscribe to the preference shares B if it cannot be reasonably expected that in the ensuing two years the dividend on the preference shares as
provided for in the Articles of Association will be paid out in full. 

Article 2  

    The shares shall be issued at par and paid for in cash. When the share issue takes place, it shall not be necessary for more than twenty-five
percent (25%) of the nominal value to be paid. 

Article 3  

    The Foundation shall exercise its voting rights attaching to the issued preference shares B in a completely independent manner in accordance with its objects
as stated in its Articles of Association. 

Article 4  

	4.1
	After
a period of two years has elapsed since the date of issue, the Foundation shall have the right to require of TNT Post Group that TNT Post Group shall make a proposal at the
general meeting of
shareholders that the preference shares B held by the Foundation should be cancelled, with repayment of the sum paid for the shares and with the obligation to make further payments being waived.

	4.2
	Should
the Foundation be obliged, within a period of two years after the share issue, to pay off the credit it has acquired in order to finance payment for the shares, it shall also
have the right to require that a proposal for cancellation be made in accordance with Article 4.1. 

Article 5  

    This Agreement is entered into on the suspensive condition of the execution of the notarial deed whereby the Demerger will be effectuated. 

Signed
in The Hague on 23 June 1998 

TNT
Post Group N.V. 

Mr
A.J. Scheepbouwer 

Stichting
Bescherming TNT Post Groep 

Dr
A. Maas 

REPRESENTATION PURSUANT TO

RULE 306 OF REGULATION 5-T  

    This document represents a fair and accurate English translation of the Dutch language document. 

	

 	
 	

By: /S/ JEROEN BRABERS
	 	 	    

	 	 	  Name: Jeroen Brabers

  Title: General Counsel, TNT Post Group N.V.

5

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