Agreements with KPN
In the context of the Foundation’s object, in 1994 agreements were concluded with KPN with respect to the placement of newly issued Class B preference shares. These took the form of a call option and a put option. The Foundation and the Company agreed that the Foundation would have the right to subscribe to Class B preference shares (call option) and that the Company would have the right to place Class B preference shares with the Foundation (put option). Under the terms of the call option the Foundation has the right to subscribe to a number of Class B preference shares not exceeding the share capital issued prior to the exercise of the call option minus one share. Under the terms of the put option the Company has the right to place a number of Class B preference shares with the Foundation not exceeding the share capital issued prior to the issue, or so much more as will be agreed upon by the parties. These arrangements have been agreed in order to enable the Foundation to achieve the aforementioned object.

On 11 April 2006, the General Meeting of Shareholders of KPN did not adopt the proposal to extend the designation of the Board of Directors as the body authorised to issue preference shares. As a result, KPN may, for the time being, no longer make use of the put option. This has no effect on the call option.

Financing
When Class B preference shares are issued, the Foundation must deposit at least 25% of the nominal value. The nominal value of the Class B preference shares is € 0.04 (four eurocents). In order to meet the payment obligation, the Foundation has concluded a financing arrangement. Outstanding Class B preference shares confer a preference right pursuant to article 31 paragraph 1 of KPN’s articles of association to payment of a dividend by KPN. The dividend is equal to the 12-month Euribor plus 1%, to be calculated on the amount paid on the shares.