Document:

Hungarian Telephone and Cable Corp. Non-Employee Director Stock Option Plan

  
 Exhibit 10.2 
  
 HUNGARIAN TELEPHONE AND CABLE CORP. 
  
 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN 
 (as amended as of October 5, 2004) 
  
 1. Purpose. This Non-Employee Director Stock Option Plan (the “Plan”) is intended to promote the interests of Hungarian Telephone and Cable Corp. (the
“Company”) by providing an inducement to attract and retain the services of qualified persons who are neither employees nor officers of the Company to serve as members of the Board of Directors and by demonstrating the Company’s
appreciation for their service on the Company’s Board of Directors. 
  
 2.
Options to be Granted. Under the Plan, Options (“Options”) are granted that give an optionee (“Optionee”) the right for a specified time period to purchase a specified number of shares of Common Stock, par value $.001 per
share, of the Company (the “Common Stock”). The Option price is determined in each instance in accordance with the terms of this Plan. All Options shall be “Non-Qualified” or “Non Statutory Options” or options not
defined or meeting the requirements of Section 422(b) of the Internal Revenue Code of 1986, as amended. 
  
 3. Available Shares. The total number of shares of Common Stock for which Options may be granted shall not exceed 250,000 shares (the “Option Shares”), subject to adjustment in accordance with Section
13 hereof. Shares subject to the Plan are authorized but unissued shares or shares that were once issued and subsequently reacquired by the Company. If any Options granted under this Plan are surrendered before exercise or lapse without exercise, in
whole or in part, the shares reserved therefor shall revert to the Option pool and again become available for grant under the Plan. 
  
 4. Administration. The Plan shall be administered by the Compensation - Stock Option Committee or its successor of the Board of Directors of the Company (the
“Committee”). The Committee shall, subject to the provisions of the Plan, have the power to construe and interpret the Plan, to resolve all issues thereunder, and to adopt and amend such rules and regulations for the administration of the
Plan as it may deem desirable. 
  
 5. Option Agreement. Each Option granted
under the provisions of this Plan shall be evidenced by an Option Agreement, in such form as may be approved by the Committee, which Option Agreement shall be duly executed and delivered on behalf of the Company and by the Optionee to whom such
Option is granted. The Option Agreement shall contain such terms, provisions and conditions not inconsistent with the Plan as may be determined by the Committee. 

 6. Eligibility and Limitations. Options may be granted pursuant to the Plan only to members of the Board of
Directors of the Company who are not officers or employees of the Company or any of its subsidiaries (“Non-Employee Directors”). 
  
 7. Exercise Price. The exercise price for the purchase of stock covered by an Option granted pursuant to the Plan shall be 100% of the fair market of such shares
on the day the Option is granted. The exercise price will be subject to adjustment in accordance with the provisions of Section 13 hereof. For purposes of the Plan, the “Fair Market Value” of a share of Common Stock shall be determined
pursuant to a valuation methodology approved by the Committee or, if the Committee does not approve a different valuation methodology, means, on any day, the daily closing price of a share of Common Stock on the American Stock Exchange, or, if the
shares are not listed or admitted to trading on such exchange, on the principal United States securities exchange or on the NASDAQ/NMS on which the shares are listed or admitted to trading, or if the shares are not listed or admitted to trading on
any such exchange or on the NASDAQ/NMS, the mean between the closing high bid and low asked quotations with respect to a share on such dates on the National Association of Securities Dealers, Inc. Automated Quotations System, or any similar system
then in use, or if no such quotations are available, the fair market value on such date of a share as the Committee shall determine. 
  
 8. Grant of Option Awards. 
  
 (a) Initial Grant of Options. Each Non-Employee Director of the Company who is serving in such capacity on (i) the date of the adoption of this
Plan by the Board of Directors of the Company and (ii) the date of the 1997 Annual Meeting of Stockholders of the Company, is hereby granted without further action by the Board of Directors or the Committee, an Option to purchase 5,000 shares of
Common Stock on the date of the 1997 Annual Meeting of Stockholders of the Company, which Options shall vest in the Optionee on the date of such grant. 
  
 (b) Automatic Annual Grant of Options. As of the date each year that any Non-Employee Director is elected or re-elected to serve as a director by
the stockholders of the Company at the Annual Meeting of Stockholders of the Company (beginning with the 1997 Annual Meeting of Stockholders), each Non-Employee Director shall be automatically granted without further action by the Board of Directors
or the Committee an Option to purchase 5,000 shares of Common Stock. Each Non-Employee Director who is appointed (or elected) to the Board of Directors after any Annual Meeting of Stockholders of the Company but prior to the next following Annual
Meeting of Stockholders of the Company shall be automatically granted, on the date of the first such appointment (or election) and without further action by the Board of Directors or the Committee, an Option to purchase a pro-rata share of 5,000
shares of Common Stock as determined by the Committee based on the ratio of the number of days actually served from the date of appointment (or election) to the date of the next Annual Meeting of Stockholders rounded to the nearest whole share. If
on any date for the grant of Options pursuant to the Plan the aggregate number of shares then remaining available for Options under the Plan is less than the number of Option Shares which the Plan provides shall be 

  

 2 

 
granted on such date, Options shall be granted on the following basis: first, ratably (to the nearest whole share) to any persons entitled to receive on such
date a grant pursuant to the first sentence of this Section 8(b), up to a maximum grant of 1,000 Option Shares per Optionee; and second, ratably (to the nearest whole share) to any person entitled to receive on such date a grant pursuant to the
second sentence of this Section 8(b), up to a maximum grant of 1,000 Option Shares per Optionee. 
  
 9. Period of Options. The Options granted hereunder shall expire on a date which is ten years after the date of grant of the Options. The Plan shall terminate when all Options granted hereunder have expired or
terminated. 
  
 10. Exercise of Options. Subject to the terms and
conditions of the Plan, Vested Options may be exercised from time to time by giving written notice to the Treasurer, Secretary, or General Counsel of the Company, or his or her designee, specifying the number of shares to be purchased. The exercise
price for every share purchased through the exercise of a Option shall be paid for in full on or before the settlement date of the shares issued pursuant to the exercise of the Option (i) in cash or in whole or in part through the transfer to the
Company of shares of Common Stock in accordance with procedures established by the Committee from time to time. An Optionee may also pay the exercise price in whole or in part pursuant to a “net share settlement” (“net exercise”)
pursuant to which the Optionee elects to have shares of Common Stock withheld upon exercise to pay the exercise price in accordance with procedures established by the Committee from time to time. In addition, in accordance with the rules and
procedures established by the Committee for this purpose, an Option may also be exercised through a “cashless exercise” procedure involving a broker or dealer, that affords Optionees the opportunity to sell immediately some or all of the
shares underlying the exercised portion of the Option in order to generate sufficient cash to pay the exercise price and/or to satisfy withholding tax obligations related to the Option. In the event such exercise price is paid in whole or in part
with shares, the portion of the exercise price so paid shall be equal to the value, as of the date of exercise of the Option, of such shares. The value of such shares shall be equal to the number of such shares multiplied by the Fair Market Value of
such shares on the trading day coincident with the date of exercise of such Option (or the immediately preceding trading day if the date of exercise is not a trading day). The Company shall not issue or transfer the shares upon exercise of an Option
until the exercise price is fully paid. Subject to such rules as the Committee may determine from time to time, an Optionee may satisfy any amounts required to be withheld by the Company under applicable federal, state and local tax laws in effect
from time to time, by electing to have the Company withhold a portion of the shares to be delivered for the payment of such taxes. The Optionee shall not have any rights of a stockholder with respect to the shares covered by the Option, except
through the due exercise of the Option. 
  

 3 

 11. Vesting of Shares and Non-Transferability of Option. 
  
 (a) Vesting. Each automatic annual grant of any Option granted under
the Plan pursuant to Section 8(b) shall vest in the Optionee, and thus become exercisable, at the earlier of (x) the date of the next Annual Meeting of the Stockholders of the Company, or (y) one year from the date of such annual grant. 

 
 If either of the following events shall occur, all Options theretofore
granted and not fully exercisable shall become exercisable in full upon the happening of such event and shall remain so exercisable for a period of 60 days following such date, after which they shall revert to being exercisable in accordance with
their terms (provided that no Option which has previously been exercised or has expired or otherwise terminated shall become exercisable): 
  
 (i) a tender offer or exchange offer for shares of Common Stock (other than such an offer by the Company) is commenced, or 
  
 (ii) the stockholders of the Company approve an agreement
providing either for a transaction in which the Company will cease to be an independent publicly-owned company or for a sale or disposition of all or substantially all the assets of the Company. 
  
 (b) Legend on Certificates. The certificates representing shares
issued upon exercise of an Option shall carry such appropriate legends, and such written instructions shall be given to the Company’s Transfer Agent, as may be deemed necessary or advisable by counsel to the Company in order to comply with the
requirements of the Securities Act of 1933 or any federal, state or local securities laws. 
  
 (c) Non-Transferability. Any Option granted pursuant to the Plan shall not be assignable or transferable other than by will or the laws of descent and distribution or a qualified domestic relations order,
provided however that with the consent of the Committee acting in its sole discretion, an Optionee may transfer (a “Family Member Transfer”) an Option to (i) a member of the Optionee’s immediate family (which for the purposes of the
Plan shall have the same meaning as defined in Rule 16a-1 promulgated under the Securities Exchange Act); (ii) a trust (the “Family Trust”) the beneficiaries of which consist exclusively of members of the Optionee’s immediate family;
and (iii) a partnership, limited partnership or other limited liability entity (“Family Entity”) the members of which consist exclusively of members of the Optionee’s immediate family or a Family Trust; provided that no consideration
is paid for the transfer and that each Family Transferee execute an instrument agreeing to be bound by the provisions of the Plan and the restrictions as to the transferability of the Option. During the lifetime of an Optionee, an Option shall be
exercisable only by the Optionee or his or her Family Transferee. A (“Family Transferee”) is a transferee that is a Family Trust, Family Entity or a member of the immediate family of an Optionee. 
  

 4 

 12. Termination of Options. 
  
 (a) In the event an Optionee ceases to be a member of the Board of Directors of the Company for any reason other than death
or disability, any Options not then exercisable shall immediately terminate and become void. If the Optionee is eligible to retire under any Company pension plan, any Options which are exercisable, but which have not been exercised at the time the
Optionee ceases to be a member of the Board of Directors, may be exercised through the original expiration date of the Options. If the Optionee is not eligible to retire under any Company pension plan, any Options which are exercisable, but which
have not been exercised at the time the Optionee so ceases to be a member of the Board of Directors, may be exercised by the Optionee until the earlier of (x) the original expiration date of the Options or (y) three years following the date the
Optionee so ceases to be a member of the Board of Directors. 
  
 (b) In the event of the death of an Optionee, who is eligible to retire under any Company pension plan, while a member of the Board of Directors of the Company, any unexercised Options may be exercised by the Optionee’s personal
representative at any time prior to the expiration date of such Options. In the event of the death of an Optionee, who is not eligible to retire under any Company pension plan, while a member of the Board of Directors of the Company, any unexercised
Options may be exercised by the Optionee’s personal representative at any time within three years after the Optionee’s death except that an Option may not be exercisable on any date beyond the expiration date of such Option. In the event
of the death of an Optionee who has retired prior to exercising all of his outstanding Options, such outstanding Options may be exercised by the Optionee’s personal representative at any time prior to the expiration date of such Options. In the
event of the death of an Optionee, who is no longer a member of the Board of Directors at the time of his death (other than due to retirement), prior to exercising all of his outstanding Options, such outstanding Options may be exercised by the
Optionee’s personal representative at any time within three years after the Optionee’s death except that an Option may not be exercisable on any date beyond the expiration date of such Option. 
  
 13. Adjustments Upon Changes in Capitalization and Other Matters. In the event that
the outstanding shares of Common Stock are changed into or exchanged for a different number or kind of shares of other securities of the Company or of another corporation by reason of any reorganization, merger, consolidation, recapitalization or
reclassification, or in the event of a stock split, combination of shares or dividends payable in capital stock, automatic adjustment shall be made in the number and kind of shares as to which outstanding Options or portions thereof then unexercised
shall be exercisable and in the available shares set forth in Section 3 hereof, to the end that the proportionate interest of the Optionee shall be maintained as before the occurrence of such event. Such adjustment in outstanding Options shall be
made without charge in the total price applicable to the unexercised portion of such Options and with a corresponding adjustment in the exercise price per share. 
  
 If an Option hereunder shall be assumed, or a new Option substituted therefor, as a result of sale of the Company, whether
by a corporate merger, consolidation or sale of property or stock, then membership on the Board of Directors of such assuming or 

  

 5 

 
substituting corporation, or a parent corporation thereof, shall be considered for purposes of the Plan to be membership on the Board of Directors of the
Company. 
  
 14. Delivery and Registration of Stock. The Company’s
obligations to deliver shares of Common Stock upon exercise of an Option shall, if the Committee so requests, be conditioned upon the receipt of a representation as to the investment intention of the Optionee to whom such shares are to be delivered,
in such form as the Committee shall determine to be necessary or advisable to comply with the provision of the Securities Act of 1933, as amended, or any other Federal, state or local securities laws. It may be provided that any representation
requirements shall become inoperative upon a registration of the shares or other action eliminating the necessity of such representation under such Securities Act or other securities laws. The Company shall not be required to deliver any shares
under the Plan prior to (i) the admission of such shares to listing on a stock exchange on which shares may then be listed, and (ii) the completion of such registration or other qualification of such shares under any state or Federal law, rule or
regulation, as the Committee shall determine to be necessary or advisable. 
  
 15.
Withholding Tax. Where an Optionee or other person is entitled to receive shares pursuant to the exercise of an Option pursuant to the Plan, the Company shall have the right in its sole discretion to require the Optionee or such other person
to pay the Company the amount of any taxes which the Company is required to withhold with respect to such shares. 
  
 16. Effectiveness. Anything in the Plan to the contrary notwithstanding, the effectiveness of the Plan and of the grant of all Options hereunder is in all respects
subject to, and the Plan and Options granted under it shall be of no force and effect unless and until, and no Option granted hereunder shall in any way vest or become exercisable in any respect unless and until, the approval of the Plan by the
Company’s Board of Directors. 
  
 17. Compliance with Section 16. This
Plan is intended to comply with Rule 16 promulgated under the Exchange Act (“Rule 16b-3”) to the fullest extent possible. Any provision of the Plan which is inconsistent with said Rule shall, to the extent of such inconsistency, be
inoperative and shall not affect the validity of the remaining provisions of the Plan. 
  
 18. Termination and Amendment of Plan. The Board may at any time terminate the Plan or make such modification or amendment thereof as it deems advisable. Termination or any modification or amendment of the Plan shall not, without the
consent of an Optionee, affect his or her rights under an Option previously granted. 
  

 6Form of Stock Option Agreement

  
 Exhibit 10.3 
  
 Hungarian Telephone and Cable Corp. 
 2004 Long-Term Incentive Plan 
  
 Form of Stock Option Award Agreement 
  

  
 Table of Contents 

 

					
	 	  	 	  	Page

	 1.
	  	 Incorporation of Plan Terms
	  	1
	 2.
	  	 Grant of Option
	  	1
	 3.
	  	 Terms and Conditions of the Option
	  	2
	 4.
	  	 Termination of Employment
	  	3
	 5.
	  	 Transfer; Option Exercisable Only by Participant and Permitted Transferees
	  	5
	 6.
	  	 Tax Withholding
	  	5
	 7.
	  	 No Restriction on Right to Effect Corporate Changes; No Right to Employment
	  	6
	 8.
	  	 Adjustment of and Changes in Shares
	  	6
	 9.
	  	 Change in Control
	  	6
	 10.
	  	 Preemption of Applicable Laws and Regulations
	  	6
	 11.
	  	 Committee Decisions Final
	  	7
	 12.
	  	 Amendments
	  	7
	 13.
	  	 Notice Requirements
	  	7
	 14.
	  	 Governing Law
	  	7
	 15.
	  	 Entire Agreement; Headings
	  	8
	 ANNEX A
	  	A

  

 ii 

  
 Hungarian Telephone and
Cable Corp. 
 2004 Long Term Incentive Plan 
  
 Stock Option Award Agreement 
  

Hungarian Telephone and Cable Corp., a Delaware Company (the “Company”), has adopted the Hungarian Telephone and Cable Corp.
2004 Long-Term Incentive Plan, (the “Plan”), for the purposes of providing an incentive to selected employees and directors of the Company and its affiliates to remain in its employ and to increase their interest in the success of
the Company by providing them with opportunities to increase their proprietary interest in the Company and to receive compensation based upon the Company’s success. 
  
 This Stock Option Award Agreement (the “Award Agreement”) sets forth the terms and conditions of the
stock options granted pursuant to the Plan. Annex A of this Award Agreement (“Annex A”) names the individual to whom the option is granted (the “Participant”) and sets forth the number of shares of
common stock of the Company (“Common Stock”) subject to the option, the exercise price of such option, the date of grant and the expiration date of such option and any vesting schedule applicable thereto. 
  

	 	1.	Incorporation of Plan Terms. 

  
 This Award Agreement and the option granted hereby shall be subject to the Plan, the terms of which are incorporated herein by reference, and in the event
of any conflict or inconsistency between the Plan and this Award Agreement, the Plan shall govern. Capitalized terms used herein without definition shall have the meanings assigned to them in the Plan, a copy of which has been furnished to the
Participant. 
  

	 	2.	Grant of Option. 

  
 Subject to the conditions contained herein and in the Plan, the Company grants to the Participant, as of the date of grant indicated on Annex A (the
“Date of Grant”), an option (the “Option”) to purchase the number of shares of Common Stock specified on Annex A, at an exercise price (the “Exercise Price”) specified on Annex
A. The shares of Common Stock issuable upon exercise of the Option are from time to time referred to herein as the “Option Shares.” The grant of an Option shall impose no obligation on the part of the Participant to exercise
the Option. The Option shall vest and be exercisable as hereinafter provided. 
  

 -1- 

	 	3.	Terms and Conditions of the Option. 

  
 The Option is granted subject to the following terms and conditions: 
  
 (a) Vesting; Exerciseability. The Option shall vest and become exercisable in accordance with
any vesting schedule set forth on Annex A, unless the Option has earlier vested or been forfeited in accordance with the terms hereof. 
  
 (b) Term of the Option. The Option shall terminate and no longer be exercisable on the earlier of (i) December 31, 2013 or
(ii) the date specified for termination of the Option in Section 4 below; provided, however, if the termination date falls on a date which the Participant is prohibited by Company policy in effect on such date, from engaging in transactions
in the Company’s securities, such termination date shall be extended to the first date that the Participant is permitted to engage in transactions in the Company’s securities under such Company policy. 
  
 (c) Notice of Exercise. Subject to Sections
3(d), 3(f) and 4 hereof, the Participant may exercise all or any portion of the Option (to the extent vested) by giving written notice of exercise to the Company (Treasurer, Secretary or General Counsel) or the Company’s agent, provided,
however, that no less than 10 Option Shares may be purchased upon any exercise of the Option unless the number of Option Shares purchased at such time is the total number of Option Shares in respect of which the Option is then exercisable, and
provided, further, that in no event shall the Option be exercisable for a fractional share. The date of exercise of an Option shall be the later of (i) the date on which the Company or the Company’s agent receives such notice or (ii) the date
on which the conditions provided in Sections 3(d) and 3(f) are satisfied. Notwithstanding any other provision of this Award Agreement, the Participant may not exercise the Option, whether in whole or in part, and no Option Shares will be issued by
the Company in respect of any such attempted exercise, at any time when such exercise is prohibited by Company policy then in effect concerning transactions by the Participant in the Company’s securities. 
  
 (d) Payment. Prior to the issuance of a
certificate pursuant to Section 3(g) hereof evidencing the Option Shares in respect of which all or a portion of the Option shall have been exercised, the Participant shall have paid to the Company the Exercise Price for all Option Shares purchased
pursuant to the exercise of such Option. Payment may be made by personal check, bank draft or postal or express money order (such modes of payment are collectively referred to as “cash”) payable to
the order of the Company in U.S. dollars. Payment may also be made in mature shares of Common Stock owned by the Participant, or in any combination of cash or such mature shares as the Compensation Committee (the “Committee”) in its
sole discretion may approve. Such shares shall be valued at their Fair Market Value as of the date of exercise. Payment of the Exercise Price in mature shares of Common Stock owned by the Participant shall be made by delivering to the Company the
share certificate(s) representing the required number of shares, with the Participant signing his or her name on the back, or by attaching executed stock powers (with the signature of the Participant guaranteed in either case); payment
of the exercise price in mature shares of Common Stock owned by the Participant may also be made through constructive surrender, by submission of an attestation of ownership in the form approved by the Company and with such signatures or other
guarantees as may be required by the Company. The Participant may also pay for such Option Shares by directing the Company to withhold shares of Common Stock that would otherwise be received by the Participant, pursuant to such rules as the
Committee may establish from time to time. In accordance with rules and procedures established by the Committee (or by any person to whom authority to establish such rules and procedures  

  

 -2- 

 
shall have been delegated by the Committee), the Participant may also make a “cashless” exercise (involving a broker or dealer) of all or a
portion of the Option. 
  
 (e)
Stockholder Rights. The Participant shall have no rights as a stockholder with respect to any shares of Common Stock issuable upon exercise of the Option until the Participant shall become the holder of record thereof, and no adjustment
shall be made for dividends or distributions or other rights in respect of any share for which the record date is prior to the date upon which the Participant shall become the holder of record thereof. 
  
 (f) Limitation on Exercise. The Option shall
not be exercisable unless the offer and sale of Common Stock pursuant thereto has been registered under the Securities Act of 1933, as amended (the “1933 Act”), and qualified under applicable state “blue
sky” laws or the Company has determined that an exemption from registration under the 1933 Act and from qualification under such state “blue sky” laws is available. 
  
 (g) Issuance of Shares. Subject to the
foregoing conditions, as soon as is reasonably practicable after its receipt of a proper notice of exercise and payment of the Exercise Price for the number of shares with respect to which the Option is exercised, the Company either (i) shall
deliver or cause to be delivered to the Participant (or to such person to whom the Option has been transferred pursuant to Section 5 hereof; or following the Participant’s death, to such other person entitled to exercise the Option), at
the principal office of the Company or at such other location as may be acceptable to the Company and the Participant (or such other person), one or more stock certificates in the name of the Participant (or of the person or persons to
whom such Option was transferred pursuant to Section 5 hereof; or following the Participant’s death, to such other person entitled to exercise the Option) for the appropriate number of shares of Common Stock issued in connection with such
exercise or (ii) shall transfer the appropriate number of shares of Common Stock issued in connection with such exercise to the brokerage account designated by the Participant to the Company in writing prior to exercise. Such shares shall be fully
paid and nonassessable. 
  
 (h)
Non-qualified Status of the Option. The Option granted hereby is not intended to qualify, and shall not be treated, as an “incentive stock option” within the meaning of Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”). 
  

	 	4.	Termination of Employment. 

  
 Subject to Article XII of the Plan, the following provisions will govern the ability of the Participant to exercise any portion of the Option following
the Participant’s termination of employment with the Company unless the Compensation Committee determines otherwise. 
  
 (i) If the employment of the Participant with the Company is terminated for reasons other than (i) death, (ii) discharge for Cause, (iii)
retirement, or (iv) resignation, the Participant’s outstanding Option may be exercised at any time within three years after such termination, to the extent of the number of shares covered by the Option which were exercisable 

  

 -3- 

 
at the date of such termination; except that no portion of the Option shall be exercisable on any date beyond the expiration date of the Option. 

 
 (ii) If the employment of the Participant with the
Company is terminated for Cause, the Option (whether or not then exercisable) shall expire and any rights thereunder shall terminate immediately. 
  
 (iii) If the employment of the Participant is terminated due to resignation and the Participant is not eligible to retire under any
Company pension plan, the Participant’s outstanding Option may be exercised at any time within three years of such resignation, to the extent of the number of shares covered by the Option were exercisable at the date of such resignation, except
that no portion of the Option shall be exercisable on any date beyond the expiration date of the Option.  
  
 (iv) If the Participant is not eligible to retire under any Company pension plan and dies while in the employ of the Company or if the
Participant’s dies after his employment has terminated (other than discharge for Cause) and the Participant was not eligible to retire under any Company pension plan upon the termination of his employment, then the Option of the deceased
Participant may be exercised by his or her Personal Representative at any time within three years after the Participant’s death to the extent of the number of shares covered by the Option which were exercisable at the date of such death, except
that no portion of the Option shall be exercisable on any date beyond the expiration date of the Option.  
  
 (v) If the Participant is eligible to retire under any Company pension plan and dies while in the employ of the Company prior to the
vesting of the outstanding Option, any installment or installments not then exercisable shall become fully exercisable as of the date of the Participant’s death and the Option may be exercised by the Participant’s Personal Representative
at any time prior to the expiration date of the Option. 
  
 (vi) If the Participant has retired and dies prior to exercising all of his outstanding Option, then the Option may be exercised by the Participant’s Personal Representative at any time prior to the expiration
date of the Option. 
  
 (vii) If the Participant
dies within 180 days of the expiration date of the Option, and if on the date of death the Participant was entitled to exercise the Option, including vesting pursuant to Section 4(v) above, and if the Option expired without being exercised, the
Personal Representative of the Participant shall receive in settlement a cash payment from the Company of a sum equal to the amount, if any, by which the Fair Market Value (determined on the expiration date of the Option) of the Company’s
Common Stock subject to the Option exceeds the aggregate Exercise Price. 
  
 (viii) Notwithstanding any other provision of this Section 4, if the Participant’s employment with the Company terminates (except for a termination for Cause which is governed by Section 4(ii)) prior to the
vesting of the Option, and if the Participant is eligible to retire under any Company pension plan at the date of such termination, any installment or installments of the Option not then exercisable shall become fully exercisable as of the effective
date of such 

  

 -4- 

 
termination and the Option may be exercised at any time prior to the expiration date of the Option. If the Participant receives severance payments from the
Company and becomes eligible to retire during the severance payment period, all of the Participant’s Option shall become fully exercisable as of the date of such Participant’s retirement eligibility date and may be exercised at any time
prior to the expiration date of the Option. 
  

	 	5.	Transfer; Option Exercisable Only by Participant and Permitted Transferees. 

  
 The Option may not be transferred, pledged, assigned, or otherwise disposed of, except (i) by will or the laws of descent
and distribution, (ii) pursuant to a domestic relations order or (iii) for no consideration, to a member or members of the Participant’s immediate family (as defined below) or to one or more trusts, partnerships, limited partnerships or
other limited liability entity established in whole or in part for the benefit of one or more of such immediate family members (the parties identified in clauses (i), (ii), and (iii) being referred to collectively as “Permitted
Transferees”). If the Option is transferred to a Permitted Transferee, it shall be further transferable only by will or the laws of descent and distribution. The Participant shall promptly notify the Company of any proposed
transfer to a Permitted Transferee in advance in writing and shall upon request provide the Company with information concerning the Permitted Transferee’s financial condition and investment experience. No assignment or transfer of the Option,
or of the rights represented thereby, whether voluntary or involuntary, by operation of law or otherwise, except as permitted by this Section 5, shall vest in the assignee or transferee any interest or right in the Option, but immediately upon any
attempt to assign or transfer the Option the same shall terminate and be of no force or effect. For purposes of this Option Agreement, the Participant’s “immediate family” means any child, stepchild, grandchild, spouse, son-in-law or
daughter-in-law and shall include adoptive relationships. 
  

	 	6.	Tax Withholding. 

  
 The Company shall have the right, prior to the issuance of shares as set forth in Section 3(g) hereor, to require the Participant to remit to the Company
any amount sufficient to satisfy the minimum required Federal, state or local tax withholding requirements. The Participant may satisfy, in whole or in part, such obligation to remit taxes, by directing the Company to withhold shares of Common Stock
that would otherwise be received by the Participant, pursuant to such rules as the Committee may establish from time to time. The Company shall also have the right to deduct from all cash payments made pursuant to or in connection with the Option
the minimum required Federal, state or local taxes required to be withheld with respect to such payments or, if the Participant so elects, up to the maximum Federal, state or local income taxes or such lesser amount as determined by the Company in
order to assure that it complies with applicable accounting standards. 
  

 -5- 

	 	7.	No Restriction on Right to Effect Corporate Changes; No Right to Employment. 

  
 Neither the Plan, this Award Agreement nor the existence of the Option shall affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments, recapitalizations, reorganizations or other changes in the Company’s capital structure or its business, or any merger or consolidation of the Company, or any issue of
bonds, debentures, preferred or prior preference stocks ahead of or convertible into, or otherwise affecting the Common Stock or the rights thereof, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its
assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise. 
  
 In addition, neither this Award Agreement, the grant of the Option nor any action taken hereunder shall be deemed to limit or restrict the right of the
Company to terminate the Participant’s employment at any time, for any reason, with or without Cause. 
  

	 	8.	Adjustment of and Changes in Shares. 

  
 In the event of any reorganization, merger, consolidation, recapitalization, reclassification, stock split, reverse stock split, stock dividend,
extraordinary cash dividend, distribution, combination of shares, spinoff, rights offering, or other changes in the corporate structure affecting the Common Stock, the Committee shall make such adjustments, if any, as it deems appropriate in the
number and class of shares subject to, and the exercise price of, the Option. The foregoing adjustments shall be determined by the Committee in its sole discretion. 
  

	 	9.	Change in Control. 

  
 The Change in Control provisions set forth in Article XII of the Plan are fully applicable to this award agreement. 
  

	 	10.	Preemption of Applicable Laws and Regulations. 

  
 Anything herein to the contrary notwithstanding, if, at any time specified herein for the issuance of shares of Common Stock to the Participant, any law,
regulation or requirement of any governmental authority having jurisdiction shall require either the Company or the Participant to take any action in connection with the shares then to be issued, the issuance of such shares shall be deferred until
such action shall have been taken. 
  

 -6- 

	 	11.	Committee Decisions Final. 

  
 Any dispute or disagreement which shall arise under, or as a result of, or pursuant to, or in connection with, this Award Agreement or the Option shall be
determined by the Committee, and any such determination or any other determination by the Committee under or pursuant to this Award Agreement and any interpretation by the Committee of the terms of the Option shall be final and binding on all
persons affected thereby. 
  

	 	12.	Amendments. 

  
 The Committee shall have the power to alter or amend the terms of the Option as set forth herein from time to time, in any manner consistent with the
provisions of the Plan, and any alteration or amendment of the terms of the Option by the Committee shall, upon adoption, become and be binding on all persons affected thereby without requirement for consent or other action with respect thereto by
any such person. The Committee shall give written notice to the Participant of any such alteration or amendment as promptly as practicable after the adoption thereof. The foregoing shall not restrict the ability of the Participant and the Company by
mutual consent to alter or amend the terms of the Option in any manner which is consistent with the Plan and approved by the Committee. In addition, the terms of the Option may be amended or supplemented by any employment, management retention,
severance or similar agreement (an “Employment Agreement”) entered into between the Company and the Participant (including any such agreement entered into prior to the Date of Grant) and approved, to the extent such
Employment Agreement amends or supplements the terms of the Option, by the Committee. 
  

	 	13.	Notice Requirements. 

  
 Any notice which either party hereto may be required or permitted to give to the other shall be in writing. Such notice may be delivered to the Company
personally or by mail, postage prepaid, addressed as follows: Hungarian Telephone and Cable Corp., 1201 Third Avenue, Suite 3400, Seattle, Washington 98101-3034, attention: Secretary; or to the Company’s Budapest, Hungary office, attention
President; or at such other address as the Company, by notice to the Participant, may designate in writing from time to time, and to the Participant at the Participant’s address as shown on the records of the Company or at such other address as
the Participant, by notice to the Company, may designate in writing from time to time. 
  

	 	14.	Governing Law. 

  
 The terms and conditions stated herein are to be governed by, and construed in accordance with, the laws of the State of Delaware. 
  

 -7- 

	 	15.	Entire Agreement; Headings. 

  
 This Award Agreement (which includes Annex A) and the other related documents expressly referred to herein (including, if applicable, any
Employment Agreement) set forth the entire agreement and understanding between the parties hereto and supersede all prior agreements and understandings relating to the subject matter hereof. In the event of a discrepancy or inconsistency in the
number of shares of common stock covered by the Option, the Date of Grant, the vesting schedule, the Exercise Price or any other term in this Award Agreement and the resolutions of the Committee authorizing the grant of the Option covered hereby,
such resolutions shall control and the Company shall have the right, in its sole discretion, to replace the Award Agreement or any portion thereof (including any portion of Annex A) with a correct version. The headings of Sections and
subsections herein are included solely for convenience of reference and shall not affect the meaning of any of the provisions of this Award Agreement. 
  
 HUNGARIAN TELEPHONE AND CABLE CORP. 
  

 -8- 

  
 ANNEX A 
  
 STOCK OPTION AWARD 
  

							
	Participant:	  	Social Security No.:	  	 	  	 
				
	No. of Shares:	  	Expiration Date:	  	 	  	 
				
	Date of Grant:	  	Exercise Price:	  	 	  	 

  
 VESTING SCHEDULE

  

			
	HUNGARIAN TELEPHONE AND CABLE CORP.
		
	 By:
	 	 
	 	 	 

  

 -A-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00074-of-00352.parquet"}]]