EX-10.3






EDN SOVINTEL

2005 STOCK APPRECIATION RIGHTS BONUS PLAN




ARTICLE I

ESTABLISHMENT OF THE PLAN




EDN Sovintel (“Sovintel”), a wholly-owned subsidiary of Golden Telecom, Inc. (the “Company”),
hereby establishes the EDN Sovintel 2005 Stock Appreciation Rights Bonus Plan (the “Plan”) upon the
terms and conditions hereinafter stated. The purpose of the Plan is to promote the long-term
success of Sovintel by (a) encouraging officers and employees performing services for Sovintel to
focus on critical long-range objectives, and (b) encouraging the attraction and retention of
officers and employees with exceptional qualifications. The Plan seeks to achieve this purpose by
providing for Awards in the form of Stock Appreciation Rights grants to individuals designated in
the sole discretion of Sovintel.



ARTICLE II

DEFINITIONS




2.01 “Award” means Stock Appreciation Rights granted to a Participant under the Plan.



2.02 “Award Agreement” means the written agreement pursuant to Article VI hereof, that sets
forth the terms, conditions, restrictions and privileges for an Award that incorporates the terms
of the Plan.



2.03 “Base Value” means the Fair Market Value of one share of Common Stock on the date of
grant of such Stock Appreciation Rights hereunder.



2.04 “Board” means the Board of Directors of Golden Telecom, Inc.



2.05 “Committee” means the Compensation Committee of the Board of Directors of Golden Telecom,
Inc.




2.06 “Common Stock” means shares of the common stock of the Company.



2.07 “Disability” means any physical or mental impairment which qualifies an Employee for
disability benefits under any applicable long-term disability plan maintained by Sovintel, in the
first instance, the Company in the second instance or, if no such plan applies, any physical or
mental impairment which would qualify such individual for disability benefits under any applicable
law of the Russian Federation.



2.08 “Effective Date” means the date upon which the Board approves this Plan.



2.09 “Employee” means any person who is employed by Sovintel. Sovintel’s classification as to
who is an Employee shall be determinative for purposes of an individual’s eligibility under the
Plan.



2.10 “Fair Market Value” of a share of the Company’s Common Stock for all purposes under the
Plan on a particular date shall be the lower of: (i) the mean between the high and low sales price
per share of Common Stock on such date, or in case no such sale takes place on such date, the last
date on which a sale occurred, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on a national securities
exchange or included for quotation on the Nasdaq market; or (ii) the average closing sales price
share of Common Stock for the fourteen (14) trading days immediately preceding such date, as
reported in the principal consolidated transaction reporting system with respect to securities
listed or admitted to trading on a national securities exchange or included for quotation on the
Nasdaq market.



If the relevant date is not a trading day, the determination shall be made as of the next
preceding trading day. As used herein, the term “trading day” means a day on which public trading
of securities occurs and as reported in the principal consolidated reporting system referred to
above.



2.11 “Final Value” means the Fair Market Value of a share of Common Stock as of the date on
which Stock Appreciation Rights are exercised by a Grantee hereunder.



2.12 “Grantee” refers to any Participant in the Plan who receives an Award.



2.13 “Officer” means any Employee of Sovintel or any of its subsidiaries who is designated by
the Board as a corporate officer of Sovintel and renders services to Sovintel under the respective
contract with Sovintel.



2.14 “Participant” means any Employee or Officer who is designated by the Board pursuant to
Article VI to participate in the Plan.



2.15 “Stock Appreciation Rights” means the right of a Participant to receive the appreciated
value of the Company’s Common Stock, payable in the form of cash in accordance with the terms of an
Award Agreement and the terms hereof.



ARTICLE III

ADMINISTRATION OF THE PLAN AND MISCELLANEOUS




3.01 Plan Administration. The Board shall administer the Plan unless and until the Board
delegates administration responsibility to the Committee in the manner provided in Section 3.02.
The Board shall have the powers, subject to, and within the limitations of, the express provisions
of the Plan:



(a) To determine from time to time which of the Participants eligible under the Plan shall be
granted Awards; when and how each Award shall be granted; the provisions of each Award granted
(which need not be identical), including the time or times when a person shall be permitted to
receive the number of Stock Appreciation Rights granted.



(b) To construe and interpret the Plan and Awards granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Board, in the exercise of this power,
may correct any defect, omission or inconsistency in the Plan or in any Award Agreement, in a
manner and to the extent it shall deem necessary or expedient to make the Plan fully effective.



(c) To amend the Plan or an Award Agreement pursuant to the terms of Article IX hereof.



(d) Generally, to exercise such powers and to perform such acts as the Board deems reasonable
and necessary to promote the best interests of Sovintel which are not in conflict with the
provisions of the Plan.



3.02 Delegation to the Committee. The Board may delegate administration of the Plan to the
Committee. If administration is delegated to the Committee, the Committee shall have, in connection
with the administration of the Plan, the powers theretofore possessed by the Board, including the
power to authorize an officer of Golden Telecom, Inc. to assume those limited administrative powers
that are related to the day to day operation and administration of the Plan that the Committee is
authorized to exercise (and references in this Plan to the Board shall thereafter be to the
Committee), subject, however, to such resolutions, not inconsistent with the provisions of the
Plan, as may be adopted from time to time by the Board. The Board may abolish the Committee any
time and revest in the Board the administration of the Plan



3.03 Revocation for Misconduct. Any Stock Appreciation Rights Award under this Plan, whether
or not vested and exercisable, made to a Participant who is discharged from the employ of Sovintel
or any of its subsidiaries due to the individual’s (i) personal dishonesty of a material nature
affecting his or her ability to perform his or her duties with Sovintel, (ii) willful misconduct or
gross negligence, (iii) breach of fiduciary duty involving personal profit, or (iv) conviction of
any criminal offense which involves dishonesty or breach of trust or conviction of any felony shall
automatically terminate, rescind and be revoked.



3.04 Limitation on Liability. No member of the Board shall be liable for any action or
determination made in good faith with respect to the Plan. To the maximum extent allowed by law
and Sovintel’s bylaws in the first instance or the Company’s bylaws in the second instance, the
Board shall be indemnified by Sovintel or the Company in respect of all their activities under the
Plan.



3.05 Compliance with Law and Regulations. All Awards granted hereunder shall be subject to
all applicable laws, rules and regulations of the Russian Federation and to such approvals by any
government or regulatory agency as may be required.



ARTICLE IV




ELIGIBILITY




Awards may be granted to such Employees and Officers as may be designated from time to time by
the Board, pursuant to guidelines, if any, which may be adopted by the Board from time to time.



ARTICLE V

ADJUSTMENTS




If and to the extent that the number of issued shares of Common Stock shall be increased or
reduced by change in par value, split up, reclassification, distribution of a dividend payable in
Common Stock, merger, consolidation, reorganization, recapitalization, reincorporation, or the
like, the Board may make appropriate adjustment in the number of shares covered by outstanding
Awards under the Plan. In the event of any adjustment in the number of shares covered by any
Award, any fractional shares resulting from such adjustment shall be disregarded and each such
Award shall cover only the number of full shares resulting from such adjustment. The Board may
make such adjustments, and its determination shall be final, binding and conclusive.



Where appropriate, the Board also may adjust the terms of outstanding Awards to take into
consideration material changes in accounting practices or principles, extraordinary dividends,
acquisitions or dispositions of stock or property or any other event if it is determined by the
Board that such adjustment is appropriate in order to prevent dilution or expansion of the rights
of Participants.



ARTICLE VI

PARTICIPATION; STOCK APPRECIATION RIGHTS AWARD AGREEMENTS




The Board shall, in its discretion, determine from time to time which Employees and Officers
will participate in the Plan and receive Awards under the Plan. In making all such determinations
there shall be taken into account the duties, responsibilities and performance of each respective
Employee and Officer in respect of Sovintel, his or her present and potential contributions to the
growth and success of Sovintel, his or her cash compensation and such other factors as the Board
shall deem relevant to accomplishing the purposes of the Plan.



All awards are subject to the terms, conditions, restrictions and privileges of the Plan in
addition to the terms, conditions, restrictions and privileges for an Award contained in the Award
Agreement. No Award under this Plan shall be effective unless memorialized in writing by the Board
in an Award Agreement delivered to and signed by the Participant.



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ARTICLE VII

STOCK APPRECIATION RIGHTS AWARDS




7.01 Stock Appreciation Rights. Subject to the provisions hereof and individual Stock
Appreciation Rights Award Agreements, Sovintel shall award to Participants that it shall designate
in its sole discretion, Stock Appreciation Rights. This Stock Appreciation Rights Award Agreement
shall contain such terms and conditions as the Board shall from time to time determine, shall
specify the Base Value of one (1) share of Common Stock, and shall specify the number of Stock
Appreciation Rights being granted to the Participant, where one (1) Stock Appreciation Right shall
equal one share of Common Stock.



7.02 Vesting of Stock Appreciation Rights Awards. Stock Appreciation Rights Awards shall vest
and be exercisable pursuant to the terms outlined in each Grantee’s individual Stock Appreciation
Rights Award Agreement.



7.03 Settlement of Stock Appreciation Rights Upon Exercise. A Grantee shall exercise his
Stock Appreciation Rights by submitting to the Board a Notice of Exercise in the form provided by
the Board. Under a Stock Appreciation Rights Award Agreement, as soon as practicable following
exercise of such Award, the Grantee will receive cash equal in value to the positive difference
between the Base Value and the Final Value multiplied by the number of Stock Appreciation Rights,
as set forth in the Award Agreement. This process shall be referred to as the “settlement” of
Stock Appreciation Rights. Partial exercises of Stock Appreciation Rights are permitted hereunder.



A Stock Appreciation Rights Award may not be exercised if there is no positive difference
between the Base Value and the Final Value, and the Grantee shall not be entitled to any settlement
in cash hereunder in such circumstances.



In the event of the Grantee’s death prior to receiving such share distribution payment when
due, such distribution will be made to the Grantee’s designated beneficiary (as identified in the
Award Agreement), provided that such designation is in accordance with applicable law of the
Russian Federation. If the Grantee is legally married at the time of the designation, and the
designated beneficiary is not the Grantee’s spouse, then a written consent of his/her spouse will
be required to be provided by the Grantee, or else Sovintel may not pay benefits under the Plan to
the designee named and the benefit would pass to the Grantee’s estate under applicable law. Prior
to making any payment to a designated beneficiary, Sovintel shall have the ability to consult with
legal counsel on the permissibility of making such payment under applicable Russian Federation law.
Notwithstanding anything to the contrary herein or in any related Award Agreement, to the extent
that Sovintel is advised by legal counsel that payment pursuant to a beneficiary designation in an
Award Agreement would violate applicable Russian Federation law, Sovintel shall, with respect to
such payment, follow the law of the Russian Federation which applies to property of a descendent
when no beneficiary has been made. All Grantees shall be required in their Award Agreement to
acknowledge and accept that the aforementioned procedure shall apply with respect to beneficiary
designations in Award Agreements.



A Grantee may at any time designate a new beneficiary by notifying the Board in writing and
such new designation shall be incorporated with and attached to Sovintel’s file copy of the Stock
Appreciation Right Awards Agreement.



7.04 Restriction on Transfer. Until an Award is exercised, none of the cash which may be paid
to the Grantee upon settlement may be pledged or otherwise encumbered by the Grantee, and no
attempt to transfer the right to receive such cash, whether voluntary or involuntary, by operation
of law or otherwise, shall vest the transferee with any interest or right in or with respect to the
cash.



7.05 Exercise by Beneficiary. If a Grantee dies, becomes disabled or otherwise is unable to
exercise an Award, the Grantee’s designated beneficiary (subject to the limitations in the third
paragraph of Section 7.03) shall have the right to exercise such Award under the terms and
conditions set forth hereunder and under the applicable Stock Appreciation Rights Award Agreement.



7.06 Termination of Employment, Effect on Awards. In the event that a Grantee dies, Stock
Appreciation Rights granted hereunder shall expire and thus be rendered not exercisable either by
the Grantee or as appropriate (subject to the limitations in the third paragraph of Section 7.03),
his beneficiary, on the ninety-first (91st) day following the date of death.



In the event that a Grantee terminates his employment with Sovintel other than for the reasons
set forth in Section 3.03 hereof, Stock Appreciation Rights granted hereunder shall expire and thus
be rendered not exercisable by the Grantee or as appropriate (subject to the limitations in the
third paragraph of Section 7.03), his beneficiary, on the thirty first (31st) day
following the effective date of the termination of his employment.



7.07 Exercisability. Vested Awards shall be exercisable by Grantees only until the fifth (5)
anniversary of the Date of Grant as set forth in a Grantee’s Award Agreement. Vested Awards that
remain unexercised after such date shall expire by their terms.



ARTICLE VIII

AMENDMENT AND TERMINATION OF THE PLAN




The Board may, by resolution, at any time terminate or amend the Plan with respect to any
Awards which have not been granted, but no such action shall adversely affect the rights under any
outstanding Award without the Grantee’s consent.



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ARTICLE IX

EMPLOYMENT RIGHTS




Neither the Plan nor any Award hereunder shall create any right on the part of any Employee of
Sovintel or any of its subsidiaries to continue in such capacity.



ARTICLE X

TAX CONSIDERATIONS




In order to comply with all applicable laws or regulations of the Russian Federation, Sovintel
may take such action as it deems appropriate to insure that, if necessary, all applicable taxes are
withheld or collected from the Grantee in connection with the exercise of any Award.



ARTICLE XI




EFFECTIVE DATE OF THE PLAN; TERM




11.01 Effective Date of the Plan. This Plan shall become effective on the Effective Date, and
Awards may be granted hereunder as of or after the Effective Date and prior to the termination of
the Plan.



11.02 Term of Plan. Unless sooner terminated, this Plan shall remain in effect for a period
of ten (10) years ending on the tenth anniversary of the Effective Date. Termination of the Plan
shall not affect any Awards previously granted and such Awards shall remain valid and in effect
until the restrictions contained therein have lapsed, or by their terms expire or are forfeited.



ARTICLE XII

GOVERNING LAW




This Plan shall be construed under the laws of the Russian Federation.



IN WITNESS WHEREOF, Sovintel has caused a duly authorized officer to execute this Golden
Telecom, Inc./EDN Sovintel 2005 Stock Appreciation Rights Plan, and to apply the corporate seal
hereto as of the 22nd day of November, 2005.




EDN SOVINTEL




By: Jean-Pierre Vandromme Title: General Director




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