AT&T LATIN AMERICA CORP
EMPLOYMENT AGREEMENT DATED JUNE 2002
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<TYPE>EX-10.2
<SEQUENCE>4
<FILENAME>w65708exv10w2.htm
<DESCRIPTION>EMPLOYMENT AGREEMENT DATED JUNE 2002
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<P align="right"><FONT size="2"><B>Exhibit&nbsp;10.2</B>
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<P align="center"><FONT size="2">&#091;This is an unofficial English translation of the original Spanish language agreement&#093;
</FONT>
<P align="center"><FONT size="2"><B>EMPLOYMENT AGREEMENT</B>
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;EMPLOYMENT AGREEMENT, by and between AT&#038;T Peru S.A., RUC number
20282037999, located at Av. Larco 1301, Torre Parque Mar, Piso 8&#186;, in the city
of Miraflores, Lima, Peru. (the &#147;Company&#148;), duly represented by the President
of the Board of Directors Mr.&nbsp;Isamel Benavides Correa, DNI number 08246154 and
the legal counsel Mrs.&nbsp;Rosa Virginia Nakagawa Morales, DNI number 09136432;
and on the other party, Mr.&nbsp;Jos&#233; Antonio Gandullia Castro, DNI number 06467247
(the &#147;Executive&#148;), located in Av. Alcanfores N&#186; 1275, Distrito de Miraflores,
Lima, dated as of the &#95;&#95;&#95;&#95;&#95;&#95;day of June 2002.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;WHEREAS, the Company desires the Executive serve as its General Manager,
and the Executive desires to so serve, in each case upon the terms and
conditions set forth herein.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NOW THEREFORE, in consideration of the mutual covenants herein contained,
the Company and the Executive hereby agree as follows:
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Employment Period
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp; Agreement to Employ. The Company hereby agrees to employ the
Executive, and the Executive hereby agrees to be employed by the Company,
pursuant to the terms and conditions set forth in this Agreement. The
Executive represents that (i)&nbsp;he is entering into this Agreement voluntarily
and that his employment hereunder and compliance with the terms and conditions
hereof will not conflict with or result in the breach by his of any agreement
to which he is a party or by which he may be bound, (ii)&nbsp;he has not, and in
connection with his employment with the Company will not, violate any
non-solicitation or other similar covenant or agreement by which he is or may
be bound and (iii)&nbsp;in connection with his employment with the Company he will
not use any confidential or proprietary information he may have obtained in
connection with employment with any prior employer.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp; Term of Employment. Unless the Executive&#146;s employment shall sooner
terminate pursuant to Section&nbsp;4, the Company shall employ the Executive for an
unlimited term commencing on the date the Executive has been registered in the
payroll
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<P><FONT size="2">of the Company. The period during which the Executive is employed
pursuant to this Agreement shall be referred to as the &#147;Employment Period&#148;.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Position and Duties.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp; During the Employment Period, the Executive shall be employed as
General Manager of the Company and shall have such duties and responsibilities
as are customarily assigned to individuals serving in such positions and such
other duties consistent with Executive&#146;s titles and positions as the Board of
Directors of the Company (the &#147;Board&#148;) or the Chief Executive Officer of AT&#038;T
Latin America Corp. specifies from time to time. The Executive, in carrying
out his duties under this Agreement, shall report and be subject to the Chief
Executive Officer of AT&#038;T Latin America Corp. During the Employment Period, and
excluding any periods of vacation, holiday, personal leave and sick leave to
which the Executive is entitled, the Executive shall devote the Executive&#146;s
full business time, attention and ability to the business and affairs of the
Company and shall use the Executive&#146;s reasonable best efforts to carry out the
Executive&#146;s responsibilities faithfully and efficiently in a professional
manner. It shall not be considered a violation of the foregoing for the
Executive to (i)&nbsp;serve on corporate or civic boards reasonably approved by the
Company or on charitable boards or committees, (ii)&nbsp;deliver lectures or fulfill
speaking engagements and (iii)&nbsp;manage his or his family&#146;s personal investments,
in each case so long as such activities do not substantially interfere with the
performance of the Executive&#146;s responsibilities as an employee of the Company
in accordance with this Agreement, do not violate the Company&#146;s rules and
policies (or present a material conflict of interest with the Company) and do
not otherwise constitute a violation of Section&nbsp;6 of this Agreement. The
Executive shall comply with the rules and policies of the Company that are
generally applicable to the Company&#146;s senior executives.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp; It is understood that Executive&#146;s position will require substantial
travel.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Compensation.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp; Base Salary. During the Employment Period, the Executive shall
receive an annual base salary of $282,240 (dollars of United States of America)
or its equivalent in Peruvian currency as of the date of payment payable
pursuant to the Company&#146;s normal payroll practices, but no less frequently than
monthly (&#147;Annual Base Salary&#148;). Commencing in 2003, the Annual Base Salary
then in effect shall be reviewed by the Company by no later than April&nbsp;15th of
each year and may be increased (but not decreased) by such amount as the
Company in its sole discretion shall determine.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;Annual Bonus. The Executive shall be entitled to participate in the
annual benefit plan for its executive officers.. Executive&#146;s target annual
bonus will be 50% of his Annual Base Salary as in effect for such year.
Executive&#146;s actual annual bonus will be determined based on specified target
performance goals with respect to which such target and maximum bonus, etc.,
will be determined as established by the Board of Director Compensation
Committee or the Chief Executive Officer of AT&#038;T Latin America Corp.
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp; Benefit Plans and Perquisites. The Executive shall be entitled to
participate in all benefit, pension, savings, welfare, perquisite and other
plans or arrangements that the Company may establish from time to time for its
senior executive officers, subject to the terms and conditions of such plans or
arrangements. The Executive shall be eligible to participate in retention
plans that the Company has in place.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp; Expenses. During the Employment Period, the Executive shall be
entitled to receive reimbursement for all reasonable business expenses incurred
by the Executive in carrying out the Executive&#146;s duties under this Agreement in
accordance with the policies of the Company, provided that the Executive
complies with the policies, practices and procedures of the Company for
submission of expense reports, receipts, or similar documentation of such
expenses.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp; Vacation. During the Employment Period, the Executive shall be
entitled to thirty (30)&nbsp;days paid vacation period per year.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp; Vehicle. During the Employment Period, the Company will transfer to
the Executive the use of a vehicle for his transportation. The vehicle may be
a truck Nissan Pathfinder or any other vehicle as selected by the Executive
provided that the vehicle value is in the range between $35,000 or $50,000 to
the maximum. The Company will be responsible for all the expenses for general
maintenance or repairs derived from a normal use. The Parties acknowledge that
the Executive has a truck Nissan Pathfinder dark green color year 2000 with
motor number VG 33431741 and series number JN1TAZR50Z0021413, individualized
with tag number RIW-793 with the purpose to facilitate the transportation and
other functions of the Executive. The Company agrees to facilitate the
Executive the acquisition of such vehicle by transferring the right to buy the
same at the time that the option to buy becomes effective pursuant to the terms
of the financial lease of the vehicle. The value of the transfer will be the
amount of such option as set forth in the Agreement for Financing Lease entered
into AT&#038;T and the Banco Sudamericano for the acquisition of such vehicle. If
the employment relation between the Company and the Executive is terminated,
the Company agrees to transfer such vehicle in consideration for the balance of
the financial leasing payments pending as of the date of employment termination
plus the value of purchase option as set forth in the financial leasing
agreement mentioned before.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp; Other Benefits. During the Employment Period, the Executive shall
have the rights for the benefits corresponding under Peruvian laws pursuant to
the terms and conditions set forth in such laws.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Termination of Employment.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp; Death or Disability. The Executive&#146;s employment shall terminate
automatically upon the Executive&#146;s death. In case the Executive becomes
disabled to the point of being incapable to execute his obligations for the
Company, as determined by the principles set forth in the Peruvian employment
laws, this Agreement shall be terminated pursuant to Articles 16.e) and 23.a)
from &#147;<I>Text Unico Ordenado del Decreto Legislativo</I>
</FONT>
<P align="center"><FONT size="2">3</FONT>
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<P><FONT size="2"><I>No.&nbsp;728, Ley de Productividad y Competividad Laboral</I>&#148;, approved by Supreme
Decree No.&nbsp;003-97-TR..
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp; By the Company. The Company may terminate the Executive&#146;s employment
during the Employment Period for Cause or without Cause. For purposes of this
Agreement, &#147;Cause&#148; means the events listed in the Articles 23 and 24 of &#147;<I>Text
Unique Organized of Decree Legislative No.&nbsp;728</I>&#148;, approved by Supreme Order No.
003-97-TR. In that sense &#147;Cause&#148; shall include at least the following events:
(i)&nbsp;detriment of physical or mental conditions or the upcoming inability
relevant to the performance of the services herein, (ii)&nbsp;deficient performance
in connection with the ability of the employee compared to the average
performance under similar duties and conditions, (iii)&nbsp;the unjustified refusal
of the employee to undergo a medical exam previously agreed or established by
law, relevant to the employment relation, or to follow the preventive or
curative measures ordered by a physician to prevent accidents or diseases, (iv)
material breach that includes at least the following events: (iv.a) breach of
the employment obligations that implies the breach of the good faith in
employment relationships, the recurring resistance to orders related to
employment duties, recurring discontinue of duties and material non-observance
of the Internal Labor Rule or the Rule for Security and Industrial Higine,
approved or issued by the competent authority, as applicable, (iv.b)
intentional and recurring diminution in the performance of the work, volume or
quality of production duly verified or determined by the inspection services of
the Ministry of Labor and Social Promotion, (iv.c) the misappropriation,
including attempt of misappropriation, of assets or services of the employer,
notwithstanding their value, or that are under its custody as well as the undue
retention or use of the same in its own benefit or in the benefit of third
parties, (iv.d) the use or disclosure to third parties of privileged
information of the employer, the misappropriation or undue use of the Company&#146;s
documents, the false information to employer with the intent to cause damage or
obtain an advantage and unfair competition, (iv.e) the recurring attendance to
the workplace under the influence of alcohol, drugs or intoxicating substances,
and if not recurring, where it is exceptionally seriously because of the nature
of the duties or work (iv.f) the acts of violence, serious lack of discipline,
verbal or written offense to the employer, the employer&#146;s representatives,
upper management or other employees, whether the offense is committed within
the workplace or outside when the events are directly derived from the
employment relationship, (iv.g) intentional damage to buildings, installations,
facilities, machines, instruments, documentation, raw materials and other
assets of the company, (iv.h) abandonment of work for more than three
consecutive days, absences without justification for more than five days in a
thirty day calendar period or more than fifteen days in a hundred and eighty
days calendar period, whether those actions have been sanctioned or not, the
recurring unpunctuality caused by the employee provided that disciplinary
sanctions have been applied prior to written notices and suspensions, (v)&nbsp;a
criminal judgment regarding willful crimes, (vi)&nbsp;suspension by a judicial or
administrative authority of the worker license to perform the worker&#146;s duties
in the workplace for a period of over three months.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition to the Causes listed, the Company can dismiss the Executive in
the following circumstances: (a)&nbsp;Force Majeure, (b)&nbsp;technological, financial,
structural or
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<P><FONT size="2">similar reasons, (c)&nbsp;dissolution or liquidation of the Company and
bankruptcy and (d)&nbsp;restructuring subject to Decree Law No.&nbsp;845. The dismissal
of the Executive by the Company in these four scenarios shall be considered
termination for Cause.
</FONT>

<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp; By the Executive. The Executive may terminate employment with or
without Good Reason. For purposes of this Agreement, &#147;Good Reason&#148; means,
without the Executive&#146;s written consent: (i)&nbsp;a material diminution of the
Executive&#146;s duties or responsibilities or the assignment of responsibilities
that are inconsistent with his position and responsibilities hereunder (it
being understood that the restructuring program and rehabilitation of the
Company and its affiliates developed with the participation of Bain &#038; Co is
not considered a diminution) ; (ii)&nbsp;a reduction in the Executive&#146;s base salary,
annual bonus or long-term incentive compensation opportunity (it being
understood that a reduction in the dollar amount of Executive&#146;s annual bonus
from year to year solely as the result of achievement or failure to achieve the
target performance objectives provided in the annual bonus plan shall not
constitute a reduction in Executive&#146;s annual bonus opportunity) or the benefits
to be made available pursuant to Section&nbsp;3(d); or (iii)&nbsp;a material breach by of
any other provision of the Agreement, in each case that is not cured by the
Company within 30&nbsp;days of receipt of prior written notice from the Executive
setting forth in reasonable detail the circumstances giving rise to such Good
Reason or (iv)&nbsp;all other cases set forth in Article&nbsp;30 of the &#147;<I>Texto Unico
Ordenado del Decreto Legislativo No.&nbsp;728, Ley de Productividad y Competitividad
Laboral</I>&#148; approved by Supreme Decree No.&nbsp;003-97-TR provided that in any case
mentioned in this section the Executive provides 90&nbsp;days advance notice to the
Company.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp; Termination Procedures. Any termination of the Executive&#146;s employment
by the Company or by the Executive shall be communicated by Notice of
Termination to the other party hereto given in accordance with this Agreement.
For purposes of this Agreement, a &#147;Notice of Termination&#148; means a written
notice which (i)&nbsp;indicates the specific termination provision in this Agreement
relied upon, (ii)&nbsp;to the extent applicable, sets forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive&#146;s employment under the provision so indicated.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp; Effect of Termination. Effective as of any Date of Termination, or, if
earlier, as of any date specified by the Company at or following the delivery
of a Notice of Termination, the Executive shall resign, in writing, from all
Board memberships and other positions then held by his with the Company and its
Affiliates.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Obligations of the Company upon Termination.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;General. If, during the Employment Period, the Executive&#146;s employment
terminates for any reason, the Executive (or his estate, beneficiary or legal
representative) shall be entitled to receive (i)&nbsp;any earned or accrued but
unpaid Annual Base Salary through the Date of Termination (including with
respect to unused vacation time), (ii)&nbsp;in the case of any termination of
employment other than for Cause, any earned but unpaid annual bonus with
respect to any fiscal year of the Company ending prior to the Date of
Termination and (iii)&nbsp;all amounts payable and benefits accrued under any
otherwise applicable plan, policy, program or practice of the Company in which
Executive was a participant during his employment with Company in accordance
with the terms thereof.
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp; Other Than for Cause, Death or Disability; Good Reason. If, during
the Employment Period, the Company terminates the Executive&#146;s employment, other
than for Cause, death or Disability, or the Executive terminates employment for
Good Reason, the Company shall, subject to Section&nbsp;12, in addition to the
amounts provided in paragraph (a)&nbsp;above, pay to the Executive (or his estate,
beneficiary or legal representative):
</FONT>
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        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;in twelve (12)&nbsp;equal monthly installments commencing on the first
day of the month following the Date of Termination, the sum of (A)&nbsp;the
Executive&#146;s Annual Base Salary (as then in effect) and (B)&nbsp;the greater of
the Executive&#146;s target bonus for the year in which the Date of Termination
occurs or the average of the Executive&#146;s actual annual bonus paid with
respect to the two years preceding the year in the which Date of
Termination occurs, such sum then divided by twelve (12); and</FONT></TD>
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        <TD><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)&nbsp;at the time annual bonuses for the fiscal year in which the Date
of Termination occurs are paid, a pro rata annual bonus based upon actual
performance under the annual bonus plan for such fiscal year (as determined
by the Board or the Compensation Committee in its reasonable discretion),
to the extent not otherwise paid.</FONT></TD>
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<P><FONT size="2">In addition, the Executive and the Executive&#146;s eligible spouse, dependents and
beneficiaries will continue to be eligible to participate in the Company&#146;s
medical, dental, disability, life and other welfare insurance plans (subject to
the Executive continuing to make any required contributions to such plans) for
a period of twelve (12)&nbsp;months following the Date of Termination (or the
Company shall provide equivalent benefits for such period); provided that such
continued benefits shall cease upon the Executive becoming eligible for
comparable benefits from a subsequent employer.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Executive and the Company emphasize that under any event the former
shall have simultaneously the right to the benefits listed in paragraph b) and
the right to other type of compensation payments for termination without cause
or similar set forth under Peruvian laws or pursuant to a plan, policy, program
or practice. Both Parties agree that this scenario could imply a duplication
of benefits that is not acceptable pursuant to the terms set forth in this
employment agreement. In that sense, if the payment of any other statutory
compensation is claimed, such other compensation will be deducted from the
compensation set forth in paragraph b) of this section.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Covenant Not to Compete. The Executive acknowledges and agrees that
the Company has a legitimate interest in being protected from the Executive&#146;s
being employed in a position of management by an entity that competes with the
Company. The Executive and the Company have considered carefully how best to
protect the legitimate interests of the Company without unreasonably
restricting the economic interests of the Executive, and hereby agree to the
following restrictions, in addition to those contained in Section&nbsp;7, as the
most reasonable and equitable under the circumstances. During the Employment
Period and for a period of twelve (12)&nbsp;months after the Executive&#146;s termination
of employment with the Company for any reason, including expiration of the
Employment Period (the &#147;Restriction Period&#148;), the Executive will not, directly
or indirectly (whether as sole proprietor, partner or venturer,
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<P><FONT size="2">stockholder, director, officer, employee or consultant or in any other
capacity as principal or agent or through any person, subsidiary or employee
acting as nominee or agent):
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp; Conduct or engage in or be interested in or associated with any
person, firm, association, partnership, corporation or other entity that,
within the &#147;Territory&#148; (as defined in the Regional Vehicle Agreement referred
to in the Merger Agreement and Merger Plan dated November&nbsp;1, 1999 between AT&#038;T
Corp, a New York company, Frantis Inc, a Delaware company, and Firstcom
Corporation, a Texas Company, that the Executive has carefully reviewed),
directly competes with any service or product that the Company actually
provides to its customers, or that the Company has taken substantial steps to
commence providing that is a significant part of the Company&#146;s business or
intended to be a significant part of the Company&#146;s business in the Company&#146;s
business plan, in each case determined as of the Date of Termination (the
&#147;Business&#148;), provided that the foregoing shall not apply if the Executive&#146;s
interest or association with such competitor is unrelated to the Business;
provided, further, that the foregoing the &#147;Business&#148; shall not be deemed to
include cable television services or programming, broadcast television,
internet access or content or consumer wireless communications or services
unless such products or services are a significant part of the Company&#146;s
business or intended to be a significant part of the Company&#146;s business in the
Company&#146;s business plan, in each case determined as of the Date of Termination.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp; Take any action, directly or indirectly, to finance, guarantee or
provide any other material assistance to any person, firm association,
partnership, corporation or other entity which conducts or engages in the
Business in the Territory with respect to any activity that competes with the
Business;
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp; Influence or attempt to influence any person, firm, association,
partnership, corporation or other entity who is a contracting party with the
Company at any time during the Restriction Period to terminate any written
agreement with the Company except to the extent the Executive is acting on
behalf of the Company in good faith; or
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp; Hire or attempt to hire for employment any person who is employed by
the Company at the time of hiring or attempted hiring or whose active
employment with the Company ceased less than six months prior to such time, or
attempt to influence any such person to terminate employment with the Company,
except to the extent the Executive is acting on behalf of the Company in good
faith; provided, however, that nothing herein shall prohibit the Executive from
general advertising for personnel not specifically targeting any employee or
other personnel of the Company.
</FONT>
<P><FONT size="2">The restrictive provisions of this Agreement shall not prohibit the Executive
from having as an investment an equity interest in the securities of any
corporation engaged in the Business, which securities are listed on a
recognized securities exchange or traded in the over-the-counter market to the
extent that such interest does not exceed 2% of the value or voting power of
such corporation and does not constitute control of such corporation. For
purposes of this Section&nbsp;6 and Sections&nbsp;7, 8, 9 and 10 of this Agreement, the
term &#147;Company&#148; shall include the Company and each of its affiliates.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Confidential Information. The Executive acknowledges and agrees that
all material information that is not publicly available or generally known in
the industry
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<P><FONT size="2">concerning the Company&#146;s business including, without limitation,
information relating to its products, customer lists, pricing, trade secrets,
patents, business methods, and cost data, business plans and strategies
(collectively, the &#147;Confidential Information&#148;) is and shall remain the property
of the Company. The Executive recognizes and agrees that all of the material
Confidential Information, whether developed by the Executive or made available
to the Executive, other than information that is not material to the Company or
generally known to the public or generally known in the industry, is a unique
asset of the business of the company, the disclosure of which would be damaging
to the Company. Accordingly, the Executive agrees to hold such material
Confidential Information in a fiduciary capacity for the benefit of the
Company. The Executive agrees that he will not at any time during or within 10
years after the Executive&#146;s employment with the Company for any reason,
directly or indirectly, disclose to any Person any material Confidential
Information the disclosure of which could harm the Company, other than
information that is already known to the public or generally know in the
industry, except as may be required in the ordinary course of business of the
Company or as may be required by law. Promptly upon the termination of this
Agreement for any reason, the Executive agrees to return to the Company any and
all documents, memoranda, drawings, notes and other papers and items (including
all copies thereof, whether electronic or otherwise) embodying any Confidential
Information of the Company which are in the possession or control of the
Executive. Information concerning the Company&#146;s business that becomes public
as a result of the Executive&#146;s breach of this Section&nbsp;7 shall be treated as
Confidential Information this Section&nbsp;7. The Executive shall not be deemed to
have breached this Section&nbsp;7 unless the disclosure of such Confidential
Information actually causes harm to the Company or any of its affiliates.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Breach of Certain Provisions. The Executive acknowledges that a
violation on the Executive&#146;s part of any of the covenants contained in Sections
6 or 7 of this Agreement would cause immeasurable and irreparable damage to the
Company. The Executive represents that his economic means and circumstances
are such that the provisions of this Agreement, including the non-competition,
non-solicitation of employees, confidentiality and Company property provisions,
will not prevent him from providing for himself and his family on a basis
satisfactory to him and them. Accordingly, the Executive agrees that the
Company shall be entitled to injunctive relief in any court of competent
jurisdiction for any actual or threatened violation of any such covenant in
addition to any other remedies it may have. The Executive agrees that in the
event that any arbitrator or court of competent jurisdiction shall finally hold
that any provision of Sections&nbsp;6 or 7 hereof is void or constitutes an
unreasonable restriction against the Executive, the provisions of such Section
shall not be rendered void but shall apply to such extent as such arbitrator or
court may determine constitutes a reasonable restriction under the
circumstances. Any breach by the Executive of the provisions of Sections&nbsp;6 or
7 of this Agreement shall relieve the Company of all obligations to any further
payments to the Executive pursuant to this Agreement (including under all
Company equity award grants pursuant to Section&nbsp;3) or otherwise under any
incentive or equity awards made by the Company and, in the case of a breach of
Section&nbsp;6 of this Agreement, shall entitle the Company to repayment from the
Executive, upon demand, of all amounts previously paid to the Executive
following or in the six months preceding
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</FONT>
<P><FONT size="2">such breach with respect to previously granted equity awards (i.e., in the
case of any stock options, the net gain realized by the Executive with respect
thereto during such period). These remedies are in addition to any other
remedies the Company may have with respect to any such breach.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Property of the Company. The Executive acknowledges that from time to
time in the course of providing services pursuant to this Employment Agreement,
he shall have the opportunity to inspect and use certain property, both
tangible and intangible, of the Company, including Confidential Information.
The Executive hereby agrees that such property shall remain the exclusive
property of the Company and shall be returned to the Company upon the
Executive&#146;s termination of employment.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Intangible Assets. The Executive shall not at any time have or claim
any right, title or interest in any trade name, trademark, copyright, or other
similar rights belonging to or used by the Company and shall not have or claim
any rights, title or interest in any material or matter of any sort prepared
for or used in connection with the business of the Company or promotion of the
Company, whether produced, prepared or published in whole or in part by the
Executive.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Litigation; Cooperation. If this Agreement is terminated by the
Company other than for Cause or by the Executive for Good Reason, in
consideration of the payments to be made to the Executive by the Company
pursuant to Section&nbsp;5(b) of this Agreement, the Executive agrees, during the
period that the Company is actually making such payments to the Executive and
providing benefits to the extent required pursuant to Section&nbsp;5(b), to provide
to the Company and its affiliates truthful and complete cooperation including,
but not limited to, the Executive&#146;s appearance at interviews and depositions at
reasonable times (taking into account the Executive&#146;s then employment and place
of residence) in all regulatory and litigation matters relating to the Company
and the Executive&#146;s employment by the Company, whether or not such matters have
been commenced at the time of such termination, and to provide to counsel to
the Company and its affiliates, upon request, all documents in the Executive&#146;s
possession or under his control relating to such regulatory and litigation
matters, all at no additional compensation to the Executive; provided, however,
that the Company will reimburse the Executive for (a)&nbsp;all reasonable expenses,
including travel, lodging, meals and attorneys&#146; fees and (b)&nbsp;any salary
forfeited by the Executive or vacation time consumed by his during time spent
by the Executive, in connection with the foregoing.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Release. In consideration of the payments to be made to the Executive
pursuant to Section&nbsp;5(b) of this Agreement and as a condition to the payment
thereof, the Executive acknowledges that all such payments, if made in
accordance with the terms of this Agreement, shall constitute complete
satisfaction of all obligations owed by the Company to the Executive hereunder
and shall further constitute the Executive&#146;s sole remedy against the Company
regarding the Executive&#146;s employment hereunder. The parties hereby agree that
if this Section&nbsp;12 becomes applicable they will execute a mutually acceptable
general release to reflect the provisions of this Section..
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Arbitration
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Any dispute, controversy or issue derived from this Agreement or in
connection with this Agreement (or the breach of this Agreement) or the
employment of the Executive by the Company or the termination of the same
(including without limitation discrimination, termination without cause and
social benefits claims) shall be subject to arbitration in Lima, Peru before an
arbitration panel of three members. One arbitrator shall be appointed by the
Executive and one arbitrator shall be appointed by the Company and the third
arbitrator shall be appointed by the two arbitrators previously appointed.
Arbitration shall be the only means to resolve any dispute. The arbitration
will be governed by the procedures and regulations set forth in the Arbitration
Laws in effect in Peru. The decision of the arbitrators shall be definitive,
conclusive and binding on all parties and no actions before the law can be
initiated and if there were any actions they will be only to request the
execution of the arbitration decision. The tribunal can take depositions if
necessary. The tribunal will issue its decision in writing as soon as
possible. The tribunal may order document production if there were proven
reasons. Each Party shall bear its own costs and expenses incurred in
connection with such arbitration provided that the Company will initially pay
the arbitration fees if the tribunal has the right to grant the prevailing
party a refund of its costs and reasonable legal expenses (including the ones
related to the arbitrators).
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Successors
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp; This Agreement is personal to the Executive and, without the prior
written consent of the Company, shall not be assignable by the Executive except
by will or the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by the Executive&#146;s legal representatives.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp; This Agreement shall inure to the benefit of and be binding upon the
Company and its successors and assigns, provided that the Company may not
assign this Agreement except in connection with the assignment or disposition
of all or substantially all of the assets or stock of the Company. Except as
specifically provided in this Agreement, &#147;Company&#148; shall mean both the Company
as defined above and any such successor, by operation of law or otherwise.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Miscellaneous.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp; This Agreement shall be governed by, and construed in accordance with
Peruvian laws.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp; All notices and other communications under this Agreement shall be in
writing and shall be given by hand delivery to the other party or by registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If to the Executive.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Jose Antonio Gandullia Castro<br>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
Av. Alcanfores No 1275, Distritio de Miraflores, Lima
</FONT>
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<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If to the Company:
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Human Resources Department
</FONT>
<P><FONT size="2">or to such other address as either party furnishes to the other in writing in
accordance with this paragraph. Notices and communications shall be effective
when actually received by the addressee.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp; The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp; Notwithstanding any other provision of this Agreement, the Company may
withhold from amounts payable under this Agreement, and shall pay over to the
appropriate authorities in a manner consistent with all applicable
requirements, all federal, state, local and foreign taxes that are required to
be withheld by applicable laws or regulations.
</FONT>
<P><FONT size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp; The Executive&#146;s or the Company&#146;s failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
shall not be deemed to be a waiver of such provision or right or of any other
provision of or right under this Agreement. This Agreement may not be amended
or modified except by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
</FONT>
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<P><FONT size="2">IN WITNESS HEREOF, the Executive has hereunto set the Executive&#146;s hand and,
pursuant to the authorization of its Board of Directors, the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.
</FONT>
<TABLE cellspacing="0" border="0" cellpadding="0" width="55%" align="right">
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        <TD width="100%">&nbsp;</TD>
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<TR valign="bottom">
        <TD valign="top"><FONT size="2">AT&#038;T Peru S.A.<BR>
/s/ Patricio Northland</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">/s/ Virginia Nakagawa Morales<BR>
Legal Counsel</FONT></TD>
</TR>
<TR><TD><FONT size="2">&nbsp;</FONT></TD></TR>
<TR valign="bottom">
        <TD valign="top"><FONT size="2">/s/ Jose Antonio Gandullia Castro</FONT></TD>
</TR>
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