As Amended Through
                                                              September 10, 1997

                          GST TELECOMMUNICATIONS, INC.

                        1996 EMPLOYEE STOCK PURCHASE PLAN

                  The  following are the  provisions of the 1996 Employee  Stock
Purchase Plan of GST Telecommunications, Inc.

                  1.  PURPOSE.  The  purpose of the Plan is to provide  eligible
employees of the Company and its Designated  Subsidiaries with an opportunity to
share in the fortunes of the Company by acquiring or increasing  their  holdings
of the Common Shares of the Company, at a discount,  through accumulated payroll
deductions.  The Plan is also designed to encourage eligible employees to remain
in the employ of the Company.  It is the  intention of the Company that the Plan
qualify as an "Employee  Stock Purchase Plan" under Section 423 of the Code. The
provisions of the Plan shall, accordingly, be construed so as to extend or limit
participation in a manner consistent with the requirements of Section 423 of the
Code.

                  2. DEFINITIONS.

                     (a)  "Board"  shall  mean  the  Board of  Directors  of the
Company  or a  committee  thereof  duly  authorized  to  administer  the Plan in
accordance with Section 13 hereof.

                     (b) "Code" shall mean the Internal Revenue Code of 1986, as
amended.

                     (c)  "Common  Shares"  shall mean the Common  Shares of the
Company as more fully described in Section 25 hereof.

                     (d) "Company"  shall mean GST  Telecommunications,  Inc., a
federally  chartered  Canadian  corporation,  with its principal offices at 4317
N.E. Thurston Way, Vancouver, Washington

                     (e)  "Compensation"  shall mean all regular gross earnings,
including  payments  for  overtime,   shift  premium,   incentive  compensation,
incentive payments, bonuses, commissions or other compensation.

                     (f)  "Continuous  Status  as an  Employee"  shall  mean the
absence of any interruption or termination of service as an Employee. Continuous
Status as an Employee shall not be considered interrupted in the case of a leave
of absence agreed to in writing by the Company,  provided that such leave is for
a period of not


<PAGE>

more  than 90  days or  reemployment  upon  the  expiration  of  such  leave  is
guaranteed by contract or statute.

                     (g) "Designated  Subsidiaries"  shall mean the Subsidiaries
that have been  designated by the Board from time to time in its sole discretion
as eligible to participate in the Plan.

                           (h)      "Dollars" or "$" shall mean U.S. Dollars.

                     (i) "Employee"  shall have the meaning set forth in Section
3 hereof.

                     (j) "Exchange Act" shall mean the  Securities  Exchange Act
of 1934, as amended.

                     (k)  "Exercise  Date"  shall  mean  the  last  day of  each
Offering Period of the Plan if such date is a regular  business day or the first
regular  business day  thereafter.  A different date may be set by resolution of
the Board.

                     (l) "Fair  Market  Value" of the  Common  Shares on a given
date shall mean the  average  daily  high and low  trading  prices of the Common
Shares  for  the  five  trading  days  immediately  preceding  such  date on the
principal  United  States  securities  exchange  on which the Common  Shares are
listed (if the Common  Shares are so listed),  or on the Nasdaq Stock Market (if
the Common Shares 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 Common Shares 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
Board in a manner consistent with the provisions of the Code.

                     (m)  "Offering  Date"  shall  mean  the  first  day of each
Offering Period of the Plan if such date is a regular  business day or the first
regular  business day  thereafter.  A different date may be set by resolution of
the Board.

                     (n)  "Offering  Period" shall have the meaning set forth in
Section 4 hereof.

                     (o) "Option"  shall mean an option granted to a Participant
to purchase Common Shares under the Plan.

                     (p)  "Participant"  shall mean an Employee who participates
in this Plan in accordance with Section 5 hereof.

                     (q) "Plan" shall mean the 1996 Employee Stock Purchase Plan
of the Company.


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<PAGE>
                     (r) "Reserves"  shall have the meaning set forth in Section
18 hereof.

                     (s)  "SEC"   shall  mean  the   Securities   and   Exchange
Commission.

                     (t) "Securities Act" shall mean the Securities Act of 1933,
as amended.

                     (u) "Subsidiary" shall mean a corporation of which not less
than 50% of the voting shares are held by the Company or a  Subsidiary,  whether
or not such corporation now exists or is hereafter  organized or acquired by the
Company or a Subsidiary.

                  3. ELIGIBILITY.

                     (a)  Any  person  who is  regularly  in the  employ  of the
Company (an  "Employee")  or any of its Designated  Subsidiaries  is eligible to
receive Options except (a) employees whose customary  employment is less than 20
hours per week and (b)  employees  whose  customary  employment is not more than
five months in any calendar year.

                     (b)  Any   provisions   of  the   Plan   to  the   contrary
notwithstanding,  no  Employee  shall be granted  an Option (i) if,  immediately
after the  grant,  such  Employee  (or any other  person  whose  stock  would be
attributed  to such Employee  pursuant to Section  425(d) of the Code) would own
stock and/or hold outstanding Options to purchase stock possessing 5% or more of
the total combined  voting power or value of all classes of stock of the Company
or of any subsidiary of the Company, or (ii) that permits his rights to purchase
stock under all employee  stock  purchase  plans (as described in Section 423 of
the Code) of the Company and its  subsidiaries  to accrue at a rate that exceeds
$25,000 of Fair Market Value of such stock  (determined  at the time such Option
is granted) for each  calendar year in which such Option is  outstanding  at any
time.

                  4.  OFFERING PERIODS.

                     (a) The Plan shall be  implemented  by one offering  during
each  six-month  period  (each an "Offering  Period").  Offering  Periods  shall
commence  on or about April 1 and  October 1 of each year as  determined  by the
Board;  PROVIDED,  HOWEVER, that the first Offering Period under the Plan may be
less than six months.

                     (b) The Board  shall have the power to change the  duration
of  Offering  Periods  with  respect  to future  offerings  without  shareholder
approval if such  change is  announced  at least 15 days prior to the  scheduled
beginning of the first Offering Period to be affected.


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<PAGE>

                  5. PARTICIPATION.

                     (a) An  Employee  may become a  Participant  in the Plan by
completing a subscription  agreement  authorizing  payroll deduction on the form
provided by the Company and filing it with the Company's Human Resources Manager
on or prior to an Offering  Date or such other date as may be  specified  by the
Board.

                     (b) Payroll  deductions for a Participant shall commence on
the first payroll following the Offering Date and shall end on the Exercise Date
of the Offering Period to which such authorization is applicable,  unless sooner
terminated by the Participant as provided in Section 10 hereof.

                  6.  PAYROLL DEDUCTIONS.

                     (a)  At the  time  a  Participant  files  his  subscription
agreement,  he shall elect to have payroll deductions made on each payday during
the Offering Period in an amount not exceeding 10% of the  Compensation  that he
receives on each payday  during the Offering  Period,  and the aggregate of such
payroll  deductions  during  the  Offering  Period  shall not  exceed 10% of his
aggregate Compensation during such Offering Period.

                     (b) The  total  number of Common  Shares  purchased  by any
Participant  shall in no event  exceed,  in any Offering  Period,  the number of
Common Shares that $12,500  could  purchase at the Fair Market Value of a Common
Share on the Offering Date.

                     (c) All payroll  deductions made by a Participant  shall be
credited  to his  account  under  the  Plan.  A  Participant  may not  make  any
additional payments into such account.

                     (d) A Participant may discontinue his  participation in the
Plan as provided in Section 10 hereof,  or may decrease  (but not  increase) the
rate of his payroll deductions one time during the Offering Period by completing
or filing with the Human  Resources  Manager of the Company a new  authorization
for payroll  deduction.  The change in rate shall be effective 15 days following
the Company's receipt of the new authorization.  If a Participant  decreases the
rate of his payroll  deductions  more than one time  during an Offering  Period,
such Participant will be deemed to have terminated his participation in the Plan
in accordance with Section 10 hereof.

                  7.  GRANT OF OPTION.

                     (a) On the  Offering  Date of each  Offering  Period,  each
Participant  shall be granted  an Option to  purchase  (at the per share  Option
price) up to a number of Common Shares determined by dividing such Participant's
payroll  deductions to be accumulated during such Offering Period (not to exceed
an amount equal to 10%


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<PAGE>

of  his  Compensation  as of the  date  of the  commencement  of the  applicable
Offering  Period)  by 85% of the Fair  Market  Value  of a  Common  Share on the
Offering  Date,  provided  that in no event shall an Employee  be  permitted  to
purchase  during  any  Offering  Period  more  than a number  of  Common  Shares
determined by dividing $12,500 by the Fair Market Value of a Common Share on the
Offering Date,  and provided  further that such purchase shall be subject to the
limitations  set forth in Sections  3(b) and 12 hereof.  Fair Market  Value of a
share of the Company's  Common Shares shall be determined as provided in Section
2(l) hereof.

                      (b) The  option  price  per  Common  Share  of the  Shares
offered in a given  Offering  Period  shall be 85% of the Fair Market Value of a
Common Share on the Offering Date.

                  8. EXERCISE OF OPTION. Unless a Participant withdraws from the
Plan  as  provided  in  Section  10  hereof,   his  Option  shall  be  exercised
automatically on the Exercise Date of the Offering Period and the maximum number
of full Common  Shares  subject to such Option shall be purchased for him at the
applicable option price with the accumulated  payroll deductions in his account.
The Common Shares purchased upon exercise of an Option hereunder shall be deemed
to be transferred to the Participant on the Exercise Date.  During his lifetime,
an Option  to  purchase  Common  Shares  hereunder  is  exercisable  only by the
Participant to whom such Option is granted.

                  9.  DELIVERY.  Common  Shares  purchased  upon exercise of the
Participants'  Options shall be represented  by one or more global  certificates
registered  in the  name  of a  custodian  from  time to  time  selected  by the
Committee.  Beneficial interests in the global  certificate(s) will be shown on,
and transfers  thereof will be effected through records  maintained by the Human
Resources  Manager of the Company.  Upon request of a  Participant,  the Company
shall arrange for the delivery to such Participant of a certificate representing
the number of Common Shares  requested by such  participant;  provided that such
Participant  has purchased at least that number of Common Shares pursuant to the
Plan. Certificated Common Shares delivered to a Participant shall not constitute
a portion  of the  global  certificates.  In the case of a  Participant  who has
requested  that  certificated  Common  Shares  be  delivered  to him,  any  cash
remaining to the credit of such  Participant's  account that is  insufficient to
purchase a full share of a Common Share of the Company shall be returned to said
Participant. In addition, no fractional Common Shares shall be delivered to such
Participant;  he shall instead receive the cash value of such fractional  Common
Shares.

                  10. WITHDRAWAL; TERMINATION OF EMPLOYMENT.

                      (a)  An  employee's  participation  in  the  Plan  may  be
terminated  by signing  and  delivering  to the Human  Resources  Manager of the
Company a notice of withdrawal from the Plan. Such


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<PAGE>

withdrawal  may be  elected  at any  time  prior  to the  Exercise  Date  of the
applicable Offering Period.

                      (b)  Any   withdrawal   from  a  given   Offering   Period
automatically   terminates  the  Participant's  interest  in  that  offering.  A
Participant  withdrawing  from an  offering  must  wait at least  90 days  until
executing a subscription agreement for subsequent offerings.

                      (c) A  Participant  may withdraw all but not less than all
the payroll deductions  credited to his account under the Plan at any time prior
to the Exercise  Date of the  Offering  Period by giving  written  notice to the
Company.  All of the Participant's  payroll  deductions  credited to his account
shall be paid to him promptly  after receipt of his notice of withdrawal and his
Option for the current period shall be automatically terminated,  and no further
payroll  deductions  for the purchase of Common  Shares shall be made during the
Offering Period.

                      (d)  Upon  termination  of  the  Participant's  Continuous
Status as an Employee prior to the Exercise Date of the Offering  Period for any
reason,  including  retirement or death, the payroll deductions  credited to his
account shall be returned to him or, in the case of his death,  to the person or
persons entitled thereto under Section 14, and his Option shall be automatically
terminated.

                      (e) In the event an Employee fails to remain in Continuous
Status as an  Employee  of the Company for at least 20 hours per week during the
Offering  Period in which the employee is a  Participant,  he shall be deemed to
have elected to withdraw  from the Plan and the payroll  deductions  credited to
his account shall be returned to him and his Option terminated.

                      (f) A Participant may discontinue his participation in the
Plan, and may decrease but not increase the rate of payroll  deductions one time
during the  Offering  Period.  Payroll  deductions  commence on the first payday
following the beginning of the employee's  participation in the Offering Period,
and continue at the same rate until terminated or decreased.

                  11.  INTEREST.   No  interest  shall  accrue  on  the  payroll
deductions of a Participant in the Plan.

                  12. STOCK.

                      (a) The maximum number of Common Shares that shall be made
available for sale under the Plan shall be 500,000,  subject to adjustment  upon
changes in  capitalization  of the Company as provided in Section 18 hereof.  If
the total  number of Common  Shares that would  otherwise  be subject to Options
granted  pursuant  to Section  7(a) hereof on the  Offering  Date of an Offering
Period

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<PAGE>
exceeds  the  number of  Common  Shares  then  available  under the Plan  (after
deduction of all Common Shares for which Options have been exercised or are then
outstanding),  the Company shall make a pro rata allocation of the Common Shares
remaining  available  for  Option  grants  in as  uniform  a manner  as shall be
practicable  and as it shall  determine  to be  equitable.  In such  event,  the
Company  shall give  written  notice of such  reduction  of the number of Common
Shares  subject to the Option to each  Participant  affected  thereby  and shall
similarly reduce the rate of payroll deductions, if necessary.

                      (b) The Participant shall have no interest or voting right
in Common Shares covered by his Option until such Option has been exercised.

                      (c) Common Shares to be delivered to a  Participant  under
the Plan shall be registered in the form of one or more global  certificates  in
the name of the Committee. Upon request of a Participant, Common Shares shall be
registered in the name of the  Participant or in the name of the Participant and
his  spouse,  in which  event  they shall no longer be  evidenced  by the global
certificates.

                  13.  ADMINISTRATION.  The Plan  shall be  administered  by the
Board or a  committee  of  members  of the Board  appointed  by the  Board.  The
administration,  interpretation  or  application of the Plan by the Board or its
committee shall be final, conclusive and binding upon all Participants.  Members
of the Board who are eligible  Employees  are  permitted to  participate  in the
Plan, provided that:

                      (a) Members of the Board who are  eligible to  participate
in the Plan may not vote on any matter affecting the  administration of the Plan
or the grant of any Option.

                      (b) If a Committee is  established to administer the Plan,
no  member  of the Board who is  eligible  to  participate  in the Plan may be a
member of the Committee.

                  14. DESIGNATION OF BENEFICIARY.

                      (a) A  Participant  may file a  written  designation  of a
beneficiary  who is to receive  any Common  Shares  and cash,  if any,  from the
Participant's  account under the Plan in the event of such  Participant's  death
subsequent  to the end of the Offering  Period but prior to entry of such Common
Shares on the records  maintained by the Company's Human  Resources  Manager and
delivery to him of such cash.  In  addition,  a  Participant  may file a written
designation of a beneficiary  who is to receive any cash from the  Participant's
account  under the Plan in the event of such  Participant's  death  prior to the
Exercise Date of the Offering Period.


                                       -7-


<PAGE>

                      (b) Such  designation of beneficiary may be changed by the
Participant  at any time by  written  notice.  In the  event  of the  death of a
Participant  and in the absence of a beneficiary  validly  designated  under the
Plan who is living at the time of such  Participant's  death,  the Company shall
deliver such Common Shares and/or cash to the executor or  administrator  of the
estate of the  Participant,  or if no such  executor or  administrator  has been
appointed (to the knowledge of the Company), the Company, in its discretion, may
deliver  such  Common  Shares  and/or  cash to the  spouse or to any one or more
dependents  or  relatives  of the  Participant,  or if no spouse,  dependent  or
relative is known to the  Company,  then to such other person as the Company may
designate.

                  15. TRANSFERABILITY.  Neither payroll deductions credited to a
Participant's  account, nor any rights with regard to the exercise of an Option,
may be assigned, transferred, pledged or otherwise disposed of in any way (other
than by will, the laws of descent and  distribution or as provided in Section 14
hereof) by the Participant. Any such attempt at assignment,  transfer, pledge or
other  disposition  shall be without  affect,  except that the Company may treat
such act as an election to withdraw funds in accordance with Section 10 hereof.

                  16. USE OF FUNDS. All payroll  deductions  received or held by
the Company under the Plan may be used by the Company for any corporate purpose,
and the Company shall not be obligated to segregate such payroll deductions.

                  17. REPORTS.  Individual accounts shall be maintained for each
Participant.  Statements  of  account  shall be given to  Participants  promptly
following the Exercise  Date,  which  statements  shall set forth the amounts of
payroll  deductions,  the per share purchase price,  the number of Common Shares
purchased and the remaining cash balance, if any.

                  18. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION. Subject to any
required action by the shareholders of the Company,  the number of Common Shares
covered by each Option that has not yet been  exercised and the number of Common
Shares that have been  authorized  for issuance  under the Plan but have not yet
been placed under option  (collectively,  the "Reserves"),  as well as the price
per Common Share covered by each Option that has not yet been  exercised,  shall
be proportionately adjusted for any increase or decrease in the number of issued
Common Shares resulting from a stock split, reverse stock split, stock dividend,
combination or  reclassification  of the Common Shares, or any other increase or
decrease  in  the  number  of  Common  Shares   effected   without   receipt  of
consideration  by  the  Company;  provided,  however,  that  conversion  of  any
convertible securities of the Company shall not be deemed to have been "effected
without receipt of  consideration."  Such adjustment shall be made by the Board,
whose  determination  in that respect  shall be final,  binding and  conclusive.
Except as


                                       -8-


<PAGE>
expressly  provided  herein,  no issue by the  Company of shares of stock of any
class,  or  securities  convertible  into  shares of stock of any  class,  shall
affect,  and no adjustment by reason  thereof shall be made with respect to, the
number or price of shares of Common Shares subject to an Option.

                  19.  EFFECT  OF  LIQUIDATION,  DISSOLUTION,  SALE OF ASSETS OR
MERGER. In the event of the proposed  dissolution or liquidation of the Company,
all  Options  shall  terminate  immediately  prior to the  consummation  of such
proposed action,  unless otherwise  provided by the Board. The Board may, in the
exercise of its sole  discretion  in such  instances,  declare  that all Options
shall  terminate as of a date fixed by the Board and give each  Participant  the
right to exercise his Option as to all or any part thereof,  including shares as
to which an  Option  would  not  otherwise  be  exercisable.  In the  event of a
proposed sale of all or substantially  all of the assets of the Company,  or the
merger of the  Company  with or into  another  corporation,  an Option  shall be
assumed  or  an  equivalent  Option  shall  be  substituted  by  such  successor
corporation  or a parent or subsidiary  of such  successor  corporation.  In the
event  that such  successor  corporation  refuses  to assume  the  Options or to
substitute an equivalent  option, the Board shall, in lieu of such assumption or
substitution,  provide for the  Participant  to have the right to  exercise  the
Options in full,  including as to Common Shares that would not otherwise then be
purchasable.  If the  Board  makes  an  Option  fully  exercisable  in  lieu  of
assumption or substitution in the event of a merger or sale of assets, the Board
shall notify the  Participant  that the Option shall be fully  exercisable for a
period of 30 days after the date of such notice,  and the Option shall terminate
upon the expiration of such period.

                  The Board may, if it so determines in the exercise of its sole
discretion,  also make  provisions  for adjusting  the Reserves,  as well as the
price per Common Share covered by each outstanding Option, in the event that the
Company effects one or more reorganizations, recapitalizations, rights offerings
or other  increases or reductions of its outstanding  Common Shares,  and in the
event  of  the  Company  being  consolidated  with  or  merged  into  any  other
corporation.

                  20.  AMENDMENT  OR  TERMINATION.  The  Board  may at any  time
terminate  or amend  the  Plan.  Except  as  provided  in  Section  18,  no such
termination can affect Options previously granted, nor may an amendment make any
change in any Option  theretofore  granted which adversely affects the rights of
any  Participant,  nor may an amendment be made  without  prior  approval of the
shareholders of the Company (obtained in a manner consistent with the provisions
of the Code and all other applicable law) if such amendment would:

                      (a)  Increase  the  number  of Common  Shares  that may be
issued under the Plan;


                                       -9-

<PAGE>

                      (b) Permit  payroll  deductions at a rate in excess of 10%
of the Participant's Compensation;

                      (c) Change the  designation  of the employees (or class of
employees) eligible for participation in the Plan; or

                      (d)  If the  Company  has a  class  of  equity  securities
registered  under Section 12 of the Exchange Act at the time of such  amendment,
materially increase the benefits that may accrue to Participants under the Plan.

                      (e) To the extent  necessary  and desirable to comply with
Rule 16b-3 under the Exchange Act, or with Section 423 of the Code (or any other
applicable  law  or  regulation,  including  requirements  of  the  NASD  or any
established stock exchange),  the Company shall obtain  stockholder  approval of
any amendment to the Plan in the requisite manner.

                  21.  NOTICES.   All  notices  or  other  communications  by  a
Participant to the Company under or in connection  with the Plan shall be deemed
to have been duly given when  received in the form  specified  by the Company at
the  location,  or by the  person,  designated  by the  Company  for the receipt
thereof.

                  22.  SHAREHOLDER  APPROVAL.  The  Plan  was  approved  by  the
affirmative  vote of the holders of a majority of the outstanding  Common Shares
at the Company's Annual Meeting of Shareholders held on February 15, 1996.

                  23.  CONDITIONS UPON ISSUANCE OF COMMON SHARES.  Common Shares
shall not be issued with respect to an Option unless the exercise of such Option
and the issuance  and  delivery of such Common  Shares  pursuant  thereto  shall
comply with all applicable  provisions of law,  domestic or foreign,  including,
without  limitation,  the  Securities  Act,  the  Exchange  Act,  the  rules and
regulations promulgated  thereunder,  and the requirements of any stock exchange
upon which the Common Shares may then be listed, and shall be further subject to
the approval of counsel for the Company with respect to such compliance.

                  As a condition to the  exercise of an Option,  the Company may
require the person  exercising  such Option to represent and warrant at the time
of any such  exercise  that the  Common  Shares  are  being  purchased  only for
investment and without any present  intention to sell or distribute  such Common
Shares if, in the opinion of counsel for the Company,  such a representation  is
required by any of the aforementioned applicable provisions of law.

                  24. RESTRICTIONS ON RESALE.  Certain officers and directors of
the  Company  may be deemed to be  "affiliates"  of the  Company as that term is
defined under the Securities  Act.  Common Shares  acquired under the Plan by an
affiliate may only be re-


                                      -10-


<PAGE>
offered or resold pursuant to an effective registration statement or pursuant to
Rule 144  promulgated  under the  Securities  Act or another  exemption from the
registration  requirements  of the Securities  Act. Such reoffers or resales may
not be made in reliance on the  Registration  Statement filed in connection with
the offer to Participants of the Common Shares issuable hereunder.

                  25.  SECURITIES TO BE PURCHASED.  The security to be purchased
under the Plan is Common Shares,  without par value, of the Company. Each Common
Share  entitles  the  holder to one vote on matters  submitted  to a vote of the
stockholders,  a PRO RATA  share of such  dividends  as may be  declared  on the
Common  Shares  and  a  PRO  RATA  share  of  assets  remaining   available  for
distribution  to  stockholders  upon a  liquidation  of the Company.  The Common
Shares are not  convertible  and have no  preemptive  rights.  The Board has the
authority,  within certain limitations, to issue shares of preference stock that
would  have one or more  preferences  over the  Common  Shares and 500 shares of
preference stock is currently outstanding.

                  26. TERM OF PLAN.  The Plan became  effective  on February 15,
1996  and  shall  continue  in  effect  for a term  of 20  years  unless  sooner
terminated under Section 20.


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