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                                      FORM OF
                                 LSC, INCORPORATED
                                  OPTION AGREEMENT


THIS AGREEMENT is entered into and effective as of this ____ day of
_____________, ____ (the "Date of Grant"), by and between LSC, Incorporated (the
"Company") and __________ (the "Optionee").

A.     The Company has adopted the 1992 Stock Option Plan (the "Plan")
       authorizing the Board of Directors of the Company, or a committee as
       provided for in the Plan (the Board of Directors or such a committee to
       be referred to as the "Comm thee"), to grant qualified Stock Options to
       employees of the Company and its Subsidiaries (as defined in the Plan).

B.     The Company desires to give the Optionee an inducement to acquire a
       proprietary interest in the Company and an added incentive to advance the
       interests of the Company by granting to the Optionee an option to
       purchase shares of Common Stock of the Company pursuant to the Plan.

Accordingly, the parties agree as follows:

ARTICLE 1.    GRANT OF OPTION

The Company hereby grants to the Optionee the right, privilege and Option (the
"Option") to purchase ______ thousand (_____) shares (the "Option Shares") of
the Company's Common Stock, $.01 par value (the "Common Stock"), according to
the terms and subject to the conditions hereinafter set forth and as set forth
in the Plan.  The Company intends that the Option granted hereunder shall be an
"Incentive Stock Option", as that term is used in Section 442A of the Internal
Revenue Code of 1987, as amended (the "Code") and the terms of the Plan and this
Agreement shall be interpreted to satisfy Section 442A of the Code.  A copy of
the Plan is available to the Optionee upon request.

ARTICLE 2.    OPTION EXERCISE PRICE

The per share price to be paid by Optionee in the event of the Option will be at
$_______.

ARTICLE 3.    DURATION OF OPTION AND TIME OF EXERCISE

       3.1    INITIAL PERIOD OF EXERCISABILITY

              a.     This Option will become exercisable in 4 equal
                     installments. The initial date of exercisability is
                     _______________, ____.  Twenty-five percent (25%) of the
                     Option shares become exercisable on _______________, ____;
                     _______________, ____ on _______________, ____ and on.  The
                     foregoing rights to exercise this Option will be cumulative
                     with respect to the Option Shares becoming exercisable on
                     each such date but, in no event, will this Option be
                     exercisable after _______________, ____, and

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                     this Option will become void and expire as to all
                     unexercised Option Shares at 5:00 p.m., Minneapolis,
                     Minnesota local time on _______________, ____ (the "Time of
                     Termination").

       3.2    TERMINATION OF EMPLOYMENT OF OTHER SERVICE

              a.     In the event the Optionee's employment or other service
                     with the Company and all Subsidiaries is terminated by
                     reason of the Optionee's death, disability or retirement
                     (as such terms are defined in the Plan), this Option will
                     become immediately exercisable in full and will remain
                     exercisable for a period of one year after such termination
                     (but in no event will this Option be exercisable after the
                     Time of Termination).

              b.     In the event the Optionee's employment or other service
                     with the Company and all subsidiaries is terminated for any
                     reason other than death, disability or retirement, all
                     rights of the Optionee under the Plan and this Agreement
                     will immediately terminate, without notice of any kind, and
                     this Option will no longer be exercisable; provided,
                     however, that if such termination is due to any reason
                     other than termination by the Company or any Subsidiary for
                     "cause" (as defined in the Plan), this Option will remain
                     exercisable to the extent exercisable as of such
                     termination for a period of three months after such
                     termination (but in no event will this Option be
                     exercisable after the Time of Termination).

       3.3    CHANGE IN CONTROL

              a.     If any events constituting a Change in Control (as defined
                     in Section 8.1 of the Plan) of the Company occur, then this
                     Option will become immediately exercisable in full and will
                     remain exercisable until the Time of Termination,
                     regardless of whether the Optionee remains in the employ or
                     service of the Company or any Subsidiary.  In addition, if
                     a Change in Control of the Company occurs, the Committee,
                     in its sole discretion and without consent of the Optionee,
                     may determine that the Optionee will receive, with respect
                     to some or all of the Option Shares, as of the effective
                     date of any such Change in Control of the Company, cash in
                     an amount equal to the excess of the Fair Market Value (as
                     defined in the Plan) of such Option Shares immediately
                     prior to the effective date of such Change in Control of
                     the Company over the Option exercise price per share of
                     this Option.

              b.     Notwithstanding anything in this Section 3.3 to the
                     contrary, if, with respect to the Optionee, acceleration of
                     the vesting of this Option or the payment of cash in
                     exchange for all or part of this Option as provided above
                     (which acceleration or payment could be deemed a "payment"
                     within the meaning of Section 280G(b)(2) of the Code),
                     together with any other payments which the Optionee has the
                     right to receive from the Company or any corporation which
                     is a member of an "affiliated group"


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                     (as defined in Section 1504(a) of the Code, without regard
                     to Section 1504(b) of the Code) of which the Company is a
                     member, would constitute a "parachute payment" (as defined
                     in Section 280G(b)(2) of the Code), the payments to the
                     Optionee as set forth herein will be reduced to the largest
                     amount as will result in no portion of such payments being
                     subject to the excise tax imposed by Section 49999 of the
                     Code; provided, however, that if the Optionee is subject to
                     a separate agreement with the Company or a Subsidiary that
                     specifically provides that payments attributable to one or
                     more forms of employee stock incentives or to payments made
                     in lieu of employee stock incentives will not reduce any
                     other payments under such agreement, even if it would
                     constitute an excess parachute payment, then the
                     limitations of this Section 3.3(b) will, to that extent,
                     not apply.

ARTICLE 4.    RESTRICTIONS REGARDING EMPLOYMENT, CONFIDENTIAL INFORMATION AND
              INTELLECTUAL PROPERTY

       4.1    In addition to the restrictions contained in the Plan, the
              Committee shall have the authority to impose additional
              restrictions and penalties on Options and Awards in the event an
              Optionee or grantee ceases to be employed by the Company, is
              employed by a competitor of the Company, or is in breach of any
              covenant not to compete or other agreement with the Company
              relating to confidential information of the Company, including,
              but not limited to, the forfeiture of an Optionee's or grantee's
              rights under an Option or Award or the repurchase by the Company
              of stock purchased by an Optionee pursuant to a Stock Option or
              Award Agreement.

       4.2    An Optionee or grantee shall not render services for an
              organization or engage directly or indirectly in any business
              which, in the judgment of the Committee is or becomes competitive
              with the Company, or which organization or business, or the
              rendering of services to such organization or business, is or
              becomes otherwise prejudicial to or in conflict with the interests
              of the Company.  For Optionees or grantees whose employment has
              terminated, the judgment of the Committee shall be based on the
              Optionee's or grantee's position and responsibilities while
              employed by the Company; the Optionee's or grantee's
              post-employment responsibilities and position with the other
              organization or business, the extent of past, current and
              potential competition or conflict between the Company and the
              other organization or business, the effect on the Company's
              customers, suppliers and competitors due to the Optionee's or
              grantee's assuming the post-employment position, and such other
              considerations as are deemed relevant given the applicable facts
              and circumstances.

       4.3    Upon exercise, payment or delivery pursuant to an Award, the
              Optionee or grantee shall certify on a form acceptable to the
              Committee that he or she is in compliance with the terms and
              conditions of the Plan and this Agreement.  Failure to comply with
              the provisions of paragraph (b) of this Article 4, prior to, or
              during the six (6) months after, any exercise, payment or delivery
              pursuant to an Award,



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              shall cause such exercise, payment or delivery to be rescinded.
              The Company shall notify the Optionee or grantee in writing of any
              such rescission within two (2) years after such exercise, payment
              or delivery.  Within ten (10) days after receiving such a notice
              from the Company, the Optionee or grantee shall pay to the Company
              the amount of gain realized or payment received as a result of the
              rescinded exercise, payment or delivery pursuant to an Award.
              Such payment shall be either in cash or by returning to the
              Company the number of shares of Common Stock that the Optionee or
              grantee received in connection with the rescinded exercise,
              payment or delivery.

       4.4    An Optionee or grantee shall not, without prior written
              authorization from the Company, disclose to anyone outside the
              Company, or use in other than the Company's business, any
              confidential information or material relating to the business of
              the Company, acquired by the Optionee or grantee either during or
              after employment with the Company.

       4.5    An Optionee or grantee shall disclose promptly and assign to the
              Company, all right, title, and interest in any invention or idea,
              patentable or not, made or conceived by the grantee or Optionee
              during employment by the Company, relating in any manner to the
              actual or anticipated business, research or development work of
              the Company and shall do anything reasonably necessary to enable
              the Company to secure a patent where appropriate in the United
              States and in foreign countries.

ARTICLE 5.    NOTICE AND PAYMENT

       5.1    NOTICE

              This Option may be exercised by the Optionee in whole or in part
              from time to time, subject to the conditions contained in the Plan
              and in this Agreement, by delivery, in person, by facsimile or
              electronic transmission or through the mail, to the Company at its
              principal executive office in Minneapolis, Minnesota (Attention:
              Secretary), of a written notice of exercise.  Such notice will in
              a form satisfactory to the Committee, will identify the Option,
              will specify the number of Option Shares with respect to which the
              Option is being exercised, and will be signed by the person or
              persons so exercising the Option.  Such notice will be accompanied
              by payment in full of the total purchase price of the Option
              Shares purchased.  In the event that the Option is being
              exercised, as provided by the Plan and Section 3.2 above, by any
              person or persons other than the Optionee, the notice will be
              accompanied by appropriate proof of right of such person or
              persons to exercise the Option.  As soon as practicable after the
              effective exercise of the Option, the Optionee will be recorded on
              the stock transfer books of the Company as the owner of the Option
              Shares purchased, and the Company will deliver to the Optionee one
              or more duly issued stock certificates evidencing such ownership.


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       5.2    PAYMENT

              At the time of exercise of this Option, the Optionee will pay the
              total purchase price of the Option Shares to be purchased solely
              in cash (including a check, bank draft or money order, payable to
              the order of the Company); provided, however, that the Committee,
              in its sole discretion, may allow such payment to be made, in
              whole or in part, by tender of a Broker Exercise Notice,
              Previously Acquired Shares or by a combination of such methods.
              For purposes of this Agreement, the terms "Broker Exercise Notice"
              and "Previously Acquired Shares" will have the meanings set forth
              in the Plan.  In the event the Optionee is permitted to pay the
              total purchase price of this Option in whole or in part with
              Previously Acquired Shares, the value of such shares will be equal
              to their Fair Market Value on the date of exercise of this Option.

ARTICLE 6.    NONTRANSFERABILITY

       Neither this Option nor the Option Shares acquired upon exercise may be
       transferred by the Optionee, either voluntarily or involuntarily, or
       subjected to any lien, directly or indirectly, by operation of law or
       otherwise, except as provided in the Plan. Any attempt to transfer or
       encumber this Option or the Option Shares other than in accordance with
       this Agreement and the Plan, will null and void this Option.

ARTICLE 7.    LIMITATION OF LIABILITY

       Nothing in the Agreement will be construed to (a) limit in any way the
       right of the Company to terminate the employment or service of the
       Optionee at any time, or (b) be evidence of any agreement or
       understanding, expressed or implied, that the Company will retain the
       Optionee in any particular position, at any particular rate of
       compensation or for any particular period of time.

ARTICLE 8.    WITHHOLDING TAXES

       The Company is entitled to (a) withhold and deduct from future wages of
       the Optionee (or from other amounts which may be due and owing to the
       Optionee from the Company), or make other arrangements for the collection
       of all legally required amounts necessary to satisfy any federal, state
       or local withholding and employment-related tax requirements attributable
       to the grant or exercise of this Option or otherwise incurred with
       respect to this Option, or (b) require the Optionee promptly to remit the
       amount of such withholding to the Company before acting on the Optionee's
       notice of exercise of this Option.  In the event that the Company is
       unable to withhold such amounts, for whatever reason, the Optionee hereby
       agrees to pay to the Company, an amount equal to the amount the Company
       would otherwise be required to withhold under federal, state or local
       law.

ARTICLE 9.    ADJUSTMENTS

       In the event of any reorganization, merger, consolidation,
       recapitalization, liquidation, reclassification, stock dividend, stock
       split, combination of shares, rights offering,


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       divestiture or extraordinary dividend (including a spin-off), or any
       other change in the corporate structure or shares of the Company, the
       Committee (or, if the Company is not the surviving corporation in any
       such transaction, the Board of Directors of the surviving corporation),
       in order to prevent dilution or enlargement of the rights of the
       Optionee, will make appropriate adjustment (which determination will be
       conclusive) as to the number, kind and exercise price of securities
       subject to this Option.

ARTICLE 10.   SUBJECT TO PLAN

       The Option and the Option Shares granted and issued pursuant to this
       Agreement have been granted and issued under, and are subject to the
       terms of the Plan.  The terms of the Plan are incorporated by reference
       in this Agreement in their entirety, and the Optionee, by execution of
       this Agreement, acknowledges having received a copy of the Plan.  The
       provisions of this Agreement will be interpreted as to be consistent with
       the Plan, and any ambiguities in this Agreement will be interpreted by
       reference to the Plan.  In the event that any provision of this Agreement
       is inconsistent with the terms of the Plan, the terms of the Plan will
       prevail.

ARTICLE 11.   MISCELLANEOUS

       11.1   BINDING EFFECT

              This Agreement will be binding upon the heirs, executors,
              administrators and successors of the parties to this Agreement.

       11.2   GOVERNING LAW

              This Agreement and all rights and obligations under this Agreement
              will be construed in accordance with the Plan and governed by the
              laws of the State of Minnesota.

       11.3   ENTIRE AGREEMENT

              This Agreement and the Plan set forth the entire Agreement and
              understanding of the parties to this Agreement with respect to the
              grant and exercise of this Option and the administration of the
              Plan and supersedes all prior agreements, arrangements, plans and
              understandings relating to the grant and exercise of this Option
              and the administration of the Plan.

       11.4   AMENDMENT AND WAIVER

              Other than as provided in the Plan, this Agreement may be amended,
              waived, modified or canceled only by a written instrument executed
              by the parties hereto, or, in the case of a waiver, by the party
              waiving compliance.


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The parties to this Agreement have executed this Agreement effective the day and
year first written above.


                                          LSC, INCORPORATED


                                          By:
                                             --------------------------------
                                              President and CEO

                                          OPTIONEE



                                          -----------------------------------
                                          (Signature)
                                          Employee

                                          SSN:  xxx-xx-xxxx




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