EXHIBIT 10.12

                              EMPLOYMENT AGREEMENT

         This  Employment  Agreement  (this  "Agreement")  is  made  and entered
into as of December 4, 1998, by and between Hungarian Telephone and Cable Corp.,
a corporation  organized under the laws of the State of Delaware,  United States
of America (the "Company") and Ole Bertram ("Executive").

                                    RECITALS:

         A.       The Company  desires  to retain Executive as its President and
                  Chief Executive Officer.

         B.       Executive desires to work for the Company as its President and
                  Chief Executive Officer.

         C.       The parties desire to set forth the terms and conditions under
                  which  Executive  shall  serve in the above-stated capacity of
                  President and Chief Executive Officer.

         NOW,  THEREFORE,  in  consideration  of the  respective  covenants and
agreements of the parties set forth herein, it is agreed as follows:

     1.  Employment  and Duties.  The  Company  agrees to employ  Executive  and
Executive accepts the employment, subject to the terms and conditions herein, to
serve as President and Chief Executive  Officer of the Company.  Executive shall
report to the Board of  Directors  of the  Company  (the  "Board").  Executive's
duties and responsibilities shall include the duties and responsibilities as set
forth in the Company's  bylaws from time to time in effect and such other duties
and  responsibilities  as the  Board  may from  time to time  reasonably  assign
Executive,  in all cases consistent with Executive's  position.  Executive shall
perform  faithfully  the  executive  duties  assigned  to him to the best of his
ability.

     2.  Place of  Employment.  Executive  shall be  employed  at the  Company's
offices located in Budapest, Hungary.

     3. Term.  The term of employment  under this  Agreement  shall  commence on
January  1,  1999  and  continue  through  December  31,  2000,  unless  earlier
terminated  in  accordance  with the terms of this  Agreement  (the  "Employment
Period").

     4.  Effective  Date.  The effective  date of this  Agreement is December 4,
1998.

     5. Annual  Salary.  Executive  will  receive a monthly  salary  based on an
annualized  rate of Two Hundred Ten  Thousand  Dollars  ($210,000).  The Company
shall be entitled to deduct or withhold all taxes and charges  which the Company
may be required by law to deduct or withhold therefrom. The Compensation - Stock
Option  Committee of the Board (the  "Compensation  Committee")  shall  annually
review  Executive's base salary in light of the performance of Executive and, if
it finds Executive's performance to be satisfactory,  the Compensation Committee
shall increase such base salary by an amount it determines to be appropriate.

<PAGE>

     6.  Option  Award.  In  consideration  of  Executive   entering  into  this
Agreement,  the Company hereby agrees to grant to Executive, by a separate stock
option  agreement(s),   options  to  purchase  100,000  shares  ("First  Tranche
Options") of the Company's  common stock from the Company's 1992 Incentive Stock
Option Plan, as amended (the "Plan").  Provided  that  Executive has  maintained
continuous  service with the Company  through January 1, 2000, the Company shall
grant  Executive  options to  purchase an  additional  100,000  shares  ("Second
Tranche  Options")  of the  Company's  common  stock from the Plan on January 3,
2000.  Executive's  rights to the Options will vest  according to the  following
schedule,  provided that if Executive has not maintained continuous service with
the Company from the date hereof  until the related  vesting date (other than in
circumstances set forth in Paragraphs 19(b) and (c)) all as yet unvested options
shall be forfeited and cancelled:

                  Vesting Date              Options Vested
                  June 30, 1999              50,000
                  December 31, 1999          50,000
                  June 30, 2000              50,000
                  December 31, 2000          50,000

     The options shall have a five-year  exercise  period.  The initial purchase
price per share for the First Tranche Options shall be the fair market value per
share  of the  Company's  common  stock as of the date  hereof  and the  initial
purchase price per share for the Second Tranche  Options,  if granted,  shall be
the fair market  value per share of the  Company's  Common Stock on December 31,
1999. The "fair market value" per share of the Company's  common stock means the
average of the high and low  quoted  sales  price on the date of grant  (or,  if
there is no reported sale on such date, on the last  preceding date on which any
reported sale occurred) of a share on the American Stock Exchange.

     7.  Annual  Performance  Bonus.  Executive  shall be entitled to receive an
annual target bonus of Ninety Thousand Dollars ($90,000) if the Company achieves
certain  pre-determined  objectives to be mutually  agreed upon by the Executive
and the  Compensation  Committee.  The  Company's  objectives  for 1999 shall be
initially  set by January 31, 1999 and shall be  finalized  upon the approval by
the Board of the Company's 1999 business plan, and such bonus,  if any, shall be
payable by April 1, 2000.  The Company's  objectives for 2000 shall be initially
set by December 31, 1999,  and shall be finalized upon the approval by the Board
of the Company's 2000 business plan, and such bonus, if any, shall be payable by
December 31, 2000 subject to an agreement  between  Executive and Committee on a
final  bonus  settlement  upon  the  completion  of the 2000  audited  financial
results.  For any year in which the Company's  performance reaches at least 95%,
but less than 100.5% of such year's  objectives,  Executive shall be entitled to
receive the following appropriate bonus:

                                      -2-
<PAGE>

                  95%:       $45,000
                  96%:       $54,000
                  97%:       $63,000
                  98%:       $72,000
                  99%:       $81,000
                  100%:      $90,000

         For any  year in which  the  Company's  performance  reaches  100.5% or
more of such  year's  objectives,  Executive  shall be  entitled  to receive the
following appropriate bonus:

                  101%:      $93,000
                  102%:      $96,000
                  103%:      $99,000
                  104%:      $102,000
                  105%:      $105,000
                  106%:      $108,000
                  107%:      $111,000
                  108%:      $114,000
                  109%:      $117,000
                  110% or
                   more:     $120,000

     8. Annual  Housing  Allowance.  Executive  will  receive an annual  housing
allowance (the "Housing  Allowance") of Thirty-Six  Thousand Dollars  ($36,000),
payable in equal monthly installments.

     9. Employee Taxes. Executive shall be solely responsible for any and all of
Executive's  (i)  income  and  (ii)  social  security,  medicare  or  any  other
miscellaneous taxes applicable to any salary,  bonus,  option grant,  allowance,
severance  benefit or any other type of  compensation  or  benefit  received  by
Executive pursuant to this Agreement which is subject to taxation and payable by
Executive to any governmental  taxing authority  including,  but not limited to,
any governmental taxing authority in the Republic of Hungary,  the United States
of America or Denmark.

     10. Pension Account.  The Company shall make an annual contribution for the
term of this Agreement to the Danish pension  account of Executive which account
Executive may not withdraw therefrom until the retirement of Executive.

     11.  Insurance.  If  requested  by  Executive,  the Company  shall  provide
Executive, his spouse and his minor dependents with health insurance
coverage under a fully comprehensive international scheme.

     12.  Automobile.  The  Company  will  provide  Executive  with the use of a
private Company automobile to be maintained by the Company.

                                      -3-

<PAGE>

     13.  Vacation.  Executive  will be entitled to thirty  (30)  business  days
annual paid vacation.

     14. Work Permits. With the Company's assistance, Executive shall obtain and
keep current any  Hungarian  work  permits,  residency  permits or other similar
licenses  as  may be  required  by  Hungarian  law as a  result  of  Executive's
employment by the Company.

     15. Covenant Not to Compete.  Executive  hereby agrees that during the term
of this Agreement, he will not, either through any kind of ownership (other than
ownership of securities of a publicly held  corporation of which  Executive owns
less than five percent  (5%) of any class of  outstanding  securities),  or as a
director, officer, principal,  agent, employee,  employer, advisor,  consultant,
co-partner, or in any individual or representative capacity whatever, either for
his own benefit or for the benefit of any other person,  firm,  or  corporation,
without the prior written consent of the Company's  Board of Directors,  compete
with the Company by engaging in any act,  including,  but not limited to, any of
the  following:  (a) canvass,  solicit,  accept,  or  perform  any  type of work
performed  by the Company for any  "customer"  (as  hereinafter  defined) of the
Company;  (b)  develop,  design,  market  any  services  that may be sold by the
Company  during the term of this  Agreement;  (c)  request or advise any firm to
withdraw,  curtail, or cancel its business with the Company; (d) give or attempt
to give any person,  partnership, or corporation the right to solicit or canvass
any customer for the  performance of services  provided by the Company;  and (e)
induce or attempt to  influence  any  employee of the Company or any employee of
any customer to terminate his employment with the view toward competing with the
Company or any customer. As used herein, the term "customer" includes any of the
Company  customers  at  any  time  during  the  term  of  this  Agreement.   

     16.  Confidential Information.

     (a) Nondisclosure.  Executive  expressly  covenants and agrees that he will
not  during  the term of this  Agreement  or at any time  after the  termination
hereof,  irrespective  of the time,  manner,  or cause of  termination,  reveal,
divulge,  disclose,  or communicate to any person,  firm, or corporation,  other
than authorized officers, directors, and employees of the Company, in any manner
whatsoever,  any  "confidential  information"  (as  hereinafter  defined) of the
Company that would be  inconsistent  with the position  held by Executive or the
duties being performed by Executive at the direction of the Company.

     (b) Return of Confidential Information and Other Property. Upon termination
of this  Agreement,  Executive  will  surrender to the Company all  confidential
information  including,   without  limitation,  all  lists,  charts,  schedules,
reports, financial statements, books and records, and all copies thereof, of the
Company and all other  property  belonging  to the Company  whatsoever.  As used
herein,  "confidential  information" means information  disclosed to or known by
Executive as a consequence  of or through his  employment  for the Company,  not
generally  known in the business in which the Company is or may become  engaged,
about the Company, its business, products and processes.

                                      -4-
<PAGE>

     17.  Breach of  Covenant  Not to  Compete  and  Confidentiality  Provision.
Executive  agrees  that a  substantial  violation  on his  part of any  covenant
contained in Paragraphs 15 and 16 above will cause such damage to the Company as
will be  irreparable  and for that  reason,  Executive  further  agrees that the
Company  shall be entitled  as a matter of right,  to an  injunction  out of any
court of  competent  jurisdiction,  restraining  any further  violation  of said
covenants by Executive, his employer, employees, partners, or agents. Such right
to injunction shall be cumulative and in addition to whatever other remedies the
Company may have, including, specifically, recovery of liquidated and additional
damages.  Executive  expressly  acknowledges  and  agrees  that  the  respective
covenants  and  agreements  shall  be  construed  in  such  a  manner  as  to be
enforceable  under applicable laws if a more limited scope of time is determined
by a court or competent jurisdiction to be required.

     18. Indemnification.  The Company agrees that if Executive is made a party,
or is threatened to be made a party, to any action, suit or proceeding,  whether
civil, criminal,  administrative or investigative (a "Proceeding"), by reason of
the fact that he is or was a  director,  officer  or  employee  of the  Company,
Executive  shall be indemnified  and held harmless by the Company to the fullest
extent  legally  permitted  or  authorized  by  the  Company's   certificate  of
incorporation or bylaws or resolutions of the Board or, if greater,  by the laws
of the  State  of  Delaware,  against  all  cost,  expense,  liability  and loss
(including, without limitation,  attorney's fees, judgments, fines, ERISA excise
taxes or  penalties  and amounts  paid or to be paid in  settlement)  reasonably
incurred or suffered by Executive in connection therewith. The Company agrees to
continue to maintain a  directors'  and  officers'  liability  insurance  policy
covering  Executive to the extent the Company  provides such coverage for any of
its other executive officers.

     19. Termination.

     (a) Reasons for  Termination.  The employment of Executive with the Company
shall terminate  automatically  upon Executive's  death and may be terminated by
written notice (i) by the Company, upon Executive's disability which renders him
unable to perform his usual and customary duties for a period of 180 consecutive
days; (ii) by the Company,  with or without  "cause" (as  hereinafter  defined);
(iii) by  Executive  upon 90 days  notice;  (iv) by  Executive,  if he suffers a
demotion  or a lower  status with the  Company  other than for cause;  or (v) by
Executive,  in the event of a "change  in  control"  (as  hereinafter  defined),
whether or not Executive  suffers a demotion or a lower status with the Company.
For purposes of this Agreement, "cause" shall mean (i) a failure by Executive to
substantially perform Executive's  reasonable and legal duties and as defined by
goals established by the Board and agreed to by Executive,  other than a failure
resulting  from  Executive's  complete or partial  incapacity due to physical or
mental illness or impairment,  (ii) a willful act by Executive that  constitutes
gross misconduct and that is injurious to the Company, (iii) a willful breach by
Executive of a material  provision  of this  Agreement,  or (iv) a  material and
willful  violation  of a federal or state law or  regulation  applicable  to the
business  of the  Company.  No act,  or failure to act,  by  Executive  shall be
considered   "willful"  unless  committed  without  good  faith  and  without  a
reasonable  belief that the act or omission was in the Company's  best interest.
For purposes of this  Agreement,  a "change of control"  shall be deemed to have
occurred if (1) any  "person" (as such term is used in Sections  13(d) and 14(d)
of the U.S.  Securities and Exchange Act (the "Exchange  Act")),  other than (x)
Citizens   Utilities   Company  and/or  any  one  or  more  direct  or  indirect
wholly-owned subsidiary of Citizens Utilities Company (together, "Citizens"), or
(y) Tele  Danmark  A/S and/or any one or more  direct or  indirect  wholly-owned
subsidiary  of Tele Danmark A/S  (together,  Tele  Danmark"),  is or becomes the
"beneficial  owner" (as defined in Rule 13d-3 under the Exchange Act),  directly


                                       -5-
<PAGE>

or indirectly,  of securities of the Company  representing  thirty-five  percent
(35%) or more of the  combined  voting  power (with  respect to the  election of
directors) of the Company's then outstanding  securities;  (2) at any time after
the execution of this Agreement, a majority of the Board shall be replaced, over
a two-year period, from the directors who constituted the Board at the beginning
of such  period,  and such  replacement  shall not have been  approved by either
two-thirds  (2/3) of the Board as constituted at the beginning of such period or
Citizens or Tele Danmark;  (3) the  consummation of a merger or consolidation of
the Company with or into any other corporation (other than with Citizens or Tele
Danmark),  other than a merger or consolidation which would result in the voting
securities of the Company  outstanding  immediately prior thereto  continuing to
represent  (either by remaining  outstanding  or by being  converted into voting
securities of the surviving  entity) more than  sixty-five  percent (65%) of the
combined  voting  power  (with  respect to the  election  of  directors)  of the
securities of the Company or of such surviving  entity  outstanding  immediately
after  such  merger  or  consolidation;  or  (4) the  consummation  of a plan of
complete  liquidation  of  the  Company  or of an  agreement  for  the  sale  or
disposition by the Company of all or substantially all of the Company's business
or assets.

     (b) Termination Benefits. If Executive's  employment is terminated pursuant
to Section 19(a) prior to the  expiration of the term of this  Agreement for any
reason noted above other than by the Company for "cause" or by Executive upon 90
days notice as set forth in clause  (iii) of Section  19(a),  Executive  will be
entitled  to  receive  the  following  benefits  as  severance  (the  "Severance
Benefits"):

(i)  a lump  sum  payment  equal  to  six  (6)  months'  salary  at  Executive's
     then-current  annual  salary level;  

(ii) payment of any salary,  expenses,
     allowances  and  benefits  accrued  by  Executive  up to  the  date  of the
     termination; and

(iii)the  immediate  vesting and release of any unvested  unreleased  portion of
     the  options  granted as of the date of such  termination  pursuant to this
     agreement, without restriction.

     (c) Benefits in the Event of Executive's Death.  Except as set forth below,
if Executive's  employment terminates  automatically in the event of Executive's
death,  Executive's  estate will be entitled to receive the Severance  Benefits.
The Company may, at its option,  maintain a life insurance  policy for Executive
in an amount deemed to be appropriate by the Board and  designating  Executive's
estate as the beneficiary. If the Company elects to maintain such life insurance
and the policy amount equals or exceeds the value of the Severance  Benefits (as
determined by the Board),  Executive's  estate shall only be entitled to receive
the  proceeds of the  insurance  policy.  If the policy  amount is less than the
value of the Severance Benefits,  the Company shall pay to Executive's estate an
amount equal to the difference  between the value of the Severance  Benefits and
the amount to which the estate would be entitled to under the insurance  policy.
The  Company  shall  determine  the value of the  Severance  Benefits as soon as
practicable  after Executive's death but in no event later than thirty (30) days
thereafter.

                                      -6-
<PAGE>


     (d) Date of  Termination;  Provision  of  Severance  Benefits.  The date of
termination  of  Executive's  employment by the Company under this  Paragraph 19
shall  be one (1)  month  after  receipt  by  Executive  of  written  notice  of
termination, provided, however, that if the termination is for cause the date of
termination  shall be the date  specified in the notice of  termination or if no
date is  specified  then  the date on  which  such  notice  is  received  by the
Executive. The date of termination by Executive under this Paragraph 19 shall be
one (1) month  after  receipt by the  Company of written  notice of  termination
except in the case of  termination  by Executive as set forth in clause (iii) of
Section  19(a)  pursuant to which  Executive  is required to give the Company 90
days notice.  All benefits to which Executive is entitled under subparagraph (b)
hereof shall be provided within thirty (30) days of termination.  In the case of
automatic  termination in the event of Executive's  death, the benefits shall be
provided no later than thirty (30) days from the date of Executive's death.

     20. Miscellaneous.

     (a) Rights  Under  Plans and  Programs.  Notwithstanding  anything  in this
Agreement to the contrary no provision of this Agreement is intended,  nor shall
it be construed, to reduce or in any way restrict any benefit to which Executive
may be entitled under any agreement,  plan,  arrangement,  or program  providing
benefits for Executive.

     (b) Entire  Agreement.  This  Agreement  constitutes  the entire  agreement
between the parties with  respect to the subject  matter of this  Agreement  and
supersedes all prior written and oral and all  contemporaneous  oral  agreements
and understandings with respect to the subject matter of this Agreement.

     (c)  Notices.  Any notice or request to be given  hereunder by any party to
the other shall be in writing and shall be deemed to have been duly given on the
next  business day after the same is sent,  if delivered  personally  or sent by
telecopy or overnight delivery, or five calendar days after the same is sent, if
sent by registered or certified mail, return receipt requested, postage prepaid,
as set forth below,  or to such other  persons or addresses as may be designated
in  writing in  accordance  with the terms  hereof by the party to receive  such
notice.

                                      -7-



<PAGE>

                           If to the Company, to:

                           Hungarian Telephone and Cable Corp.
                           100 First Stamford Place, Suite 204
                           Stamford, CT 06902
                           Facsimile No.: 203/348-9128
                           Attn:  General Counsel

                           If to Executive, to:

                           the address or facsimile number
                           for Executive as set forth
                           in the Company's records

                           with a required copy to:

                           (to be provided by Executive)

     (d) Governing Law; Forum; Consent to Jurisdiction.  This Agreement shall be
governed by and construed in  accordance  with the laws of the State of New York
without giving effect to the principles of conflict of laws thereof. Each of the
parties to this Agreement hereby irrevocably and unconditionally (i) consents to
submit to the exclusive  jurisdiction of the courts of the State of New York for
any  proceeding  arising in connection  with this Agreement (and each such party
agrees not to commence any such proceeding,  except in such courts), (ii) to the
extent such party is not a resident of the State of New York,  agrees to appoint
an agent in the State of New York as such party's agent for  acceptance of legal
process in any such proceeding  against such party with the same legal force and
validity as if served upon such party  personally  within the State of New York,
and to notify  promptly  each other party hereto of the name and address of such
agent,  (iii) waives any objection to the laying of venue of any such proceeding
in the courts of the State of New York, and (iv) waives, and agrees not to plead
or to make, any claim that any such proceeding brought in any court of the State
of New York has been brought in an improper or otherwise inconvenient forum.

     (e)   Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  and each of such counterparts shall for all purposes be deemed to
be an original,  but all such  counterparts  together  shall  constitute but one
instrument.

     (f)  Executive's  Successors.  This  Agreement  and all rights of Executive
hereunder  shall  inure to the benefit of, and be  enforceable  by,  Executive's
personal or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.

                                      -8-
<PAGE>

     (g)  Assignment.  Neither this  Agreement,  nor the rights and  obligations
hereunder,  may be assigned by either party without the prior written consent of
the other party.

     (h) Parties in Interest.  Nothing in this Agreement,  expressed or implied,
is  intended  to confer on any  person  other than the  parties  hereto or their
respective  successors  or  assigns,  any  rights,   remedies,   obligations  or
liabilities under or by reason of this Agreement.

     (i) Amendment. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties.

     (j)  Extension;  Waiver.  Either party to this Agreement may (a) extend the
time for the  performance  of any of the  obligations or other acts of the other
party to this  Agreement or (b) waive  compliance by the other party with any of
the  agreements  or  conditions  contained  herein or any  breach  thereof.  Any
agreement on the part of a party to any such  extension or waiver shall be valid
only if set forth in an instrument in writing signed on behalf of such party.

     (k)  Severability.  The  provisions of this Agreement are severable and, if
any provision of this Agreement is determined to be invalid or  unenforceable by
any court of competent jurisdiction,  such provision (in any other jurisdiction)
and the other  provisions  hereof (in any  jurisdiction)  shall not be  rendered
otherwise  invalid or  unenforceable  and such  provision  shall be deemed to be
modified to the extent necessary to render it legal, valid and enforceable,  and
if no such modification shall render it legal, valid and enforceable,  then this
Agreement  shall be  construed as if not  containing  the  provision  held to be
invalid,  and the rights and  obligations  of the parties shall be construed and
enforced accordingly.

     IN WITNESS WHEREOF,  the parties have executed this Agreement as of the day
and year first above written.

                                            HUNGARIAN TELEPHONE AND CABLE CORP.

                                            By:  /s/David A. Finley
                                            ------------------------------------
                                              David A. Finley
                                              Chairman of the Board of Directors

                                            OLE BERTRAM

                                                /s/Ole Bertram
                                            ------------------------------------


                 [SIGNATURE PAGE TO BERTRAM EMPLOYMENT AGREEMENT
                          DATED AS OF DECEMBER 4, 1998]



                                      -9-