Act on Nippon Telegraph and Telephone Corporation, etc.


Published: 2005

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Act on Nippon Telegraph and Telephone Corporation,

etc.

(Act No. 85 of December 25, 1984)

(Purpose)

Article 1 (1) Nippon Telegraph and Telephone Corporation (hereinafter referred

to as "the Company") shall be a company limited (Kabushiki Kaisha) whose

purpose is to own all the shares issued by East Nippon Telegraph and

Telephone Corporation and West Nippon Telegraph and Telephone Corporation,

to ensure appropriate and stable provision of telecommunications services

supplied by the latter two companies, as well as to engage in research activities

of telecommunications technologies that would form the basis of

telecommunications.

(2) East Nippon Telegraph and Telephone Corporation and West Nippon

Telegraph and Telephone Corporation (hereinafter referred to as "the Regional

Companies") shall be companies whose purpose is to manage regional

telecommunications businesses.

(Business Activities)

Article 2 (1) The Company shall, in order to attain its corporate purposes,

operate the following business activities

(i) To accept and hold the shares issued by the Regional Companies and to

exercise the rights of shareholder of the shares;

(ii) To offer necessary advice and assistance in the form of mediation to the

Regional Companies, etc.

(iii) To conduct research activities related to telecommunications technologies

that would form the basis of telecommunications;

(iv) Incidental business activities related to the preceding three items.

(2) The Company may engage in the business activities necessary for execution of

its purpose, subject to the authorization of the Minister of Internal Affairs and

Communications (hereinafter referred to as "the Minister"), in addition to

operating preceding business activities.

(3) The Regional Companies shall, in order to attain their purposes, operate the

following business activities:

(i) Regional telecommunications business (meaning telecommunications

business activities operated by establishing telecommunications facilities of

the Regional Companies which can intermediate intraprefectual

telecommunications without facilities of other telecommunications business

carriers; the same shall apply hereinafter) to be respectively provided in the

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following prefectural areas (areas to be specified under the applicable

ordinance of the Ministry of Internal Affairs and Communications (MIC)

(hereinafter referred to as "the applicable Ordinance of MIC"), when deemed

it necessary in view of the usage of telecommunications services; the same

shall apply hereinafter).

(a) As for East Nippon Telegraph and Telephone Corporation, Hokkaido

Prefecture, Aomori Prefecture, Iwate Prefecture, Miyagi Prefecture, Akita

Prefecture, Yamagata Prefecture, Fukushima Prefecture, Ibaraki

Prefecture, Tochigi Prefecture, Gunma Prefecture, Saitama Prefecture,

Chiba Prefecture, Tokyo Metropolis, Kanagawa Prefecture, Niigata

Prefecture, Yamanashi Prefecture and Nagano Prefecture;

(b) As for West Nippon Telegraph and Telephone Corporation, Kyoto

Prefecture, Osaka Prefecture and other prefectures than those stipulated

in a).

(ii) Incident business activities related to the preceding item.

(4) The Regional Companies may, subject to the authorization of the Minister,

operate the following business activities

(i) In addition to those listed in the preceding paragraph, those business

activities necessary for the attainment of corporate purposes of the Regional

Companies;

(ii) Regional telecommunications business activities to be operated respectively

in prefectural areas other than those where they are stipulated to operate

regional telecommunications business activities based on item (i) of the

preceding paragraph.

(5) In addition to the business activities under the provisions of the preceding

two paragraphs, the Regional Companies may, subject to the authorization of

the Minister, operate the telecommunications business activities and other

business activities by using facilities or technologies which are maintained in

order to operate the business activities under the provisions of paragraph (3),

or their staff. In this case, the Minister shall grant authorization if it is

deemed that the business activities operated by the Regional Companies do not

interfere smooth implementation of the business activities under the provisions

of the same paragraph and securement of fair competition of the

telecommunications business.

(Obligations)

Article 3 The Company and the Regional Companies shall, in operating their

own businesses, give due consideration to the maintenance of its proper and

efficient management and shall contribute to the securement of appropriate,

fair and stable provision of nationwide telephone services which are

indispensable to the lives of people; additionally, the Company and the

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Regional Companies shall endeavor, in view of the importance of the role which

telecommunications will play for the social and economical progress in the

future, to contribute to the innovative advancement and development of

telecommunications in Japan through the promotion of research and

development concerning telecommunications technology and through

dissemination of the results thereof, and thereby promote the public welfare.

(Shares)

Article 4 (1) The Government shall always hold one-third or more of the total

number of the issued shares of the Company.

(2) Where the Company intends to invite subscribers to new shares to be issued

(hereinafter referred to as "invitation for subscription") or intends to deliver

shares (except the Company's own shares possessed by the Company

(hereinafter referred to as "own shares")) upon exchange of shares, the

Company shall obtain authorization of the Minister. The same shall apply to

cases where the Company intends to invite subscribers to new bonds with a

right to subscribe for new shares stipulated in Article 238 paragraph (1) of the

Companies Act (Act No. 86 of 2005) (limited to rights attached to bonds with a

right to subscribe for new shares. Referred to as "invitation of a right to

subscribe for new shares" in paragraph (2) of the following article and Article

23 item (iii)) or intends to deliver rights attached to bonds with a right to

subscribe for new shares (except the Company's own bonds with a right to

subscribe for new shares possessed by the Company (referred to as "own bonds

with a right to subscribe for new shares" in Article 23 item (iii))) upon

exchange of shares

Article 5 (1) The Company shall hold all the issued shares of each of the

Regional Companies.

(2) The Regional Companies shall obtain authorization of the Minister when

intending to issue new shares. The same shall apply to cases when intending to

invite subscribers to rights to subscribe for new shares.

(Treatment of Shares Acquired by Foreign Nationals, etc.)

Article 6 (1) When the Company has received a request to enter the name and

address in its register of shareholders from those persons set forth in any of

the following items who have acquired its shares, the Company shall not do so

if the aggregate of the ratios of the voting rights directly held by the persons

set forth in items (i) through (iii) and the ratio prescribed in the provisions of

the applicable Ordinance of MIC as the ratio of voting rights indirectly held by

such persons through controlling the persons set forth in item (iv) (such an

aggregate will be referred to as the "ratio of voting rights of foreign nationals,

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etc.") in this article reaches or exceed one-third upon acceptance of the request.

(i) Any person who does not have Japanese nationality;

(ii) Any foreign government or its representative;

(iii) Any foreign juridical person or entity;

(iv) Any juridical person or entity whose voting rights directly held by the

persons set forth under the preceding three items exceed the ratio prescribed

in the applicable Ordinance of MIC

(2) In cases where it makes the "ratio of voting rights of foreign nationals, etc."

reach or exceed one-third to register or record all shares on the Company's

shareholders list pursuant to the provisions of Article 152 paragraph (1) or

paragraph (8) of the Act on Transfer of Bonds, Shares, etc. (Act No. 75 of 2001),

by those persons listed in any of the items in the preceding paragraph who are

the shareholders pertaining to the notice as provided for under Article 151

paragraph (1) or paragraph (8) of the same act, the Company shall not register

on its substantial shareholders list, notwithstanding the provisions of the same

paragraph, those shares except such shares which may be registered in the

manner stipulated in the applicable Ordinance of MIC by which only part of

such shares are entered on its substantial shareholders list so that the "ratio of

voting rights of foreign nationals, etc." does not reach or exceed one-third.

(3) In the case, other than in those cases provided in the preceding two

paragraphs, where the total number of the Company's outstanding shares

changes, the Company shall take necessary measures to ensure that the "ratio

of voting rights of foreign nationals, etc." does not reach or exceed one-third.

(4) The Company shall make public notice on the "ratio of voting rights of foreign

nationals, etc." before the number of days as specified in the applicable

Ordinance of MIC from the standard day specified in Article 124 paragraph (1)

of the Companies Act in the manner stipulated in the applicable Ordinance of

MIC.

(Disposal of Shares Owned by the Government)

Article 7 Disposal of shares owned by the Government shall be within the

limitation on the number of shares decided by the Diet in the relevant annual

budget.

(Restriction on Use of Trade Names)

Article 8 No person other than the Company or the Regional Companies shall

use the trade names, "Nippon Telegraph and Telephone Corporation," "East

Nippon Telegraph and Telephone Corporation" or "West Nippon Telegraph and

Telephone Corporation" in the trade name.

(General Mortgage)

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Article 9 (1) A bond holder of the Company shall, with respect to the property of

the Company, have the right to have his or her claim satisfied, in preference to

other creditors. A bond holder of each Regional Company shall, with respect to

the property of the Regional Company, have the right to have his or her claim

satisfied, in preference to other creditors.

(2) The order of the statutory lien referred to in the preceding paragraph shall be

next to the general statutory lien under the provisions of the Civil Code (Act

No. 89 of 1896).

(Directors and Auditors)

Article 10 (1) Any person who does not have Japanese nationality shall not

become a director or auditor of the Company or the Regional Companies.

(2) Any resolution for the appointment or dismissal of directors or auditors of the

Company shall not take effect unless authorized by the Minister.

(Change of Articles of Incorporation, etc.)

Article 11 (1) Any resolution for change in the articles of incorporation, or for

merger, partition or dissolution of the Company and the Regional Companies

or for disposal of profits of the Company shall not take effect unless authorized

by the Minister.

(2) When the Minister has granted the resolution for merger pertaining to the

Regional Company(ies) under the preceding paragraph or the resolution for

division pertaining to the Regional Company(ies) (limited to the resolution of

the division of the entire business of the telecommunications business), such

authorization shall be deemed as the notification under the provisions of

Article 17 paragraph (2) of the Telecommunications Business Act (Act No. 86 of

1984).

(Business Plan)

Article 12 The Company and the Regional Companies shall formulate its

business plan for each business year and shall obtain authorization of the

Minister before the commencement of that business year. The same shall apply

when such a business plan is to be amended.

(Financial Statements)

Article 13 The Company and the Regional Companies shall submit to the

Minister, within three months after the end of each business year, its balance

sheet, profit and loss statement and a business report for that business year.

(Transfer, etc. of Important Facilities)

Article 14 The Regional Companies shall obtain authorization of the Minister in

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order to transfer or mortgage their telecommunications trunk lines or other

similarly important telecommunications facilities.

(Order, etc. for Audit)

Article 15 (1) The Minister may, if the Minister deems it necessary for enforcing

this Act, appoint auditors of the Company and the Regional Companies and

have them audit specific items and report the Minister the audit results.

(2) Auditors of the Company and the Regional Companies may, if they deem it

necessary, submit to the Minister their opinions based upon the audit results.

(Supervision)

Article 16 (1) The Company and the Regional Companies shall be subject to

supervision of the Minister in accordance with the provisions of this Act.

(2) The Minister may, if the Minister deems it necessary for enforcing this Act,

issue to the Company and the Regional Companies orders necessary for the

supervision with respect to its business activities.

(Report)

Article 17 The Minister may, to the extent necessary for enforcing this Act,

require the Company and the Regional Companies to make reports relating to

its business activities.

(Consultation with the Minister of Finance)

Article 18 The Minister shall consult with the Minister of Finance before:

(i) The Minister grants the Company authorization under Article 4 paragraph

(2), Article 11 paragraph (1) (with respect to authorization of resolutions for

changing the articles of incorporation, this paragraph shall apply only to

those relating to resolutions for change in the total number of shares that

can be issued by the Company), or Article 12;

(ii) The Minister grants the Regional Companies authorization under Article 11

paragraph (1) (with respect to authorization, this paragraph shall apply only

to those relating to resolutions for merger, division and dissolution), Article

12 or Article 14.

(Replacement of Terms When Being Corporation with Audit Committee)

Article 18-2 In cases of a corporation with audit committee, with respect to the

application of the provisions of this Act listed in the first column, the terms

among the provisions listed in the column shall be the terms listed in the third

column.

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Article 10, Article 19, Article auditor executive officer

23 and Article 15 of the

Supplementary Provisions

Article 15 auditor audit committee

member

Article 26 director executive officer

(Penal Provisions)

Article 19 (1) When a director, audit counselor (where the counselor is a juridical

person, an employee thereof who executes the audit duty. Hereinafter the same

shall apply in this article.), auditor or employee of the Company and the

Regional Companies has received, demanded or promised to receive a bribe in

connection with the person's job, this person shall be punishable and liable to

penal servitude for a term not exceeding three years. Anyone who has

committed an improper act or has omitted a proper act thereby shall be guilty

of an offense and liable to penal servitude for a term not exceeding seven years.

(2) When a person who intends to become a director, audit counselor, auditor or

employee of the Company or one of the Regional Companies has received,

demanded or promised to receive a bribe in response to a solicitation in

connection with the functions such person will assume after such person's

appointment, such person shall, where such person becomes such director,

audit counselor, auditor or employee, be punishable and liable to penal

servitude for a term not exceeding two years.

(3) When a person who was a director, audit counselor, auditor or employee of the

Company or one of the Regional Companies has received, demanded or

promised to receive a bribe in response to a solicitation in connection with such

persons having committed an improper act or having omitted a proper act in

the course of performing such person's functions while such person was in

office, such person shall be guilty of an offense and liable to penal servitude for

a term not exceeding two years.

Article 20 In the case specified under each paragraph of the preceding article,

the bribe which the offender has received shall be confiscated. Where it is

unable to confiscate the entire bribe or portion thereof, the amount of money

equivalent thereto shall be sought and collected.

Article 21 (1) Any person who has given, offered or promised to give a bribe as

stipulated in each paragraph of Article 19 shall be punishable and liable to

penal servitude for a term not exceeding three years or a fine not exceeding

two million and five hundred thousand yen.

(2) When a person who has committed any offense stipulated in the preceding

paragraph surrenders himself or herself to authorities, the punishment thereof

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may be reduced or remitted.

Article 22 (1) The offenses as specified in Article 19 of this Act shall comply with

the provisions of Article 4 of the Penal Code (Act No. 45 of 1907).

(2) The offenses as specified in paragraph (1) of the preceding article shall

comply with the provisions of Article 2 of the Penal Code.

Article 23 Where any of the violations enumerated in the following items has

occurred, a director, audit counselor (where the counselor is a juridical person,

an employee thereof who executes the audit duty. Hereinafter the same shall

apply in this article.) or auditor of the Company or the Regional Companies

who has committed the violation shall be punishable and liable to a fine not

exceeding one million yen:

(i) When the Company or a Regional Company engaged in business activities

without obtaining authorization specified in Article 2 paragraph (2), (4) or

(5);

(ii) When the Company or a Regional Company performed business activities

other than those stipulated in Article 2;

(iii) When the Company or a Regional Company has invited subscribers to new

shares or has delivered shares (except own shares) upon exchange of shares,

or has invited subscribers to rights to subscribe for new shares or has

delivered bonds with a right to subscribe for new shares (except bonds with a

right to subscribe for new shares) upon exchange of shares in violation of the

provisions of Article 4 paragraph (2) or Article 5 paragraph (2);

(iv) When the Company or a Regional Company disposed of the shares of the

Regional Companies in violation of the provisions of Article 5 paragraph (1);

(v) When the Company or a Regional Company has failed to submit application

for authorization prior to the start of a business year or prior to the

implementation of a business plan pertaining to change in violation of the

provisions of Article 12;

(vi) When the Company or a Regional Company, in violation of the provisions

of Article 13, has failed to submit their balance sheet, profit and loss

statements, account or business report, or has submitted such documents

containing a false statement;

(vii) When the Company or a Regional Company, in violation of the provisions

of Article 14, has alienated or collateralized their own equipment and/or

facilities;

(viii) When the Company or a Regional Company has contravened any order

issued under the provisions of Article 16 paragraph (2);

(ix) When the Company has failed to make the report under the provisions of

Article 17 or has made any false report.

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Article 24 In cases where any violation to the provisions of Article 6 paragraph

(1) or paragraph (2) has occurred, the employee concerned of the Company and

the Regional Companies or transfer agent (where the transfer agent is a

juridical person, its employee) who has committed the violation shall be

punishable and liable to a fine not exceeding five hundred thousand yen.

Article 25 (1) Any person who has violated the provisions of Article 8 shall be

punishable and liable to a fine not exceeding two hundred thousand yen.

(2) When a representative of a juridical person, or proxy, employee or any other

person in the employment of a juridical or natural person has committed the

violation referred to in the preceding paragraph in connection with the

business activities of the juridical or natural person, the juridical or natural

person shall, in addition to the punishment of the offender, be punishable and

liable to the fine stipulated in the same paragraph.

Article 26 A director of the Company who neglects to give public notice or gives

untrue public notice in violation of the provisions of Article 6 paragraph (4)

shall be liable to a non-penal fine not exceeding one million yen.

Supplementary Provisions

(Effective Date)

Article 1 This Act shall come into force as from the day of promulgation. The

provisions of Articles 11 and 12 of the Supplementary Provisions shall,

however, come into force as from April l, 1985.

(Review of the Status of the Company)

Article 2 The Government shall, within five years after the date of the

incorporation of the Company, review the status of the Company, taking into

account the situation under which this Act is enforced and changes in

circumstances after the effective date of this Act, etc., and shall take necessary

measures based upon the conclusion of the review.

(Incorporation of the Company)

Article 3 (1) The Minister of Posts and Telecommunications shall appoint

members of an organizing committee and shall have them function as

promoters of the Company.

(2) The organizing committee shall prepare the articles of incorporation and shall

obtain authorization of the Minister of Posts and Telecommunications.

(3) The Minister of Posts and Telecommunications shall consult with the

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Minister of Finance before granting authorization under the preceding

paragraph.

(4) The matters specified in each item of Article 168-2 of the Commercial Code

with respect to shares to be issued at the time of incorporation of the Company

shall be stipulated in the articles of incorporation of the Company.

(5) With respect to shares to be issued at the time of incorporation of the

Company, more than one half of the total amount of the issue-prices of the

shares may not, notwithstanding the provisions of operative part of Article

284-2 paragraph (2) of the Commercial Code, be capitalized. In this case, "this

Code" in paragraph (1) of the same article shall be read as "this Code or the Act

on Nippon Telegraph and Telephone Corporation, etc.".

(6) The Nippon Telegraph and Telephone Public Corporation (hereinafter

referred to as "the Public Corporation") shall accept all shares to be issued at

the time of incorporation of the Company, and the organizing committee shall

allocate all the shares to the Public Corporation.

(7) The Government shall exercise the rights, relating to the incorporation of the

Company, as the subscriber to the shares allocated under the provisions of the

preceding paragraph.

(8) The Public Corporation shall contribute all the assets to the Company at the

time of incorporation of the Company. In this case, the provisions of Article 68

of the Nippon Telegraph and Telephone Public Corporation Act (Act No. 250 of

1952) shall not apply.

(9) With respect to the application of the provisions of Article 180 paragraph (1)

of the Commercial Code in connection with the incorporation of the Company,

"performance of contribution-in-kind under the provisions of Article 177" in the

same paragraph shall be read as "allocation of shares under the provisions of

Article 3 paragraph (6) of the Supplementary Provisions of the Act on Nippon

Telegraph and Telephone Corporation, etc.".

(10) The performance pertaining to the contribution-in-kind by the Public

Corporation under the provisions of paragraph (8) shall be made at the

effective time of the provisions of Article 11 of the Supplementary Provisions,

and the Company shall be incorporated at such time notwithstanding the

provisions of Article 57 of the Commercial Code.

(11) Notwithstanding the provisions of Article 188 paragraph (1) of the

Commercial Code, the Company shall, upon incorporation, effect the

registration of incorporation without delay.

(12) Shares of the Company acquired by the Public Corporation as a result of the

contribution-in-kind shall be transferred gratis to the Government at the time

of incorporation of the Company.

(13) The provisions of Article 167, Article 168 paragraph (2) and Article 181 of

the Commercial Code shall not apply to the incorporation of the Company.

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(Dissolution, etc. of the Public Corporation)

Article 4 (1) The Public Corporation shall be dissolved at the time of

incorporation of the Company, and all rights and liabilities of the Public

Corporation shall, at such time, be succeeded to by the Company.

(2) With respect to the account settlement and general inventory, balance sheet

and profit and loss statement of the Public Corporation for the business year

commencing on April 1, 1984, precedents shall continue to apply, except parts

pertaining to Article 10 paragraph (2) item (ii) and Article 58 paragraph (1)

(limited to part related to the audit report to be submitted by the auditor) of

the Nippon Telegraph and Telephone Public Corporation Act.

(3) The registration of dissolution of the Public Corporation under the provisions

of paragraph (1) above shall be stipulated in the applicable cabinet order.

(Transitional Measures for Succession of Rights and Liabilities)

Article 5 (1) Guarantee contracts which the government has made under the Act

on Special Measures Pertaining to the Acceptance of Foreign Capital from the

International Bank for Reconstruction and Development, etc. (Act No. 51 of

1953) with respect to the Public Corporation's obligations concerning its

telegraph and telephone bonds to be succeeded to by the Company under the

provisions of paragraph (1) of the preceding article shall continue to be

effective, even after the succession, on the precedent terms and conditions with

respect to the obligations relating to said bonds. Precedent shall continue to

apply with respect to taxes or other imposts on interests of telegraph and

telephone bonds related to said guarantee contracts or on gains from

redemption of these bonds.

(2) With respect to the obligations, which are to be succeeded to by the Company

under paragraph (1) of the preceding article, of the telegraph and telephone

bonds subscribed by or borrowings loaned from the Fund of Trust Fund Bureau,

the Company shall be deemed as a juridical person stipulated in item (iii) or iv)

of Article 7 paragraph (1) of the Fund of Trust Fund Bureau Act (Act No. 100 of

1941) in applying the same paragraph.

(3) In cases where the telegraph and telephone bonds pertaining to debts, which

are to be succeeded to by the Company under the provisions of paragraph (1) of

the preceding article, pertain to subscription by the reserve fund of the Postal

Life Insurance Account and the Postal Annuity Special Account stipulated in

Article 1 of the Postal Life Insurance Account and the Postal Annuity Special

Account Act (Act No. 12 of 1944) prior to its amendment under the provisions

of Article 10 of the Supplementary Provisions of the Act Amending Part of the

Postal Life Insurance Act (Act No. 50 of 1990), with respect to the application

of the provisions of Article 3 paragraph (1) of the Act on the Operation of the

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Fund of Postal Life Insurance (Act No. 210 of 1952) to said telegraph and

telephone bonds, the Company shall be deemed to be a juridical person

stipulated in item (iv) of the same paragraph.

(Transitional Measures Concerning Employees)

Article 6 (1) Those who are actually the employees of the Public Corporation at

the time of incorporation of the Company shall become the employees of the

Company upon incorporation of the Company.

(2) No retirement allowance prescribed in the National Government Employees,

etc. Retirement Allowance Act (Act No. 182 of 1953) shall be payable to the

employees of the Public Corporation who become those of the Company in

accordance with the provisions of the preceding paragraph.

(3) When the Company intends to pay a retirement allowance to the employees of

the Company to whom the provisions of the preceding paragraph are applied,

the continued period during which they served the Public Corporation shall be

regarded and treated as their service period with the Company.

Article 7 Deleted.

Article 8 Deleted.

(Transitional Measures Concerning Application of Tax-related Acts in

Connection with Incorporation of the Company)

Article 9 (1) No real estate acquisition taxes, special land holding taxes to be

imposed on acquisition of land, or automobile acquisition taxes shall be

imposed on the Company's acquisition of real estate and/or automobiles related

to the contribution-in-kind by the Public Corporation pursuant to the

provisions of Article 3 paragraph (8) of the Supplemental Provisions.

(2) With respect to the land which is acquired and continuously held by the

Company and is related to the contribution-in-kind by the Public Corporation

under the provisions of Article 3 paragraph (8) of the Supplemental Provisions,

no special land holding taxes shall be imposed on the land which was acquired

by the Public Corporation prior to January 1, 1969 (with respect to the land

located in Okinawa Prefecture, prior to April 1, 1972).

(3) With respect to the land which is acquired and continuously held by the

Company and is related to the contribution-in-kind by the Public Corporation

under the provisions of Article 3 paragraph (8) of the Supplementary

Provisions (limited to the land which the Public Corporation acquired on April

1, 1982 or later), no special land holding taxes shall be imposed on the land if

more than ten years have elapsed as of January 1 of the year during which the

Company is required to pay the tax by self-assessment under the provisions of

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Article 599 paragraph (1) of the Local Tax Act (Act No. 226 of 1950) after the

Public Corporation acquired said land.

(4) With respect to the land which is acquired and continuously held by the

Company as a result of the contribution-in-kind by the Public Corporation

under the provisions of Article 3 paragraph (8) of the Supplementary

Provisions (limited to the land which the Public Corporation acquired during

the period from January 1, 1969 (with respect to the land located in Okinawa

Prefecture, from April 1, 1972) to March 31, 1982), no special land holding

taxes shall be imposed on the land other than those which are located in

"urbanized areas" as stipulated in Article 7 paragraph (1) of the City Planning

Act (Act No. 100 of 1968) as of January 1 of the year during which the

Company is required to pay the tax by self-assessment under the provisions of

Article 599 paragraph (1) of the Local Taxes Act if more than ten years have

elapsed since the Public Corporation acquired said land.

(5) The performance related to the contribution-in-kind of share certificates

(including the equity stipulated in the provisions of Article 4 paragraph (2) of

the Security Transaction Tax Act (Act No. 102 of 1953)) by the Public

Corporation under the provisions of Article 3 paragraph (8) of the

Supplementary Provisions herein shall not fall under the transfer of securities

stipulated in Article l of the same act.

(6) No registration and license taxes shall be imposed on the registration of

incorporation required to the Company under the provisions of Article 3

paragraph (11) of the Supplementary Provisions and on the registrations

required to the Company pertaining to the transfer of the property related to

the contribution-in-kind by the Public Corporation under the provisions of the

same article paragraph (8).

(7) With respect to the amount of expenses for test and research for the business

year to which the date of incorporation of the Company belongs, the main

provisions of Article 42-4 paragraph (1) of the Special Taxation Measures Act

(Act No. 26 of 1957) shall apply: Provided that "the amount of expenses for test

and research of each business year to be included in the amount of loss in the

calculation of income for the respective business year during the period from

the business year (in this article referred to as "the reference year")

immediately prior to the business year of the juridical person including

January 1, 1967 to the business year immediately prior to said applicable

business year" in the same paragraph shall be read as "the amount of expenses

for test and research for the business year including April 1, 1984 of the

Nippon Telegraph and Telephone Public Corporation", and that "in the case of

exceeding the largest amount of" in the same paragraph shall be read as "in

the case of exceeding the amount of", the provision of the same paragraph shall

not apply.

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(8) In addition to those stipulated in the preceding paragraph, matters necessary

for the application of laws and ordinances relating to the corporate tax to be

imposed on the Company in connection with the incorporation of the Company

shall be stipulated in the applicable cabinet order.

(Delegation to Cabinet Order)

Article 10 In addition to the provisions of Article 3 through the preceding article

of the Supplementary Provisions, matters necessary for the incorporation of

the Company and the dissolution of the Public Corporation shall be stipulated

in the applicable cabinet order.

(Abolition of Nippon Telegraph and Telephone Public Corporation Act, etc.)

Article 11 The following acts shall be abolished:

(i) The Nippon Telegraph and Telephone Public Corporation Act;

(ii) The Act for Enforcement of the Nippon Telegraph and Telephone Public

Corporation Act (Act No. 251 of 1952)

(Transitional Measures Concerning Abolition of Nippon Telegraph and

Telephone Public Corporation Act)

Article 12 (1) Administrative dispositions, procedures and other acts made

before the enforcement of the preceding Article in accordance with the

provisions of the Nippon Telegraph and Telephone Public Corporation Act prior

to its abolition under the provisions of the preceding article (hereinafter

referred to as "the Former Act") shall be deemed administrative dispositions,

procedures and other acts made under the corresponding provisions of this Act.

(2) With respect to the application of the provisions of the Former Act to the

emoluments payable to the employees of the Public Corporation for the period

prior to the enforcement of the preceding article, the precedent shall continue

to apply.

(3) With respect to the disciplinary punishments to the employees to whom the

provisions of Article 6 paragraph (1) of the Supplementary Provisions apply,

which are imposed under the provisions of Article 33 of the Former Act, prior

to the enforcement of the preceding article and disciplinary punishments

related to cases prior to the enforcement of the preceding article, the precedent

shall continue to apply. In this case, if such disciplinary punishments are to be

imposed after the enforcement of the preceding article, a person who

represents the Company or its delegate shall execute such disciplinary

punishments.

(4) With respect to the obligation to indemnify for any matter prior to the

enforcement of the preceding article by an employee in charge of handling cash

as stipulated in Article 69 of the Former Act or a person designated by the

14

President of the Public Corporation as an employee in charge of the control of

goods under the provisions of Article 70 of the Former Act, the precedent shall

continue to apply.

(5) With respect to the audit of the accounting of the Public Corporation by the

Board of Audit under the provisions of Article 73 of the Former Act, the

precedent shall continue to apply.

(6) With respect to the compensation to the employees of the Public Corporation

for casualties on duty or accidents in commutation, which occurred prior to the

date of enforcement of the preceding article, the precedent shall continue to

apply.

(7) With respect to the application of penal provisions to an act committed prior

to the enforcement of the preceding article, the precedent shall continue to

apply

(8) In addition to the provisions of the preceding paragraphs, necessary

transitional measures in connection with the repeal of the Nippon Telegraph

and Telephone Public Corporation Act shall be stipulated in the applicable

cabinet order.

(Exceptions in Method for Calculating Total Number of Outstanding Shares)

Article 13 (1) With respect to the application of the provisions of Article 4

paragraph (1), for the time being, in cases of the invitation for subscription or

the issuance of shares by exercising the right to subscribe for new shares, or

the delivery of shares in exchange for acquisition of shares with rights to

acquire new shares or shares with acquisition clause, each number of increased

shares (referred to as "the number of shares not to be included" in the following

paragraph) due to such cases shall not respectively be included in the total

number of outstanding shares in the provisions of Article 4 paragraph (1).

(2) In cases where split-up or consolidation of shares has occurred after the

increase of shares stipulated in the preceding paragraph, the number

calculated by the number of shares not to be included multiplied by the ratio of

split-up or consolidation (where split-up or consolidation of shares has occurred

more than two steps, the ratio corresponding to multiplied ratio of each step)

shall be the number of shares not to be included in the total number of

outstanding shares in the same paragraph.

(Exceptions for Authorization of Invitation for Subscription, etc. of the

Company)

Article 14 (1) The Company, for the time being, may invite new subscriptions or

deliver shares (except own shares) upon exchange of shares without

authorization under Article 4 paragraph (2) until the increase of the number of

new shares issued through the invitation for subscription or the delivery of

15

shares (except own shares) upon exchange of shares reaches the number

stipulated in the applicable Ordinance of MIC. In this case, the Company shall

report this matter in advance to the Minister in accordance with the applicable

Ordinance of MIC.

(2) When the Minister intends to establish Ordinance of MIC in accordance with

the former part in the preceding paragraph, the Minister shall consult with the

Minister for Finance.

(Penal Provisions)

Article 15 A director or auditor of the Company who failed to report or made

false reports in violation of the provisions of preceding article paragraph (1)

shall be punishable and liable to a fine not exceeding one million yen.

(Delivery of Money, etc.)

Article 16 (1) Nippon Telegraph and Telephone East Corporation (hereinafter in

this article referred to as "NTT East") shall, in order to ensure that the level of

the specified interconnection charges (referring to those pertaining to

telephone services among interconnection charges as stipulated in Article 33

paragraph (2) of the Telecommunications Business Act and which are specified

in the applicable Ordinance of MIC. The same shall apply in this article.) of

NTT East be on the same level of the specified interconnection charges of

Nippon Telegraph and Telephone West Corporation (hereinafter in this article

referred to as "NTT West") during the period specified in the applicable

Ordinance of MIC, deliver the specified amount of money calculated by the

method specified in the applicable Ordinance of MIC as money to cover part of

costs necessary for interconnection services of NTT West.

(2) The specified interconnection charges of NTT East and NTT West during the

period specified in the applicable Ordinance of MIC specified in the preceding

paragraph shall, in accordance with the method specified in the applicable

Ordinance of MIC, calculated based upon the amount of money by adding

together costs pertaining to the specified interconnection charges of NTT East

and NTT West. In this case, said specified interconnection charges shall be

deemed to be in compliance with Article 33 paragraph (4) item (ii).

Supplementary Provisions [Act No. 9 of March 30, 1985] [Extract]

(Effective Date)

Article 1 This Act shall come into force as from April 1, 1985.

Supplementary Provisions [Act No. 50 of June 27, 1989] [Extract]

16

(Effective Date)

Article 1 This Act shall come into force as from April 1, 1990.

Supplementary Provisions [Act No. 65 of June 29, 1990] [Extract]

Article 1 This Act shall come into force as from the effective date of the Act to

Amend the Commercial Code, etc.

(Transitional Measure Concerning Application of the Penal Provisions)

Article 42 With respect to the application of the penal provisions concerning the

offense prior to the effective date of this Act, and the offenses which shall be

dealt with as precedents under the provisions of Article 3 and Article 12 of the

Supplementary Provisions of the Act to Amend the Commercial Code, etc.

(including cases where Article 10 shall, mutatis mutandis, apply to) after the

effective date of this Act shall be dealt with as precedents.

Supplementary Provisions [Act No. 61 of May 27, 1992]

This Act shall come into force within three months from the day of

promulgation as provided for under the applicable cabinet order.

Supplementary Provisions [Act No. 63 of June 14, 1993] [Extract]

Article 1 This Act shall come into force as from the effective date of the Act to

Amend the Commercial Code, etc

Supplementary Provisions [Act No. 98 of June 20, 1997] [Extract]

(Effective Date)

Article 1 This Act shall come into force as from the date not exceeding eighteen

months from its promulgation as provided for under the applicable cabinet

order. However, articles from the following article through Article 7 of the

Supplementary Provisions, and from Article 12 (excluding paragraph (4) and

paragraphs (6) through (8)) through Article 17 of the Supplementary Provisions,

and Article 20 of the Supplementary Provisions shall come into force as from

the day of promulgation.

(Restructuring of Nippon Telegraph and Telephone Corporation)

Article 2 (1) The Government shall incorporate East Nippon Telegraph and

Telephone Corporation and West Nippon Telegraph and Telephone Corporation

(hereinafter referred to as "the Regional Companies"), thereby the business

17

which falls under the regional telecommunications business stipulated in

Article 2 paragraph (3) item (i) of the Act on Nippon Telegraph and Telephone

Corporation, etc. as amended by this Act (hereinafter referred to as "the New

Act") among domestic telecommunications businesses operated by Nippon

Telegraph and Telephone Corporation (hereinafter referred to as "the

Company") shall be succeeded to by the Regional Companies respectively.

(2) The Government shall arrange for the new joint stock company to be

incorporated by the Company by the effective date of this Act to succeed to

other domestic telecommunications businesses operated by the Company

excluding those businesses as succeeded to the Regional Companies under the

provisions of the preceding paragraph.

(3) The Government shall arrange for the Regional Companies or the joint stock

company of the preceding paragraph (hereinafter referred to as "the Long-

Distance Company"), in addition to businesses as provided for under the

preceding two paragraphs, to succeed to other businesses among businesses

operated by the Company, which are deemed to be appropriate to operate

together with the business succeeded to the Regional Companies or the Long-

Distance Company under the provisions of the two preceding paragraphs.

(Basic Policy)

Article 3 (1) The Minister of Posts and Telecommunications shall establish the

basic policy concerning the business succession and succession of rights and

obligations (hereinafter referred to as "the Basic Policy") so that the businesses

operated by the Company can be succeeded to appropriately and smoothly by

the Regional Companies and the Long-Distance Company (hereinafter referred

to as "the Succeeding Companies").

(2) The Basic Policy shall contain the basic matters concerning the following

items:

(i) The date of business succession by the Succeeding Companies.

(ii) Types of and its scope of the telecommunications businesses to be succeeded

to by the Succeeding Companies

(iii) Research activities concerning the telecommunications technologies to be

succeeded to by the Succeeding Companies

(iv) Assets, debts, and other rights and obligations to be succeeded to by the

Succeeding Companies

(v) Necessary matters for ensuring fair competition in the field of

telecommunications upon business succession by the Succeeding Companies

(vi) Other matters concerning appropriate and smooth business succession by

the Succeeding Companies

(Implementation Plan)

18

Article 4 (1) Upon establishment of the Basic Policy, the Minister of Posts and

Telecommunications shall issue instructions to the Company to prepare each

Succeeding Company's implementation plan, in accordance with the applicable

ordinance of the Ministry of Posts and Telecommunications, concerning the

business succession and succession of rights and obligations (hereinafter

referred to as "the Implementation Plan").

(2) The matters as specified under the provisions of each item of paragraph (2) of

the preceding article shall be contained in the Implementation Plan.

(3) The Company, upon receipt of instructions under the provisions of paragraph

(1), shall prepare the Implementation Plan pursuant to the Basic Policy within

a period provided for by the Minister of Posts and Telecommunications and

obtain authorization of the Minister of Posts and Telecommunications.

(4) When the Company intends to change the Implementation Plan, the Company

shall obtain authorization of the Minister of Posts and Telecommunications.

(Incorporation of the Regional Companies)

Article 5 (1) The Minister of Posts and Telecommunications shall appoint

members of an organizing committee for each Regional Company and shall

have them function as promoters of said Regional Company.

(2) The organizing committee shall prepare the articles of incorporation and shall

obtain authorization of the Minister of Posts and Telecommunications.

(3) The matters specified in each item of Article 168-2 of the Commercial Code

(Act No. 48 of 1899) with respect to shares to be issued at the time of

incorporation of the Regional Company(ies) shall be stipulated in the articles of

incorporation of the Regional Company(ies).

(4) With respect to shares to be issued at the time of incorporation of the

Regional Companies, the amount exceeding one-half of the total amount of the

issue-prices of the shares may not, notwithstanding the provisions of the

operative part of Article 284-2 paragraph (2) of the Commercial Code, be

capitalized. In this case, "this Code" in paragraph (1) of the same article shall

be read as "this Code or the Act to Amend the Nippon Telegraph and Telephone

Corporation Act (Act No. 98 of 1997)".

(5) The Company shall accept all shares to be issued at the time of incorporation

of the Regional Companies, and the organizing committees shall allocate all

the shares to the Company.

(6) The Company shall contribute its assets to the Regional Companies at the

time of incorporation of the Regional Companies pursuant to the provisions of

the Implementation Plan as authorized under the provisions of preceding

article paragraph (3) of the preceding article (in cases where authorization

under the provisions of the same article paragraph (4), the revised

Implementation Plan (hereinafter referred to as "the Succeeding Plan")). In

19

this case, the provisions of Article 13 of the Nippon Telegraph and Telephone

Company Act (hereinafter referred to as "the Former Act"), prior to the

amendment by this amended Act, shall not apply.

(7) With respect to the application of the provisions of Article 180 paragraph (1)

of the Commercial Code pertaining to the incorporation of the Regional

Companies, "payment and contribution-in-kind under the provisions of Article

177" in the same paragraph shall be read as "allocation of shares under the

provisions of Article 5 paragraph (5) of the Supplementary Provisions of the

Act to Amend the Nippon Telegraph and Telephone Corporation Act (Act No. 98

of 1997)".

(8) No resolution of amendments to the articles of incorporation at the inaugural

general meeting(s) of the Regional Company(ies) shall come into force without

authorization of the Minister of Posts and Telecommunications.

(9) The performance with respect to the contribution-in-kind by the Company

under the provisions of paragraph (6) shall be made at the effective time of this

Act and the Regional Companies shall be incorporated at such time

notwithstanding the provisions of Article 57 of the Commercial Code.

(10) The transfer by the Company under the provisions of paragraph (6) shall be

performed at the time of incorporation of the Regional Companies.

(11) Notwithstanding the provisions of Article 188 paragraph (1) of the

Commercial Code, the Regional Companies shall, upon its incorporation,

complete the registration of its incorporation without delay.

(12) The provisions of Article 167, Article 168 paragraph (2) and Article 181 of

the Commercial Code shall not apply to the incorporation of the Regional

Companies.

(Incorporation of the Long-Distance Company, etc.)

Article 6 (1) The Company shall accept the following shares issued by the Long-

Distance Company:

(i) All shares issued by the Long-Distance Company at the time of its

incorporation

(ii) All shares issued by the Long-Distance Company in accordance with the

Succeeding Plan

(2) The Company shall contribute or transfer its assets to the Long-Distance

Company in accordance with the Succeeding Plan. In this case, the provisions

of the Article 13 of the Former Act shall not apply.

(3) The performance pertaining to the contribution-in-kind and transfer by the

Company under the provisions of the preceding paragraph (limited to

acceptance of the shares under the provisions of paragraph (1) item (ii)) shall

be made at the effective time of this Act.

(4) With respect to the shares under the provisions of paragraph (1), the

20

provisions of paragraph (4) of the preceding article shall apply mutatis

mutandis.

(5) In the case of issuance of the shares at the time of incorporation of the Long-

Distance Company, the provisions of Article 173 of the Commercial Code shall

not apply, and in the case of issuance of the shares pursuant to the provisions

of paragraph (1) item (ii) and the provisions of Article 246 paragraph (2) and

Article 280-8 of the same act shall not apply.

(Succession of the Business, etc.)

Article 7 The Regional Companies, at the time of incorporation, and the Long-

Distance Company, at the effective time of this Act, shall succeed to the

businesses, and the rights and obligations related to said businesses under the

provisions of each Succeeding Plan from the Company in accordance with the

Succeeding Plan.

Article 8 (1) With regard to the businesses which have been operated by the

Company at the effective time of this Act, with authorization under the

provisions of Article 1 paragraph (2) of the Former Act, and which are

stipulated in the provisions of the Succeeding Plan as the businesses to be

succeeded to by the Regional Companies, they shall be regarded as the

businesses authorized under the provisions of Article 2 paragraph (4) item (i)

of the New Act at the time of incorporation of the Regional Companies.

(2) The Company may, for the time being, continue to operate the businesses

which have been operated by the Company at the effective time of this Act, and

which are excluded from the businesses to be succeeded to by the Succeeding

Companies under the provisions of the Succeeding Plan (except the businesses

under the provisions of Article 2 paragraph (1) of the New Act).

(Joint and Several Obligations Related to Obligations Pertaining to Corporate

Debentures)

Article 9 (1) With respect to obligations pertaining to the outstanding corporate

debentures at the effective time of this Act, the Company and the Succeeding

Companies shall be jointly and severally obligated for the payment.

(2) In the case of the preceding paragraph, holders of corporate debentures of the

Company shall, with respect to the assets of the Company and the Succeeding

Companies, have the preemptive rights to have their claims satisfied, in

preference to other creditors.

(3) The order of the preemptive rights in the preceding paragraph shall be next

to the general preemptive rights under the provisions of the Civil Code (Act No.

89 of 1896).

21

(Transitional Measures Concerning Business Plans of the Regional Companies)

Article 10 With respect to the business plan of the business year to which the

date of incorporation of the Regional Companies belongs, "immediately prior to

every business year" in Article 12 of the New Act shall be read as "after

incorporation of the Regional Companies without delay".

(Subsidy)

Article 11 East Nippon Telegraph and Telephone Corporation (hereinafter

referred to as "NTT East") may, in cases where financial stabilization of West

Nippon Telegraph and Telephone Corporation (hereinafter referred to as "NTT

West") is required, subsidize a sum of money to NTT West, within the amount

stipulated under the applicable Ordinance of MIC, necessary for business

operations of NTT West as a disposition of NTT East's profits pertaining to

each business year which ends within three years after the incorporation of

NTT East.

(Transitional Measures Concerning Application of Tax-related Laws and

Regulations)

Article 12 (1) No real estate acquisition taxes or special land holding taxes to be

imposed on acquisition of land, or automobile acquisition taxes shall be

imposed on the Succeeding Companies' acquisition of real estates or

automobiles pertaining to the contribution-in-kind or transfer by the Company

pursuant to the provisions of Article 5 paragraph (6) or Article 6 paragraph (2)

of the Supplementary Provisions.

(2) With respect to the land which is acquired and continuously held by the

Succeeding Companies pertaining to the contribution-in-kind or transfer by the

Company under the provisions of Article 5 paragraph (6) or Article 6 paragraph

(2) of the Supplementary Provisions, no special land holding taxes shall be

imposed on the land which was acquired by the Company under the provisions

of Article 3 paragraph (8) of the Supplementary Provisions of the Former Act

(limited to the land acquired by Nippon Telegraph and Telephone Public

Corporation before dissolution in accordance with the provisions of Article 4

paragraph (1) of the Supplementary Provisions of the Former Act prior to

January 1, 1969 (with respect to the land located in Okinawa Prefecture,

limited to the land acquired prior to April 1, 1972)).

(3) With respect to the land which is acquired and continuously held by the

Succeeding Companies pertaining to the contribution-in-kind or transfer by the

Company under the provisions of Article 5 paragraph (6) or Article 6 paragraph

(2) of the Supplementary Provisions, no special land holding taxes shall be

imposed on the land if more than ten years have elapsed as of January 1 of the

year during which the Succeeding Companies are required to pay the tax by

22

self-assessment under the provisions of Article 599 paragraph (1) of the Local

Taxation Act (Act No. 226 of 1950) after the Company acquired said land.

(4) With respect to the depreciation assets acquired by the Succeeding Companies

pertaining to the contribution-in-kind or transfer by the Company under the

provisions of Article 5 paragraph (6) or Article 6 paragraph (2) of the

Supplementary Provisions, the basis of assessment of real estate tax to which

the special tax rate applies and still within an effective period on the preceding

day of the effective date of this Act (hereinafter referred to as "the effective

date") under the provisions of: Article 15 paragraph (27) though paragraph (30)

of the Supplementary Provisions of the Local Taxation Act; Article 6 paragraph

(15) through paragraph (17) of the Supplementary Provisions of the Act to

Amend the Local Taxation Act, etc. (Act No. 12 of 1996); Article 15 paragraph

(30) of the Supplementary Provisions of the Local Taxation Act before the

amendment pursuant to the provisions of Article 1 of the same Act which shall

be read as still effective under the provisions of paragraph (18) of the same

article, or the provisions of Article 6 paragraph (11) or paragraph (12) of the

Act to Amend the Local Taxation Act, etc. (Act No. 28 as of 1998), shall follow

the precedent during the period to which the special tax rate applies.

(5) In the case of contribution-in-kind or transfer of the property from the

Company to the Regional Companies under the provisions of Article 5

paragraph (6) of the Supplementary Provisions, and the case of contribution-in-

kind or transfer of the property from the Company to the Long-Distance

Company under the provisions of Article 6 paragraph (2) of the Supplementary

Provisions, no registration license taxes shall be imposed on the registration of

said property in accordance with the applicable cabinet order.

(6) No registration license taxes shall be imposed on the registration of

incorporation as required for the Regional Companies under the provisions of

Article 5 paragraph (11) of the Supplementary Provisions.

(7) Within the amount of money subsidized to NTT West (hereinafter referred to

as "the amount of subsidization") by NTT East under the provisions of the

preceding article as a disposition of the settled profits related to each business

year which ends within three years after the incorporation of NTT East

(limited to only the business year of which ending date is the same as the

ending date of the business year of the NTT West (hereinafter referred to as

"the applicable business year")), the amount of money not exceeding the

amount of deficit (which shall be equal to the deficit under the provisions of

Article 2 paragraph (19) of the Corporate Tax Act (Act No. 34 of 1965) in cases

where the amount of money equivalent to said amount of subsidization is

excluded from its profits) in the corresponding business year of NTT West

(meaning the business year whose ending date is the same as said applicable

business year; the same shall apply hereinafter) shall be deductible in the

23

accounting of said applicable business year. In this case, with respect to the

application of the provisions of Article 37 of the same act to NTT East, "the

accounted amount" in paragraph (1) of the same article shall be read as "except

the accounted amount (the amount of money under the provisions of Article 12

paragraph (7) of the Supplementary Provisions of the Act to Amend the Nippon

Telegraph and Telephone Corporation Act (Act No. 98 as of 1997) within the

amount of deficit equal to the amount of subsidization (in the following

paragraph referred to as "the amount of subsidization deductible"))", and

"excluding the amount of contributions" in paragraph (2) of the same article

shall be read as "except the amount of donations and the amount of

subsidization deductible".

(8) The amount of money, which is booked as a disposition in the settlement of

the account in the applicable business year of NTT East, and which is

equivalent to the amount of subsidization, shall be regarded as the amount of

income of the corresponding business year of NTT West.

(9) In addition to the provisions of the preceding two paragraphs, necessary

matters concerning application of the provisions related to the corporate tax

imposed on the Company and the Succeeding Companies in connection with the

incorporation of the Succeeding Companies shall be stipulated in the applicable

cabinet order.

Article 13 Deleted.

(Capital Contribution to the Corporation Operating International

Telecommunications Business)

Article 14 The Company may contribute for capital in a juridical person

operating international telecommunications business with authorization of the

Minister of Posts and Telecommunications prior to the effective date of this Act.

(Order Concerning the Succession of the Business, etc.)

Article 15 In order to enforce the provisions of Article 2 and Article 4 through

Article 7 of the Supplementary Provisions, the Minister of Posts and

Telecommunications, if necessary, may issue an order to the Company to the

extent necessary.

Article 16 Deleted.

(Penal Provisions)

Article 17 In case of violation as set forth in any of the following items, a

corporate director or auditor of the Company shall be liable to a fine not

exceeding one million yen:

24

(i) When the Company subscribes for capital in a juridical person operating

international telecommunications business against the provisions of Article

14 of the Supplementary Provisions

(ii) When the Company acted against the order under the provisions of Article

15 of the Supplementary Provisions

(Transitional Measures Concerning Application of Telecommunications

Business Act)

Article 18 (1) Upon incorporation of the Regional Companies, and with regard to

the Long-Distance Company upon effectuation of this Act, Type I

telecommunications business operated by the Company and to be succeeded to

by the Succeeding Companies under the provisions of the Succeeding Plan,

shall be regarded as the businesses permitted to the Regional Companies and

the Long-Distance Company, respectively under the provisions of Article 9

paragraph (1) of the Telecommunications Business Act (Act No. 86 of 1984).

(2) The Succeeding Companies, with respect to the businesses regarded as the

permitted business under the provisions of Article 9 paragraph (1) of the

Telecommunications Business Act, shall submit documents stating items set

forth in each items in paragraph (2) of the same article within one month as

from the effective date of this Act to the Minister of Posts and

Telecommunications. In this case, the provisions of Article 13 and Article 14 of

the same act shall apply to items stated in said documents which are deemed

to be pursuant to the same paragraph.

(3) The Succeeding Companies, with respect to the items required for the

authorization or notification concerning terms and conditions of the

telecommunications service under the provisions of Article 31 or Article 31-2 of

the Telecommunications Business Act, shall submit an application form for

authorization or submit a notification within tree months as from the effective

date of this Act. In this case, said Succeeding Companies may provide the

telecommunications services as based upon the same terms and conditions as

those provided at the effective time of this Act, until the decision for said

application for authorization to be made or until said notification to be

submitted.

(Transitional Measures Concerning Application of Relevant Laws and

Regulations)

Article 19 (1) Each of permission, authorization or license for the Company

listed in the fourth column granted by the person listed in the third column

pursuant to the provisions listed in the second column of the Act listed in the

first column of the following table shall be regarded as permission,

authorization or license listed in the fifth column in said table for the

25

Succeeding Companies which succeeded to the rights and obligations

pertaining to said permission, authorization or license granted by the person

listed in the third column pursuant to the provisions listed in the second

column under the provisions of Article 7 of the Supplementary Provisions.

Column 1 Column 2 Column 3 Column 4

(i) Act on Control of Article 61-3 Director Permission

Nuclear Raw paragraph General of the

Material, (1) Science and

Nuclear Fuel Technology

and Nuclear Agency

Reactor (Act No.

166 of 1957)

Article 61-8 Director Authorization

paragraph General of the

(1) Science and

Technology

Agency

(ii) Act on Article 3 Director Permission

Prevention of paragraph General of the

Radiation (1) Science and

Disease Due to Technology

Radioactive Agency

Isotope, etc. (Act

No.167 of 1957)

(iii) Natural Park Article 17 As for national Permission

Act(Act No.161 paragraph parks, Director

of 1957) (3), or Article General of the

18 paragraph Science and

(3) or Article Technology

28-2 Agency. As for

paragraph semi-national

(3) parks, the

Governor

26

(iv) Fishing Port Act Article 39 Minister of Permission

(Act No. 137 of paragraph Agriculture, (including the

1950) (1) Forestry and permission

Fisheries pertaining to the

activities

operated by the

Company

regarded as being

permitted under

the provisions of

Article 15 of the

Supplementary

Provisions of the

Act on

Preparation of

Relevant Acts

Accompanying

Effectuation of

the Nippon

Telegraph and

Telephone

Corporation Act

and the

Telecommunicati

ons Business Act

(Act No. 87 of

1984, hereinafter

referred to as

"the Preparation

Act")

(v) Coast Act (Act Article 7 Coast Permission

No.101 of 1956) paragraph administrator (including the

(1) permission

pertaining to the

occupation by the

Company

regarded as being

permitted under

the provisions of

Article 16 of the

Supplementary

Provisions of the

Preparation Act)

Article 8 Coast Permission

paragraph administrator

(1)

27

(vi) High Pressure Article 5 Governor Permission

Gas Safety Act paragraph

(Act No. 204 of (1), Article

1951) 14 paragraph

(1), or Article

16 paragraph

(1) or Article

19 paragraph

(1)

(vii) Port Regulation Article 31 Portmaster Permission

Act (Act No. 174 paragraph

of 1948) (1)

(viii) Harbor Act (Act Article 37 Chief harbor Permission

No.218 of 1950) paragraph administrator (including the

(1) permission

pertaining to the

activities made

by the Company

regarded as being

permitted under

the provisions of

Article 17 of the

Supplementary

Provisions of the

Preparation Act.)

(ix) Maritime Traffic Article 30 Director- Permission

Safety Act (Act paragraph General of the

No.115, 1972) (1) Japanese

Maritime

Safety Agency

(Japan Coast

Guard)

(x) Radio Act (Act Article 4 Minister of License

No.131 of 1950) Posts and

Telecommunica

tions

Article 17 Minister of Permission

paragraph Posts and

(1) Telecommunica

tions

(xi) Road Act (Act Article 32 Road Permission

No.180 of 1952) paragraph administrator

(1) or

paragraph

(3)

(xii) Urban Park Act Article 6 Park Permission

(Act No. 79 of paragraph administrator

1956) (1) or

paragraph

(3)

28

(xiii) Special Article 14 Road Permission

Measures Act on paragraph administrator (including the

Preparation, etc. (1) permission

for Common-Use pertaining to the

Tunnel (Act occupation by the

No.81 of 1963) Company

regarded as being

permitted under

the provisions of

Article 26 of

Supplementary

Provisions of the

Preparation Act)

(xiv) River Act (Act Article 24, River Permission

No.167 of 1964) Article 26 administrator

paragraph

(1), Article

27 paragraph

(1), Article

55 paragraph

(1) or Article

57 paragraph

(1)

(xv) Special Article 10 Road Permission

Measures Act on administrator

Preparation, etc.

for Common-Use

Cable Tunnel

(Act No. 39 of

1995)

(2) The approval or permission related to the hospitals or clinics owned by the

Company being approved or permitted by prefectural governors under the

provisions of Article 4 paragraph (1) or Article 7 paragraph (1) of the Medical

Treatment Act (Act No. 205 of 1948) prior to the effective date of this Act shall

be regarded as the authorization or permission related to the hospitals or

clinics owned by the Succeeding Companies which succeeded to the rights and

obligations pertaining to said approval or permission being approved by the

prefectural governors under the provisions of Article 7 of the Supplementary

Provisions.

(3) The designation concerning the hospitals made by prefectural governors with

consent of the Company under the provisions of the following acts prior to the

effective date of this Act shall be regarded as the designation concerning the

hospitals being made by the prefectural governors with consent of the

Succeeding Companies which succeeded to the rights and obligations

pertaining to said hospitals.

29

(i) Article 19-2 paragraph (1) of the Act on Welfare of People with Disabilities

(Act No. 283 of 1949)

(ii) Article 49 of the Daily Life Protection Act (Act No. 144 of 1950)

(iii) Article 36 paragraph (1) of the Tuberculosis Prevention Act (Act No. 96 of

1951)

(iv) Article 19 paragraph (1) of the Act on Protection for Atomic Bomb Victims

(Act No. 117 of 1994)

(4) The notification submitted to the person listed in the second column of the

following table by the Company under the provisions of the Act listed in the

first column prior to the effective date of this Act shall be regarded as the

notification submitted to the person listed in the second column of said table by

the Succeeding Companies which succeeded to the rights and obligations

pertaining to said notification under the provisions of Article 7 of the

Supplementary Provisions.

Column 1 Column 2

(i) Article 21 paragraph (1) of Prefectural Governor

the National Park Act

(ii) Article 31 paragraph (1) of Director-General of the Japanese

the Maritime Traffic Safety Maritime Safety Agency (Japan

Act Coast Guard)

(5) The status as an expected occupant for common-use cable tunnel, under the

provisions of the Article 5 paragraph (2) of the Special Measures Act on

Preparation, etc. for Common-Use Cable Tunnel, pertaining to the application

for the permission submitted to the road administrator by the Company under

the provisions of Article 4 paragraph (1) of the same act shall be succeeded by

the Succeeding Companies which succeeded to the rights and obligations

pertaining to said application under the provisions of Article 7 of the

Supplementary Provisions.

(Delegation to Cabinet Order)

Article 20 In addition to the provisions of Article 2 through the preceding article

of the Supplementary Provisions, transitional measures and other matters

necessary for this Act to take effect shall be provided for under the applicable

cabinet order.

(Transitional Measures Concerning the Application of the Penal Provisions)

Article 21 With respect to the application of penal provisions to acts committed

prior to the enforcement of this Act, the provisions then in force shall remain

applicable.

30

Supplementary Provisions [Act No. 24 of March 31, 1998] [Extract]

(Effective Date)

Article 1 This Act shall come into force as from April 1, 1998.

Supplementary Provisions [Act No. 27 of March 31, 1998] [Extract]

(Effective Date)

Article 1 This Act shall come into force as from April 1, 1998.

Supplementary Provisions [Act No. 160 of December 22, 1999] [Extract]

(Effective Date)

Article 1 This Act (except Article 2 and Article 3) shall come into force as from

January 6, 2001.

Supplementary Provisions [Act No. 91 of May 31, 2000]

(Effective Date)

(1) This Act shall come into force as from the day of enforcement of the Act to

Amend the Commercial Code, etc. (Act No. 90 of 2000).

(Transitional Measures)

(2) In the case of the day of enforcement of this Act is the day before the day of

enforcement of the provisions of Article 8 of the Supplementary Provisions of

the Act on the Independent Administrative Institution Center for Food Quality,

Labeling and Consumer Services (Act No. 183 of 1999), "Article 27" in the

amended provisions of Article 19-5-2, Article 19-6 paragraph (1) and Article 27

of the Act on Standardization and Proper Labeling of Agricultural and Forestry

Products shall be read as "Article 26".

Supplementary Provisions [Act No. 6 of March 30, 2001] [Extract]

(Effective Date)

Article 1 This Act shall come into force as from March 31, 2001.

Supplementary Provisions [Act No. 62 of June 22, 2001] [Extract]

(Effective Date)

Article 1 This Act shall be come into force as from the date not exceeding six

months from the day of promulgation specified in the applicable cabinet order.

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(Transitional Measures Concerning the Application of the Penal Provisions)

Article 4 With respect to the application of penal provisions to acts committed

prior to the enforcement of this Act, the provisions then in force shall remain

applicable.

(Delegation of Other Transitional Measures to Cabinet Order)

Article 5 In addition to the provisions of this Supplementary Provisions, other

necessary transitional measures (including the transitional measures

concerning the penal provisions) required for this Act to take effect shall be

specified in the applicable cabinet order.

(Review)

Article 6 The Government shall review the status of legal system pertaining to

telecommunications including the classification pertaining to

telecommunications and broadcasting, taking into account the implementation

status of the provisions as amended by this Act, technologies pertaining to the

Internet and other advanced information and telecommunications networks

and trends in use thereof and changes in socioeconomic climates in Japan and

foreign countries, and taking into consideration facilitation of international

telecommunications business and improvement of international

competitiveness of Japanese telecommunications technologies, and shall take

necessary measures for preparing legal frameworks, etc. based on the

conclusion of the review.

Supplementary Provisions [Act No. 129 of November 28, 2001] [Extract]

(Effective Date)

(1) This Act shall come into force as from April 1, 2002.

(Transitional Measures Concerning the Application of the Penal Provisions)

(2) The application of the penal provisions, with respect to the offense prior to

the enforcement of this Act and the case deemed to which the provisions then

in force shall remain applicable under the provisions of this Act, the provisions

then in force shall remain applicable.

Supplementary Provisions [Act No. 45 of May 29, 2002]

(Effective Date)

(1) This Act shall come into force as from the date specified in the applicable

cabinet order within a period not exceeding one year from the day of

32

promulgation.

(Transitional Measures)

(2) In the case where the day of enforcement of this Act is a day before the day of

enforcement of the provisions of Article 2 of the "Act to Amend Part of the

Japan Agricultural Cooperatives Act, etc. (Act No. 94 of 2001)", "Article 30

paragraph (12)" in the amendment provisions of Article 30 paragraph (12) of

the Japan Agricultural Cooperatives Act referred to in Article 9 shall be read

as "Article 30 paragraph (11)".

Supplementary Provisions [Act No. 125 of July 24, 2003] [Extract]

(Effective Date)

Article 1 This Act shall come into force as from the date specified in the

applicable cabinet order within a period not exceeding nine months from the

day of promulgation. However, the provisions in the following items shall come

into force as of the day specified in said respective items.

(i) The provisions of the following article and Article 17 through Artic le 19 of

the Supplementary Provisions shall come into force as of the day of

promulgation.

(ii) The amendment provisions in Article 3 to add an article to the

Supplementary Provisions of the Act on Nippon Telegraph and Telephone

Corporation, etc. (referred to as the "NTTC Act" in the following item and

Article 16 of the Supplementary Provisions) and the provisions of Article 16

of the Supplementary Provisions shall come into force as from the date

specified in the applicable cabinet order within a period not exceeding three

months from the day of promulgation.

(iii) The provisions in Article 2, the amendment provisions in Article 3 to

amend Article 11 paragraph (2) of the NTTC Act, and the provisions of

Article 6 through Article 15, Article 21 through Article 31 of the

Supplementary Provisions, Article 34 through Article 41 of the

Supplementary Provisions and Article 44 through Article 48 of the

Supplementary Provisions shall come into force as from the date specified in

the applicable cabinet order within a period not exceeding one year

calculating from the day of promulgation.

(Transitional Measures Accompanying the Amendment to the Act on Nippon

Telegraph and Telephone Corporation, etc.)

Article 16 With respect to the application of Article 16 of the Supplementary

Provisions of the revised NTTC Act during a period from the day of

enforcement of said amendment provisions in Article 3 to add an article to the

33

Supplementary Provisions of the NTTC Act through the day before the day of

enforcement of the revised NTTC Act, "Article 33 paragraph (2)" in Article 16

paragraph (1) of the Supplementary Provisions of the NTTC Act shall be read

as "Article 38-2 paragraph (2)" and "Article 33 paragraph (4) item (ii)" in

Article 16 paragraph (2) of the Supplementary Provisions of the NTTC Act

shall be read as "Article 38-2 paragraph (3) item (ii)".

Supplementary Provisions [Act No. 88 of June 9, 2006] [Extract]

(Effective Date)

Article 1 This Act shall come into force as from the date specified in the

applicable cabinet order within a period not exceeding five years from the day

of promulgation (hereinafter referred to as "the effective date").

(Transitional Measures Concerning the Application of the Penal Provisions)

Article 134 With respect to the application of the Penal Provisions to acts that

have been committed prior to the enforcement of this Act, and the application

of the Penal Provisions to acts committed after the enforcement of this Act in

the cases where the provisions then in force shall remain applicable under the

provisions of these Supplementary Provisions and where the provisions then in

force shall remain applicable under the provisions of these Supplementary

Provisions, the provisions then in force remain applicable.

(Delegation of Other Transitional Measures to Cabinet Orders)

Article 135 In addition to the transitional measures specified in these

Supplementary Provisions, other transitional measures necessary for the

enforcement of this Act shall be specified in the applicable cabinet order.

(Review)

Article 136 After five years have elapsed from the enforcement of this Act, the

government shall review the settlement system for trade of stocks, etc. revised

by this Act and if the government deems that necessary measures shall be

taken as a result of such review, while taking into account the progress in

implementation of the revised provisions pursuant to this Act and changes, etc.

in socioeconomic circumstances, the government shall take necessary measures

based upon the results of the review.

Supplementary Provisions [Act No. 87 of July 26, 2005] [Extract]

This Act shall come into force as from the effective date of the Companies Act.

34