As Amended Through
                                                              September 10, 1997


                          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."

               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.

        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



<PAGE>
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 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.


                                       -2-


<PAGE>
        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:

                      (a)  OPTION  PRICE.  The  purchase  price of each share of
Stock  purchasable  under an 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 last trading day prior to the date
the Option is granted; PROVIDED,  HOWEVER, that with respect to an Optionee who,
at the time an 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 last trading day prior to 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


                                       -3-


<PAGE>

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,  the Toronto
Stock Exchange or the Vancouver Stock Exchange, so long as the Common Shares are
listed on any such 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.

                      (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.

                      (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


                                       -4-


<PAGE>
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 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


                                       -5-


<PAGE>

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 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


                                       -6-

<PAGE>

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 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 last
         trading day prior to the date of grant thereof; or


                                       -7-


<PAGE>

                      (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,  the Toronto  Stock  Exchange or the
Vancouver  Stock  Exchange,  so long as the Common Shares are listed on any such
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  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


                                       -8-


<PAGE>
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.


                                       -9-