As amended Through
                                                                January 14, 1997

                          GST TELECOMMUNICATIONS, INC.

                   SENIOR OPERATING OFFICER STOCK OPTION PLAN

         1. PURPOSE OF THE PLAN.

         This  Senior  Operating  Officer  Stock  Option  Plan (the  "Plan")  is
intended  as an  incentive,  to retain in the employ of GST  TELECOMMUNICATIONS,
INC., a federally  chartered  Canadian  corporation with its principal office at
4317 N.E.  Thurston Way,  Vancouver,  Washington  98662 (the  "Company") and any
Subsidiary  of the Company,  within the meaning of Section  424(f) of the United
States  Internal  Revenue  Code of 1986,  as  amended  (the  "Code"),  as senior
operating  officers,   operating  officers,  senior  executive  officers,  other
officers, employees and directors, persons of training,  experience and ability,
to attract new senior operating officers,  operating officers,  senior executive
officers, other officers,  employees and directors whose services are considered
valuable,  to encourage the sense of proprietorship  and to stimulate the active
interest of such persons in the development and financial success of the Company
and its Subsidiaries.

         It is further  intended that certain  options  granted  pursuant to the
Plan shall constitute  incentive stock options within the meaning of Section 422
of the Code (the  "Incentive  Options"),  while certain  other  options  granted
pursuant to the Plan shall be  nonqualified  stock  options  (the  "Nonqualified
Options").  Incentive Options and Nonqualified  Options are hereinafter referred
to collectively as "Options."

         The Company  intends that the Plan meet the  requirements of Rule 16b-3
("Rule 16b-3") promulgated under the Securities Exchange Act of 1934, as amended
(the  "Exchange  Act"),   and  that   transactions  of  the  type  specified  in
subparagraphs  (c) to (f)  inclusive of Rule 16b-3 by officers and  directors of
the Company  pursuant to the Plan will be exempt from the  operation  of Section
16(b) of the Exchange Act. In all cases, the terms,  provisions,  conditions and
limitations of the Plan shall be construed and  interpreted  consistent with the
Company's intent as stated in this Section 1.
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         2. ADMINISTRATION OF THE PLAN.

         The Board of Directors of the Company (the  "Board")  shall appoint and
maintain as administrator of the Plan a Committee (the  "Committee")  consisting
of two or more  Non-Employee  Directors (as such term is defined in Rule 16b-3),
which  shall  serve at the  pleasure  of the Board.  The  Committee,  subject to
Sections  3 and 5 hereof,  shall  have full  power and  authority  to  designate
recipients  of Options,  to determine  the terms and  conditions  of  respective
Option  agreements (which need not be identical) and to interpret the provisions
and  supervise the  administration  of the Plan.  The  Committee  shall have the
authority, without limitation, to designate which Options granted under the Plan
shall be  Incentive  Options and which  shall be  Nonqualified  Options.  To the
extent any Option does not qualify as an Incentive Option, it shall constitute a
separate Nonqualified Option.

         Subject to the  provisions of the Plan, the Committee  shall  interpret
the Plan and all  Options  granted  under the Plan,  shall make such rules as it
deems necessary for the proper  administration of the Plan, shall make all other
determinations  necessary or advisable  for the  administration  of the Plan and
shall correct any defects or supply any omission or reconcile any  inconsistency
in the Plan or in any  Options  granted  under the Plan in the manner and to the
extent that the Committee  deems  desirable to carry into effect the Plan or any
Options.  The act or  determination  of a majority of the Committee shall be the
act or  determination  of the Committee and any decision  reduced to writing and
signed by all of the members of the Committee  shall be fully effective as if it
had been made by a majority at a meeting duly held. Subject to the provisions of
the Plan, any action taken or  determination  made by the Committee  pursuant to
this and the other Sections of the Plan shall be conclusive on all parties.

         In the event that for any reason the  Committee  is unable to act or if
the  Committee at the time of any grant,  award or other  acquisition  under the
Plan of Options or Stock does not consist of two or more Non-Employee Directors,
then any such grant,  award or other  acquisition may be approved or ratified in
any other manner contemplated by subparagraph (d) of Rule 16b-3.

         3. DESIGNATION OF OPTIONEES.

         The persons  eligible for  participation  in the Plan as  recipients of
Options (the "Optionees")  shall comprise senior operating  officers,  operating
officers, senior executive officers, other officers,  employees and directors of
the  Company or any  Subsidiary;  provided  that  Incentive  Options may only be
granted to senior  operating  officers,  operating  officers,  senior  executive
officers,  other  officers,  employees  and  directors  who are employees of the
Company and the  Subsidiaries.  In selecting  Optionees,  and in determining the
number of shares to be covered by each Option


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granted to Optionees,  the Committee may consider the office or position held by
the  Optionee or the  Optionee's  relationship  to the Company,  the  Optionee's
degree of  responsibility  for and contribution to the growth and success of the
Company or any Subsidiary,  the Optionee's length of service,  age,  promotions,
potential and any other factors that the  Committee  may consider  relevant.  An
Optionee who has been granted an Option  hereunder  may be granted an additional
Option or Options, if the Committee shall so determine.

         4. STOCK RESERVED FOR THE PLAN.

         Subject to  adjustment  as  provided  in  Section 7 hereof,  a total of
900,000 of the Company's  Common  Shares (the  "Stock")  shall be subject to the
Plan.  The shares of Stock subject to the Plan shall consist of unissued  shares
or  previously  issued shares held by any  Subsidiary  of the Company,  and such
amount of shares of Stock shall be and is hereby reserved for such purpose.  Any
of such  shares of Stock  that may  remain  unsold  and that are not  subject to
outstanding  Options at the  termination  of the Plan shall cease to be reserved
for the  purposes  of the Plan,  but until  termination  of the Plan the Company
shall at all times  reserve a  sufficient  number of shares of Stock to meet the
requirements of the Plan.  Should any Option expire or be cancelled prior to its
exercise  in full or should the number of shares of Stock to be  delivered  upon
the exercise in full of an Option be reduced for any reason, the shares of Stock
theretofore  subject to such Option may be subject to future  Options  under the
Plan.

         5. TERMS AND CONDITIONS OF OPTIONS.

         Options  granted  under  the Plan  shall be  subject  to the  following
conditions  and  shall  contain  such  additional  terms  and  conditions,   not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

         (a) OPTION PRICE. The purchase price of each share of Stock purchasable
under an Incentive  Option shall be  determined  by the Committee at the time of
grant,  but shall not be less than  100% of the Fair  Market  Value (as  defined
below)  of such  share of Stock on the date the  Option  is  granted;  PROVIDED,
HOWEVER, that with respect to an Optionee who, at the time such Incentive Option
is granted,  owns  (within the meaning of Section  424(d) of the Code) more than
10% of the total combined voting power of all classes of stock of the Company or
of any Subsidiary,  the purchase price per share of Stock shall be at least 110%
of the Fair Market  Value per share of Stock on the date of grant.  The purchase
price of each share of Stock purchasable  under a Nonqualified  Option shall not
be less than 80% of the Fair Market Value of such share of Stock on the date the
Option  is  granted;  PROVIDED,  HOWEVER,  that an  Optionee  who is a  Canadian
taxpayer may require that any Nonqualified Option granted to him provide for the
purchase of shares of Stock upon


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exercise thereof at a price equal to the Fair Market Value per share of Stock on
the date of grant.  The  exercise  price for each  Option  shall be  subject  to
adjustment  as provided in Section 7 below.  Fair Market Value means the closing
price  of  publicly  traded  shares  of  Stock on the  principal  United  States
securities  exchange on which shares of Stock are listed (if the shares of Stock
are so  listed),  or on the  NASDAQ  Stock  Market  (if the  shares of Stock are
regularly quoted on the NASDAQ Stock Market),  or, if not so listed or regularly
quoted,  the mean  between the closing bid and asked  prices of publicly  traded
shares of Stock in the over-the-counter market, or, if such bid and asked prices
shall not be  available,  as reported  by any  nationally  recognized  quotation
service  selected by the Company,  or as determined by the Committee in a manner
consistent with the provisions of the Code. Anything in this Section 5(a) to the
contrary  notwithstanding,  in no event shall the  purchase  price of a share of
Stock be less than the minimum price  permitted  under rules and policies of the
American Stock Exchange and the Vancouver Stock Exchange.

         (b)  OPTION  TERM.  The  term of each  Option  shall  be  fixed  by the
Committee, but no Option shall be exercisable more than six years after the date
such Option is granted.

         (c)  EXERCISABILITY.  Subject to Section 5(j) hereof,  Options shall be
exercisable  at such time or times and subject to such terms and  conditions  as
shall be  determined  by the  Committee  at the time of grant.  No option may be
exercised to the extent that such exercise will cause the Company to issue, upon
exercise of options to purchase  shares of Stock granted by the Company  without
shareholder approval, that number of shares of Stock as equals or exceeds (i) 5%
of the number of outstanding shares of Stock in any 12-month period, or (ii) 10%
of the number of outstanding shares of Stock in any five-year period.

         (d) METHOD OF EXERCISE.  Options to the extent then  exercisable may be
exercised  in whole or in part at any time during the option  period,  by giving
written  notice to the  Company  specifying  the number of shares of Stock to be
purchased,  accompanied  by payment in full of the purchase  price,  in cash, by
check  or such  other  instrument  as may be  acceptable  to the  Committee.  As
determined by the Committee, in its sole discretion,  at or after grant, payment
in full or in part may also be made in the form of Stock  owned by the  Optionee
(based on the Fair  Market  Value of the Stock on the  trading  day  before  the
Option is  exercised).  An Optionee  shall have the right to dividends and other
rights of a stockholder  with respect to shares of Stock purchased upon exercise
of an Option after (i) the Optionee has given written notice of exercise and has
paid in full for such  shares  and (ii)  becomes a  stockholder  of record  with
respect thereto.


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<PAGE>

         (e)  NON-TRANSFERABILITY  OF OPTIONS.  Options are not transferable and
may be exercised  solely by the Optionee  during his lifetime or after his death
by the person or persons  entitled thereto under his will or the laws of descent
and distribution.  Any attempt to transfer,  assign, pledge or otherwise dispose
of, or to subject  to  execution,  attachment  or  similar  process,  any Option
contrary to the provisions  hereof shall be void and  ineffective and shall give
no right to the purported transferee.

         (f) TERMINATION BY DEATH. Unless otherwise  determined by the Committee
at grant,  if any  Optionee's  employment  with or service to the Company or any
Subsidiary  terminates  by  reason  of  death,  the  Option  may  thereafter  be
exercised,  to the extent then exercisable (or on such accelerated  basis as the
Committee shall determine at or after grant), by the legal representative of the
estate or by the legatee of the Optionee  under the will of the Optionee,  for a
period of one year after the date of such death or until the  expiration  of the
stated  term of such  Option as  provided  under the Plan,  whichever  period is
shorter.

         (g) TERMINATION BY REASON OF DISABILITY. Unless otherwise determined by
the  Committee at grant,  if any  Optionee's  employment  with or service to the
Company  or  any  Subsidiary   terminates  by  reason  of  total  and  permanent
disability, any Option held by such Optionee may thereafter be exercised, to the
extent it was  exercisable at the time of  termination  due to Disability (or on
such accelerated basis as the Committee shall determine at or after grant),  but
may not be  exercised  after  30 days  after  the  date of such  termination  of
employment  or service or the  expiration  of the  stated  term of such  Option,
whichever  period is shorter;  provided,  however,  that,  if the Optionee  dies
within such 30 day period,  any  unexercised  Option held by such Optionee shall
thereafter be exercisable to the extent to which it was  exercisable at the time
of death for a period of one year after the date of such death or for the stated
term of such Option, whichever period is shorter.

         (h) TERMINATION BY REASON OF RETIREMENT. Unless otherwise determined by
the  Committee at grant,  if any  Optionee's  employment  with or service to the
Company or any Subsidiary terminates by reason of Normal or Early Retirement (as
such terms are defined  below),  any Option held by such Optionee may thereafter
be exercised to the extent it was exercisable at the time of such Retirement (or
on such  accelerated  basis as the Committee shall determine at or after grant),
but may not be  exercised  after 30 days after the date of such  termination  of
employment  or service or the  expiration  of the  stated  term of such  Option,
whichever  period is shorter;  provided,  however,  that,  if the Optionee  dies
within such 30 day period,  any  unexercised  Option held by such Optionee shall
thereafter be exercisable, to the extent to which it was exercisable at the time
of death, for a period of one year after


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the date of such death or for the stated term of such Option,  whichever  period
is shorter.

         For  purposes  of this  paragraph  (h),  Normal  Retirement  shall mean
retirement from active employment with the Company or any Subsidiary on or after
the normal  retirement  date specified in the  applicable  Company or Subsidiary
pension plan or if no such pension  plan,  age 65. Early  Retirement  shall mean
retirement from active employment with the Company or any Subsidiary pursuant to
the early retirement  provisions of the applicable Company or Subsidiary pension
plan or if no such pension plan, age 55.

         (i) OTHER TERMINATION.  Unless otherwise determined by the Committee at
grant,  if any  Optionee's  employment  with or  service  to the  Company or any
Subsidiary  terminates for any reason other than death,  Disability or Normal or
Early Retirement, the Option shall thereupon terminate,  except that the portion
of any Option that was exercisable on the date of such termination of employment
may be exercised for the lesser of 30 days after the date of  termination or the
balance of such Option's term if the  Optionee's  employment or service with the
Company or any  Subsidiary  is  terminated  by the  Company  or such  Subsidiary
without cause (the  determination as to whether  termination was for cause to be
made by the  Committee).  The  transfer  of an  Optionee  from the employ of the
Company to a Subsidiary, or vice versa, or from one Subsidiary to another, shall
not be deemed to  constitute a  termination  of  employment  for purposes of the
Plan.

         (j) LIMIT ON VALUE OF  INCENTIVE  OPTIONS.  The  aggregate  Fair Market
Value,  determined as of the date the Incentive Option is granted,  of Stock for
which  Incentive  Options  are  exercisable  for the first time by any  Optionee
during any calendar  year under the Plan (and/or any other stock option plans of
the Company or any Subsidiary) shall not exceed $100,000.

         (k) TRANSFER OF INCENTIVE  OPTION  SHARES.  The stock option  agreement
evidencing any Incentive  Options  granted under this Plan shall provide that if
the Optionee  makes a  disposition,  within the meaning of Section 424(c) of the
Code and  regulations  promulgated  thereunder,  of any share or shares of Stock
issued to him upon exercise of an Incentive Option granted under the Plan within
the two-year  period  commencing  on the day after the date of the grant of such
Incentive  Option or within a one-year  period  commencing  on the day after the
date of transfer of the share or shares to him  pursuant to the exercise of such
Incentive  Option, he shall,  within 10 days after such disposition,  notify the
Company  thereof  and  immediately  deliver to the  Company any amount of United
States federal income tax withholding required by law.

         (l) LIMITATION ON OPTIONS HELD BY ONE PERSON.  The aggregate  number of
shares of Stock subject to options held by any


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<PAGE>

one  person  shall  not  exceed  that  number  of  shares  as  equals  5% of the
outstanding shares of the Company.

         6. TERM OF PLAN.

         No Option  shall be  granted  pursuant  to the Plan on or after May 21,
2006, but Options theretofore granted may extend beyond that date.

         7. CAPITAL CHANGE OF THE COMPANY.

         In  the   event   of   any   merger,   reorganization,   consolidation,
recapitalization,  stock  dividend,  or  other  change  in  corporate  structure
affecting  the Stock,  the  Committee  shall make an  appropriate  and equitable
adjustment in the number and kind of shares reserved for issuance under the Plan
and in the number  and option  price of shares  subject to  outstanding  Options
granted  under  the Plan,  to the end that  after  such  event  each  Optionee's
proportionate  interest shall be maintained as immediately before the occurrence
of such event.

         8. PURCHASE FOR INVESTMENT.

         Unless the Options and shares covered by the Plan have been  registered
under the United  States  Securities  Act of 1933,  as amended (the  "Securities
Act"), or the Company has determined that such registration is unnecessary, each
person  exercising  an Option  under the Plan may be  required by the Company to
give a  representation  in writing that he is  acquiring  the shares for his own
account for investment  and not with a view to, or for sale in connection  with,
the distribution of any part thereof.

         9. TAXES.

         The  Company  may make  such  provisions  as it may  deem  appropriate,
consistent with applicable law, in connection with any Options granted under the
Plan with respect to the  withholding  of any United States or Canadian taxes or
any other tax matters.

         10. EFFECTIVE DATE OF PLAN.

         The Plan shall be effective on May 22, 1996.

         11. AMENDMENT AND TERMINATION.

         The Board may amend,  suspend,  or terminate  the Plan,  except that no
amendment  shall be made that would impair the rights of any Optionee  under any
Option  theretofore  granted  without his consent,  and except that no amendment
shall be made which,  without the  approval of the  shareholders  of the Company
would:


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<PAGE>

              (a)  materially  increase  the number of shares that may be issued
         under the Plan, except as is provided in Section 7;

              (b)  materially  increase the benefits  accruing to the  Optionees
         under the Plan;

              (c)  materially  modify the  requirements  as to  eligibility  for
         participation in the Plan;

              (d)  decrease the  exercise  price of an Incentive  Option to less
         than  100% of the Fair  Market  Value per share of Stock on the date of
         grant thereof or the exercise  price of a  Nonqualified  Option to less
         than 80% of the Fair  Market  Value  per  share of Stock on the date of
         grant thereof; or

              (e) extend  the term of any Option  beyond  that  provided  for in
         Section 5(b).

         The  Committee may amend the terms of any Option  theretofore  granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Optionee without his consent.  The Committee may also substitute new Options
for previously  granted  Options,  including  options  granted under other plans
applicable to the  participant  and  previously  granted  Options  having higher
option prices, upon such terms as the Committee may deem appropriate.

         12. GOVERNMENT REGULATIONS.

         The Plan,  and the grant and  exercise  of Options  hereunder,  and the
obligation of the Company to sell and deliver  shares under such Options,  shall
be subject to all applicable laws, rules and regulations,  and to such approvals
by any governmental  agencies or national  securities  exchanges  (including the
American Stock Exchange and Vancouver Stock Exchange) as may be required.

         13. GENERAL PROVISIONS.

         (a) CERTIFICATES.  All certificates for shares of Stock delivered under
the Plan shall be subject to such stop transfer orders and other restrictions as
the  Committee  may deem  advisable  under  the  rules,  regulations  and  other
requirements  of the Securities  and Exchange  Commission,  or other  securities
commission  having  jurisdiction,  any applicable  Federal,  provincial or state
securities  law, any stock  exchange upon which the Stock is then listed and the
Committee may cause a legend or legends to be placed on any such certificates to
make appropriate reference to such restrictions.

         (b) EMPLOYMENT MATTERS.  The adoption of the Plan shall not confer upon
any Optionee of the Company or any


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Subsidiary, any right to continued employment or, in the case of an Optionee who
is  a  director,  continued  service  as  a  director,  with  the  Company  or a
Subsidiary, as the case may be, nor shall it interfere in any way with the right
of the Company or any  Subsidiary  to  terminate  the  employment  of any of its
employees,  the service of any of its  directors or the  retention of any of its
consultants or advisors at any time.

         (c)  LIMITATION OF LIABILITY.  No member of the Board or the Committee,
or any officer or  employee of the Company  acting on behalf of the Board or the
Committee,  shall  be  personally  liable  for  any  action,  determination,  or
interpretation  taken or made in good  faith with  respect to the Plan,  and all
members of the Board or the  Committee  and each and any  officer or employee of
the Company  acting on their behalf  shall,  to the extent  permitted by law, be
fully  indemnified  and  protected by the Company in respect of any such action,
determination or interpretation.

         (d) REGISTRATION OF STOCK.  Notwithstanding  any other provision in the
Plan,  no Option may be  exercised  unless and until the Stock to be issued upon
the exercise thereof has been registered under the Securities Act and applicable
state securities laws, or are, in the opinion of counsel to the Company,  exempt
from such  registration  in the United States or exempt from the  prospectus and
registration  requirements under applicable provincial legislation.  The Company
shall not be under any obligation to register under applicable  federal or state
securities  laws any Stock to be issued upon the  exercise of an Option  granted
hereunder,  or to comply with an appropriate  exemption from registration  under
such laws or the laws of any  province  in order to permit  the  exercise  of an
Option and the  issuance and sale of the Stock  subject to such Option  however,
the Company may in its sole  discretion  register such Stock at such time as the
Company shall determine. If the Company chooses to comply with such an exemption
from registration,  the Stock issued under the Plan may, at the direction of the
Committee,  bear an appropriate  restrictive  legend restricting the transfer or
pledge  of the  Stock  represented  thereby,  and the  Committee  may also  give
appropriate stop transfer instructions to the Company's transfer agents.

                          GST TELECOMMUNICATIONS, INC.
                                  May 22, 1996

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