Offer Document Dated15October 2004
Lastdayof acceptance 12November 2004,subject to extension
Concerningthe recommended firm public offer by
J&tk.
kpn Burum B.V., aprivate limited liability company, registered inTheHague,the Netherlands, anindirectly fully-owned subsidiary of Koninklijke KPNN.V.,for alltheoutstandingshares of
SNT SNTGroup N.V., apublic limited liability company registered inZoetermeer, the Netherlands Theinformation included inthis Offer Document relates tothe recommended firm public offer bythe Offeror for all outstanding SNTShares.Themeaningoftheterms incapitals in this Offer Document arestated under 'Definitions',with theexception ofthe F-pagesand the Fairness Opinion provided byINGInvestment BankinginSection 12,usingown definitions. SNTShareholders areoffered EUR13.50 perSNTSharecum dividend,to bepaid incash. Accordingly, ifthe Offer isdeclared unconditional, nofinaldividend will bepaidtotheSNT Shareholders inrespect ofthe financialyear 2004. TheOffer is subjectto certain conditions andrestrictions. See'Restrictions', 'Important information','Invitation to SNTShareholders' and 'Explanation and background ofthe Offer'. TheSNTSupervisory Board andthe SNTManagement Board support the Offer and fully recommend the SNTShareholders to acceptthe Offer. TheAcceptance Periodwill start on19October 2004 and,unless extended,will endon12 November 2004 at 15:00 hours CET.IftheAcceptance Period is extended,theOfferor will makeanannouncement to that effect, nolaterthan 17November 2004,with due observance ofthe provisions ofarticle 90 paragraph 5ofthe Decree.Assoon as possible but no later than onthe fifth Trading Dayafter the ClosingDate,theOfferor will announce whether or notthe Offer has been declared unconditional (hetbodaldannietgestandis gedaan).Announcements will inanyevent bepublished inthe Daily Official List of Euroaext Amsterdam (Officiële Prijscourant) and in(at least) onedaily newspaper with nation-wide distribution inthe Netherlands. See'Invitation to SNTShareholders' and'Explanation and background ofthe Offer'. Ifthe Offer becomes unconditional, payment ofthe Consideration tothe SNTShareholders who havetendered and delivered their SNTShares under the Offer willtake placeonthe Settlement Date.See'Invitation to SNTShareholders' and 'Explanation and background of the Offer'. Subject to the Offer beingdeclared unconditional,anumber ofSNTShareholders have irrevocably agreedtotender the SNTShares held bythem undertheterms ofthe Offer.The number of SNTShares concerned represents approximately 1.22 percent,assuming full conversion ofthe SpecialShare,of SNT'soutstandingsharecapitalasatthe date of this Offer Document. Rabobank,which holds 2,300,163 SNTShares,representing 10.36 per cent,assuming full conversion ofthe SpecialShare,ofSNT'soutstandingshare capital,has irrevocably committed to sell its SNTSharesto the Offeror against payment ofthe Consideration.The Offeror hasagreed to accept transfer ofthe SNTShares held by Rabobank within 2 business days after thedate ofthis Offer Document. OnWednesday 3November 2004,at 14:00 hoursCET,an EGM will beheldatthe offices of SNTinZoetermeer, the Netherlands, atwhich the Offer will bediscussed andexplained in accordancewith article 9qofthe Decree.See'Extraordinary generalmeetingSNT. Asummary ofthis Offer Document inthe Dutch language is included inthis Offer Document in'Nederlandse samenvatting'.
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00
0l . RESTRICTIONS TheOffer is not beingmade,andSNTShares will not beaccepted for purchase from oron behalf ofany SNTShareholder, inanyjurisdiction inwhich the makingor acceptance thereof would not beincompliancewith the securities orother laws or regulations of such jurisdiction orwould require any registration,approvalorfilingwith any regulatory authority notexpressly contemplated bythe terms ofthis Offer Document. Persons obtainingthe Offer Document arerequiredto take due note andobserve allsuch restrictions and obtain any necessary authorisations, approvals orconsents.NeitherKPN, the Offeror, nor SNT,nor anyoftheir advisers accept any liability for anyviolation byany person ofanysuch restriction.Any person (including,without limitation, custodians, nominees andtrustees) whowould or otherwise intendto forward this Offer Document or any related document to anyjurisdiction outsidethe Netherlands should carefully read this Section i (Restrictions) beforetakinganyaction.Any SNTShareholder who is inany doubt asto his position should consult anappropriate adviser without delay. Canada,Australia andJapan TheOffer is not beingmade,directly or indirectly, inorinto,or byuseofthe mails of, orby any meansor instrumentality (including,without limitation,telephone,facsimile,telex or electronic transmission) of interstate orforeign commerce of, orofanyfacility ofa securities exchange ofCanada,Australia orJapan,andtheOffer cannot beaccepted byany such use,means,instrumentality orfacility orfrom within Canada,Australia orJapan. Accordingly, this Offer Document andany related documents are not beingand must not be mailed orotherwise distributed orsent inor into Canada,Australia orJapanand persons receivingsuch documents (including,without limitation,custodians, nominees and trustees) must notdistribute orsendthem intosuch jurisdictions. United Kingdom ThisOffer Document isdirected only at personswho (i)are persons fallingwithin article 49(2)(a)to(d)(high networth companies,unincorporated associations, etcetera)ofThe Financial Services andMarketsAct 2000 (FinancialPromotion) Order 2001(as amended) (the"Order") or(ii)areinvestment professionals asinthe meaningofarticle 19ofthe Order or have professional experience in matters relatingto investments or(iii) areoutside the United Kingdom (allsuch personstogether beingreferredto as"relevant persons").This Offer Document must not beacted onor relied onbypersons who are not relevant persons. TheOffer mayonly beaccepted by,andanyinvestment activitytowhich this communication relates isavailable onlyto andwill beengaged inonly with, relevant persons. UnitedStatesofAmerica TheOffer is not beingmadeandwill not bemade,indirectly or directly, inor intothe United States,or byuseofthe mailsof, or byanymeansor instrumentality (including,without limitation,the post,facsimile transmission,telex,telephone andthe internet) of interstate orforeign commerce of, oranyfacilities ofanationalsecurities exchange ofthe United States.Accordingly, copies ofthis Offer Document andany related press announcements, acceptance forms andother documents arenot being,and must not be,mailed or otherwise distributed or sent in,into orfrom the United States.Persons receivingthis Offer Document and/or such other documents (including,without limitation,custodians, nominees and trustees) must notdistribute orsendthem in,into orfrom the United States,or usesuch mailsoranysuch means,instrumentality orfacility for any purpose directly or indirectly in connectionwith the Offer. Any purported acceptance ofthe Offer resulting,directly orindirectly, from aviolation of these restrictions will beinvalid.NoSNTshares arebeingsolicited from aresident ofthe United States and,ifsent inresponse byaresident ofthe United States,will not be accepted.
o 2. IMPORTANT INFORMATION ThisOffer Documentcontains importantinformation thatshouldbereadcarefullybefore any decisionismadetotenderSNTSharesinconnection with theOffer. SNTShareholders are advisedtoseekindependentadvicewherenecessary. Inaddition,SNTShareholders may wishtoconsultwith their taxadvisers regarding thetaxconsequences ofparticipating in the Offer. Theinformation included in Section i (Restrictions), Section 7(Invitation toSNT Shareholders), Section 9(Explanation and background ofthe Offer) excludingthe statements regardingthe number ofSNTShares andthe number ofOptions held bytheSNT Management Board,the SNTSupervisory Board,Stichting SNTandSNT,Section11 (Information regarding KPN),Section 13(Declarations pursuant to the Decree) insofaras referringtothe statements made bythe Offeror, has been provided bythe Offeror.The information included inSection 6(Extraordinary general meetingSNT),Section 8 (Recommendation to SNTShareholders), Section 9(Explanation and background ofthe Offer) relative tothe statements regardingthe number of SNTShares andnumber of Options held bythe SNTManagement Board,the SNTSupervisory Board,StichtingSNTand SNT,Section 10(Information regarding SNT),Section 13(Declarations pursuant to the Decree) insofar asreferringto the statements made bySNT,and Section 18(Financial Statements) has been provided bySNT.TheFaimess Opinion included inSection 12has been provided byINGInvestment Banking.PricewaterhouseCoopers Accountants N.V. has provided the review report onthe information asset out on pages F2through F6ofthe Offer Document, and has provided the auditor's report on page F32. TheOfferor and SNThave jointly provided the information included onthe other pagesofthe Offer Document. TheOfferor and SNTareexclusively responsible for theaccuracyandcompleteness ofthe information provided inthis Offer Document, eachwith respect to such information asit has provided,andtogether with respect tothe information they have provided jointly. Eachof the Offeror andSNTconfirms,with respect to such information it has provided inthis Offer Document,that to the best ofits knowledge and belief asofthedate hereofthe information contained inthis Offer Document istrue andaccurate inall material respects andthereare noother factsthe omission ofwhich would makeanystatement inthis Offer Document misleading inany material aspect. Please beawarethat certain financial and statistical information inthis Offer Document may berounded upor down andshouldtherefore not beregarded asdefinitive. Theinformation included inthis Offer Document reflects the situation asatthedateof this Offer Document.Thedelivery ofthis Offer Document shall not under any circumstances createany implication that the information contained herein iscorrect asofanytime subsequent to its dateorthat there has beennochange inthe information set out in it or in the affairs ofSNTand/or its subsidiaries sincethe dateofthis Offer Document.The foregoing does not affect theobligation ofboth the Offeror and SNTto makeapublic announcement pursuant tothe Decreeand/or the Listingand IssuingRulesof Euronext Amsterdam (Fondsenreglement), if applicable. Noperson other than SNTandthe Offeror andwithout prejudice totheauditor's report issued byPricewaterhouseCoopers andthe FairnessOpinion issued byING Investment Bankingincluded inthis Offer Document, isauthorised to giveany information orto make anyrepresentation inconnection with theOffer not contained inthis Offer Document and any information or representation not contained herein must not berelied upon as having been provided byoronbehalf ofthe Offeror orSNT. This Offer Document andtheOffer are,andanytender, purchase or delivery ofSNTShares will be,governed byandconstrued inaccordancewith the lawsofthe Netherlands.The District Court ofAmsterdam (rechtbankAmsterdam) and its appellate courts areto have jurisdiction to settle anydisputes which might arise out ofor inconnection with this Offer Document, theOffer and/or anytender, purchase ordelivery of SNTShares.Accordingly, any legalaction or proceedings arisingout ofor inconnection with this Offer Document, the Offer and/or anytender, purchase ordelivery ofSNTShares may bebrought exclusively in such courts.
& ThisOffer DocumentisissuedintheEnglishlanguage.AsynopsisintheDutchlanguageis includedinthisOffer Document.Incaseofdifferencesofinterpretation betweentheEnglish andtheDutchlanguage,theEnglishlanguagewillprevail. ThisOffer Documentincludesforward-lookingstatementsthatinvolverisksand uncertainty.AlthougheachofKPNandSNTbelievestheexpectationsreflectedinsuch forward-lookingstatementsarebasedonreasonableassumptions,noassurancecan be giventhatsuchprojectionswillbefulfilled,andnorepresentationsaremadeastothe accuracyandcompletenessofsuchstatements.Anysuchforward-lookingstatementmust beconsideredalongwiththefactthatactualeventsorresultsmayvarymateriallyfrom suchpredictionsdueto,amongotherthings,political,economicorlegalchangesinthe marketsandenvironmentsinwhichKPN and/orSNTconducttheirrespectivebusinesses, andgeneralbusinessdevelopmentsorrisksinherenttothebusinessesofKPN and SNT. ABNAMRO isactingasfinancialadviserexclusivelytoKPN andtheOfferorandtono one elseinconnectionwiththeOfferandwillnotberesponsibletoanyoneotherthanKPN and theOfferorforprovidingtheprotectionsaffordedtotheclientsofABNAMRO orfor providingadviceinrelationtotheOffer.
ABNAMROBank N.V., aDutch public limited liability company (naamloze vennootschap),with its statutory seat inAmsterdam, the Netherlands
'Acceptance Period'
Theperiod duringwhich SNTShareholders maytender their SNTSharesto the Offeror under theOffer, which period starts on19October 2004 andends onthe ClosingDate
'Admitted Institutions'
Theinstitutions admitted to Euronext Amsterdam
'AFM'
TheNetherlands Authority forthe Financial Markets (stichting AutoriteitFinanciële Markten)
'Articles ofAssociation'
Thearticles ofassociation ofSNT
'ASST^s'
TheDutchActonthe Supervision ofthe SecuritiesTrade1995 (Wettoezichteffectenverkeer 1995),asamended from time to time
'CET
CentralEuropeanTime
'ClosingDate'
Thetime anddateonwhich theAcceptance Periodends, being 15:00 hours CET, on12November 2004,unless extended in accordance with article 90 paragraph 5ofthe Decree,in which casethe ClosingDatewill besuch later time and date
'Commencement Date'
Thefirst date oftheAcceptance Period,being19October 2004
'Consideration'
Thecash amount of EUR 13.50cumdividend offered bythe Offeror for eachSNTSharetendered and delivered (geleverd) undertheterms and conditions ofthe Offer
'Decree'
TheDutch Decreeonthe Supervision ofthe SecuritiesTrade 1995(Besluittoezichteffectenverkeer 1995),asamended from time to time
'Dutch CivilCode'
TheDutch CivilCode(Burgerlijk Wetboek),asamended from time to time
'EGM'
Theextraordinary general meetingof SNTShareholders,tobe held on3November 2004,at 14:00 hours CET,attheoffices of SNTinZoetermeer, the Netherlands,atwhich the Offer will be discussedandexplained inaccordancewith article 9q ofthe Decree
'EUR'
Euro,the legalcurrency ofthe European Monetary Union
'Euronext Amsterdam'
EuronextAmsterdam N.V.ortheOfficial Segment ofthe Stock Market (OfficiëleMarkt) of EuronextAmsterdam N.V., located in Amsterdam,the Netherlands, asthecontext requires
'Fairness Opinion'
Theopinion asgiven byINGInvestment Bankingto theSNT Management Boardand SNTSupervisory Board regardingthe fairnessofthe Consideration,fromafinancial point ofview, to the SNTShareholders
'HonouringDate'
Thedateonwhich the Offer is beingdeclared unconditional by the Offeror, expected to beon17November 2004
G> 'ING Investment Banking'
Theorganisation andtrade name used byINGBank N.V. and certain of its subsidiaries for theconduct of international corporate and investment bankingbusiness. INGBank N.V. isa Dutch public limited liability company (naamloze vennootschap),with its statutory seat inAmsterdam,the Netherlands
'KPN'
Koninklijke KPNN.V., aDutch public limited liability company (naamloze vennootschap) with its statutory seat inTheHague, the Netherlands,and/or oneor moreof its subsidiaries,asthe casemaybe
'Merger Code'
The2000 Merger Codeofthe Netherlands Socialand Economic Council(SER-besluitFusiegedragsregels 2000)
'Offer'
Therecommended firm public offer (aanbevolen vastopenbaar bod) made bythe Offeror for alloutstanding SNTShares,as described in Section7
'Offer Conditions'
Theconditions tothe Offer asset out in Section7
'Offer Document'
Thisoffer document describingtheOffer, dated 15October 2004
'Offeror'
Burum B.V., aDutch private limited liability company (besloten vennootschap metbeperkteaansprakelijkheid) with its statutory seat inTheHague,the Netherlands, anindirect fullyowned subsidiary ofKPN
'Options'
Any rightsto subscribe for the issueordelivery of SNTShares, asreferred to inSection9
'Rabobank'
RaboSecurities N.V., aDutch public limited liability company (naamloze vennootschap) with its statutory seat inAmsterdam, the Netherlands,and/or oneor moreofits group companies,as the casemaybe
'Settlement Date'
Thedateof payment ofthe Consideration to theSNT Shareholders who havetendered anddelivered theirSNT Sharesto theOfferor under theterms ofthe Offer, being as soon aspossible but inanyevent nolaterthan the fifth Trading Dayafter the HonouringDate
'SNT1
SNTGroup N.V., aDutch public limited liability company (naamloze vennootschap) with its statutory seat in Zoetermeer, the Netherlands,and/or oneor moreof itsgroup companies,as the case maybe
'SNTManagement Board'
Themanagement board (raadvanbestuur) ofSNT
'SNTShares'
Theordinary shares andthe ordinary C shares inthe share capitalof SNTwith anominalvalueof EUR 0.02 each
'SNTShareholder'
Theholder ofSNTShare(s)
'SNTSupervisory Board'
Theboard ofsupervisory directors (raadvancommissarissen) of SNT
'Special Share'
Theonespecialshare (bijzonderaandeel) inthe sharecapitalof SNTwith anominalvalueof EUR 0.02, held byKPN Telecommerce B.V., afully-owned subsidiary of KPN,which may
Thetrust foundation (stichting) Stichting Medewerkersparticipatie SNT,with its statutory seat in Zoetermeer, the Netherlands
'TradingDay'
Adayonwhich EuronextAmsterdam isopenfor trading
'WMZ 1996'
TheDutchActon Disclosure ofMajor Holdings in Listed Companies 1996(Wetmeldingzeggenschap interbeurze genoteerde vennootschappen 1996),asamended from time to time
4. TABLEOFCONTENTS 1.
RESTRICTIONS
2
2.
IMPORTANT INFORMATION
3
3.
DEFINITIONS
5
4.
TABLE OFCONTENTS
5.
SUMMARY
6.
EXTRAORDINARY GENERAL MEETING SNT
11
7.
INVITATION TO SNTSHAREHOLDERS
12
8.
RECOMMENDATION TOTHESNTSHAREHOLDERS
15
9.
EXPLANATION AND BACKGROUND OFTHEOFFER
16
8 9
10. INFORMATION REGARDING SNT
21
11. INFORMATION REGARDING KPN
26
12. FAIRNESS OPINION
28
13. DECLARATIONS PURSUANTTOTHEDECREE
30
14. OTHER INFORMATION
31
15. PRESSRELEASES
32
16. NEDERLANDSE SAMENVATTING
37
17. ADVISERS
48
18. CONSOLIDATED FINANCIAL STATEMENTS
Fi-F32
o 5. SUMMARY Thischaptercontainsasummaryofthe main characteristics ofthe Offer. Itis expressly pointedoutthatthissummaryisnotexhaustiveanddoesnotcontainallinformation which isofimportance tothereaderhereof. Readingthissummaryshouldinnowaybe considered asubstituteforreadingthis OfferDocumentinits entirety. Introduction On10September 2004, KPNand SNTjointly announced KPN'sintention to makea recommended cashoffer of EUR13.50cumdividend per sharefortheoutstandingSNT Shares,subject tothe fulfilment ofcertain terms and conditions. Inafurther press releasedated8October 2004, KPNand SNTjointly announced that they had reached adefinitive agreement with respect to the Offer andthatthe preparations of theOfferwerewellunderway.Certaintermsofthe mergeragreement between KPNand SNTare reflected inthis Offer Document. Sincethe public announcement of8October 2004,the Offeror hascompleted aconfirmatory duediligence review,from which nofacts or circumstances haveemergedwhich require aseparate public announcement to bemade. Sincethe announcement of8October 2004,allconditions precedent to commencement of the Offer havebeensatisfied. KPNhas nominated the Offeror to maketheOffer. KPNandSNThaveagreed that KPNmay beheldjointly andseverally liable forallobligations which the Offeror may incur in respect ofthe makingoftheOffer. Theaforesaid agreement astothejoint andseveral liability of KPN,canalso becalled upon byaSNTShareholder whotenders his SNTShares under the Offer, asthis agreement qualifies asan irrevocablethird-party clause(within the meaning of article 6:253ofthe DutchCivilCode). Transaction rationale KPNoffers telecommunications servicesto both consumers and business customers. KPN's coreactivities comprise fixedtelephony anddata services inthe Netherlands, mobile telecommunications services inGermany,the Netherlands and Belgium anddata services in Western Europe.At theendof December 2003,KPNserviced 7.7 million fixed-line subscribers and1.5 million Internet customers inthe Netherlands and 14.7million mobile customers inthe Netherlands, Germany and Belgium. Telecommunications customers areincreasingly seekingaccessto communication channels and information sources,at any placeandat anytime.Businesses increasingly managethe totalcost ofownership across alltheir service requirements including mobilevoice,fixed voiceand data.This dynamic market presents significant opportunities through growth in broadband services (such asADSL)intheconsumer market and newservices and applications inboth thefixed and mobile telephony markets. Inthis environment, KPN views service bundling,joint marketingandcustomer satisfaction asfundamental drivers ofvalue in its business. KPNidentifies the optimisation ofeach point ofcontact with customers asintegralto thisvision. During2003,KPNintroduced anumber of initiatives with theaim ofincreasingthe quality ofserviceto customers.Continuingfrom these initiatives, KPNintends to restructure its Customer Relationship Management ("CRM")activities.Arestructuring hasthe potential to improve serviceto KPNcustomers, maximisethe potentialto createvalue through optimisation ofakeycontact point with customers while reducingcosts. TheOffer, if declared unconditional,would bringSNTunderthefullcontrolof KPNand would therefore facilitate the restructuring. KPNbelieves that it can improve its execution standards in particular for KPN'shighvalue contact services.Therestructuring,the partial integration as referred to below, andthe intended de-listingof SNT(reference is madeto 'De-listingof SNTandsqueeze-out of minority SNTShareholders' below)would result in significant reduction ofcostsacross SNT.Theacquisition will also enablethe closer integration of keySNTactivities, such asthe Multiconnect business (0800/0900 numbers) with KPN'sCallCenter Solution and Call Factory.
& Theexisting program of restructuringwithin SNTwill becontinued.TheSNTbusiness is internationally orientated,wellestablished and hasstrongmarket positions in eachcore market, particularly after the recent restructurings inScandinavia andFrance. Offer Conditions Notwithstanding anyother provisions ofthe Offer,the obligation ofthe Offeror to declare the Offer unconditional andto acceptthetendered anddelivered SNTShares,shallbe conditional upon customary Offer Conditions beingsatisfied,including,but not limited to, the condition that such number ofSNTShares having beentendered that these, together with the SNTShares directly or indirectly held by KPNfor itsown account atthe Closing Date,represent at least 95%(ninety-five percent.) ofthe SNTShares assuming full conversion ofthe SpecialShare,soasto enable KPN to mandatorily squeeze-out the remaining holders ofSNTShares inaccordancewith article 2:92a ofthe Dutch CivilCode. Extraordinary generalmeetingofSNT TheEGM will beheld on3November 2004 at14:00 hours CET,attheoffices of SNTin Zoetermeer, the Netherlands. Theagendaforthe EGM will include anexplanation anddiscussion oftheOffer in accordancewith article 9q ofthe Decree. TheEGM will beconvened inthe usualwayand inaccordancewith theArticles of Association. Announcements Announcements will inanyevent bepublished inthe DailyOfficial List of Euronext Amsterdam (Officiële Prijscourant) and in(at least) onedaily newspaper with nation-wide distribution inthe Netherlands. Expecteddateandtimeevent 18October 2004 18October 2004
Announcement regardingthe convocation oftheEGM Publication oftheadvertisement announcingthe availability ofthe Offer Document andthe commencement oftheAcceptance Period 19October 2004 Commencement Date 14:00 hours CET,3November 2004 EGM 15:00 hours CET,12November 2004 ClosingDate Nolater thanfiveTrading Days after theClosing Date
Honouring Date
NolaterthanfiveTrading Days after the Honouring Date
Settlement Date
O 6. EXTRAORDINARY GENERALMEETINGSNT TheEGM will beheld on3November 2004 at 14:00 hours CET,atthe offices of SNTin Zoetermeer, the Netherlands. Theagenda for the EGM will include anexplanation anddiscussion ofthe Offer in accordance with article 9qofthe Decree. TheEGM will beconvened inthe usualway andinaccordance with theArticles of Association.
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7. INVITATIONTOSNTSHAREHOLDERS TTreSNTShareholders areadvisedtoreviewthis OfferDocument(including all documents) incorporatedbyreferenceherein) andinparticularSection i (Restrictions) andSection2 (Importantinformation) thoroughlyandcompletelyandtoseekindependentadvice where appropriate inorder toreachabalancedjudgement withregardtotheOfferandthe Offer Document. With due reference to allstatements,terms,conditions and restrictions included in this Offer Document, SNTShareholders arehereby invited totender their SNTSharesto the Offeror under theterms ofthe Offer for acceptance inthe manner and subject tothe terms andconditions set out below. Consideration perSNTShare Foreach SNTSharetendered under theterms andconditions ofthe Offer, theOfferor offers aconsideration perSNTShare of EUR13.50cumdividend to bepaid incash.Accordingly, if theOffer is declared unconditional, no final dividend will bepaidtothe SNTShareholders in respect ofthe financial year 2004. Acceptance bySNTShareholders SNTShareholders areinvited totender their SNTShares for acceptance,through (their bank or stockbroker through) theAdmitted Institutions toABNAMRO,which has been appointed asexchange agent in relation to the Offer. Unlessthe initialAcceptance Period is extended inaccordance with article 90 paragraph 5ofthe Decree,SNTShares must have been tendered bynolater than 15:00 hours CETon12November 2004. Admitted Institutions mayonlytender SNTSharesfor acceptancetoABNAMROin writing via aduly completed andsigned application form.Bytendering,theAdmitted Institutions declarethat they havethe SNTShares intheir administration,that each SNTShareholder who acceptsthe Offer irrevocably represents andwarrants that heor shecomplies with the restrictions set out in Section 1 (Restrictions) andthat they bindthemselves to deliver these SNTSharestothe Offeror bynolaterthan 10:00 hours CETonthe Settlement Date. Unless stated otherwise inthe Decree,atender of SNTShareswill bedeemed irrevocable. Offer Conditions Notwithstanding anyother provisions ofthe Offer,the obligation ofthe Offeror to declare the Offer unconditional andto acceptthetendered anddelivered SNTShares,shallbe conditional uponthefollowingOffer Conditions beingsatisfied,subject to the right of the Offeror to waive anyorallofthe Offer Conditions (a)upto and including (h),with the exception ofOffer Condition (e)which cannot bewaived: (a) such number ofSNTShares havingbeentenderedthat these,together with theSNT Shares directly or indirectly held by KPNfor its own account atthe ClosingDate, represent at least95%(ninety-five per cent.) ofthe SNTShares assuming full conversion ofthe Special Share,soasto enable KPNto mandatorily squeeze out the remaining holders of SNTShares inaccordance with article 2:92a ofthe Dutch Civil Code; (b) onor prior to the ClosingDate,nopublic announcement havingbeen made, indicating forthefirst timethat athird party hasannounced that it is preparing,has prepared or madeapublic offer for anyofthe SNTSharesoranysecurities issued orto be issued bySNTagainst aconsideration higher than the Consideration andthere not beinga firm indication (beyond reasonable doubt) that athird party hasobtained fromSNT and/or anyof itsfully-owned subsidiaries or SNTDeutschlandAGthe right to acquire, or hasagreedwith SNTand/or anyof its fully-owned subsidiaries orSNTDeutschland AGto acquire ortake upsharesto beissued bySNTand/or anyofits fully-owned subsidiaries or SNTDeutschlandAGorasubstantial part ofthe assets of SNTand/or anyof itsfully-owned subsidiaries or SNTDeutschlandAG; (c) onor prior to theClosingDatethere hasbeen noevent,factorcircumstance with respect to the SNTShares,SNT,its group companies andtheir businesses which,on the date ofthis Offer Document,was unknown to KPNand/or theOfferor, orcould not have beenderived bytheOfferor from certain information disclosed to KPN,and which
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(d)
(e)
(f)
(g)
(h)
does not result from compliance bySNTor KPN with theterms andconditions ofthe merger agreement between KPNandSNTorfromthejoint press releaseof KPNand SNTof10September 2004,8October 2004 orsubsequent announcements in respect oftheOffer andwhich has not directly or indirectly beencaused byKPNand/or the Offeror, andwhich isofsuch materialnaturethat it can,inallreasonableness and fairness,not beexpected from theOfferor to declare the Offer unconditional, whereby materialshall bedetermined with reference to anamount, individually or in the aggregate,inexcess of EUR5,000,000; onor prior to the Closing Date neither SNT,the SNTManagement Board northeSNT Supervisory Board havingbreached their respective obligations pursuant to the merger agreement entered into bySNTand KPN,and noneofthe individual members ofthe SNTManagement Boardorthe SNTSupervisory Board havingdone so,to the extent that such breach hasorcould reasonably beexpected to havematerial adverse consequences for SNT,KPNorthe Offer andwould beofsuch naturethat it cannot be required, inall reasonableness andfairness,from the Offeror to declarethe Offer unconditional; onor prior to the ClosingDate,nonotification having been receivedfrom theAFM statingthat theOffer has been made inviolation ofChapter IIAoftheASST1995,in which case,pursuant toarticle 32aofthe Decree,the securities institutions (effecteninstellingen, asdefined intheASST1995)would not beallowed to give their co-operation to theexecution andsettlement ofthe Offer; onor prior tothe ClosingDate: (i) with the exception ofthe competition approvals provided for in(ii) below, all materialapprovals, licences,exemptions and permissions ofdomestic and international authorities required inconnection with theOffer andits intended changeofcontrol havingbeenobtained; (ii) allmandatory, pre-completion andcompetition approvals ofdomestic and international authorities reasonably required inconnection with the Offer and its intended changeofcontrol havingbeenobtained; (iii) in relation to the matters referred to in(i)and(ii) above,allwaiting periods pursuant to applicable legislation havingexpired duringwhich domestic or internationalauthorities mayopposethe Offer orits intended changeofcontrolor cantake orannounce steps,which could impede theOffer and its intended changeofcontrolorcould inanyother way result in material adverse consequences for SNTorthe Offeror inconnectionwith the Offer; and (iv) in relation tothe matters referred to in(i)and(ii)above,neither domestic nor international authorities havingtaken orannounced stepswhich could impede the Offer or its intended change of controlorwhich could inanyother way result in materialadverse consequences forSNTorthe Offeror inconnection with the Offer; between 10September 2004,beingthe date of KPN'sand SNTs initial announcement regardingthe Offer, andthe Closing Date,SNTnot havingcommitted itself inanyway tothe payment ofanydividend or another distribution,whether or not intheform of shares,andSNTnot havingpaid out anydividend or anyother distribution,whether or not inthe form ofshares;and the SNTManagement Boardandthe SNTSupervisory Board nor anyoftheir individual members havingchangedtheir positions asregards their recommendation ofthe Offer.
Acceptance Period TheAcceptance Period starts on19October 2004 andends at 15:00hours CETonthe ClosingDate. Extension If not allOffer Conditions described above havebeen satisfied orwaived prior to the Closing Date,KPNmayextendtheAcceptance Period.Ifthe initialAcceptance Period is extended (asaresult ofwhich theobligation to announcewhether or nottheOffer willbe declared unconditional,will bepostponed) anannouncement to that effect will bemadeno laterthan onthethirdTradingDayafterthe endofthe initialAcceptance Period,with due observance ofthe provisions ofarticle 90 paragraph 5ofthe Decree.
& Duringanextension oftheAcceptance Period,anySNTShares previously tendered and not withdrawn will remain subject tothe Offer, subject to the right ofeach SNTShareholder to withdraw the SNTShares heor shehasalreadytendered. DeclaringtheOffer unconditional (gestanddoening) With due observance ofarticle 9t paragraph 4ofthe Decree,the Offeror will announce as soonas possible, but nolaterthan onthe fifth TradingDayafter the ClosingDate,whether or not it declares the Offer unconditional (hetbodaldannietgestanddoet).Inthe event that the Offeror announces to declarethe Offer unconditional,the Offeror will purchase all SNTSharesthat have beenvalidlytendered (ordefectively tendered provided that such defect has beenwaived byKPN)to the Offeror inaccordancewith theterms and conditions set out inthis Offer Document. Settlement Onthe Settlement Date,payment ofthe Consideration inrespect ofeach SNTShare tendered anddelivered (geleverd)tothe Offeror undertheterms ofthe Offer shalltake place,atwhich point,dissolution orannulment ofaSNTShareholder's tender or delivery (levering) shall not bepermitted. Commission Admitted Institutions shall receivefromABNAMROon behalfofthe Offeror acommission in the amount of EUR 0.0394 in respect ofeachSNTSharevalidly tendered undertheterms of the Offer (ordefectively tendered provided that such defect hasbeenwaived bythe Offeror) and delivered (geleverd),upto amaximum of EUR10,000 per SNTShareholder tender.The commission must beclaimed from theOfferor through the exchange agentwithin thirty (30) days ofthe Honouring Date.TheSNTShareholders may becharged certain costs bytheir banks or brokers. Restrictions TheOffer is being madewith dueobservance ofsuch statements, conditions and restrictions asareincluded inthe Offer Document.TheOfferor reservesthe right,subject to theOffer Conditions described above,to accept anytender, evenif it has not been effectuated entirely insuch manner asset out inthis Section7.
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8. RECOMMENDATIONTOTHESNTSHAREHOLDERS DearSNTShareholder, We,the SNTSupervisory Board andthe SNTManagement Board haveduly considered the strategic, financial andsocialaspects ofthe Offer onthe basisofthe considerations set out inthis Offer Document and have reachedtheconclusion that the Offer isinthe best interests ofSNT,the SNTShareholders andother stakeholders inSNT. Alsotaking into account the Fairness Opinion of INGInvestment Bankingasincluded in Section 12(Fairness Opinion) ofthis Offer Document,eachofthe members ofthe SNT Supervisory Board andthe SNTManagement Board believethe Offer is reasonable and fair (redelijkenevenwichtig) to the SNTShareholders. With referencetothe aforementioned,wefully recommendthe Offer totheSNT Shareholders for acceptance.
15October 2004
Supervisory Board Drs.R.J.N.Abrahamsen; Chairman Ir. P.P.'t Hoen Drs.D.J.M.G. baronvan Slingelandt Drs.R.G.J.Langezaal Management Board T.A.M.Walraven; CEO Ir.W.M.Middelburg;CFO
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9. EXPLANATIONANDBACKGROUNDOFTHE OFFER Introduction On10September 2004, KPNandSNTjointly announced KPN'sintention to makea recommended cashoffer ofEUR13.50cumdividend perSNTShare,subjecttothe fulfilment ofcertain terms and conditions. In afurther press releasedated 8October 2004 KPNandSNTjointly announcedthat they had reached adefinitive agreementwith respect tothe Offer andthatthe preparations of theOffer werewell underway.Certainterms ofthe merger agreement between KPNand SNTarereflected inthis Offer Document. Sincethe public announcement of8 October 2004,the Offeror hascompleted aconfirmatory duediligence review, fromwhich nofacts orcircumstances haveemergedwhich require aseparate public announcement to bemade. Sincethe announcement of8October 2004,all conditions precedent to commencement of the Offer havebeensatisfied. KPNhas nominated the Offeror to makethe Offer. KPNand SNThaveagreedthat KPNmay beheldjointly and severally liable for allobligations which the Offeror may incur in respect ofthe makingoftheOffer.Theaforesaid agreement astothejoint andseveral liability of KPN,canalso becalled upon byaSNTShareholder whotenders his SNTShares under the Offer, asthis agreement qualifies asanirrevocable third-party clause (within the meaning ofarticle 6:253ofthe Dutch CivilCode). Transaction rationale KPNoffers telecommunications servicesto both consumersandbusiness customers.KPN's coreactivities comprise fixed telephony anddata services inthe Netherlands, mobile telecommunications services inGermany,the Netherlands and Belgium anddataservices in Western Europe.Attheendof December 2003,KPNserviced 7.7 million fixed-line subscribers and1.5 million Internet customers inthe Netherlands and 14.7million mobile customers inthe Netherlands, GermanyandBelgium. Telecommunications customers areincreasingly seekingaccessto communication channels and information sources,atany placeandat anytime. Businesses increasingly manage the totalcost ofownership across alltheir service requirements including mobile voice, fixed voice anddata.This dynamic market presents significant opportunities through growth in broadband services (such asADSL)inthe consumer market and newservices and applications in boththe fixed andmobiletelephony markets. Inthis environment, KPN views service bundling,joint marketingandcustomer satisfaction asfundamental drivers ofvalue inits business. KPNidentifies theoptimisation ofeach point ofcontact with customers asintegraltothisvision. During2003,KPNintroduced anumber ofinitiatives with theaim ofincreasingthe quality of serviceto customers.Continuingfromthese initiatives, KPNintends to restructure its Customer Relationship Management ("CRM")activities.Arestructuring hasthe potential to improve serviceto KPNcustomers, maximisethe potentialto createvalue through optimisation ofakeycontact pointwith customers while reducingcosts. TheOffer, if declared unconditional,would bringSNTunderthe fullcontrolof KPNand would therefore facilitate the restructuring. KPNbelieves that it canimprove its execution standards in particular for KPN's highvalue contact services.Therestructuring,the partial integration asreferred to below, andthe intended de-listingofSNT(reference is madeto 'De-listingofSNTandsqueeze-out of minority SNTShareholders' below) would result in significant reduction ofcostsacross SNT.Theacquisition will also enablethe closer integration of keySNTactivities, such asthe Multiconnect business (0800/0900 numbers) with KPN's CallCenter Solutionand CallFactory. Theexisting program of restructuringwithin SNTwill becontinued.TheSNTbusiness is internationally orientated,wellestablished and hasstrongmarket positions ineachcore market, particularly after the recent restructurings inScandinavia andFrance.
© Foundation ofthe Consideration TheConsideration has been basedoncarefulfinancialanalyses,consistingofthe following elements: • adiscounted cashflow analysis basedonhistoric andexpected developments in the financial performance,cashflow and balancesheet ofSNT; • atrading multiple analysis based onthevalue ofcomparable listed companies;and • the results ofaduediligence investigation. TheConsideration represents apremium of: • approximately 6per cent,relativeto the closingprice per SNTShareof EUR 12.75 o n 9 September 2004, beingtheTradingDayprior tothe first public announcement regardingthe Offer; • approximately 8percent,relativetothevolume-weighted average closingprice per SNTShare duringthe last month prior to and including9September 2004; • approximately 8 percent, relative to thevolume-weighted averageclosingprice per SNTShare overthetwelve months prior to and including9September 2004;and • approximately 11 percent,relative tothevolume-weighted averageclosingprice per SNTShareoverthetwenty-four months prior to and including9September 2004. Atthe request ofthe SNTManagement Boardandthe SNTSupervisory Board,ING Investment Bankinghas provided aFairness Opinion statingthat asatthe dateofthe Fairness Opinion,in INGInvestment Banking's opinion the Consideration isfair, froma financial point ofview,tothe SNTShareholders, subject to theassumptions and qualifications setout therein.SeeSection 12(Fairness Opinion). Committed SNTSharesand Options SNTShares Rabobank,which holds approximately 2,300,163 SNTShareswith atotal nominalvalueof EUR46,003.26, representing10.36 percent,assumingfullconversion ofthe SpecialShare, ofthetotal outstandingsharecapitalofSNT,hasirrevocably committed to sellitsSNT Sharestothe Offeror against payment ofthe Consideration.TheOfferor hasagreed to accepttransfer ofthe SNTShares held byRabobank within 2business days after the date this Offer Document has been madeavailable. MrWalraven,asfounder ofSNT,currently holds 188,967 SNTShareswith atotal nominal value of EUR 3.779-34. representing0.85 percent,ofthetotal issuedandoutstanding share capitalofSNTassumingfullconversion ofthe SpecialShare,and has irrevocably committed totender all SNTShares held byhim under theOffer, subject tothe Offer beingdeclared unconditional.NoSNTShares are held byMrMiddelburgoranyofthe members oftheSNT Supervisory Board. Stichting SNTcurrently holds 81,535SNTShareswith atotal nominalvalue of EUR 1,630.70, representing 0.37 per cent,ofthetotal issuedandoutstandingsharecapitalofSNT assumingfullconversion ofthe SpecialShare andhas irrevocably committed totender all SNTShares held byit underthe Offer, subject to theOffer beingdeclared unconditional. Saveasreferred to above,noother SNTShareholders havecommitted themselves to accept the Offer. At thedate hereof, SNTholds 588,309 SNTShares,representing 2.65 percent,ofthe outstanding SNTShares. Inlight ofthe abovementioned,the Offeror will hold approximately 83.45 P er c e n t - ofthe issuedandoutstandingshare capitalofSNTassumingfullconversion ofthe SpecialShare, transfer ofthe SNTShares held byRabobank, MrWalraven andStichting SNT,and taking into account the SNTShares held bySNT. Options Anumber ofSNTs employees haveacquired SNTShares asaresult oftheir participation in SNT'semployees stock option plans (personeelsoptieregelingen).
& Inlight ofthe Offer, allapplicable employee stock options plans (personeelsoptieregelingen) have recently beenamended in such awaythat the exercise period ofthe outstandingOptions havebeenamended andnow correspondwith the Acceptance Period.Furthermore,SNThasimplemented the possibility ofacash settlement, which enables the holders of in-the-money Options,subject to the Offer beingdeclared unconditional,to submit their Options to SNTfor cancellation beforethe ClosingDate, whereupon KPNshall reimburseanamount incashequalto theConsideration less the exercise priceofthe relevant Options.SeeSection10. Onthe dateofthis Offer Document, anumber of780,800 in-the-money Options are outstanding ofwhich 103,000 are held byMrWalraven,CEOofSNTand12,000 byMr Middelburg,CFOofSNT.Themembers ofthe SNTSupervisory Boarddo not holdany Options.MrWalravenandMrMiddelburghavecommitted themselves tosubmit all Options held bythem pursuant to theaforementioned cash settlement, subject tothe Offer being declared unconditional. SNTSharesheldbySA/rs employees Furthermore, subject to any regulatory requirements, SNTandeachofthe members ofthe SNTManagement Boardandthe SNTSupervisory Board havecommitted themselves to use their best efforts to procure that the employees ofSNTwho areor shall become holders of SNTShares,tender these SNTShares under theterms ofthe Offer. Future structure KPNwishes to simplify the current SNTlegalstructure intwoways,namely (i)by terminatingassoon aspossible existingarrangements madewith SNTonthe composition ofthe SNTSupervisory Boardandtheappointment anddismissal ofits members and by bringingtheArticles ofAssociation in linewith the articles ofassociation ofother KPN subsidiaries,and(ii) eventually, onceSNThas beendelisted from EuronextAmsterdam,by adoptinganamendment totheArticles ofAssociation inwhich the SNTSupervisory Board is removed asanorgan ofSNT. Activities such asthird-party callcentre services and market research,will bedivested in duecourse.Potentially the restructuring anddivestments mayleadto restructuring charges and impairments depending onthe proceeds.With respect to foreign subsidiaries ofSNT, various options arebeingevaluated byKPNwhich mayor may not leadto such subsidiaries beingdivested after theOffer isdeclared unconditional.With regardto Interview-NSS B.V., a100 per cent,subsidiary of SNT,discussions aretaking place inrelation to a potential management buy-out which would allow Interview-NSS B.V.to operate asastand-alone entity.Thediscussions arecontinuing. Futurecomposition ofthe SNTManagement Boardandthe SNTSupervisory Board KPNintends to takeoverthe management and effective control(directievoering enfeitelijke besturing) ofSNTand its subsidiaries assoon aspossible. Forthis purpose,it is KPN's intention to convene anextraordinary general meetingofSNTShareholders immediately after the Offer has beendeclared unconditional,inwhich,interalia, newmembers of the SNTManagement BoardandSNTSupervisory Boardareto beappointed.KPNintends to nominate MrJacobMiddeldorp tothe SNTManagement Boardsubject to prior works council's advice,andto nominate appropriate membersto the SNTSupervisory Board. MrWalraven,CEOofSNT,shallonsuch date,with immediate effect resign as member of the SNTManagement Board.Subject to theOffer beingdeclared unconditional,the contract ofemployment ofMrWalraven shall beterminated on1 July2005.MrWalraven willbe granted his agreed contractual maximum performance bonus for 2004,to bepaid on1July 2005,which agreement will supersede all previous bonus agreements with MrWalraven.Mr Walraven shall however beemployed asaconsultant by KPNin relationtotheCRM business of KPN for aperiod of3yearsfrom the HonouringDateor1January2005 (whichever isthe later date)andshallservefor 1year onthesupervisory boards of the subsidiary companies ofSNTinScandinavia,GermanyandFrance. MrMiddelburg,CFOofSNT,and MrG.C.vander Stelt,the managingdirector Benelux, shall onsuch datewith immediate effect resign asmember ofthe SNTManagement Board and the management team respectively. However,they shallcontinue to perform similar duties,
-© inaccordance with the instructions of KPN,forthe benefit of SNTuntil i July2005 (Mr Middelburg) and1August 2005 (MrVander Stelt).Mr Middelburgand MrVander Stelt will both begranted their agreed contractual maximum performance bonus for 2004,to be paid on1July2005 (Mr Middelburg) and 1August 2005 (MrVander Stelt),which agreement shall supersedeallprevious bonus arrangements withthem. Furthermore,allcurrent members ofthe SNTSupervisory Boardshallonsuch date with immediate effect resign.Themembers ofthe SNTSupervisory Board shall however continue to remainavailable until 31 December 2004,for the purpose ofprovidingadviceto KPNand tothe SNTManagement Board.InDecember 2004,the resigning members oftheSNT Supervisory Boardwill receive aredundancy payment intheamount oftheir respective annualsalaries,pro rata,asapplicable inthefirst quarter of2005. Socialconsequences ofthe Offer Theaverage number ofSNTemployees in 2003totalled upto 6,595. K P N will respect the current conditions ofemployment ofSNT'semployees inthe Netherlands after the successfulcompletion ofthe Offer.After the merger, in principle,anysuch employees who may become redundant will beallowed the opportunity to apply for other vacant positions within KPNor its group companies.Theforegoingdoes not applyto such employees who have been notified bySNTonthe basis ofthe so-called Uranus redundancy plan. De-listingofSNTandsqueeze-out of minority SNTShareholders Dependingon,interalia,the number ofSNTShares held byKPNafter the Settlement Date, KPNintends to seek de-listingofthe SNTShares from EuronextAmsterdam andto liaise with EuronextAmsterdam inthat respect. SNTShareholders who choose notto tender their SNTShares under theterms oftheOffer therefore risk holding shares inathinly traded, illiquid stock. Inthe eventthat KPNhasacquired 95percent,or moreofthe issued SNTShares following the Settlement Date,the Offeror, shortlythereafter, intends to initiate compulsory squeezeout proceedings (uitkoopprocedure), inaccordancewith article 2:92a ofthe Dutch Civil Code,inorderto obtainthe remaining SNTShares. Inthe eventthat KPNhasacquired lessthan 95percent,ofthe issued SNTShares following the Settlement Date,such that it is not possible to initiate compulsory squeeze-out proceedings inaccordance with article 2:92a ofthe Dutch CivilCode,KPN,mayconsider to effect shortlythereafter, subject to approvalofthe SNTSupervisory Board andby simple majority vote ofthegeneral meetingof SNTShareholders to beconvened following the Settlement Date,astatutory merger (juridischefusie) between the Offeror andSNTorKPN and SNTinwhich either the Offeror or KPNisthe survivingentity andSNTthe disappearing entity. Incaseanyofthe statutory mergers mentioned above areeffected, SNTShareholders that have nottendered their SNTShares under the Offer, will become,byoperation of law, shareholders in KPN.Thenumber ofordinary shares inthe sharecapitalof KPN to be distributed byoperation of law(toekennen) byKPNtothe SNTShareholders that have not tendered their SNTShares under theOffer will bedetermined basedonthevalue ofthe SNTSharesthat were nottendered underthe Offer in proportion tothevalueofthe shares inthe share capitalofKPN. Incaseofastatutory merger, amerger proposalwill beprepared bythe management boards ofthe mergingcompanies which will, inaddition to other particulars required to be included pursuant to Dutch law,mention the exchange ratio ofthe SNTShares andthe extent of payments, if any,to bemade pursuant to Dutch law basedonsuch exchange ratio. Insuch event,inaseparate statement tothe merger proposal,details will further begiven ofthe following: •
the methodor methods accordingtowhichthe exchange ratiofor the SNTShares will have beendetermined;
•
why such method or methods areconsidered appropriate under the circumstances;
•
thevaluation resultingfrom each method applied;
s•
'ifmorethan one method hasbeenapplied,whether the relative importance attributed to thevaluation methods applied maybeconsidered generally acceptable; and
•
whether there havebeenany particular difficulties onsuchvaluation andwith the determination ofthe exchange ratio.
Inthe event ofastatutory merger, anaccountant will berequestedto examinethe merger proposalandwill beaskedto certify that in hisopinion the proposed ex-change ratio for the SNTShares is reasonable. KPNalso reservesthe right to useanyother legally permitted method (either directly or indirectly) to obtain 100per cent,oftheSNTShares,aswellasto effect aliquidation,demerger or sale ofallorsubstantially alloftheassets ofSNTorto effect astatutory merger between theOfferor and SNTwith SNTbeingthe survivingentity andthe Offeror the disappearingentity. Finally, KPNandSNTreservethe right to haveKPNcontribute assets to SNTagainst the issuance ofSNTShares,while atthe sametime pre-emptive rights (voorkeursrechten) ofother SNTShareholders shall beexcluded,allinaccordance with Dutch law andtheArticles ofAssociation. Financingofthe Offer TheOfferor willfinancethe Offer from the cash resources andexisting credit facilities of KPN. Time schedule Thefollowingis asummary oftheexpected timetable fortheOffer.This expected timetable is subject to change intheevent ofextension oramendment ofthe Offer. Expecteddateandtimeevent 18October 2004 18October 2004
Announcement regardingtheconvocation oftheEGM Publication ofthe advertisement announcingthe availability ofthe Offer Document and the commencement oftheAcceptance Period 19October 2004 Commencement Date 14:00 hoursCET,3November 2004 EGM 15:00 hours CET,12November 2004 ClosingDate NolaterthanfiveTrading Days after theClosingDate
HonouringDate
Nolater thanfiveTradingDaysafter the Honouring Date
Settlement Date
o 10. INFORMATION REGARDINGSNT PROFILE SNTisaDutch publicly traded company founded in1985,and has sincedeveloped into beingoneof Europe's largest providers ofservices inthe field of CRM.These services ensurethat clients canobtain and maintain effective contact with their customers through either telephone,e-mailorthe internet. Inorder tofacilitate these customer contacts,SNT provides infrastructure facilities byway ofdeveloping newservices,products and applications,analysingtraffic patterns andcalldata.SNT'scustomers arefurther serviced bythe provision ofinformation andadvice,the makingof reservations and performing of transactions. SNTs customers consist of, amongothers,large insurance companies, international "A"-brands inconsumer products, bankinginstitutions,travelorganisations, ITcompanies andtelecom companies. GENERALINFORMATION Incorporation SNTwas incorporated underthe laws ofthe Netherlands on7October 1985asaprivate limited liability company (besloten vennootschap metbeperkteaansprakelijkheid). SNTwas converted into apublic limited liability company (naamloze vennootschap) intheyear 2000. TheArticles ofAssociation were last amended bynotarialdeed executed on 23April 2004. SNThas its registered seat inZoetermeer and is registeredwith thecommercial register of the Haaglanden Chamber ofCommerce under file number 27113040. Registered office SNTGroup N.V. Koraalrood70 2718SCZoetermeer The Netherlands Telephone:+31(0)79368 6900 Telefax: +31 (0)79368 5190 E-mail:
[email protected] Website: www.snt.com SNTManagement Board TheSNTManagement Boardcurrently consists oftwo (2) members,being: MrT.AM. Walraven-CEO MrWalraven has been chairman ofthe SNTManagement Boardsince SNTsfoundation.He wasthefounder of inbound telemarketing inthe Netherlands,and initiator and former chairman ofthe employers'federation for callcenters (WGCC).Inthese positions Mr Walraven devoted himself to further increasing professionalism within the industry. Hehas received distinctions on morethan oneoccasion.In1993,hewasawarded the prize for innovative entrepreneurship from the Chamber ofCommerce inTheHague.In1996,he receivedthe Best BusinessVision Awardfrom theJunior Chamber. In2000, hewas proclaimed Direct Marketing ManoftheYear.Onthe 23rd of November 2001, MrWalraven wasawarded the prizefor Excellent Entrepreneurship bythe Netherlands Centreof Executive andSupervisory Directors.MrWalraven ischairman ofthe supervisory boardof SNTGermany. Inaddition tothis,MrWalraven isamember ofthesupervisory board of Excellent (Stockholm),Vitalicom (Paris),O.N.S.Group (Schiedam) andW& R Support B.V. (Capellea/d IJssel). Ir. W.M.Middelburg - CFO MrMiddelburgbecame CFOofSNTon 25April2003. Hewasaco-founder ofPink Elephant, anICTbusinessthat mergedwith the Rijks Computer Centrum (RCC),now knownas PinkRoccade,atthestart ofthe90's. From1992 until 2002,MrMiddelburgwas employed byPinkRoccade asCFO,andamongother things was responsible for Finance, Investor Relations and HRpolicy.
€> SNTSupervisory Board TheSNTSupervisory Board currently consists offour (4)members,being: Drs.R.J.N.Abrahamsen - Chairman MrAbrahamsen became amember ofthe SNTSupervisory Board in 2002.Prior to his retirement inAugust 2001, MrAbrahamsen was CFOof Koninklijke Luchtvaart Maatschappij N.V. Beforethat, hehelddirectorships at companies includingABNAMRO Bank N.V.,De Nationale Investerings Bank N.V.and Nedbank Group.MrAbrahamsen isalsoamember of the supervisory boardof PonHoldings B.V., TNTPostGroup N.V., Fluor Daniel B.V., Koninklijke BAMGroep N.V.,Translink Systems,Vitens N.V., Optimix N.V.,ANP,Madurodam B.V. andthe Port of Rotterdam. Ir. P.P. 'tHoen - Vice-chairman Mr't Hoen became amember ofthe SNTSupervisory Board in 2000. Until1September 2001, Mr't Hoenwas StrategyVice President Europeat LucentTechnologies. Inthe past, Mr't Hoen has heldvarious executive functions at subsidiary companies of KPN Telecom and hewas managingdirector ofVision Networks N.V. Mr'tHoen isalsoamember ofthe supervisory board ofTelematic Systems &Services B.V., Siennax B.V. andAtoBe B.V. Heis chairman ofthe Dutch ICT-Forumandthe supervisory board ofthe Foundation Kennisnet and isalsoamember ofanumber ofconsultative bodies and boards. Drs.R.GJ. Langezaal Mr Langezaal became amember ofthe SNTSupervisory Board in1998.Mr Langezaalis managingdirector ofKPNRetail B.V. Inthe past Mr Langezaalhas heldvarious management functions at KPN.Mr Langezaalisalsoamember ofthe boardofMedia Plaza in Utrecht and member ofthe board ofConference Center 'KasteelOud Poelgeest'. Drs.D.J.M.G. baron vanSlingelandt MrVanSlingelandt becameamember ofthe SNTSupervisory Board in2003.MrVan Slingelandt isamember ofthe management board of Rabobank Nederland and also chairman ofthe management boardof Rabobank International. Inaddition,MrVan Slingelandt ischairman ofthesupervisory boardof RIAS,Interpolis, deputy chairman ofthe supervisory boardof Bank Sarasin &Cieand member ofthe supervisory boardof Schretlen &Co. Personnel Theaveragenumber ofSNTemployees in2003totalled upto6,595. KPNwill respect the current conditions ofemployment ofSNT's personnel inthe Netherlands after the successfulcompletion ofthe Offer. KPNfurther undertakes that all such employeeswho will bemade redundant after the Offer beingdeclared unconditional shall beallowed to apply for other vacant positions within KPNor itsgroup companies.Theforegoing does not apply to such employeeswho havebeen notified bySNTonthe basisofthe so-called Uranus redundancy plan. Business overview SNTparticipates inthedevelopment ofCRMconcepts for clients.SNTinterprets these concepts inits customer contact centers bymakingclients accessible totheir customers via telephone, e-mail,chat,co-browsingand SMS.Management information,which clients can usetofurther interpret their marketing strategy and build up lastingrelationships with customers, isdistilled from these customer contacts usingdata-miningtechnologies.SNT provides serviceto millions ofconsumers annually from the Netherlands, Belgium and Germanythrough its subsidiaries inthe Netherlands, Belgium andGermany.Within the Netherlands the market research bureau Interview-NSS B.V. isoperating under its own name.SNTisafullservice provider inthefield ofCRM.Theportfolio is divided into three parts,which are inextricably linked: Contactservices Assoon asaccessibility andaccessareset up,reliefand mediation start to playan important role.Thecustomer expects hiscallto betaken at anytime ofthe day, irrespective ofwhich medium heusestoestablish contact.Thecustomer contact centers ofSNTprovide integrated handlingofcustomer contacts viatelephone,e-mailor internet 24hours per day, 365days peryear. Ineighteen different languages.
Contact center employees ofSNTrepresentthe customer. Onits behalf, they answer questions, provide information,make reservations or perform transactions. Inorder tobe ableto dothis,they haveaccessto databases andcustomer systems ofthat customer. Thesesystems have been linked uptothe localSNTinfrastructure bySNTICTspecialists, in co-operation with the customer.Various traffic flows arefound toandfrom the customer contact center. Incaseof inbound traffic, the customer takes the initiative to contact the SNTcustomer viatelephone,e-mailor internet. Incaseofoutboundtraffic, the initiative, following arequest bythe SNTcustomer, istaken bythe SNTemployee.Thiscould concern aservice call,for instanceto checkwhether acustomer issatisfied with apurchase orto arrange aservicingappointment for acar inthe nearest garage. Research Valuable management information can bedistilled from the calldata registered inthe customer contact centers.Basedonthis information,SNTcharts thecustomer's behaviour and preferences.Theoutcome canresult inanadvicetotheSNTcustomer toadjust its rangeofservices,orto pro-actively anticipate trends. Analysis ofthe calldata also leadsto amorefocused,more cost efficient deployment of contact center employees andsubsequently to higher productivity percustomer contact. In addition to studyingcustomer contacts of individual SNTcustomers, SNTalso studies behaviour and preferences of(European) population groups.Thesestudies form the basis forfurther portfolio development withinSNT. Multiconnect SNTmakescompanies accessible byoperating800 and900 telephone numbers andby providingthe required infrastructure. Inaddition,value added services are developed within SNTwhich makethe800 and900 services ofcustomers morecostefficient, more customer friendly and more effective. Examples ofsuch services aretraffic routingapplications, for instance from an understaffed location to alocation where the helpdesk iscompletely manned,applications which help to avoid inconvenience incaseof improper useoffree phone numbers and Interactive Voice Responseapplications,which automatically connect the customers to the right department, listingdata prior tothe calloroperate asalternative inaddition tothe livecustomer service. SNTalso studies the accessibility ofcompanies andgives adviceon howto realise improvements. Finally,SNToffers accessibility byfacilitating remoteworkingand conferencing. Group structure SNTconsists of10different operatingcompanies divided overseveral European countries. Theoperatingcompanies all havetheir owncultural background,language, local experience and specific knowledge of markets and products. Fromthis own identity, each operating company contributes to the result andthe development ofthewholeSNT. Together they constitute the international SNTnetwork.Although eachoperating company operates independently andhas built itsown market position,the operatingcompanies are linked byauniformvision andstrategy, ajoint portfolio and uniform working processes. RECENTMARKETDEVELOPMENTS Both internet and SMSservices havedeveloped into forms ofcommunication highly integrated in people's personaland business lives.Inlight ofa24-hour information society and increasingtechnical possibilities, so-called self-help services keep developing.More households switch toADSLinternet connections and soon services such asthe bookingof airline tickets online orthe electronic reportingofmeter readingswill beeasyand the obvious thingtodo. SNThas anticipated the switchfromvoicetraffic to datatraffic.Thebroad product portfolio ofSNTcontains both electronic solutions (Multiconnect) and relief and mediation (Contact). Theresearch activities ofSNTmeetthe growingdemand for insight incustomers' behaviour and preferences, basedonwhich SNTs customers areableto communicate through the right channelwith the right customer group atthe right time.
Asaresult ofthe abovementioned developments the roleofthe contact centre employee haschanged.Inaddition to anincrease ofsales and marketingdriven (outbound) calls, there isashift from providingstandard information towards personalconsultingand support ofcustomers (from 'commodity' to 'high-end'services). STRATEGY
Thestrategy ofSNTis basedonfourfundamental principles: • Growth byway ofstrategic sourcing- Bymeansofstrategic cooperation,whether by way ofalliances orjoint ventures,contacts areestablished and maintained leadingto SNTand itsclients becoming partners in business andthereby strengthening each others' position; • Expansion towards provision ofCRMservices - SNTsupplies atotal range of combined products and services inthe CRMfieldthrough which "one-stop-shop" concept, clients gainaccessto atotal rangeof possibilities rangingfrom accessibility to relief, mediation andanalysis; • Internationalisation through strategic alliances - Whilst historic market borders are fading, SNTcustomers areincreasingly doingbusiness abroad.Through its international network, SNTlinks its own knowledge andexperience to local knowledge of markets andculture;and • Investing in people- Despite developments, establishingand maintaining contacts remains to bedone bypeople, leadingto SNTsconscious investment inits employees. Byinvesting in motivation,trainingandworking conditions,employees are motivated to realise,onadaily basis,theambitions of clients. Strategic developments in respect qf2004 include: • Growth bywayofstrategic sourcing- Inthe springof2004,SNTBenelux and Stichting Korrelatie collaborated inthe field ofsocialandcarerelated services.Both parties make useoftheir combined knowledge andexperience inordertojointly develop products andservices inthe Dutch healthcare services.BASE,afully owned subsidiary of KPN,thethird provider within the Belgiantelecom market,atthe start of 2004 renewed andextended its contract with SNTBelgium whereupon the latter willfor the nextthreeyears carryout Base's complete customer serviceactivities. Internationally, SNThas becomethe preferred supplier of leadinginternet providers such asWanadoo, Planet media Group andTiscali; • Expansion towards provision ofCRMservices - Until recently services with respect to business line Multiconnect were provided mainly bySNTBenelux.Atthe start of 2004, these activities werealso started inGermany. InJanuary 2004,SNTGermany acquired Info.PortalGmbHfrom O2Germanyand Norwegian TelenorTeleservice.SNTaims to expandthe German activities into acomplete range ofCRMproducts and services.SNT Benelux has boosted its Multiconnect activities with the signingofcontractswithTom Tomand Planet Media Group,afully owned subsidiary of KPN,concerning the provision of licenses for Eresponse services.Adistribution agreementwas signed in June2004with E-piphanyforthe InteractionAdvisor relatingtothe combination of data from different customer entry stations,and inthis month SNTBenelux also commenced ajointventure with Emexusinthe field of mobile CRMinanticipation of the growingneedofcustomers for mobile customer contact channels.Within the business line SNTResearch,Interview-NSS inMarch 2004 signed anagreement with respect to cooperation inthe field ofdata collection bytelephone. Interview-NSS also strengthened its position inthe market for international media researchthrough the introduction of EMSSelect,aresearch product that charts the media behaviour ofthe top 3%income group; • Internationalisation through strategic alliances - InJune2004 SNTand Hewlett Packard(HP)agreedthat SNTwillcarryout salesandsupport activities for HPin Northern Europe.Thenetwork ofSNToffices inthe Benelux incombination with its Scandinavian partner, Excellent,will ensure scaleandflexibility for successfully taking careof HP'sactivities inthis region;and • Investingin people- Inearly 2004,the COPCstandardwas adopted with respect to contact centreworks inaccordancewith anumber ofdetermined quality requirements. Asfrom 2004,SNTemployees have beentrained to operate to these quality standards. TheE-collegewasadopted bySNTBenelux inorder totrain employees more effectively in lesstime.
CAPITALANDSHARES Share capital SNTs authorised sharecapitalamounts to EURi million.Theissued share capitalofSNT amounts to EUR277,597.32.Theissued share capital is divided into 13,879,865 SNTShares andoneSpecialShare,registered inthe nameof KPNTelecommerce B.V., afully-owned subsidiary ofKPN. TheSpecialShare hasaconversion right to enable KPN to maintain its interest in SNTata levelabove50%and henceforth to maintain thecurrent votingbalances inthe general meetingof SNTShareholders. Pursuant to theArticles ofAssociation,the holder ofthe Special Share isentitledto fully exercisethe (remaining) conversion right ofthe Special Share (i)intheevent ofapublic offer bythe holder ofthe SpecialSharefor allSNTShares beingdeclared unconditional or (ii) at anytime after 1 December 2004.Fullconversion of the Special Sharewill enable KPNto increase its shareholding inSNTfrom 50.78%to 69.22%ofthetotal issued andoutstandingshare capitalofSNT. Disclosureof Major Holdings in ListedCompaniesAct Under article 2ofthe WMZ1996thefollowing notifications of interests inthe subscribed share capitalof SNTarecurrently outstanding,and havebeen received bySNT. %of interest
Notification date SNTShareholder 03-03-2000 22-10-2002 09-01-2002 30-11-2000 13-03-2000 03-03-2000
Koninklijke KPNN.V. Coöperatieve Centrale Raiffeisen - Boerenleenbank BA Orange FundN.V. Eureko B.V. Mercurius Beleggingsmaatschappij T.A.M.Walraven
51% 21% 5.09% 5% 5.14% 5.46%
Pursuant to article 2aoftheWMZ1996,thefollowing interests arecurrently outstanding. Notification date
SNTShareholder
15-10-2004 15-10-2004
T.A.M.Walraven W.M.Middelburg
SNTShares 188,967 —
Options 103,000 12,000
Atthe date hereof, noneofthe SNTSupervisory Board members hold any SNTSharesand/ or Options. Dividends Nodividend was paidto SNTShareholders forthe financial years 1999through 2003. OPTIONS Since 1999,SNThasgranted Options everyyear,with the exception of 2003,in connection with its employees stock option plansto employees aswellasto members oftheSNT Management Board.Theobjective hereof isto align the interests of SNTand its employees, inorderto helpattract and retain employees. Eachyear,the SNTSupervisory Board decides if and how manyOptionswill begranted to members ofthe SNTManagement Board andthe SNTManagement Board,with theapprovalofthe SNTSupervisory Board,decides ifand how manyOptionswill begrantedto employees.OnexercisingOptions,the holders have the right to buy1 (one) SNTShare per Option.TheexercisingofOptions issubject to restrictions, includingthe provisions ofthe Regulations for the Prevention of Insider Dealing(misbruik voorwetenschap). SNThas in placeoption plans for 1999(applicable to Options issuedto SNTs personnel in 1999),for 2000 (applicable to Options issuedto SNTs personnelin 2000through 2002) andfor 2004 (for Options issuedto SNTs personnel in2004).Atthedate ofthis Offer Document, only (part of)the Options issued in 1999,2001, 2002 and 2004 areto be considered in-the-money Options.Atthedate ofthis Offer Document,780,800 in-themoney Options areoutstanding,115,000 ofwhich are held bythe members oftheSNT Management Board.Pleaserefer to Section 9(Explanation and background ofthe Offer), under 'Committed SNTSharesand Options'.
l l . INFORMATION REGARDINGKPN GENERALANDBUSINESSINFORMATION Incorporation Koninklijke KPNN.V., apublic limited liability company (naamloze vennootschap) with its statutory seat inTheHague,the Netherlands,was incorporated under Dutch Lawon i January1989. RegisteredofficeandChamberofCommerce KPNis registered with the commercial register oftheChamber ofCommerceof the Haaglanden,the Netherlands under file number 02045200. Supervisory boardand management board Members ofthe supervisoryboard: MrA.H.J.Risseeuw, Chairman Mr D.G.Eustace, Mr M. Bischoff, MrV.Halberstadt, Mr D.l.Jager, Mrs M.E.van Lier Leis,and MrJ.B.M.Streppel. Membersofthe managementboard: MrA.J.Scheepbouwer, Chairman andCEO MrE.Blok, MrG.J.M.Demuynck,and Mr M.H.M.Smits, CFO Capitaland shares KPN'sauthorised sharecapitalamounts to EUR1,920,000,000divided into 4,000,000,000 ordinary shares of EUR 0.24 each,onespecial share of EUR 0.48 and3,999,999,998 classB preferred shares of EUR 0.24. Onthe dateofthis Offer Document,atotal of 2,490,996,876 ordinary shares have been issued,plus onespecialshare held bythe State ofthe Netherlands. INFORMATIONREGARDINGTHEOFFEROR Incorporation Burum B.V., aprivate limited liability company (besloten vennootschap metbeperkte aansprakelijkheid) with its statutory seat inTheHague,the Netherlands,was incorporated under Dutch law on 20September2001. RegisteredOfficeandChamberofCommerce Burum B.V. is registered with the commercial register oftheChamber ofCommerceof the Haaglanden,the Netherlands under file number 27244673. Management board Thesole director of Burum B.V. isKPN. > Capitaland Shares Burum B.V.'sauthorised share capitalamounts to EUR90,000 divided into 9,000 shares (8,999 ordinary shares and1 information share)with anominalvalueof EUR 10each.On the date ofthis Offer Document, atotalof1,800 shares have beenissued. Information onKPN KPNoffers telecommunications services to both consumers and business customers. KPN's coreactivities aretelephony and data services through its fixed network inthe Netherlands, mobile telecommunications services inGermany,the Netherlands and Belgium and data services inWestern Europe.KPNisthe market leader inthe major segments ofthe Dutch telecommunications market.Through E-PlusinGermanyand BASEin Belgium,KPNholds the numberthree position inthe mobile market inthese countries.
•€> OTHERINFORMATION Transactions KPNinSNTShares KPNhas inthe last 3years been involved either directly or indirectly, through its subsidiary KPNTelecommerce B.V., intransactions pertainingtoSNTasfollows: (i) On19July2002,anagreement between KPN Telcommerce B.V., KPNand SNTwas concluded inwhich the parties agreedthat the SpecialShare held byKPN Telecommerce B.V. inSNTshall beableto beconverted,if exercised,to 8,315,659 SNT Shares, (ii) On28June2002,SNTconverted KPN'sSpecialShare into 1,536,776SNTSharesofEUR 0.02 nominalvalueeachandanewspecialsharewith anominalvalueof EUR0.02 which replacedthe previous SpecialShare, (iii) On9July2002,Atos Origin,KPNand SNTagreedthat KPNwould deliver with immediate effect 1,839,217registered SNTshares (listed on Euronext) inexchange for 1,839,217registered SNTShares held byAtosOrigin, (iv) On1 October 2002,KPNrequested SNTto convert 878,104 ordinary C SNTshares to the same number ofordinary SNTshares (amountingto 9.8 percent,ofthetotal shares listed atthat time) effective asfrom 8October 2002. (v) On13December 2002,KPNrequested SNTto convert 964,158 ordinary C SNTshares to the samenumber ofordinary SNTshares (amountingto 9.8 percent,ofthetotal shares listed atthat time) effective asfrom 17January 2003. (vi) On23April 2003,KPNrequested SNTto convert 1,058,646ordinary C SNTshares to the same number ofordinary SNTshares (amountingto 9.8 percent,ofthe total shares listed atthat time) effective asfrom 28April 2003. (vii) On13August 2003,KPNrequested SNTto convert 1,162,393ordinary C SNTshares to the same number ofordinary SNTshares (amountingto 9.8 percent,ofthe total shares listed atthat time) effective asfrom 15August 2003. (vi) On11 December 2003,KPNrequested SNTto convert 856,316 ordinary C SNTshares to the same number ofordinary SNTshares (amountingto 6.58 percent,ofthe total shares listed atthat time) effective asfrom 12December 2003. (vii) Rabobank,which holds approximately 2,300,163 SNTShares, representing 10.36 percent,assumingfullconversion ofthe SpecialShare,ofthetotal outstanding sharecapitalof SNTirrevocably committed to sellits SNTSharestotheOfferor against payment ofthe Consideration.TheOfferor hasagreedto accepttransfer oftheSNT Shares held by Rabobankwithin 2business days after the datethis Offer Document has been madeavailable.
12. FAIRNESSOPINION FAIRNESSOPINION
Tothe Supervisory Board and Management Boardof SNTGroup N.V. Koraalrood70
2700AD Zoetermeer
15 October 2004
Subject: Fairness Opinion Members ofthe Management Boardand Supervisory Board, Weunderstand that Koninklijke KPNN.V.oroneof itswholly-owned subsidiaries ("KPN"), isconsideringmakingapublic offer forall outstandingshares ofSNTGroup N.V. ("SNT"or the "Company"),which it does notalready own (the"Offer").Asissetforth inthe terms andconditions ofthe Offer Document to bedated 15October 2004 (the"Offer Document"), ofwhich wehaveseenadraft, KPNwill makeanoffer of EUR 13.50 pershare (cum dividend) incash for allissuedandoutstandingordinary shareswith anominalvalue of EUR0.02 per ordinary share inthe capitalofSNT("Share"). INGInvestment Banking,theorganisation andtrade nameused byINGBank N.V. and certain ofits subsidiaries for theconduct ofinternational corporate andinvestment banking business ("ING Investment Banking"), has been requested bythe Supervisory Board and Management Board(the"Boards") oftheCompanyto render anopinion with respect to the fairness,from a financial point ofview,ofthe consideration to beoffered inthe Offer to the Company's holders ofthe Shares.Wehave not beenrequested to opine asto,and our opinion does not inany manneraddress,the Company's underlyingbusiness decision to recommend orotherwise to proceedwith the Offer. Inarrivingatour opinion,we have reviewed andanalysed: (1) certain publicly available information with respect tothe Company, including,the annual reports forthefinancialyears 2001, 2002,2003 andfirst half 2004 and such other publicly available information concerningthe Companythat we believeto be relevant to our analysis; (2) certain other financial andoperatinginformation with respect to the business, operations andprospects ofthe Companyfurnished to usbythe Company; (3) atrading history ofthe Company's common stock sinceits listingon3March 2000 to the present dateandacomparison ofthat trading historywith those of other companies that wedeemed relevant; (4) acomparison ofthe historical financial results and present financial condition ofthe Companywith those ofother companiesthatwedeemed relevant; (5) acomparison ofthe financial terms ofthe Offer with the financial terms ofcertain other recenttransactions thatwedeemed relevant; (6) discussions with theManagement Boardand other senior management of the Companyconcerning its business,operations,assets, financial condition and prospects; (7) adraft ofthe Offer document dated 15October 2004; (8) other studies,analysis andinvestigations that wedeemed appropriate. Inarrivingatour opinion,wehaveassumed andrelied uponthe accuracy and completeness ofthe financial andother information used byuswithout assumingany responsibility for independent verification ofsuch information andwe havefurther relied upon the assurances ofmanagement ofthe Companythat theywere not awareofanyfacts that would makesuch information inaccurate and misleading. INGInvestment Bankingdoes not accept any responsibility regardingthis information. With respect to thefinancial projections ofthe Company,uponadviceofthe Companywe haveassumed that such projections havebeen reasonably prepared onabasis reflecting the best currently available estimates andjudgements ofthe management ofthe Company andwehaveassumed that the Companywill perform substantially inaccordance with such
forecasts/projections. INGInvestment Bankingdoes notaccept any responsibility with regardto these projections andtheir assumptions. INGInvestment Banking hasassumed,and it is confirmed bythe Management Board ofthe Company, that: (a) all information provided to INGInvestment Bankingisaccurate andcomplete; (b) noinformation that would materially impact INGInvestment Banking'sview hasbeen withheld; (c) upto the dateofthis letter, nofactorcircumstances haveoccurred that are not known to INGInvestment Banking,orshould havebeen knownto INGInvestment Banking giventhe information provided,that could materially impact INGInvestment Banking's view regardingthefairness ofthe Offer. Ouropinion is basedupon market,economic andother conditions asthey exist on,andcan beevaluated asof,the dateofthis letter. Developments inforegoingconditions occurring after thedateofthis letter, andanyother information that becomes available after this date,could impact our opinion andtheassumptions onwhich the opinion is based.Inthat case,INGInvestment Bankingis not obliged to renew, review orconfirm itsopinion. Based uponand subject totheforegoing,weareofthe opinion asofthe date hereof that, from afinancial point ofview,theconsideration to beoffered under the Offer isfair to the holders ofthe Company's Shares. Thisopinion is solely for the useand benefit ofthe Boardsofthe Companyand is rendered to the Boards inconnection with its consideration ofthe Offer.Thisopinion is not intended to beand does not constitute arecommendation to anyshareholder ofthe Company asto whether to acceptthe consideration to beoffered tothe shareholders inconnection with the Offer. Inaddition,INGInvestment Bankinghas not provided anylegal,accountingortax advice inconnection with the Offer, andassuch assumes noliability or responsibility in connection therewith. Inconnectionwith the Offer, INGInvestment Bankingactsasprovider ofthe fairness opinion andwill receiveafeefrom theCompanyfor our services,which isnotdependent on theoutcome oftheOffer. INGInvestment Bankinghas not been involved asadvisor to the Company inthe negotiations regardingtheterms andconditions ofthe Offer. Fromtime to time,other departments within INGGroup N.V. and its subsidiaries mayhave(i)abanking relationship with theCompany,and(ii) been involved in proprietary orthird partytradingof SNTshares or KPNshares.INGInvestment Bankinghasestablished procedures, including ChineseWalls,designed to help ensurethe independence ofadvice. Third parties cannot relyonpart or allofthis letter norcanthey extract any rights from this letter for any purposeswhatsoever. Thecontents ofthis letter maynot bemade public, other than through publication ofthe complete contents ofthis letter inthe Offer Document in relation to the Offer, for information purposes tothe holders ofthe Shares. This letter shallbegoverned by,andconstrued inaccordancewith, Dutch law andeach party agrees forthe benefit ofthe other that proceedings against it may bebrought inthe Dutch courts. Yours faithfully, INGBank N.V.
13. DECLARATIONS PURSUANTTOTHEDECREE Inaddition tothe other statements set out inthis Offer Document,the management board ofthe Offeror with regardto subjects (i),(ii),(iii),(iv),(vi),(vii),(viii) and(ix) andtheSNT Supervisory Boardandthe SNTManagement Boardwith regardto subjects (i),(iii),(v),(vi), (viii) and(x),hereby declare asfollows: (i) There have beenconsultations between KPN,theOfferor and SNTregardingthe Offer, which have resulted inagreement regardingthe Offer. (ii) With dueobservance ofandwithout prejudice tothe restrictions referred to in Section i (Restrictions) andSection 2(Important information),the Offer concerns all outstanding SNTSharesandapplies onanequal basisto allSNTShareholders. (iii) Apart fromthe compensations mentioned in Section9under 'Future composition ofthe SNTManagement Boardandthe SNTSupervisory Board',no financial compensation will bemadeto the resigning members ofthe SNTManagement BoardandtheSNT Supervisory Board. (iv) Atthedate ofthis Offer Document, KPNindirectly holds 7,047,859 SNTShares andthe SpecialShare,intheaggregate representing50.78 percent,ofthe issued and outstandingshare capitalofSNT.Assumingfull conversion ofthe SpecialShare,KPN would at thedate hereof indirectly hold 69.22 percent,ofthetotal issued and outstanding sharecapitalofSNT.Atthe dateofthis Offer Document,the Offeror does not hold anySNTShares. (v) Atthe date ofthis Offer Document, SNTdoes not holdanyshares inthe share capitalof KPNorthe Offeror. (vi) Notransactions havetaken placeorwilltake placeonthe basisof concluded agreements with individuals and/or legalpersonswithin the meaningofarticle91' paragraph sand/or t and/or uofthe Decree,other than with respect to the SNTShares held byRabobank.Anexplanation with respect to thetransaction relatingto theSNT Shares held byRabobank is provided in Section 9under 'Committed SNTShares and Options*. (vii) Saveasreferred to inSection 9under 'Committed SNTShares andOptions',noother SNTShareholders havecommitted themselves to acceptthe Offer. (viii)Theinformation referred to inarticle 9pofthe Decreehas been provided totheAFM. (ix) TheAFM,Euronext andthe relevant works councils andtrade unions have been informed oftheOffer, tothe extent it pertains KPNand/or the Offeror. (x) TheAFM,Euronext andthe relevant works councils andtrade unions havebeen informed ofthe Offer,tothe extent it pertainsSNT.
o 14. OTHER INFORMATION Available documents Copiesofthe annual reports of SNTfor the financial years ended 31December 2003, 2002 and 2001,the halfyear report for thesix months ending30June2004 andtheArticles of Association,which areconsidered to form an integral part ofthis Offer Document,and copies ofthis Offer Document, areavailable free ofcharge upon request atthe offices of SNTandABN AMRO. SNT
ABNAMRO
Koraalrood70 2718SCZoetermeer The Netherlands Tel:+31(0)79 3686900 Fax:+31(0)793685190 Email:
[email protected]
Department Equity Capital Markets HQ7006 Gustav Mahlerlaan 10 1082 PPAmsterdam The Netherlands Fax: +31(0) 20 6280004 Email:
[email protected]
Copies ofthis Offer Document arealsoavailable freeofchargeatthewebsite of Euronext Amsterdam:www.euronext.com (Dutch residents only). Exchange agent ABNAMROBank N.V. is designated asexchange agentwith respect tothe Offer. SNTShareprice development Thetable below givesanoverview ofthe high and low closingprices ofthe SNTShares for the periods indicated. Endofmonth
Euronext Amsterdam price per share (EUR)
June 2003 July 2003 August 2003 September 2003 October 2003 November 2003 December 2003 January 2004 February 2004 March 2004 April 2004 May 2004 June 2004 July 2004 August 2004 September 2004
Low
High
9.80 11.26 12.70 12.50 12.75 12.40 11.41 10.80 11.30 12.62 12.41 12.89 12.50 12.20 11.50 12.65
13.50 12.86 13-74 14.00 13.00 12.90 12.46 12.20 13.30 13.91
Source: Datastream
Thegraph below gives anoverview ofthe SNTShare price development forthe period indicated. SNTShare price graph (EUR) 15 i
Jun-03
Source: Datastream
Sop-03
Sep-04
13-49 14.00 13-55 12.80 13.20 13.50
15. PRESSRELEASES On10September 2004,KPNand SNTjointly published the following press release: Quote
Thisisajointpress releaseofRoyalKPNN.V.andSNTGroupN.V. Notforrelease,publication ordistribution, inwholeorinpart, inorintoAustralia,Canada, Japan, theUnitedStatesofAmerica andtheUnitedKingdom. Thisannouncementandrelatedmaterials donotconstituteanofferforshares inSNTGroup N.V.butanofferisexpectedtobemadeinduecourseassetoutinthispressrelease. The Hague,Zoetermeer, 10September 2004 - RoyalKPNN.V. andSNTGroup N.V. jointly announce that KPNintends to makearecommended cash offer of EUR 13.50per share for the outstanding shares of SNT. Theoffer stems from KPN'sintention to restructure its Customer Relationship Management activities. SNTand KPNbelievethat the expectation is justified that agreement can bereachedontheterms andconditions ofthe intended offer. TheSupervisory Board andthe Management Board ofSNTsupport the intended offer and will recommend it foracceptance tothe shareholders ofSNT. At present KPN,through oneofitswholly ownedsubsidiaries, holds 50.78%ofthe issued andoutstandingsharecapitalof SNTandone(1)specialsharewhich canbeconverted after acceptance ofthe offer. Conversion ofthe specialsharewill enable KPNto increase its shareholdingto 69.22%ofthetotal issuedandoutstanding share capitalofSNT. Rabobank beingthe holder of 2,273,497 shares inthe sharecapitalofSNTrepresenting 10.2%,onafully diluted bases,ofthe total issuedandoutstandingsharecapitalhas irrevocably committed to sellits shares inSNTto KPNagainst the offer price.KPNhas agreedto buythe shares of Rabobank immediately after the offer has been made. KPN will hold approximately 83%ofthe issuedandoutstandingcapital inSNTafter full conversion ofthe specialshare,transfer of Rabobank's interest in SNTto KPNandthe shares held bySNTandits CEOhavingbeentendered. Transaction Highlights Theintended offer will bemadeby RoyalKPNN.V., or oneofitswholly owned subsidiaries and isexpected to amount to EUR13.50incash pershare,cumdividend.Prior to acceptance ofthe offer nodividend will be paid. When made,the intended offer will behonoured subject to, inter alia,the condition that such number of SNTshares aretenderedthat these,together with the SNTshares assumingfullconversion ofthespecialshareanddirectly or indirectly held byKPN represent at least 95%ofalloutstanding SNTshares. KPNhas confirmed that it hasthe necessary cashfacilities available to fundthe intended offer. Transaction Rationale Inthe eventthatthe intended offer issuccessful KPNintendsto improve SNT's execution standards inparticular for KPN'shighvaluecontact services andaimsto implement a significant reduction ofcosts across SNT.Therestructuring isakeycomponent ofKPN's drivetowards improved customer satisfaction andwillyield anattractive financial improvement for KPNasagroup. Eelco Blok, member ofthe Boardof KPNand responsible for the Fixed Division said: "Customer satisfaction is anincreasingly important factor inour efforts to improve KPN's operational andfinancial performance, especially consideringthe dynamic and competitive markets inwhich wework.Takinganumber ofour most important customer contacts back
into our own hands will enable usto improve our service provision and profitto the fullest from our customer contacts." TobiasWalraven,CEO of SNT: TobiasWalraven,CEO ofthe SNTGroup:"We consider it wise to separate KPNfrom third partyCRMactivities. Inthe current market ofCRMactivities, the close relationship between KPNandSNTconstitutes anhindrance forthe development of SNTsthird party activities. Since SNThas moved away from agrowth through acquisition model,there isno point in maintainingthe 'smallcapp' listing." Apart from the highvaluecontact services KPNwishes to integrate 0800-0900 information services aswellasthe conferencing unit into KPN.Activities such asthird-party callcentre services and market research,will bedivested induecourse.Potentially the restructuring anddivestments may leadto restructuringcharges andimpairments dependingonthe proceeds. Organisation and Management Followingasuccessfuloffer the existing program of restructuringof SNTwill becontinued. Theoffer assuchwill not haveanyconsequences forthe employees ofSNT.SNTs employees will remain subject to their own collective labour agreement. SNTsand KPN's works councils andthe appropriate trades unions havebeen informed ofthe proposed transaction. Followingsettlement ofthe offer, the members ofthe Management Board andthe Supervisory Board ofSNTwill formally step down.Theywill beadvisingSNTand its new Management. Procedure KPNand SNTexpectto reach fullagreement onthe intended offer within the next two weeks. After completion offullagreement onthe intended offer andsubject to,inter alia, confirmatory duediligence,aformaloffer will bemadeto SNT'sshareholders.When made, the intended offer will behonoured subject to customary conditions, including the condition that such number ofSNTshares aretenderedthat these,together with theSNT shares assumingfullconversion ofthe specialshare andtheother SNTshares directly or indirectly held byKPNat closingoftheoffer, represent at least 95%ofthe outstanding share capitalofSNT. Theofferingdocument, containingtheterms andconditions ofthe intended offer, is expectedto bemadeavailable inthethirdweek ofOctober 2004.Followingthe publication ofthe offering memorandum,SNTwill conveneanextraordinary general meetingof shareholders to,amongst other things,discuss theoffer. Iftheoffer is declared unconditional, KPNintends to end SNTs listingontheOfficial Market of Euronext Amsterdam N.V. TheNetherlands Authority forthe Financial Markets (AutoriteitFinanciëleMarkten), EuronextAmsterdam N.V., andthe SocialEconomic Councilofthe Netherlands (SociaalEconomische Raad)havebeeninformedofthe intended offer. Ascommunicated above, SNT'sand KPN'sworks councils andtheappropriate trades unions havealso been informed ofthe proposed transaction. Thisannouncement isapublic announcement asmeantwithin section 9b paragraph 2sub aofthe Dutch Securities Supervision Decree(Besluittoezichteffectenverkeer 1995). This press release appears in Dutchalso. Intheevent ofany inconsistency, the English version will prevail overthe Dutchversion.
KPN KPN- RoyalDutch Telecommunications KPNoffers high quality and innovativetelecommunication services to both consumers and businesses. KPN'score businesses are:fixed network services inthe Netherlands, mobile services inthe Netherlands,Germany (E-Plus),and Belgium (BASE)anddata services in Western Europe. Atthe endofthe second quarter of 2004, KPNserviced atotalof7.6 million fixed line and 1.6 million Internet customers,and15.6million mobile customers. SNTProfile SNTis oneofthe biggest providers ofCRMservices in Europe.SNTcarries out surveys into the communication preferences and behaviour ofcustomer groups andcouples this knowledgeto thedevelopment andimplementation ofcommunication channels and services aimedat improvingandintensifyingthecontact between organisations and their customers.SNTalso handles customer contacts bygivingadvice andinformation, making reservations andcarryingouttransactions viatelephone, Internet ande-mail.Together with its European partners,SNTprovides good servicefor customers of international A-brands, banks,insurance companies,travelorganisations, ITandtelecommunication companies, care providers,charitable institutions and governments. SNTGroup consists ofsubsidiary companies SNTNetherlands, SNTBelgium andSNT Germany.Within SNTNetherlands,the research bureau Interview-NSS operates asa100% subsidiary company under its own name.InScandinavia SNTworkstogether with alliance partner Excellent.Vitalicom isSNTs partner in France.Inthe first half of2004,SNT recorded net salesof EUR231.7million,anEBITDAof EUR 22.3 million and booked anet profit of EUR2.6 million.
Unquote
On8October 2004. KPNandSNTjointly published thefollowing press release.
Quote Thisisajointpress releaseofRoyalKPNN.V.andSNTGroupN.V. Notforrelease,publication ordistribution,inwholeorinpart, inorintoAustralia,Canada, Japan, theUnitedStatesofAmericaandthe UnitedKingdom. Thisannouncementandrelatedmaterials donotconstituteanofferforshares inSNTandis anannouncementpursuant toarticle9gparagraph ia ofthe DutchDecreeonthe Supervision ofthe Securities Trade1995(Besluittoezichteffectenverkeer 1995),pursuantto whichKPNisrequiredtomakeapublic announcementwithin30 daysofthe initialpress releaseof10September2004. KPNandSNTconfirmthat the preparations arewellunderwayfor KPN's intended recommended public cashoffer fortheSNTsharesfor aconsideration ofEUR13.50perSNT share TheHague,Zoetermeer, 8October 2004- Inconformity with the press release dated 10September 2004, RoyalKPNN.V.andSNTGroup N.V.jointly announce that the preparations ofthe intendedoffer arewell under wayandthat KPNcurrently expects to maketheoffer inthe courseofOctober 2004 bywayofanoffer document. Inrespect ofthe aforementioned preparations ofthe intended offer, the parties have reachedfinalagreement ontheterms and conditions oftheintended offer asdescribed in the press releaseof10September 2004.Subject to thefulfilment ofthe last conditions to makingtheoffer, including completion ofaconfirmatory duediligence investigation with
satisfactory results, KPNwill makeapublic cashoffer ofEUR 13.50,inclusive ofdividend, per sharefor all issuedandoutstanding shares inthe sharecapitalofSNT.Iftheoffer is made,the management board andthe supervisory board ofSNTwill fully recommend the offer. Theoffer document willinter'alia contain information ontheoffer, the conditions to declaringthe offer unconditional aswellasatimetable.Asconditions to declaringthe offer unconditional,the usualconditions for this kind oftransaction will apply. Oneofthese is the condition that such number of SNTshares have beentendered under theoffer that they, together with the SNTshares (directly or indirectly) held byKPNattheclosingofthe offer assumingfull conversion ofthe specialSNTshare held by KPN,constitute at least 95%of the share capitalof SNTatclosing. This press releaseappears inthe Dutch language also. Inthe event ofany inconsistency, the English languagewill prevail. KPN- RoyalDutch Telecommunications KPNoffers high quality andinnovative telecommunication services to both consumers and businesses. KPN'score businesses are: fixed network services inthe Netherlands, mobile services inthe Netherlands,Germany(E-Plus),and Belgium(BASE)anddata services in Western Europe. Attheendofthe second quarter of 2004, KPNserviced atotalof7.6 million fixed lineand 1.6 million Internet customers,and15.6million mobile customers. SNTProfile SNTisoneofthe biggest providers ofCustomer Relationship Management (CRM)services inEurope.SNTcarries out surveys intothe communication preferences andbehaviour of customer groups and couples this knowledgeto thedevelopment and implementation of communication channels andservices aimedat improvingandintensifyingthe contact between organisations andtheir customers.SNTalso handles customer contacts by giving adviceand information, makingreservations andcarryingouttransactions via telephone, Internet ande-mail.Together with its European partners,SNTprovides good service for customers ofinternationalA-brands, banks,insurance companies,travelorganisations,IT andtelecommunication companies,care providers,charitable institutions and governments. SNTGroup consists ofsubsidiary companies SNTNetherlands, SNTBelgium andSNT Germany.Within SNTNetherlands,the research bureau Interview-NSS operates asa100% subsidiary company under its own name.InScandinavia SNTworks together with alliance partner Excellent.Vitalicom is SNT's partner inFrance.
Unquote
On15October 2004,SNTpublished thefollowing press release
Quote ResultofSNTGroup in linewith forecast Zoetermeer, 15October 2004. Inthethird quarter of 2004theturnover ofSNTGroup N.V. amounts to EUR345.8 million (Q32003 EUR391.1 million).Theoperating result before goodwill depreciation (EBITA)is EUR16.6million (4.8%ofturnover) compared to EUR21.5in thethird quarter of2003.Thenet result comesto EUR4.0 million (Q32003:EUR-20.4 million).Theaforementioned results arein linewith theforecast for thewhole of2004, which SNTdeclared duringthe publication ofthe half-yearly figures on 29July2004.
On10September 2004 KPNand SNTannounced that KPNintends to bidfor all outstanding SNTshares. Preparations forthe proposed offer arecurrently well underwayandKPN expectsto make anoffer inOctober 2004via anoffer document.
Unquote
16. NEDERLANDSE SAMENVATTING BELANGRIJKEINFORMATIE Ditdocument bevat eensamenvattingvan enkeleelementen uit het Biedingsbericht. Deze samenvattingdient geenszinstervervangingvanhet Biedingsbericht. Met nadrukwordt er opgewezen dat menzich bijdebeslissingomhet Bodaldan niette aanvaarden uitsluitend dient te baseren opdeinformatie die in het Biedingsbericht isopgenomen.In gevalvanverschillen tussendit document enhet Biedingsbericht, prevaleert detekstvan het Biedingsbericht. Menwordt danook nadrukkelijk aangeradenomhet Biedingsbericht eveneenszorgvuldigte bestuderen,enwaar nodigonafhankelijk advies intewinnen over het Bodendebeschrijvingdaarvan in het Biedingsbericht,teneinde eenafgewogen oordeeltekunnenvormenoverhetgeeninhet Biedingsbericht wordt uiteengezet. DitBiedingsbericht bevatbelangrijke informatie diemenzorgvuldig dienttelezenalvorens eenbesluit tenemenoverhetaanmelden vanAandelenSNTinverbandmethetBod. Aandeelhouders SNTwordtaangeraden waarnodigonafhankelijk adviesinthewinnen. DaarnaastzullenAandeelhouders SNTmogelijk hunbelastingadviseur willen raadplegen metbetrekking totdefiscalegevolgen vandeelnameaanhetBod. 4
Deinformatie opgenomen in Hoofdstuk i (Restrictions), Hoofdstuk 7(Invitation toSNT Shareholders), Hoofdstuk 9(Explanation and background ofthe Offer) met uitzonderingvan deinformatie met betrekkingtot het aantalAandelen SNTenhet aantal Opties gehouden door deRaadvan Bestuur SNT,de RaadvanCommissarissen SNT,Stichting SNTenSNT), Hoofdstuk 11 (Information regarding KPN),Hoofdstuk 13(Declarations pursuant to the Decree)voor zover deze refereert aandemededelingen gedaan door Bieder, isdoor Bieder verstrekt. Deinformatie opgenomen in Hoofdstuk 6(Extraordinary general meetingSNT), Hoofdstuk 8(Recommendation to SNTShareholders), Hoofdstuk 9(Explanation and background ofthe Offer)wat betreft de informatie met betrekkingtot het aantalAandelen SNTenhetaantalOpties gehouden door de Raadvan Bestuur SNT,deRaadvan Commissarissen SNT,Stichting SNTenSNT,Hoofdstuk 10(Information regardingSNT), Hoofdstuk 13(Declarations pursuant tothe Decree)voor zover deze refereert aande mededelingen gedaan door SNTen Hoofdstuk 18(Financial Statements) isdoorSNT verstrekt. DeFairnessOpinie opgenomen in Hoofdstuk 12is door INGInvestment Banking verstrekt. PricewaterhouseCoopers Accountants N.V. heeft een'review report' opde informatie opgenomen op pagina F2tot enmet F6ende'auditors' report' op pagina F32. De informatie opgenomen opdeoverige pagina'svandit Biedingsbericht isdoor Bieder enSNT gezamenlijk verstrekt. Uitsluitend Bieder enSNTzijnverantwoordelijk voor dejuistheid envolledigheid vande informatie die indit Biedingsbericht is opgenomen,ieder afzonderlijk voor deinformatie die door henzelf isverstrekt, engezamenlijk voor de informatie diedoor hengezamenlijk is verstrekt. Bieder enSNTverklaren beide,iedervoor de informatie die door hen in dit Biedingsbericht isverstrekt, dat deinformatie indit Biedingsbericht opde verschijningsdatum vandit Biedingsbericht naar besteweten inelkwezenlijk opzicht juist eninovereenstemming met dewerkelijkheid is,endat ergeen informatie achterwege is gelaten waardoor enigeverklaring indit Biedingsbericht inenigwezenlijk opzicht misleidend zouworden. Bepaalde financiële enstatistische informatie indit Biedingsbericht kan naar boven of beneden zijn afgerond,endient derhalve niet als exactteworden beschouwd. Deinformatie indit Biedingsbericht geeft desituatieweer opdeverschijningsdatum van dit Biedingsbericht. Onder geen bedinghoudt deverspreidingvandit Biedingsbericht nade datumvan publicatie indat dehierin opgenomen informatie ook nade verschijningsdatum juist envolledig isofdat ergeenwijziging is opgetreden inde hierin uiteengezette informatie of indegangvanzaken bij SNTen/of haardochtermaatschappijen sinds de verschijningsdatum vandit Biedingsbericht. Hetvoorgaande laat echter onverlet de verplichtingvanzowel Bieder als SNTomeenpublieke aankondigingtedoen ingevolge het Besluit of het Fondsenreglement indien zulksvantoepassing is. Met uitzonderingvan SNTenBieder enbehoudens deaccountantsverklaring van PricewaterhouseCoopers Accountants N.V. ende Fairness Opinievan ING Investment
Bankingdie indit Biedingsbericht zijnopgenomen,is niemand bevoegd ofgerechtigd om informatie teverstrekken ofverklaringen afte leggen inverband met het Boddie niet in dit Biedingsbericht zijn opgenomen,enopinformatie ofverklaringen die niet hierin zijn opgenomen dient niettewordenvertrouwd alswaren dezeverstrekt door Bieder ofSNT. Dit Biedingsbericht enhet Bodworden (eneeneventuele aanmelding,koop of leveringvan Aandelen SNTzullen worden) beheerst door endienen teworden uitgelegd naar Nederlands recht. Derechtbank teAmsterdam enzijn beroepsinstanties zullen rechtsbevoegdheid hebbenvoor debeslechtingvangeschillen die mochtenvoortvloeien uit ofverband houden met dit Biedingsbericht, het Boden/of deaanmelding, koopof leveringvanAandelenSNT. Eventuele (juridische) procedures die mochtenvoortvloeien uit ofverband houden met dit Biedingsbericht, het Boden/of deaanmelding, koopof leveringvanAandelen kunnen derhalve uitsluitend wordenvoorgelegd aandevoornoemde instanties. Ingevalvanverschillen tussen dezeNederlandse SamenvattingendeEngelsetekstvan het Biedingsbericht, prevaleert deEngelsetekst vanhet Biedingsbericht. Dit Biedingsbericht bevat mededelingen die opdetoekomst gericht zijn, die risico's en onzekerheden inhouden.Hoewelzowel KPNals SNTvan meningzijn dat de verwachtingen die indergelijke toekomstgerichte mededelingen worden weerspiegeld gebaseerd zijnop redelijkeveronderstellingen, kangeenzekerheid worden gegeven dat dergelijke projecties wordenverwezenlijkt enwordt geenverklaringafgelegd overdejuistheid en volledigheid vandergelijke mededelingen. Dergelijketoekomstgerichte mededelingen dienen teworden overwogen in samenhangmet het feit dat dewerkelijke gebeurtenissen of resultaten in belangrijke mate kunnen afwijken vandegenoemdevoorspellingen alsgevolgvan, onder meer, politieke,economische ofjuridische veranderingen indemarkten en omgeving waarin KPNenSNTactief zijn, alsmedevanalgemene zakelijke ontwikkelingen of risico's die inherent zijn aandeondernemingen van KPNenSNT. ABNAMROtreedt inverband met het Boduitsluitend envoor geenander dan KPNenBieder opals financieel adviseur, enis nietverantwoordelijk jegens eenander dan KPNenBieder voor deaancliënten vanABNAMROverschafte beschermingofvoor hetverstrekken van advies met betrekkingtot hetBod. BEPERKINGEN
Het Bodwordt niet gedaan in,enAandelen SNTmogen nietworden geaccepteerdvoor koop vanof namensAandeelhouders SNTvanuit, enigejurisdictie waar het doen of aanvaarden daarvan niet inovereenstemming is met deindiejurisdictie geldende effectenwetgeving of anderewet-of regelgevingofwaar registratie, goedkeuringof indieningvanstukken vanof bij eentoezichthoudende instantievereist iswelke niet uitdrukkelijk onder devoorwaarden vandit Biedingsbericht wordtvoorzien.Personen die inhet bezit komenvan dit Biedingsbericht dienen zich opdehoogte stellen vandergelijke beperkingen endeze in achtte nemen,ende nodige machtiging,goedkeuringoftoestemmingteverkrijgen.KPN, Bieder, SNT,enhun adviseurs sluiten iedere aansprakelijkheid ter zakevan overtredingen vanvoornoemde restricties uit. Personen (waaronder, onder meer effectenbewaarders, gevolmachtigden entrustees) diedeintentie hebben dit Biedingsbericht ofeen daaraan gerelateerd document naareenjurisdictie buiten Nederlandte sturen,dienen zorgvuldig kenniste nemenvan Hoofdstuk i (Restrictions) alvorens daartoe overtegaan. Aandeelhouders SNTdie nietzeker zijnvan hun positiewordt aangeraden onverwijld een professioneel adviseur te raadplegen.
DEFINITIES
'Aandelen SNP
Degewoneaandelen endegewoneC aandelen in het aandelenkapitaal vanSNTmet ieder een nominale waardevan EUR0,02
'Aandeelhouder SNP
Dehouder vaneenofmeerAandelenSNT
'Aanmeldingstermijn'
Determijn waarbinnen Aandeelhouders SNThun Aandelen SNTingevolge het Bod kunnen aanbieden aan Bieder,welke aanvangt op19 oktober 2004 en,behoudens verlenging,eindigt opde Sluitingsdatum
'ABNAMRO'
ABNAMROBank N.V., een naamloze vennootschap met statutaire zetel inAmsterdam, Nederland
'AFM'
StichtingAutoriteit Financiële Markten
'Afwikkelingsdatum'
Dedatum van betalingvandeBiedprijs aan Aandeelhouders SNTdie hunAandelenSNT hebben aangeboden engeleverd aande Bieder opdewijze als uiteengezet in het Bod,zosnelals mogelijk, doch uiterlijk opdevijfde Beursdag volgende opde Sluitingsdatum
'BAVA'
Debuitengewone algemenevergaderingvan Aandeelhouders SNT,te houden op3november 2004 om14:00 uur CETten kantorevanSNTte Zoetermeer, waar het Bodzalworden toegelicht enbesproken inovereenstemming metartikel9q van het Besluit
'Besluit'
Het Besluit toezicht effectenverkeer 1995,zoals vantijd tot tijd van kracht
'Beursdag'
Eendagwaarop Euronext (Amsterdam) open is voor handel
'Bieder'
Burum B.V. een besloten vennootschap met beperkte aansprakelijkheid met statutaire zetelin DenHaag,Nederland,eenindirecte volledige dochtermaatschappij vanKPN
'Biedingsbericht'
Dit Biedingsbericht waarin het Bod uiteen wordt gezet,d.d.15oktober 2004
'Biedingsvoorwaarden'
Devoorwaarden van het Bodals opgenomen in Hoofdstuk7
'Biedprijs'
Het bedragvan EUR13,50 incontanten cum dividend geboden door deBiedervoor iederSNT Aandeeldatonder het Bodis aangemelden geleverd
'Bijzonder Aandeel'
Het bijzondere aandeel inhet aandelenkapitaal vanSNTgehouden door KPN Telecommerce B.V., dat onder bepaaldevoorwaarden als uiteengezet in Hoofdstuk 7magworden geconverteerd in AandelenSNT
'Bod'
Hetaanbevolenvast openbaar bod dat door Bieder is uitgebracht opalle uitstaande Aandelen SNT,zoals uiteengezet inhoofdstuk7
'BW'
Het Burgerlijk Wetboek,zoalsvantijd tot tijdvan kracht
'CET'
Centraal EuropeseTijd
'Datumvan Gestanddoening'
Dedatum waarop het Boddoor Bieder gestand wordt gedaan,naarverwachting 17november 2004
'EUR'
Euro,hetwettig betaalmiddelvande Europese Monetaire Unie
'Euronext (Amsterdam)'
EuronextAmsterdam N.V.of haar Officiële Markt, gevestigd teAmsterdam,alnaargelangde context
'Fairness Opinie'
Deopinie zoals afgegeven door ING Investment Bankingaande RaadvanCommissarissen SNTen deRaadvan Bestuur SNTmet betrekkingtot het oordeelvanderedelijkheid en evenwichtigheid ('fairness'), vanuit financieel oogpunt,voor de SNTAandeelhouders,vandevergoedingdie krachtens het Bodwordt aangeboden
'INGInvestment Banking'
INGInvestment Banking,deondernemingende handelsnaam gebruikt door INGBank N.V.en bepaalde groepsmaatschappijen inverband met internationale corporate eninvestment banking activiteiten. INGBank N.V. iseen naamloze vennootschap met statutaire zetelinAmsterdam, Nederland
'KPN'
Koninklijke KPNN.V., een naamloze vennootschap met statutaire zetel inDenHaag, Nederland,ofeenof meervan haar dochtermaatschappijen, alnaargelanghet geval
'Raadvan Bestuur SNT
Deraadvan bestuur vanSNT
'RaadvanCommissarissen SNT
Deraadvancommissarissen vanSNT
'SW
SNTGroup N.V., eennaamlozevennootschap met statutaire zetel inZoetermeer, Nederland,ofeen of meervan haar dochtermaatschappijen, alnaar gelanghet geval
'Sluitingsdatum'
Detijd endatum waarop de Aanmeldingstermijn eindigt,teweten om15:00 uurCETop12 november 2004,behoudensverlenging in overeenstemming met artikel90 lid 5van het Besluit, inwelk gevaldeSluitingsdatum zal eindigen opdie lateretijd en datum
'Statuten'
DestatutenvanSNT
'StichtingSNT
Stichting Medewerkersparticipatie SNT,een stichting met statutaire zetelin Zoetermeer, Nederland
•© 'Toegelaten Instellingen'
Deaan Euronext (Amsterdam) toegelaten instellingen
'Wte1995'
DeWettoezicht effectenverkeer 1995,zoalsvan tijd tot tijdvan kracht
@ . UITNODIGINGAANAANDEELHOUDERSSNT Biedprijs perAandeelSNT Door Bieder zalvoor elkAandeelSNTdat onder devoorwaarden van het Bodis aangemeld engeleverd,betaling incontanten plaatsvinden van EUR13,50cumdividend.Derhalve zullen deAandeelhouders SNT,indien het Bodgestand wordt gedaan,geen slotdividend ontvangen over het boekjaar 2004. AanvaardingdoorAandeelhoudersSNT Aandeelhouders SNTworden uitgenodigd hunAandelen SNTvia (hun bank of commissionair via) deToegelaten Instellingen ter aanvaardingaante melden bijABN AMRO,welke isaangesteld alsverwisselkantoor met betrekkingtot het Bod.Behoudens verlengingvandeinitiëleAanmeldingstermijn overeenkomstig artikel90 lid5van het Besluit, dienenAandelen SNTuiterlijk 15:00 uurCETop12november 2004te zijn aangemeld. Toegelaten Instellingen mogenAandelen SNTalleen schriftelijk ter aanvaarding aanmelden bijABNAMROmiddels een ingevuld enondertekend acceptatieformulier. DoorAandelen SNTaante melden,verklaren deToegelaten Instellingen dat zij dezein hun administratie hebben,dat elkeAandeelhouder SNTdie het Bodaanvaardt onherroepelijk verklaart dat hij ofzij debeperkingen als uiteengezet in Hoofdstuk 1 (Restrictions) naleeft endatzij zich ertoeverbinden de betreffende Aandelen SNTuiterlijk 10:00 uur CETopde Afwikkelingsdatum tezullen leveren aande Bieder. Tenzij het Besluit anders bepaalt,zaleenaanmeldingvanAandelen SNTgeacht worden onherroepelijk te zijn. Voorwaardenvanhet Bod Niettegenstaande enigeandere bepalingvan het Biedingsbericht geldt de verplichting zijdens Bieder om het Bodgestand tedoen endeaangeboden engeleverdeAandelenSNT te accepteren,indien aandevolgende Biedingsvoorwaarden isvoldaan,behoudens het rechtvan Bieder afstand tedoenvandevoorwaarden onder (a)tot enmet (h),met uitzonderingvan Biedingsvoorwaarde (e)waarvan geenafstand kanworden gedaan: (a) eenzodanigaantalAandelen SNTwordt ter aanvaardingaangemeld dat deze,tezamen met deAandelen SNTdie door KPNdirect of indirect worden gehouden,opde Sluitingsdatum tenminste 95%(vijfennegentig procent)vandeAandelen SNTin het kapitaalSNTvertegenwoordigen uitgaandevanvolledige conversie van het Bijzonder Aandeel,zodat KPNoverde mogelijkheid beschikt omde overblijvende Aandelenhouders SNTuitte kopen overeenkomstigartikel 2:92a BW; (b) opofvoor deSluitingsdatum isgeenopenbare mededelinggedaanwaaruit voor het eerst blijkt dat eenander dan Bieder eenopenbaar bodvoorbereidt, aankondigt of uitbrengt opAandelen SNTofopdoor SNTuitgegeven ofuit tegeveneffecten voor een prijs die meer bedraagt dande Biedprijs enbestaan ergeenduidelijke aanwijzingen (buiten redelijke twijfel) dat eenderdevanSNTen/of haar100%dochtermaatschappijen ofSNTDeutschlandAGhet recht heeftverkregen door SNTen/ of haar100%-dochtermaatschappijen ofSNTDeutschlandAGuitte gevenaandelen te verwerven,of met SNTen/of haar 100%-dochtermaatschappijen ofSNTDeutschland AGisovereengekomen dergelijke uit tegeven aandelen teverwerven ofte nemen,of eenaanzienlijk deelvandeactivavan SNTen/of haar 100%-dochtermaatschappijen of SNTDeutschlandAGteverwerven. (c) opofvoor deSluitingsdatum heeft zich geengebeurtenis,feit of omstandigheid voorgedaan met betrekkingtot deAandelen SNT,SNT,haar groepsmaatschappijen en hun ondernemingen die opdedatumvandit biedingsbericht Bieder en/of KPNniet bekendwas,of niet door Bieder en/of KPNuit bepaalde aan KPNgeopenbaarde informatie hadkunnenworden afgeleid,enwelke niet het gevolgisvannakomingdoor SNTof KPN vandevoorwaarden vandefusie-overeenkomst tussen KPNenSNTofvan het gezamenlijke persbericht van KPNenSNTvan10september 2004 of daaropvolgende aankondigingen met betrekkingtot het Bodenwelke niet direct of indirect door KPNen/of Bieder isveroorzaakt, enwelkevanzodanigwezenlijke aard is dat inredelijkheid enbillijkheid nietvan Bieder kanwordenverlangd dat zij het Bod gestand doet,waarbij 'wezenlijk' geacht wordt betrekkingte hebben opeen bedrag dat pergevalofintotaal meer bedraagt dan EUR5,000,000;
(d) opofvoor deSluitingsdatum hebben noch SNT,nochde Raadvan Bestuur SNT,noch deRaadvanCommissarissen SNTdefusie-overeenkomst tussen KPNenSNT geschonden,enheeft geenvandeledenvande respectieve Raadvan Bestuur SNTen RaadvanCommissarissen SNTzijnverplichtingen uit hoofdevan bepaalde bepalingen indefusie-overeenkomst tussen KPNenSNTgeschonden,inzoverre dat een dergelijke schendingwezenlijke negatieve gevolgen heeft ofin redelijkheid verwacht magwordentezullen hebbenvoor KPN,SNTof het Bod,ofvanzodanige aardzouzijn datin redelijkheid enbillijkheid nietvan Bieder kanwordenverlangd dat zij het Bod gestand doet; (e) opofvoorafgaand aandeSluitingsdatum isgeen mededelingontvangenvandeAFM dat het Bod instrijd met hoofdstuk IIAWte1995is uitgebracht, inwelk geval effecteninstellingen conform artikel32avan het Besluit geen medewerkingzouden mogenverlenen aandeuitvoering enafwikkelingvan het Bod; (0 opofvoorgaand aande Sluitingsdatum: (i) zijn met uitzonderingvandegoedkeuringvande mededingingsautoriteiten voorzien in(ii) hieronder, alle inverband met het Bodendedaarmee samenhangende wijzigingvanzeggenschap belangrijke vereiste of gewenste goedkeuringen,toestemmingen,ontheffingen envergunningen onherroepelijk verkregen van binnenlandse en/ of buitenlandse autoriteiten; (ii) zijn alleverplichte goedkeuringen verkregenvande mededingingsautoriteiten die vóór degestanddoening vanhet Bodvanbinnenlandse en buitenlandse autoriteiten voor het Bodenzijnvoorgenomen wijzigingvan dezeggenschap zijn vereist; (iii) zijn inverband met hetgeen waarnaar in(i)en(ii) hierboven wordt verwezen,alle wachtperioden krachtens detoepasselijke wet-enregelgeving verstreken gedurendewelke binnenlandse en/ of buitenlandse autoriteiten zichtegen het Bodofzijn bedoeldewijzigingvandezeggenschap kunnenverzetten,of stappen kunnen zetten ofaankondigen die het Bodendevoorgenomen wijzigingvan zeggenschap kunnen belemmeren ofanderszins kunnen resulteren in aanmerkelijk nadelige gevolgenvoor SNTof Bieder inverband met het Bod;en (iv) hebben inverband met hetgeen waarnaar in(i)en(ii) hierboven wordtverwezen, noch binnenlandse, noch buitenlandse autoriteiten stappen gezet of aangekondigd die het Bodofdevoorgenomen wijzigingvanzeggenschap kunnen belemmeren of anderszins kunnen resulteren in aanmerkelijk nadelige gevolgen voor SNTof Bieder inverband met hetBod; (g) tussen dedatum van het gezamenlijke persbericht van KPNenSNTvan10september 2004 endeSluitingsdatum zalSNTzich opgeenenkelewijze gebonden hebbentot de uitbetalingvanenigdividend ofeenandere uitkering,aldan niet indevormvan aandelen,noch zalSNTenig(e) dividend,kapitaaluitkering ofandere uitkering,aldan niet indevormvanaandelen,hebben uitbetaald;en (h) DeRaadvanBestuur SNTenRaadvanCommissarissen SNT,noch iedervande individuele ledenvandeRaadvan Bestuur SNTenRaadvanCommissarissen SNT, zullen hun standpunt hebben gewijzigd met betrekkingtot hunaanbevelingvan het Bod. Aanmeldingstermijn DeAanmeldingstermijn vangt aanop19oktober 2004 eneindigt om15:00 uurCETopde Sluitingsdatum. Gestanddoening Met inachtnemingvanartikel9t lid4van het Besluit zal Bieder zosnelmogelijk, echter uiterlijk opdevijfde Beursdagvolgend opdeSluitingsdatum, aankondigen ofzij het Bodal dan niet gestand doet. IngevalBiederverklaart dat zij het Bodgestand doet,zalBieder alle Aandelen SNTkopendie aanBieder opgeldige wijze zijn aangemeld(ofopongeldige wijze mits Bieder deaanbiedingdaarvan desalniettemin aanvaardt),overeenkomstig de voorwaarden als uiteengezet indit Biedingsbericht. Verlenging Indienvoor deSluitingsdatum niet aanalle Biedingvoorwaarden, als hierboven beschreven, isvoldaan,kan KPNdeAanmeldingstermijn verlengen.Indien de oorspronkelijke Aanmeldingstermijn wordtverlengd(tengevolgewaarvan deverplichtingtot aankondiging of het Bodgestandwordt gedaan,zalworden opgeschort) zaldit uiterlijk opdederde Beursdagnaafloopvandeoorspronkelijke Aanmeldingstermijn worden aangekondigd,met inachtnemingvandebepalingen inartikel90 lid 5van het Besluit.
Gedurende eenverlengingvandeAanmeldingstermijn blijft het Bodgeldenvoor alle eerder aangemelde enniet teruggetrokken Aandelen SNT,behoudens het rechtvan elke Aandeelhouder SNTomdeAandelen SNTterugtetrekken die hij ofzijalhadaangemeld. Afwikkeling Betalingvande Biedprijsvoor elkAandeelSNTdat onder devoorwaarden van het Bodis aangemeld engeleverd,vindt plaats opdeAfwikkelingsdatum, opwelk moment ontbinding ofvernietigingvaneenaanmeldingof leveringdoor eenAandeelhouder SNTopwelke grond danook is uitgesloten. Commissie Toegelaten Instellingen ontvangenvanABNAMROnamens Bieder eencommissie ten bedragevan EUR0,0394voor elkAandeelSNTdatopgeldigewijze isaangemeld (c.q.op ongeldige wijze isaangemeld mits Bieder deaanbiedingdaarvan desalniettemin aanvaardt) engeleverd,tot eenmaximumvanEUR10.000 perdepotcliënt. Decommissiedient binnen dertig(30) dagen nadeDatumvanGestanddoening bij BiederviaABNAMROte worden geclaimd. Het is mogelijk dat aanAandeelhouders SNTbepaalde kosten in rekening gebracht door hun eigen bank of commissionair. Beperkingen Het Bodwordt gedaan met inachtnemingvandeverklaringen,voorwaarden en beperkingen als opgenomen in het Biedingsbericht. Bieder behoudt zich het rechtvoor, met in achtnemingvandehiervoor beschreven Biedingvoorwaarden,elkeaanmeldingte aanvaarden,ook indien die nietvolledig heeft plaatsgevonden opdewijze als uiteengezet indit Hoofdstuk 7(Invitation to SNTShareholders) endit Hoofdstuk 16. UITLEGENACHTERGRONDVANHETBOD Inleidingensamenstellingvanhet Bod Op10september 2004werd door KPNenSNTgezamenlijk bekendgemaakt datKPN voornemens waseenaanbevolen bodincontanten te doenvan EUR13,50cumdividend per Aandeel SNT,indien aanbepaaldevoorwaarden zouzijnvoldaan. Inhet persbericht gedateerd 8oktober 2004 isdoor KPNenSNTgezamenlijk bekendgemaakt datzij eendefinitieve overeenstemming hadden bereikt overde voorwaarden van het Bodendat devoorbereidingen voor het Bodinvolle gangwaren.Een aantalvoorwaarden vandefusie-overeenkomst tussen KPNenSNTwordenweergegeven in dit Biedingsbericht. Sinds deopenbare mededelingvan8oktober 2004 heeft Bieder een bevestigend duediligence onderzoek afgerondwaaruit geenfeiten ofomstandigheden naar vorenzijn gekomen die eenseparate openbare mededelingvereisen.Sindsde openbare mededelingvan8oktober 2004,isaanalleopschortende voorwaarden voor het uitbrengen vanhet Bodvoldaan. KPNheeft Bieder aangewezen om het Bod uitte brengen.KPNenSNTzijn overeengekomen dat KPNhoofdelijk aansprakelijk magworden gesteldvoor alleverplichtingen die Bieder aangaat inverband met het uitbrengen van het Bod.Opvoornoemde hoofdelijke aansprakelijkheid van KPNkantevens een beroepworden gedaandoor een Aandeelhouder SNTdiezijnAandelen SNTonder het Bodaanmeldt, aangezien dezeovereenkomst geldt als eenonherroepelijk derdenbeding (als bedoeld inartikel6:235BW). Grondslagvande transactie KPNbiedt telecommunicatiediensten aanzowel particuliere alszakelijke klanten.De kernactiviteiten van KPNomvatten vastetelefonie endatadiensten in Nederland,mobiele telecommunicatiediensten in Duitsland,Nederland enBelgië endatadiensten inWestEuropa.Ultimo december 2003 bediende KPN7,7 miljoen vastetelefonie-abonnees, 1,5 miljoen Internet-klanten in Nederland en14,7miljoen mobiele klanten in Nederland, Duitsland enBelgië. Telecommunicatieklanten willen intoenemende mateoveralenaltijdtoegang tot communicatiekanalen eninformatiebronnen hebben.Bedrijven sturen intoenemende mate aanopdetotale costofownership vanalhun dienstverleningsbehoeften, waaronder mobiele spraak,vaste spraak endata.Dezedynamische markt biedt aanzienlijke kansen via groei inbreedbanddiensten (zoalsADSL)opdeconsumentenmarkt en nieuwe diensten
enapplicaties inzoweldevaste enmobiele telefoniemarkten. Tegendezeachtergrond ziet KPNhet bundelenvandiensten,gezamenlijke marketingen klanttevredenheid alsfundamentele waarde-aandrijvers in haaronderneming.KPNziet het optimaliseren vanelk contactmoment met klanten als integraalvoor dezevisie. Inde loopvan2003 heeft KPNeenaantal initiatieven geïntroduceerd metals doel het verbeterenvande kwaliteit vandedienstverlening aan haar klanten.KPN wil opdeze initiatieven voortborduren door haar Customer Relationship Management ("CRM") activiteiten te herstructureren. Eenherstructurering kan inpotentie dedienstverleningaan klanten van KPNdoenverbeteren het potentieelvoorwaardecreatie maximaliseren door een belangrijk contactmoment met klanten teoptimaliseren terwijl een kostenreductie gerealiseerd kanworden. Indien het Bodgestand wordt gedaan zal KPN volledige zeggenschap verkrijgen overSNT, hetgeen zalbijdragen aande herstructurering. KPNisvanmeningdatzij haar prestatienormen kanverhogen,met namevoor de dienstverlening aande meestwaardevolle klanten.KPNistevensvan meningdatde herstructurering, degedeeltelijke integratie zoals hierna beschreven endevoorgenomen beëindigingvande noteringvanSNT(verwezen wordt naar'Beëindiging noteringSNTen uitkoop (minderheids-) Aandeelhouders SNP hierna), eenaanzienlijke kostenreductie in alle sectoren vanSNTzalbetekenen.Door deacquisitie zullen belangrijke activiteiten van SNT,zoals Multiconnect (0800/0900 nummers),beter kunnenworden geïntegreerd metde CallCenter Solution enCallFactoryvanKPN. Het huidige herstructureringsprogramma binnen SNTzalworden voortgezet.De ondernemingvanSNTheeft een internationale focus,is eengevestigd bedrijf enalhaar kernactiviteiten hebben eensterke marktpositie, met namesinds de herstructureringen in Scandinavië en Frankrijk. Grondslagvoorde Biedprijs DeBiedprijs isgebaseerd opzorgvuldige financiële analyses, bestaande uit devolgende elementen: discounted cashflow analyse (contante waarde berekeningop basisvan historische en voorziene ontwikkelingen inde financiële prestaties, decashflows enbalansvanSN"0; een'trading multiple analyse'op basisvandewaardevan vergelijkbare beursgenoteerde ondernemingen;en deuitkomst vaneenduediligence onderzoek. DeBiedprijs vertegenwoordigt eenpremievan: circa 6procent ten opzichtevandeslötkoers van EUR12,75van hetAandeel SNTop9 september 2004,zijnde delaatste Beursdagvoorafgaand aan deeerste aankondiging met betrekkingtot hetBod; circa8procenttenopzichtevandegemiddelde slötkoers perAandeelSNTgedurende delaatste maandvoorafgaand aanenmet inbegripvan9september 2004; circa 8procent ten opzichtevandegemiddelde slötkoers perAandeelSNTgedurende detwaalf maandenvoorafgaand aanenmet inbegripvan9september 2004;en circa 11 procent ten opzichtevandegemiddelde slötkoers perAandeelSNTgedurende devierentwintig maandenvoorafgaand aanenmet inbegrip van9september 2004. Opverzoekvande Raadvan Bestuur SNTendeRaadvanCommissarissen SNTheeftING Investment Bankingeen Fairness Opinieverschaft met betrekkingtot het Bodwaarin zij verklaart dat deBiedprijs,opdedatumvande Fairness Opinie,vanuit financieel oogpunt voor deAandeelhouders SNTfair (redelijk enevenwichtig) is,behoudens deaannames en kwalificaties die inde Fairness Opiniezijnvermeld.Zie Hoofdstuk 12(Fairness Opinion). Sociale gevolgen Hetgemiddelde aantal personeelsleden vanSNTin2003 bedroeg6,595. K P N za'de bestaande arbeidsvoorwaarden vandein Nederlandwerkzame personeelsleden van SNTna desuccesvolle afwikkelingvan het Bod respecteren.Nadefusie zalin principe elke vorenbedoelde werknemer vanSNTwiens functieverdwijnt de mogelijkheid worden gelaten
tesolliciteren naarvacatures bij KPNof haargroepsmaatschappijen. Hetvoorgaande is niet vantoepassingopdiewerknemers vanSNTdie reedsontslagisaangezegd opbasisvande zogeheten Uranus afvloeiingsregeling. BeëindigingnoteringSNTenuitkoop(minderheids-)AandeelhoudersSNT Afhankelijk van,onder meer, het aantalAandelen SNTdat door Biederwordt gehouden na deAfwikkelingsdatum, is het debedoelingvan KPNde noteringvandeAandelen SNTop EuronextAmsterdam te beëindigen,endaartoe inoverlegtetreden met Euronext Amsterdam.Aandeelhouders SNTdie hunAandelen SNTniet aanmelden onder de voorwaarden van het Bod lopen derhalve het risico datzij aandelen houden die weinig wordenverhandeld enniet-liquide zijn. Inhet gevaldat KPNnadeAfwikkelingsdatum 95%of meervandegeplaatste AandelenSNT houdt, is KPNvoornemens zosnelmogelijk dewettelijke uitkoopprocedure tevolgen overeenkomstig artikel 2:92a BW,terverkrijgingvanderesterendeAandelenSNT. Inhet gevaldat KPNnadeAfwikkelingsdatum minder dan95procentvande geplaatste Aandelen SNThoudt, is het niet mogelijk omeenvorderinginte stellen tot verplichte overdracht vanAandelen SNTinovereenstemming met artikel2:92a BW.Indat geval overweegt KPNom nagoedkeuringvandeRaadvanCommissarissen SNTeningevolge een besluit vandealgemenevergaderingvanAandeelhouders SNTte nemen met een gewone meerderheid vandegeldiguitgebrachte stemmen,die nadeAfwikkelingsdatum zalworden gehouden,omeenjuridische fusie teeffectueren tussen Bieder enSNToftussen KPNen SNTwaarbij Bieder danwel KPNdeverkrijgende vennootschap zalzijn enSNTde verdwijnende vennootschap. Inhet gevaldat eenvandehierboven genoemdejuridische fusies wordt geëffectueerd, zullen deAandeelhouders SNTdie hunAandelen SNTnogniet hebbenaangemeld onder het Bodvan rechtswege aandeelhouder wordenvanKPN. Hetaantalgewoneaandelen in het geplaatste kapitaalvan KPNdatvan rechtswege zal wordentoegekend door KPNaandeAandeelhouders SNTdie hunAandelen SNTnogniet onder het Bodhadden aangemeld,zalworden bepaald op basisvandewaardevande Aandelen SNTdie niet waren aangeboden,inverhoudingtot dewaardevandeaandelen in hetaandelenkapitaal vanKPN. Ingevalvaneenjuridische fusie zaleenfusievoorstelwordenvoorbereid door de raadvan bestuur vandefuserendevennootschappen welke, naastandere naar Nederlands recht vereiste gegevens,de ruilverhoudingvandeAandelen SNTzalvermelden eneventueelde omvangvandebetalingen krachtens deruilverhouding die dienenteworden gedaan op basisvan het Nederlandse recht. Indatgevalzullen devolgende gegevensworden verstrekt ineenseparateverklaring bij het fusievoorstel: • volgenswelke methode ofmethoden deruilverhoudingvandeAandelen SNTis vastgesteld; • waarom deze methode ofmethoden geachtworden in het gegeven gevalte passen; • tot welke waarderingelkegebruikte methode leidt; • indien meerdaneenmethode is gebruikt, ofhet bij dewaardering aangenomen betrekkelijke gewicht vande methoden in het maatschappelijke verkeer als aanvaardbaar kanworden beschouwd;en • welke bijzondere moeilijkheden ereventueelzijn geweest bij dewaarderingen bij de bepalingvanderuilverhouding. Ingevalvaneenjuridische fusie zaleenaccountant worden verzocht om hetvoorstel tot fusie teonderzoeken enzalhemworden gevraagd omtheverklaren ofde voorgestelde ruilverhoudingvandeAandelen SNTnaarzijn oordeelredelijk is. KPNbehoudt zichtevens het rechtvoor elkanderwettig middelaantewenden om(direct of indirect) 100%vandeAandelen SNTteverkrijgen,alsmedete besluiten tot ontbinding, splitsing ofverkoopvanalleof nagenoegalleactivavanSNToftot eenjuridische fusie als bedoelt inartikel2:334a BWtussen Bieder enSNT,metSNTalsverkrijgende entiteit enKPN
•o alsverdwijnende entiteit. Tenslotte behouden KPNenSNTzich het rechtvoor KPNactiva te laten inbrengen inSNTtegen uitgifte vanAandelen SNT,waarbijvoorkeursrechten van andereAandeelhouders SNTzullen worden uitgesloten,dit allesovereenkomstig het Nederlands recht endeStatuten. Financieringvanhet Bod Bieder zal het Bodfinancieren vanuit haar liquide middelen endoor middelvan bestaande kredietfaciliteiten vanKPN. Toekomstige structuur KPNwenst dehuidige juridische structuur vanSNToptwee manieren teversimpelen, namelijk (i)doorzosnelmogelijk de bestaande regelingen metSNTter zakevande samenstellingvande RaadvanCommissarissen SNTendebenoemingenhet ontslagvan haar ledenopdeSluitingsdatum te beëindigen endeStatuten inovereenstemmingte brengen metdestatutenvananderedochtermaatschappijen vanKPN,en(ii) uiteindelijk, wanneer denoteringvanSNTis beëindigd,door eenwijzigingvandeStatuten waarbij de RaadvanCommissarissen SNTals orgaanvanSNTzalworden verwijderd. Activiteiten zoals call-centerdiensten voor derden enmarktonderzoek zullen op termijn worden afgestoten. KPNevalueert diverse opties aangaande debuitenlandse dochterondernemingen vanSNT,die aldan niet kunnen leiden tot eendesinvesteringvan die buitenlandse dochterondernemingen, nadat het Bodgestand isgedaan.Het is niet uitgesloten dat deherstructurering enmogelijke desinvesteringen,afhankelijk vande opbrengsten, kunnen leidentot herstructureringslasten enafschrijvingen.Met betrekking tot Interview-NSS B.V., een100%dochteronderneming van SNT,heeft overlegovereen mogelijke management buy-out plaatsgevonden,die Interview-NSS B.V. de mogelijkheid zou bieden zelfstandigte opereren.Dezediscussies zijn gaande. VOORLOPIGTIJDSCHEMA Hieronder wordt eensamenvattinggegevenvan hettijdschema voor het Bod.Dit tijdschema isonderhevigaanverandering indien het Bodwordt verlengd ofgewijzigd. Verwachte datumen tijd 18October 2004
19October 2004
Publicatie vandeadvertentie waarin de verkrijgbaarstelling van het Biedingsbericht en het ingaanvandeAanmeldingstermijn wordt aangekondigd Aanvangvande Aanmeldingstermijn
14.00 uur CET, 3november 2004
BAVA
15.00uur CET,12november 2004
Sluitingsdatum
Uiterlijk vijf Beursdagen nahet einde vande Aanmeldingstermijn
Datumvan Gestanddoening
Uiterlijk vijf Beursdagen nade Gestanddoeningsdatum
Afwikkelingsdatum
OVERIGEINFORMATIE Beschikbare documenten Exemplaren vandejaarrekeningen vanSNTvoor deboekjaren eindigend op31 december 2003,2002 en 2001,zoals goedgekeurd door de RaadvanCommissarissen SNT,evenalsde Statuten enderesultaten vanSNTover deeerstezesmaandenvan2004,welke documenten geacht worden integraalonderdeeluit te makenvandit Biedingsbericht, en exemplaren vandit Biedingsbericht zijn opverzoek kosteloosverkrijgbaar ten kantorevan SNTenABN AMRO. Kopieënvan het Biedingsbericht zijnook kosteloos verkrijgbaar opdewebsitevan Euronext Amsterdam (www.euronext.com, slechts voor Nederlandse ingezetenen). Verwisselkantoor ABNAMROBank N.V. isaangewezen alsverwisselkantoor met betrekkingtot hetBod.
i / . ADVISERS
Advisersto the Offeror
FinancialAdviser
LegalAdviser
ABNAMROBank N.V. GustavMahlerlaan10 1082 PPAmsterdam
Allen& Overy Apollolaan15 1077ABAmsterdam AdviserstoSNT
Auditors
LegalAdviser
PricewaterhouseCoopers Accountants N.V. Houtplein19 3032 ACRotterdam
Loyens& Loeff Fred.Roeskestraat 100 1076 EDAmsterdam
ExchangeAgent ABNAMROBank N.V. GustavMahlerlaamo 1082 PPAmsterdam
o 18. CONSOLIDATED FINANCIAL STATEMENTS INDEXTOCONSOLIDATEDFINANCIALSTATEMENTS SNTConsolidated balance sheet for the six months ending30June2004 (unaudited) SNTconsolidated profit and loss statement forthe six months ending30June2004 (unaudited) SNTconsolidated statements ofcash flows forthe six months ending30June2004 (unaudited) Notesto the SNTconsolidated financialstatements 30June2004 Press release 29July 2004 Review report SNTconsolidated balance sheet asat31 December 2003,2002 and 2001 SNTconsolidated profit and loss statement fortheyears ending2003,2002 and 2001 SNTconsolidated statements ofcashflows fortheyearsending2003,2002 and 2001 Notesto the SNTconsolidated financial statements at31 December 2003 Auditors' report
©• SNTCONSOLIDATEDBALANCESHEETFORTHESIXMONTHSENDING30JUNE2004 (UNAUDITED)ANDTHEJWELVEMONTHSENDING31DECEMBER2003 (x€ 1,000)
30-06-2004
31-12-2003
Fixed assets Intangible fixed assets Tangible fixed assets Financial fixed assets
106,665 42,901 40,601
99.072 44.533 43.786
Total fixed assets
190,167
187.391
Current assets Receivables Cashandcash equivalents
143.484 68,305
130,397 105,647
Totalcurrent assets
211,789
236,044
401,956
423.435
Group equity Shareholders' equity Minority interests
228,227 1,302
224,861
Group equity Provisions Long-term liabilities Current liabilities
229,529 40,086 50,285 82,056
225,610 41.087 61,746 94.992
401,956
423.435
749
<§> SNTCONSOLIDATEDPROFITANDLOSSSTATEMENTFORTHESIXMONTHSENDING 30JUNE2004 (UNAUDITED)ANDTHESIXMONTHSENDING30JUNE2003 (UNAUDITED) (x€.1.000)
1HY2004
1HY2003
Net revenues Direct costs Personnel expenses Temporary staff Depreciation ontangible fixed assets Amortisation of goodwill Goodwill impairments Other operating costs
38,419 104.999 27.174 11,216 3.997 38,828
278,922 39.998 134.635 28,415 13.432 3.893 38,144 49.115
Totaloperatingcosts Financial income and expenses
224,633 -1,182
307,632 -2,096
5,888 -2,243
-30,806 -3.712 9.644
Resultfrom ordinary activities before taxes Taxation on result from ordinary activities Balanceof incidental taxation Result non-consolidated participations Minority interest Net result
Weighted average numberofoutstanding shares Net result per share Fullydiluted * net result per share
231,703
0
0
-1,058 30
47 710
2,617
-24.117
13,879,866 0.19 0.12
13,879,866 -1.74 -1.08
number of outstanding sharesadjusted for the effect of theconversion ofthe Special Share (maximum of 8,315,658 shares)
& SNTCONSOLIDATEDSTATEMENTSOFCASHFLOWSFORTHESIXMONTHSENDING 30JUNE2004 (UNAUDITED)ANDTHESIXMONTHSENDING30JUNE2003 (UNAUDITED) 2004 2003 ( x € 1,000) (unaudited) (unaudited) Cashflowfrom operating activities Net result Movement deferred tax assets Depreciation Amortization goodwill Movement in networking capital Movement in provisions
3,997 -26,024 -1,001
-24,117 5.897 13.432 42,037 -47.430 2,693
Cashflowfromoperating activities
-9,266
-7,488
-9.584 -ii,590
-7,953 -4,183
0 0
69 0
3,258
-398
Cashflowfrom investing activities Investments intangible fixed assets Investments in intangible fixed assets Proceedsfrom disposals oftangible fixed assets Acquisitions Investments infinancialfixed assets Proceeds from disposals of financial fixed assets Purchase ofown shares Cashflowfrom investing activities
2,617 -71
11,216
0
0
748
-3,192
-17,168
-15,657
0 0
60
553
Cashflowfromfinancing activities Issue of shares Additional paid in capital Movement net result minority interests Movement Longterm liabilities
-11,461
-1,099 -1,360
Cashflowfrom financing activities
-10,908
-2,399
Liquidity Netincrease/decrease cash andcash equivalents Cashandcash equivalents asat1January
-37,342 105,647
-25,544 99,009
68,305
73.465
Cashandcashequivalents asat 30June
0
•o NOTESTOTHESNTCONSOLIDATEDFINANCIALSTATEMENTS30JUNE2004 1.Accounting Principles General Theaccounting policies applied are unchanged comparedto theyear 2003. 2.Acquisitions and disposals SNTGermany Theacquisition of Info.portal GmbHandtheactivities of ExtracomAGinthe first half-year of 2004 resulted insomewhat lower margins ofSNTGermany.Theintegration ofthese new activities has now beencompleted. 3.Non-consolidated participations Despitethe efforts ofthe management ofVitalicom (formerly SNTFrance),a30% participation ofSNTGroup,the results inthe first half-year of2004 did not meet expectations. The30%interest of SNTinVitalicom hasanegative effect onthe net results ofSNTGroup amountingto EUR1 million.Theseresults andthe outlook atthis moment donot give reason for an impairment ofthe outstanding loanof EUR 11 million.Theresults of Excellent (formerly SNTScandinavia), a23%participation ofSNTGroup,isdeveloping in line with expectation.Theoperating losses havebeenended andthe break-even point hasbeen reached. 4. Intangible FixedAssets Goodwill (x€.1.000) Balanceasat 1 January 2004 Investments Amortisation Balanceasat 30June2004
1HY2004
2003
99.072 11,590 -3.997
139.538 9.484 -49.950
106,665
99.072
5.Group Equity
(x€i.ooo)
1 HY2004
2003
Balanceasat1January 2004 Perido result Purchaseown shares
224,861 2,617 748
250,176 -22,913 -2,402
Balanceasat 30June2004
228,226
-224,861
6. Provisions Reorganisation provision (x€ mln.) Balanceasat1January 2004 Additions Utilisation Balance asat 30June2004
7.Revenueand results pergeographical segment RevenuePerGeographicalSegment ( x € i million)
1HY2004 4-5 1-5 -2.6 3-4
1HY2004
1HY2003
Benelux Germany Subtotal Scandinavia France
171.6 60.1 231.7
177-2 52.0 229.2 16.8 32.9
TotaalSNTGroup
231.7
278.9
Operating ResultsPerGeographicalSegment i HY2004 x € i million Benelux Germany Subtotal
6.4 -0.5 5-9
1HY2004 %ofrevenue 3-7% -0.8% 2.5%
Scandinavia France TotaalSNTGroup
5-9
2.5%
1HY2003 x € i million
1 HY2003 %of revenue
6.8
2.7% 3.8% 3.0%
-12.7 -24.9
-0.8% -0.8%
-30.8
-11.0%
4-8 2.0
8. Related parties Aspart ofits ordinary operations, SNTentered into severalpurchase andsales agreements with KPNGroup companies andaffiliates.Theprices applied inthese agreements areat market conditions. Thevolume ofthe transactions andthe remaining receivables and liabilities canbe summarised asfollows: Balancesasat Receivables from KPN Debtsto KPN
30/06/2004 68,875,450 11,098,243
Profit andlossaccount
1stHY2004
Revenuesfrom KPN Purchases from KPN
140,635,076 32,644,556
•® PRESS RELEASE On29July2004 SNTpublished the following press release: Quote
Performances andexpectations SNTinlinewith 2003 Theexpectedturnoverfor thewholeof 2004isaround EUR460-480 million with an expected Ebitaof6to 7%ofturnover •
Turnoverincreases by1.1%toEUR231.7million
•
Ebitamarginremainsstableat4.8%includingreorganisation provision
•
NetresultincreasestoEUR2.6millionfollowing deconsolidation ofFrenchand Scandinavian activities
Zoetermeer, 29July2004.TheturnoverofSNTGroupN.V.cameto EUR231.7million in the first halfof2004.Aftertakingintoaccountthedeconsolidation ofSNT'sactivities in Scandinavia and France,this represents anincrease of1.1%comparedtothe first half of 2003 (EUR229.2 million).Without the reorganisation provision SNTGroup hasrealised an operatingresult (Ebita) of EUR12.6 million,or5.4%ofturnover.The reorganisation provision ofEUR4.5 million made in2003wassupplemented byEUR1.5 million inthe first halfof2004;thiswasnecessitated bythetimethat elapsed between noticesof dismissal andtheobtainingofpermission toterminate employment.Theoperatingresult, including the reorganisation provision,comesto EUR11.1 million,or4.8%ofturnover,similar to the result inthefirst halfof2003.Deconsolidation ofthe FrenchandScandinavian activities from 1July 2003 hascausedthe net result from ordinary businessoperationsto riseinthe first half of 2004to EUR2.6 million (first half of 2003:EUR-24.1million). Turnoverand profit development Theslight turnover increase of 1.1%can beentirely attributed to SNTGermany.Turnover in Germany rose by15.6%asaresult ofacquisitions.Turnover inthe Benelux fell slightly by 3.2%.Themargin inthe Netherlands is under pressure dueto ashift to less profitable activities such asoutbound telemarketing. Inthe first half of2004 radical measures have beentaken inthe Netherlands with regardto the set upoftheorganisation.Working processes have beenfurther streamlined andthe number of indirect FTE is reduced by156 asaresult of both compulsory redundancy and naturalwasteage.This number includes79 FTE forwhich permission toterminate contract remains outstanding.Theimplementation of the aforementioned internalmeasures has hadalimitingeffect onthe result inthe first half year.Thesavings realised areexpectedto haveademonstrably positive effect onthe result from thethird quarter of2004. InGermanythe margin inthe first half of2004fellbehind duetothetakeover of Info.portal GmbHandtheactivities of ExtracomAG.Thesenewactivities have now been fully integrated into the business operations andthe margin of SNTGermany isexpected to have recovered bythe endof2004. Cashposition andworking capital Thecash position ofSNTGroupatthe endofJune2004 is EUR68.3 million.After the deduction ofallshort- and long-term debts,the net liquidity position is EUR24.4 million. This indicates anincrease of EUR2,6 million when comparedwith the EUR21,8million at the comparable date last year. Result of non-consolidated participations Despitethe efforts ofthe management ofVitalicom (formerly SNTFrance),a30% participation of SNTGroup,the results inthe first half of2004 continueto lag behind expectations.The30%interest ofSNTinVitalicom has hadanegative effect onthe net result ofSNTGroupof EUR 1 million.This result andthefuture expectations atthis moment give no indication ofanimpairment ofthe outstanding borrowingof EUR11 million.
Theresult of Excellent (formerly SNTScandinavia,a23%participation ofSNTGroup,has lived upto expectations.Theoperating losses have nowendedandthe break-even point has beenreached. Investments Thenecessary replacement ofthe 0800/0900 platform,aMulticonnect activity, is expected to involve aninvestment of EUR 15-17million.Withthis new platform,which becomes operational inthe first quarter of2005,SNTis readyto connect allforms oftelephonic and electronic traffic, includingthe 088 numbers recently announced byOPTA. Market developments Internet and SMSservices havedeveloped into communication forms which,to agreat extent, have been integrated into personaland business life.Inlinewith the development ofthe 24 hour information society and progressive technical possibilities, 'self-help' services continuetodevelop further. Clients ofSNTencouragethese developments from the point ofview ofcost saving.Personalservice provision isexpensive and is increasingly dependent onspending behaviour andthe expected future valueofcustomers. Forthe provision of'commodity' information,self-help services via Internet, Interactive Voice Response programs or automatic e-mail answeringareaneffective andcheap alternative which also meetthe needs ofagrowing number ofconsumers. SNTContact Within the business line SNTContact several newcontracts have beenconcluded inthe last halfyear. Inthe springof2004 SNTBeneluxand Stichting Korrelatie entered into an intensive joint venture intheareaofsocialandcare-related services,thereby providingthe basisfor the development ofservice andefficiency-enhanced activities inthe care sector. Thecollaboration with Stichting Korrelatie is in linewith SNT'sgrowth ambitions inthe care sector and offers Stichting Korrelatie new perspectives since its continued existence came under threat. InJune2004 SNTBenelux and Hewlett Packard (HP)agreedthat SNTwill carryout sales and support activities for HPin Northern Europe.Thenetwork ofSNTbranches inthe Benelux, plusthe capacity ofSNTs Scandinavian partner Excellent,guarantees the scale size and flexibility required to successfully promote HP'sactivities in Northern Europe. BASE,thethird provider inthe Belgiantelecom market, expanded andextended its contract with SNTBelgium atthe beginningof2004. Forthe nextthreeyears SNTBelgiumwillcarry outthefull rangeofcustomer serviceactivities for BASE.Inaddition newcontracts have been concluded in Belgiumwith VersatelandNeckermann. SNTResearch Within the business line SNTResearch,market research bureau Interview-NSS concluded anagreement with Trendbox inMarch concerningcooperation inthe areaoftelephonic data collection. Undertheterms ofthis agreement, Interview-NSSwillcarry outthe majority of the nationaltelephonic data collection.Inthedata collection market there has beena noticeable shift from telephonic to online data collection.Asaresult ofthis shift, various market parties haveseentheir contact centers fall below critical scalethresholds.As part of the SNTconcern,Interview-NSS isableto offer ascale sizeand degreeofflexibility that is notfeasible for many individual parties.Interview-NSS hasalso strengthened its position onthe market for international media research byintroducing EMSSelect,aresearch product that charts the media behaviour ofthe top 3%of incomes. SNTMulticonnect Theaimofthe business line SNTMulticonnect isto deliver anddevelop multichannel solutions. Untilrecently these services have beensupplied mainly bySNTBenelux. Atthe beginningof 2004these activities were also started upinGermany.Atthe beginning ofJanuary SNTGermanytook over Info.portalGmbHfrom O2Germany andthe Norwegian TelenorTeleservice.Info.portal isaplatform for information and mediation inthe areaof telecommunication (including'directory services').InMarchthis wasfollowed bythe takeover ofactivities ofExtracomAG,aservice number provider with its own fibre optic network. SNTaimsto extendthe German activities into acomplete CRMoffer, which will
include not only contact center activities but also multichannel products (infrastructure and applications) and research activities (data mining).Theacquisitions mentioned arein line with this strategy. Finally,inthe last halfyear SNTGermany hasalsofurther extended its telemarketing,direct mailandfulfilment activities. SNTBenelux hasgiven its Multiconnect activities anadditional boost by concluding contracts with TomTomand Planet Media Groupforthe supply of licences for Eresponse services. Eresponse standardises andautomates incomingcalls,non-personalande-mail traffic, andthis can result insubstantial cost saving.InJuneaEuropean distribution contract was concludedwith E-piphanyfor thesupply ofthe Interaction Advisor,an application that combines data from different customer entries,andwhich can beusedfor makingappropriate offers to customers.Inaddition inJuneSNTBenelux entered into ajoint venturewith Emexusinthe areaofmobile CRM.BydoingsoSNTis respondingto the clients' needfor mobile customer contact channels. Corporate governance DuringtheAnnualGeneralMeetingofShareholders on23April 2004, PaulP.'t Hoenwas re-appointed supervisory director. InApril2004 Gerardvander Stelt wasappointed asManaging Director SNTBeneluxad interim.TheManagement Boardandthe Supervisory Board intendto formally appoint Mr Vander Stelt to Managing Director SNTBenelux and memberofthe Management Board in thethird quarter of2004.Gerardvander Stelt succeeds SjaakTeterissa inthis role,the latter havingleft SNTon1 January 2004. Employees Increasingefficiency andquality is amajor point of interest within SNTBenelux.In connection with this,atthe beginningof 2004 itwasdecided to introducetheCOPC standard,aninternational 'quality mark'that guarantees that acontact center operates in accordancewith anumber ofestablished quality standards.Thecontact centers that operate accordingto this standard areamongthe best intheworld.Operation accordingto this standard meansthat SNTdelivers maximum quality to its clients at acceptable internal costs.Asfrom 2004 SNTContact employeeswill betrainedtowork inaccordancewith the formulated quality standards. SNTBenelux hasrecently concluded aCAO(Collective LabourAgreement) agreement in principlewhich includes,amongother things,abonus/malus schemeaimedat reducing frequent short-term absenteeism. Inaddition thetravelallowancewill bebrought in line with the new legislation inthis area. Tocompensate forthe increasing pressure on prices,on1April2004 SNTGermany introduced a43hourweekfor most of its employees.Theextra hourswill not bepaidand will bespent entirely ontrainingandcoaching.Thiswill enable SNTGermanyto control internalcosts andatthe sametime maintain ahigh quality standard.Thelengtheningofthe workingweekwas agreed incloseconsultation with employees andtheworks council.The extra investment inhours andquality areregarded bymanagement andemployees ofSNT Germany asaninvestment injob preservation. Expectations SNTexpectsturnover forthewholeof2004tocometo around EUR460-480 millionwith an expected Ebita offrom 6to 7%ofturnover, in linewith theoperating result over 2003. Profile SNTisoneofthe biggest providers ofCustomer Relationship Management (CRM)services in Europe.SNTcarries out surveys intothe communication preferences and behaviour of customer groups and couples this knowledgeto the development and implementation of communication channels andservices aimed at improvingand intensifyingthe contact between organisations andtheir customers.SNTalso handles customer contacts by giving advice and information,makingreservations andcarryingouttransactions via telephone, Internet and e-mail.Together with its European partners,SNTprovides good service for customers of internationalA-brands, banks,insurance companies,travelorganisations,IT andtelecommunication companies,care providers,charitable institutions and
governments. SNTGroup consists ofsubsidiary companies SNTNetherlands, SNTBelgium andSNT Germany.Within SNTNetherlands,the research bureau Interview-NSS operates asa100% subsidiary company under its own name.InScandinavia SNTworks together with alliance partner Excellent.Vitalicom is SNTs partner inFrance.
Unquote
ReviewReport Tothe boardofdirectors and shareholders ofSNTGroup N.V. Review report Introduction Inaccordancewith your instructions,we have reviewedthe consolidated financial statements ofSNTGroup N.V., ("the Company"),Zoetermeer, for thesix-month period ended30June2004 (asset out on pages F2 to F6).Theseconsolidated financial statements arethe responsibility ofthe Company's management. Our responsibility isto issueareport onthese consolidated financial statements based onour review. Scope Weconducted our review inaccordance with standards for review engagements generally accepted inthe Netherlands.Thesestandards require that we plan and perform the review to obtain moderate assurance about whether the consolidated financial statements arefree of material misstatement.Areview is limited primarily to inquiries ofcompany personnel andanalytical procedures applied to financial data andtherefore provides less assurance than anaudit.Wehave not performedanaudit and,accordingly,wedo notexpress anaudit opinion. Opinion Basedonour review, nothing hascometo our attention that causes usto believethat the financial statements do not give atrue andfairview inaccordance with accounting principles generally accepted inthe Netherlands andthe financial reporting requirements included in Part9of Book 2ofthe Netherlands CivilCode. Rotterdam,15October 2004 PricewaterhouseCoopers Accountants N.V.
SNTCONSOLIDATEDBALANCESHEETASAT31DECEMBER,2003,2002AND2001 Before appropriation of profit (3c€ 1,000)
Notes
31-12-2003
31-12-2002
31-12-2001
3 4 5
99.072 44.533 43,786
139.538 53,011 47.003
134.453 66,053 66,336
187,391
239.552
266,842
Fixed assets Intangible fixed assets Tangible fixed assets Financial fixed assets Total fixed assets Current assets Receivables Cash and cash equivalents
6 6
Total current assets
130,397
167,163
105,647
107,448
296,599 32,138
236,044
274,611
328,737
423,435
514.163
595.579
224,861
250,176 2,888
222,555 4,200
253.064 40,700
226,755 50,803
94,992
69.877 150,522
87.235 230,786
423.435
514,163
595.579
Group equity Shareholders' equity Minority interests
7
Group equity Provisions Long-term liabilities Current liabilities
7 8
749
9 10
225,610 41,087 61,746
•® SNTCONSOLIDATEDPROFITANDLOSSSTATEMENTFORTHEYEARSENDING2003,2002AND
2001 (x€ 1.000) Netrevenues Direct costs Personnelexpenses Temporary staff Depreciation on tangible fixed assets Amortisation of goodwill Goodwill impairments Other operatingcosts
Notes
12
Net result Weigthed average number of outstanding shares Net result per share Fully diluted * net result per share
20021
20011
514.526 79.989 234,002 55,613
554.552 111.477 247,574 32,927
317.968 56,263 148,546 32,228
26,249
29,850
21,328
5.772 44,178 86,495
Totaloperatingcosts Financial income and expenses Resultfrom ordinary activities before taxes Taxation onresult from ordinary activities Balanceof incidental taxation Resultnonconsolidated participations Minority interest
2003 1
532,298
16
17
18
-3,170
7.269
4.179
0
0
96.923
41,510
526,020
304,054
-2,220
-i,357
-20,942
26,312
12,557
-12,050
-11,916
-4.781
9,644
0
0
-1,352 1,787
-4,121 379
-667 628
-22,913
10,654
7.737
13,879,866 -1.65
12,393,862 0.86
9,056,684 0.85
-1.03
0.48
*
number ofoutstanding shares for the effect ofthe conversion ofthe Special Share (maximum of 8,315,658 shares)
1
Forcomparison purposes with the consolidated profit and loss statement for the six-month period ended 30 lune 2004,amortisation ofgoodwill has been reclassified from aseparate line itemwithin operating result in operating costs for each ofthethree years ended 31December 2003, 2002, 2001.
0.40
©• SNTCONSOLIDATEDSTATEMENTSOFCASHFLOWSFORTHEYEARSENDING2003,2002AND 2001 (x€ 1,000) Cashflowfrom operating activities Net result Depreciation Movements inworking capital Movements deferred tax assets Movements in provisions Cashflowfromoperating activities Cashflowfrom investing activities Investments in(in)tangible fixed assets Proceedsfrom disposals in tangible fixed assets Acquisitions Investments infinancial fixed assets Write off of financial fixed assets Purchase own shares Cashflowfrom investing activities
2003
2002
2001
-22,913 76,199 -19.158 9.905 387
10,654 37,119 44,077 4,738 978
7.737 25.507 -1.835
44.420
97.566
31.409
-26,903
-18,231
-20,202
9.648 -15.379 950 -3.120
1,894 -5.323 -779 3.231 -2,647
4,469 -45,200 -1.351
-34.804
-21,855
-62,284
Cashflowfrom financing activities Issue of shares Other movements in shareholders' equity Increase in long-term liabilities Redemptions on bank loans
-1,421
244
-9.997
-645
53,ooo -3.937
Cashflowfrom financing activities
-11,418
-401
61,463
12,400
Liquidity Netincrease/decrease cashandcash equivalents Cashandcash equivalents asat 1January
-1,801
75.310
30,588
107,448
32.138
1.550
Cashandcashequivalents asat 31 December
105,647
107,448
32,138
-® NOTESTOTHESNTCONSOLIDATEDFINANCIALSTATEMENTSAT31DECEMBER2003 1. ACCOUNTINGPRINCIPLES General Theamounts included inthe notestothefinancial statements aredenominated inEuros. Valuation and result determination are based on historicalcosts. Group Relations The financial information ofSNTGroup N.V. is included intheconsolidated financial statements of Koninklijke KPNN.V. inTheHague.Asat31December 2003,KoninklijkeKPN N.V.owns 51% ofthe shares ofSNTGroup N.V. Consolidation Group companies,which arecompanies that form anorganisational andeconomic entity with SNTGroup N.V.and inwhich SNTGroup N.V. hasacontrolling interest, are fully consolidated. Theminority participating interests ingroup equity and inresults ofoperations are disclosed separately.Group companies inwhich SNTGroup N.V.acquired an interest during thecourse ofthe financial year areconsolidated inthe financial statements from the date onwhich the controlling interest wasacquired. Theconsolidated financial statements include SNTGroup N.V. andthefollowinggroup companies asat31December 2003.Unlessotherwise stated,the participations are100% interests: Benelux SNTBenelux B.V., Zoetermeer KCCNederland B.V., TheHague SNTNederland B.V., Zoetermeer; Swoko B.V., Nijmegen (51%) Interview/NSS B.V., Amsterdam SNTBusiness Commerce Services B.V.,TheHague SNTConnect B.V., TheHague SNTConferencing Services B.V., TheHague SNTTACTB.V., TheHague Avalanche Enterprises B.V., Goes(75%) Avalanche Group B.V.B.A.,Antwerp (95%) SNTBelgië N.V., Antwerp; SNTBelgium N.V., Antwerp SNTParticipations B.V., Zoetermeer Germany SNTDeutschlandA.G.,Frankfurt amMain (84%) • Diatel Direkt Kommunikation GmbH&Co.KG,Frankfurt amMain • Diatel Direkt Systems GmbH,Frankfurt amMain • Variotel GmbH,Chemnitz • SNTVerwaltungs GmbH,Frankfurt amMain • JostTelemarketingGmbH8.Co.KG,Limburg Offheim • SNTGmbH,Frankfurt amMain • SNTPhorzheim GmbH,Phorzheim • SNTKölnGmbH&Co.KG,Cologne • SNTKölnVerwaltungs GmbH,Cologne • SNTEssenGmbH&Co.KG,Essen • SNTEssenVerwaltungs GmbH,Essen • SNTPotsdam GmbH&Co.KG,Potsdam • SNTPotsdamVerwaltungs GmbH,Potsdam Scandinavia SNTScandinavia AS,Copenhagen (95%) • SNTDenmarkAS,Copenhagen • SNTSwedenAB,Stockholm • SNTNorwayAS,Oslo
•
SNTFinlandOY,Helsinki
France SNTHoldingFranceSAS,Paris • SNTFranceSA,Paris Other Stichting Medewerkersparticipatie SNT,Zoetermeer Asthe corporate financialstatements ofSNTGroup N.V. areincluded inthe consolidated financial statements,the corporate statement of income is presented inasummarised form (Article 402,Title9,and Book 2ofthe Netherlands CivilCode). SNTGroup N.V. hasassumed liability asreferred to inarticle 403 Book 2ofthe Netherlands CivilCodeforthe following companies: • SNTNederland B.V., Zoetermeer • KCCNederland B.V., TheHague • SNTBusiness Commerce Services B.V., TheHague • SNTConnect B.V.,TheHague • SNTConferencing Services B.V., TheHague • SNTTACTB.V., TheHague • SNTDeelnemingen B.V., Zoetermeer • Interview/NSS B.V., Amsterdam Foreign Currencies Transactions denominated inforeign currencies aretranslated atthe exchange rates prevailingatthe dateofthetransactions.Theresultingassets and liabilities denominated inforeign currencies aretranslated attheexchange rate prevailingonthe balance sheet date.Translation gainsand losses areincluded inthe profit and lossaccount.Theforeign group companies areconsideredto beindependent foreign units.Thefinancial statements denominated inforeign currencies aretranslated atthe rate ofexchange prevailingonthe balance sheet date.Theexchange ratedifference ontheopeningequity areaddedor charged directly tothe shareholders' equity,aspart ofthe statutory reserve for investments. ACCOUNTINGPOLICIESRELATINGTOTHEBALANCESHEET Intangible fixed assets Asof1January 2001, goodwill arisingfrom acquisitions will bevalued at historical cost less amortisation accordingtothe straight line method forthe estimated economic lifewitha maximum of20years,takinginto account exceptional impairments. Tangiblefixedassets Thesearevalued at historical cost lessdepreciation.Theproduction costs consist ofthe direct production costs(materials,direct wagecosts andwork contracted out) aswellasa chargefor indirect production costs.Depreciation takes placeaccordingtothe straight-line method onthe basisofthe expected economic life.Assets acquired duringtheyear are depreciated from the momentthey cameinto use.Thefollowing review states the expected economic lifeofthe tangible fixed assets: Expected economic life Buildings Telecom/IT equipment • Telecom hardware and infrastructure • Personalcomputers • Software Other assets • Refurbishing • Office equipment • Cars
40 years 4-5years 3years 3years 4years 5-10years 4years
Financial fixed assets Majority participations andother participating interests,where significant influence canbe exercised,areincluded at net assetvalue.Participating interests where no significant influence can beexercised arevalued atthe lower ofcost,or net realisablevalue,inthe caseofpermanent lowervalue. Taxation Deferred incometaxassets andliabilities derivefrom temporary differences between the fiscaland financial valuation ofassets and liabilities andfrom loss carry forward facilities available.Thecurrent tax liability is included under current liabilities. Other assetsand liabilities Other assets and liabilities arecarried atfacevalue unless stated otherwise.Accounts receivable arestated netofaprovision for doubtful debts calculatedonanindividual basis. Provisions Provisions aremadefor commitments which hadalready been madeasatthe balance sheet dateasaresult ofevents inthe past,ifthecommitment canbeestimated accurately andwill result infuture expenses orachievements. Pension-related provisions, including the provisions for early retirement, pre-pension andvoluntary redundancy in connection with the reorganisation (Sociaal Plan2001) andtheother pension-related provisions are included attheir discounted value inaccordance with actuarial principles. Interest allocations tothese provisions areincluded underthe financial expenses.Theother provisions (includingthe reorganisation provision) areincluded at facevalue. ACCOUNTINGPRINCIPLESRELATINGTODETERMINATIONOFTHERESULT Determinationof result Result represents thedifference between the realisablevalueofthe services rendered and the costs andother charges fortheyear. Results ontransactions arerecognised intheyear inwhich they take place;lossesareprovided for immediately. Net revenues This represents the amounts charged oryetto bechargedto third parties for services rendered duringthe reportingyear lessdiscounts andexcludingVAT. Direct costs Direct costscomprise costs,supplied bythird parties,onbehalf of projects where SNTis the contractor. Costs Costsare reported inthefinancialyeartowhich they relate. Taxation Incometaxes arecalculated byapplyingthe relevant ratetothe earnings inthe fiscal year andtaking into account the permanent differences between commercialand fiscal income determination. Resultfrom non-consolidated participations This represents SNT's share inthe results ofthe non-consolidated participating interests, valued at net assetsvalue. Dividends received or receivable atthe balancesheet date with respect to the other unconsolidated participations areincluded under this heading. Furthermore,the profit ondisposals of participations are included inthis item. Minority interests This represents the shareof minority interest shareholders inthe net earnings of fully consolidated subsidiaries. 2. ACQUISITIONSANDDISPOSALS Excellent /SNT Scandinavia Asof1July2003,hasSNTGroup acquired a24%interest inthe sharecapitalof Excellent Intressenter AB.Thepricewas EUR5.1million incash.Simultaneous with theacquisition of the Excellent shares bySNTGroup,SNTDenmark,SNTNorway,SNTSwedenandSNT
Finland havesoldtheir assets and liabilities to operatingcompanies of Excellent.The price ofthe assetswas EUR5.4 million incash.Theempty companies SNTDenmark,SNTNorway, SNTSweden and SNTFinland aswellasthe holdingcompany SNTScandinavia willbe dissolved.Alsoasaresult ofthis,atotal amount of EUR10.7million ofgoodwillwith regard to SNTScandinavia wasamortised,aswellasEUR3.5 million ofdeferredtaxassets of the above companies. Asaresult ofthe decision to dissolve,anexpected tax refundof EUR 6.5 million is recognised onthe loss ofthe capital initially invested inSNTScandinavia. Vitalcom /SNTFrance Effective asat1July2003,the activities and related assets and liabilities ofSNTFrance accordingto French law havebeendemerged from the newlyfounded company Vitalicom SAS.Ofthetotal bookvalueof EUR 8.4 million,EUR4million wastransferred asshare capitaland EUR4.4 million incash.Simultaneous with the acquisition ofthe share capital inVitalicom of EUR4million,SNTFrancesold70%oftheVitalicom sharesto INISConseils et Participations SARL(INIS)(50.i%sharefor EUR2,0 million) andAtos Origin (19.9%for EUR0.8 million).Theemptycompany SNTFranceaswellasthe holdingcompanySNT HoldingFrancewill bedissolved in2004.Asaresult ofthis,atotalamount of EUR33.4 million ofgoodwillwith regardto SNTFrancehas beenamortised,aswell asEUR4 million ofdeferred tax assets ofthis company. Aswas agreedwith AtosOrigin in 2001, SNTasat31 December 2003 acquired the remaining20%inSNTHolding Francefor anamount ofEUR5million.Asaresult ofthe decision to dissolve SNTHoldingFrancethis acquisition held nomorevaluefor SNTGroup, the pricewascharged directly to the 2003 result (asamortisation ofgoodwill,and aspart of the previously mentioned EUR33.4 million amortisation of goodwill). Asaresult ofthe decision to dissolve,anexpected tax refund of EUR 10.6 million is recognised onthe lossofthecapitaloriginally invested inFrance. SNTDeutschland Asat31January 2003,SNTGroup inaccordance withthe current agreements has increased its interest inSNTDeutschland from76%to 84%.Forthe acquired 8%, aprice of EUR4-3 million was paid.Thenet assetvalueoftheacquired 8%amounted EUR0.3 million.An amount of EUR 4.0 million istherefore stated asgoodwill investment. 3. INTANGIBLEFIXEDASSETS Themovements of 2003wereasfollows: ( x € 1,000)
2003
2002
Accumulated depreciation
150,202 -10,664
138,633 -4.179
Netbookvalue
139.538
134.454
Movements Acquisitions Depreciation
9,484 -49,950
12,353 -7,269
Total movements
-40,466
5,084
Balanceasat31December Cost Accumulated depreciation
159,686 -60,614
150,986 -11,448
99,072
139,538
Balanceasat1January
Cost
Netbookvalue Amortisation period
20year
Foradescription inmoredetailregarding investments andamortisation ofgoodwillwe refer to section 2:Acquisitions anddisposals. Inaddition tothe amortisations asstated in section 2asaresult ofdisposals (ofatotalof EUR44.2 million),an exceptional amortisation ofgoodwill ofEUR 5.8 million hastaken place.
•o 4.
TANGIBLE FIXEDASSETS
Thecomposition of Land/Buildings,Telecom/ITequipment andother assets,andthe movements in2003wereasfollows: Land/ Buildings
(x€.1,000) Balance as at 1January Cost Accumulated depreciation Net book value Movements Investments Acquisitions Disposals Depreciation
Depreciation period
Assetsunder Other construction
2,508
"3,391
65,381
-873
-86,458
1,635
26,933
-43.417 21,964
9
16,647
10,763
-570
1,009
-293
-9,717 -16,095
-9,861
-854
-9.165
1,911
-370
2,109
2,479
Total2003
Total2002 Total 2001
183,759
166,951
-130,748
-100,898
53.011
66,053
27.419
18,231
-9,648
-2,350
-26,249
-29,850
-8,478
-13.042
2,479
927
Total movements Balance asat 31December Cost Accumulated depreciation Net book value
Telecom/IT equipment
1.947
120,321
77.153
-1,166
-102,553
•53,278
781
17.768
23.875
o t 0 40 years
3 to 5 years
4 to 10 years
-370
201,530
183.759
-156,997
-130,748
44.533
53.011
2,109
Investments inTelecom/ITequipment of EUR16,6 million include anamount of EUR 10 million regardinga financial leaseagreement of SNTDeutschland (from 2oo2).The asat the balance sheet date connected leaseobligation of EUR 7.0 million hasaterm to May 2006 and isforthe long-term part (EUR4.3 million)included underthe long-term liabilities andfor the short-term part (EUR2.7 million) undertheother current liabilities.Thetotal disposals includethetangible fixed assets of SNTScandinavia andSNTFrance,which have been transferred to Excellent andVitalicom, respectively. 5.
FINANCIAL FIXEDASSETS
Themovements of 2003wereasfollows:
( x € 1,000) Balance as at 1January Acquisitions Investments Repayments/ redemptions Net result Write off New consolidations Other movements Balance as at 31 December
Participating interests
Loans
Deferred taxation
816
551
11.449
6.403
8.976 -2.358
64 -950
Receivables from related parties
Total 2003
Total 2002
34-187
47.003
66.336
15-379
779
-10.346
-16.218
-7.988
-7-547
64
37
-8.497
-3.231 -700
6-333
9-527
1-544
183
183
0
26.382
43-786
47.003
Participations
Theseinclude, inaddition tothe 24%interest in Excellent Intressenter ABin Stockholm (EUR5.1million)and the30%interest inVitalicom SASin Paris(EUR1.2 million) acquired in 2003,the49%interest in Klant Contact Services B.V. inZeist,aswellasthe German minority participations FlexitelGmbHin Berlin,CombitelGmbHinMunich,OmbutelGmbH in Berlin(all26%),TribeTechnologies GmbHin Frankfurt (20%) andGSMlGmbHin Frankfurt (25%).Thewrite off accounted for in 2003 of EUR1 million concerns the change inthe net assetvalue asat31December ofthe participating interest in Excellent. Loans
These include,inaddition to the loans issued in2003to Excellent (EUR2.7 million), Vitalicom (EUR4.4 million) and INIS(EUR1.9 million) the loans issued in 2001to the (former)management ofSNTScandinavia forthe financing oftheir 5%inthis company.The loansto Excellent,Vitalicom and INIShaveaterm toJuly2oo6,June 2006 and October 2009, respectively, with an interest of EURIBOR-nso.the loanstothe management ofSNT Scandinavia haveaninitial term to 2011 with aninterest ofSTIBOR+i,2.The loans are
however expected to berepaidfaster than originally agreedasaresult ofthe planned liquidation ofSNTScandinavia in 2004. DeferredTaxation Thedeferred taxasset iscomposed asfollows: ( x € i million) Taxloss carry-forward Temporaryvaluation differences Total
2003
2002
1-5 1-5
6.9 4-5 11.4
Receivablesfrom Related Parties This item mainly relates tothe long-term part ofthe agreedcompensation by KPN to SNTfor the commitments regardingabove-scale CAOpayments and pre-pension andearly retirement (VU"0commitments acquired attheacquisition of KPNCallCentersand KPNCall Bedrijfin2001. 6. CURRENTASSETS Theamounts mentioned below haveamaximum term ofoneyear. Thecurrent assets arecomposed asfollows: (x€ 1,000) Accounts receivable Other receivables Prepayments andaccrued income Cashandcash equivalents
2003
2002
77.972 18,317 34,108 105.647
108,185 17.605 41.373 107,448
236,044
274,611
2003
2002
225,677
251,710
-816 224,861
-1.534 250,176
749
2,888
225,610
253,064
Thecash andcash equivalents areall payablewithin onemonth. 7. GROUPEQUITY Thegroup equity is composed asfollows: (x€1,000) Shareholders' equity SNTGroup N.V. Purchased shares SNTGroup by Stichting Medewerkersparticipatie SNT-
Minority interests
Theshareholders 'equity of SNTGroup NVcan bespecified asfollows: ( x € 1,000)
Movements 1January-31December Issuedshare capital Balanceasat1January Issue ofshares duringtheyear Balanceasat31December Share premium Balance asat1 January Issue ofshares duringtheyear Movement dueto conversion into C shares Balanceasat31December Sharepremium C shares Balanceasat 1January Issueof shares duringtheyear Movement dueto conversion into ordinary shares Movement dueto conversion special share Balanceasat31December Sharepremiumspecialshare Balance asat 1January Issueofshares duringthe year Movement dueto conversion into C shares Balance asat31December Statutory reserve Balanceasat1January Exchange rate differences Balanceasat31December
2003
278 278
73.990 51,661 125,651
51,661
2002
217 61 278
54,818 5,950 13,222 73.990
-51,661
23.613 16,020 -13,222 25.250 51,661
129,694
154.975
129.694
-25.250 129,694
-31
146 146
146 146
Other reserves Balanceasat1 January Increase dueto profit appropriation Purchase own shares Other movements Balanceasat31December
-4.059 -22,913 -3.120
-11,068 10,654 -2,648
-30,092
-4.059
Balanceasat31December
225,677
251.710
-997
Theauthorised sharecapitalamounts to EUR1,000,000. Theissued share capitalis divided into 13,879,866 shareswith anominalvalueof EUR0.02 per share. Theissuedsharecapitalasat31 December 2003was divided into: • 13,879,865 ordinary shares • 1 special share registered inthe nameof KPN Telecommerce B.V. Thespecialshare hasaconversion right to enable KPNto maintain its interest inSNTat approximately 51%.andto maintainthe current votingbalances intheGeneralMeetingof Shareholders. Until1 December 2004,conversion mayonlytake place incase SNTissues ordinary (C)sharesto third parties.Asfrom 1December 2004, KPNmayexercisethe then possibly remainingconversion right inamaximum ofthreetranches.SNTmayoptto payin cash rather than issue newshares. Theconversion right ofthe specialshareamounts to EUR131.7million and isfixedon 8,315,659 ordinary (C)shares,issued incaseofconversion ofthe specialshare.
During2003,4,041,513 ordinary C shareswereconverted into ordinary shares.Theshare premium onthese shares of EUR 51.7million istransferred from 'Share premium Cshares' to 'ordinary share premium'. Tocoveroutstandingoption rights,312,278ownshareswerepurchased inApril2003ata price of EUR 10.53 pershare.Inaddition,26,957shareoptions wereexercised in2003 with anexercise priceof EUR 6.45. Onbalance,EUR3.1million 'purchase own shares'was in 2003 charged tothe other reserves. Atyear-end 2003,SNTGroup (includingStichtingMedewerkersparticipatie SN"0held 669,844 own shares (nominalvalue EUR0.02 pershare),or4.8%ofthe outstanding shares. 8. PROVISIONS Theprovisions can besummarised asfollows: Deferred taxation
(x€ 1,000)
Pension
Balanceasat1January Additions /released Interest Disposals Other movements
28,802 1,016 1,288 -3,677 -1,502
8,241
Balanceasat 31December
25,927
8,143
Total
Total
Other
2003
2002
3,657 5,314
40,700 6,330 1,288
-1.954
-5,631 -1,600
50,803 1,490 1,229 -14,646 1,824
-98 7.017
41,087
40,700
Pension Employees inthevarious countries aresubject to pension arrangements, in accordance with the legalrequirements andcustoms inthecountries concerned.Most ofthe employees inthe Netherlands in2003were,via the KPNPension fund, still subject to pension arrangements viathe KPNpension fund,covered bydefined-benefit plans.If necessary, SNTGroup,inaddition to regular premium payments,will makecontributions to the KPNpension fundto ensurethat there aresufficient fundsto meetthe eventual payment obligations. For2003,nosuchcontributions were necessary. Foralmost all employees inthe Netherlands who did not make useofthe above arrangement, pension rights will bebuilt upasof1January 2003,retrospectively till 1January 2002 intheSNT pension fund, basedonthe available premiumsystem. Thepension provisions stated asobligation inthe balance sheet mostly concern obligations onthe basis ofthecurrent VUTand pre-pension payments to beneficiaries and ofthe future payments to employees eligible for early retirement/pre-pension at62 and61 years, respectively. Thepension provisions areincluded attheir discounted value,inaccordancewith actuarial principles, assuminganinterest of4%. Bywayofaninprinciple yearly unchanging contribution,the aim isto realise aterminalfundingcapitalin10years,startingfrom the initial capital,taking payments into account duringthis period. Anamount of EUR 10.6 million was included atyear-end 2003 inthe pension provision,for employeesvoluntarily leavingSNTinconnection with the 2001SocialPlan.The employees involvedwho are55yearsandolder haveanarrangement underthe sameconditions that apply tothe existingVUTarrangement. DeferredTaxation Deferredtax liabilities relatetotemporary differences ofa long-term nature between the fiscal and financial valuation ofassets and liabilities.
Other Provisions These include atotal provision for reorganisation costs of EUR5.6 million aswellasa provision for disability (WAO)commitments forwhich operatingcompanies of SNTBenelux haveanown risk (EUR1.0 million).Ofthe total reorganisation provision of EUR 5.6 million, EUR4.5 million concerns the decision madeattheendof 2003to reduce indirect jobs inthe Netherlands.Theother part (EUR1.1million) concerns previous reorganisations (including SociaalPlan2001). Ofthetotal provisions, EUR12,5million hasaterm of lessthan oneyear,while EUR6.0 million hasaterm of morethan 5 years. 9. LONG-TERMLIABILITIES Thelong-term liabilities can besummarised asfollows: ( x € 1,000)
2003
2002
Lease contracts Other loans Accruals anddeferred income
4.321 47.183 10,242 61,746
53.062 16,815
Future redemptions 0to 1year 1to 5years morethan 5years
69,877
16,210 45.536
5.751 53.909 10,217 69.877
61,746 Other LoansCredit Institutions Theinterest ratesofthese long-term loans amount to: ( x € 1,000) Loans payable Loans payable
18.9 28.3
Euribor+0,95 Euribor+1,35
47-2 SNThas provided nosecurities forthese loans,exceptthe shares ofSNTDeutschland and Avalanche. Accrualsand Deferred Income Aspartofthe acquisition bySNTof KPNCallCenters (KCC)in2001, itwas agreedwithKPN Telecommerce (KPN)that SNTwill becompensated by KPNuptoyear-end 2006 for variances betweenthe KPNCollective Labour agreements (CAO)andthe KCCCAOof former KPNemployees.Thelong-term part ofthe related receivable byKPNis included as financial fixed assets.Theshort-term part ofthe receivable KPNis included incurrent assets. 10. CURRENTLIABILITIES Theamounts mentioned below haveamaximum term ofoneyear.Accruals and deferred income areincluded inthe item 'other current liabilities '. SNTGroup N.V. andthe group companies havecurrent account facilities of EUR16.0 million. ( x € 1,000)
Debtsto credit Institutions Accounts payable Taxesand socialsecurity premiums Pension premium Other creditors Accruals
2003
2002
9.713 32,087
8,439 56,816 30,730 250 2,270 52,017
94,992
150,522
41.312 12,706 -826
e11. GUARANTEESANDOFF-BALANCESHEETCOMMITMENTSGUARANTEES Koninklijke KPNN.V. has issuedthe following revenue guaranteestoSNT: • 2004 financial year EUR143.6 million • 2005 financial year EUR123.0 million • 2006 financial year exclusivity on70%ofall CRMservices ofKPN Commitments Thecommitments given bythegroup companies can bespecified asfollows: amount(x€1,000)
2003
Total1year
Rentalagreements Operationallease Other
124,688 21,474 2,943
24,411 7.5i6 1,591
149,105
33.518
1-3year 44,868 11,811 1,320 57,999
3-5year
>5year
35,867 2,147
32 38,014
Acquisitions Inaddition,there arecommitments regardingthe gradualacquisition ofthe remaining interests of: 16%in SNTDeutschland A.G.(between 1January 2004 and31 March 2006). Theacquisition pricedepends onthefuture revenues andcashflows ofthe participation. Forthe 6%interest to beacquired in2004,anacquisition priceof EUR4.9 million has been agreed. Agreement was reachedwith the(former) management inScandinavia regardingthe settlement oftheir earn-out on5%ofthe shares inSNTScandinavia.Theshares will be repurchased bySNTGroup in 2004for atotalamount of EUR 0.8 million with settlement of the outstanding loan of EUR0.5 million. Bank Guarantees Asfurther security, atotalof EUR 0.8 million of bank guarantees havebeen issuedfor rental obligations. SNTGroup N.V. hasassumed liability asreferred to inarticle 403 Book 2of the Netherlands CivilCodeforthefollowing companies: • SNTNederland B.V., Zoetermeer • KCCNederland B.V., TheHague • SNTBusiness Commerce Services B.V., TheHague • SNTConnect B.V., TheHague • SNTConferencing Services B.V., TheHague • SNTTACTB.V., TheHague • SNTParticipations B.V., Zoetermeer • Interview/NSS B.V., Amsterdam Inaddition,SNTGroup N.V. isjointly andseverally liable forthe corporate income tax payable byallthe companies belongingto its fiscal unity.Thefollowing companies form part ofthis fiscal unity: • SNTBenelux B.V., Zoetermeer • KCCNederland B.V., TheHague • SNTNederland B.V., Zoetermeer • Interview/NSS B.V., Amsterdam • SNTBusiness Commerce Services B.V., TheHague • SNTConnect B.V., TheHague • SNTConferencing Services B.V., TheHague • SNTTACTB.V., TheHague • SNTParticipations B.V., Zoetermeer 12. PERSONNELCOSTS Personnelcostscanbespecified asfollows:
19.542
19,574
•€) (xCiooo,) Wagesand salaries Socialsecurity charges Pension costs
2003
2002
191,882 35.100 7.020
206,080 32,039
234,002
247.574
9.455
Theaverage number ofemployees (FTE)in 2003was6,595(2002:7,911) 13. REMUNERATIONOFTHEMANAGEMENTBOARDANDTHESUPERVISORYBOARD MANAGEMENTBOARD Inthe financialyear 2003,thetotalcosts ofsalaries,bonus and pensions of members of the Management Boardamounted to EUR3.4 million,ofwhich EUR0.7 million to the present members ofthe Management Board and EUR2.7 million to former members ofthe Management Board.Theremuneration can bespecified asfollows: Total Total Salary Bonus Pension Other 2003 2002 Presentmembers ofthe Management Board T.A.M.Walraven W.M.Middelburg Formermembers ofthe Management Board D.l.Teterissa R.Zandbergen R.C.H.Kippers L.D.Verburgh
Total
250,000 168,000 418,000
90,000 42,000 132,000
23,000 15.400 38,400
150,000
184,000 56,400 80,900 69,300 390,600
36,800
1,200,000
36,800
28,800 6,200 103,700 10,700 149,400
808,600
168,800
187,800
513,000 225,400 738,400
290,000
2,105,500
1,449,600 62,600 1,090,100 80,000 2,682,300
192,000 219,000 206,000 180,000 797,000
2,255,500
3,420,700
1,087,000
150,000
905,500
Thebonuses awardedfor 2003were basedon meetingthetargets set bythe company which was done duringtheyear under review. Thetotalofother remuneration costsof EUR2.3 million concerns for EUR2.1contractually agreed compensation andsalary payments to former members ofthe Management Board Teterissa and Kippers. Mr. Middelburgwas employed bythe company for only apartoftheyear 2003. Agreement was reachedwith Mr.Walraven (CEO)inApril2003 regardingthe current provisions inhis employment contract relatingto termination ofhis employment.An amount of EUR1.0 million was agreedand paid. Because Mr.Walraven 's employment contract was notterminated,atime proportionate part of EUR150.000 has beenaccounted for undercosts in2003. Therearecurrently nomorecontractual agreements with regardto termination of employment with members ofthe management board ofSNT. Supervisory board Duringthe 2003 financialyear, the remuneration of members ofthesupervisory board amounted to EURi6o,ooo (2002:EUR162,000).In2003,onenew memberwas appointed to the supervisory board,while one member ofthe supervisory boardresigned.
290,000
Theremuneration per member ofthe Supervisory Boardcan bespecified asfollows: Total2003 Present Members ofthe Supervisory Board R.Abrahamsen (chairman) R.baronvan Slingelandt C.vandenHeijkant P.'t Hoen R.Langezaal Former Membersofthe Supervisory Board J.WesselGanzevoort (until 25/04/2003) B. Bourigeaud
Total2002
37.500 22,500 30,000 30,000 30,000
26,500
26,500 26,500 26,500
10,000
-
44.500 -11,500
160,000
162,000
14. HOLDINGOFSHARESANDOPTIONSBYTHEMANAGEMENTBOARDANDTHE SUPERVISORYBOARD Theholdingofoptions andshares asat31 December 2003was divided asfollows over the (former) members ofthe Management Board: Options/Shares T.A.M.Walraven W.M. Middelburg D.l.Teterissa
Options Options Options Options Total 1999 2000 2001 2002 Options Shares 20,000
20,000
20,000
20,000
22,500
22,500
85,000
12,500
12,500
25,000
35.000
35,000
110,000
188,967
188,967
Noneofthe members ofthe Supervisory Boardowns SNTshares or related option rights. 15. EMPLOYEESHAREOPTIONPLANANDSHARE PLAN ShareOption Plan Since1999,SNTGroup N.V. eachyear grants options inconnection with its employee share option planto employees and members ofthe Management Board.Theobjective of this plan isto align the interests ofSNTandofits employees,inorder to help retain and attract employees. Eachyearthe Management Board,with theapprovalofthe Supervisory Board,decides if and how manyoptions will begranted to employees.Thedecision to grant share options to members ofthe Management BoardofSNTGroup N.V.canonly bemade bythe Supervisory Board.Themembers ofthe Supervisory Board may not participate intheshare option plan. Onexercisingoptions,the holders havethe right to buy1 (one)ordinary share peroption. Theexercisingofoption rights issubject to restrictions, includingthe provisions ofthe Regulationsfor the Prevention of Insider Dealing. Theoptions granted in1999 relateto newlyto beissued SNTshares and,calculated asat 31December 2003,onexercise leadto anincrease ofthetotal number of outstanding shares ofabout 0,6%.Thegrantingofoptions asof2000willonexercise not leadtoan increase ofthe number ofoutstanding shares,asSNThas purchased will purchase own shares to cover these option commitments. Intheyear 2003,SNTpurchased 312,278SNT shares.Asat31 December 2003,SNTGroup N.V. heldatotalof 588.309 ownshares. Anumber ofemployees and members ofthe Management Board receivedoptions under the 1999option plan.Theseoptions weregranted on12November 1999and haveafiveyear life. Employees eligible fortheoption plan couldchoose between anexercise priceof EUR12.75(addition totax incomeof 20%)oranexercise priceof EUR 16.00(addition to tax income of5%).Employees eligible forthe option plan 2000 could choose between an exercise price of EUR38(addition totax incomeof16%)oranexercise priceof EUR45 (addition to tax incomeof4%).
Theseoptions weregranted on19September 2000 and haveafour-year life.A penalty clauseappliesto boththe options granted in2000 andthe options granted in1999,to discourage early exercisingofthese options. Employees leavingthe companywithin the year after the optionsweregrantedwillbefined 100%ofthe realised book profit.This fine is 60%inyear 2and 20%inyear3. Theoptions granted inconnection with theoption planon30 November 2001(Option Series 2001) haveanexercise priceof EUR 9.15 andalifeto 30 November 2009.Theseoptions can beexercised from 30 November 2004.Asaresult ofchangedtax laws,taxation for the holder ofthe options haschanged from the moment ofgrantingofthe share option to the moment oftheoption becomingunconditional (inthis case30 November 2004) or, at the choice ofthe holder ofthe option,atthe exerciseoftheoption. On29 November 2002 (Option series 2002),atotalof367,000 shareoptions were granted with anexercise priceof EUR 11 andalife until 29 November 2010.Theseoptions maybe exercised from 29 November 2005. In2003 noshare options weregranted. Thefollowingdiagram provides information onoption rights asat31 December 2003.
Year
Granted
1999 2000 2001 2002 2003
131.750 184,500 363.957 367,000
Total
Exercised
26,957
Outstanding as at 31/12/ Cancelled 2003 54,500 98,500 119,000 95,000
77.250 86,000 218,000 272,000
1,047,207
Average exercise price in €
Own shares held for Expiration Coverage
13.19 1999-2004 42.19 2000-2004 9-15 2004-2009 11.00 2005-2010
Coverage rate
73,388 49.381 207,100 258,440
95% 57% 95% 95%
588,309
90%
26,957
367,000
653,250
Share Plan Since 2000 SNThadashare participation planfor employees of SNTNederland B.V. and SNTGroup N.V.. Theobjective ofthe share participation planwasto motivate employees andto increase their involvement with the company bylettingthem (indirectly) participate inthe sharecapitalofthe company. Theplan impliedthat each participant two times peryearwas granted share certificates by the 'StichtingMedewerkersparticipatie SNT'.Thecertificates could becashed bythe employees. Forthe certificates granted inconnection with the plan,the Stichting Medewerkersparticipatie SNTpurchased shares,sothat nodilution occurred. Asparticipation inthe share plan provedto beunrealistic for employees ofthe operating companies acquired inthe Netherlands andabroad in2001and 2002,itwas decided in January 2003toterminate the share plan. Asaresult, alloutstandingcommitments from the certificates were settled in2003.The foundation isexpected to bedissolved in2004. 16. FINANCIALINCOMEAND EXPENSES The financial incomeandexpenses can beshown asfollows:
(x€iooo) Financial income Financial expenses
2003
2002
660 -3.830
1,521 -3.741
-3.170
-2,220
17- TAXATION Taxdue inthe profit and lossaccount amounted to EUR2.4 million.Thestatement below provides abreakdownto showthe difference in relation to the nominaltax burden of34.5% inthe Netherlands: 2003 (x€1,000) Result onordinary activities Amortisation ofgoodwill
Domestic statutory tax rate Foreign operating companies Fiscal facilities Writeoff deferredtax assets Scandinavia &France Fiscally deductible investments Other non/deductible costs Adjustment previous years Effectivetax rate
(in%)
-20,942 49,950 29,008
2002 (x€1,000)
(in%)
26,312 7,269 33,58i
10,008 419
34-5% 1.3%
7,547
26.0%
-17,191 2,111 -488 2,406
-59-3% 7-3% -1.7% 8.3%
11,585 489 -79
34-5% 1.4% -0.2%
526 -605 11,916
1.6% -1.8% 35-5%
18. RESULTNON-CONSOLIDATED PARTICIPATIONS These includethe changes inthe net assetvalueof Excellent Intressenter AB(€ 1.0 million) andother onconsolidated minority participations. 19. RELATEDPARTIES SNTentered into severalagreements with the related party RoyalKPNN.V.and its group companies (KPNGroup).KPN Telecommerce B.V., a100%KPNgroup company, owns approximately 51% ofthe shares of SNTGroup N.V. KPNisamajor customer and supplier of SNT.In 2001, SNTalsoacquiredthe shares of KPNBusiness Commerce Services B.V. from KPNTelecommerce B.V. Aspart ofits ordinary operations,SNTentered into several purchase and sales agreements with KPNGroupcompanies andaffiliates.Theprices applied inthese agreements areat market conditions.Thevolume ofthe transactions andthe remaining receivables and liabilities can besummarised asfollows: (x€ 1,000) Balanceasat31December Receivables fromKPN DebtstoKPN Profit and loss account RevenuesfromKPN Purchases fromKPN FinancialincomefromKPN
2003
2002
100,220 16,131
119.252 24.949
285,616 78,356
255.856 116,765 1.076
20. SEGMENTATION Geographic segmentation isasfollows:
( x € i million)
Totalassets
Total liabilities
Nonconsolidated participations
Investments fixed assets
17-5
0.3 0.6
48.8
1.2 4.2
12.1 13.6 0.5 0.6 0.1
197.8
6.3
26.9
Benelux Germany Scandinavia France Holding
263.8 39-3 0-5 14.1 105.7
131.5
Total
423-4
^
(x€ i million)
Net revenues
Operating result before amortisation of goodwill
Average number of own employees (in FTE)
Depreciation
Income from investments 0.2
Benelux Germany Scandinavia France Holding
347-6 114.3 18.5 32.9 1.2
43-4 8.0 -0.8 -4.9 -9.0
4.846 1,885 800 2,160 20
18.9
Total
514.5
36-7
9.711
26.3
5-2 0.9 1-3 -1-5 -1-3
The portfolio of SNTcan be segmented as follows: Investments fixed assets
( x € i million)
Net revenues
Contact Research Multiconnect Holding
381.8 28.6 102.9
228.1 23.8 65.8
1.2
105.7
3-4 9.2
514.5
423-4
26.9
Notes
31-12-2003
31-12-2002
96,083
106,032
135 144.877 241,095
325.839
Total assets
12.5 1.8
COMPANYBALANCESHEET before appropriation of profit ( x € 1,000) Fixed assets Intangible fixed assets Tangible fixed assets Financial fixed assets Total fixed assets
21
219,807
Short-term receivables Receivables Cash and cash equivalents Total short-term receivables
—
Shareholders' equity Issued share capital Share premium Share premium Cshares Share premium special share Statutory reserve Other reserves
34.587
2,228 29,804 32,032
275,682
357.871
278 125,651
278 73.990 51,661
129,694 146 -30,092
129,694 146
-1.349 35.936
7 7 7 7 7 7
Total shareholders' equity
225,677
Provisions Long-term liabilities Current liabilities
-4.059 251,710
2,000 47,176 829
53,000
275.682
357.871
53.i6i
—
©COMPANYPROFITANDLOSSACCOUNT (x€iooo) Net incomefrom investments Other income andexpenses after taxationNet result
2003
2002
-18,622 -4,292 -22,914
28,425 -17.771 10,654
AZOTES TOTHECOMPANYFINANCIALSTATEMENTS GENERAL Theaccounting principles forthe Company financial statements arethe sameasthoseas set out intheaccounting principles forthe consolidated financial statements.Wetherefore refer tothe notesto these statements. 21. FINANCIALFIXEDASSETS Areport ofthe changes inthefinancial fixed assets is included inthefollowing review: ( x € 1,000)
Group companies Balance asat 1January Investments Capital investments Other movements Net result Balanceasat31December Other participating interests Balanceasat1January Investments Disposals Write-off Balance asat31December Loans Balanceasat 1January Increases Redemptions Balance asat31December
2003
2002
158,606
122,880 2,564 5,898 -l,l6l 28,425 158,606
-31.085 -18,622 108,899
2,868 5.203
363 -3.231
-950 4.253
0
1,251 2,950
1,221 30
-2
4,199
1,251
Loansto group companies Balanceasat1January Investments Redemptions Write-off Balance asat 31December
59.950 9,628 -29,905 -12,147 27,526
56,369 12,900
Totalfinancialfixed assets
144,877
219,807
Alist ofthegroup companies is included inthe Notesto the consolidated annual account, pages F15andF16. Purchase participations ingroup companies of EUR5.2 million concerns the acquisition of the 24%interest in Excellent. Investments inloansof EUR3.0 million concern loans to Excellent (EUR2.7 million) and StichtingMedewerkers Participatie (EUR0.3 million). Loansto group companies include loansto SNTBelgië N.V.andSNTDeutschland A.G.,SNT Scandinavia and SNTHoldingFrance.Theterms ofthese loansvaryfrom 5to 10years. Theinterest ratesofthese long-term loansvary between Euribor +1.2 and Euribor+1.6.
-9.319 59.950
—— OTHER INFORMATION STATUTORYPROVISIONS REGARDINGTHEPROFITAPPROPRIATION TheManagement Board,subject to approvalofthe Supervisory Board,determines which part ofthe profitwill bereserved.Theremainingprofit isatthedisposalofthe General Meetingof Shareholders.TheManagement Board,subject to approvalofthe Supervisory Board,maydecideto make interim dividend payments.Payments ofdividends or other distributable reserves must beannounced inanationally distributed newspaper and inthe Official List of EuronextAmsterdam. Payment of(interim) dividends and distribution andother distributable reserves ofthe companywilltake place simultaneously andto equalamounts ontheordinary shares,the ordinary C shares andthe specialshare,provided that forthe application ofthis provision the specialshare isdeemedto consist ofanumber ofshares equaltothe quotient of(i)as numerator: the unit ofaccount asdefined inarticle 5,paragraph 2under coftheArticles of Association lesstheaverage issue price asdefined inarticle 5,paragraph 2under cofthe Articles ofAssociation multiplied bythe number of issuedConversion Shares,and(ii)as denominator: the average share priceon EuronextAmsterdam N.V.ofanordinary share in thecompany duringthethirty (30) lasttradingdaysofthe financial year prior totheyear in which the decision was madeto paythe (interim) dividend or distribute the other distributable reserves. Ifinanyyear aloss is made,nodividendwill bepaidforthatyear. Nodividend will bepaid in lateryears untilthe loss is paidoff through settlement with realised profits.However, the GeneralMeeting,onarecommendation ofthe Management Boardapproved bythe Supervisory Board,may resolveto payoff aloss,infullor in part,through settlement with the Distributable Reserves,provided that nopayment maytake place outofthe share premium reserveofthe company. TheGeneralMeetingof Shareholders, onarecommendation bythe Management Board approved bythe Supervisory Board,may resolvethat apayment ofdividend onshares in fullor in part maytake place not incash,but inshares inthe company.TheGeneral Meeting ofShareholders,onarecommendation bythe Management Boardapproved bythe Supervisory Board,mayresolveto make distributions to shareholders outofthe distributable reserves.Resolutions to makedistributions outofthe specialshare premium reserve mayonly bemade bythe Management Board,subject to approvalofthe Supervisory Boardandwith prior approvalofthe holder ofthe specialshare.Forthe complete provisions regardingthe profit appropriation,wereferto articles 30,31 and32of thecurrentArticles ofAssociation. ResultAppropriation for 2003 Thenet lossfor the 2003 financial yearof€22.9 million will bechargedtothe other reserves.This hasalready been incorporated inthefinancial statements.
©
e Auditors' reports Auditors' report Inour opinion theconsolidated financial information fortheyears 2003,2002 and 2001,as included inthis offer document onpages F12to F30isconsistent, inallmaterial respects, with the financial statements forthoseyearsfrom which they have beenderived.Weissued anauditors' report onthese financial statements on10February 2004,17 February 2003, and13February 2002, respectively. Forabetter understanding ofthecompany's financial position and results andofthe scope ofour audit,the consolidated financial information should bereadinconjunction with the financial statements from which they havebeenderived andour auditors' reports thereon.
Rotterdam,15October 2004
PricewaterhouseCoopers Accountants N.V.
imprima debussy—C90618
