Corporate Governance

The Management Board of Netia SA (“Netia” or the “Company”) hereby presents a draft resolution concerning item 10 of the agenda of Netia’s Annual General Meeting to be held on May 26, 2010 (“AGM”) (Annex 1). The draft resolution was presented to the Company by Third Avenue International Value Fund, Netia’s shareholder who placed the matter “Undertaking a resolution in the matter of amendments to the Remuneration By-laws of Supervisory Board Members” on the AGM’s agenda (see Netia’s current report No. 16/2010). The most significant aspect of the proposed resolution is modification of the remuneration package of Supervisory Board members by cancelling the stock option program and replacing it with annual grants of Restricted Stock Units. This change brings the Supervisory Board remuneration into line with the European Commission’s Recommendation and the expected amendments to the Warsaw Stock Exchange’s Best Practices for listed companies.

In addition, Netia presents an amended draft resolution No. 24 concerning a new management stock option program for the period 2010-2020 to be presented for shareholders vote at the AGM, as proposed by the Supervisory Board of the Company. (Annex 2). These amendments reflect feedback received from shareholders by members of the Supervisory Board and introduce certain new restrictions, including the setting of vesting conditions and a maximum profit limitations. A summary slide detailing the key terms of the proposed stock option program is available at Netia’s investor website.