As Amended Through March 4, 1998


                          GST TELECOMMUNICATIONS, INC.

                             1997 STOCK OPTION PLAN

         1.   PURPOSE OF THE PLAN.

              This  1997  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
4001 Main Street, Vancouver, Washington 98663 (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"),  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.  Further,  the Plan is  intended  to  satisfy  the
performance-based  compensation exception to the limitation on the Company's tax
deductions  imposed by  Section  162(m) of the Code.  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  directors  that are Non- Employee  Directors (as such
term is defined in Rule 16b-3) and "Outside  Directors" (as such term is defined
in Section 162(m) of the Code),  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 (as  hereinafter  defined)  does not  consist of two or
more Non-Employee  Directors,  or if there shall be no such Committee,  then the
Plan  shall be  administered  by the  Board and any such  grant,  award or other
acquisition  may be approved or ratified  in any other  manner  contemplated  by
subparagraph (d) of Rule 16b-3;  PROVIDED,  HOWEVER, that options granted to the
Company's  Chief  Executive  Officer or to any of the Company's  other four most
highly compensation  officers that are intended to qualify as  performance-based
compensation  under  Section  162(m)  of the  Code may  only be  granted  by the
Committee.

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         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
1,000,000  shares of the Company's  Common Shares (the "Stock") shall be subject
to the Plan.  The  maximum  number of shares  of Stock  that may be  subject  to
options  granted under the Plan to any individual in any calendar year shall not
exceed  200,000,  and the method of counting  such shares  shall  conform to any
requirements  applicable to performance-based  compensation under Section 162(m)
of the Code.  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;

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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 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.


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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 90 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 90 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 90 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 90 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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<PAGE>
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 90 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


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<PAGE>

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

                           (m)  LIMITATION  ON OPTIONS  GRANTED TO INSIDERS.  No
Option may be granted  under the Plan to an insider  (as such term is defined in
the company manual of the Toronto Stock  Exchange) if such grant would cause the
Company to: (i) reserve for issuance to insiders such number of Common Shares of
the Company as would exceed 10% of the  outstanding  issue of the Company;  (ii)
issue to insiders, within a one-year period, such number of Common Shares of the
Company as would exceed 10% of the  outstanding  issue of the Company;  or (iii)
issue to any one insider and such insider's  associates (as such term is defined
in the company manual of the Toronto Stock Exchange),  within a one year period,
such number of Common Shares as would exceed 5% of the outstanding  issue of the
Company.

         6.   TERM OF PLAN.

              No  Option  shall  be  granted  pursuant  to the  Plan on or after
December 16, 2007, 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.


                                       -7-

<PAGE>
         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 December 16, 1997, provided however
that the Plan shall  subsequently  be approved by majority vote of the Company's
shareholders not later than December 15, 1998.

         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

                           (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.


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<PAGE>
         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
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


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<PAGE>
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.


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