Corporate Governance

1. The Rules of Remunerating the Supervisory Board Members applies to those members of the Company's Supervisory Board who are elected by the General Shareholders' Meeting of Netia Holdings S.A. (the "Entitled Members").
2. The Remuneration Committee of the Supervisory Board is entitled to make proposals regarding remuneration for each of the Entitled Members within the scope of amounts as specified in § 2 of these Rules.

1. The Entitled Member who is an Independent Member of the Company's Supervisory Board as defined in the Company's Statute, may by granted remuneration in the PLN equivalent of between 1,000 USD and 3,000 USD per month.
   
   
2. The other Entitled Members may by granted remuneration in the PLN equivalent of between 500 USD and 1,500 USD per month.

1. Subject to § 3, section 2 of these Rules, Netia Holdings S.A.'s General Shareholders' Meeting will define the remuneration granted to each of the Entitled Members after the receiving a proposal from any member of the Remuneration Committee of the Supervisory Board. Netia Holdings S.A.'s Shareholders' Meeting shall not be bound by the proposal of the members of the Supervisory Board's Remuneration Committee.
   
   
2. The Remuneration Committee of the Supervisory Board may, on its own initiative, adopt a resolution whereby remuneration is granted to an Entitled Member of the Supervisory Board within the range specified in § 2, sections 1 and 2 of these Rules; provided that the given member of the Supervisory Board shall not participate in voting on such a resolution. The General Shareholders' Meeting may change or revoke any resolution adopted by the Remuneration Committee of the Supervisory Board as provided above.
   
   
3. The Remuneration Committee of the Supervisory Board shall report at the subsequent General Shareholders' Meeting each granting of remuneration to a Supervisory Board member, in accordance with § 3, section 2 of these Rules. The Company's Management Board and the Remuneration Committee of the Supervisory Board shall place any vote on amending or revoking such granting of remuneration on the agenda of the next General Shareholders' Meeting.

1. The Company's share capital is increased by up to PLN 2,145,138 (say: two million one hundred and forty five thousand, one hundred and thirty eight zlotys) i.e. up to PLN 190,660,170 (say: one hundred and ninety million, six hundred and sixty thousand, one hundred and seventy zlotys) by issuing up to 357,523 (say: three hundred and fifty seven thousand, five hundred and twenty three) ordinary bearer series H shares with a nominal value of PLN 6.00 (say: six zlotys) each.
2. The series H shares are divided into two tranches:



• I tranche of 133,233 (say: one hundred and thirty three thousand, two hundred and thirty three) series H shares,
  
  
• II tranche of 224,290 (say: two hundred and twenty four thousand, two hundred and ninety) series H shares.



3. Series H shares shall be offered to investors by way of a public subscription. The offer to acquire series H shares shall be made directly to Stoen S.A. and to Telia AB (publ.):
• I tranche of series H shares shall be offered to Stoen S.A.;
  
  
• II tranche of series H shares shall be offered to Telia AB (publ.).



4. Series H shares may be subscribed for in cash.



5. The Company's Management Board, subject to the Supervisory Board's final approval, is authorised to determine the detailed conditions of the subscription for series H shares and, in particular:
1. to determine the issue price of series H shares in accordance with Article 11 and Article 20 of the Agreement of Current and Future Shareholders and Netia 1 dated November 22, 1999;
   
   
2. to determine the time of the opening and closing of the subscription;
   
   
3. to determine the detailed terms and conditions for the allocation and distribution of series H shares;
   
   
4. to adopt a decision on the allocation of the series H shares.



6. Series H shares shall participate in the dividend for 2001.
   
   
7. The pre-emptive rights of the Existing Shareholders are waived with respect to the subscription for series H shares.
   The waiver of the pre-emptive right to subscribe for the newly issued shares results from the fact that the Company has to satisfy its obligation under Article 11 of the Agreement of Current and Future Shareholders and Netia 1 dated November 22, 1999 (the "Agreement") entered into, among others, between the Company, Stoen S.A. and Telia AB (publ.) and in connection with Stoen S.A.'s delivery of a notice that it elects to exercise its right to subscribe for the Company's shares in exchange for cash received from the Company as payment for the shares of Netia 1 Sp. z o.o. transferred to the Company, in accordance with the provisions of the Agreement, and furthermore, because of Telia AB (publ.) having the right to make an identical transaction on the basis of Article 20 of the Agreement. The Management Board shall not offer the II tranche series H shares if Telia AB (publ.) decides not to exercise its rights within the time provided in the Agreement.
   
   
8. The Company's Management Board shall be authorised to withdraw, on the basis of redundancy thereof from offering all or a part of the series H shares designated for Stoen S.A. and/or for Telia AB (publ.), if such offering has become redundant, and to withdraw from public subscription, if the Management Board decides to change the terms and conditions of subscription and sale of series C and E shares subscribed for by a firm commitment underwriter, in order to perform the Company's incentive plans, on the basis of the prospectus made on 30 November 1999 ("Prospectus"), so that a part of the series C and E shares which are currently held by the firm commitment underwriter will be purchased by Stoen S.A. and/or Telia AB (publ) having the effect of full and complete performance of the Company's obligations under the Agreement.
   The General Shareholder's Meeting consents to the change of the terms and conditions of distribution of the series E and C shares so that they may be offered to Stoen S.A. and/or to Telia AB (publ.) and for the change of the Prospectus in the above respect, because the performance of the Company's obligations under the Agreement in the above described manner will be the least expensive for the Company and therefore, in the best interest of all the Company shareholders.
   The Company's Management Board is authorised, subject to approval by the Supervisory Board, and subject to obtaining the consent of the Securities and Exchange Commission, to change the Prospectus as necessary to perform this resolution.

1. 5,000 ordinary registered series A shares;
2. 1,000 privileged registered series A1 shares;
3. 3,727,340 ordinary registered series B shares;
4. 17,256,855 ordinary bearer series C shares;
5. 3,977 ordinary bearer series C1 shares;
6. 5,500,000 ordinary bearer series D shares;
7. 425,000 ordinary bearer series E shares;
8. 2,250,000 ordinary bearer series F shares;
9. 2,250,000 ordinary bearer series G shares;
10. 357,523 ordinary bearer series H shares."