GST TELECOMMUNICATIONS, INC.

                            1995 STOCK OPTION PLAN


     1.   Purpose of the Plan.

     This 1995 Stock  Option Plan (the "Plan") is intended as an  incentive,  to
retain   in  the   employ   of  and  as   consultants   and   advisors   to  GST
TELECOMMUNICATIONS,  INC., a 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  425(f) of the United
States  Internal  Revenue  Code of 1986,  as amended  (the  "Code"),  persons of
training, experience and ability, to attract new employees,  directors, advisors
and consultants 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."

     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"), 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



                                       
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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.

     3.   Designation of Optionees.

     The persons eligible for participation in the Plan as recipients of Options
(the  "Optionees")  shall  include  employees,  officers and  directors  of, and
consultants  and  advisors  to, the  Company or any  Subsidiary;  provided  that
Incentive  Options  may only be  granted to  employees  of the  Company  and the
Subsidiaries. In selecting Optionees, and in determining the number of shares to
be covered by each Option  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 1,750,000
shares 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:

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          (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  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 five 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,  provided,
     however, that no Option shall be exercisable until at least six months have
     elapsed after the date of grant of such Option.

          (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


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     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.

          (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



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     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  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  Option.  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



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     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 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  January 10,
2005, 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.


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     10.  Effective Date of Plan.

     The Plan shall be effective on January 10, 1995,  provided however that the
Plan  shall   subsequently  be  approved  by  majority  vote  of  the  Company's
shareholders not later than January 9, 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:

          (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.



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      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 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



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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.
                              January 10, 1995, as amended
                              through September 21, 1995

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