Document:

<PAGE>

                                  Exhibit 10.7

                       HUNGARIAN TELEPHONE AND CABLE CORP.

         1992 INCENTIVE STOCK OPTION PLAN, AS AMENDED AS OF MAY 21, 2001

         1. Purpose. The purpose of the 1992 Incentive Stock Option Plan of
            -------
Hungarian Telephone and Cable Corp. (the "Corporation") is to provide incentive
to employees of the Corporation, to encourage employee proprietary interest in
the Corporation, to encourage employees to remain in the employ of the
Corporation, and to attract to the Corporation individuals of experience and
ability to serve as employees, directors and consultants.

         2. Definitions.
            -----------

                (a) "Board" shall mean the Board of Directors of the
         Corporation.

                (b) "Code" shall mean the Internal Revenue Code of 1986 as
         amended from time to time.

                (c) "Common Stock" shall mean the $.001 par value Common stock
         of the Corporation.

                (d) "Committee" shall mean the Committee appointed by the Board
         in accordance with Section 4 of the Plan.

                (e) "Corporation" shall mean Hungarian Telephone and Cable
         Corp., a Delaware corporation, its parent or any of its subsidiaries.

                (f) "Disability" shall mean the condition of an Employee who is
         unable to engage in any substantial gainful activity by reason of any
         medically determinable physical or mental impairment which can be
         expected to result in death or which has lasted or can be expected to
         last for a continuous period of not less than twelve (12) months.

                (g) "Employee" shall mean an individual (who may be an officer
         or a director) employed by the Corporation (within the meaning of the
         Code section 3401 and the regulations thereunder).

                (h) "Exercise Price" shall mean the price per Share of Common
         Stock, determined by the Committee, at which an Option may be
         exercised.

                (i) "Fair Market Value" of a share of Common Stock on any day
         shall mean the average of the daily closing prices for the prior twenty
         (20) trading days of a share of the Company's Common Stock on the
         American Stock Exchange, or, if the shares are not listed or admitted
         to trading on such Exchange, on the principal

<PAGE>

         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.

                (j)   "Incentive Stock Option" shall mean an Option described in
         Code section 422(b).

                (k)   "Nonstatutory Stock Option" or a "Non-Qualified Stock
         Option" shall mean an Option not described in Code sections 422(b) or
         423(b).

                (l)   "Option" shall mean a stock option granted pursuant to the
         Plan.

                (m)   "Purchase Price" shall mean the Exercise Price times the
         number of whole Shares with respect to which an Option is exercised.

                (n)   "Optionee" shall mean an Employee to whom an option has
         been granted.

                (o)   "Plan" shall mean this Hungarian Telephone and Cable Corp.
         1992 Incentive Stock Option Plan.

                (p)   "Share" shall mean one Share of Common Stock, adjusted in
         accordance with Section 10 of the Plan (if applicable).

                (q)   "Subsidiary" shall mean those subsidiaries of the
         Corporation as defined in section 424(f) of the code.

         3.     Effective Date. This Plan was approved by the Board and
                --------------
Shareholders effective April 30, 1992.

         4.     Administration. The Plan shall be administered by the Board of
                --------------
Directors or by the Stock Option Committee (the `Committee") appointed by the
Board, consisting of not less than two members thereof. The Board may from time
to time remove members from, or add members to, the Committee. Vacancies on the
Committee, however caused, shall be filled by the Board.

                The Committee shall hold meetings at such times and places as it
may determine. Acts of a majority of the Committee at which a quorum is present,
or acts reduced to or approved in writing by a majority of the members of the
Committee, shall be the valid acts of the Committee. The Committee shall from
time to time at its discretion make determinations with respect to Employees who
shall be granted Options, the number

                                       2

<PAGE>

of Shares to be optioned to each and the designation of such Options as
Incentive Stock Options or Nonstatutory Stock Options.

               The interpretation and construction by the Committee of any
provisions of the Plan or of any Option granted thereunder shall be final. No
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Option granted thereunder.

         5.    Eligibility. Optionees shall be such key Employees (who may be
               -----------
officers, whether or not they are directors), or directors or consultants of the
Corporation who perform services of special importance to the management,
operation and development of the business of the Corporation as the Committee
shall select, but subject to the terms and conditions set forth below.

               (a)   Each Option shall be designated in the written option
         agreement as either an Incentive Stock Option or a Non-Qualified Stock
         Option. However, notwithstanding such designations, to the extent that
         the aggregate fair market value of the Shares with respect to which
         Options designated as Incentive Stock Options are exercisable for the
         first time by any Optionee during any calendar year (under all plans of
         the Company) exceeds $100,000, such Options shall be treated as
         Non-Qualified Stock Options.

               (b)   For purposes of Section 5(a), Options shall be taken into
         account in the order in which they were granted, and the fair market
         value of the Shares shall be determined as of the time the Option with
         respect to such Shares is granted.

               (c)   Nothing in the Plan or any Option granted hereunder shall
         confer upon any Optionee any right with respect to continuation of
         employment with the Company, nor shall it interfere in any way with the
         Optionee's right or the Company's right to terminate the employment
         relationship at any time, with or without cause.

         6.    Stock. The stock subject to Options granted under the Plan shall
               -----
be Shares of the Corporation's authorized but unissued or reacquired Common
Stock. The aggregate number of Shares which may be issued under Options
exercised under this Plan shall not exceed 1,250,000. The number of Shares
subject to Options outstanding under the Plan at any time may not exceed the
number of Shares remaining available for issuance under the Plan. In the event
that any Option outstanding under the Plan expires for any reason or is
terminated, the Shares allocable to the unexercised portion of such Option may
again be subjected to an Option under the Plan.

               The limitations established by this Section 6 shall be subject to
adjustment upon the occurrence of the events specified and in the manner
provided in Section 10 hereof.

                                       3

<PAGE>

         7.    Terms and Conditions of Options. Options granted pursuant to the
Plan shall be evidenced by written agreements in such form as the Committee
shall from time to time determine, which agreements shall comply with and be
subject to the following terms and conditions:

               (a)   Date of Grant. Each option shall specify its effective
         date (the "date of grant"), which shall be the date specified by the
         Board or the Committee, as the case may be, in its action relating to
         the grant of the Option.

               (b)   Optionee's Agreement. Each Optionee shall agree to remain
         in the employ of and to render to the Corporation his or her services
         for a period of one (1) year from the date of the granting of the
         Option, but such agreement shall not impose upon the Corporation any
         obligation to retain the Optionee in their employ for any period.

               (c)   Number of Shares. Each Option shall state the number of
         Shares to which it pertains and shall provide for the adjustment
         thereof in accordance with the provisions of Section 10 hereof.

               (d)   Exercise Price and Consideration.

                     (i)   The per Share exercise price under each Option shall
               be such price as is determined by the Board, subject to the
               following:

                     a)    In the case of an Incentive Stock Option

                           i)   granted to an Employee who, at the time of the
               grant of such Incentive Stock Option, owns stock representing
               more than ten percent (10%) of the voting power of all classes
               of stock of the Company or any Parent or Subsidiary, the per
               Share exercise price shall be no less than 110% of the fair
               market value per share on the date of grant.

                           ii)  granted to any other Employee, the per Share
               exercise price shall be no less than 100% of the fair market
               value per Share on the date of grant.

                     b)    In the case of a Non-Qualified Stock Option the per
               Share exercise price may be less than, equal to, or greater than
               the fair market value per Share on the date of grant.

                     (ii)  The fair market value per Share shall be the average
               of the daily closing prices for the prior twenty (20) trading
               days of a share of the Company's 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

                                        4

<PAGE>

                  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.

                  (e)   Medium and Time Payment. The Purchase Price shall be
         payable in full in United States dollars upon the exercise of the
         Option; provided, however, that, with the consent of the Committee, the
         Purchase Price may be paid by the surrender of Shares in good form for
         transfer, owned by the person exercising the option and having a Fair
         Market Value on the date of exercise equal to the Purchase Price or in
         any combination of cash and Shares, so long as the total of the cash so
         paid and the Fair Market Value of the Shares surrendered equals the
         Purchase Price. No Share shall be issued until full payment therefore
         has been made.

                  (f)   Term and Exercise of Options; Nontransferability of
         Options. Each Option shall state the time or times when it becomes
         exercisable. No option shall be exercisable after the expiration of ten
         (10) years from the date it is granted. During the lifetime of the
         Optionee, an Incentive Stock Option shall be exercisable only by the
         Optionee and shall not be assignable or transferable. In the event of
         the Optionee's death, no Incentive Stock Option shall be transferable
         by the Optionee otherwise than by will or the laws of descent and
         distribution. No Non-Qualified Option granted under the Plan shall be
         transferable other than by will or the laws of descent or distribution
         except pursuant to a domestic relations order as defined by the
         Internal Revenue Code or Title I of the Employee Retirement Income
         Security Act ("ERISA") or the rules thereunder and except that, with
         the consent of the Committee acting in its sole discretion, an Optionee
         may transfer (a "Family Member Transfer") a Non-Qualified 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 Non-Qualified Option.
         During the lifetime of an Optionee, a Non-Qualified 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.

                                       5

<PAGE>

                  (g) Termination of Employment Except Death.  In the event that
         an Optionee shall cease to be employed by the Corporation for any
         reason other than his or her death, such Optionee (or permitted Family
         Transferee in the case of a Non-Qualified Option) shall have the right,
         subject to the restrictions of Subsection (f) hereof, to exercise the
         Option at any time within the earlier of (x) the original expiration
         date of the Option or (y) three (3) months after such termination of
         employment in the case of an Incentive Stock Option and eighteen (18)
         months after such termination of employment in the case of a
         Nonstatutory or Non-Qualified Stock Option, (twelve (12) months if
         termination was due to Disability in the case of an Incentive Stock
         Option), to the extent that, on the day preceding the date of
         termination of employment, the Optionee's right to exercise such Option
         had accrued pursuant to the terms of the option agreement pursuant to
         which such Option was granted, and had not previously been exercised.

                  For this purpose, the employment relationship will be treated
         as continuing intact while the Optionee is on military leave, sick
         leave or other bona fide leave of absence (to be determined in the sole
         discretion of the Committee, in accordance with rules and regulations
         construing Code section 422(a)(2)). Notwithstanding the foregoing, in
         the case of an Incentive Stock Option, employment shall not be deemed
         to continue beyond the ninetieth (90/th/) day after the Optionee ceased
         active employment, unless the Optionee's reemployment rights are
         guaranteed by statute or by contract.

                  (h) Death if Optionee. If the Optionee shall die while in the
         employ of the Corporation and shall not have fully exercised the
         Option, an Option may be exercised in full, subject to the restrictions
         of Subsection (f) hereof, to the extent it had not previously been
         exercised, at any time within twelve (12) months after the Optionee's
         death, by the executors or administrators of his or her estate or by
         any person or persons who shall have acquired the Option directly from
         the Optionee by bequest or inheritance or by a permitted Family
         Transferee (in the case of a Non-Qualified Option).

                  If the Optionee shall die following the termination of his
         employment with the Company and such death shall occur prior to the
         earlier of (x) the original expiration date of the option or (y) three
         (3) months following the termination of employment in the case of an
         Incentive Stock Option, and (18) months following the termination of
         employment in the case of a Nonstatutory or Non-Qualified Stock Option,
         and such Option shall not have been fully exercised, an Option may be
         exercised (subject to the limitations on exercisability set forth in
         Subsection (f) hereof) to the extent that, at the date of termination
         of employment, the Optionee's right to exercise such Option had accrued
         pursuant to the terms of the applicable option agreement and had not
         previously been exercised, at any time within twelve (12) months after
         the Optionee's death, by the executors or administrators of the
         Optionee's estate or by any person or persons who shall have acquired
         the Option

                                       6

<PAGE>

         directly from the Optionee by bequest or inheritance or by a permitted
         Family Transferee (in the case of a Non-Qualified Option).

                  (i) Rights as a Stockholder. An Optionee or a permitted
         transferee of an Optionee shall have no rights as a stockholder with
         respect to any Shares covered by his or her Option until the date of
         the issuance of a stock certificate for such shares. No adjustment
         shall be made for dividends (ordinary or extraordinary, whether in
         cash, securities or other property) or distributions or other rights
         for which the record date is prior to the date such stock certificate
         is issued, except as provided in Section 10.

                  (j) Modification, Extension and Renewal of Options. Subject to
         the terms and conditions and within the limitations of the Plan, the
         Committee may modify, extend or renew outstanding Options granted under
         the Plan, or accept the exchange of outstanding Options (to the extent
         not theretofore exercised and subject to the provisions of paragraph
         7(d) above) for the granting of new Options in substitution therefor.
         Notwithstanding the foregoing, however, no modification of an Option
         shall, without the consent of the optionee, alter or impair any rights
         or obligations under any Option theretofore granted under the Plan.

                  (k) Other Provisions. The option agreements authorized under
         the Plan shall contain such other provisions not inconsistent with the
         terms of the Plan, including, without limitation, restrictions upon the
         exercise of the Option, as the Committee shall deem advisable.

         8.       Limitation on Annual Awards.
                  ---------------------------

                  General Rule. Each Option shall be designated in the written
option agreement as either an Incentive Stock Option or a Non-Qualified Stock
Option. However, notwithstanding such designations, to the extent that the
aggregate fair market value of the Shares with respect to which Options
designated as Incentive Stock Options are exercisable for the first time by any
Optionee during any calendar year (under all plans of the Company) exceeds
$100,000, such Options shall be treated as Non-Qualified Stock Options.

         9.       Term of Plan.  Options may be granted pursuant to the Plan
                  ------------
until the termination of the Plan on April 30, 2003.

         10.      Recapitalization. Subject to any required action by the
                  ----------------
stockholders, the number of Shares covered by this Plan as provided in Section
6, the number of Shares covered by each outstanding Option, and the Exercise
Price thereof shall be proportionately adjusted for any increase or decrease in
the number of issued Shares resulting from a subdivision or consolidation of
Shares, stock split, or the payment of a stock dividend.

                                       7

<PAGE>

                 Subject to any required action by the stockholders, if the
Corporation shall be the surviving corporation in any merger or consolidation,
each outstanding Option shall pertain and apply to the securities to which a
holder of the number of Shares subject to the Option would have been entitled. A
dissolution or liquidation of the Corporation or a merger or consolidation in
which the Corporation is not the surviving corporation shall cause each
outstanding Option to terminate, unless the agreement of merger or consolidation
shall otherwise provide, provided that each Optionee shall in such event, if a
period of one (1) year from the date of the grant of the Option shall have
elapsed, have the right immediately prior to such dissolution or liquidation, or
merger or consolidation in which the Corporation is not the surviving
corporation, to exercise the Option in whole or in part, subject to limitations
on exercisability under Section 7(k) hereof.

                 In the event of a change in the Common Stock as presently
constituted, which is limited to a change of all of its authorized shares with
par value into the same number of shares with a different par value or without
par value, the shares resulting from any such change shall be deemed to be the
Common Stock within the meaning of the Plan.

                 To the extent that the foregoing adjustments related to stock
or securities of the Corporation, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive.

                 Except as hereinbefore expressly provided in this Section 10,
the Optionee shall have no rights by reason of any subdivision or consolidation
of shares of stock of any class, stock split, or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock of
any class or by reason of any dissolution, liquidation, merger, or consolidation
or spin-off of assets or stock of another corporation, and any issue by the
Corporation of shares of stock of any class or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of Shares subject to
the Option.

                 The grant of an Option pursuant to the Plan shall not affect in
any way the right or power of the Corporation to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge or consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.

         11.     Securities Law Requirements. No Shares shall be issued upon the
                 ---------------------------
exercise of any Option unless and until the Corporation has determined that: (i)
it and the Optionee have taken all actions required to register the Shares under
the Securities Act of 1933 or perfect an exemption from the registration
requirements thereof; (ii) any applicable listing requirement of any stock
exchange on which the Common Stock is listed has been satisfied; and (iii) any
other applicable provision of state or Federal Law has been satisfied.

         12.     Amendment of the Plan. The Board may, insofar as permitted by
                 ---------------------
law, from time to time, with respect to any Shares at the time not subject to
Options, suspend or

                                       8

<PAGE>

discontinue the Plan or revise or amend it in any respect whatsoever except
that, without approval of the stockholders, no such revision or amendment shall:

         (a)  Increase the number of Shares issuable pursuant to the Plan; or

         (b)  Change the requirements as to eligibility for participation in the
              Plan.

         (c)  Materially increase benefits accruing to participants under the
              Plan.

    13.  Application of Funds. The proceeds received by the Corporation from the
         --------------------
sale of Common Stock pursuant to the exercise of an Option will be used for
general corporate purposes.

    14.  No Obligation to Exercise Option. The granting of an Option shall
         --------------------------------
impose no obligation upon the Optionee to exercise such Option.

                                       9<PAGE>

                                  Exhibit 10.8

                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "Agreement") is made and entered into
as of May 21, 2001 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.   Executive has been the Company's President and Chief Executive
Officer since January 1, 1999.

         B.   The Company and Executive are parties to that certain Employment
Agreement dated December 4, 1998, as amended and restated to date (the "1998
Employment Agreement"), pursuant to which Executive is serving as the Company's
President and Chief Executive Officer.

         C.   The Company and Executive have agreed to enter into this
Agreement to replace the 1998 Employment Agreement.

         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 the date hereof and continue through December 31, 2003, unless earlier
terminated in accordance with the terms of this Agreement (the "Employment
Period").

         4.   Annual Salary. Executive is receiving for 2001 a monthly salary
              -------------
based on an annualized rate of Two Hundred Fifty Thousand Dollars ($250,000).
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 (on a calendar year basis) Executive's base
salary in light of the performance of Executive and, if it finds Executive's
performance to be

<PAGE>

satisfactory, the Compensation Committee shall increase such base salary by an
amount it determines to be appropriate.

         5. Option Award. Pursuant to the 1998 Employment Agreement, the Company
            ------------
has awarded Executive options to purchase 300,000 shares of the Company's common
stock from the Company's 1992 Incentive Stock Option Plan, as amended (the
"Plan"). Options to purchase 200,000 of such shares have vested and options to
purchase the remaining 100,000 shares shall vest in 50,000 increments on June
30, 2001 and December 31, 2001, respectively, provided Executive has maintained
continuous service with the Company through such dates. Provided that Executive
has maintained continuous service with the Company through January 1, 2002, the
Company shall grant Executive options to purchase an additional 100,000 shares
("2002 Tranche Options") of the Company's common stock from the Plan on January
2, 2002. Provided that Executive has maintained continuous service with the
Company through January 1, 2003, the Company shall grant Executive options to
purchase another 100,000 shares ("2003 Tranche Options") of the Company's common
stock from the Plan on January 2, 2003. Executive's rights to the 2002 Tranche
Options and the 2003 Tranche 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 18(b) and (c)) all as yet unvested options
shall be forfeited and cancelled:

                Vesting Date              Options Vested
                ------------              --------------
                June 30, 2002             50,000
                December 31, 2002         50,000
                June 30, 2003             50,000
                December 31, 2003         50,000

         The options shall have a five-year exercise period. The initial
purchase price per share for the 2002 Tranche Options and the 2003 Tranche
Options shall be the fair market value per share of the Company's common stock
(as determined by the Plan) on the date of such grants.

         6. Annual Performance Bonus. Executive shall be entitled to receive an
            ------------------------
annual cash bonus if the Company achieves certain pre-determined objectives to
be mutually agreed upon by Executive and the Compensation Committee. The
Compensation Committee established the 2001 objectives on January 30, 2001. Such
bonus for 2001, if any, shall be payable by April 30, 2002 following the
completion of the Company's audited financial statements for 2001. The
Compensation Committee shall set the 2002 and 2003 bonus objectives by January
31, 2002 and January 31, 2003, respectively. The bonus for 2002 and 2003, if
any, shall be payable by April 30th of the year following the year in which the
bonus is attributable (the "Bonus Year") after the completion of the Company's
audited financial statements for the Bonus Year, provided that if the Bonus Year
is Executive's last year of employment, then the bonus, if any, shall be payable
by December 31st of the Bonus Year subject to an agreement between Executive and
the Compensation Committee on a final bonus settlement upon the completion of
the audited financial statements for the Bonus Year. For any year in which the
Company's performance reaches at least 75% of such year's objectives, Executive
shall be entitled to receive the following bonus:

                                      -2-

<PAGE>

                75%:     $75,000             101%:             101,000
                76%:      76,000             102%              102,000
                77%:      77,000             103%:             103,000
                78%:      78,000             104%:             104,000
                79%:      79,000             105%:             105,000
                80%:      80,000             106%:             106,000
                81%:      81,000             107%:             107,000
                82%:      82,000             108%              108,000
                83%:      83,000             109%              109,000
                84%:      84,000             110%:             110,000
                85%:      85,000             111%:             111,000
                86%:      86,000             112%:             112,000
                87%:      87,000             113%:             113,000
                88%:      88,000             114%:             114,000
                89%:      89,000             115%:             115,000
                90%:      90,000             116%:             116,000
                91%       91,000             117%:             117,000
                92%       92,000             118%:             118,000
                93%       93,000             119%:             119,000
                94%       94,000             120%:             120,000
                95%       95,000             121%:             121,000
                96%       96,000             122%:             122,000
                97%       97,000             123%:             123,000
                98%       98,000             124%:             124,000
                99%       99,000             125% or more:     125,000
               100%      100,000

         7. 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.

         8. 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.

         9. Pension Account. The Company is making, and shall continue to make
            ---------------
during Executive's term of employment, a monthly contribution based on an annual
rate of $30,000 to the Danish pension account of Executive which account
Executive may not withdraw therefrom until the retirement of Executive.

                                      -3-

<PAGE>

         10. Insurance. The Company shall provide Executive and his spouse with
             ---------
health insurance coverage under a fully comprehensive international scheme.

         11. Automobile. The Company shall provide Executive with the use of a
             ----------
private Company automobile to be maintained by the Company.

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

         13. 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.

         14. 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.

         15. 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

                                      -4-

<PAGE>

         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.

         16. Breach of Covenant Not to Compete and Confidentiality Provision.
             ---------------------------------------------------------------
Executive agrees that a substantial violation on his part of any covenant
contained in Paragraphs 14 and 15 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.

         17. 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.

         18. 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
         180 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

                                      -5-

<PAGE>

         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 Paragraphs 13(d) and 14(d)
         of the U.S. Securities and Exchange Act (the "Exchange Act")), other
         than (x) Citizens Communications Company and/or any one or more direct
         or indirect wholly-owned subsidiary of Citizens Communications 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 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 Paragraph 18(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 180 days notice as set forth
         in clause (iii) of Paragraph 18(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 and pension payments at Executive's
                           then-current annual salary and pension 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

                                      -6-

<PAGE>

         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.

                  (d)  Date of Termination; Provision of Severance Benefits. The
                       ----------------------------------------------------
         date of termination of Executive's employment by the Company under this
         Paragraph 18 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 18 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
         Paragraph 18(a) pursuant to which Executive is required to give the
         Company 180 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.

         19.      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.
                           32 Center Street
                           Darien, CT 06820
                           Facsimile No.: 203-656-3867
                           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.

                  (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.

                                      -8-

<PAGE>

          (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)  Prior Employment Agreement. This Agreement terminates and
               --------------------------
     replaces the 1998 Employment Agreement but preserves any options granted
     pursuant to the 1998 Employment Agreement.

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

          (k)  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.

          (l)  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.

WITNESS:                            HUNGARIAN TELEPHONE AND CABLE CORP.

__________________________          By:________________________________________
                                          Daryl A. Ferguson
                                          Co-Chairman of the Board of Directors

WITNESS:                            OLE BERTRAM

__________________________          ___________________________________________

                 [SIGNATURE PAGE TO BERTRAM EMPLOYMENT AGREEMENT
                            DATED AS OF MAY 21, 2001]

                                       -9-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]