On May 11, 2010 the NWT Board of Directors made the decision to include the issue of OJSC NWT reorganization by merger with OJSC Rostelecom in the agenda for the annual General Meeting of Shareholders scheduled for 19th June.

According to the Agreement for NWT merger with Rostelecom to be approved by the shareholders within the framework of the reorganization issue, the NWT shares will be converted into Rostelecom shares as follows:

- 4,102 ordinary registered non-documentary shares in NWT will be converted into one ordinary registered non-documentary share in Rostelecom;

- 5,220 preference registered non-documentary shares in NWT will be converted into one preference registered non-documentary share in Rostelecom.

In addition, the Board of Directors approved the redemption price of NWT shares the demands for the redemption of which may be presented in case of NWT reorganization. The redemption price of the Company’s ordinary and preference shares will be the same and will be equal to 21.01 rubles per share.

The market valuation of the NWT shares was carried out by an independent valuator, LLC Ernst & Young – Otsenka using the following approaches:

- discounted cash flow method within the framework of the income-based method;

- exchange quotations method and similar companies method within the framework of the comparative method.

The Board of Directors also determined the recommendations to the annual General Meeting of Shareholders regarding dividends payable according to the Company’s results for 2009 and approved the agenda for the annual General Meeting of Shareholders.

The Board of Directors made the decision to recommend to the annual General Meeting of Shareholders the following distribution of the Company’s profit according to the results of the financial year 2009:

- payment of dividends on type A preference shares, 307,453,546 rubles;

- payment of dividends on ordinary shares, 521,020,388 rubles;

- increase in the NWT own capital, 2,644,995,322 rubles.

The dividends are to be paid in the amount of:

- 1,228 rubles per type A preference share;

- 0.591 rubles per ordinary share

according to the information on receipt of dividends, which was provided by registered persons as per the North-West Telecom register of shareholders at April 30, 2010.

The NWT Board of Directors approved the following agenda for the annual General Meeting of Shareholders:

1. Approval of the Annual Report, annual accounting reports, including the profits and losses report (account), according to the results of the financial year 2009.

2. Distribution of profit (including payment of dividends) according to the results of the financial year 2009.

3. Election of members of the NWT Board of Directors.

4. Election of members of the NWT Audit Commission.

5. Reorganization of OJSC North-West Telecom by merger with Open Joint-Stock Inter-City and International Electric Communications Company “Rostelecom”.

6. Approval of the amended NWT Articles of Association.

7. Approval of the amended Regulation on the NWT Board of Directors.

8. Approval of NWT’s external auditor for 2010.

9. Approval of allocation rates (percentages) for calculating the annual remuneration to members of the NWT Board of Directors.

10. Remuneration to members of the NWT Board of Directors for 2009. Determination of the amount and method of payment of remuneration for the 2009 results.

During the meeting, the NWT Board of Directors discussed also other issues regarding the preparation and holding of the annual General Meeting of Shareholders.

Materials for the annual General Meeting of Shareholders will be available on NWT’s corporate web-site, “For investors and shareholders” section, from May 19, 2010.