As Amended Through
                                                              September 10, 1997

                          GST TELECOMMUNICATIONS, INC.

                   SENIOR OPERATING OFFICER STOCK OPTION PLAN

         1. PURPOSE OF THE PLAN.

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

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

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


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         2. ADMINISTRATION OF THE PLAN.

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

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

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

         3. DESIGNATION OF OPTIONEES.

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


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

         4. STOCK RESERVED FOR THE PLAN.

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

         5. TERMS AND CONDITIONS OF OPTIONS.

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

                           (a) OPTION PRICE. The purchase price of each share of
Stock  purchasable  under an 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

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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 six years
after the date such Option is granted.

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

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

                           (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

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to subject to execution,  attachment or similar process,  any Option contrary to
the provisions  hereof shall be void and  ineffective and shall give no right to
the purported transferee.

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

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

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


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

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

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

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

                           (l)  LIMITATION  ON OPTIONS  HELD BY ONE PERSON.  The
aggregate  number of shares of Stock  subject to options  held by any one person
shall not exceed that number of shares as equals 5% of the outstanding shares of
the Company.


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<PAGE>
         6. TERM OF PLAN.

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

         7. CAPITAL CHANGE OF THE COMPANY.

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

         8. PURCHASE FOR INVESTMENT.

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

         9. TAXES.

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

         10. EFFECTIVE DATE OF PLAN.

             The Plan shall be effective on May 22, 1996.

         11. AMENDMENT AND TERMINATION.

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

                           (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;


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<PAGE>
                           (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.

         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

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service of any of its  directors or the retention of any of its  consultants  or
advisors at any time.

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

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

                          GST TELECOMMUNICATIONS, INC.


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