SECURITIES AND EXCHANGE COMMISSION
                             Washington, D. C. 20549

                               FORM 10-K/A (No. 1)

                ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                       THE SECURITIES EXCHANGE ACT OF 1934
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1996

                        Commission File Number 000-18050

                         EAGLE PACIFIC INDUSTRIES, INC.
        (Exact name of Small Business Issuer as specified in its Charter)
 Minnesota                                                        41-1642846
(State of incorporation                                      (I.R.S. Employer
 or organization)                                        Identification Number)

                            2430 Metropolitan Centre
                            333 South Seventh Avenue
                          Minneapolis, Minnesota 55402
               (Address of principal executive offices) (Zip Code)

         Issuer's telephone number, including area code: (612) 371-9650

       Securities registered under Section 12(b) of the Exchange Act: NONE

  Securities  registered  under  Section  12(g) of the Exchange  Act:  Common
   Stock, par value $.01 per share.

Check  whether  the issuer  (1) has filed all  reports  required  to be filed by
Section 13 or 15(d) of the Exchange Act during the  preceding 12 months (or such
shorter period that the  registrant was required to file such reports),  and (2)
has been subject to such filing requirements for the past 90 days.

                              Yes             No [X]

Check if there is no disclosure of delinquent  filers in response to Item 405 of
Regulation S-B contained  herein,  and no disclosure  will be contained,  to the
best of registrant's  knowledge,  in definitive proxy or information  statements
incorporated  by reference  in Part III of this Form 10-KSB or any  amendment to
this Form 10-KSB. [ ]

Registrant's revenues for its most recent fiscal year: $65,280,138

The  aggregate  market  value of the  voting  stock held by  non-affiliates  was
approximately  $14,719,000 based upon the average high and low bid prices of the
Registrant's Common Stock as of February 28, 1997.

There were 6,443,237 shares of common Stock,  $.01 par value,  outstanding as of
February 28, 1997.

Transitional Small Business Disclosure Format (check one):

                       Yes                       No  [X]
<PAGE>
                                                 

The  Registrant is providing this Amendment No. 1 to Form 10-K to amend Part II,
Item 5 and Part III, Items 10, 11, 12 and 13.


                                     PART II.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

         The Company's  Common Stock is currently  traded on the Nasdaq SmallCap
Market under the symbol  "EPII."  Prior to  September 6, 1994,  when the Company
became listed on the Nasdaq  SmallCap  Market,  the  Company's  Common Stock was
traded  on the  National  Association  of  Securities  Dealers  Over-the-Counter
Bulletin  Board.  The  Company's  Series A Preferred  Stock does not trade.  The
following  table sets forth the high and low bid prices for each fiscal  quarter
in 1996 and 1995.

                                            High              Low
Year ended December 31, 1996:
         First quarter                      $2-3/8            $1-1/4
         Second quarter                      4                 1-1/2
         Third quarter                       3-7/8             3-1/8
         Fourth quarter                      3-1/2             2-5/16

Year ended December 31, 1995:
         First quarter                      $3-1/2            $2-1/4
         Second quarter                      3-1/8             2
         Third quarter                       3-3/8             1-5/8
         Fourth quarter                      2-1/4             1-3/8

         The bid  quotations  represent  interdealer  prices and do not  include
retail mark-ups,  mark-downs,  or commissions and may not necessarily  represent
actual  transactions.  At February 28, 1997, the Company had approximately 1,880
shareholders of record.

         The Company has never paid a cash dividend on its Common Stock. Payment
of Common Stock dividends is at the discretion of the Board of Directors subject
to the Company's  lending  arrangements.  The Board of Directors plans to retain
earnings,  if any,  for  operations  and does not  intend  to pay  Common  Stock
dividends in the near future. However,  dividends are paid by the Company on its
Series A 7% Convertible Preferred Stock.

         RECENT  SALES OF  UNREGISTERED  SECURITIES.  On  November  13, 1996 the
Company  issued  34,047  shares of common  stock to a director in  exchange  for
shares of common  stock of Eagle  Plastics,  Inc.  of  equivalent  value.  As an
exemption  from  registration  for this  transaction,  the  Company  relied upon
Section 4(2) of the  Securities  Act of 1933 as a  transaction  by an issuer not
involving a public offering.
<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

         The names,  ages and positions of the executive  officers and directors
of the Company are as follows:

   Name                       Age                       Position

   Harry W. Spell(1)          73               Chairman of the Board

   William H. Spell(2)        40               Chief Executive Officer and 
                                               Director

   Bruce A. Richard(1)(3)     66               Vice Chairman of the Board, 
                                               Secretary, Treasurer, and
                                               Director

   G. Peter Konen             47               President and Director

   Patrick M. Mertens         33               Chief Financial Officer

   Richard W. Perkins(1)(2)   66               Director

   George R. Long(3)          66               Director

   Larry D. Schnase(2)(3)     64               Director


===============================================================================

(1)   Member of Compensation Committee
(2)   Member of Nominating Committee
(3)   Member of Audit Committee

         HARRY W.  SPELL has been  Chairman  of the Board of the  Company  since
January  1992.  He was  formerly  Chief  Executive  Officer of the Company  from
January 1992 through  December  1996. In addition,  Mr. Spell is the Chairman of
the  Board of  Peerless  Industrial  Group,  which  during  1995  completed  the
leveraged buyout of Peerless Chain, Inc. Peerless is a manufacturer of chain and
wire form products with over $45 million of sales in 1995. Previously, Mr. Spell
was involved with the  acquisitions  of a specialty food products  company and a
manufacturer of various clothing sportswear.  He was employed by Northern States
Power,  a Fortune  500  company,  from 1949 until  August 1988 when he reach the
mandatory  retirement  age of 65 and he retired  from all  positions at Northern
States Power  Company.  Mr. Harry Spell was Senior Vice  President,  Finance and
Chief  Financial  Officer of Northern  States Power  Company from May 1983 until
April  1988.  Mr.  Harry  Spell  currently  serves as a  director  of  Appliance
Recycling  Centers of America,  Inc. and Peerless  Industrial  Group, as well as
several private organizations.
<PAGE>

     WILLIAM H. SPELL has been  President  and a director of the  Company  since
January  1992 and was named Chief  Executive  Officer of the Company in December
1996.  He was  formerly  President  of the Company  from  January  1992  through
December  1996.  In  addition,  Mr. Spell is the Chief  Executive  Officer and a
Director of Peerless Industrial Group, which during 1995 completed the leveraged
buyout of Peerless Chain, Inc. Peerless is a manufacturer of chain and wire form
products  with over $45  million  of sales in 1995.  Previously,  Mr.  Spell was
involved  with the  acquisitions  of a  specialty  food  products  company and a
manufacturer of various clothing  sportswear.  From 1981 through 1988, Mr. Spell
was vice  president  and  director  of  corporate  finance at John G.  Kinnard &
Company,  Inc., a regional  investment banking firm located in Minneapolis.  Mr.
Spell  serves as a director of  Peerless  Industrial  Group,  as well as several
private  organizations.  Mr.  Spell  has a B.S.  and an M.B.A.  degree  from the
University of Minnesota.

     BRUCE A.  RICHARD has been a Director  of the Company  since March of 1992,
Secretary,  Treasurer  since the summer of 1993 and Vice Chairman since February
1996. He also served as Chief Financial  Officer of the Company from mid-1993 to
February  1996.  In  addition,  Mr.  Richard is the Chief  Financial  Officer of
Peerless  Industrial Group,  which during 1995 completed the leveraged buyout of
Peerless Chain,  Inc. Peerless is a manufacturer of chain and wire form products
with over $45  million  of sales in 1995.  As a member  of the Spell  Investment
Group,  Mr.  Richard has been involved in numerous  acquisitions  and investment
activities.  He retired as  President  and Chief  Operating  Officer of Northern
States Power  Company,  a Fortune 500 company,  in July of 1986.  He is a former
member  of the  Board of  Regents  of St.  John's  University,  and is  actively
involved in other philanthropic organizations.

     G. PETER KONEN has been a Director of the Company since  December  1993. He
has been Executive Vice President and Chief Operating Officer of Eagle since its
inception in 1984 and was named President of the Company in December 1996. Prior
to founding Eagle Plastics,  he was Plant Manager with Western  Plastics,  a PVC
pipe and PE tubing  manufacturer.  Mr. Konen has over 28 years of  experience in
the business of manufacturing and sales of plastic pipe.

     PATRICK M.  MERTENS came to the Company in May 1995 as  Controller  and was
promoted to Chief Financial  Officer in December 1995. From 1986 to May of 1991,
he was a Senior Auditor, specializing in manufacturing clients, for Baird, Kurtz
& Dobson,  CPA's. During his tenure at Baird, Kurtz & Dobson, Mr. Mertens was in
charge of the annual audit for Eagle Plastics,  Inc. for three years.  From 1991
to May of 1995 he was Assistant  Controller of ISCO, Inc., a public company that
manufactures  scientific and environmental  instruments.  Mr. Mertens has a B.S.
degree  from  Peru,  Nebraska  State  College  and an  M.B.A.  degree  from  the
University of Nebraska.

     RICHARD W.  PERKINS.  Mr.  Perkins has been a director of the Company since
January 1992.  Mr.  Perkins has been  President of Perkins  Capital  Management,
Inc., a registered investment adviser, since 1984 and has 40 years experience in
the investment business. Prior to establishing Perkins Capital Management, Inc.,
Mr.  Perkins was a Senior Vice  President  at Piper  Jaffray  Inc.  where he was
involved  in  corporate  finance  and  venture  capital  activities,  as well as
rendering  investment advice to domestic and international  investment managers.
As a member of Spell  Capital  Partners,  LLC, Mr.  Perkins has been involved in
numerous  leveraged  acquisition and investment  transactions.  Mr. Perkins is a
director of various public companies,  including:  Bio-Vascular,  Inc., Lifecore
Biomedical, Inc., Children's Broadcasting Corporation,  CNS, Inc., Quantech Ltd.
and Nortech Systems, Inc.

     GEORGE R. LONG.  Mr. Long has been a director of the Company since 1986. He
has served as Chairman of the Board of Directors of the Mayfield Corporation,  a
financial  advisory firm, since 1973. For over five years, he has been a private
investor.  Mr.  Long also is a  director  of the IAI  Series  of  Mutual  Funds,
Minneapolis, Minnesota.
<PAGE>

     LARRY D.  SCHNASE.  Mr.  Schnase has been a director  of the Company  since
December 1993. He was Chief Executive Officer of the Company's subsidiary, Eagle
Plastics,  Inc.  ("Eagle  Plastics"),  from  its  inception  in 1984  until  his
retirement in January 1997,  and served as President of Eagle Plastics from 1984
to February 1996.  Prior to founding Eagle Plastics,  Mr. Schnase served as Vice
President of Sales for Western Plastics,  a PVC pipe and PE tubing manufacturer.
Mr. Schnase has over 35 years of experience in the business of manufacturing and
sales of plastic pipe.

     Harry W. Spell is William H. Spell's father.


Committee and Board Meetings

     The Company has an Audit  Committee  whose members  during fiscal 1996 were
Messrs.  Richard  (Chairman),  Konen and  Perkins and which met once during such
fiscal year. The Audit Committee,  among other  responsibilities,  recommends to
the full Board of Directors  the selection of auditors and reviews and evaluates
the activities and reports of the auditors,  as well as the internal  accounting
controls of the Company.

     The Company has a Compensation  Committee  whose members during fiscal 1996
were Messrs.  Perkins (Chairman),  Long and Richard. The Compensation  Committee
met once  during  fiscal  1996.  The  Compensation  Committee  is  charged  with
determining  the  compensation  to be paid to  officers  of the  Company  and to
determine other compensation issues if requested by the Board of Directors.

     Finally, the Company has a Nominating Committee whose members during fiscal
1996 were Messrs.  Harry Spell  (Chairman),  Schnase and William Spell and which
met once in fiscal 1996. The Nominating  Committee presents nominees for members
on the Board of  Directors  to the full Board of  Directors  for  approval.  The
Nominating Committee does consider nominees recommended by Company shareholders.
Such recommendations should be submitted in writing to William Spell and include
a biography of the nominee.

     The Board of Directors  met six times during  fiscal  1996.  Each  director
attended  at  least  75% of the  meetings  of the  Board  of  Directors  and any
committee on which he served.

             SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

     Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive  officers and  directors,  and persons who own more than 10 percent of
the Company's Common Stock, to file with the Securities and Exchange  Commission
initial reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and greater than
10%  shareholders  ("Insiders")  are required by SEC  regulations to furnish the
Company with copies of all Section 16(a) forms they file.

     To the Company's knowledge, based on a review of the copies of such reports
furnished  to the  Company,  during the fiscal year ended  December 31, 1996 all
Section  16(a) filing  requirements  applicable  to Insiders  were complied with
except as follows: Forms 3 were filed late by David Schnase and Patrick Mertens;
two forms covering two  transactions  were filed late by G. Peter Konen; and one
form covering one transaction was filed late by each of Harry W. Spell,  William
H. Spell and David Schnase.
<PAGE>

ITEM 11. EXECUTIVE COMPENSATION

Compensation Committee Report on Executive Compensation

     Compensation Committee's Responsibility.  The Compensation Committee of the
Board of Directors is currently composed of directors Richard A. Perkins, who is
the Chairman of the  Committee,  Bruce A.  Richard and Harry W. Spell.  Harry W.
Spell was Chief Executive  Officer of the Company during 1996. Bruce Richard was
Chief  Financial  Officer of the Company from mid-1993 to February  1996, and is
currently Vice Chairman and Secretary.  During 1996, the Compensation  Committee
members were Richard  Perkins,  George Long and Bruce Richard.  The Committee is
responsible for developing and making  recommendations to the Board with respect
to  compensation  of  the  executive  officers  of the  Company  and  its  three
subsidiaries.

     Compensation  Philosophy.   The  Company  is  concerned  with  finding  and
retaining top quality  employees.  The Committee looks at industry  averages and
surveys, and also considers geographic location in establishing salaries.

     The  executive  compensation  plan is  comprised of base  salaries,  annual
EBITDA  performance  bonuses,  long-term  incentive  compensation in the form of
stock option awards and Company loans to purchase stock, and various benefits in
which all  qualified  employees of the Company  participate.  In  addition,  the
Compensation Committee from time to time may award special cash bonuses or stock
options related to non-recurring, extraordinary performance.

     Base  Salary.  Base  salaries  for  executive  officers are reviewed by the
Committee on an annual  basis.  Each year the  Committee  assesses the executive
employee's level of responsibility,  experience,  and external market standards.
For the year ended 1996,  salaries were considered to be low so compensation was
increased.  Each  year the  Committee  reviews  the  Company's  performance  and
recommends to the full Board the salaries for the coming year.

     Annual Incentives.  In 1996, the Company adopted an EBITDA (earnings before
interest,  taxes,  depreciation and amortization) Bonus Plan (the "Bonus Plan").
Generally,  executives  receive a percentage,  up to 100%, of potential  bonuses
based upon the Company's  performance  relative to EBITDA goals. Under the Bonus
Plan,  the  Board of  Directors  establishes  the  Company's  EBITDA  goals  and
identifies  other  factors  that will be  considered  in awarding  bonuses.  The
Compensation  Committee  presents  recommendations  to the Board for executives'
potential bonuses for the Board's approval.

     Long Term Incentives.  The Company may grant some executive level employees
long-term  awards,  including stock options pursuant to the Company's 1997 Stock
Option Plan. Prior to 1997, the Company had a 1991 Stock Plan, however no awards
were made under such plan during 1996.  Beginning in 1997, awards under the 1991
Stock  Plan will no longer  be made.  The  Company  adopted  a  Leverage  Equity
Purchase Plan (the "LEPP") in 1996 under which the Company loans 90% of the cost
of purchasing  shares of the Company's common stock to selected  employees.  The
purpose  of the LEPP is to more  closely  align  the  goals  and  motivation  of
management with those of other  shareholders and to provide key personnel with a
long-term  capital  accumulation  opportunity.  In 1996, the Company made grants
under the LEPP to executive employees in the amount of $190,000 and total grants
under the LEPP to all employees of $510,000.
<PAGE>

     Other  Compensation  Plans.  The Company has  adopted  certain  broad-based
employee benefit plans in which all employees,  including the named  executives,
are  permitted  to  participate  on the same terms and  conditions  relating  to
eligibility and generally subject to the same limitation on the amounts that may
be  contributed  or the  benefits  payable  under  those  plans.  The  Company's
subsidiaries  maintain plans  qualified  under I.R.C.  Section  401(k),  and the
Company made  aggregate  contributions  to such plans of $243,191 for year ended
1996, and a contribution of $58,999 for year ended 1995.

     Chief  Executive  Officer  Compensation.  Harry  W.  Spell  served  as  the
Company's Chief Executive Officer in 1996. Mr. Harry Spell received compensation
of $7,200 in 1996.  Beginning  January  1997,  William H.  Spell,  formerly  the
President  and  Chief  Operating  Officer,  will  serve as the  Company's  Chief
Executive Officer.  The Compensation  Committee has established a base salary of
$108,000  for Mr.  William  Spell and he is  eligible  for a cash bonus of up to
$51,000 beginning 1997.

     Members of the Compensation  Committee.  Richard W. Perkins, George R. Long
and Bruce A. Richard.

     Summary Compensation Table

     The following table sets forth all cash  compensation paid or to be paid by
the  Company  and its  subsidiary,  Eagle  Plastics,  as well as  certain  other
compensation  paid or accrued,  during the last three  fiscal years to the Chief
Executive  Officers of the Company and Eagle Plastics and the executive officers
of the Company and Eagle Plastics who received more than $100,000  during fiscal
1996:


<PAGE>

<TABLE>
<CAPTION>

                                                                                         Long Term
                                                                                          Compen-
                                              Annual Compensation                          sation
                                              -------------------
                                                                                         Securities
                                                                                         Underlying
         Name and                                                           Other         Options            All
         Principal              Fiscal                                     Annual           and             Other
         Position                Year        Salary(1)       Bonus      Compensation        SARs        Compensation
         --------                ----        ---------       -----      ------------        ----        ------------
<S>                              <C>       <C>             <C>                <C>          <C>                <C>


Harry W. Spell                   1996      $  7,200(2)         0              0              0                0
 Chairman of the                 1995      $  7,200            0              0            15,000             0
 Board and former                1994      $  6,000            0              0              0                0
 Chief Executive
 Officer of the Company

William H. Spell                 1996      $ 89,188(3)      $55,000           0              0                0
 Chief Executive                 1995      $ 74,648           $ 0             0            50,000             0
 Officer of                      1994      $ 62,500        $ 35,000           0              0                0
 the Company and
 Chairman and CEO
 of Eagle Plastics

Larry D. Schnase                 1996      $179,050(4)     $150,000           0              0                0
 Former Chief Executive          1995      $167,225           $ 0             0            35,000             0
 Officer of Eagle                1994      $150,000        $150,000           0              0                0
 Plastics

G. Peter Konen                   1996      $145,000(5)     $ 75,000           0              0                0
 President of the                1995      $118,000           $ 0             0            75,000             0
 Company and                     1994      $105,500        $ 50,000           0              0                0
 Eagle Plastics

David Schnase                    1996      $137,797(6)     $ 12,500           0              0                0
 Sr. Vice President of the       1995      $139,970(6)        $ 0             0            30,000             0
 Company and                     1994      $115,818(6)     $ 12,500           0              0                0
 Eagle Plastics
</TABLE>
-----------------


(1)      Compensation  to  Messrs.  Peter  Konen,  Larry and David  Schnase  and
         William  Spell is paid by Eagle  Plastics,  the  Company's  Subsidiary,
         which was acquired by the Company on December 17, 1993.

(2)      During 1996,  Harry W. Spell,  pursuant to an oral agreement,  received
         $600 per  month for his  services  as  Chairman  of the Board and Chief
         Executive  Officer.  No other benefits were provided to Mr. Spell other
         than stock options that he has received.

(3)      William H. Spell, Chief Executive Officer of the Company,  entered into
         a restated  employment  contract with the Company for a three year term
         beginning January 1, 1997. Under such contract,  Mr. Spell will receive
         an annual base  salary  (currently  $108,000)  and a $600 per month car
         allowance.  Along with this base  salary,  he can receive a bonus up to
         $51,000 per year if the Company meets certain  operating profit levels.
         Such employment agreement has a confidentiality  provision,  a two year
         noncompetition clause and provides for a severance payment equal to Mr.
         Spell's  base  salary in the event of his  termination  other  than for
         cause.
<PAGE>

(4)      Larry  Schnase,  former  Chief  Executive  Officer  of Eagle  Plastics,
         entered  into a  Consulting  Agreement  and Release for a two year term
         beginning  January 1, 1997. Under such agreement,  Mr. Schnase resigned
         as an officer and  employee of the  Company and its  subsidiaries.  Mr.
         Schnase will receive  monthly  compensation  of $10,000 during 1997 and
         $8,333 during 1998 and will be assigned the  Company's  interest in two
         insurance  policies  on his life.  Along  with this  compensation,  Mr.
         Schnase can receive an annual bonus up to $30,000, if the Company meets
         certain  operating  profit  levels.  Such  consulting  agreement  has a
         confidentiality  provision and a five year  noncompetition  clause. Mr.
         Schnase's  existing  Deferred  Compensation  Agreement  will  remain in
         effect  until  January  1, 1999 but was  amended  to  provide  that the
         payments  for  $75,000  upon  his  death  or  upon  termination  of his
         consulting  arrangement with the Company shall be increased at the rate
         of 7% per year.

(5)      G. Peter Konen, President,  entered into a restated employment contract
         for a three year term  beginning  January 1, 1997.  Under such contact,
         Mr. Konen will receive an annual base salary (currently $175,000) and a
         $600 per month car allowance. Along with his base salary, Mr. Konen can
         receive  an annual  bonus up to $81,000 if the  Company  meets  certain
         operating   profit   levels.   Such   employment    agreement   has   a
         confidentiality   provision,  a  two  year  noncompetition  clause  and
         provides for a severance  payment  equal to Mr.  Konen's base salary in
         the event of his termination other than for cause.

(6)      David  P.  Schnase,  Senior  Vice  President-Sales,   entered  into  an
         employment  contract for a three year term  beginning  January 1, 1997.
         Under such  contract,  Mr.  Schnase  will receive an annual base salary
         (currently  $125,000).  Along with his base  salary,  Mr.  Schnase  can
         receive  an annual  bonus up to $35,000 if the  Company  meets  certain
         operating   profit   levels.   Such   employment    agreement   has   a
         confidentiality   provision,  a  two-year   noncompetition  clause  and
         provides for a severance  payment  equal to his then annual base salary
         in the event of his  termination  other than for cause.  Salary figures
         shown for Mr.  Schnase  include  commissions  of  $50,297,  $52,470 and
         $50,818 for years ended 1996, 1995 and 1994 respectively.


Option/SAR Grants During 1996 Fiscal Year

         No stock options or SARs were granted to the named  executive  officers
during fiscal 1996.


Option/SAR Exercises in 1996 Fiscal Year and Fiscal Year End Option Values

         The following table sets forth  information as to individual  exercises
of options,  number of options  and value of options at  December  31, 1996 with
respect to the named executive officers:

<PAGE>


<TABLE>
<CAPTION>


                                                                        Number of               Value of
                                                                       Unexercised             Unexercised
                                                                        Securities            In-the-Money
                                                                        Underlying            Options/SARs
                                                                       Options/SARs                at
                                    Shares                            at FY-End(#)(2)          FY-End($)(1)
                                   Acquired            Value            Exercisable/           Exercisable/
            Name                 on Exercise        Realized(1)        Unexercisable           Unexercisable
            ----                 -----------        ----------        ---------------         --------------           
<S>                                 <C>              <C>              <C>                    <C>    
William H. Spell                    35,000           $110,470           250,000/0              $353,281/0

Harry W. Spell                      35,000           $110,470           185,000/0              $332,656/0

Larry D. Schnase                      0                 0             181,250/48,750         118,125/39,375

G. Peter Konen                        0                 0             126,250/43,750          66,875/25,625

David P. Schnase                      0                 0             53,750/21,250           36,250/13,750
</TABLE>

(1)      Based on the  difference  between  the closing  price of the  Company's
         Common Stock as reported by Nasdaq on the date of exercise or at fiscal
         year end, as the case may be, and the option exercise price.

(2)      Does not include  outstanding options to purchase Common Stock of Eagle
         Plastics  at $.75 per share held by  William  Spell  (100,000  shares),
         Larry Schnase (380,000  shares),  Peter Konen (80,000 shares) and David
         Schnase (40,000 shares).


Directors' Compensation

         In 1996,  each  director  who was not an  employee  of the Company or a
subsidiary (other than the Chairman and the Vice Chairman) was entitled to a fee
of $600  for  attendance  at each  meeting  of the  Board  of  Directors  or any
committee meeting of the Board. Harry W. Spell, Chairman of the Board, and Bruce
A. Richard,  Vice Chairman of the Board,  were compensated for their services in
such capacities at the rate of $600 per month and $450 per month,  respectively.
Also,  pursuant to the Company's 1991 Stock Option Plan (the "1991 Plan"),  each
nonemployee member of the Board of Directors was entitled to receive at the time
of his  election  or  re-election,  an option to  purchase  5,000  shares of the
Company's Common Stock at a purchase price equal to the fair market value of the
Company's  Common  Stock  on the  date  of  such  election  or  re-election.  In
connection  with its  adoption  of the  Company's  1997 Stock  Option  Plan (See
Proposal No. 3 below),  the Board has determined that no additional options will
be granted  under the 1991 Plan.  In 1997,  Harry W. Spell and Bruce A.  Richard
shall  receive fees of $24,000 and George R. Long and Richard W.  Perkins  shall
receive fees of $9,000 for their roles as non-employee directors.

STOCK PERFORMANCE CHART

         The following chart compares the cumulative total shareholder return on
the  Company's  Common  Stock with the S&P Midcap 400 Index and an index of peer
companies  selected by the  Company  (the "Peer Group  Index").  The  comparison
assumes $100 was invested on December 31, 1991 in the Company's Common Stock and
in each of the foregoing indices and assumes reinvestment of dividends.
<PAGE>

                            TOTAL SHAREHOLDER RETURNS
<TABLE>
<CAPTION>

                                                                                    YEARS ENDING
                                           BASE
                                          PERIOD
COMPANY NAME/INDEX                         DEC91     DEC92       DEC93        DEC94           DEC95      DEC96
--------------------------------------- ------------ ----------- ------------ --------------- ---------- -----------
<S>                                         <C>      <C>         <C>          <C>             <C>        <C>

EAGLE PAC INDUSTRIES INC                    100      433.33      500.00       600.00          383.20     733.33
S&P MIDCAP 400 INDEX                        100      111.91      127.53       122.96          161.00     191.91
PEER GROUP                                  100      136.36      115.15       145.45          187.88     175.76
</TABLE>

     The Peer Group Index includes the following companies:  Lamson and Sessions
Co. and Royal Group Tech Ltd.


<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT


     SECURITY OWNERSHIP OF PRINCIPAL SHAREHOLDERS, DIRECTORS AND MANAGEMENT

         At the close of business on March 28, 1997, the Company had outstanding
two classes of stock:  (i) 6,443,237  shares of $.01 par value Common Stock; and
(ii) 18,750 shares of Series A 7% Convertible  Preferred  Stock (the  "Preferred
Stock").  Each share of Common Stock and Preferred Stock is entitled to one vote
at the Annual Meeting.

         The  following  table  provides  information  as  of  March  28,  1997,
concerning the beneficial ownership of the Company's Common Stock by persons who
are known to own five  percent or more of the Common  Stock of the  Company,  by
each  executive  officer  named  in the  Summary  Compensation  Table,  by  each
director,  and by all  directors  and executive  officers  (including  the named
individuals)  of the  Company as a group.  Unless  otherwise  noted,  the person
listed as the  beneficial  owner of the  shares has sole  voting and  investment
power over the shares.

<PAGE>

                                          Shares               Percent
Name and Address of                    Beneficially               of
  Beneficial Owner                         Owned               Class(1)
-------------------                      ---------             ---------
William Blair Mezzanine               750,000(2)                11.1%
  Capital Fund, L.P.
222 West Adams Street
Chicago, IL 60606

Okabena Partnership K                 425,000                    6.6%
5140 Norwest Center
Minneapolis, MN 55402

William H. Spell                      408,963(3)(4)              6.1%
2430 Metropolitan Centre
Minneapolis, MN 55402

Harry W. Spell                        344,332(4)(5)              5.2%
2430 Metropolitan Centre
Minneapolis, MN 55402

Richard W. Perkins                    323,228(6)                 5.0%
730 East Lake Street
Wayzata, MN 55391

George R. Long                        251,807(7)                 3.9%
29 Las Brisas Way
Naples, FL  33963

Larry D. Schnase                      199,375(8)                 3.0%
146 North Maple
Hastings, NE 68901

G. Peter Konen                        186,797(9)                 2.8%
146 North Maple
Hastings, NE 68901

Bruce A. Richard                      109,822(10)                1.7%
2458 Farrington Circle
Roseville, MN 55113

David P. Schnase                       73,750(11)                1.1%
146 North Maple
Hastings, NE 68901

All Directors and Officers          1,872,574(12)               25.4%
as a Group (9 persons)
<PAGE>


(1)  Shares not outstanding but deemed beneficially owned by virtue of the right
     of a person to acquire  them as of March 28,  1997 or within  sixty days of
     such date are  treated as  outstanding  only when  determining  the percent
     owned by such  individual  and when  determining  the percent  owned by the
     group.

(2)  Includes  315,000  shares which may be purchased upon exercise of currently
     exercisable Warrants.

(3)  Includes  250,000  shares which may be purchased upon exercise of currently
     exercisable options and 21,429 shares held by Mr. Spell's wife.

(4)  Includes 30,500 shares held by the Spell Family Foundation.  Messrs.  Harry
     Spell and  William  Spell  share  voting  and  dispositive  power over such
     shares.

(5)  Includes  185,000  shares which may be purchased upon exercise of currently
     exercisable options.

(6)  Includes  40,000  shares which may be purchased  upon exercise of currently
     exercisable  options.  Also includes 147,286 shares held by Perkins Capital
     Management, Inc. ("PCM"), a registered investment adviser, for its clients.
     Mr. Perkins is the  controlling  shareholder  and an officer of PCM and has
     sole dispositive power over such shares.  Mr. Perkins disclaims  beneficial
     ownership of the shares held by PCM.

(7)  Includes  45,000  shares which may be purchased  upon exercise of currently
     exercisable options.

(8)  Includes  181,250  shares which may be purchased upon exercise of currently
     exercisable options.

(9)  Includes  126,250  shares which may be purchased upon exercise of currently
     exercisable options.

(10) Includes  55,000  shares which may be purchased  upon exercise of currently
     exercisable options.

(11) Includes  53,750  shares which may be purchased  upon exercise of currently
     exercisable options.

(12) Includes  936,250  shares which may be purchased upon exercise of currently
     exercisable options.

<PAGE>

ITEM 14. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Office Sharing. William H. Spell, President of the Company, pursuant to his
employment  contract,  has an office sharing  arrangement  with the Company.  In
addition to those  responsibilities  pertaining  to the  Company,  Mr.  Spell is
engaged in activities unrelated to those of the Company, for which he has agreed
to pay a fee equal to fair market value. Currently,  another business with which
Mr.  Spell is  involved  shares the space with the  Company and pays fees to the
Company for such office sharing.  Because of such payments,  Mr. Spell's payment
obligation  under his  employment  contract has been waived by the Company.  The
Company's  Board of Directors  has approved a proposed  arrangement  whereby the
Company  would pay a monthly  fee of $10,000 for rent,  secretarial  support and
other incidentals.  The proposed arrangement is expected to take effect mid-year
1997.

     Eagle  Stock  Agreement.  In  conjunction  with  the  acquisition  of Eagle
Plastics,  the Company entered into an Eagle Stock Agreement (the  "Agreement").
Pursuant to the Agreement:  (i) an aggregate of 628,581 shares of Eagle Plastics
Common  Stock held by Larry  Schnase and G. Peter  Konen;  (ii) an  aggregate of
500,000 shares of Eagle Plastics Common Stock that may be acquired upon exercise
of Stock Options held by Larry Schnase,  G. Peter Konen and David  Schnase;  and
(iii) up to 338,357  shares that may be purchased upon exercise of Stock Options
that  may  be  granted   under  the  Eagle   Plastics  1993  Stock  Option  Plan
(collectively  the  "Liquidity  Shares") have liquidity  rights.  Such liquidity
rights provide that at any time after June 30, 1995, upon request by a holder of
Liquidity  Shares,  the Company will provide such holder liquidity in his or her
Liquidity  Shares by: (i) purchasing such Liquidity Shares for cash based on the
market value of the Company's  Common Stock at the time of the request;  (ii) by
registering  the Liquidity  Shares  pursuant to the  Securities  Act of 1933, as
amended,  for  public  sale;  (iii)  exchanging  the  Liquidity  Shares  for the
Company's  Common Stock on a one-for-one  ratio,  provided,  however,  that only
314,290 of the Liquidity  Shares may be presented to the Company pursuant to the
Agreement from June 30, 1995 through December 31, 1995 and an additional 157,145
Liquidity Shares may be presented after January 1, 1997 and January 1, 1998. The
determination  of  which  form  of  liquidity  to be  provided  is in  the  sole
discretion  of  the  Company.   During  Fiscal  1996,  34,047  Liquidity  Shares
previously  owned by  Peter  Konen  were  exchanged  for  34,047  shares  of the
Company's Common Stock.

     Employment Agreements. The Company entered into Employments Agreements with
William  H.  Spell,  G.  Peter  Konen and  David P.  Schnase,  and a  Consulting
Agreement and Release with Larry D. Schnase, all as more specifically  described
herein in the notes to the Summary Compensation Table.

     The  Company  has  entered  into an  employment  contract  with  Patrick M.
Mertens,  Chief Financial  Officer,  for a three year term beginning  January 1,
1997.  Under such  contract,  Mr.  Mertens  will  receive an annual  base salary
(currently  $90,000).  Along with his base  salary,  Mr.  Mertens can receive an
annual bonus up to $21,000 if the Company meets certain operating profit levels.
Such  employment  agreement  has  a  confidentiality   provision,   a  one  year
noncompetition  clause and  provides for a severance  payment  equal to his then
annual base salary in the event of his termination other than for cause.
<PAGE>

     William Blair Mezzanine Fund,  L.P.  Agreement.  The Company entered into a
Plan of  Recapitalization  dated March 16,  1995 with  William  Blair  Mezzanine
Capital Fund, L.P., an Illinois limited partnership ("Blair"). Pursuant to this,
Blair  was  issued a senior  subordinated  debenture  of Eagle  Plastics  in the
principal amount of $7,500,000 which was guaranteed by the Company, a warrant to
purchase  100,000 shares of the Company's  common stock at $3.00 per share,  and
210,000 shares of Company common stock.  In addition,  Blair was granted,  among
other things,  the right to receive  certain cash payments.  On May 10, 1996 the
Company, its subsidiaries and Blair entered into an Amendment Agreement revising
the  terms of the  March  1995 Plan of  Recapitalization.  Under  the  Amendment
Agreement,  the Company paid Blair $970,000 as full payment of all cash payments
owed, $3,000,000 as a partial prepayment under the senior subordinated debenture
and issued a warrant to purchase 215,000 shares of Company common stock at $3.25
per share.


                                   SIGNATURES

     Pursuant  to the  requirement  of  Section  13 or 15(d)  of the  Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.


                                        EAGLE PACIFIC INDUSTRIES, INC.


Dated:  May 22, 1997                     By: /s/ Patrick M. Mertens
                                               Patrick M. Mertens, Chief 
                                               Financial Officer