SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D/A
Under the Securities Exchange Act of 1934
(Amendment No. 3)(1)
Philippine Long Distance Telephone Company
(Name of Issuer)
Common Capital Stock, 5 Philippine Pesos par value
(Title of Class of Securities)
718252109
(CUSIP Number)
Haruhiko Yamada
NTT Communications Corporation
1-6, Uchisaiwai-cho 1-chome
Chiyoda-ku, Tokyo 100-8019
Japan
(81-3) 6700-4601
with a copy to:
Alec P. Tracy, Esq.
Skadden, Arps, Slate, Meagher & Flom
30/F Tower Two
Lippo Centre
89 Queensway
Central, Hong Kong
Telephone: (852) 2820-0700
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
March 14, 2006
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following
box [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7 for other
parties to whom copies are to be sent.
(1) The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 (the "Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
CUSIP No. 718252109
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1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
NTT Communications Corporation
No I.R.S. Identification
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
N/A
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
JAPAN
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY -------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 25,266,973
WITH -------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
25,266,973
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,266,973
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES / /
CERTAIN SHARES
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.0%
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14 TYPE OF REPORTING PERSON
CO
CUSIP No. 718252109
-------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
Nippon Telegraph and Telephone Corporation
No I.R.S. Identification
-------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) /X/
(b) / /
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
N/A
-------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS / /
REQUIRED PURSUANT TO ITEM 2(d) OR 2(e)
-------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
JAPAN
-------------------------------------------------------------------------------
NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY -0-
OWNED BY -------------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON 25,266,973 (1)
WITH -------------------------------------------------------
9 SOLE DISPOSITIVE POWER
-0-
-------------------------------------------------------
10 SHARED DISPOSITIVE POWER
25,266,973
-------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
25,266,973
-------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES / /
CERTAIN SHARES
-------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.0%
-------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON
HC
-------------------
(1) Nippon Telegraph and Telephone Corporation beneficially owns (i)
12,633,487 shares through NTT Communications Corporation, its
wholly-owned subsidiary, and (ii) 12,633,486 shares through NTT
DoCoMo, Inc., its majority-owned publicly-traded subsidiary.
This Amendment No. 3 (this "Amendment No. 3") amends and restates the
Schedule 13D dated March 24, 2000 (the "Schedule 13D"), which was filed in
paper format with the Securities and Exchange Commission (the "SEC") on behalf
of the Reporting Persons (as defined herein) and NTT-UK (as defined herein),
relating to the Common Shares (as defined herein) of Philippine Long Distance
Telephone Company, a corporation organized under the laws of the Philippines
(the "Company" or "PLDT"). The Schedule 13D was amended and restated by
Amendment No. 1 dated December 11, 2002 (as amended, "Amendment No. 1") and by
Amendment No. 2 dated January 31, 2006 (as amended, "Amendment No. 2"). The
purpose of this Amendment No. 3 is to amend and restate items 3, 4, 5 and 6 to
reflect the completion of the Transfer (as defined herein) of the Common Shares
from NTTC (as defined herein) to DoCoMo (as defined herein) on March 14, 2006
pursuant to the Stock Sale and Purchase Agreement (as defined herein).
Item 1. Security and Issuer.
The title of the class of equity securities to which this Amendment
No. 3 relates is the common capital stock, par value five Philippine Pesos per
share, of PLDT (the "Common Shares"). The principal executive offices of the
Company are located at the 7th floor, Ramon Cojuangco Building, Makati Avenue,
Makati City, Metro Manila, Philippines.
Item 2. Identity and Background.
(a) - (c) and (f)
This Amendment No. 3 is being filed on behalf of:
Nippon Telegraph and Telephone Corporation ("NTT"), a corporation
organized under the laws of Japan, has its principal executive offices at 3-1,
Otemachi 2-chome, Chiyoda-ku, Tokyo 100-8116, Japan. NTT's principal business
is serving as a holding company for subsidiaries engaged in providing
telecommunications services. These services fall into seven major classes:
telephone services, telegraph services, leased circuit services, data
communication facility services, Integrated Services Digital Network services,
sale of telecommunication equipment and other services; and
NTT Communications Corporation, a corporation organized under the
laws of Japan ("NTTC"), has its principal executive offices at 1-6
Uchisaiwai-cho 1-chome, Chiyoda-ku, Tokyo 100-8019, Japan. NTTC is a
wholly-owned direct subsidiary of NTT and its principal business is providing
inter-prefectural telecommunications, multimedia network services and related
services including, providing local, long distance and other telecommunications
services outside of Japan.
NTT and NTTC are hereinafter referred to as the "Reporting
Persons".
The name, present principal occupation, business address and
citizenship of each of the directors and executive officers of the Reporting
Persons are set forth on the following schedules to this Amendment No. 3:
Schedule A...............Nippon Telegraph and Telephone Corporation
Schedule B...............NTT Communications Corporation
This Amendment No. 3 contains information with respect to NTT
Communications Capital (UK) Limited ("NTT-UK"), a corporation that was
organized under the laws of England and Wales and was an indirect wholly-owned
subsidiary of NTT, had its principal executive offices at 3rd Floor, Devon
House, 58-60 St. Katherine's Way, London E1 9LB, United Kingdom. NTT-UK was a
Reporting Person in the Schedule 13D but is no longer required to report its
beneficial ownership of the Common Shares of PLDT as a result of NTT-UK
transferring all of the Common Shares to NTTC as part of a reorganization of
NTTC's holdings, as described in Item 3. Prior to its dissolution and
liquidation on July 10, 2003, NTT-UK was a direct wholly-owned subsidiary of
NTTC and its principal business was acting as an investment holding company.
(d) and (e)
Neither of the Reporting Persons nor, to the best knowledge of each
Reporting Person, any of their directors or executive officers has, during the
last five years, been (a) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (b) a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration
March 2000 Transaction
On March 24, 2000, the transactions contemplated by the Stock Purchase
and Strategic Investment Agreement dated as of September 28, 1999, as amended
(the "Strategic Agreement"), among First Pacific Company Limited ("FPC"), Metro
Pacific Corporation, Metro Asia Link Holdings, Inc., Metro Pacific Resources,
Inc. (collectively with FPC, the "FPC Group"), the Company and NTTC, were
consummated. Pursuant to the Strategic Agreement, NTT-UK acquired:
(a) 13,068,509 newly issued and fully paid Common Shares (the "NTT
PLDT Exchange Shares") in exchange for 1,017,222,294 of common stock of SMART
Communications, Inc., a Philippine cellular telecommunications company
("SMART"), which were held by NTT-UK prior to the transaction. The NTT PLDT
Exchange Shares were issued at an issue price of 1,080 Philippine Pesos per
share, or an aggregate issue price of 14,113,989,720 Philippine Pesos.
(b) 12,198,462 newly issued and fully paid Common Shares (the "NTT
PLDT Cash Shares" and together with the NTT PLDT Exchange Shares, the "PLDT
Shares") for a purchase price of 14,662,551,324 Philippine Pesos. All of the
funds used to pay for the NTT PLDT Cash Shares were provided through NTT-UK
from NTTC's available cash resources. In addition, simultaneous with the
closing under the Strategic Agreement, NTT-UK purchased two newly issued Common
Shares, one of which is owned of record by each of the two persons nominated by
NTTC to serve as directors of PLDT.
The aggregate purchase price for the PLDT Shares was 28,776,541,044
Philippine Pesos.
For a more detailed summary of the Strategic Agreement, see Item 4 and
Item 6. The Strategic Agreement and the First and Second Amendments thereto
were filed as Exhibits 2 through 4, respectively, to the Schedule 13D and are
incorporated herein by reference.
December 2002 Transfer from NTT-UK to NTTC
On December 11, 2002, pursuant to the terms of an agreement for the
transfer of shares in PLDT, dated December 11, 2002, by and between NTT-UK and
NTTC, NTT-UK transferred the PLDT Shares to NTTC. As a result of the
consummation of the transactions contemplated therein, NTT-UK was no longer the
record or beneficial owner of any Common Shares and therefore was no longer
required to report its beneficial ownership of the Common Shares of PLDT.
January 2006 DoCoMo Transaction
On January 31, 2006, NTTC and NTT DoCoMo, Inc., a company incorporated
under the laws of Japan and having its principal place of business at 11-1
Nagata-cho 2-Chome, Chiyoda-ku, Tokyo 100-6150, Japan ("DoCoMo"), entered into
an agreement (the "Stock Sale and Purchase Agreement") pursuant to which NTTC
agreed to transfer (the "Transfer"), 12,633,486 Common Shares (the "DoCoMo PLDT
Shares") to DoCoMo. The aggregate purchase price of 52,102,815,772 Japanese Yen
for the DoCoMo PLDT Shares was paid to NTTC by DoCoMo in immediately available
funds by wire transfer upon the closing of the Transfer on March 14, 2006.
In connection with the Stock Sale and Purchase Agreement, the FPC
Group, Larouge B.V., Metro Pacific Assets Holdings, Inc. (collectively, the
"FPC Parties"), NTTC, DoCoMo and PLDT entered into a Co-Operation Agreement
("Co-Operation Agreement") dated January 31, 2006, pursuant to which, each of
the FPC Parties, NTTC and PLDT agreed to grant DoCoMo certain benefits under
the Strategic Agreement and the Shareholders Agreement, to amend the
Registration Rights Agreement, to discuss the amendment of certain other
existing agreements and to enter into certain business relationships in the
field of mobile communications services.
DoCoMo is a majority-owned, publicly-traded subsidiary of NTT.
For a more detailed summary of the Stock Sale and Purchase Agreement
and the Co-Operation Agreement, see Item 4 and Item 6. The Stock Sale and
Purchase Agreement and the Co-Operation Agreement were filed as Exhibit 7 and
Exhibit 8, respectively, to Amendment No. 2 and are incorporated herein by
reference.
Item 4. Purpose of Transaction.
The Reporting Persons acquired the PLDT Shares and transferred the
DoCoMo PLDT Shares to DoCoMo with a view to (i) establishing and maintaining a
strategic relationship among PLDT, NTTC and DoCoMo to enhance the global
business development of NTT by, among other things, exploiting DoCoMo and
NTTC's leadership in fixed-mobile convergence and enhancing PLDT's mobile
business and (ii) together with DoCoMo, attaining and maintaining an equity
interest in PLDT and influence over the management and policies of PLDT,
including representation on PLDT's board of directors, that is at least
commensurate with their aggregate direct and indirect interests in PLDT from
time to time.
The Reporting Persons have not yet made a determination as to the
specific level of beneficial ownership they will seek to obtain, but as a
result of the Stock Sale and Purchase Agreement described in this Item 4 and in
Item 6, the Reporting Persons as of December 31, 2005, controlled approximately
14.0% of the voting power attached to the outstanding Common Shares. Following
the closing of the sale of the DoCoMo PLDT Shares by NTTC to DoCoMo pursuant to
the Stock Sale and Purchase Agreement described in this Item 4 and in Item 6,
the Reporting Persons and DoCoMo, in the aggregate, continue to beneficially
own approximately 14.0% of the voting power attached to the outstanding Common
Shares. Under the Co-Operation Agreement, upon the holdings of Common Shares by
NTTC, DoCoMo and their respective subsidiaries collectively reaching 20% of the
Common Shares then issued and outstanding, and for so long as NTTC and DoCoMo
and their respective subsidiaries continue to hold at least 17.5% of the Common
Shares then outstanding from time to time, DoCoMo will be entitled to exercise
additional rights under the Strategic Agreement and the Shareholders Agreement.
March 2000 Transaction
Pursuant to the Strategic Agreement, PLDT acquired all of the shares
of SMART owned by the FPC Group and NTT-UK in exchange for newly issued and
fully paid Common Shares and NTT-UK subscribed for an additional 12,198,462 NTT
PLDT Cash Shares (the "SMART Transaction"). PLDT also acquired the shares of
the existing minority shareholders in SMART in exchange for newly issued and
fully paid Common Shares. Upon consummation of the SMART Transaction, NTTC and
PLDT established a strategic relationship to, among other things, coordinate
the development and marketing of telecommunications products and services. As
part of this strategic relationship, (i) NTTC and its subsidiaries are
restricted in making investments in businesses that compete with PLDT; (ii)
NTTC has certain approval rights over expenditures and investments made by PLDT
as well as approval rights over actions PLDT takes with respect to Pilipino
Telephone Corporation ("Piltel"), a majority-owned, publicly-traded subsidiary
of PLDT and (iii) NTTC has certain rights in the event PLDT proposes (with
certain exceptions) to issue additional Common Shares or securities convertible
into or exchangeable for the Common Shares.
The consummation of the SMART Transaction resulted in the following:
(a) SMART becoming a wholly owned subsidiary of PLDT, (b) the FPC Group
controlling voting rights attaching at that time approximately 31.4% of the
outstanding Common Shares, (c) NTT-UK becoming the registered and beneficial
owner of 25,266,973 Common Shares, representing approximately 15.0% of the
outstanding Common Shares and (d) NTTC having the right to nominate: (i) two
directors to the board of directors of PLDT, which was recently enlarged from
eleven to thirteen members, (ii) two directors to the board of directors of
SMART and (iii) one director to serve as a member of each of the boards of
directors of the other subsidiaries of PLDT.
In connection with the Strategic Agreement, the FPC Parties, NTT-UK
and NTTC entered into a shareholders agreement as to certain corporate
governance and other matters among those parties as shareholders of PLDT (the
"Shareholders Agreement"). PLDT also entered into registration rights
agreements with NTTC and NTT-UK with respect to the Common Shares held by them
(the registration rights agreement between PLDT and NTTC is hereinafter
referred to as the "Registration Rights Agreement").
NTTC (or certain of its subsidiaries) and PLDT also entered into
agreements (the "Commercial Agreements") as to certain commercial and technical
matters relating to PLDT's ongoing operations and as to certain advisory
arrangements with respect to such Commercial Agreements (the "Services
Agreements").
January 2006 DoCoMo Transaction
Pursuant to the Stock Sale and Purchase Agreement, NTTC has completed
the transfer of 12,633,486 DoCoMo PLDT Shares to DoCoMo as of March 14, 2006.
The Stock Sale and Purchase Agreement, provides, among other things, that:
o upon and after DoCoMo's appointment of the Chief Operation Advisor
(the "COA") on or before July 1, 2006, DoCoMo will cause the COA to
consult with and act in accordance with the direction of NTTC's
executive advisor in the Philippines regarding matters relating to
fixed-line telecommunications, data or information and communications
technology services. Prior to DoCoMo's appointment of the COA, NTTC
will cause the COA to consult with and act in accordance with the
direction of DoCoMo's senior technical advisor in the Philippines
regarding matters relating to wireless telecommunications services;
and
o from the date of the Stock Sale and Purchase Agreement, each of NTTC
and DoCoMo will (a) cause its representatives and advisors not to take
any action that would amend or terminate the Commercial Agreements and
Services Agreements between NTTC and PLDT or any rights and
obligations DoCoMo has under the Integrated i-mode Services Package
Agreement between DoCoMo and SMART Communications, Inc., or any other
agreements entered into between DoCoMo and PLDT or SMART
Communications pursuant to the Co-Operation agreement, (b) use good
faith efforts to discuss conflicts of interest between the two parties
and (c) use good faith efforts to negotiate the exercise of any rights
under the Registration Rights Agreement.
In connection with the Stock Sale and Purchase Agreement, the FPC
Parties, NTTC, DoCoMo and PLDT entered into the Co-Operation Agreement,
pursuant to which the parties have agreed to add DoCoMo as a party under the
existing agreements among the parties to share the benefit of certain rights
thereunder with NTTC and to enter into certain strategic business relationships
in the field of mobile communication services. In the Co-Operation Agreement,
NTTC and DoCoMo have agreed to certain procedures relating to their respective
exercise of such rights.
NTTC and DoCoMo have agreed that NTTC, after completion of the
Transfer of the DoCoMo PLDT Shares to DoCoMo, DoCoMo and their respective
subsidiaries, in the aggregate, will not acquire more than 21% of the Common
Shares then issued and outstanding and to support PLDT management to safeguard
PLDT against certain Hostile Transferees (as defined herein).
For brief summaries of the Strategic Agreement, the Shareholders
Agreement, the Registration Rights Agreement and the Services Agreements, see
Item 6. The Stock Sale and Purchase Agreement and the Co-Operation Agreement
are filed as Exhibit 7 and Exhibit 8, respectively, to Amendment No. 2 and are
incorporated herein by reference.
Item 5. Interest in Securities of the Issuer
(a) As of December 31, 2005, the Reporting Persons beneficially owned
25,266,973 Common Shares, representing approximately 14.0% of the total number
of the Common Shares outstanding. By virtue of NTT's ownership of all of the
outstanding capital stock of NTTC and a majority of the common stock of DoCoMo
and the terms of the Stock Sale and Purchase Agreement and Co-Operation
Agreement, the Reporting Persons and DoCoMo constitute a "group" within the
meaning of section 13(d)(3) of the Securities Exchange Act of 1934 and
therefore, DoCoMo may be deemed to have acquired beneficial ownership of the
25,266,973 Common Shares beneficially held by the Reporting Persons. Given the
terms of the Shareholders Agreement and the Co-Operation Agreement (as
described herein), the Reporting Persons and DoCoMo and the other parties to
the Shareholders Agreement might be deemed to constitute a "group". However,
the Reporting Persons disclaim that they have agreed to act as a group with any
other parties to the Shareholders Agreement (other than to the extent provided
in the Shareholders Agreement and the Co-Operation Agreement) and the Reporting
Persons disclaim beneficial ownership of the Common Shares other than the
amounts of shares reported for the Reporting Persons herein.
(b) As the registered owner, NTTC has the shared power to vote or
dispose or to direct the vote or disposition of the 25,266,973 Common Shares
beneficially owned by NTTC and DoCoMo. By virtue of its ownership of all of the
issued and outstanding capital stock of NTTC, NTT has the power to direct the
voting or disposition of the Common Shares beneficially owned by NTTC.
(c) Except for the Transfer of DoCoMo PLDT Shares to DoCoMo
contemplated by the Stock Sale and Purchase Agreement as described in Item 3,
neither the Reporting Persons, nor to the knowledge of each Reporting Person,
any of its directors or executive officers has effected any transaction in the
Common Shares during the past sixty days.
(d) None.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer.
Reference is made hereby to Item 3 hereof which is incorporated by
reference in this Item 6.
1) The following section describes the agreements giving rise to the filing of
the Schedule 13D, Amendment No. 1, which amended and restated the Schedule 13D,
Amendment No. 2, which amended and restated Amendment No. 1, and this Amendment
No. 3, which amends and restates Amendment No. 2.
A. The Strategic Agreement
As described under Item 3, on March 24, 2000 the transactions
contemplated by the Strategic Agreement were consummated. Pursuant to the
Strategic Agreement, among other things:
o PLDT acquired from the members of the FPC Group 1,597,814,621 SMART
shares representing approximately 56% of the issued common capital
stock of SMART in exchange for the issuance to members of the FPC
Group 20,527,524 newly issued and fully paid Common Shares at a price
of 1,080 Philippine Pesos per Common Share, or an aggregate issue
price of 22,169,725,920 Philippine Pesos;
o PLDT acquired from NTT-UK 1,017,222,294 SMART shares representing
approximately 37% of the issued common capital stock of SMART, in
exchange for the issue to NTT-UK of 13,068,509 newly issued and fully
paid Common Shares at a price of 1,080 Philippine Pesos per Common
Share, or an aggregate issue price of 14,113,989,720 Philippine Pesos;
and
o NTT-UK subscribed for an additional 12,198,462 NTT PLDT Cash Shares,
which were issued to NTT-UK for an aggregate price of 14,662,551,324
Philippine Pesos in cash, or 1,202 Philippine Pesos per Common Share.
The consummation of the SMART Transaction resulted in the following:
(a) SMART becoming a wholly-owned subsidiary of PLDT, (b) the FPC Group
controlling voting rights attaching at that time approximately 31.4% of the
outstanding Common Shares, (c) NTT-UK becoming the registered and beneficial
owner of 25,266,973 Common Shares, representing approximately 15.0% of the then
outstanding Common Shares and (d) NTTC having the right to nominate: (i) two
directors to the board of directors of PLDT, which was enlarged from eleven to
thirteen members, (ii) two directors to the board of directors of SMART and
(iii) one director to serve as a member of each of the boards of directors of
the other subsidiaries of PLDT. For a more detailed summary of NTTC and
DoCoMo's rights to nominate directors to the board of directors of PLDT and its
subsidiaries, see "The Shareholders Agreement" under this Item 6.
The Strategic Agreement was amended by the Co-Operation Agreement,
dated January 31, 2006, and the following summarizes certain of the principal
terms of the Strategic Agreement, as amended by the Co-Operation Agreement.
A copy of the Strategic Agreement and the first and second amendments
thereto were filed as Exhibits 2 through 4 to the Schedule 13D, and the
Co-Operation Agreement was filed as Exhibit 8 to Amendment No. 2, and any
description contained in this Amendment No. 3 relating to the Strategic
Agreement does not purport to be complete and is qualified in its entirety by
reference to the Strategic Agreement and the first and second amendments
thereto filed as Exhibits 2 through 4 to the Schedule 13D and the Co-Operation
Agreement filed as Exhibit 8 to Amendment No. 2.
The following provisions of the Strategic Agreement have become
effective as to DoCoMo upon the completion of the Transfer of DoCoMo PLDT
Shares to DoCoMo on March 14, 2006 pursuant to the Stock Sale and Purchase
Agreement.
1. Strategic Relationship
PLDT, NTTC and DoCoMo have agreed to form a strategic relationship in
the Philippines and, among other things, to establish a joint committee to
explore the development and marketing of products and services between the
parties. PLDT has agreed not to enter into another strategic alliance with
another party without the consent of NTTC and DoCoMo, provided that PLDT may,
subject to certain exceptions, designate as its "strategic partner" any person
in which PLDT and its subsidiaries own 25% or more of its capital stock.
2. Limitations on Competition by NTTC and DoCoMo
Without PLDT's consent, NTTC or DoCoMo and their respective
subsidiaries may not invest in a business competing with PLDT in respect of
customers principally located in the Philippines if such investment, when added
to all prior investments by NTT and its majority owned and controlled
subsidiaries (the "NTT Holding Company Group") in such business, is in excess
of US$50 million (subject to certain adjustments for inflation) or if such
investment, when added to all prior investments by NTTC and its subsidiaries in
all such businesses for the past 12 months, is in excess of US$100 million
(subject to certain adjustments for inflation). Similar limitations exist with
respect to NTTC's and DoCoMo's use of assets in the Philippines in such
businesses.
3. Committee Structure
PLDT has agreed to maintain the Committee structure defined in
Schedule 10 of the Strategic Agreement and to cause NTTC and DoCoMo to be
entitled to appoint (i) two persons to serve as members or advisors of each
Committee consisting of more than five members; and (ii) one person to serve as
a member or as an advisor of each Committee consisting of not more than five
members.
4. Certain Approval Rights of NTTC and DoCoMo
(a) Capital Expenditures
Subject to certain exceptions, PLDT and/or its subsidiaries may make
any capital expenditures in connection with a single project if the total
capital expenditures required for such project will or will likely exceed US$50
million (subject to certain adjustments for inflation), in each case only
pursuant to the approval procedures described in paragraph (f) below and with
the approval of NTTC and DoCoMo, given in the manner described in paragraph (f)
below.
(b) Investment in Existing Investees
Subject to certain exceptions, PLDT and/or its subsidiaries may make
any investments in or provide certain forms of financial support to any
existing investee of PLDT, if the cumulative value of all investments by PLDT
and its subsidiaries would exceed the sum of US$10 million (subject to certain
adjustments for inflation), plus the aggregate book value of all investments
made in such existing investee by PLDT and its subsidiaries as of July 31,
1999, or to any existing investee, if, for the past 12-month period, the
cumulative value of all investments by PLDT and its subsidiaries would exceed
US$25 million (subject to certain adjustments for inflation), in each case only
pursuant to the approval procedures described in paragraph (f) below and with
the approval of NTTC and DoCoMo, given in the manner described in paragraph (f)
below.
(c) Investments in New Investees
Subject to certain exceptions, PLDT and/or its subsidiaries may make
any investments in or provide certain forms of financial support to any new
investee, if the cumulative value of all investments by PLDT and its
subsidiaries in such new investee would exceed US$50 million (subject to
certain adjustments for inflation), or to any new or existing investee, if, for
the past 12-month period, the cumulative value of all investments by PLDT and
its subsidiaries in new or existing investees would exceed US$100 million
(subject to certain adjustments for inflation), in each case only pursuant to
the approval procedures described in paragraph (f) below and with the approval
of NTTC and DoCoMo, given in the manner described in paragraph (f) below.
(d) Exception for Capital Expenditures for or Investments in a NTT
Competing Business
Neither NTTC nor DoCoMo may withhold its consent to any proposed
capital expenditure or investment if (A) such proposed transaction would
involve a person who is in direct competition for the same business
opportunities with the NTT Holding Company Group, or involve a business in
which the NTT Holding Company Group is, or is to be, engaged in, and (B) the
board of directors of PLDT confirms in writing that proceeding with such
transaction will not give rise to a right to accelerate or otherwise demand
payment of material indebtedness of PLDT. To the extent any such proposed
transaction would involve a person who is in direct competition for the same
business opportunities with DoCoMo, PLDT will first consult with DoCoMo no
later than thirty calendar days prior to the first submission to the board of
PLDT, Joint Mancom or PLDT Mancom for approval for any such investment.
(e) Limitation on Competition Where Consent is Withheld
In the event NTTC and DoCoMo withhold their approval in connection
with PLDT's proposed expenditure or investment, none of NTTC and DoCoMo and
their respective subsidiaries may make a similar or competing investment for a
period of nine months following notification by NTTC and DoCoMo of their
decision to withhold such approval.
(f) Approval Procedures
PLDT, FPC Parties, NTTC and DoCoMo have agreed in the Strategic
Agreement to certain discussion and written notification procedures in
connection with the approval process by NTTC and DoCoMo in respect of the
above-mentioned proposed expenditures or investments (each, a "Proposed
Transaction"). Such procedures require, among other things, that NTTC and
DoCoMo give their approval to a Proposed Transaction unless they reasonably
conclude in good faith, having given proper consideration to all material
factors identified by PLDT, the best interests of PLDT and its shareholders
taken as a whole, and all other facts and circumstances that NTTC and DoCoMo
deem relevant in making such decision, that the Proposed Transaction is not in
the best interests of PLDT and its shareholders taken as a whole. NTTC and
DoCoMo have agreed in the Co-Operation Agreement to discuss between themselves
the manner in which the above rights shall be exercised.
In the event of any dispute between PLDT, the members of the FPC
Parties, NTTC and DoCoMo regarding whether NTTC and DoCoMo have acted in
accordance with the above standard in withholding its consent to any Proposed
Transaction, NTTC and DoCoMo shall be deemed for all purposes to have complied
with the terms of the Strategic Agreement and not to have breached said
agreement in withholding such approval, unless PLDT shows, by clear and
convincing proof, that NTTC and DoCoMo did not act in accordance with the
agreed standards in withholding its approval of such Proposed Transaction.
Under the Co-Operation Agreement, NTTC and DoCoMo have agreed to
discuss between themselves the manner in which their rights will be exercised.
Prior to July 1, 2006, NTTC is responsible for notifying PLDT and the FPC
Parties of decisions with respect to exercise of such rights. From and after
July 1, 2006, DoCoMo is responsible for notifying PLDT and the FPC Parties of
such decisions. In each case, PLDT and the FPC Parties are entitled to rely on
any such notice as if it had been given by both NTTC and DoCoMo.
5. Approval Rights Relating to Piltel
The Strategic Agreement provides that prior written approval of NTTC
and DoCoMo is required with respect to certain corporate actions relating to
Piltel, including matters relating to the integration of Piltel into the
businesses of PLDT and its subsidiaries (the "Piltel Integration"). The Piltel
Integration has been substantially completed.
In addition, prior written approvals of NTTC and DoCoMo are required
in connection with various corporate and business actions of Piltel to the
extent such actions would be outside the Piltel Integration, including actions
relating to any refinancing of Piltel's debt or any additional investment in
Piltel in excess of US$150 million (in the aggregate), changes to Piltel's
capital stock, capital expenditures, certain intercompany agreements and
transactions, migration of Piltel customers to PLDT or its subsidiaries,
marketing and material asset dispositions.
The Strategic Agreement also provides that, except for certain agreed
to parameters relating to the Piltel Integration, prior written approval of
NTTC or DoCoMo is required for (i) Piltel or PLDT to issue, redeem, consolidate
or split or otherwise reclassify or amend the terms of any capital stock of
Piltel, (ii) PLDT and its subsidiaries (other than Piltel) shall not make any
capital expenditure for any asset to be used in the Piltel business, (iii) PLDT
and its subsidiaries (other than Piltel) shall not enter into any agreement
with Piltel or its subsidiaries, other than arms-length transactions in the
ordinary course of business, (iv) PLDT and its subsidiaries (other than Piltel)
shall not seek the mitigation of Piltel customers to PLDT or any of its
subsidiaries or market/or sell any product or service which depends in any
material respect upon the use of assets owned or operated by Piltel or any of
its subsidiaries, and (v) PLDT shall cause Piltel and its subsidiaries not to
make any material asset disposition.
Under the Co-Operation Agreement, NTTC and DoCoMo have agreed to
discuss between themselves the manner in which their rights will be exercised.
Prior to July 1, 2006, NTTC is responsible for notifying PLDT and the FPC
Parties of decisions with respect to exercise of such rights to PLDT and the
FPC Parties. From and after July 1, 2006, DoCoMo is responsible for notifying
PLDT and the FPC Parties of such decisions. In each case, PLDT and the FPC
Parties are entitled to rely on any such notice as if it had been given by both
NTTC and DoCoMo.
6. Limitations on the Issuance of Common Capital Stock
Subject to certain exceptions, under the terms of the Strategic
Agreement, PLDT may not issue Common Shares or securities convertible into or
exchangeable for the Common Shares without the prior written approval of NTTC
and DoCoMo unless PLDT has first offered NTTC and DoCoMo the right to purchase
a number of shares equal to its pro-rata portion of the number of shares
proposed to be issued. By operation of Philippine law, holders of the Common
Shares will, with certain exceptions, have preemptive rights with respect to
issuances of new Common Shares, including issuances of the Common Shares to
NTTC and DoCoMo pursuant to any exercise by NTTC and DoCoMo of the rights
referred to above.
Under the Co-Operation Agreement, NTTC and DoCoMo have agreed to
discuss between themselves the manner in which their rights will be exercised.
Prior to July 1, 2006, NTTC is responsible for notifying PLDT and the FPC
Parties of decisions with respect to exercise of such rights to PLDT and the
FPC Parties. From and after July 1, 2006, DoCoMo is responsible for notifying
PLDT and the FPC Parties of such decisions. In each case, PLDT and the FPC
Parties are entitled to rely on any such notice as if it had been given by both
NTTC and DoCoMo. With respect to NTTC and DoCoMo's pre-emptive rights, DoCoMo
will be entitled to purchase all, or some, of the Common Shares or PTIC Shares
(as defined in the Shareholders Agreement) which may be purchased by NTTC or
DoCoMo, however, if DoCoMo decides not to purchase some or all of the Common
Shares or PTIC Shares, NTTC and DoCoMo have agreed that NTTC shall have the
option to purchase some or all of the Common Shares or PTIC Shares.
7. Termination of Approval Rights
NTTC's and DoCoMo's rights to the strategic arrangements summarized in
paragraphs 1 through 6 above will terminate when the NTTC, DoCoMo and their
respective subsidiaries cease to own, in aggregate, 10% of the Common Shares
then issued and outstanding (subject to certain adjustments, including certain
adjustments for dilution arising out of settlements with Piltel's creditors).
8. Competing Business in Japan
In case PLDT intends to enter into any contractual arrangement with
any person relating to any activity which involves, as its principal component,
the provision of telephone, telecommunications, paging, Internet, data or voice
transmission services, whether or not terrestrial (a "Competing Business") in
Japan involving joint branding, the provision, production or marketing of
telecommunications or multimedia products or services, or corporation in, or
sharing of, research and development of technology or other Intellectual
Property (as defined in the Strategic Agreement), PLDT will (a) from the date
of the Co-Operation Agreement until June 30, 2006, first provide NTTC and if
NTTC declines, then provide DoCoMo with the same opportunity to enter into such
agreement with PLDT and (b) from July 1, 2006, first provide DoCoMo and if
DoCoMo declines, then provide NTTC with the same opportunity to enter into such
agreement with PLDT upon the same terms being considered by PLDT, provided that
PLDT will not be obligated to contract with NTTC or DoCoMo if such arrangement
will not fully realize its expected benefits in the reasonable opinion of PLDT.
In case PLDT, SMART or SMART's subsidiaries intends to enter into any
contractual arrangement on or after July 1, 2006 with any person who is engaged
in a Competing Business in competition with DoCoMo, PLDT will and PLDT will use
its reasonable efforts to procure that SMART or SMART's subsidiaries will first
provide DoCoMo with the same opportunity to enter into such agreement with
PLDT, SMART or SMART's subsidiaries. PLDT will not be obligated to contract
with, or to cause SMART or SMART's subsidiaries to contract with, DoCoMo if (a)
such arrangement will not fully realize its expected benefits in the reasonable
opinion of PLDT, (b) PLDT needs to maintain a relationship with a person other
than NTTC or DoCoMo pursuant to reasonable business arrangements in furtherance
of PLDT's strategic objectives or (c) the board of PLDT, SMART or its
subsidiaries determines that to be in the best interests of its company to
enter into such arrangements with a person other than DoCoMo.
DoCoMo and PLDT have agreed that they will, from time to time, discuss
other strategic developments in their respective businesses.
B. The Shareholders Agreement
Simultaneously with the closing under the Strategic Agreement, the FPC
Parties, NTT-UK, and NTTC (the "Party Shareholders") entered into the
Shareholders Agreement. The Shareholders Agreement was amended by the
Co-Operation Agreement, dated January 31, 2006, in which FPC Parties and NTTC
agreed that DoCoMo will be added to the Shareholders Agreement as a Party
Shareholder upon the Transfer of DoCoMo PLDT Shares to DoCoMo pursuant to the
Stock Sale and Purchase Agreement. A copy of the Shareholders Agreement was
filed as Exhibit 5 to the Schedule 13D, and a copy of the Co-Operation
Agreement has been filed as Exhibit 8 to Amendment No. 2, and any description
contained in Amendment No. 2 relating to the Shareholders Agreement does not
purport to be complete and is qualified in its entirety by reference to the
Shareholders Agreement filed as Exhibit 5 to the Schedule 13D and the
Co-Operation Agreement filed as Exhibit 8 to Amendment No. 2.
The following summarizes certain of the principal terms of the
Shareholders Agreement, as amended by the Co-Operation Agreement.
The following provisions of the Shareholders Agreement have become
effective as to DoCoMo upon the completion of the Transfer of DoCoMo PLDT
Shares to DoCoMo on March 14, 2006 pursuant to the Stock Sale and Purchase
Agreement.
1. Board and Committee Representation
In respect to NTTC's right to nominate two directors to the board of
PLDT, NTTC and the FPC Parties have agreed to use reasonable efforts to procure
a PLDT shareholders vote in favor of replacing one existing NTTC nominee on the
board of PLDT with one DoCoMo nominee.
Upon the holdings of the Common Shares by NTTC, DoCoMo and their
respective subsidiaries reaching in aggregate 20% of the Common Stock then
issued and outstanding, and so long as DoCoMo and NTTC continue to hold at
least full legal and beneficial title to not less than 17.5% of the Common
Shares then issued and outstanding from time to time, each of NTTC and the FPC
Parties will cast its votes as a PLDT shareholder, lobby the directors of PLDT,
and otherwise use reasonable efforts to procure a vote in favor of any
resolution put to the meeting of the PLDT shareholders, for the purpose of
effecting the election of one additional DoCoMo nominee as a director of PLDT.
In respect to NTTC's right to nominate two directors to the board of
SMART, NTTC and the FPC Parties have agreed to use reasonable efforts to
procure a SMART shareholders vote in favor of replacing one existing NTTC
nominee on the board of PLDT with one DoCoMo nominee.
Upon the holdings of the Common Shares by NTTC, DoCoMo and their
respective subsidiaries, reaching in aggregate 20% of the Common Stock then
issued and outstanding, and so long as DoCoMo and NTTC continue to hold at
least 17.5% of the Common Shares then issued and outstanding from time to time,
each of NTTC and the FPC Parties have agreed to cast its votes as a PLDT
shareholder, lobby the directors of PLDT, and otherwise use reasonable efforts
to procure a vote in favor of any resolution put to the meeting of the SMART
shareholders, for the purpose of effecting the election of one additional
DoCoMo nominee as a director of SMART.
2. Committees and Subsidiary Committees
Each of the FPC Parties, PLDT and NTTC have agreed to use reasonable
efforts to procure that DoCoMo be entitled to appoint one individual, who may
be replaced at any time, to attend any committee of PLDT or SMART as a member,
advisor or observer.
3. Unanimous Consent
The Party Shareholders and DoCoMo have agreed not to permit PLDT,
without the prior written consent of all the other parties, to:
(i) engage in any business other than the telecommunications and
related activities currently engaged in by PLDT or cease to carry on any
substantial part of the telecommunications and related activities currently
engaged in by PLDT;
(ii) merge or consolidate with or into any other company or entity;
(iii) take any steps to effect the winding up of PLDT or pass any
resolution to liquidate PLDT; or
(iv) apply to any court, administrative agency or tribunal to order a
meeting of creditors or any class of creditors or members or any class of
members or to sanction any compromise or arrangement between creditors or
shareholders of PLDT.
Under the Co-Operation Agreement, NTTC and DoCoMo have agreed to
discuss between themselves the manner in which their rights will be exercised.
Prior to July 1, 2006, NTTC is responsible for notifying PLDT and the FPC
Parties of decisions with respect to exercise of such rights to PLDT and the
FPC Parties. From and after July 1, 2006, DoCoMo is responsible for notifying
PLDT and the FPC Parties of such decisions. In each case, PLDT and the FPC
Parties are entitled to rely on any such notice as if it had been given by both
NTTC and DoCoMo.
4. Restrictions on Transfers of the Common Shares and PTIC Shares
A Party Shareholder and DoCoMo may transfer its Common Shares only
after offering to sell such Shares to the non-disposing Party Shareholders or
with the prior written consent of the other Party Shareholders. Party
Shareholders and DoCoMo may encumber their Common Shares provided that such
encumbering Party Shareholder or DoCoMo provides certain information regarding
the encumbrance to the non-encumbering Party Shareholders or DoCoMo. Similar
restrictions apply to shares of Philippine Telecommunications Investment
Corporation.
Notwithstanding the foregoing, transfer of NTTC's remaining Common
Shares to any person is subject to a superior right of first offer granted to
DoCoMo, subject to the limitations on share acquisitions described in paragraph
(2)B(2)(b) below.
In the event DoCoMo proposes to transfer any Common Shares which would
result in NTTC and DoCoMo holding, in the aggregate, less than 10% of the
Common Shares then issued and outstanding, then NTTC shall have a right of
first offer to purchase such Common Shares from DoCoMo on terms and conditions
no less favorable to DoCoMo than those on which DoCoMo proposes to transfer
such Common Shares. Such right shall be superior to any right of first refusal
which any of the FPC Parties may have in respect of such proposed transfer
under the Shareholders Agreement. Any such transfer from DoCoMo to NTTC
pursuant to the exercise by NTTC of this right will not give rise to a right of
first offer by the FPC Parties under the Shareholder Agreement and shall
constitute a transfer to a Permitted Transferee (as defined in the Shareholders
Agreement).
Pursuant to the Co-Operation Agreement, NTTC and DoCoMo have agreed
that within the time periods provided for giving a Preemption Reply (as defined
in the Co-Operation Agreement), both parties will consult with each other
regarding the exercise of the relevant rights. DoCoMo will be entitled to
purchase all, or some, of the Common Shares or PTIC Shares which may be
purchased from a Party Shareholder, however, if DoCoMo decides not to purchase
some or all of the Common Shares or PTIC Shares, NTTC and DoCoMo have agreed
that NTTC shall have the option to purchase some or all of the Common Shares or
PTIC Shares.
5. Termination
The Shareholders Agreement will terminate if NTTC, DoCoMo or their
respective subsidiaries cease to own, in aggregate, full legal and beneficial
title to 10% of the Common Shares then issued and outstanding, or if the FPC
Parties and their respective subsidiaries cease to have effective voting power
in respect to at least 18.5% of the Common Shares then issued and outstanding.
C. The Registration Rights Agreement
On March 24, 2000, PLDT entered into registration rights agreements
with each of NTTC and the FPC Group in connection with the registration of
their Common Shares. A copy of the Registration Rights Agreement among PLDT,
NTT-UK and NTTC was filed as Exhibit 6 to the Schedule 13D, and any description
contained in this Amendment No. 3 relating to the Registration Rights Agreement
does not purport to be complete and is qualified in its entirety by reference
to the Registration Rights Agreement filed as Exhibit 6 to the Schedule 13D.
The Registration Rights Agreement provides for four demand
registrations and unlimited piggy-back registration rights with respect to the
Common Shares held by NTTC. The rights are subject to the rights of PLDT to
delay or suspend registration upon the occurrence of certain events and certain
holdback agreements. PLDT is responsible for all fees and expenses in
connection with all but one of the demand registrations and all of the
piggy-back registrations (other than fees and expenses of legal counsel for
NTTC and the FPC Group).
Pursuant to the Co-Operation Agreement, NTTC and PLDT have agreed as
soon as possible, and in any event within 60 days of the completion of the
Transfer of DoCoMo PLDT Shares to DoCoMo, to amend the Registration Rights
Agreement to increase NTTC's present entitlement to require four Demand
Registrations (as defined in the Registration Rights Agreement) to six Demand
Registrations, and to review the provisions of the Registration Rights
Agreement and hold discussions with DoCoMo to determine whether additional
amendments are required.
Pursuant to the Stock Sale and Purchase Agreement, NTTC and DoCoMo
have agreed to use good faith efforts to negotiate their respective exercise of
any rights under the Registration Rights Agreement, as amended pursuant to the
Co-Operation Agreement, taking into account the respective interests of NTTC
and DoCoMo.
After July 1, 2006, NTTC and DoCoMo have agreed, pursuant to the Stock
Sale and Purchase Agreement, to negotiate in good faith any rights under the
Registration Rights Agreement and the timing of exercising such rights.
D. NTTC Commercial Agreements
Ancillary to the SMART Transaction, PLDT and NTTC entered into various
commercial agreements (the "NTTC Commercial Agreements") which provide for,
among other things, the provision of mutual services on arm's length pricing
terms, access to NTTC's telecommunications network services and joint marketing
efforts. PLDT and NTTC also entered into an Advisory Services Agreement in
connection with these commercial agreements.
1. Service Provider Agreement
NTTC, along with certain other service providers, operates global and
international data managed telecommunications services marketed under the brand
name "Arcstar" using the telecommunications network of NTTC and other service
providers (the "Arcstar Network Services"). In connection with the appointment
of PLDT as a service provider of the Arcstar Network Services, the parties
agreed to the following:
(a) NTTC, at its cost and expense, is required to design the system
specification of the equipment through which PLDT will provide the Arcstar
Network Services. PLDT agreed to pay for the installation, assembly and
subsequent maintenance and modification of such equipment.
(b) NTTC agreed to design and determine a global network topology for
use in connection with the Arcstar Network Services and to the extent
commercially practical, PLDT agreed to prepare, install, set-up, maintain, and
modify, at its cost and expense, the facilities within its network and the
international leased circuits to be used in connection with the provision of
the Arcstar Network Services in the Philippines.
(c) PLDT is required to procure, maintain, manage and operate, at its
cost and expense, standard local access lines in the Philippines to be used for
the purpose of providing the Arcstar Network Services, the establishment of
which is subject to NTTC's acceptance.
(d) PLDT is obligated, at its cost and expense, to procure the carrier
management equipment and install and design the system-configuration of the
carrier management equipment as specified by NTTC for rental or sale to its
customers.
(e) PLDT has agreed to promote, market and sell the Arcstar Network
Services to its customers on a preferential basis over other competing services
subject to customer suitability.
2. Tradename and Trademark Agreement
PLDT entered into an agreement with NTTC pursuant to which NTTC
licenses to PLDT certain tradenames and trademarks to be used in connection
with the marketing, promotion and selling of the Arcstar Network Services in
the Philippines.
3. Conventional International Telecommunications Services Agreement
PLDT and NTTC agreed to certain mutually beneficial bilateral
arrangements for conventional international telecommunications services as
follows:
(a) PLDT and NTTC provide each other with transit and refilling
services of their respective international outgoing calls subject to various
conditions, including having excess capacity, non-interference with existing
bilateral arrangements, terms no less favorable than those offered to other
carriers and overall strategic objectives.
(b) PLDT and NTTC seek to agree upon the terms on which they terminate
the outgoing calls to Japan and the Philippines.
(c) Subject to certain terms and conditions, PLDT and NTTC agreed to
cooperate in matters relating to international private leased circuit services,
excess cable capacity and cable capacity swap and planning.
4. Internet Agreement
PLDT and NTTC agreed to coordinate their plans for deployment of
Internet transmission capacity for access to and connectivity with the public
Internet as follows:
(a) PLDT and its subsidiaries may not construct or procure additional
Internet capacity between the Philippines and destinations outside of the
Philippines or increase the capacity of its existing access to and connectivity
with the Internet without prior consultation with NTTC.
(b) The parties have agreed to form a joint committee to discuss
opportunities for use by PLDT and its subsidiaries of NTTC's international
transport facilities providing access to and connectivity with the Internet.
(c) Each of PLDT and its subsidiaries are required to inform NTTC of
its plans to allow a third party to carry its capacity or plans to use or
increase its capacity for its own use or use by a third party (other than
capacity to the U.S.) and NTTC will be given a right of last bid to match the
terms and conditions of such proposal.
(d) Subject to certain conditions, NTTC will also be given a right of
last bid in connection with PLDT's (or its subsidiaries') plans to introduce
Internet-related and other value added services on the Internet, which require
end-to-end arrangements with overseas providers.
5. Advisory Services Agreement
NTTC provides PLDT with technical consultants, who advise PLDT's
finance group, strategy and support sector, information systems sector and
corporate customer service group and the Arcstar Network Services.
2) The following describes the 2006 DoCoMo Transaction giving rise to the
filing of Amendment No. 2.
Pursuant to the Co-Operation Agreement, PLDT has agreed to use
reasonable efforts to procure that, with respect to the Advisory Services
Agreement, PLDT and SMART will receive at a minimum the specified aggregate
number of Advisors (as defined in the Advisory Services Agreement) to be
provided by NTTC and DoCoMo (together), in accordance with the timetable set
out in the Co-Operation Agreement. PLDT, NTTC and DoCoMo have agreed to review
these numbers from time to time.
In addition and pursuant to the Co-Operation Agreement, as soon as
possible and in any event within 60 calendar days immediately after the
Transfer of the DoCoMo PLDT Shares to DoCoMo pursuant to the Stock Sale and
Purchase Agreement, NTTC, DoCoMo and the FPC Group have agreed to review and
hold discussions with one another in good faith with a view to determine
whether the NTT Commercial Agreements need to be amended in light of the
Co-Operation Agreement.
A. The Stock Sale and Purchase Agreement.
As briefly described above, on January 31, 2006, NTTC and NTT DoCoMo
entered into the Stock Sale and Purchase Agreement pursuant to which NTTC
agreed to transfer the DoCoMo PLDT Shares to DoCoMo. The transaction was
completed on March 14, 2006, and as a result:
(a) DoCoMo acquired from NTTC 12,633,486 Common Shares representing
approximately 7.0% of the issued capital stock of the Company; and
(b) NTTC transferred to DoCoMo 12,633,486 Common Shares, reducing its
shareholdings in the Common Shares to 12,633,487, representing
approximately 7.0% of the issued capital stock of the Company.
The purchase price for the DoCoMo PLDT Shares was fixed at
52,102,815,772 Japanese Yen, and was based on the volume-weighted average of
the closing market prices of the Common Shares during the thirty calendar days
immediately prior to the date of the Stock Sale and Purchase Agreement. The
purchase price, fixed at a conversion rate of 2.26 Japanese Yen for 1
Philippine Peso, was paid by DoCoMo in immediately available funds by wire
transfer at the closing of the Transfer.
A copy of the Stock Sale and Purchase Agreement was filed as Exhibit 7
of Amendment No. 2, and any description contained in this Amendment No. 3
relating to the Stock Sale and Purchase Agreement does not purport to be
complete and is qualified in its entirety by reference to the Stock Sale and
Purchase Agreement filed as Exhibit 7 of Amendment No. 2.
1. Co-Investment Arrangements
From the date of the Stock Sale and Purchase Agreement, and with
respect to any matter primarily relating to the operation of wireless
telecommunications services, including without limitation, matters relating to
i-mode and the business of SMART Communications Inc., NTTC will cause the COA
to use good faith effort to discuss with and act in accordance with the
direction of DoCoMo's senior technical advisor.
Upon the appointment of the COA by DoCoMo on or before July 1, 2006,
from July 1, 2006, DoCoMo will cause the COA to act in accordance with the
direction of NTTC's executive advisor in the Philippines with respect to any
matter primarily relating to the operation of fixed-line telecommunications,
data or information and communications technology services.
On and after the date of the Stock Sale and Purchase Agreement, each
of NTTC and DoCoMo have agreed not to take any action that would have an effect
of amending or terminating (i) any rights or obligations of NTTC under the
Commercial Agreements and (ii) any rights or obligations of DoCoMo under any
agreement between DoCoMo and PLDT or SMART. Each of NTTC and DoCoMo has agreed
to use good faith efforts to discuss with each other any conflict of interest
matters arising therefrom, taking into account each other's commercial and
business interests.
From July 1, 2006, NTTC and DoCoMo have agreed to use good faith
efforts to negotiate their respective exercise of any rights under the
Registration Rights Agreement, as amended pursuant to the Co-Operation
Agreement, taking into account the respective interests of NTTC and DoCoMo.
B. The Co-Operation Agreement
As described under Item 3, on January 31, 2006, NTTC, DoCoMo and the
FPC Parties entered into the Co-Operation Agreement to grant DoCoMo certain
benefits and to amend the Shareholders Agreement and the Strategic Agreement in
connection with DoCoMo's proposed acquisition of the Common Shares from NTTC. A
copy of the Co-Operation Agreement was filed as Exhibit 8 of Amendment No. 2,
and any description contained in this Amendment No. 3 relating to the
Co-Operation Agreement does not purport to be complete and is qualified in its
entirety by reference to the Co-Operation Agreement filed as Exhibit 8 of
Amendment No. 2.
1. Provisions of the Co-Operation Agreement Effective on the Date of
the Co-Operation Agreement
(a) Permitted Transfer of the Common Shares
Any transfer of the Common Shares from NTTC to DoCoMo is deemed to be
a transfer to a Permitted Transferee, and will not trigger FPC's right of first
offer, or result in default or constitute ground for termination of the
Shareholders Agreement or the Strategic Agreement.
DoCoMo and NTTC have agreed that all the Common Shares held by DoCoMo
and NTTC as a result of the Transfer shall be subject to the covenants of the
Shareholders Agreement and Strategic Agreement, as amended by the Co-Operation
Agreement, as if DoCoMo were NTTC and a party to such agreements.
(b) Alliance
PLDT has agreed not to enter into any contract, understanding or
arrangement relating to preferred roaming or the lost inter operator tariff
with any person carrying on a Competing Business in Japan for a period of six
months from the date of the Co-Operation Agreement, without the prior consent
of DoCoMo.
2. Provisions of the Co-Operation Agreement Effective Upon the Closing
of the Stock Purchase and Sale Agreement
(a) Lock-up
The Co-Operation Agreement provides that prior to and including the
third anniversary of the Effective Date, DoCoMo shall not without the prior
written consent of the FPC Parties, and FPC Parties shall not without the prior
written consent of DoCoMo, transfer or create or permit to exist any
Encumbrance (as defined in the Shareholders Agreement), except those set out
the Co-Operation Agreement.
(b) Restriction on Share Acquisitions
NTTC and DoCoMo have warranted that they shall procure that their
respective representatives, advisers, and subsidiaries and affiliates and their
respective representatives and advisers shall not, directly or indirectly,
together hold more than 21% of then issued and outstanding Common Shares. If
such event does occur, the FPC Parties have the right to terminate their
respective rights and obligations under the Co-Operation Agreement, the
Shareholders Agreement and the Strategic Agreement by written notice to PLDT,
NTTC and DoCoMo. The right of FPC to terminate the above agreements will
terminate if FPC, its subsidiaries and affiliates hold less than 18.5% of the
Common Shares then issued and outstanding.
(c) Support
Each of NTTC, DoCoMo and the FPC Parties have agreed that to the
extent permissible under applicable laws and regulations of the Philippines and
other jurisdictions, each of NTTC, DoCoMo and the FPC Parties will cast its
vote as a PLDT shareholder in support of any resolution proposed by the PLDT
board of directors for the purpose of safeguarding PLDT from a Hostile
Transferee. If NTTC, DoCoMo, or a FPC Party reasonably determines such action
would or might violate any applicable law or regulation, then NTTC, DoCoMo, or
any of the FPC Parties will not be bound by the above obligation.
A "Hostile Transferee" is defined under the Co-Operation Agreement to
mean any person (other than NTTC, DoCoMo, FPC or any of their respective
affiliates) determined to be so by the board of directors of PLDT and includes,
without limitation, a person who announces an intention to acquire, seeks to
acquire or acquires 30% or more of the Common Shares then issued and
outstanding from time-to-time or having (by itself or together with itself)
acquired 30% or more of such Common Shares announces an intention to acquire,
seeks to acquire or acquires a further 2% of such Common Shares (a) at a price
per share which is less than the fair market value of a Common Share as
determined by the board of PLDT as advised by a professional financial advisor,
(b) which is subject to conditions which are subjective or which could not
reasonably be satisfied, (c) without making an offer for all the Common Shares
not held by it and/or its affiliates and/or persons who, pursuant to an
agreement or understanding (whether formal or informal), actively cooperate to
obtain or consolidate control over PLDT, (d) whose offer for the Common Shares
is unlikely to succeed or (e) whose intention is otherwise not bona fide;
provided that, no person shall be a Hostile Transferee unless prior to making
such determination, the board of directors of PLDT shall have used reasonable
efforts to discuss with NTTC and DoCoMo in good faith regarding whether such
person should be considered a Hostile Transferee.
(d) Principle of Co-Operation, Exercise of Rights
NTTC and DoCoMo have provided notice to PLDT and each of the FPC
Parties that NTTC has transferred to DoCoMo the First Minimum Shareholding
Threshold of not less than 12,633,486 Common Shares on March 14, 2006 (the
"Effective Date"). After the Effective Date, NTTC, DoCoMo and FPC Parties have
agreed that references to "NTT Group" under the Shareholders Agreement and the
Strategic Agreement shall include NTTC and its subsidiaries and DoCoMo and its
subsidiaries. References to an NTT Party shall be construed as references to
NTTC and DoCoMo and their respective Permitted Transferees (as defined in the
Shareholders Agreement).
(e) Exercise of Rights by DoCoMo and NTTC
In respect to rights of NTTC and DoCoMo set forth in the Co-Operation
Agreement, NTTC and DoCoMo have agreed to discuss between themselves the manner
in which such rights shall be exercised. NTTC and DoCoMo have also agreed to
consult with each other with respect to their first refusal rights. Both
parties have agreed that each is entitled to purchase any or all of the Common
Shares which the other party decides not to purchase.
(f) Permitted Transfers of the Common Shares
In the event DoCoMo proposes to transfer any Common Shares which would
result in NTTC, DoCoMo or their respective subsidiaries holding, in aggregate,
less than 10% of the Common Shares then issued and outstanding, NTTC will have
the right of first offer to purchase the Common Shares from DoCoMo on terms and
conditions no less favorable to DoCoMo than those on which DoCoMo proposes to
transfer such Common Shares. Such right shall be superior to any right of first
refusal which any of the FPC Parties may have in respect of such proposed
transfer under the Shareholders Agreement. Any transfer from DoCoMo to NTTC
pursuant to the exercise by NTTC of its rights in such circumstance shall not
give rise to a right of first offer by the FPC Parties under the Shareholders
Agreement and shall be a transfer to a Permitted Transferee.
(g) Board Appointments
In respect of NTTC's right to nominate two directors to the board of
PLDT, each of NTTC and the FPC Parties have agreed to use reasonable efforts to
replace one existing NTTC nominee on the board of PLDT with one DoCoMo nominee.
Upon the collective holdings of the Common Shares by NTTC and its subsidiaries
and DoCoMo and its subsidiaries reaching 20% of the Common Shares then issued
and outstanding, and so long as DoCoMo and NTTC and their respective
subsidiaries continue to hold at least 17.5% of the Common Shares then issued
and outstanding, each of NTTC and the FPC Parties have agreed to use reasonable
efforts to effect the election of one additional DoCoMo nominee as a director
of PLDT.
In respect of NTTC's right to nominate two directors to the board of
SMART, NTTC and the FPC Parties have agreed to use reasonable efforts to
replace one existing NTTC nominee on the board of PLDT with one DoCoMo nominee.
Upon the collective holdings of the Common Shares by NTTC and DoCoMo and their
respective subsidiaries reaching 20% of the Common Shares then issued and
outstanding, and so long as DoCoMo and NTTC continue to hold at least 17.5% of
the Common Shares then issued and outstanding from time to time, each of NTTC
and the FPC Parties have agreed to use reasonable efforts to effect the
election of one additional DoCoMo nominee as a director of SMART.
(h) DoCoMo Holds at Least 17.5% of All the Common Shares
When NTTC and DoCoMo and their respective subsidiaries collectively
hold 20% of the Common Shares then issued and outstanding and continue to hold
at least 17.5% of the Common Shares then issued and outstanding from time to
time, PLDT has agreed to consult DoCoMo prior to the first submission to the
board of PLDT of any proposal of investment in an entity that would primarily
engage in a business that would be in direct competition or substantially the
same business opportunities, customer base, products or services with business
carried on by DoCoMo, or which DoCoMo has announced publicly an intention to
carry on.
Each of NTTC, PLDT and the FPC Parties have agreed that it will use
reasonable efforts to procure that SMART does not cease to carry on business,
dispose of all of its assets, issue Common Capital Stock, merge or consolidate,
or effect winding up or liquidation without PLDT first consulting with DoCoMo
no later than thirty days prior to the first submission to the board of PLDT or
SMART, or SMART Mancom for approval of any such action.
In the event PLDT seeks to transfer, and seeks to cause any member of
the PLDT Group to transfer, any SMART Common Capital Stock to any Person who is
not a member of the PLDT Group, PLDT will first consult with DoCoMo no later
than thirty calendar days prior to the first submission to the board of PLDT,
Joint Mancom or PLDT Mancom for approval for any such transfer. An appropriate
and duly authorized representative of DoCoMo shall be entitled to participate
in the internal discussions or meetings in PLDT with respect to such intended
transfer.
(i) Additional Rights in Favor of DoCoMo
NTTC, PLDT and the FPC Parties have caused SMART to execute an
agreement between SMART and DoCoMo to implement i-mode. PLDT and DoCoMo have
also agreed in principle to collaborate with each other on the business
development of W-CDMA mobile communication network. In addition, PLDT has
agreed, to the extent of the power conferred by its direct or indirect
shareholding of SMART:
(a) to cause SMART to become a member of a strategic alliance group
for international roaming and corporate sales and services; and
(b) to negotiate in good faith with DoCoMo to enter into a business
relationship concerning preferred roaming and inter-operator tariff discount
between DoCoMo and SMART with a view to concluding a binding agreement as soon
as possible but in any event not later than April 30, 2006.
PLDT has agreed to use reasonable efforts to procure that PLDT and
SMART receive at a minimum nine Advisors to be provided by NTTC and DoCoMo in
accordance with the time schedule set out in the Co-Operation Agreement.
(j) Non-Compete
In case PLDT enters into any contractual arrangement with any person
relating to the operation of a Competing Business in Japan, PLDT will from date
of the Co-Operation Agreement until June 30, 2006, first provide NTTC, and if
NTTC declines, then provide DoCoMo the same opportunity, and from July 1, 2006,
provide DoCoMo, and if DoCoMo declines, then provide to NTTC the opportunity.
In case PLDT, SMART or any of SMART's subsidiaries intends to enter into any
contractual arrangement on or after July 1, 2006 with any person who is engaged
in a Competing Business with DoCoMo in the Philippines, PLDT shall use its
reasonable efforts to procure SMART and its subsidiaries to first provide
DoCoMo with the same opportunity to enter into such an agreement with PLDT,
SMART or any such SMART subsidiary.
(k) Transitional Arrangements
NTTC, DoCoMo and the FPC Parties have agreed that the COA, currently
appointed by NTTC, will be replaced by a DoCoMo nominee on or before July 1,
2006. From the Effective Date, DoCoMo will have the right to appoint a senior
technical advisor to SMART, and such advisor will assume the role of COA upon
the replacement of the COA on or before July 1, 2006. Prior to becoming a COA,
the senior technical advisor will be entitled to be an observer at meetings of
the board of SMART, and advisor to each of SMART Mancom, PLDT Mancom and Joint
Mancom, and director of the board of PLDT. The new COA will be entitled to be
an observer at meetings of the board of SMART, an advisor to each of SMART
Mancom, PLDT Mancom and Joint Mancom, and a direct of the board of PLDT.
(l) Provision of PLDT's Financial Information
If DoCoMo and/or NTT are required in preparation of its statutory
financial statements in accordance with GAAP to reflect their respective
interests in the Common Shares using the equity method, PLDT has agreed to
provide DoCoMo with financial information in relation to PLDT that is necessary
to satisfy such reporting obligations, including information specified in the
Co-Operation Agreement.
(m) Termination
The Co-Operation Agreement, the Strategic Arrangements (as defined in
the Strategic Agreement) and the Shareholders Agreement will terminate if NTTC,
DoCoMo or their respective subsidiaries cease to own, in aggregate, full legal
and beneficial title to at least 10% of the Common Shares then issued and
outstanding (subject to a 60 days cure period as set out in the Co-Operation
Agreement). If the FPC Parties and their respective subsidiaries cease to have
effective voting power in respect to at least 18.5% of the Common Shares then
issued and outstanding, their respective rights and obligations under the
Co-Operation Agreement, Strategic Agreement and the Shareholders Agreement will
terminate.
3. Provisions of the Co-Operation Agreement Effective on and after
July 1, 2006
NTTC and DoCoMo have agreed to discuss between themselves the manner
in which their rights will be exercised. Prior to July 1, 2006, NTTC is
responsible for notifying PLDT and the FPC Parties of decisions with respect to
exercise of such rights to PLDT and the FPC Parties. From and after July 1,
2006, DoCoMo is responsible for notifying PLDT and the FPC Parties of such
decisions. In each case, PLDT and the FPC Parties are entitled to rely on any
such notice as if it had been given by both NTTC and DoCoMo.
NTTC and DoCoMo have also agreed that NTTC will irrevocably assign to
DoCoMo on July 1, 2006, all of NTTC's rights to nominate and provide the COA
pursuant to the Advisory Services Agreement.
Information about pledges or contingencies giving other persons voting or
investment power over the Common Shares beneficially owned by the Reporting
Persons.
The Fernandez Petition
On December 9, 1999, Victor C. Fernandez (a PLDT stockholder owning
preferred shares), filed a petition (with an application for the issuance of a
writ of preliminary injunction against the then incumbent directors of PLDT
before the Philippine Securities and Exchange Commission (the "PSEC")
questioning the validity of the resolutions of the Board of Directors of PLDT
authorizing the acquisition of SMART. Fernandez claimed that he would suffer
injury from dilution of his shares and the possible revocation of PLDT's
franchise in view of the violation of the Philippine Constitution's foreign
equity restrictions and anti-trust provision if said resolutions were
implemented. Fernandez also claimed that NTTC's approval rights would
constitute foreign intervention in the management and operation of a public
utility and that the SMART shares being acquired by PLDT were overvalued.
The request of Victor C. Fernandez for the issuance by the PSEC of a
temporary restraining order to enjoin the holding of the special meeting of the
stockholders of PLDT on December 10, 1999 was denied by the PSEC thereby
allowing said meeting to proceed as scheduled. The stockholders approved the
resolutions passed by the Board of Directors authorizing the acquisition of
SMART. On June 20, 2000, the PSEC denied Fernandez's application for a writ of
preliminary injunction.
In view of the provisions of Republic Act No. 8799 enacted in July
2000, referred to as the Securities Regulations Code, transferring the
jurisdiction of intra-corporate controversies to the Regional Trial Court, the
PSEC transferred the case to the Regional Trial Court of Manila. Upon a motion
filed by the respondents, the case was later ordered transferred to the
Regional Trial Court of Makati City, the proper venue pursuant to the Rules of
Procedure Governing Intra-Corporate Controversies because it has jurisdiction
over the place where PLDT's principal office is located.
After due proceedings, the Makati Court issued a February 21, 2003
Decision upholding the subject resolutions and dismissing Fernandez's petition.
Fernandez then appealed to the Philippine Supreme Court in April 2003, but the
Court dismissed his appeal (and also denied his motion to elevate the case to
the Supreme Court en banc) and later denied his two motions for reconsideration
on June 9, 2003 and November 22, 2004. The case's dismissal was confirmed to
have become final and executory with the Supreme Court's issuance of an Entry
of Judgment on December 21, 2004.
The PLDT directors-respondents to Fernandez' petition have pursued
counterclaims (consisting of attorney's fees and moral and exemplary damages)
against him, in light of what they perceived to be his baseless suit. After
hearing the respondents' evidence, the Makati Court denied their counterclaims
on February 27, 2004. The respondents have elevated this issue to the Court of
Appeals which, on May 3, 2005, after the parties exchanged pleadings, deemed
the matter submitted for resolution. The parties are awaiting the Court of
Appeals' decision.
Item 7. Material to be Filed as Exhibits.
Item 7 of the Schedule 13D is hereby amended and supplemented
by adding the following exhibits:
Exhibit No. Exhibit Name
1 Joint Filing Agreement dated March 16, 2006.
2* Strategic Agreement, dated September 28, 1999, by and among
PLDT, the FPC Group and NTTC 3* First Amendment to the
Strategic Agreement, dated March 8, 2000, by and among PLDT,
the FPC Group and NTTC.
4* Second Amendment to the Strategic Agreement, dated March 8,
2000, by and among PLDT, the FPC Group and NTTC.
5* Shareholders Agreement, dated March 24, 2000, by and among
NTT-UK, NTTC and the FPC Parties.
6* Registration Rights Agreement, dated March 24, 2000, by and
among NTT-UK, NTTC and PLDT.
7# Stock Sale and Purchase Agreement dated January 31, 2006
8# Co-Operation Agreement dated January 31, 2006
*Incorporated by reference from the Reporting Persons' Schedule 13D
dated March 24, 2000.
#Incorporated by reference from the Reporting Persons' Amendment No. 2
dated January 31, 2006.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 16, 2006 NIPPON TELEGRAPH AND TELEPHONE
CORPORATION
By: /s/ Kiyoshi Kousaka
Name: Kiyoshi Kousaka
---------------------------------
Title: Senior Vice President
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: March 16, 2006 NTT COMMUNICATIONS CORPORATION
By: /s/ Haruhiko Yamada
Name: Haruhiko Yamada
-------------------------------------
Title: Vice President and Executive
Manager, Corporate Planning
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS
OF
NIPPON TELEGRAPH AND TELEPHONE CORPORATION ("NTT")
The name, country of citizenship, residential or business address,
present principal occupation or employment, and the name, principal business
and address of any corporation or other organization in which such employment
is conducted, of each of the directors and executive officers of NTT is set
forth below. All of the persons listed below are directors of NTT and unless
otherwise indicated, each occupation set forth opposite a director's name
refers to employment with NTT. If no address is given, the director's business
address is 3-1, Otemachi 2-chome, Chiyoda-ku, Tokyo 100-8116, Japan. NTT's
principal business is serving as a holding company for subsidiaries engaged in
providing telecommunications services. These services fall into seven major
classes: telephone services, telegraph services, leased circuit services, data
communication facility services, Integrated Services Digital Network ("ISDN")
services, sale of telecommunication equipment and other services.
Directors
Name Country of Citizenship Present Principal Occupation or Employment and
Principal Business
----------------------------- ----------------------------- ----------------------------------------------------
Norio Wada Japan President & CEO
Satoshi Miura Japan Senior Executive Vice President
Ryuji Yamada Japan Senior Executive Vice President
Yuji Inoue Japan Senior Vice President
Shin Hashimoto Japan Senior Vice President
Hiroo Unoura Japan Senior Vice President
Ken Yagi Japan Senior Vice President
Akira Arima Japan Senior Vice President
Kiyoshi Kousaka Japan Senior Vice President
Haruki Matsuno Japan Senior Vice President
Takashi Imai Japan Senior Vice President
Chairman Emeritus and Executive
Counselor of Nippon Steel Corporation,
6-3, Otemachi 2-chome, Chiyoda-ku,
Tokyo 100-8017, Japan
Yotaro Kobayashi Japan Senior Vice President
Chairman and Representative Director of
Fuji Xerox Co., Ltd.,
17-22, Akasaka 2-chome, Minato-ku,
Tokyo 107-0052, Japan
Masamichi Tanabe Japan Corporate Auditor
Johji Fukuda Japan Corporate Auditor
Masao Iseki Japan Corporate Auditor
Yoshio Miwa Japan Corporate Auditor
Yasuchika Negoro Japan Corporate Auditor
SCHEDULE B
----------
DIRECTORS AND EXECUTIVE OFFICERS
OF
NTT COMMUNICATIONS CORPORATION ("NTTC")
The name, country of citizenship, residential or business address,
present principal occupation or employment, and the name, principal business
and address of any corporation or other organization in which such employment
is conducted, of each of the directors and executive officers of NTTC is set
forth below. All of the persons listed below are directors of NTTC and unless
otherwise indicated, each occupation set forth opposite a director's name
refers to employment with NTTC. If no address is given, the director's business
address is 1-6 Uchisaiwai-cho, 1-chome, Chiyoda-ku, Tokyo 100-8019, Japan.
NTTC's principal business is providing international and long distance
telecommunications services and data transmission services.
Directors
---------
Name Country of Citizenship Present Principal Occupation or Employment and
Principal Business
----------------------------- ----------------------------- ----------------------------------------------------
Hiromi Wasai Japan President & CEO
Masayuki Nomura Japan Senior Executive Vice President
Masaki Mitsumura Japan Senior Executive Vice President
Masae Tamura Japan Executive Vice President
Osamu Inoue Japan Executive Vice President
Yo Yusa Japan Executive Vice President
Masayuki Nakagawa Japan Senior Vice President
Koichi Maeda Japan Senior Vice President
Akira Yabiki Japan Senior Vice President
Sadao Maki Japan Senior Vice President
Mitsuo Murakami Japan Senior Vice President
Masanobu Suzuki Japan Senior Vice President
Tatsuo Kawasaki Japan Senior Vice President
Testuya Obata Japan Senior Vice President
Yutaka Yamaga Japan Corporate Auditor
Kenichi Shiraishi Japan Corporate Auditor
Kikuo Mito Japan Corporate Auditor
INDEX TO EXHIBITS
Exhibit No. Exhibit Name
----------- ------------
1 Joint Filing Agreement dated March 16, 2006.
2* Strategic Agreement, dated September 28, 1999, by and among
PLDT, the FPC Group and NTTC 3* First Amendment to the
Strategic Agreement, dated March 8, 2000, by and among PLDT,
the FPC Group and NTTC.
4* Second Amendment to the Strategic Agreement, dated March 8,
2000, by and among PLDT, the FPC Group and NTTC.
5* Shareholders Agreement, dated March 24, 2000, by and among
NTT-UK, NTTC and the FPC Parties.
6* Registration Rights Agreement, dated March 24, 2000, by and
among NTT-UK, NTTC and PLDT.
7# Stock Sale and Purchase Agreement dated January 31, 2006
8# Co-Operation Agreement dated January 31, 2006
*Incorporated by reference from the Reporting Persons' Schedule 13D
dated March 24, 2000.
#Incorporated by reference from the Reporting Persons' Amendment
No. 2 dated January 31, 2006.
EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13d-1(f) under the Securities Exchange Act
of 1934, as amended, the undersigned agree to the joint filing on behalf of
each of them of a statement on Schedule 13D with respect to the shares of
common capital stock of Philippine Long Distance Telephone Company and further
agree that this Joint Filing Agreement be included as an Exhibit to such joint
filing. This Agreement may be executed in any number of counterparts all of
which taken together shall constitute one and the same instrument.
In evidence thereof, the undersigned, being duly authorized, hereby
executes this Agreement on March 16, 2006.
NIPPON TELEGRAPH AND TELEPHONE CORPORATION
By: /s/ Kiyoshi Kousaka
----------------------
Name: Kiyoshi Kousaka
Title: Senior Vice President
NTT COMMUNICATIONS CORPORATION
By: /s/ Haruhiko Yamada
Name: Haruhiko Yamada
--------------------
Title: Vice President and Executive Manager
Corporate Planning