EXHIBIT 10.26

                            EQUALNET HOLDING CORP.

                 1995 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN


      1. PURPOSE. The 1995 Non-Employee Director Stock Option Plan (the "Plan")
is to benefit EqualNet Holding Corp. (the "Company") by offering its
non-employee directors (the "Eligible Directors") an opportunity to become
owners of the Common Stock, $.01 par value, of the Company (the "Stock") and is
intended to advance the best interests of the Company by increasing their
proprietary interests of the Company by increasing their proprietary interest in
the success of the Company and its subsidiary corporations.

      2. ADMINISTRATION. The Plan shall be administered by the Board of
Directors of the Company (the "Board"). Subject to the terms of the Plan, the
Board shall have the power to construe the provisions of the Plan, or of options
granted hereunder (the "Options"), to determine all questions arising
thereunder, and to adopt and amend such rules and regulations for administering
the Plan as the Board deems desirable.

      3. AVAILABLE SHARES. The total amount of the Stock with respect to which
Options that may be granted under this Plan shall not exceed in the aggregate
250,000 shares; provided, that the class and aggregate number of shares of Stock
with respect to which Options may be granted hereunder shall be subject to
adjustment in accordance with the provisions of Paragraph 16 hereof. Such shares
of Stock may be treasury shares or authorized but unissued shares of Stock. In
the event that any outstanding Option for any reason shall expire or is
terminated or canceled, the shares of Stock allocable to the unexercised portion
of such Option may again be subject to an Option or Options under the Plan.

      4. AUTHORITY TO GRANT OPTIONS AND STOCK. All Options granted under the
Plan shall be non-qualified stock options. No Options shall be granted under the
Plan subsequent to May 8, 2005. The only Options under the Plan that may be
granted are those that are granted after both adoption of the Plan and approval
thereof by the stockholders of the Company within twelve months after the date
of such adoption, all as provided in Paragraph 19 hereof.

      5. ELIGIBILITY FOR STOCK OPTIONS. Except as specifically provided below,
the individuals who shall be eligible to receive Options under the Plan shall be
Eligible Directors of the Company.

      6.    OPTION GRANT SIZE AND GRANT DATES.

            (a)   INITIAL GRANTS.

                  (i) ELIGIBLE DIRECTORS ON THE EFFECTIVE DATE OF THE PLAN. An
            Option to purchase 5,000 shares of Stock (as adjusted pursuant to
            Paragraph 16) (an "Initial Grant") shall be granted on the day
            following the effective date of the Plan to each person who is an
            Eligible Director on the date of the annual meeting of stockholders
            ("Annual Meeting") at which the Plan is approved. If however, the
            Chairman of the Board of the Company determines, in his sole
            discretion following discussions with the Company's legal counsel,
            that the Company is in possession of material, nonpublic information
            about the Company, then the Initial Grant to the Eligible Directors
            shall be suspended until
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            the second trading day after public dissemination of such
            information.

                  (ii) ELIGIBLE DIRECTORS ELECTED OR APPOINTED AFTER THE
            EFFECTIVE DATE OF THE PLAN. An Initial Grant (as adjusted pursuant
            to Paragraph 16) shall be granted to each person who shall become an
            Eligible Directors after the effective date of the Plan on the day
            following the day on which such Eligible Director is first elected
            or appointed to be a Director, whichever is applicable; provided,
            that if an Eligible Director who previously received an Initial
            Grant terminates service as a Director and is subsequently elected
            or appointed to the Board, such Director shall not be eligible to
            receive a second Initial Grant, but shall be eligible to receive
            only Annual Grants (defined below) as provided in this Paragraph 6,
            beginning with the Annual Meeting held immediately following the
            date on which such Director was reelected or appointed. If however,
            the Chairman of the Board of the Company determines, in his sole
            discretion following discussions with the Company's legal counsel,
            that the Company is in possession of material, nonpublic information
            about the Company, then the Initial Grant to the Eligible Directors
            shall be suspended until the second trading day after public
            dissemination of such information.

            (b) ANNUAL GRANTS. An Option to purchase 1,000 shares of Stock (as
      adjusted pursuant to Paragraph 16) shall be granted to each Eligible
      Director as an annual retainer fee for service as a member of the
      Company's Board of Directors (each, an "Annual Grant").

                  (i) ELIGIBLE DIRECTORS ON THE EFFECTIVE DATE OF THE PLAN. An
            Annual Grant shall be granted to each person who is an Eligible
            Director on the effective date of the Plan on the day following each
            Annual Meeting beginning with the first Annual Meeting to occur
            after the date on which the stockholders approve the Plan. If,
            however, the Chairman of the Board of the Company determines, in his
            sole discretion following discussions with the Company's legal
            counsel, that the Company is in possession of material, nonpublic
            information about the Company, then the Annual Grant shall be
            delayed until the second trading day after public dissemination of
            such information.

                  (ii) ELIGIBLE DIRECTORS ELECTED OR APPOINTED AFTER THE
            EFFECTIVE DATE OF THE PLAN. An Annual Grant shall be granted to each
            person who shall become an Eligible Director after the effective
            date of this Plan on the day following each Annual Meeting beginning
            with the later of (A) the first Annual Meeting to occur after the
            date on which the stockholders approve the Plan and (B) the first
            Annual Meeting after such Eligible Director is first elected or
            appointed to be a Director, whichever is applicable. If, however,
            the Chairman of the Board of the Company determines, in his sole
            discretion following discussions with the Company's legal counsel,
            that the Company is in possession of material, nonpublic information
            about the

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            Company, then the Annual Grant shall be delayed until the second
            trading day after public dissemination of such information.

      7. OPTION PRICE; FAIR MARKET VALUE. The price at which shares of Stock may
be purchased by an Eligible Director pursuant to an Option (the "Optionee")
shall be the fair market value of the shares of Stock on the date the Option is
granted. For all purposes of this Plan, the "fair market value" of the Stock
shall be the mean of the highest and lowest selling prices of the Stock as
reported in THE WALL STREET JOURNAL for the last trading day before the date as
of which such fair market value is to be determined. No Option may be repriced.

      8. DURATION OF OPTIONS. The term of each Option hereunder shall be ten
years, and no Option shall be exercisable after the expiration of ten years from
the date such Option is granted. An Option shall expire immediately following
the last day of which such Option is exercisable pursuant to this Paragraph 8.

      9.    AMOUNT EXERCISABLE.

            (a) No Option shall be exercisable earlier than the six month
      anniversary of the date of grant.

            (b) An Initial Grant becomes exercisable according to the following
      schedule:

                    PERIOD FROM                       PORTION OF GRANT THAT
                    THE DATE THE                       BECOMES EXERCISABLE
                  OPTION IS GRANTED                      AFTER SUCH PERIOD
                  -----------------                   ---------------------
                  One year after grant.............            33-1/3%
                  Two years after grant............            33-1/3%
                  Three years after grant..........            33-1/3%

            (c)   An Annual Grant becomes exercisable on the six month
      anniversary of the date of grant.

      10. EXERCISE OF OPTIONS. Options shall be exercised by the delivery of
written notice to the Company setting forth the number of shares of Stock with
respect to which the Option is to be exercised, together with cash, wire
transfer, certified check, bank draft or postal or express money payable to the
order of the Company (the "Acceptable Funds") for an amount equal to the Option
price of such shares of Stock, or at the election of the Optionee, by exchanging
shares of Stock owned by the Optionee, so long as the exchanged shares of Stock
plus Acceptable Funds paid, if any, have a total fair market value (determined
in accordance with Paragraph 7, as of the date of exercise) equal to the
purchase prices for such shares to be acquired upon exercise of said Option, and
specifying the address to which the certificates for such shares are to be
mailed. Whenever an Option is exercised by exchanging shares of Stock
theretofore owned by the Optionee: (a) no shares of Stock received upon exercise
of that Option thereafter may be exchanged to pay the Option price for
additional shares of Stock within the following six months; and (b) the Optionee
shall deliver to the Company certificates registered in the name of such
Optionee, free of all liens, claims, and encumbrances of every kind, accompanied
by stock powers duly endorsed in blank by the record holder of the shares
represented by such certificates, with signature guaranteed by a commercial bank
or trust company or by a brokerage firm having a membership on a registered
national stock exchange. Such notice may be delivered in person to the Secretary
of the Company, or may be sent by mail to the Secretary of the Company, in which
case delivery shall be deemed made on the date such notice is received. As
promptly as practicable after receipt of such written notification

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and payment, the Company shall deliver to the Optionee certificates for the
number of shares with respect to which such Option has been so exercised, issued
in the Optionee's name; provided, that such delivery shall be deemed effected
for all purposes when a stock transfer agent of the Company shall have deposited
such certificates in the United States mail, addressed to the Optionee, at the
address specified pursuant to this Paragraph 10. The delivery of certificates
upon the exercise of Options is subject to the condition that the person
exercising such Option provide the Company with such information as the Company
might reasonably request pertaining to such exercise, sale or other disposition.

      11. TRANSFERABILITY OF OPTIONS. Options shall not be transferable by the
Optionee other than by will or under the laws of descent and distribution.
Options shall be exercisable, during the Optionee's lifetime, only by the
Optionee or his legal guardian or representative.

      12. TERMINATION OF DIRECTORSHIP OF OPTIONEE. If, before the date of
expiration of the Option, the Optionee shall cease to be a Director of the
Company, the Option shall terminate on the earlier of such date of expiration or
one year after the date of ceasing to serve as a Director. In such event, the
Optionee shall have the right prior to the termination of such Option to
exercise the Option to the extent to which he was entitled to exercise such
Option immediately prior to ceasing to serve as a Director; however, in the
event that the Optionee has ceased to serve as a Director on or after attaining
the age of sixty-two (62) years, the Optionee shall be entitled to exercise all
or any part of such Option (without regard to any limitations imposed pursuant
to Paragraph 9(b) hereof, but subject to Paragraph 9(a)). Upon the death of the
Optionee, his executors, administrators, or any person or persons to whom his
Option may be transferred by will or by the laws of descent and distribution,
shall have the right, at any time prior to the earlier of the date of expiration
or one year following the date of such death, to exercise the Option, in whole
or in part (without regard to any limitations imposed pursuant to Paragraph 9(b)
hereof, but subject to Paragraph 9(a)).

      13. REQUIREMENTS OF LAW. The Company shall not be required to issue any
shares under any Option or as partial payment for annual retainer fees if the
issuance of such shares shall constitute a violation by the Optionee or the
Company of any provisions of any law or regulation of any governmental
authority.

      14. NO RIGHTS AS STOCKHOLDER. No Optionee shall have rights as a
stockholder with respect to shares covered by any Option until the date of
issuance of a stock certificate for such shares; and, except as otherwise
provided in Paragraph 16 hereof, no adjustment for dividends, or otherwise,
shall be made if the record date thereof is prior to the date of issuance of
such certificate.

      15. NO EMPLOYMENT OR NOMINATION OBLIGATION. The granting of any Option
shall not impose upon the Company or its stockholders any obligation to employ
any Optionee or to continue to nominate any Optionee for election as a Director
of the Company.

      16. CHANGES IN THE COMPANY'S CAPITAL STRUCTURE. The existence of
outstanding Options shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganization or other changes in the Company's capital
structure or its business, or any merger or consolidation of the Company, or any
issuance of bonds, debentures, preferred or prior preference stock ahead of or
affecting the Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise.

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      If the Company shall effect a subdivision or consolidation or shares or
other capital readjustment, the payment of a stock dividend, or other increase
or reduction of the number of shares of the Stock outstanding, without receiving
compensation therefor in money, services or property, then (a) the number, class
and per share price of shares of Stock subject to outstanding Options hereunder
shall be appropriately adjusted in such a manner as to entitle an Optionee to
receive upon exercise of an Option, for the same aggregate cash consideration,
an equivalent total number and class of shares as he would have received had he
exercised his Option in full immediately prior to the event requiring the
adjustment; and (b) the number and class of shares then reserved for issuance
under the Plan shall be adjusted by substituting for the total number and class
of shares of Stock then reserved the number and class of shares of Stock that
would have been received by the owner of an equal number of outstanding shares
of each class of Stock as the result of the event requiring the adjustment.

      After a merger of one or more corporations into the Company, or after a
consolidation of the Company and one or more corporations in which the Company
shall be the surviving corporation, each holder of an outstanding Option shall,
at no additional cost, be entitled upon exercise of such Option to receive
(subject to any required action by stockholders) in lieu of the number and class
of shares into which such Option would have been so exercisable in the absence
of such event, the number and class of shares of stock or other securities to
which such holder would have been entitled pursuant to the terms of the
agreement of merger or consolidation if, immediately prior to such merger or
consolidation, such holder had been the holder of record of the number and class
of shares of Stock equal to the number and class of shares into which such
Option shall be so exercised.

      If the Company is merged into or consolidated with another corporation
under circumstances where the Company is not the surviving corporation, or if
the Company sells or otherwise disposes of substantially all its assets to
another corporation and is liquidated while unexercised Options remain
outstanding under the Plan, (a) after the effective date of such merger,
consolidation or sale and liquidation, as the case may be, each holder of an
outstanding Option shall be entitled, upon exercise of such Option, to receive,
in lieu of shares of the Stock, shares of such stock or other securities as the
holders of shares of such class of Stock received pursuant to the terms of the
merger, consolidation or sale; and (b) notwithstanding Paragraphs 9(b) and 9(c)
hereof, but subject to Paragraph 9(a), all Options, from and after the date of
any agreement regarding such merger, consolidation, or sale and liquidation, as
the case may be, shall be exercisable in full prior to the effective date of
such merger, consolidation or sale or liquidation.

      Except as hereinbefore expressly provided, the issuance by the Company of
shares of stock of any class, or securities convertible into shares of stock of
any class, for cash or property, or for labor or services either upon direct
sale or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made with respect to, the number, class or price of shares of Stock then
subject to outstanding Options.

      17. TERMINATION AND AMENDMENT OF PLAN. The Board of Directors of the
Company may amend, terminate or suspend the Plan at any time, in is sole and
absolute discretion; provided, however, to the extent required to qualify the
Plan under Rule 16b-3 promulgated under Section 16 of the Securities Exchange
Act of 1934, as amended, no amendment shall be made more than once every six
months that would change the amount, price or timing of the Initial and Annual
Grants, other than to comport with changes in the Internal Revenue Code of 1986,
as amended, the Employee Retirement Income Security Act or the rules and
regulations promulgated thereunder; and provided, further, to the extent
required to qualify

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the Plan under Rule 16b-3, no amendment that would (a) materially increase the
number of shares of Stock that may be issued under the Plan, (b) materially
modify the requirements as to eligibility for participation in the Plan, or (c)
otherwise materially increase the benefits accruing to participants under the
Plan, shall be made without the approval of the Company's stockholders.

      18. WRITTEN AGREEMENT. Each Option granted hereunder of Stock issued
hereunder shall be embodied in a written agreement, which shall be subject to
the terms and conditions prescribed above and shall be signed by the Eligible
Director and by the Chairman of the Board, the President or any Senior Vice
President of the Company for and in the name and on behalf of the Company.

      19. ADOPTION, APPROVAL AND EFFECTIVE DATE OF PLAN. The Plan shall be
considered adopted and shall become effective, subject to approval by the
stockholders of the Company, on May 8, 1995. The Plan and all Options granted
under the Plan prior to stockholder approval shall be void and of no further
force and effect unless the Plan shall have been approved by the requisite vote
of the stockholders entitled to vote at a meeting of the stockholders of the
Company called for such purpose prior to May 8, 1996.

      20. GOVERNING LAW. The Plan and all determinations made and actions taken
pursuant hereto shall be governed by the laws of the State of Texas, without
reference to principles of conflict of laws, and shall be construed accordingly.

      21. COMPLIANCE WITH SEC REGULATIONS. It is the Company's intent that the
Plan comply in all respects with Rule 16b-3, and any successor rule pursuant
thereto. If any provision of this Plan is later found not to be in compliance
with Rule 16b-3, the provision shall be deemed null and void. All grants of
Options and all exercises of Options under this Plan shall be executed in
accordance with the requirements of Section 16 of the Securities Exchange Act of
1934, as amended, and any regulations promulgated thereunder.

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