<PAGE>
THE TOTAL NUMBER OF PAGES CONTAINED IN THIS DOCUMENT IS 54
FORM 6-K
--------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the month of June 1999
NIPPON TELEGRAPH AND TELEPHONE CORPORATION
(Translation of registrant's name into English)
19-2, NISHI-SHINJUKU 3-CHOME
SHINJUKU-KU, TOKYO 163-19, JAPAN
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F ___
---
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ____ No X
---
If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b):
82-____________.
<PAGE>
2
NOTICE OF CONVOCATION OF THE ORDINARY GENERAL MEETING OF SHAREHOLDERS TO BE HELD
ON JUNE 29, 1999
On June 14, 1999, the registrant issued a Notice of Convocation of the
Ordinary General Meeting of Shareholders to be held on June 29, 1999 to its
shareholders. Attached is an English translation of such notice. The financial
information included in the attached notice was prepared on the basis of
accounting principles generally accepted in Japan and, accordingly, will not be
directly comparable to the financial information to be included in the
registrant's Annual Report on Form 20-F for the fiscal year ended March 31,
1999, which information will be prepared on the basis of accounting principles
generally accepted in the United States.
The attached notice contains certain forward-looking statements. The
registrant desires to qualify for the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995, and consequently is hereby filing
cautionary statements identifying important factors that could cause the
registrant's actual results to differ materially from those set forth in the
attachment.
Certain projections in the attached notice are based on a series of
projections and estimates regarding the economy and the telecommunications
industry in Japan in general. The projections and estimates regarding the
telecommunications industry may be affected by the pricing of services, the
effects of competition, and the success of new products, services and new
business.
No assurance can be given that the registrant's actual results will not vary
significantly from the included projections.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NIPPON TELEGRAPH AND TELEPHONE
CORPORATION
By /s/ KAZUTO TSUBOUCHI
-----------------------
Name: Kazuto Tsubouchi
Title: Senior Manager
Department V
NTT-Holding Provisional
Headquarters
Date: June 14, 1999
<PAGE>
NOTICE OF CONVOCATION OF
THE 14TH ORDINARY GENERAL MEETING OF SHAREHOLDERS
TO BE HELD AT
THE NEW TAKANAWA PRINCE HOTEL, TOKYO, JAPAN
ON JUNE 29, 1999, AT 10:00 A.M.
(This is a translation of the original notice
in Japanese mailed on June 14, 1999,
to shareholders in Japan.)
NIPPON TELEGRAPH AND TELEPHONE CORPORATION (NTT)
TOKYO, JAPAN
<PAGE>
June 14, 1999
To the Shareholders
[LETTERHEAD OF NIPPON TELEGRAPH AND TELEPHONE CORPORATION APPEARS HERE]
NOTICE OF CONVOCATION OF
THE 14TH ORDINARY GENERAL MEETING
OF SHAREHOLDERS
You are hereby notified that the 14th Ordinary General Meeting of Shareholders
will be held as stated below. Your attendance is respectfully requested.
In the event of your inability to attend, it is possible to exercise your
voting rights with the voting right exercise form. You are requested to study
the attached reference documents, indicate your approval or disapproval on the
enclosed voting right exercise form, and return it to the Company after affixing
your seal.
Particulars
1. Date and Time: 10:00 a.m. on Tuesday, June 29, 1999
2. Place: International Convention Center PAMIR
New Takanawa Prince Hotel
13-1, Takanawa 3-chome, Minato-ku, Tokyo
3. Purpose of the Meeting:
Matters to be reported
Report on the business report, balance sheet, and statement
of income for the 14th fiscal year (from April 1, 1998 to
March 31, 1999)
Matters to be resolved
First Item Approval of proposed appropriation of unappropriated
retained earnings for the 14th fiscal year ended March 31,
1999
Second Item Acquisition and Retirement of company stock through retained
profits
Third Item Reorganization of NTT (Transfers of businesses)
Fourth Item Partial Modifications to the Articles of Incorporation
Fifth Item Election of five Directors
Sixth Item Election of two Corporate Auditors
Seventh Item Presentation of retirement allowances to retired and
retiring Directors and Corporate Auditors
Eighth Item Revisions to the Compensation of Directors
[The main provisions of Items 2, 3 and 4 are noted in the section "Reference
Documents Concerning the Exercise of Voting Rights."]
END
- --------------------------------------------------------------------------------
When attending the meeting in person, you are kindly requested to submit the
enclosed voting right exercise form to the receptionist at the place of the
meeting.
1
<PAGE>
(Attachment)
BUSINESS REPORT
(from April 1, 1998, to March 31, 1999)
I. OUTLINE OF BUSINESS
1. BUSINESS PROGRESS AND RESULTS
(1) Overall Conditions
During the fiscal year under review, the Japanese economy remained stagnant.
Although there were signs that consumer spending and housing construction were
picking up towards the end of the fiscal year, the pace of the recovery was
sluggish, with private-sector capital investments sharply reduced.
In the field of telecommunications, competition intensified in both the
long-distance and local telecommunications markets. Foreign carriers entered the
Japanese market through investments, heralding the dawn of a new age of
competition covering the entire spectrum of domestic and international
telecommunications markets.
The explosive worldwide increase in the number of Internet users and the
spread of local area networks (LANs) is expected to create a huge computer-based
communications market with enormous potential for growth. As a result, many
companies are seeking to establish themselves in this new market, and the
competition, which extends beyond traditional sector boundaries and crosses
national frontiers, has intensified.
Under these business conditions, making use of its fully digitized network,
Nippon Telegraph and Telephone Corporation (NTT) responded to this challenging
business environment by developing its presence in the information sharing
market - extending its Internet and computer-based communications services, and
continuing to provide optical access networks in line with demand. NTT has also
promoted international telecommunications services and boosted its
competitiveness by introducing a wide range of discount services.
In order to meet the increasingly sophisticated and diverse needs of
customers in terms of computer-based communications services, NTT further
developed its menu of OCN services. During the fiscal year, it introduced "Super
OCN," a service providing unrivaled quality and outstanding reliability that is
ideal for corporations, universities and other users to help them cope with a
large volume of Internet traffic. The Company also launched "OCN Dial Access
Long," a service offering direct-dial access that is ideal for users who tend to
remain on-line for relatively long periods of time. Further, within the leased
circuit services sector, the Company added a new menu option, "Digital
2
<PAGE>
Access 1500," to its series of digital-access services, which, through a
simplified range of functions, provides customers with a low-priced service
limited to the local area. Besides this, in the medium and long distance area,
NTT also introduced another service called "Digital Reach."
In a separate move to create a new market segment spanning the consumer and
corporate sectors, NTT launched "Telesse", a multimedia telephone that allows
users to enjoy the Internet simply and conveniently.
To strengthen its competitiveness, alongside the introduction of new OCN
services and leased circuit services, NTT also began offering diverse discount
services. It extended "Time Plus", which had been test-marketed in certain
regions from February 1998, to the whole of Japan, and also introduced a new
pricing plan to "Telechoice." With the INS-Net services, a new pricing plan
called "INS Area Plus" was also introduced which allows customers to make
three-minute calls to adjacent local calling areas, or up to 20 kilometers, at a
cost of (Yen)10 in the daytime ((Yen)10 for four minutes during late night hours
and early morning) by paying a fixed monthly fee. Alongside this, NTT also
launched "INS Time Plus", which enables local calls to be made at a cost of
(Yen)10 for five minutes ((Yen)10 for seven minutes during late night hours and
early morning) by paying a fixed monthly fee. Through these measures, NTT has
steadily strengthened its easy-to-use services.
Through these initiatives, NTT has steadily increased its revenues from
multimedia network services, principally ISDN.
To make a full-scale entry into global telecommunications market following
the reorganization of NTT, NTT began global telecommunications services under
the "Arcstar" brand through subsidiaries in September 1997. By March 1999, the
number of international service destinations offered had been extended to 16
countries and areas to meet the needs of both corporations and individuals. In
the United States, NTT formed a strategic partnership with Verio Inc. by
investing in the company, which enabled NTT America, NTT's locally-registered
corporation, to begin marketing Arcstar-branded Internet services to corporate
customers throughout the U.S. through its wholly-owned subsidiary. Furthermore,
with an aim to expanding its global services, NTT's subsidiary signed a
"Japan-U.S. Cable Network Construction and Maintenance Agreement" to meet
growing needs for information telecommunications in the U.S. and the Pan-Pacific
region.
In other overseas business, NTT focused on the development of business in
Asia. In Singapore, the "StarHub" consortium, created by NTT in conjunction with
British Telecom and local partners, was awarded licenses by the Singaporean
government to provide basic telecommunication services and public mobile
services. It has made preparations to commence services in April 2000. In China,
NTT established a joint venture with the Beijing
3
<PAGE>
Telecommunications Administration, called "Beijing Telecom NTT Engineering Co.,
Ltd." This company will offer system-integration services to customers
principally in Beijing.
To improve operational efficiency while expanding the scope of operations,
the Company placed more emphasis on human resources. NTT completed the
outsourcing of its directory assistance operations in September 1998. In
December 1998, "NTT Directory Services Co." was created to unify all of NTT's
telephone directory and directory assistance operations, thereby raising
operational efficiency and creating new business opportunities. In a similar
vein, NTT established another new subsidiary in January 1999, called "NTT
Infrastructure Network Corporation", to focus on infrastructure improvements by
assembling the Company's technical expertise in this area.
As a result, operating revenues for the fiscal year amounted to
(Yen)6,137.0 billion, down 2.9% from the previous year, and recurring profit
declined 33.4% to (Yen)237.3 billion.
Net income amounted to (Yen)386.2 billion, an increase of 118.6% over the
previous year. Net income was boosted by profits from the sale of part of the
Company's stake in NTT Mobile Communications Network Inc., which was listed on
the first section of the Tokyo Stock Exchange in October 1998. Profit on sale
amounted to (Yen)823.9 billion.
(2) Operational Review
(Domestic Telecommunications Business)
Voice Transmission Services
Operating revenues declined 5.5% to (Yen)4,599.2 billion.
Although there was good growth in sales of INS-Net services, as of the end
of the fiscal year, the number of subscriber lines had decreased by 1.91
million, to 58.28 million subscribers, compared with the previous fiscal
year-end.
During the fiscal year, NTT developed and provided services which responded
to customer needs. This included extension of "Time Plus", which had been
test-marketed in advance in certain regions from February 1998, to the whole of
Japan.
Capitalizing on the continued growth in demand for Internet access, while
taking positive steps to develop operations, NTT introduced new pricing plans
such as "INS Area Plus" and "INS Time Plus." As a result, sales of INS-Net 64
services climbed over the previous fiscal year, with lines installed as of the
end of the fiscal year totaling 3.96 million.
With respect to public telephones, the Company began introducing "IC
4
<PAGE>
telephone cards" and "IC card public telephones" in March 1999, while reissuing
cards enabling a large number of calls and developing cards with a telephone
directory function to provide customers with even more convenience.
Principal new services offered in the fiscal year under review were as
follows:
. "INS Area Plus" (introduced in June 1998)
For a fixed monthly fee of (Yen)350, this service allows customers to make
three-minute calls to adjacent local calling areas, or up to 20
kilometers*, at a cost of (Yen)10 in the daytime ((Yen)10 for four minutes
during late night hours and early morning).
*/1/ Adjacent local calling areas, or up to 20 kilometers' is defined as
the area that includes areas which are adjacent to the caller's own Message
Areas (MAs), areas in which a three-minute call may be placed day or night
from a subscriber fixed line for (Yen)10, and any MAs located within a
distance of 20 km.
. "INS Time Plus" (introduced in November 1998)
For a fixed monthly fee of (Yen)350, this service allows customers to make
calls within the local calling area at a cost of (Yen)10 for five minutes
((Yen)10 for seven minutes during late night hours and early morning).
Data Transmission Services
Operating revenues increased 34.7% to (Yen)111.6 billion.
To meet the demand for greater quality and reliability in corporations'
intranets and extranets, NTT strengthened and expanded its cell relay services
with the addition of a service offering a guarantee for certain bandwidths. In
its frame relay services, NTT launched a new "Dial-Up FR" service that allows
customers to access between a frame relay network and an ordinary analog or ISDN
fixed line.
The number of lines to the "OCN Dial Access" service increased steadily,
rising to over 400,000 by the end of the fiscal year. Thanks to the introduction
of "Super OCN" and other services, NTT was able to promote business activities
for corporate customers and make further inroads into the corporate market.
In its facsimile communication network services, NTT aimed to increase the
functions of "Tegarus", a service enabling reciprocal communication between
facsimile machines and electronic mail, to provide customers with extra
convenience.
Leased Circuit Services
Operating revenues increased 5.7% to (Yen)640.0 billion.
In its high-speed digital transmission services, amid the increasing
complexity
5
<PAGE>
and sophistication of corporate telecommunications systems, NTT worked to
strengthen its corporate sales activities, with the result that the subscriber
base for "Digital Access 64/128" and other services grew substantially during
the fiscal year. Further, through the launch of the "Digital Access 1500"
service in the short distance area, and the introduction of the "Digital Reach"
service in the medium and long distance area, NTT boosted its competitiveness.
NTT's "ATM Megalink Services", which use asynchronous transfer mode (ATM)
transmission, became much more popular with corporations as the
telecommunications backbone for their internal networks. Alongside this, to meet
specific demands of customers, NTT launched another ATM-based service called
"ATM Sharelink Service", which is a "best effort" type service offering minimum
communication rates even under the heaviest traffic conditions. This service
also enables customers to select different downstream and upstream transmission
speeds.
Telegram Services
Operating revenues for telegram services decreased 7.0% to (YEN) 84.4 billion.
Although the number of communications made by "D-MAIL", a telegram service
that makes use of the Internet, increased steadily during the fiscal year, this
could not fully offset the continued decline in the use of telegrams for
weddings and condolences.
Other Services
Operating revenues edged down 0.6% to (YEN) 313.0 billion.
NTT improved its telephone directories (such as Townpage) by providing a
complete Townpage on the Internet, and by publishing a trial CD-ROM Hellopages,
a business directory for Tokyo's 23 wards. In addition, NTT continued to provide
multicolor printing for telephone directory advertisements and an improved
indexing system. Based on environmental concern, the Company also increased the
use of recycled paper for its telephone directories, expanded the recycling of
used directories and made other efforts to efficiently use wood resources.
Owing to the above factors, total telecommunications business operating
revenues for the fiscal year decreased 3.6% to (YEN) 5,748.4 billion, accounting
for 93.7% of total operating revenues.
6
<PAGE>
Details of telecommunications business operating revenues are as follows:
Telecommunications Business Operating Revenues
<TABLE>
<CAPTION>
(billions of yen)
- ------------------------------------------------------------------------------------
Operating Revenues
--------------------------------------------
Service classification Previous fiscal year This fiscal year Change (%)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Voice transmission
services (Yen)4,867.8 (81.6) (Yen)4,599.2 (80.0) -5.5%
Data transmission services 82.9 (1.4) 111.6 (1.9) 34.7
Leased circuit services 605.7 (10.2) 640.0 (11.1) 5.7
Telegram services 90.7 (1.5) 84.4 (1.5) -7.0
Other services 314.8 (5.3) 313.0 (5.5) -0.6
- -----------------------------------------------------------------------
Total (Yen)5,962.0 (100.0) (Yen)5,748.4 (100.0) -3.6
- ------------------------------------------------------------------------------------
</TABLE>
Notes 1. Figures in parentheses are percentages of total telecommunications
business operating revenues.
2. Operating revenues classifications were changed this year according to
the revised Accounting Regulation of the Telecommunications Business
Law.
(Related Businesses)
Operating revenues from related businesses amounted to (Yen)388.5 billion, an
increase of 7.9% over the previous fiscal year, and accounted for 6.3% of NTT's
total operating revenues.
Within related businesses, with regard to NTT's telecommunications
equipment business, due to the effects of the long-standing domestic recession
and other factors, the total value of sales of business telephones and other
terminal equipment to companies was down. However, NTT was successful in
boosting sales of products compatible with LANs, ISDN networks and the Number
Display.
(3) Capital Investment
Total capital investment for the fiscal year declined 8.4% to (Yen)1,727.9
billion.
NTT is shifting away from deliberate capital investment programs designed
to create additional basic telecommunications infrastructure towards an emphasis
on investing to respond to the varying demand for each kind of service.
As well as upgrading and expanding the infrastructure necessary for ISDN,
OCN and frame relay services, NTT aggressively continued installing optical
access networks to rapidly respond to the demand for multimedia services.
To further strengthen customer services and enhance operating efficiency,
NTT established and extended internal information systems and endeavored to
invest funds more effectively.
7
<PAGE>
Major facilities completed during the fiscal year were as follows:
Major Facilities Completed During the Fiscal Year
- --------------------------------------------------------------------------------
Area of investment Completed during the year
- --------------------------------------------------------------------------------
Telephone Transfers of ordinary subscriber
telephones 7.65 million
Expansion of area code coverage
(elimination of external area
codes when calling within a message
area) 33 areas
Digital switches 23 units
Fiber-optic cable systems 211 links
Microwave systems 27 links
- --------------------------------------------------------------------------------
Leased circuit High-speed digital transmission lines 59,000 lines
- --------------------------------------------------------------------------------
Other Expansion of INS-Net service areas 12 areas
- --------------------------------------------------------------------------------
(4) External Financing
The Company issued the following bonds and contracted long-term borrowings for
general financing purposes:
Bonds and Long-Term Borrowings
- --------------------------------------------------------------------------------
Amount Details
- --------------------------------------------------------------------------------
Bonds and notes (Yen)230.0 billion . NTT bonds: (Yen)170 billion
. Euro U.S. dollar notes: $500 million
(Yen)60.0 billion)
- --------------------------------------------------------------------------------
Long-term
borrowings (Yen)128.0 billion
- --------------------------------------------------------------------------------
Total (Yen)358.0 billion
- --------------------------------------------------------------------------------
8
<PAGE>
(5) Research and Development
In the field of telecommunications, demand for the information sharing market
would appear to be set to maintain high growth rates well into the future,
fueled by the spread of cellular telephones and personal computers (PCs) and the
sharp rise in the use of the Internet and other computer-based communications
networks. The structure of information sharing networks is also changing across
a wide variety of areas - for example, news can now be received by e-mail, and
tickets can be booked over the Internet. Based on this kind of market situation,
NTT has energetically engaged in research and development programs that aim,
first, to create convenient and secure multimedia services, and, second, to
develop the basic and foundation technologies that will support the future of
telecommunications.
R&D expenses for the fiscal year included sales expenses of (Yen) 219.9
billion, and also included an extraordinary loss of (Yen) 106.3 billion caused
by extraordinary depreciation for fixed assets for R&D. The Company's principal
R&D efforts are outlined below.
. Creating convenient and secure multimedia services
NTT has pushed forward with the research and development of technologies
that will underpin the high-speed, wide-band networks which promise to
become the foundation of the telecommunications industry in the future. As
well as ATM backbone network technologies, NTT is developing high-speed
access network technologies that make use of optical fiber or wireless
connections, and, at the same time, is also developing next-generation
network technologies. Moreover, NTT has successfully developed a new kind
of light source that permits the world's highest volume of data
transmission along an optical fiber, achieving fiber-optic data
transmission speeds of 3 terabits/second.
NTT has also devoted its energies to the development of a range of
technologies designed to be the foundation of information sharing. As well
as a crypt system that enhances security for Internet users, NTT has
developed technologies that prevent the unlawful use of contents within a
network to assure the security of network transmissions.
NTT has also developed a Japanese-English machine translation system
called "ALTFLASH", which is designed for use with newspaper articles on the
economy and financial markets that typically use Japanese with a highly
standardized structure. In another project, NTT has developed an "Active
Search" that enables high-speed search for specific data from a time-series
of audiovisual data taken from a commercial or a jingle for an
advertisement. NTT's R&D activities during the fiscal year are expected to
9
<PAGE>
find applications in a variety of different areas.
. Building future basic and foundation telecommunications technologies
To support the economical construction of optical fiber networks, NTT has made
substantial progress in developing all-plastic components for the central
parts of fiber-cable connectors - a success that promises to make the goal of
optical fiber to the home (FTTH) a reality.
Further, to aid global environmental preservation, NTT is striving to
reduce the energy consumption of telecommunications infrastructure. As well as
developing large-scale integration (LSI) circuits that can operate at low
voltage and other clean-energy technologies, NTT is also working on the
development of an MPEG-2 encoder compatible with high-definition television
(HDTV) applications that consumes about 5% of the electrical power of
conventional products. In another development, after beginning to recycle
telephone directories, NTT has developed a method of using the secondary
wastes thus produced as water purification materials.
10
<PAGE>
2. ISSUES FACING THE COMPANY
Although it still remains subdued, there are now clear signs of a recovery in
consumer spending in the Japanese economy. However, a possible worsening in the
employment situation and abundant evidence of a continued slump in capital
investment remain acute causes for concern. It is forecast that it will take
quite some time before any full-fledged economic recovery takes hold.
Telecommunications is one of the areas that is expected to spearhead
Japanese socioeconomic efficiency and activity. Its market is expected to be
resilient as companies and individuals alike begin to participate more and more
in the global economy. At the same time as market needs are becoming more
sophisticated and diverse, the worldwide trend towards greater
telecommunications deregulation is encouraging an accelerating merger and
alliance frenzy that spans the traditional boundaries separating industries and
nations, and this reorganization of the industry is stimulating competition.
NTT's response to this fast-changing operating environment is to strengthen
its business base, while implementing a wide range of measures towards the
realization of a dynamic information sharing society in which text, voice or
image information is distributed around the world. One of the first steps on the
road to becoming such a "Global Information Sharing Company" is for NTT to
contribute to the development of Japan's industries and economy and to support
quality-enhanced consumer lifestyles.
In terms of the main challenges that face the Company, NTT has striven to
create a pleasant telecommunications environment through the provision of
services that make use of a foundation of advanced digitized networks. For the
future, NTT has shifted its focus and concentrated all its efforts on maximizing
the full R&D capabilities and resources of the NTT Group in the creation and
provision of new services, as well as a wide variety of discount pricing
schemes, that together will help to revitalize and enliven the information
sharing market in Japan. Alongside this, NTT is strengthening its ability to
deliver solution businesses. Furthermore, with regard to the fiber-optic
conversion of the access networks that can enable the provision of wide-band
services such as video transmission, taking into consideration the demand for
such services, NTT is gradually installing the necessary infrastructure.
In global business, in line with the easing of regulations worldwide, NTT
plans to expand the number of destination countries and extend the menu of
global services provided under the "Arcstar" brand through subsidiaries. As well
as independent development by the NTT Group, NTT will launch a variety of
businesses, including tie-ups with companies from Japan and overseas. For
example, in Asia, NTT will investigate possibilities of management participation
in international carriers. In Europe and America, NTT is aiming to develop its
11
<PAGE>
business presence both through strengthening its own service provision
capabilities and through joint ventures and alliances with other firms.
NTT, fully recognizing the gravity of the computer bug problem known as the
"Year 2000 Problem", has been actively implementing countermeasures to manage
the problem. Going forward, NTT will implement testing of systems and equipment,
and also establish supervisory procedures for handling the changeover and
subsequent events.
In regard to the reorganization of NTT, the proposed law to amend the part
of Nippon Telegraph and Telephone Corporation Law was passed at the 140th
ordinary session of Diet on June 13, 1997 and then promulgated and partially
implemented on June 20, 1997. As a result, NTT will continue to exist as a
holding company that fully owns two regional companies (Nippon Telegraph and
Telephone East Corporation and Nippon Telegraph and Telephone West Corporation)
and one long-distance company (NTT Communications Corporation). The holding
company will own the shares of the two regional companies and of the
long-distance company. It will promote fundamental R&D activities and
disseminate their results, act to unify and coordinate the operations of each
company concerned, and actively promote Group operations. Furthermore, NTT plans
that the holding company will be paid for its services through concluding the
contracts as follows: the comprehensive services for its fundamental R&D
activities through concluding the contracts with each of NTT's subsidiaries
which continuously used results of those R&D activities, and the comprehensive
services for the Group growth through concluding the contracts with each company
which is within the consolidated accounts in the Group. The regional companies
will each provide intra-prefectural telecommunications services, and will be
obligated to provide telephone services, which are indispensable to everyday
life, on an appropriate, fair and reliable basis. The long-distance company will
provide domestic inter-prefectural telecommunications services as a fully
private corporation and expand into international telecommunications business.
NTT will utilize the considerable resources of the entire NTT Group to
enable these various companies to thrive in an environment of intensifying
international competition, while also continuing to vigorously develop and
expand its business through developing a global information sharing business.
We look forward to the continued support of all our shareholders.
12
<PAGE>
3. BUSINESS RESULTS AND FINANCIAL POSITION
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------
11th Fiscal year, 12th Fiscal year, 13th Fiscal year, 14th Fiscal year,
ended ended ended ended
March 31, 1996 March 31, 1997 March 31, 1998 March 31, 1999
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Operating revenues
(billions of yen) 6,234.7 6,371.2 6,322.3 6,137.0
- ---------------------------------------------------------------------------------------------------------
Recurring profit
(billions of yen) 328.9 365.9 356.6 237.3
- ---------------------------------------------------------------------------------------------------------
Net income
(billion of yen) 217.4 179.4 176.6 386.2
- ---------------------------------------------------------------------------------------------------------
Net income per share
(yen) 13,668.20 11,280.74 11,100.84 24,271.69
- ---------------------------------------------------------------------------------------------------------
Assets (billion of yen) 11,114.6 11,177.3 10,838.6 11,467.3
- ---------------------------------------------------------------------------------------------------------
Shareholders' equity
(billions of yen) 4,404.4 4,504.2 4,601.1 4,907.5
- ---------------------------------------------------------------------------------------------------------
</TABLE>
. In the 11th fiscal year, NTT launched such innovative services as "Catchphone
II" and "Telehodai" to meet customer needs and made active efforts to bolster
sales through the construction of LAN and other corporate information
telecommunications systems. Due to these factors, operating revenues amounted
to (Yen)6,234.7 billion, recurring profit, to (Yen)328.9 billion, and net
income to (Yen)217.4 billion.
. In the 12th fiscal year, in response to surging demand for computer-based
communications media, the Company launched such services as "OCN (Open
Computer Network)" services and strove to reinforce its earning power by
promoting business activities for corporate customers and by introducing
"Voice Warp" services. As a result, operating revenues amounted to
(Yen)6,371.2 billion, recurring profit reached (Yen)365.9 billion, and net
income was (Yen)179.4 billion.
. In the 13th fiscal year, NTT reduced long-distance call rates and boosted its
competitiveness through the launch of new services such as "Area Plus" and
"Time Plus", NTT also developed and provided services that meet customer
demands such as "Number Display". As a result, operating revenues amounted to
(Yen)6,322.3 billion, recurring profit reached (Yen)356.6 billion, and net
income of (Yen)176.6 billion.
. For a review of the Company's performance during the 14th fiscal year, please
see "1. Business Progress and Results" on page 2.
13
<PAGE>
II. COMPANY OUTLINE (as of March 31, 1999)
1. MAJOR BUSINESSES
The Company's major businesses under the Nippon Telegraph and Telephone
Corporation Law are domestic telecommunications businesses and related
businesses (related services for domestic telecommunications businesses and such
other services as are required to fulfill those purposes).
Main services and products are as detailed below.
<TABLE>
<CAPTION>
Principal Businesses and Services
- --------------------------------------------------------------------------------------------------
Classification Type of service Major services
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Domestic Voice Transmission Telephone subscriber services, Members-Net
Telecommu- Services telephone services, receive-only telephone services,
nications emergency-use telephone services, public telephone
Businesses services, public facsimile, airport radiotelephone
services, INS-Net services, off-talk communications
services
---------------------------------------------------------------------------------
Data Transmission Telegraph subscriber services, circuit-switched
Services services, pocket-switched services, frame relay
services, cell relay services, facsimile communications
network services, videotex communications services,
Open Computer Network services
---------------------------------------------------------------------------------
Leased circuit services Ordinary leased circuits, high-speed digital leased
circuits, ATM Megalink services, integrated leased
circuits, video transmission circuits, TV relay
services, satellite communications services, radio
leased circuit services
---------------------------------------------------------------------------------
Telegram services Telegram services
---------------------------------------------------------------------------------
Other services. Directory assistance services
- --------------------------------------------------------------------------------------------------
Related Businesses Sales of telephones and related terminal equipment,
information charge billing and collecting services,
telecommunications consulting, telephone operator
services, training and seminar services
- --------------------------------------------------------------------------------------------------
</TABLE>
14
<PAGE>
2. MAJOR OFFICES AND RESEARCH FACILITIES
Head Office: 19-2, Nishi-Shinjuku 3-chome, Shinjuku-ku, Tokyo
Provisional
headquarters: NTT-Holding Provisional Headquarters (Tokyo)
NTT-East Provisional Headquarters (Tokyo)
NTT-West Provisional Headquarters (Osaka)
NTT-Long Distance and Global Provisional Headquarters
(Tokyo)
Branch offices: 60
Overseas offices: Bangkok, Geneva, Jakarta, Beijing, Manila, Hanoi, Seoul
R&D facilities: Laboratory Groups
Cyber Communications Laboratory Group (Kanagawa)
Information Sharing Laboratory Group (Tokyo)
Science & Core Technology Laboratory Group
(Kanagawa)
Laboratories: 12
15
<PAGE>
3. EMPLOYEES
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Number of employees Average
(change from end of previous fiscal year) Average age working years
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Male 109,818 (-6,018) 43.2 23.3
- --------------------------------------------------------------------------------------------------
Female 28,332 (-1,205) 43.3 22.6
- --------------------------------------------------------------------------------------------------
Total or Average 138,150 (-7,223) 43.3 23.1
- --------------------------------------------------------------------------------------------------
</TABLE>
4. SHARES AND SHAREHOLDERS
(1) Total number of shares authorized
to be issued by the Company: 62,400,000 shares
(2) Total number of shares issued: 15,912,000 shares
(3) Number of shareholders, including holders
of odd-lot shares: 1,568,417
(4) Principal shareholders:
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------
Investment in the principal
shareholders by the Company
-----------------------------------
Ratio of the Ratio of the
number of shares number of shares
held to the held to the
Number total number of Number total number of
Name of shares held shares issued (%) of shares held shares issued (%)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The Minister of Finance 9,419,339.24 59.20 0 0
State Street Bank and
Trust Company 206,523.00 1.30 0 0
The Sumitomo Trust &
Banking Co., Ltd. 171,730.00 1.08 1,800,912 0.13
NTT Employee Share-
Holding Association 151,184.22 0.95 0 0
The Mitsubishi Trust and
Banking Corporation 121,105.00 0.76 1,800,275 0.14
Boston Safe Deposit
BSDT Treaty
Clients Omnibus 102,439.00 0.64 0 0
The Chase Manhattan
Bank, N.A. London 99,751.00 0.63 0 0
Morgan Stanley Trust
Company-Taxable
Client Account 92,943.00 0.58 0 0
Nippon Life Insurance
Company 85,717.68 0.54 0 0
The Chuo Trust &
Banking Co., Ltd. 80,862.00 0.51 594,000 0.20
- --------------------------------------------------------------------------------------------------
</TABLE>
Note: The ratios of the number of shares held to the total number of shares
issued with respect to The Sumitomo Trust & Banking Co., Ltd., The
Mitsubishi Trust and Banking Corporation and The Chuo Trust & Banking Co.,
Ltd., are calculated excluding non-voting preferred shares.
16
<PAGE>
5. PRINCIPAL SUBSIDIARIES
(1) Principal Consolidated Subsidiaries
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Capitalization Percentage owned
Company (millions of yen) by the Company (%) Main line(s) of business
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NTT Mobile (Yen)474,499 67.1% Cellular communications services;
Communications development, maintenance, and
Network Inc. sales of cellular communications
network systems
- ----------------------------------------------------------------------------------------------
NTT Data 142,520 54.2 Data communications services;
Corporation systems development services
- ----------------------------------------------------------------------------------------------
NTT 20,000 100.0 Development, operation, and
Communicationware maintenance of telecommunications
Corporation systems and software
- ----------------------------------------------------------------------------------------------
NTT Urban 12,699 100.0 Real estate
Development Co.
- ----------------------------------------------------------------------------------------------
NTT Telecom 12,200 100.0 Management of telecommunications
Engineering Kanta facilities and the sale and
Co.,Ltd. maintenance of telecommunications
equipment
- ----------------------------------------------------------------------------------------------
NTT Power and 10,000 100.0 Design, management, and maintenance
Building Facilities of buildings, equipment,
Inc. and electric power facilities
- ----------------------------------------------------------------------------------------------
NTT Tokia Real 5,039 100.0 Real estate
Estate Corporation
- ----------------------------------------------------------------------------------------------
NTT Kansai Building 4,519 100.0 Real estate
Co.
- ----------------------------------------------------------------------------------------------
NTT Telecom 4,160 100.0 Management of
Engineering Tokyo telecommunications facilities and
Co., Ltd. the sale and maintenance of
telecommunications equipment
- ----------------------------------------------------------------------------------------------
</TABLE>
Notes 1. NTT Telecom Engineering Kanto Co., Ltd. and NTT Telecom Engineering
Tokyo Co., Ltd. are newly included in the above listing owing to an
increase in their capital during the 14th fiscal term. Note also that
on April 1, 1999, both firms, together with the NTT wholly-owned
subsidiary NTT Telecom Engineering Shinetsu Co., Ltd., merged with NTT
Telecom Engineering Kanto Co., Ltd., a surviving company. The newly
merged company changed its name to NTT-ME Corporation.
2. On April 1, 1999, NTT Urban Development Co., NTT Tokai Real Estate
Corporation, and NTT Kansai Building Co., all merged with the three NTT
wholly-owned subsidiaries NTT Hokkaido Estate Co., Ltd., NTT Kyushu
Real Estate Corporation and NTT Cred Co., Ltd., with the continuing
business trading under the name NTT Urban Development Co.
3. NTT Data Corporation changed its trading name from NTT Data
Communications System Corporation on August 1, 1998.
4. The combined sales revenues of the above-listed 9 principal
subsidiaries were (Yen)3,135.6 billion, and they produced combined net
income of (Yen)110.6 billion.
17
<PAGE>
(2) Principal Non-Consolidated Subsidiaries
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
Capitalization Percentage owned
Company (millions of yen) by the Company (%) Main line(s) of business
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NTT America, Inc. 34,160* 100.0% Provision of Arcstar services in
the U.S.
- ------------------------------------------------------------------------------------------------------
Advanced (Yen)22,035 56.8 Research and development, and
Telecommunications exploration of telecommunications
Research Institute technology
International
- ------------------------------------------------------------------------------------------------------
NTT Worldwide 20,000 100.0 International leased circuit and
Network telephone service as a Type I
Corporation international telecommunications
company
- ------------------------------------------------------------------------------------------------------
U-CARD Inc. 15,600 72.3 Issue and settlement of prepaid
cards
- ------------------------------------------------------------------------------------------------------
NTT Worldwide 12,000 100.0 Global telecommunications
Telecommunications services as a Type II
Corportion international telecommunications
company
- ------------------------------------------------------------------------------------------------------
Nippon Information 8,000 50.0 Design and construction of
and Communication telecommunications networks;
Corporation systems development and sales
- ------------------------------------------------------------------------------------------------------
NTT Vietnam 6,400 55.0 Management of plant engineering
Corporation and telecommunications business
in Vietnam
- ------------------------------------------------------------------------------------------------------
NTT Living 6,300 100.0 Real estate
Corporation
- ------------------------------------------------------------------------------------------------------
NTT International 6,120 98.0 General engineering and
Corporation consulting for overseas
telecommunications businesses
- ------------------------------------------------------------------------------------------------------
NTT Finance (U.K.) 4,609* 100.0 Fund procurement and securities
Limited investment
- ------------------------------------------------------------------------------------------------------
NTT Europe Limited 2,440* 100.0 Fund procurement and securities
investment
- ------------------------------------------------------------------------------------------------------
NTT Logisco Inc. 4,000 100.0 Distribution of
telecommunications-related
materials and equipment
- ------------------------------------------------------------------------------------------------------
NTT PC Communications 4,000 96.5 Networking services and
Incorporated networking SI businesses
- ------------------------------------------------------------------------------------------------------
NTT Directory 3,500 100.0 Publication of telephone
Services Co. directories and services related
to directory enquiries and
telephone numbers
- ------------------------------------------------------------------------------------------------------
</TABLE>
Notes 1. Newly established and listed corporations in the above chart are as
follows: NTT Directory Services Co. established December 4, 1998
2. NTT Vietnam Corporation was added to the above list due to an increase
in capital during this term. *Capitalization of NTT America, Inc. and
NTT Finance (U.K.) Limited is in 10 thousands of U.S. dollars;
capitalization of NTT Europe Ltd. is in 10 thousands of Sterling
pounds.
18
<PAGE>
6. PRINCIPAL LENDERS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Borrowings Number and percentage
outstanding of shares of the Company
Name of lender (millions of yen) owned by the lenders
- -------------------------------------------------------------------------------------------
Shares %
<S> <C> <C> <C>
The Japan Development Bank (Yen)150,090 0.00 0.00
Nippon Life Insurance Company 64,000 85,717.68 0.54
Sumitomo Life Insurance Company 58,000 36,186.00 0.23
The Dai-ichi Mutual Life Insurance Company 50,500 51,147.00 0.32
The Industrial Bank of Japan, Limited 41,580 19,278.00 0.12
The Dai-ichi Kangyo Bank, Limited 39,679 19,380.00 0.12
The Fuji Bank, Limited 38,679 19,380.00 0.12
The Meiji Mutual Life Insurance Company 32,500 15,290.00 0.10
The Export-Import Bank of Japan 28,420 0.00 0.00
The Sumitomo Bank, Limited 25,309 18,360.00 0.12
- -------------------------------------------------------------------------------------------
</TABLE>
19
<PAGE>
7. DIRECTORS AND CORPORATE AUDITORS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Position Name Areas of responsibility or principal occupations
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Chairman and Shigeo Sawada
Representative Director
- -------------------------------------------------------------------------------------------------------------------
President and Jun-ichiro Miyazu
Representative Director
- -------------------------------------------------------------------------------------------------------------------
Senior Executive Hidekazu Inoue Senior Executive Manager of NTT-East Provisional
Vice Presidents Headquarters; In charge of Reorganization
------------------------------------------------------------------------------------
Toshiharu Aoki In charge of Research and Development
------------------------------------------------------------------------------------
Kozuo Asada Senior Executive Manager of NTT-West Provisional Headquarters
- -------------------------------------------------------------------------------------------------------------------
Executive Vice Masanobu Suzuki Senior Executive Manager of NTT-Long Distance and Global
Presidents Provisional Headquarters
------------------------------------------------------------------------------------
Yuji Matsuo Deputy Senior Executive Manager of NTT-East Provisional
Headquarters and Senior Executive Manager of Business
Communications Headquarters of NTT-East Provisional
Headquarters
------------------------------------------------------------------------------------
Toshiyuki In charge of Accounts and Finance of NTT-Holding
Mineshima Provisional Headquarters
------------------------------------------------------------------------------------
Norio Wada Senior Executive Manager of NTT-Holding Provisional
Headquarters
------------------------------------------------------------------------------------
Tadayuki Arai Deputy Senior Executive Manager of NTT-Long Distance and
Global Provisional Headquarters
------------------------------------------------------------------------------------
Satoshi Miura Deputy Senior Executive Manager of NTT-East Provisional
Headquarters; In charge of the Pension and Health Insurance
Center; In charge of Reorganization
------------------------------------------------------------------------------------
Michio Takeuchi Deputy Senior Executive Manager of NTT-West Provisional
Headquarters; In charge of Reorganization
------------------------------------------------------------------------------------
Katsuya Okimi Deputy Senior Executive Manager of NTT-Long Distance and
Global Provisional Headquarters and Executive Manager of
Global Business Division of NTT-Long Distance and Global
Provisional Headquarters
- -------------------------------------------------------------------------------------------------------------------
Senior Vice Michitomo Ueno Deputy Senior Executive Manager of NTT-West Provisional
Presidents Headquarters and Senior Executive Manager of Business
Communications Headquarters of NTT-West Provisional
Headquarters
------------------------------------------------------------------------------------
Kunihiro Kato Executive Manager of Cyber Communications Laboratory
Group of NTT-Holding Provisional Headquarters
------------------------------------------------------------------------------------
Masaaki Kasahara General Manager of Osaka Branch
------------------------------------------------------------------------------------
Kanji Koide Executive Manager of Corporate Strategy Planning Office
and Executive Manager of Department I of NTT-Holding
Provisional Headquarters; In charge of User Tariff and
Articles of Agreement concerning Interconnection
------------------------------------------------------------------------------------
Yoshiyuki General Manager of Tokyo Branch
Sukemune
------------------------------------------------------------------------------------
Jun-ichi Yuki Executive Manager of Public Telephone Services Division of
NTT-West Provisional Headquarters
------------------------------------------------------------------------------------
Kiyoshi Fujita In charge of the Legal and Internal Audit Department of
NTT-Holding Provisional Headquarters
------------------------------------------------------------------------------------
Shunzo Morishita Executive Manager of Technology Department of NTT-East
Provisional Headquarters; In charge of the Interconnection
Promotion Department of NTT-East Provisional Headquarters
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Position Name Areas of responsibility or principal occupations
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Senior Vice Shigehiko Suzuki Executive Manager of Department III of NTT-Holding
Presidents Provisional Headquarters and Executive Manager of
Information Sharing Laboratory Group of NTT-Holding
Provisional Headquarters
-----------------------------------------------------------------------------------------------
Mamoru Ishida General Manager of Solution Business Division of NTT-Long
Distance and Global Provisional Headquarters and Executive
Manager of Sales and Marketing Department II of Solution
Business Division of NTT-Long Distance and Global
Provisional Headquarters
-----------------------------------------------------------------------------------------------
Nobuharu Ono Deputy Senior Executive Manager of Business
Communications Headquarters of NTT-East Provisional
Headquarters and Executive Manager of Multimedia Service
Promotion Department of NTT-East Provisional Headquarters
-----------------------------------------------------------------------------------------------
Susumu Fukuzawa Executive Manager of Accounts and Finance Department of
NTT-West Provisional Headquarters; In charge of
Interconnection Promotion Department of NTT-West
Provisional Headquarters
- -------------------------------------------------------------------------------------------------------------------------------
Director and Ryuzo Sejima Special Counsellor of ITOCHU Corporation
Counsellor to the
President
- -------------------------------------------------------------------------------------------------------------------------------
Full-time Corporate Masayuki Kojima
Auditors
-----------------------------------------------------------------------------------------------
Tadashi
Yamamoto
-----------------------------------------------------------------------------------------------
Keisuke Sada
-----------------------------------------------------------------------------------------------
Toshio Hayata
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Note: Of the Corporate Auditors, Mr. Masayuki Kojima and Mr. Tadashi Yamamoto
are outside Corporate Auditors assigned in accordance with Item 1 of
Article 18 of the Law of Special Exceptions to the Commercial Code
regarding corporate auditing.
The following is a list of directors who resigned or retired during the fiscal
year:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Position Name Date of resignation or retirement
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Executive Vice President Toshio Hayata* June 26, 1998
Executive Vice President Shigeru Ikeda* June 26, 1998
Executive Vice President Shuichi Kizuka* June 26, 1998
Executive Vice President Hitoshi Tajima* June 26, 1998
Executive Vice President Hiroshi Ishikawa* June 26, 1998
Senior Vice President Shaichi Makino* June 26, 1998
Senior Vice President Tatsuo Izawa* June 26, 1998
Director and Counsellor to the
President Masashi Kojima* June 26, 1998
Full-time Corporate Auditor Satoshi Hirose** June 26, 1998
Full-time Corporate Auditor Tokuhiko Shiota** June 26, 1998
Executive Vice President Hiroshi Ishihara** January 25, 1999
Executive Vice President Kiyoshi Mita** January 25, 1999
Senior Vice President Hirofumi Shimada** January 25, 1999
Senior Vice President Masahiro Shibao** January 25, 1999
Senior Vice President Ryuji Nunotani** January 25, 1999
Senior Vice President Yashinori Udo** January 25, 1999
Senior Vice President Seiji Takashima** January 25, 1999
Senior Vice President Toshiaki Fukui** January 25, 1999
Senior Vice President Shin-ichi Aizawa** January 25, 1999
Senior Vice President Yoshio Bessyo** January 25, 1999
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
*resigned
**retired
21
<PAGE>
III. MAJOR EVENTS AFTER THE END
OF THE FISCAL YEAR
At the meeting of the Board of Directors held on March 5, 1999, it was
resolved that the Company would issue a total amount of not more than
(Yen)300 billion in bonds, including NTT bonds, foreign currency
denominated bonds and other bonds, during the period from April
through June 1999. In line with this resolution, the Company issued
the 40th series of NTT bonds, with a maturity of 10 years and in the
amount of (Yen)120 billion, on April 28, 1999, and the 1st series
Euro-denominated Eurobonds, with a maturity of 7 years and in the
amount of 750 million Euro ((Yen)95.3 billion), on May 14, 1999.
---------------------------------------------------------------------
Note: The figures given in this business report are rounded down to
eliminate amounts less than the units shown.
22
<PAGE>
BALANCE SHEET
(at March 31, 1999)
(millions of yen)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
ASSETS (YEN)11,467,394 LIABILITIES (YEN)6,559,806
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FIXED ASSETS 9,361,082 LONG-TERM LIABILITIES 4,269,174
Fixed assets for telecommuni- Bonds 1,593,065
cations business: 8,929,958 Long-term debt
625,912
Property, plant and equipment 8,514,070 Long-term debt from affiliated
Telecommunications equipment 2,147,254 company 424
Lines 58,367 Severance payments 2,030,752
Telecommunications satellite 20,564 Others 19,019
-------------------------------------------------
Terminals 46,422 CURRENT LIABILITIES 2,290,631
Local telephone service lines 1,332,377 Current portion of long-term debt 447,562
Long-distance telephone Accounts payable 410,528
service lines 113,116
Civil engineering equipment 1,866,816 Accrued liabilities 392,919
Buildings 1,757,243 Accrued expenses 116,319
Structures 77,120 Accrued corporate tax 425,924
Machinery 14,935 Advances received 49,384
Vehicles and vessels 1,642 Deposits received 15,093
Tools and fixtures 216,973 Unearned income 61
Land 461,734 Account payable from affiliated
Construction in progress 399,502 company 289,408
Accrued liabilities from affiliated
- -------------------------------------------------
Intangible assets: 415,887 company 116,477
Interest of use of equipment 118,269 Short-term borrowings from
Software 293,729 affiliated company 9,155
Leasehold 3,513 Others 17,796
Others 374
- -------------------------------------------------
Investments: 431,123
-------------------------------------------------
Investment securities 54,014 SHAREHOLDERS EQUITY 4,907,588
-------------------------------------------------
Investments in capital 2,306 COMMON STOCK 795,600
Investments in affiliates 347,268 LEGAL RESERVE 2,637,929
Long-term loans 1,338 Legal capital reserve 2,530,476
Prepaid costs 11,569 Legal earned reserve 107,453
-------------------------------------------------
Others 43,233
Allowance for bad debt (2,505)
Investment valuation reserve (26,103) RETAINED EARNINGS 1,474,058
- -------------------------------------------------
CURRENT ASSETS 2,106,312 Special depreciation reserve 64,196
Cash 520,983 General reserves 895,000
Notes receivable 335 Unappropriated retained earnings
Accounts receivable 830,983 for the year 514,861
Accounts receivable, others 13,929 [Net income for the year 386,211]
-------------------------------------------------
Inventories 34,885
Advance payments 15,400
Prepaid expenses 6,778
Short-term loan to affiliated
company 83,381
Short-term loans 580,795
Other current assets 32,058
Allowance for bad debt (13,220)
- -------------------------------------------------
Total liabilities and shareholders'
Total assets (Yen)11,467,394 equity (Yen)11,467,394
- --------------------------------------------------------------------------------------------------------
</TABLE>
Notes 1. In the figures above, amounts less than one million yen are rounded
down.
2. The significant accounting policies and notes are stated on pages 25 to
29 of this report.
23
<PAGE>
STATEMENT OF INCOME
(from April 1, 1998, to March 31, 1999)
<TABLE>
<CAPTION>
(millions of yen)
- ----------------------------------------------------------------------------------------------------
RECURRING INCOME (LOSS)
- ----------------------------------------------------------------------------------------------------
<S> <C>
OPERATING INCOME (LOSS)
Telecommunications business
Operating revenues (Yen)5,748,404
Voice transmission 4,599,272
Data transmission 111,669
Leased circuit 640,020
Telegram 84,423
Other 313,017
Operating expenses 5,515,533
Business expenses 1,219,718
Running cost 100,276
Repair and maintenance 1,315,072
Common expenses 438,222
Administrative expenses 410,934
R&D expenses 110,806
Depreciation 1,487,151
Removal of fixed assets 252,247
Rent for telecommunications equipment 634
Miscellaneous taxes 180,469
Telecommunications business net income 232,871
Related business
Operating revenues 388,599
Operating expenses 377,638
Related business net income 10,960
Total operating income 243,831
- ----------------------------------------------------------------------------------------------------
NONOPERATING INCOME (LOSS)
Nonoperating revenues 112,897
Interest income 3,144
Dividend income 6,008
Rent 82,544
Other income 21,200
Nonoperating expenses 119,359
Interest expenses 22,086
Debenture interest 77,318
Loss on securities revolution 7,691
Other expenses 12,263
Recurring profit 237,368
- ----------------------------------------------------------------------------------------------------
EXTRAORDINARY INCOME (LOSS)
Extraordinary income 823,929
Gain on sales of related companies' stock 823,929
Extraordinary loss 175,587
Loss from reorganization of related companies 43,136
Investment valuation allowance 26,103
Extraordinary depreciation for fixed assets for R&D 106,347
Income before taxes 885,711
Income taxes 499,500
Net income for the year 386,211
Unappropriated retained earnings brought forward 172,408
Interim dividends 39,779
Transfer to legal reserve relating to interim dividends 3,977
Unappropriated retained earnings at end of year 514,861
- ----------------------------------------------------------------------------------------------------
</TABLE>
Notes: 1. In the figures above, amounts less than one million yen are rounded
down.
2. The significant accounting policies and notes are stated on pages 25
to 29 of this report.
24
<PAGE>
SIGNIFICANT ACCOUNTING POLICIES
1. Method of accounting for depreciation and amortization of fixed assets in
accordance with the provisions of the Japanese Corporation Tax Law, depreciation
of property, plant and equipment is computed by the declining-balance method
(with the exception of buildings, for which the straight-line method is used).
Amortization of intangible assets is calculated by the straight-line method.
In addition, from this fiscal year the useful life of buildings has been
shortened in line with the changes to the tax system made in the fiscal year
ended March 1999.
In line with the change, compared with using the values for useful life
from the previous year, depreciation expenses have increased by (Yen)6,998
million, with recurring profit and income before income taxes therefore falling
by the corresponding amount.
2. Basis and method of evaluating marketable securities
Listed marketable securities: Stated at the lower of cost or market, cost
being determined by the moving average method
Other securities: Stated generally at cost, cost being
determined by the moving average method.
3. Basis and method of evaluating inventories
Inventories are stated at cost determined by the annual average method.
4. Accounting for deferred assets
The full amounts of bond discounts and expenses related to bond issued are
charged to income as incurred or paid.
5. Accounting for allowances
(1) Allowance for bad debt
In order to prepare for possible losses from write-off of bad debt, "Allowance
for bad debt" is provided for in an amount determined by the method prescribed
by the Japanese Corporation Tax Law for allowing deductions (transfer rate based
on actuals). In addition, allowance is provided against specific receivables
based on the evaluation of possibility of collection.
Note also that, whereas previously the transfer limit as stipulated in the
Japanese Corporation Tax Law was calculated at the statutory transfer rate, from
this fiscal year, in line with the changes to the tax system made in the fiscal
year ended March 1999, the calculation method has been changed to use the
transfer rate based on actuals. The influence of this accounting change on
recurring profit and income before taxes is negligible.
(2) Investment valuation allowance
This allowance is calculated as the amount necessary to cover any losses
expected to arise from the transfer of investment securities, investments and
investments in affiliates from the Company to the two regional companies (Nippon
Telegraph and Telephone East Corporation and Nippon Telegraph and Telephone West
Corporation) and the long-distance company (planned name NTT Communications
Corporation), as planned in connection with the implementation of the
reorganization of NTT during 1999, taking into consideration the financial
status of those parties in which the Company has funds invested.
(3) Allowance for severance payments
In order to provide for payments of employees' retirement benefits, "Severance
payments"
25
<PAGE>
are set up based on the present value of the benefits payable upon voluntary
retirement of all eligible employees at the balance sheet date.
In addition, the reserve balance is increased by the amount of the benefits
applicable to all employees who are in service with the Company at the balance
sheet date. The amount of benefits in this context is determined by the amount
of retirement benefits recognized in respect of all employees at the time of
incorporation of the Company pursuant to the Nippon Denshin Denwa Kabushiki
Kaisha Law, less the amount of such benefits determined by the present value
method.
6. Accounting for monetary liabilities in a foreign currency covered by forward
exchange contracts.
Foreign currency bonds issued with forward exchange contracts are translated
into yen at the contracted forward rate. Exchange differences resulting from the
use of the contracted rate are amortized over the period through the month of
settlement of the contracts on a monthly basis.
Note also that, of the specified exchange differences on forward contracts,
(Yen)62 million of profit has been accounted for in this fiscal year as a
deduction from the loss on exchange differences contained within other expenses
in the nonoperating expenses section of the Statement of Income. Additionally,
(Yen)105 million for the following fiscal year is being accounted for in the
balance sheet, split between (Yen)50 million as other fixed liabilities and
(Yen)54 million as prepaid income.
7. Non-contributory funded pension plan
A non-contributory funded pension plan was introduced on June 1, 1992, as a part
of the Company's severance payment system to employees. The assets of the
pension fund amounted to (Yen)468,842 million at February 28, 1999.
Excess portion of the allowance for employees' severance payments is being
reversed over an approximately 19-year period for which the past service
liabilities are contributed and such contributions, net of reversals, are
included in operating expenses.
8. Accounting for consumption tax
Consumption tax is eliminated from the amount of recorded transactions.
Changes in presentation
1. Previously, accrued business tax and accrued business office tax were listed
as accrued business taxes. However, in line with the changes made to the
accounting regulation of the telecommunications business laws, from this fiscal
year accrued business tax ((Yen)90,822 million) has been included within accrued
corporate taxes, and accrued business office tax ((Yen)1,287 million) has been
included in accrued liabilities.
2. In line with the changes made to the accounting regulation of the
telecommunications business laws, from this fiscal year the operating revenue
classifications for the telecommunications business operating income (loss) in
the Statement of Income have been amended as follows: part of the items
previously listed as telephone revenues and part of other revenues have been
included as voice transmission revenues; further, the items previously listed as
telegraph revenues, data transmission revenues and other revenues have been
included within data transmission revenues.
NOTES TO THE BALANCE SHEET
1. Fixed assets for related business are included in fixed assets for
telecommunications
26
<PAGE>
business due to the amount not being material.
2. Accumulated depreciation of property, plant and equipment amounted to
(Yen)17,838,390 million.
3. Monetary receivables from and payables to the Company's subsidiaries and
controlling shareholders are as follows:
(1) Subsidiaries
Long-term monetary receivables: (Yen)8,983 million
Short-term monetary receivables: (Yen)82,310 million
Long-term monetary payables: (Yen)423 million
Short-term monetary payables: (Yen)387,885 million
(2) Controlling shareholders
Short-term monetary receivables: (Yen)3,483 million
Short-term monetary payables: (Yen)347 million
4. Investments in shares of subsidiaries and investments in non-stock capital
of subsidiaries included in investments in affiliates are as follows:
Shares of subsidiaries: (Yen)268,399 million
Non-stock capital of subsidiaries: (Yen)449 million
5. Major assets and liabilities denominated in foreign currencies are as
follows:
(1) Assets denominated in foreign currencies
Investment securities: (Yen)6,073 million
U.S. dollars 26,382,000
Thai baht 891,714,000
Investments in affiliates: (Yen)129,864 million
U.S. dollars 407,516,000
Philippine pesos 13,110,559,000
Sri Lanka rupees 13,206,950,000
Pounds sterling 24,400,000
Singapore dollars 45,855,000
Malaysian ringgits 64,000,000
New Taiwan dollars 100,000,000
Hong Kong dollars 26,000,000
Australian dollars 4,400,000
Brasil reales 3,032,000
Deutsche marks 2,070,000
French francs 6,750,000
(2) Liabilities denominated in foreign currencies
Bonds and notes: (Yen)609,629 million
(Including those maturing within one year)
U.S. dollars 3,350,000,000
Pounds sterling 350,000,000
Swiss francs 840,000,000
Canadian dollars 400,000,000
Deutsche marks 400,000,000
Long-term borrowings: (Yen)12,764 million
(Including those maturing within one year)
U.S. dollars 90,379,000
Thai baht 675,541,000
Accrued expenses: (Yen)6,761 million
27
<PAGE>
U.S. dollars 76,452,000
Pounds sterling 15,791,000
Swiss francs 19,195,000
Canadian dollars 9,908,000
6. Treasury stock included in other current assets: (Yen)131 million
7. Consumption tax is stated at the net amount of consumption tax received and
paid, and included in other current liabilities.
8. Pursuant to Article 8 of the Nippon Denshin Denwa Kabushiki Kaisha Law, all
the Company's assets are pledged as general collateral for bonds. The Company
also deposits investment securities of (Yen)50 million as a guarantee under the
terms of the Real Estate Business Law.
9. Guaranteed deposits: (Yen)476 million
10. Contingent liabilities: Contract for acceptance of obligations regarding
corporate bonds (Yen)150 billion
11. Net income per share: (Yen)24,271.69
28
<PAGE>
NOTES TO THE STATEMENT OF INCOME
1. Operating expenses incurred through transactions with subsidiaries were
(Yen)1,295,212 million. Operating income earned through transactions with
subsidiaries was (Yen)646,320 million. Non-operating transactions with
subsidiaries totaled (Yen)355,565 million.
2. Operating expenses incurred through transactions with controlling
shareholders were (Yen)10,866 million. Operating income earned through
transactions with controlling shareholders was (Yen)5,370 million. Non-
operating transactions with controlling shareholders were (Yen)208 million.
3. Extraordinary depreciation for fixed assets for R&D are related to the
revision of the R&D system for fundamental research undertaken in connection
with the implementation of the Company's reorganization. This amount represents
the cost of an extraordinary depreciation of R&D fixed assets.
4. In line with the changes made to the accounting regulation of the
telecommunications business laws, from this fiscal year, business taxes,
amounting to (Yen)106,400 million within this fiscal year including an
extraordinary income (loss) or (Yen)81,800 million, have been included, in
addition to corporation and inhabitants' taxes totaling (Yen)393,100 million
during this fiscal year, within income taxes.
PROPOSAL OF APPROPRIATION
OF UNAPPROPRIATED RETAINED EARNINGS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Item Amount
- -------------------------------------------------------------------------------
<S> <C>
Unappropriated retained earnings for the year (Yen)514,861,922,025
Reversal of special depreciation reserve 14,393,256,833
Total 529,255,178,858
Proposal of appropriation:
Legal earned reserve 11,953,000,000
Cash dividends ((Yen)7,500 per share ) 119,339,121,450
( year-end dividend (Yen)2,500)
( special dividend (Yen)5,000 )
Bonuses to directors and corporate auditors 190,000,000
[Portion to corporate auditors] [21,600,000]
Reserve for buy-back of shares 120,000,000,000
Special depreciation reserve 4,456,192,329
Profits brought forward 273,316,865,079
- -------------------------------------------------------------------------------
</TABLE>
Notes 1. An interim dividend of (Yen)39,779,942,650 ((Yen)2,500 per share) was
paid to shareholders on December 11, 1998.
2. The reserve for buy-back of shares is for the purpose of acquiring
treasury stock and retiring of stock through retained profits.
3. Reversal and provision of the special depreciation reserve are in
accordance with the Special Taxation Measures Law.
29
<PAGE>
Certified Copy
INDEPENDENT CERTIFIED PUBLIC
ACCOUNTANTS' REPORT
May 17, 1999
Mr. Jun-ichiro Miyazu
President and Representative Director
Nippon Telegraph and Telephone Corporation
Asahi & Co.
Tadashi Nizawa, C.P.A.,
Representative Partner and
Engagement Partner
Takuichi Aroi, C.P.A.,
Representative Partner and
Engagement Partner
Chuo Audit Corporation
Tokugoro Murayama, C.P.A.,
Representative Partner and
Engagement Partner
Tsutomu Kawaguchi, C.P.A.,
Representative Partner and
Engagement Partner
Pursuant to Article 2 of the Law for Special Exceptions to the Commercial Code
concerning audit, etc., of joint stock corporations (kabushiki kaisha), we have
examined the balance sheet, the statement of income, the business report (with
respect to accounting matters only), the proposal of appropriation of
unappropriated retained earnings and the supplementary schedules (with respect
to accounting matters only) of Nippon Telegraph and Telephone Corporation for
the 14th fiscal year from April 1, 1998, to March 31, 1999. The accounting
matters included in the business report and supplementary schedules referred to
above, which are subject to our examination, are limited to those derived from
the accounting books and records of the Company.
Our examination was made in accordance with generally accepted auditing
standards in Japan and included such auditing procedures as are normally
required.
As a result of our examination, we state our opinions as follows:
(1) The balance sheet and the statement of income present fairly the financial
position and the results of operations of the Company, in conformity with
the applicable laws and regulations and the Company's articles of
incorporation.
(2) The business report (with respect to accounting matters only) presents
fairly the status of the Company, in conformity with the applicable laws
and regulations and the
30
<PAGE>
Company's articles of incorporation.
(3) The proposal of appropriation of unappropriated retained earnings is in
conformity with the applicable laws and regulations and the Company's
articles of incorporation.
(4) There are no matters to be noted in the supplementary schedules (with
respect to accounting matters only) in accordance with the provisions of
the Commercial Code.
Subsequent events with respect to the issue of bonds and notes, which may have a
significant effect on the financial position and results of operations of the
Company in the following fiscal years, are described in Section III of the
business report under the heading "III. Major Events after the End of the Fiscal
year."
We, both Asahi & Co. and Chua Audit Corporation, and respective engagement
partners, have no interest in the company which should be disclosed pursuant to
the provisions of the Certified Public Accountants Law.
31
<PAGE>
Certified Copy
BOARD OF CORPORATE AUDITORS' REPORT
The Board of Corporate Auditors has been given a report by each Corporate
Auditor on the method and results of his audit regarding the Directors'
execution of their duties for the 14th fiscal year from April 1, 1998, to March
31, 1999, and, after discussion at the meetings of the Board, prepared this
Board of Corporate Auditors' Report. The Board hereby reports as follows:
1. Outline of the method of the audit by Corporate Auditors
According to the policy decided by the Board of Corporate Auditors, each
Corporate Auditor has attended the meetings of the Board of Directors and other
important meetings of the Company, received a report from the Directors and
Officers on the Company's operations, reviewed important documents for internal
approval, examined the operations and assets of the head office and other main
offices, made necessary inquiries to the Company's subsidiaries regarding their
operations, made necessary inquiries to the Certified Public Accountants
regarding their audits and examined the financial statements and supplementary
schedules.
2. Results of the audit
(1) The method and results of the audit by the Certified Public Accountants,
Asahi & Co. and Chuo Audit Corporation are adequate.
(2) The business report states fairly, in conformity with the applicable laws
and regulations and the Company's articles of incorporation, the position of
the Company.
(3) With regard to the proposed appropriation of unappropriated retained
earnings, nothing unusual is to be noted in light of the status of the
Company's assets and other circumstances.
(4) The supplementary schedules state fairly the information required to be set
forth therein and nothing unusual is to be noted.
(5) With respect to the performance of Directors' duties, neither illegal acts
nor any item in violation of the laws, the regulations of the Company's
articles of incorporation is to be noted.
With respect to the Directors' transactions which compete with the business of
the Company, transactions between the Directors and the Company which conflict
with the interests of the Company, free distribution of profits undertaken by
the Company, any extraordinary transactions with the Company's subsidiaries or
any shareholder of the Company and such transactions as the acquisition and
disposal by the Company of its own shares, we have examined these items, in
addition to the aforementioned method of examination by means of a more
detailed inspection of the circumstances of such transactions, etc, as we deemed
necessary, and found no violation of duties by the Directors of the Company.
May 24, 1999
Nippon Telegraph and Telephone Corporation
The Board of Corporate Auditors
Full-Time Corporate Auditor Masayuki Kajima (seal)
Full-Time Corporate Auditor Tadashi Yamamoto (seal)
Full-Time Corporate Auditor Keisuke Sada (seal)
Full-Time Corporate Auditor Toshio Hayata (seal)
Note: Mr Masayuki Kojima, Corporate Auditor, and Mr Tadashi Yamamoto, Corporate
Auditor, are outside Corporate Auditors assigned in accordance with Item 1
of Article 18 of the Law for Special Exceptions to the Commerical Code
regarding corporate auditing.
32
<PAGE>
REFERENCE DOCUMENTS CONCERNING THE EXERCISE OF VOTING RIGHTS
1. Total number of shares owned by shareholders with voting rights:
15,862,337
2. Matters for resolution and reference
. First Item Approval of proposed appropriation of unappropriated retained
earnings for the 14th fiscal year ended March 31, 1999
The Company proposes to make an appropriation of unappropriated retained
earnings for this fiscal year, as described in the chart on page 29.
An interim dividend of (Yen)2,500 per share was paid in December 1998. The
year-end dividend for this fiscal year is proposed to also be (Yen)2,500 per
share, to which has been added a special dividend of (Yen)5,000 per share in
commemoration of the successful listing of NTT subsidiary, NTT Mobile
Communications Network Inc. (NTT DoCoMo) on the First Section of the Tokyo
Stock Exchange, for a dividend of (Yen)7,500 per share.
Further, the Board submits the Second Item for the approval of shareholders
in connection with reserves for buy-back of shares.
. Second Item Acquisition and Retirement of company stock through retained
profits
In accordance with Item 2 of Article 212 of the Commercial Law of Japan, the
Board of Directors seeks the approval of shareholders to acquire and retire
stock of the Company during the period beginning from the conclusion of this
meeting and continuing to the conclusion of the next Ordinary General Meeting
of Shareholders. The number of shares to be acquired shall not exceed 120,000
shares of common stock. The cost of the acquisition shall not exceed (Yen)120
billion with such funds derived from retained profits of the Company.
. Third Item Reorganization of NTT (Transfers of businesses)
1. REASONS FOR TRANSFERRING BUSINESSES
The proposed law to amend the part of Nippon Telegraph and Telephone Corporation
Law was passed at the 140th ordinary session of Diet on June 13, 1997, and then
promulgated and partially implemented on June 20, 1997.
On May 10, 1999, NTT applied for approval from the Minister of Posts and
Telecommunications for "the Implementation Plans Concerning the Transfer of the
Business Activities and Succession of the Rights and Obligations for Nippon
Telegraph and Telephone Corporation", which were prepared in accordance with
"the Basic Principles Concerning the Transfer of the Business Activities and
Succession of the Rights and Obligations of Nippon Telegraph and Telephone
Corporation" as drawn up in accordance with the provisions of the aforementioned
legislation. On May 21, NTT received the Minister of Posts and
Telecommunications' approval for the plans. In conjunction with these approved
implementation plans that set out how the business transfer will occur,
reorganization will be implemented in which NTT will become a holding company
holding all the shares in two regional companies (Nippon Telegraph and Telephone
East Corporation and Nippon Telegraph and Telephone West Corporation) and one
long-distance company (NTT Communications Corporation).
The transfers of businesses will be accomplished by transferring at 0:00
a.m., on July 1, 1999, the relevant NTT business activities to the respective
wholly-owned subsidiaries, Nippon Telegraph and Telephone East Corporation,
Nippon Telegraph and Telephone
33
<PAGE>
West Corporation, and NTT Communications Corporation,
Nippon Telegraph and Telephone East Corporation will inherit the business
activities being managed through NTT-East Provisional Headquarters, namely the
intro-prefectural telecommunications services in the Hokkaido, Tohoku, Tokyo and
Shinetsu regions and related services. Nippon Telegraph and Telephone West
Corporation will inherit the business activities being managed through NTT-West
Provisional Headquarters, namely the intra-prefectural telecommunications
services in the Tokai, Hokuriku, Kansai, Chugoku, Shikoku and Kyushu regions and
related services.
NTT Communications Corporation will inherit all the business activities
comprising the domestic inter-prefectural telecommunications and multimedia
network services and related services currently managed through NTT-Long
Distance and Global Provisional Headquarters.
As the revolutions of multimedia and globalization sweep through the
business world,this reorganization provides the NTT Group with an excellent
opportunity to transform itself from within, with the aim of becoming a "Global
information sharing group". As well as providing for higher level of services
to customers, it should help boost the performance of the NTT Group as a whole.
In addition to that, the fair and effective competition between the
succeeding companies and other firms will spur the fresh development and
expansion of the information market, and contribute to the development of NTT's
operations.
NTT trusts that the shareholders will appreciate the aims of this plan and
give their approval to the transfers of businesses.
2. CONTENTS OF BUSINESS TRANSFER AGREEMENT
Business Transfer Agreement (Copy)
(1) Nippon Telegraph and Telephone East Corporation
Nippon Telegraph and Telephone Corporation (hereinafter referred to as "Party
A") and Nippon Telegraph and Telephone East Corporation (hereinafter referred to
as "Party B") hereby conclude the following contract concerning the transfer of
business through the contribution and transfer of associated assets from Party A
to Party B in association with the establishment of the latter based on the
stipulations laid down in Article 5 of the Supplementary Provisions of the law
to amend the part of Nippon Telegraph and Telephone Corporation Law (Law No. 98
of 1997) and pursuant to the Succession Plan (approved by the Minister of Posts
and Telecommunications on May 21, 1999) as specified in the stipulations of
Clause 6 of the aforesaid Article.
Objective
Article 1.
As of 0:00 a.m., on July 1, 1999 (hereinafter referred to as "the Transfer
Date"), Party A shall assign and Party B shall assume the business which has
been conducted by NTT-East Provisional Headquarters of Party A until the
Transfer Date (hereinafter referred to as the "Business")
Transfer Assets
Article 2.
The assets to be contributed or transferred from Party A to Party B in
accordance with Article 1. (hereinafter referred to as the "Transfer Assets")
shall be any and all fixed assets, liquid assets, fixed liabilities and current
liabilities of the Business and all rights and obligations associated with the
Business as of the Transfer Date. The details related to these Transfer Assets
shall be determined upon consultation between the parties.
34
<PAGE>
Transfer price, method of payment, etc.
Article 3.
1. The transfer price of the Transfer Assets shall be determined through
discussions between the parties, based the fair market value of the Transfer
Assets on the Transfer Date. However, for other specified portions of the
Transfer Assets, such as land holdings, the transfer price shall be
determined through discussion between the parties, based on the lower of the
fair market value or relevant book value of the Transfer Assets on the
Transfer Date.
2. The method, time, etc. of the payment of the consideration provided in the
preceding paragraph shall be determined upon consultation between the
parties.
Delivery Date
Article 4.
1. The Transfer Assets shall be delivered on the Transfer Date; however, this
date may be changed upon the mutual consent of the parties when potential
legal restrictions or transfer procedures so require.
2. The details of the procedures necessary for the delivery of the Transfer
Assets shall be determined upon consultation between the parties.
Duty of care of a good manager
Article 5.
During the time period between the execution of this Agreement and the
completion of the delivery of the Transfer Assets to Party B, Party A shall
manage the Transfer Assets with the care of a good manager. Party A shall
consult with Party B prior to making any major changes to the Transfer Assets.
Registration, etc.
Article 6.
Where registration, recordation, etc. of a Transfer Asset is required, such
shall be carried out on or after the Transfer Date without delay.
In the event of change of circumstances
Article 7.
Should a natural disaster and/or any other circumstance or event cause a
significant change in the Transfer Assets after the execution of this Agreement
but before the completion of delivery of the Transfer Assets, or should any
other circumstance or event frustrate the objective of this Agreement, the
parties may change or cancel this Agreement upon consultation between the
parties.
Employees
Article 8.
Party B undertakes to take on all employees of Party A engaged in the Business
on the Transfer Date. The details of this transfer shall be determined upon
consultation between the parties.
Approval of the transfer by General Meeting of Shareholders
Article 9.
Party A shall hold a General Meeting of Shareholders prior to the Transfer Date
in order to obtain the respective shareholders' approval for the execution of
this Agreement.
Agreement validity and implementation
Article 10.
35
<PAGE>
This Agreement shall be deemed invalid in the event that Party A fails to obtain
approval from its shareholders (as stipulated in Article 9) or is unable to
obtain approval or permission required by law.
Other matters
Article 11.
Matters not stipulated in this Agreement and other matters necessary for the
Business transfer shall be determined upon consultation between the parties.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate, and both parties have signed, sealed, and retained a copy of the
same.
May 28, 1999
Party A
Nippon Telegraph and Telephone Corporation
19-2, Nishi-Shinjuku 3-chome, Shinjuku-ku, Tokyo, Japan
President and Representative Director
Jun-ichiro Miyazu
Party B
Nippon Telegraph and Telephone East Corporation Organizing Committee
8-1, Kasumigaseki 3-chome, Chiyoda-ku, Tokyo, Japan
Chairman
Sho Nasu
(2) Nippon Telegraph and Telephone West Corporation
Nippon Telegraph and Telephone Corporation (hereinafter referred to as "Party
A") and Nippon Telegraph and Telephone West Corporation (hereinafter referred to
as "Party B") hereby conclude the following contract concerning the transfer of
business through the contribution and transfer of associated assets from Party A
to Party B in association with the establishment of the latter based on the
stipulations laid down in Article 5 of the Supplementary Provisions of the law
to amend the part of Nippon Telegraph and Telephone Corporation Law (Law No. 98
of 1997) and pursuant to the Succession Plan (approved by the Minister of Pasts
and Telecommunications on May 21, 1999) as specified in the stipulations of
Clause 6 of the aforesaid Article.
Objective
Article 1.
As of 0:00 a.m., on July 1, 1999 (hereinafter referred to as "the Transfer
Date"), Party A shall assign and Party B shall assume the business which has
been conducted by NTT-West Provisional Headquarters of Party A until the
Transfer Date (hereinafter referred to as the "Business")
(Articles 2-11 are identical to the corresponding articles in the business
transfer agreement of Nippon Telegraph and Telephone East Corporation, and are
omitted in the interests of saving space.)
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate, and both parties have signed, sealed, and retained a copy of the
same.
May 28, 1999
36
<PAGE>
Party A
Nippon Telegraph and Telephone Corporation
19-2, Nishi-Shinjuku 3-chome, Shinjuku-ku, Tokyo, Japan
President and Representative Director
Jun-ichiro Miyazu
Party B
Nippon Telegraph and Telephone West Corporation Organizing Committee
8-1, Kasumigaseki 3-chome, Chiyodo-ku, Tokyo, Japan
Chairman
Sho Nasu
(3) NTT Communications Corporation
Nippon Telegraph and Telephone Corporation (hereinafter referred to as "Party
A") and NTT Communications Corporation (hereinafter referred to as "Party B")
hereby conclude the following contract concerning the transfer of business
through the contribution and transfer of associated assets from Party A to Party
B in association with the establishment of the latter based on the stipulations
laid down in Article 6 of the Supplementary Provisions of the law to amend the
part of Nippon Telegraph and Telephone Corporation Law (Law No. 98 of 1997) and
pursuant to the Succession Plan (approved by the Minister of Pasts and
Telecommunications on May 21, 1999) as specified in the stipulations of Clause 2
of the aforesaid Article.
Objective
Article 1.
As of 0:00 a.m., on July 1, 1999 (hereinafter referred to as "the Transfer
Date"), Party A shall assign and Party B shall assume the business which has
been conducted by NTT-Long Distance and Global Provisional Headquarters of Party
A until the Transfer Date (hereinafter referred to as the "Business")
(Articles 2-8 are identical to the corresponding articles in the business
transfer agreement of Nippon Telegraph and Telephone East Corporation, and are
omitted in the interests of saving space.)
Approval of the transfer by General Meeting of Shareholders
Article 9.
Each party shall hold a General Meeting of Shareholders prior to the Transfer
Date in order to obtain the respective shareholders' approval for the execution
of this Agreement.
Agreement validity and implementation
Article 10.
This Agreement shall be deemed invalid in the event that either party fails to
obtain approval from its shareholders (as stipulated in Article 9) or is unable
to obtain approval or permission required by law.
(Article 11 is identical to the corresponding article in the business transfer
agreement of Nippon Telegraph and Telephone East Corporation, and is omitted in
the interests of saving space.)
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed in
duplicate, and both parties have signed, sealed, and retained a copy of the
same.
May 28, 1999
37
<PAGE>
Party A
Nippon Telegraph and Telephone Corporation
19-2, Nishi-Shinjuku 3-chome, Shinjuku-ku, Tokyo, Japan
President and Representative Director
Jun-ichiro Miyazu
Party B
NTT Communications Corporation
1-6, Uchisaiwai-cha 1-chome, Chiyoda-ku, Tokyo, Japan
President and Representative Director
Masanobu Suzuki
3. PROPOSED TRANSFER ASSETS AND LIABILITIES
(AS OF MARCH 31, 1999)
(1) Assets
(millions of yen)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Nippon Nippon
Telegraph and Telegraph and NTT
Telephone East Telephone West Communications
Corporation Corporation Corporation
---------------------------------------------------
Item Amount Amount Amount
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fixed assets (Yen)4,104,176 (Yen)3,829,298 (Yen)919,632
Tangible fixed assets 3,894,903 3,673,513 683,973
Telecommunications equipment 2,694,971 2,467,728 421,722
Tools, furniture and fixtures, etc 92,776 80,664 29,496
Land and buildings, etc 922,476 970,768 216,483
Construction in progress 184,678 154,352 16,271
Intangible fixed assets 148,749 131,721 53,831
Investments and other assets 60,523 24,063 181,827
Current Assets 490,562 447,720 70,098
Total assets 4,594,739 4,277,018 989,731
- ---------------------------------------------------------------------------------------------
</TABLE>
Note: In the figures above, amounts less than one million yen are rounded down.
(2) Liabilities
(millions of Yen)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
Nippon Nippon
Telegraph and Telegraph and NTT
Telephone East Telephone West Communications
Corporation Corporation Corporation
---------------------------------------------------
Item Amount Amount Amount
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Fixed liabilities (Yen)928,991 (Yen)1,054,413 (Yen)45,891
Current liabilities 263,405 237,705 34,344
Total 1,192,396 1,292,119 80,235
- ---------------------------------------------------------------------------------------------
</TABLE>
Note: In the figures above, amounts less than one million yen are rounded down.
38
<PAGE>
4. PROFITS AND LOSSES OF THE TRANSFERRED DIVISIONS IN RECENT BUSINESS YEARS
(millions of yen)
- --------------------------------------------------------------------------------
East-Nippon West-Nippon
regional regional Long-distance
marketing marketing marketing
division division division
------------------------------------------------
Item FY 1998 FY 1998 FY 1998
- --------------------------------------------------------------------------------
Operating revenues (YEN)2,922,106 (YEN)2,787,578 (YEN)1,271,608
Recurring profit 163,583 -68,239 142,025
- --------------------------------------------------------------------------------
Note: In the figures above, amounts less than one million yen are rounded down.
5. OUTLINE OF THE COMPANIES TO WHICH THE BUSINESSES ARE GOING TO BE
TRANSFERRED
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------
Nippon Telegraph Nippon Telegraph
and Telephone and Telephone NTT Communications
Company name East Corporation West Corporation Corporation
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Date of July 1, 1999 July 1, 1999 May 28, 1999
Establishment (planned) (planned)
- -------------------------------------------------------------------------------------------
Total Number of 6.7 million shares 6.24 million shares 0.6 million shares
Authorized Shares (planned) (planned) time of
at the date of establishment
reorganization 1.44 million shares
following transfer
of business (planned)
- -------------------------------------------------------------------------------------------
Stated Capital (YEN)335 billion (YEN)312 billion (YEN)30 billion at time
(planned) (planned) of establishment
(YEN)72 billion
following transfer of
business (planned)
- -------------------------------------------------------------------------------------------
Shareholder Nippon Telegraph Nippon Telegraph Nippon Telegraph
and Telephone and Telephone and Telephone
Corporation (all Corporation (all Corporation (all
shares) shares) shares)
- -------------------------------------------------------------------------------------------
Head Office 19-2, Nishi-Shinjuku 3-15, Banba-cho 1-6, Uchisaiwai-cho
3-chome, Chuo-ku, Osaka-shi 1-chome
Shinjuku-ku, Tokyo Osaka (planned) Chiyoda-ku, Tokyo
(planned)
- --------------------------------------------------------------------------------------------
</TABLE>
. Fourth Item Partial Modifications to the Articles of Incorporation
1. Reasons for the modifications
(1) In line with the reorganization as described in the previous resolution,
NTT will become a holding company. Accordingly, the Company's purpose of
business will change, and this needs to be reflected in the revised
Articles of Incorporation.
(2) In line with the reorganization, the Company intends to move its Head
Office within Tokyo, from Shinjuku Ward to Chiyoda Ward. This specific
change in Head Office
39
<PAGE>
location also requires to be reflected in the revised Articles of
Incorporation.
(3) In line with the reorganization, the Company intends to reduce the number
of Directors to a maximum of fifteen (15) persons, and this also needs to
be reflected in the revised Articles of Incorporation.
2. Date from which the modifications will become effective
NTT wishes to make the date from which the modifications will take effect to be
July 1, 1999.
3. Modifications
The relevant item should be modified as follows: (The modified portions are
underlined)
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Current Version Modified Version
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Article 2. (Purpose) Article 2. (Purpose)
The purpose of the company shall be The purpose of the company shall be
to operate domestic telecommunications to hold all the shares which both
----------------------------------- ------------------------------
business. Nippon Telegraph and Telephone East
-------- -----------------------------------
Corporation and Nippon Telegraph
--------------------------------
and Telephone West Corporation
------------------------------
(hereinafter referred to as the "
---------------------------------
Regional Companies") respectively issue
---------------------------------------
and to ensure proper and stable
-------------------------------
provision of telecommunications services
----------------------------------------
by the Regional Companies as well as
------------------------------------
to conduct research relating to the
-----------------------------------
telecommunications technologies that
------------------------------------
will form the foundation for
----------------------------
telecommunications.
------------------
2. The company may engage in business 2. The company shall engage in the
---------------------- -------------------
activities incidental to the business following business activities:
- ------------------------------------- -----------------------------
referred to in the preceding paragraph
- --------------------------------------
and other business necessary to
- -------------------------------
achieve the purpose of the company.
- ----------------------------------
(1) subscribing for and holding the shares
- --------------------------------------
which the Regional Companies issue as
--------------------------------------
well as exercising the rights as the
------------------------------------
holder of the shares;
--------------------
(2) providing advice, mediation and other
- ------------------------------------
assistance to the Regional Companies;
-------------------------------------
(3) conducting research relating to the
- -----------------------------------
telecommunications technology that will
---------------------------------------
form the foundation for
-----------------------
telecommunications; and
-----------------------
(4) such business activities as are incidental
- ------------------------------------------
to the business activities of the
---------------------------------
preceding three items.
---------------------
(a New Clause) 3. The Company may, besides the
- ----------------------------
business activities referred to in the
--------------------------------------
preceding paragraph, engage business
------------------------------------
activities necessary to achieve the
-----------------------------------
purpose of the company:
----------------------
</TABLE>
40
<PAGE>
Article 3. (Location of Head Office) Article 3. (Location of Head Office)
The head office of the company shall be The head office of the company shall be
located in Shinjuku-ku, Tokyo. located in Chiyoda-ku, Tokyo.
----------- ----------
Article 17. (Number of Directors) Article 17. (Number of Directors)
There shall be no more than thirty-six There shall be no more than fifteen
---------- -------
(36) directors of the company. (15) directors of the company.
-- --
- --------------------------------------------------------------------------------
. Fifth Item Election of five Directors
Following the resignation on January 25, 1999 of ten Directors, namely Mr.
Hiroshi Ishihara, Senior Vice President, Mr. Kiyoshi Mita, Senior Vice
President, Mr. Hirofumi Shimada, Senior Vice President, Mr. Masahiro Shibao,
Senior Vice President, Mr.Ryuji Nunotoni, Senior Vice President, Mr. Yoshinori
Uda, Senior Vice President, Mr. Seiji Takashima, Senior Vice President, Mr.
Toshiaki Fukui, Senior Vice President, Mr. Shin-ichi Aizawa, Senior Vice
President, and Mr. Yoshio Bessyo, Senior Vice President,
the resignation on June 29, 1999 of Mr. Toshiharu Aoki, Senior Vice President,
and the resignation on June 30, 1999 of eighteen Directors, namely Mr. Hidekazu
Inoue, Senior Vice President, Mr. Kazuo Asada, Senior Vice President, Mr.
Masonobu Suzuki, Senior Vice President, Mr. Yuji Matsuo, Senior Vice President,
Mr. Tadayuki Arai, Senior Vice President, Mr. Satashi Miura, Senior Vice
President, Mr. Michio Takeuchi, Senior Vice President, Mr. Katsuya Okimi, Senior
Vice President, Mr. Michitomo Ueno, Senior Vice President, Mr. Masaaki
Kasahara, Senior Vice President, Mr. Yoshiyuki Sukemune, Senior Vice President,
Mr. Jun-ichi Yuki, Senior Vice President, Mr. Kiyoshi Fujita, Senior Vice
President, Mr. Shunzo Morishita, Senior Vice President, Mr. Mamoru Ishida,
Senior Vice President, Nobuharu Ono, Senior Vice President, Mr. Susumu Fukuzawa,
Senior Vice President and Mr.Ryuzo Sejima, Senior Vice President, subject to
the approval of Resolution by shareholders, it is proposed that five Directors
be elected to fill the vacancies on July 1, 1999.
Candidates for Directors are as follows:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Candidate No. Name Number of shares of the
(Date of birth) Resume and representation of other companies Company held
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. Yusuke Tachibana April 1962 Entered Nippon Telegraph and 1204 shares
(September 16, Telephone Public Corporation
1938) April 1993 Executive Vice President and Senior
Executive Manager of Industrial
Systems Sector of NTT Data
Communications System Corporation
June 1996 President of Japan Leisure Card
System Co., Ltd, (expected to retire on
June 22, 1999)
July 1996 Senior Vice President of NTT Data
Communications System Corporation
(Currently NTT Data Corporation)
(expected to retire on June 29, 1999)
- -----------------------------------------------------------------------------------------------------------------
2. Hiromi Wasai April 1969 Entered Nippon Telegraph and
(August 25, 1946) Telephone Public Corporation
</TABLE>
41
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
June 1996 Vice President and Senior 5.00 shares
Manager of Corporate Strategy
Planning Department of the Company
June 1998 Vice President and Deputy
Executive Manager of NTT-Holding
Organizational Office of the Company
January 1999 Vice President and Senior Manager
of Department 1 of NTT-Holding
Provisional Headquarters of the
Company (present post)
- ---------------------------------------------------------------------------------------------------
3. Toyohiko Takabe July 1969 Entered Nippon Telegraph and 8.06 shares
(January 9, 1947) Telephone Public Corporation
June 1996 Vice President and Senior Manager
of Multimedia Service Department of
the Company
April 1997 Vice President and Senior Manager of
Reorganization Planning Office of the
Company
June 1998 Vice President and Executive Manager
of Coordination and Liaison
Department of the Company
January 1999 Vice President and Executive Manager
of Reorganization Office and Executive
Manager of Department V of NTT-Holding
Provisional Headquarters of the Company
(present post)
- ---------------------------------------------------------------------------------------------------
4. Takoshi Imai April 1952 Entered Fuji Steel Corporation 1.02 shares
(December 23, 1929) June 1993 President of Nippon Steel Corporation
April 1998 Chairman of Nippon Steel
Corporation (present post)
May 1998 Chairman of Japan Federation of
Economic Organizations (present post)
- ---------------------------------------------------------------------------------------------------
5. Yotaro Kobayashi October 1958 Entered Fuji Photo Film Co., Ltd. 0.00 shares
(April 25, 1933) September 1963 Entered Fuji Xerox Co., Ltd.
January 1978 President of Fuji Xerox Co., Ltd.
January 1992 Chairman of Fuji Xerox Co., Ltd.
(present post)
April 1999 Chairman of KEIZAI DOYUKAI (Japan
Association of Corporate Executives)
(present post)
- ---------------------------------------------------------------------------------------------------
</TABLE>
. Sixth Item Election of two Corporate Auditors
Since Mr. Masayuki Kojima, Full-time Corporate Auditor, and Mr. Toshio Hayata,
Full-time Corporate Auditor, are to resign on June 30, 1999, it is proposed that
two Corporate Auditors be elected on July 1, 1999 to fill the vacancies.
42
<PAGE>
<TABLE>
<CAPTION>
Candidates for Corporate Auditors are as follows:
- ---------------------------------------------------------------------------------------------------
Number of
Candi- shares of
date Name the Company
No. (Date of birth) Resume and representation of other companies held
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1. Makoto Yoshida April 1956 Entered Nippon Telegraph and Telephone 7.14 shares
(October 16, Public Corporation
1932) April 1985 Vice President and Senior Manager of
President's Office of the Company
July 1985 Vice President and Executive Manager
of Personnel Department of the Company
June 1987 Senior Vice President and Executive
Manager of Personnel Department of the
Company
June 1989 Full-time Corporate Auditors of NTT
Data Communications System Corporation
December 1991 Executive Vice President and Senior
Executive Manager of Telecommunications
Headquarters of Kyowa Exeo Corporation
December 1993 Executive Vice President and Senior
Executive Manager of Industrial
Relations Department of Kyowa Exeo
Corporation
June 1995 President of NTT Living Corporation
(expected to retire on June 25, 1999)
- ---------------------------------------------------------------------------------------------------
2. Hideaki Toda April 1958 Entered Nippon Telegraph and 11.22
(August 15, 1934) Telegraph Public Corporation shares
June 1986 Vice President and Executive Manager
of Coordination and Liaison Department
of General Planning Headquarters
June 1988 Senior Vice President and Executive
Manager of Affiliated Companies
Headquarters of the Company
June 1990 Senior Vice President and Executive
Manager of International Affairs
Department of the Company
June 1992 President of Nippon Information and
Communication Corporation (expected
to retire on June 24, 1999)
- ---------------------------------------------------------------------------------------------------
</TABLE>
Note: Mr. Hideaki Toda is an outside Corporate Auditor assigned in accordance
with Item 1 of Article 18 of the Law for Special Exceptions to the
Commercial Code regarding corporate auditing.
. Seventh Item Presentation of retirement allowances to retired and
retiring Directors and Corporate Auditors
It is proposed that retirement allowances be given in accordance with the
Company's regulations and at an appropriate level for respective services
rendered by thirty-one
43
<PAGE>
Directors, namely Mr. Hiroshi Ishihara, Executive Vice President, Mr. Kiyoshi
Mita, Executive Vice President, Mr. Hirofumi Shimada, Senior Vice President,
Mr. Masahiro Shibao, Senior Vice President, Mr. Ryuji Nunotani, Senior Vice
President, Mr. Yoshinori Uda, Senior Vice President, Mr. Seiji Takashima, Senior
Vice President, Mr. Toshiaki Fukui, Senior Vice President, Mr. Shin-ichi
Aizawa, Senior Vice President, Mr. Yoshio Bessyo, Senior Vice President, who
resigned on January 25, 1999, and Mr. Toshiharu Aoki, Senior Executive Vice
President, who are to resign on June 29, 1999, and Mr. Hidekazu Inoue, Senior
Executive Vice President, Mr. Kazua Asada, Senior Executive Vice President, Mr.
Masonobu Suzuki, Executive Vice President, Mr. Yuji Matsuo, Executive Vice
President, Mr. Todayuki Aroi, Executive Vice President, Mr. Satoshi Miura,
Executive Vice President, Mr. Michio Takeuchi, Executive Vice President, Mr.
Katsuyo Okimi, Executive Vice President, Mr. Michitomo Ueno, Senior Vice
President, Masaaki Kasahara, Senior Vice President, Mr. Yoshiyuki Sukemune,
Senior Vice President, Mr. Jun-ichi Yuki, Senior Vice President, Mr. Kiyoshi
Fujita, Senior Vice President, Mr. Shunzo Morishita, Senior Vice President, Mr.
Mamoru Ishida, Senior Vice President, Mr. Nobuharu Ono, Senior Vice President,
Mr. Susumu Fukuzawa, Senior Vice President, Mr. Ryuzo Sejima, Senior Vice
President, Mr. Masayuki Kojima, Full-time Corporate Auditor, and Mr. Toshio
Hoyata, Full-time Corporate Auditor, who are to resign on June 30, 1999.
It is proposed that decisions on the amount of money, time and method of
payment of such monetary awards be entrusted to the Board of Directors as to the
retiring Directors and to the Board of Corporate Auditors as to the retiring
Corporate Auditors.
Resumes of the retiring Directors and Corporate Auditors are as follows:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
Name Resume
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Hiroshi Ishihara June 1994 Senior Vice President and Executive Manager of
Plant Planning Department of the Company
June 1995 Senior Vice President and General Manager of Kanto
Regional Communications Sector of the Company
June 1996 Executive Vice President and General Manager of
Kanto Regional Communications Sector of the Company
January 1999 Resigned the position of Executive Vice President
of the Company
- ----------------------------------------------------------------------------------------------
Kiyoshi Mita June 1995 Senior Vice President and General Manager of
Chugoku Regional Communications Sector of the Company
June 1997 Senior Vice President and Executive Manager of
Corporate Strategy Planning Office and Executive
Manager of Coordination and Liaison Department
of the Company
June 1998 Executive Vice President and Executive Manager of
Corporate Strategy Planning Office of the Company
January 1999 Resigned the position of Executive Vice President
of the Company
- ----------------------------------------------------------------------------------------------
Hirofumi Shimada June 1994 Senior Vice President and General Manager of
Shinetsu Regional Communications Sector of the
Company
January 1999 Resigned the position of Senior Vice President of
the Company
- ----------------------------------------------------------------------------------------------
</TABLE>
44
<PAGE>
<TABLE>
<S> <C> <C>
Masahiro Shibao June 1994 Senior Vice President and Executive Manager of
Service Management Department of the Company
June 1995 Senior Vice President and General Manager of Tokai
Regional Communications Sector of the Company
January 1999 Resigned the position of Senior Vice President of
the Company
- ------------------------------------------------------------------------------------------
Ryuji Nunotani June 1995 Senior Vice President and Executive Manager of Real
Estate Development Department of the Company
July 1996 Senior Vice President and Executive Manager of Real
Estate Strategy Department of the Company
January 1999 Resigned the position of Senior Vice President of the
Company
- ------------------------------------------------------------------------------------------
Yoshinori Uda June 1996 Senior Vice President and General Manager of Tokyo
Regional Communications Sector of the Company
January 1999 Resigned the position of Senior Vice President of the
Company
- ------------------------------------------------------------------------------------------
Seiji Takoshima June 1996 Senior Vice President and General Manager of Tohoku
Regional Communications Section of the Company
January 1999 Resigned the position of Senior Vice President of the
Company
- ------------------------------------------------------------------------------------------
Toshiaki Fukui June 1997 Senior Vice President and General Manager of Chugoku
Regional Communications Sector of the Company
January 1999 Resigned the position of Senior Vice President of the
Company
- ------------------------------------------------------------------------------------------
Shin-ichi Aizawa June 1997 Senior Vice President and Executive Manager of
Maintenance and Service Operation Department of the
Company
January 1999 Resigned the position of Senior Vice President of the
Company
- ------------------------------------------------------------------------------------------
Yoshio Bessyo June 1998 Senior Vice President and General Manager of
Hokuriku Regional Communications Sector of the Company
January 1999 Resigned the position of Senior Vice President of the
Company
- ------------------------------------------------------------------------------------------
</TABLE>
45
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Resume
- --------------------------------------------------------------------------------
<S> <C> <C>
Toshiharu Aoki June 1992 Senior Vice President and Executive Manager
of Telecommunication Network Laboratory Group
of the Company
July 1994 Senior Vice President and Executive Manager
of Telecommunication Networks Laboratories
and Executive Manager of Telecommunication
Network Laboratory Group of the Company
June 1996 Executive Vice President and Senior Executive
Manager of Research and Development
Headquarters and Executive Manager of
Telecommunication Network Laboratory Group of
the Company
July 1996 Executive Vice President and Senior Executive
Manager of Research and Development
Headquarters and Executive Manager of
Telecommunication Network Laboratory Group
and Executive Manager of Intellectual
Property Department of the Company
August 1996 Executive Vice President and Senior Executive
Manager of Research and Development
Headquarters and Executive Manager of
Telecommunication Network Laboratory Group of
the Company
June 1997 Senior Executive Vice President and Senior
Executive Manager of Research and Development
Headquarters and Executive Manager of
Telecommunication Network Laboratory Group
and Senior Executive Manager of Multimedia
Network Service Sector of the Company
October 1997 Senior Executive Vice President and Senior
Executive Manager of Research and Development
Headquarters and Senior Executive Manager of
Multimedia Network Service Sector of the
Company
June 1998 Senior Executive Vice President and Senior
Executive Manager of Research and Development
Headquarters and Senior Executive Manager of
Multimedia Service Promotion Headquarters of
the Company
January 1999 Senior Executive Vice President of the
Company (present post)
- --------------------------------------------------------------------------------
Hidekazu Inoue June 1991 Senior Vice President of the Company
July 1993 Senior Vice President and Deputy Senior
Executive Manager of Affiliated Business
Development Headquarters of the Company
June 1994 Senior Vice President and General Manager of
Tokai Regional Communications Sector of the
Company
</TABLE>
46
<PAGE>
June 1995 Executive Vice President and Executive
Manager of Service Charge Planning Office of
the Company
June 1996 Senior Executive Vice President of the
Company
June 1997 Senior Executive Vice President and Senior
Executive Manager of Service Marketing and
Support Headquarters of the Company
June 1998 Senior Executive Vice President and Senior
Executive Manager of Service Marketing and
Support Headquarters and Senior Executive
Manager of NTT-East Organizational Office of
the Company
January 1999 Senior Executive Vice President and Senior
Executive Manager of NTT-East Provisional
Headquarters of the Company (present post)
- --------------------------------------------------------------------------------
Kazuo Asada June 1992 Executive Vice President and Executive
Manager of International Affairs Department
of the Company
June 1996 Executive Vice President and General Manager
of Kansai Regional Communications Sector and
Executive Manager of Hanshin Restoration
Promotion Office of the Company
June 1997 Senior Executive Vice President and General
Manager of Kansai Regional Communications
Sector and Executive Manager of Hanshin
Restoration Promotion Office of the Company
March 1998 Senior Executive Vice President and General
Manager of Kansai Regional Communications
Sector of the Company
January 1999 Senior Executive Vice President and Senior
Executive Manager of NTT-West Provisional
Headquarters of the Company (present post)
- --------------------------------------------------------------------------------
Masanobu Suzuki June 1993 Senior Vice President and Deputy Senior
Executive Manager of Integrated
Communications Systems Headquarters of the
Company
July 1994 Senior Vice President and Executive Manager
of Sales & Marketing Department II of the
Company
June 1996 Executive Vice President and Executive
Manager of Sales & Marketing Department II
of the Company
July 1996 Executive Vice President and Executive
Manager of Sales & Marketing Department II
and Deputy Senior Executive Manager of
International Affairs Headquarters of the
Company
February 1997 Executive Vice President and Deputy Senior
Executive Manager of International Affairs
Headquarters of the Company
June 1997 Executive Vice President and Senior
Executive Manager of International Affairs
Headquarters of the Company
47
<PAGE>
June 1998 Executive Vice President and Senior
Executive Manager of Global Business
Headquarters and Executive Manager of
NTT-Long Distance and Global Organizational
Office of the Company
January 1999 Executive Vice President and Senior
Executive Manager of NTT-Long Distance and
Global Provisional Headquarters of the
Company (present post)
- --------------------------------------------------------------------------------
Yuji Matsuo June 1994 Senior Vice President and Executive Manager
of Procurement and Supply Department of the
Company
January 1996 Senior Vice President and General Manager of
Kyushu Regional Communications Sector of the
Company
June 1996 Executive Vice President and General Manager
of Kyushu Regional Communications Sector of
the Company
January 1999 Executive Vice President and Deputy Senior
Executive Manager of NTT-East Provisional
Headquarters and Senior Executive Manager of
Business Communications Headquarters of
NTT-East Provisional Headquarters of the
Company (present post)
- --------------------------------------------------------------------------------
Tadayuki Arai June 1995 Senior Vice President and Executive Manager
of Sales & Marketing Department I of the
Company
May 1998 Senior Vice President and Executive Manager
of Sales & Marketing Department I of
Business Communications Headquarters I of
the Company
June 1998 Executive Vice President and Executive
Manager of Public Telephone Services
Department of the Company
January 1999 Executive Vice President and Deputy Senior
Executive Manager of NTT-Long Distance and
Global Provisional Headquarters of the
Company (present post)
- --------------------------------------------------------------------------------
Satoshi Miura June 1996 Senior Vice President and Executive Manager
of Personnel Department of the Company
July 1996 Senior Vice President and Executive Manager
of Personnel and Industrial Relations
Department of the Company
June 1998 Executive Vice President and Executive
Manager of Personnel and Industrial
Relations Department of the Company
January 1999 Executive Vice President and Deputy Senior
Executive Manager of NTT-East Provisional
Headquarters of the Company (present post)
- --------------------------------------------------------------------------------
Michio Takeuchi June 1996 Senior Vice President and Executive Manager
of Public Relations Department and Executive
Manager of Advertising Department of the
Company
48
<PAGE>
<TABLE>
<S> <C> <C>
July 1996 Senior Vice President and Executive Manager of Public Relations Department of the
Company
June 1997 Senior Vice President and Executive Manager of OCN Service Division of the Company
July 1997 Senior Vice President and Executive Manager of OCN Service Division and Executive
Manager of Packet Network Division of the Company
June 1998 Executive Vice President and Senior Executive Manager of Multimedia
Network Service Sector and Senior Executive Manager of NTT-West Organizational Office
of the Company
January 1999 Executive Vice President and Deputy Senior Executive Manager of NTT-West Provisional
Headquarters of the Company (present post)
- ------------------------------------------------------------------------------------------------------------------------------------
Katsuya Okimi June 1997 Senior Vice President and Executive Manager of Network Strategy Planning Department of
the Company
June 1998 Executive Vice President and Executive Manager of Network Strategy Planning Department
and Deputy Senior Executive Manager of Global Business Headquarters of the Company
January 1999 Executive Vice President and Deputy Senior Executive Manager of NTT-Long Distance and
Global Provisional Headquarters and General Manager of Global Business Division of NTT-
Long Distance and Global Provisional Headquarters of the Company (present post)
- ------------------------------------------------------------------------------------------------------------------------------------
Michitomo Ueno June 1996 Senior Vice President and Executive Manager of Interconnection Promotion Department of
the Company
January 1999 Senior Vice President and Deputy Senior Executive Manager of NTT-West Provisional
Headquarters and Senior Executive Manager of Business Communications Headquarters of
NTT-West Provisional Headquarters of the Company (present post)
- ------------------------------------------------------------------------------------------------------------------------------------
Masaaki Kasahara June 1997 Senior Vice President and Executive Manager of Technology Department of the Company
January 1999 Senior Vice President and General Manager of Osaka Branch of the Company (present post)
- ------------------------------------------------------------------------------------------------------------------------------------
Yoshiyuki Sukemune June 1997 Senior Vice President and Executive Manager of Network Services Department of the
Company
January 1999 Senior Vice President and General Manager of Tokyo Branch of the Company (present post)
- ------------------------------------------------------------------------------------------------------------------------------------
Jun-ichi Yuki June 1998 Senior Vice President and Deputy Senior Executive Manager of Multimedia Network Service
Sector of the Company
January 1999 Senior Vice President and General Manager of Public Telephone Services Division of NTT-
West Provisional Headquarters of the Company (present post)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
<TABLE>
<S> <C> <C>
Kiyoshi Fujita June 1998 Senior Vice President and Executive Manager of
Legal and Internal Audit Department of the
Company
January 1999 Senior Vice President (present post)
- -----------------------------------------------------------------------------------------------------
Shunzo Morishita June 1998 Senior Vice President and Executive Manager of
Plant Planning Department of the Company
January 1999 Senior Vice President and Executive Manager of
Technology Department of NTT-East Provisional
Headquarters of the Company (present post)
- -----------------------------------------------------------------------------------------------------
Mamoru Ishida June 1998 Senior Vice President and Senior Executive
Manager of Business Communications
Headquarters I and Senior Executive Manager
of Sales and Marketing Department II of
Business Communications Headquarters I of the
Company
January 1999 Senior Vice President and Executive Manager of
Solution Business Division of NTT-Long Distance
and Global Provisional Headquarters of the
Company (present post)
- -----------------------------------------------------------------------------------------------------
Nobuharu Ono June 1998 Senior Vice President and Executive Manager of
Multimedia Business Department of the
Company
January 1999 Senior Vice President and Deputy Senior
Executive Manager of Business Communications
Headquarters of NTT-East Provisional
Headquarters of the Company (present post)
- -----------------------------------------------------------------------------------------------------
Susumu Fukuzawa June 1998 Senior Vice President and Executive Manager of
Accounts and Finance Department of the
Company
January 1999 Senior Vice President and Executive Manager of
Accounts and Finance Department of NTT-West
Provisional Headquarters of the Company
(present post)
- -----------------------------------------------------------------------------------------------------
Ryuzo Sejima June 1986 Senior Vice President and Counsellor of the
Company (present post)
- -----------------------------------------------------------------------------------------------------
Masayuki Kojima June 1995 Full-time Corporate Auditor of the Company
(present post)
- -----------------------------------------------------------------------------------------------------
Toshio Hayata June 1998 Full-time Corporate Auditor of the Company
(present post)
- -----------------------------------------------------------------------------------------------------
</TABLE>
. Eighth Item Revisions to the Compensation of Directors
The aggregate remuneration for all the Directors and Corporate Auditors of the
Company was decided and approved at the 6th Ordinary General Meeting of
Shareholders held on June 27, 1991 to be not more than (Yen)85 million per
month, with the corresponding figure for Corporate Auditors being (Yen)8
million. This sum has not been broached in the intervening period. However, in
consideration of the planned decrease in the number of Directors and other
reasons, the Board seeks the approval of shareholders to revise the maximum
aggregate monthly remuneration for Directors to (Yen)39 million. Please note
that the maximum aggregate monthly remuneration for Corporate Auditors will
remain at the current value of (Yen)8 million.
50
<PAGE>
The current maximum numbers of Directors and Corporate Auditors are 36 and
4, respectively. Should Item 4 be approved, the maximum number of Directors will
decrease to 15, while the maximum number of Corporate Auditors will remain
unchanged at 4.
51
<PAGE>
The Location
of the
14th Ordinary General Meeting of Shareholders
International Convention Center PAMIR
New Takanawa Prince Hotel
13-1, Takanawa 3-chome, Minato-ku, Tokyo
____________________________________________________
[MAP APPEARS HERE]
8-minute walk from Shinagawa Station (JR and
Keihin Express Lines)
6-minute walk from Takanawadai Station (Toei
Asakusa Subway Line)
Note: As traffic will be heavy in this area
on the day of the meeting, it is
recommended you do not come by car.
_____________________________________________________
