<PAGE>   1
                                                               EXHIBIT 10.26

                           MIDCOM COMMUNICATIONS INC.

                              AMENDED AND RESTATED
                        1995 EMPLOYEE STOCK PURCHASE PLAN
                        (AS REVISED ON DECEMBER 13, 1995,
                      DECEMBER 18, 1996 AND MARCH 13, 1997)


            1.  Purpose of the Plan.  The 1995 Employee Stock Purchase Plan as
amended and restated (the "Plan") is intended to encourage stock ownership by
all eligible employees of MIDCOM Communications Inc., a Washington corporation
(the "Company") and participating subsidiaries so that they may share in the
fortunes of the Company by acquiring or increasing their proprietary interest in
the Company. It is intended that the Plan shall constitute an "employee stock
purchase plan" within the meaning of Section 423 of the Internal Revenue Code of
1986, as amended (the "Code"). Accordingly, the provisions of the Plan shall be
construed to ensure that participation is consistent with the requirements of
the Code.

            2.  Definitions.

                2.1  "Account" shall mean an account to which amounts deducted
from a participant's paycheck for the purpose of purchasing stock under this
Plan are credited. Amounts credited to an employee's account shall remain the
property of the respective participant at all times but may be commingled with
for any proper corporate purpose.

                2.2  "Common Stock" shall mean shares of common stock of the
Company, $.0001 par value.

                2.3  "Compensation" shall mean all earnings required to be
reported on an Employee's Form W-2 (or any analogous tax form for foreign-based
employees) plus any amounts not included on Form W-2 by reason of deferral into
a tax-qualified employee benefit plan of the Company (such as 401(k) or
cafeteria plan salary deferrals), but excluding all earnings recognized by an
Employee as the result of (a) the exercise of a non-qualified stock option of
the Company, (b) upon any disqualifying disposition of an ISO, (c) upon any
disqualifying disposition of shares acquired pursuant to this Employee Stock
Purchase Plan, and (d) income recognized upon the grant of a prize, gift of
tangible property, bonus travel and similar events whereby phantom income must
be recognized by an Employee.

                2.4  "Enrollment Date" shall mean the first day of each Offering
Period. A different date may be set by resolution of the Plan Administrator.

                2.5  "Exercise Date" shall mean the last Trading Date of each
Purchase Period.

                2.6  "Fair Market Value" shall mean the value of the Company's
common stock (the "Common Stock"), as of any date, determined as follows:

                                       1
<PAGE>   2
                     (a)  If the Common Stock is listed on the National Market
System ("NMS") of the National Association of Securities Dealers, Inc. Automated
Quotation ("NASDAQ") System, its Fair Market Value shall be its closing sales
price (or the average of its closing bid and asked prices, if no sales were
reported) on the date of determination, as reported in The Wall Street Journal
or such other source as the Plan Administrator deems reliable; or

                     (b)  If the Common Stock is quoted on the NASDAQ System
(but not on the NMS) or is regularly quoted by a recognized securities dealer,
but selling prices are not reported, its Fair Market Value shall be the average
of its closing bid and asked prices, as reported in The Wall Street Journal or
such other source as the Plan Administrator deems reliable; or

                     (c)  By any other reasonable method as the Plan
Administrator may determine.

                2.7  "Offering Period" shall mean each of successive six (6)
month periods during which an option granted pursuant to the Plan may be
exercised, commencing on January 1 and July 1 of each year and terminating on
the following June 30 and December 31, respectively, until this Plan is
terminated by the Board or no additional shares of Common Stock of the Company
are available for purchase under the Plan. The Board shall have the power to
change the duration of any Offering Period (including the commencement date
thereof) without shareholder approval if such change is announced at least
forty-five (45) days before the Enrollment Date of the Offering Period to be
affected.

                2.8  "Participating Subsidiary" shall mean any subsidiary of the
Company which is designated by the Board to participate in the Plan. The Board
shall have the power to make such designation before or after the Plan is
approved by the shareholders.

                2.9  "Plan Administrator" shall mean the Board of Directors of
the Company or a committee designated by the Board to administer the Plan
pursuant to Section 19 below.

                2.10 "Purchase Price" shall mean an amount equal to ninety
percent (90%) of the Fair Market Value of the Common Stock on the Enrollment
Date or the Exercise Date, whichever is lower.

                2.11 "Trading Day" shall mean a day on which the National
Association of Securities Dealers Automated Quotation (NASDAQ) System (or such
national stock exchange as the Company's Common Stock may be listed for trading)
is open for trading.

            3.  Eligible Employees.  Subject to any express limitations
contained herein or otherwise imposed by law, any individual who has been a full
or part-time regular employee of the Company for purposes of tax withholding
under the Code for at least ninety (90) consecutive days, and whose customary
employment with the Company or any Participating Subsidiary is not less than
twenty (20) hours per week is eligible to receive options under the Plan,
provided, however, that no person shall be granted an option under the Plan if,
immediately after the grant,

                                       2
<PAGE>   3
such person would own shares and/or options to purchase shares under the Plan
(including all shares which may be attributed to such person under the rules of
Section 425(d) of the Code) representing five percent (5%) or more of the total
combined voting power or value of all classes of shares of the Company or of its
parent or subsidiary corporations. For purposes of the Plan, an employee on sick
leave or other leave of absence approved by the Company shall retain eligibility
for the Plan for a period of ninety (90) days, or such longer period as may be
guaranteed by statute or contract.

            4.  Offering Periods.  Until the Plan is terminated pursuant to
Section 20 of the Plan, options shall be offered under the Plan during
consecutive Offering Periods commencing on January 1 and July 1 each year, or
such other date as the Board shall determine.

            5.  Participation.

                5.1  An eligible employee may participate in an Offering Period
under the Plan by completing, signing, and filing a Subscription Agreement in
the form of Exhibit 5.1 to this Plan at least fifteen (15) business days prior
to the applicable Enrollment Date, unless a longer or shorter period is
prescribed by the Plan Administrator.

                5.2  Payroll deductions for a participant shall commence on the
Enrollment Date and shall end on the termination date of such Offering Period
unless earlier terminated by the participant as provided in Section 14 of the
Plan or unless automatically transferred in a new Offering Period pursuant to
Section 15 of the Plan.

                5.3  Participation in one offering under the Plan shall neither
limit, nor require, participation in any other offering; provided, however, that
participants may not participate in more than one Offering Period at any time,
and provided, further, that unless participants submit a Withdrawal Notice as
provided in Section 14 of the Plan prior to the end of the Offering Period in
which they are participating, such participants shall be automatically
re-enrolled in the next succeeding Offering Period.

            6.  Payroll Deductions.

                6.1  At the time a participant files his or her Subscription
Agreement, he or she shall elect to have deductions made from his or her pay on
each payday during the Offering Period at a rate of between one percent (1%) and
ten percent (10%) of his or her Compensation (in whole percentages only).

                6.2  All payroll deductions made for a participant shall be
credited to his or her Account. A participant may not make any separate cash
payment into such Account nor may payment for shares be made other than by
payroll deduction.

                6.3  A participant may decrease, but not increase, the rate of
his or her payroll deductions at any time during an Offering Period by
submitting to the Company a revised Subscription Agreement indicating the
desired rate at least five (5) business days before the

                                       3
<PAGE>   4
beginning of the applicable pay period. A participant may only increase his or
her deduction rate for the next succeeding Offering Period, by delivering a
revised Subscription Agreement to the Company at least fifteen (15) business
days prior to the beginning of such Offering Period. The Plan Administrator may
limit the number of rate changes during any Offering Period.

                6.4  Notwithstanding the foregoing, a participant's payroll
deductions may be reduced during any Offering Period to the extent necessary to
comply with Section 423(b)(8) of the Code and Section 7 of the Plan. Payroll
deductions shall resume at the beginning of the first Offering Period scheduled
to end in the following calendar year at the rate indicated in such
participant's Subscription Agreement, unless terminated or modified by the
participant as provided above.

            7.  Granting of Option.

                7.1  On the Enrollment Date of each Offering Period, the Company
shall grant to each participant an option to purchase, on each Exercise Date
during the applicable Offering Period, that number of full shares of Common
Stock equal to the amount in the participant's Account as of the Exercise Date
divided by the applicable Purchase Price, provided, however, that such
participant remains eligible to participate in the Plan at all times during the
Offering Period up to and including the applicable Exercise Date; and provided,
further, that no participant shall be granted an option to purchase during any
single Offering Period more than that number of shares determined by dividing
twelve thousand five hundred dollars ($12,500) by the Fair Market Value of one
share of Common Stock on the Enrollment Date.

                7.2  Notwithstanding the foregoing, no participant shall be
granted an option which permits his or her rights to purchase Common Stock under
the Plan and any similar employee stock purchase plans of the Company or any
parent or subsidiary corporations to accrue at a rate which exceeds twenty-five
thousand dollars ($25,000) of Fair Market Value of such stock (determined at the
time such option is granted) for each calendar year which any such option is
outstanding at any time. The purpose of the limitation in the preceding sentence
is to comply with Section 423(b)(8) of the Code, and it does not limit the
amount of stock which an employee may purchase pursuant to any plan other than
an employee stock purchase plan under Section 423.

                7.3  If the total number of shares for which options are to be
granted on any date in accordance with Paragraph 7.1 exceeds the number of
shares then available under the Plan as provided in Section 17 of the Plan
(after deduction of all shares for which options have been exercised or are then
outstanding), the Company shall make a pro rata allocation of the shares
remaining available in as nearly a uniform manner as shall be practical and as
the Plan Administrator shall determine to be equitable.

            8.  Exercise of Option.

                The option of each eligible participant on an applicable
Exercise Date shall be exercised on such Exercise Date, and the maximum number
of full shares subject to such option

                                       4
<PAGE>   5
shall be purchased for such participant with the accumulated payroll deductions
in his or her Account (subject to the maximum number of shares allowable under
Section 7 of the Plan). No fractional shares will be purchased, and any
accumulated funds not sufficient to purchase a full share shall remain in the
participant's Account for the subsequent Offering Period, subject to withdrawal
by the participant pursuant to Section 14 of the Plan.

            9.   Tax Withholding.  The Company shall not be obligated to issue,
transfer or deliver a certificate of Common Stock to any participant, or to his
personal representative, until adequate provision has been made by the
participant for satisfaction of any federal, state or local tax withholding
obligations associated with such exercise. The Company may, but is not obligated
to, withhold from the participant's Compensation any amount necessary for the
Company to meet such withholding obligations, including any withholding required
to qualify the Company for any tax deductions or benefits attributable to the
sale or early disposition of the stock by the participant.

            10.  Delivery.  Certificates for stock issued to participants will
be delivered as soon as practicable after the Exercise Date. Shares to be
delivered to a participant under the Plan will be registered in the name of the
participant, or, if the participant so directs, by written notice to the Company
prior to the termination date of the pertinent offering, in the names of the
participant and one such other person as may be designated by the participant,
as joint tenants with right of survivorship or as community property, to the
extent and in the manner permitted by applicable law.

            11.  Participant's Rights as a Shareholder.  No participant shall
have any right as a shareholder with respect to any shares under the Plan until
the shares have been purchased in accordance with Section 8 of the Plan.

            12.  Rights Not Transferable.  No participant shall be permitted to
sell, assign, transfer, pledge, or otherwise dispose of or encumber either the
payroll deductions credited to his or her account or any rights with her account
or any rights with regard to the exercise of an option or to receive shares
under the Plan other than by will or the laws of descent and distribution.
Further, such right and interest shall not be liable for, or subject to, the
debts, contracts, or liabilities of the participant. If any such action is taken
by the participant, or any claim is asserted by any other party in respect of
such right and interest whether by garnishment, levy, attachment or otherwise,
such action or claim will be treated as an election to withdraw funds in
accordance with Section 14 of the Plan.

            13.  Interest.  No interest will be paid or allowed on any money in
the Accounts of participants.

            14.  Withdrawal.

                 14.1 A participant may withdraw from the Plan, in whole but not
in part, at any time prior to the last business day of each offering by
delivering a Withdrawal Notice to the

                                       5
<PAGE>   6
Company in the form of Exhibit 14.1 to this Plan, in which event the Company
will refund the entire balance of his or her Account as soon as practicable
thereafter.

                14.2 A participant who has withdrawn may re-enter the Plan by
filing a new Subscription Agreement in accordance with Section 5 of the Plan.

                14.3 A participant may elect to discontinue his or her payroll
deductions during the course of a particular offering, at any time prior to the
last business day preceding the final payday during such offering by delivering
to the Company a revised Subscription Agreement indicating a deduction rate of
zero percent (0%). Such election shall not constitute a withdrawal for the
purposes of this Section 14 of the Plan, and the participant shall remain a
participant in such offering and shall be entitled to purchase from the Company
such number of full shares of Common Stock as set forth in and in accordance
with Section 8 of the Plan.

           15.  Automatic Transfer to New Offering Period.  To the extent
permitted by Rule 16b-3 under the Exchange Act ("Rule 16b-3"), if the Fair
Market value of the Common Stock on any Exercise Date in an Offering Period is
lower than the Fair Market Value of the Common Stock on the Enrollment Date of
such Offering Period, then all participants in such Offering Period shall be
withdrawn immediately after the exercise of their option on such Exercise Date
and automatically re-enrolled in the immediately following Offering Period.

           16.  Termination of Participant's Rights.  A participant's rights
under the Plan shall terminate when he or she ceases to be a participant because
of resignation, retirement, layoff, discharge, or change of status. The Company
shall treat the date a participant's employment ceases as a withdrawal date, and
all payroll deductions not used will be refunded. If a participant's employment
shall be terminated by reason of death or disability prior to the end of an
Offering Period in which he or she is participating, he or she (his or her
designated beneficiary, in the event of his or her death, or if none, his or her
legal representative) shall have the right, within ninety (90) days thereafter,
to elect to have the balance in his or her account either paid to him or her in
cash or applied at the end of such Offering Period toward the purchase of Common
Stock.

           17.  Stock Subject to the Plan.  Subject to changes in the Company's
capitalization as provided in Section 18 of the Plan, the maximum number of
shares that may be issued pursuant to the Plan in the aggregate shall be two
hundred sixty-two thousand five hundred (262,500). The stock subject to the
options shall be shares of the Company's authorized but unissued Common Stock or
shares of Common Stock reacquired by the Company, including shares purchased in
the open market.

           18.  Changes in Capital Structure.  Except as expressly provided
herein, no issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall affect the
number or price of shares of Common Stock subject to the Plan.

                18.1 If the outstanding shares of Common Stock of the Company
are increased or decreased or changed into or exchanged for a different number
or kind of shares or other securities of the Company or of another corporation,
by reason of any reorganization, merger,

                                       6
<PAGE>   7
consolidation, recapitalization, reclassification, stock split-up, combination
of shares, or dividend payable in shares, appropriate adjustment shall be made
by the Plan Administrator in the number and kind of shares as to which an option
granted under this Plan shall be exercisable, to the end that the participant's
proportionate interest shall be maintained as before the occurrence of such
event. Any such adjustment made by the Plan Administrator shall be conclusive.

                18.2 If the Company is not the survivor or resulting corporation
in any reorganization, merger, consolidation or recapitalization, each
outstanding option shall be assumed by the surviving or resulting corporation
and shall continue in full force and effect, and each option shall apply to the
same number and class of securities of the surviving corporation as a holder of
the number of shares of Common Stock subject to the option would be entitled to
under the terms of the reorganization, merger, consolidation or capitalization.

           19.  Administration of the Plan.  The Plan shall be administered by
the Board of Directors of the Corporation (the "Board") or by a committee
designated by the Board composed of one or more members of the Board and such
other persons as the Board shall designate. Any such committee shall have the
powers and authority vested in the Board hereunder as the Board shall designate.
The members of any such committee shall serve at the pleasure of the Board. A
majority of the members of the committee shall constitute a quorum, and all
actions of such committee shall be taken by a majority of the members present.
Any action may be taken by a written instrument signed by all of the members of
such committee and any action so taken shall be fully as effective as if it had
been taken at a meeting. The Board, or any committee thereof appointed to
administer the Plan, is referred to herein as the "Plan Administrator."

           Subject to the provisions of the Plan or any limitations imposed on
it by the Board, the Plan Administrator shall have sole authority, in its
absolute discretion, (a) to construe and interpret the Plan; (b) to define the
terms used herein; (c) to prescribe, amend, and rescind rules and regulations
relating to the Plan; (d) to determine all of the other terms and conditions of
Options granted under the Plan; and (e) to make all other determinations
necessary or advisable for the administration of the Plan and do everything
necessary or appropriate to administer the Plan. All decisions, determinations,
and interpretations made by the Plan Administrator shall be binding and
conclusive on all participants in the Plan and on their legal representatives,
heirs, and beneficiaries.

           20.  Termination and Amendments to Plan.  The Board or the Plan
Administrator may terminate the Plan at any time. If not terminated by act of
the Board or the Plan Administrator, the Plan will terminate on the earlier of
(a) the date on which all or substantially all of the unissued shares of Common
Stock reserved for the purpose of the Plan have been purchased, or (b) ten (10)
years from the date the Plan is adopted by the Board of Directors. Upon such
termination or any other termination of the Plan, all payroll deductions not
used to purchase stock will be refunded.

           The Plan Administrator may amend the Plan from time to time in any
respect; provided, however, that any amendment for which shareholder approval is
required by Rule 16b-3 or under

                                       7
<PAGE>   8
Section 423 of the Code (or any successor rule or provision or any other
applicable law or regulation), shall be subject to approval of the shareholders.

           21.  Conditions Upon Issuance of Shares.  Shares shall not be issued
with respect to an option unless the exercise of such option and the issuance
and delivery of such shares pursuant thereto shall comply with all applicable
provisions of law, domestic or foreign, including, without limitation, the
Exchange Act, the Securities Act of 1933, as amended, the rules and regulations
promulgated thereunder, and the requirements of any stock exchange upon which
the Company's stock may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.

           As a condition to the exercise of an option, the Company may require
a participant to represent and warrant at the time of exercise that the shares
are being purchased only for investment and without any present intention to
sell or distribute such shares if, in the option of counsel for the Company,
such a representation is required by any applicable law.

           22.  Reports.  Statements of individual accounts, setting forth the
amounts of payroll deductions, the number of shares purchased, the Purchase
Price and the remaining cash balance, if any, will be delivered to participants
at least annually.

           23.  Approval of Shareholders.  This Plan is being implemented by
action of the Board of Directors with the understanding that approval of the
Plan by the shareholders of the Company will be sought. Options granted
hereunder prior to the date of the first meeting of the shareholders of the
Company duly convened following the effective date of this Plan shall be granted
subject to ratification of this Plan by the shareholders of the Company at such
duly convened meeting, and if shareholder ratification is not obtained at such
meeting, each and every option granted under this Plan shall be null and void
and shall convey no rights to the holder thereof and all payroll deductions will
be refunded promptly, without interest.

           Approved by the Corporation's Board of Directors as of December 9,
           1994, and as amended by the Board of Directors on December 13, 1995,
           December 18, 1996 and March 13, 1997.

           Approved by the Corporation's Shareholders as of December 9, 1994.

                                  MIDCOM Communications Inc.



                                  By /s/ Paul P. Senio
                                     ---------------------------
                                         Paul P. Senio
                                         Its Vice President

                                       8
<PAGE>   9
                                   EXHIBIT 5.1

                           MIDCOM COMMUNICATIONS INC.
                        1995 EMPLOYEE STOCK PURCHASE PLAN
                 AS AMENDED AND RESTATED THROUGH MARCH 13, 1997

                             SUBSCRIPTION AGREEMENT


___  Original Application                   Enrollment Date:  _______
___  Change in Payroll Deduction Rate
___  Change of Beneficiary(ies)


(a)      ______________________________ hereby elects to participate in the
         Amended and Restated MIDCOM Communications Inc. 1995 Employee Stock
         Purchase Plan (the "Employee Stock Purchase Plan") and subscribes to
         purchase shares of the Company's Common Stock in accordance with this
         Subscription Agreement and the Employee Stock Purchase Plan.

(b)      I hereby authorize payroll deductions from each paycheck in the amount
         of __________ percent ( _____%) of my Compensation on each payday
         during the Offering Period in accordance with the Employee Stock
         Purchase Plan. (Please note that no fractional percentages are
         permitted.)

(c)      I understand that said payroll deductions shall be accumulated for the
         purchase of shares of Common Stock at the applicable Purchase Price
         determined in accordance with the Employee Stock Purchase Plan. I
         understand that if I do not withdraw from an Offering Period, any
         accumulated payroll deductions will be used automatically to exercise
         my option.

(d)      I have received a copy of the complete memorandum to participants
         summarizing the "Mid-Com Communications Inc. 1995 Employee Stock
         Purchase Plan." I understand that my participation in the Employee
         Stock Purchase Plan is in all respects subject to the terms of the
         Plan. I understand that the grant of the option by the Company under
         this Subscription Agreement is subject to obtaining shareholder
         approval of the Employee Stock Purchase Plan.

(e)      Shares purchased for me under the Employee Stock Purchase Plan should
         be issued in the name(s) of (Employee or Employee and spouse only):
         ________________________________
         ___________________________________________________.


                                       9
<PAGE>   10
(f)      I understand that if I dispose of any shares received by me pursuant
         to the Plan within two years after the Enrollment Date (the first day
         of the Offering Period during which I purchased such shares) or one
         year after the Exercise Date, I will be treated for federal income tax
         purposes as having received ordinary income at the time of such
         disposition in an amount equal to the excess of the Fair Market Value
         of the shares at the time such shares were delivered to me over the
         price which I paid for the shares. I HEREBY AGREE TO NOTIFY THE COMPANY
         IN WRITING WITHIN THIRTY (30) DAYS AFTER THE DATE OF ANY DISPOSITION OF
         MY SHARES AND I WILL MAKE ADEQUATE PROVISION FOR FEDERAL, STATE OR
         OTHER TAX WITHHOLDING OBLIGATIONS, IF ANY, WHICH ARISE UPON THE
         DISPOSITION OF THE COMMON STOCK. The Company may, but will not be
         obligated to, withhold from my compensation the amount necessary to
         meet any applicable withholding obligation including any withholding
         necessary to make available to the Company any tax deductions or
         benefits attributable to sale or early disposition of Common Stock by
         me.

(g)      I hereby agree to be bound by the terms of the Employee Stock Purchase
         Plan. The effectiveness of this Subscription Agreement is dependent
         upon my eligibility to participate in the Employee Stock Purchase Plan.

(h)      In the event of my death, I hereby designate the following as my
         beneficiary(ies) to receive all payments and shares due me under the
         Employee Stock Purchase Plan:


NAME:  (Please print) __________________________________________________________
                          (First)           (Middle)             (Last)


____________________                ___________________________________
Relationship

                                    ___________________________________
                                                 (Address)

Employee's Social
Security Number:                    ___________________________________

I UNDERSTAND THAT THIS SUBSCRIPTION AGREEMENT SHALL REMAIN IN EFFECT THROUGHOUT
SUCCESSIVE OFFERING PERIODS UNLESS TERMINATED BY ME.

Dated:  _________________________________________________________
            Signature of Employee

        _________________________________________________________
            Spouse's Signature (If beneficiary other than spouse)

                                       10
<PAGE>   11
                                  EXHIBIT 14.1

                           MIDCOM COMMUNICATIONS INC.
                        1995 EMPLOYEE STOCK PURCHASE PLAN
                 AS AMENDED AND RESTATED THROUGH MARCH 13, 1997


                                WITHDRAWAL NOTICE


           The undersigned participant in the MIDCOM Communications Inc. 1995
Employee Stock Purchase Plan as Amended and Restated through December 18, 1996
(the "Plan") hereby notifies the Company that he or she hereby withdraws from
the Plan. He or she hereby directs the Company to pay to the undersigned as
promptly as practicable all the payroll deductions credited to his or her
account under the Plan. The undersigned understands and agrees that his or her
option for the current Offering Period under the Plan will be automatically
terminated. The undersigned understands further that no further payroll
deductions will be made for the purchase of shares in the current Offering
Period and the undersigned shall be eligible to participate in succeeding
Offering Periods only by delivering to the Company a new Subscription Agreement
in accordance with the terms of the Plan.


                                   Name and Address of Participant:
                                   ___________________________________

                                   ___________________________________

                                   ___________________________________

                                   Signature:

                                   ___________________________________

                                   Date:  ____________________________

                                       1