EXHIBIT 10.14

                         EAGLE PACIFIC INDUSTRIES, INC.

                             1997 STOCK OPTION PLAN


SECTION 1.

         DEFINITIONS

         As used herein, the following terms shall have the meanings indicated
below:

         (a)      "Affiliates" shall mean a Parent or Subsidiary of the Company.

         (b)      "Committee" shall mean a Committee of two or more directors
                  who shall be appointed by and serve at the pleasure of the
                  Board. In the event the Company's securities are registered
                  pursuant to Section 12 of the Securities Exchange Act of 1934,
                  as amended, each of the members of the Committee shall be a
                  "Non-Employee Director" within the meaning of Rule 16b-3, or
                  any successor provision, as then in effect, of the General
                  Rules and Regulations under the Securities Exchange Act of
                  1934 as amended.

         (c)      The "Company" shall mean Eagle Pacific Industries, Inc., a
                  Minnesota corporation.

         (d)      "Fair Market Value" shall mean (i) if such stock is reported
                  in the national market system or is listed upon an established
                  stock exchange or exchanges, the reported closing price of
                  such stock in such national market system or on such stock
                  exchange or exchanges on the date the option is granted or, if
                  no sale of such stock shall have occurred on that date, on the
                  next preceding day on which there was a sale of stock; (ii) if
                  such stock is not so reported in the national market system or
                  listed upon an established stock exchange, the average of the
                  closing "bid" and "asked" prices quoted by a recognized
                  specialist in the Common Stock of the Company on the date the
                  option is granted, or if there are no quoted "bid" and "asked"
                  prices on such date, on the next preceding date for which
                  there are such quotes; or (iii) if such stock is not publicly
                  traded as of the date the option is granted, the per share
                  value as determined by the Board, or the Committee, in its
                  sole discretion by applying principles of valuation with
                  respect to all such options.

         (e)      The "Internal Revenue Code" is the Internal Revenue Code of
                  1986, as amended from time to time.

         (f)      "Option Stock" shall mean Common Stock of the Company (subject
                  to adjustment as described in Section 12) reserved for options
                  pursuant to this Plan.

         (g)      The "Optionee" means an employee of the Company or any
                  Subsidiary to whom an incentive stock option has been granted
                  pursuant to Section 9; or a consultant or advisor to or
                  director, employee or officer of the Company or any Subsidiary
                  to whom a nonqualified stock option has been granted pursuant
                  to Section 10.

         (h)      "Parent" shall mean any corporation which owns, directly or
                  indirectly in an unbroken chain, fifty percent (50%) or more
                  of the total voting power of the Company's outstanding stock.

         (i)      The "Plan" means Eagle Pacific Industries, Inc. 1997 Stock
                  Option Plan, as amended hereafter from time to time, including
                  the form of Option Agreements as they may be modified by the
                  Board from time to time.

         (j)      A "Subsidiary" shall mean any corporation of which fifty
                  percent (50%) or more of the total voting power of outstanding
                  stock is owned, directly or indirectly in an unbroken chain,
                  by the Company.

         SECTION 2.

         PURPOSE

                  The purpose of the Plan is to promote the success of the
         Company and its Subsidiaries by facilitating the retention of competent
         personnel and by furnishing incentive to officers, directors,
         employees, consultants, and advisors upon whose efforts the success of
         the Company and its Subsidiaries will depend to a large degree.

                  It is the intention of the Company to carry out the Plan
         through the granting of stock options which will qualify as "incentive
         stock options" under the provisions of Section 422 of the Internal
         Revenue Code, or any successor provision, pursuant to Section 9 of this
         Plan, and through the granting of "nonqualified stock options" pursuant
         to Section 10 of this Plan. Adoption of this Plan shall be and is
         expressly subject to the condition of approval by the shareholders of
         the Company within twelve (12) months before or after the adoption of
         the Plan by the Board of Directors. Any incentive stock options granted
         after adoption of the Plan by the Board of Directors shall be treated
         as nonqualified stock options if shareholder approval is not obtained
         within such twelve-month period.

                                   SECTION 3.

                             EFFECTIVE DATE OF PLAN

                  The Plan shall be effective as of the date of adoption by the
         Board of Directors, subject to approval by the shareholders of the
         Company as required in Section 2.

                                   SECTION 4.

                                 ADMINISTRATION

                  The Plan shall be administered by the Board of Directors of
         the Company (hereinafter referred to as the "Board") or by a Committee
         which may be appointed by the Board from time to time (collectively
         referred to as the "Administrator"). The Administrator shall have all
         of the powers vested in it under the provisions of the Plan, including
         but not limited to exclusive authority (where applicable and within the
         limitations described herein) to determine, in its sole discretion,
         whether an incentive stock option or nonqualified stock option shall be
         granted, the individuals to whom, and the time or times at which,
         options shall be granted, the number of shares subject to each option
         and the option price and terms and conditions of each option. The
         Administrator shall have full power and authority to administer and
         interpret the Plan, to make and amend rules, regulations and guidelines
         for administering the Plan, to prescribe the form and conditions of the
         respective stock option agreements (which may vary from Optionee to
         Optionee) evidencing each option and to make all other determinations
         necessary or advisable for the administration of the Plan. The
         Administrator's interpretation of the Plan, and all actions taken and
         determinations made by the Administrator pursuant to the power vested
         in it hereunder, shall be conclusive and binding on all parties
         concerned.

                  No member of the Board or the Committee shall be liable for
         any action taken or determination made in good faith in connection with
         the administration of the Plan. In the event the Board appoints a
         Committee as provided hereunder, any action of the Committee with
         respect to the administration of the Plan shall be taken pursuant to a
         majority vote of the Committee members or pursuant to the written
         resolution of all Committee members.

                                   SECTION 5.

                                  PARTICIPANTS

                  The Administrator shall from time to time, at its discretion
         and without approval of the shareholders, designate those employees,
         officers, directors, consultants, and advisors of the Company or of any
         Subsidiary to whom nonqualified stock options shall be granted under
         this Plan; provided, however, that consultants or advisors shall not be
         eligible to receive stock options hereunder unless such consultant or
         advisor renders bona fide services to the Company or Subsidiary and
         such services are not in connection with the offer or sale of
         securities in a capital raising transaction. The Administrator shall,
         from time to time, at its discretion and without approval of the
         shareholders, designate those employees of the Company or any
         Subsidiary to whom incentive stock options shall be granted under this
         Plan. The Administrator may grant additional incentive stock options or
         nonqualified stock options under this Plan to some or all participants
         then holding options or may grant options solely or partially to new
         participants. In designating participants, the Administrator shall also
         determine the number of shares to be optioned to each such participant.
         The Board may from time to time designate individuals as being
         ineligible to participate in the Plan.

                                   SECTION 6.

                                      STOCK

                  The Stock to be optioned under this Plan shall consist of
         authorized but unissued shares of Option Stock. One Million (1,000,000)
         shares of Option Stock shall be reserved and available for options
         under the Plan; provided, however, that the total number of shares of
         Option Stock reserved for options under this Plan shall be subject to
         adjustment as provided in Section 12 of the Plan. In the event that any
         outstanding option under the Plan for any reason expires or is
         terminated prior to the exercise thereof, the shares of Option Stock
         allocable to the unexercised portion of such option shall continue to
         be reserved for options under the Plan and may be optioned hereunder.

                                   SECTION 7.

                                DURATION OF PLAN

                  Incentive stock options may be granted pursuant to the Plan
         from time to time during a period of ten (10) years from the effective
         date as defined in Section 3. Nonqualified stock options may be granted
         pursuant to the Plan from time to time after the effective date of the
         Plan and until the Plan is discontinued or terminated by the Board. Any
         incentive stock option granted during such ten-year period and any
         nonqualified stock option granted prior to the termination of the Plan
         by the Board shall remain in full force and effect until the expiration
         of the option as specified in the written stock option agreement and
         shall remain subject to the terms and conditions of this Plan.

                                   SECTION 8.

                                     PAYMENT

                  Optionees may pay for shares upon exercise of options granted
         pursuant to this Plan with cash, personal check, certified check or, if
         approved by the Administrator in its sole discretion, Common Stock of
         the Company valued at such Stock's then Fair Market Value, or such
         other form of payment as may be authorized by the Administrator. The
         Administrator may, in its sole discretion, limit the forms of payment
         available to the Optionee and may exercise such discretion any time
         prior to the termination of the option granted to the Optionee or upon
         any exercise of the option by the Optionee.

                  With respect to payment in the form of Common Stock of the
         Company, the Administrator may require advance approval or adopt such
         rules as it deems necessary to assure compliance with Rule 16b-3, or
         any successor provision, as then in effect, of the General Rules and
         Regulations under the Securities Exchange Act of 1934, if applicable.

                                   SECTION 9.

                 TERMS AND CONDITIONS OF INCENTIVE STOCK OPTIONS

                  Each incentive stock option granted pursuant to this Section 9
         shall be evidenced by a written stock option agreement (the "Option
         Agreement"). The Option Agreement shall be in such form as may be
         approved from time to time by the Administrator and may vary from
         Optionee to Optionee; provided, however, that each Optionee and each
         Option Agreement shall comply with and be subject to the following
         terms and conditions:

                  (a)      Number of Shares and Option Price. The Option
                           Agreement shall state the total number of shares
                           covered by the incentive stock option. To the extent
                           required to qualify the Option as an incentive stock
                           option under Section 422 of the Internal Revenue
                           Code, or any successor provision, the option price
                           per share shall not be less than one hundred percent
                           (100%) of the Fair Market Value of the Common Stock
                           per share on the date the Administrator grants the
                           option; provided, however, that if an Optionee owns
                           stock possessing more than ten percent (10%) of the
                           total combined voting power of all classes of stock
                           of the Company or of its parent or any Subsidiary,
                           the option price per share of an incentive stock
                           option granted to such Optionee shall not be less
                           than one hundred ten percent (110%) of the Fair
                           Market Value of the Common Stock per share on the
                           date of the grant of the option. The Administrator
                           shall have full authority and discretion in
                           establishing the option price and shall be fully
                           protected in so doing.

                  (b)      Term and Exercisability of Incentive Stock Option.
                           The term during which any incentive stock option
                           granted under the Plan may be exercised shall be
                           established in each case by the Administrator. To the
                           extent required to qualify the Option as an incentive
                           stock option under Section 422 of the Internal
                           Revenue Code, or any successor provision, in no event
                           shall any incentive stock option be exercisable
                           during a term of more than ten (10) years after the
                           date on which it is granted; provided, however, that
                           if an Optionee owns stock possessing more than ten
                           percent (10%) of the total combined voting power of
                           all classes of stock of the Company or of its parent
                           or any Subsidiary, the incentive stock option granted
                           to such Optionee shall be exercisable during a term
                           of not more than five (5) years after the date on
                           which it is granted.

                  The Option Agreement shall state when the incentive stock
         option becomes exercisable and shall also state the maximum term during
         which the option may be exercised. In the event an incentive stock
         option is exercisable immediately, the manner of exercise of the option
         in the event it is not exercised in full immediately shall be specified
         in the Option Agreement. The Administrator may accelerate the
         exercisability of any incentive stock option granted hereunder which is
         not immediately exercisable as of the date of grant.

                  (c)      Other Provisions. The Option Agreement authorized
                           under this Section 9 shall contain such other
                           provisions as the Administrator shall deem advisable.
                           Any such Option Agreement shall contain such
                           limitations and restrictions upon the exercise of the
                           option as shall be necessary to ensure that such
                           option will be considered an "incentive stock option"
                           as defined in Section 422 of the Internal Revenue
                           Code or to conform to any change therein.

         SECTION 10.

         TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTIONS

         Each nonqualified stock option granted pursuant to this Section 10
         shall be evidenced by a written Option Agreement. The Option Agreement
         shall be in such form as may be approved from time to time by the
         Administrator and may vary from Optionee to Optionee; provided,
         however, that each Optionee and each Option Agreement shall comply with
         and be subject to the following terms and conditions:

         (a)      Number of Shares and Option Price. The Option Agreement shall
                  state the total number of shares covered by the nonqualified
                  stock option. Unless otherwise determined by the
                  Administrator, the option price per share shall be one hundred
                  percent (100%) of the Fair Market Value of the Common Stock
                  per share on the date the Administrator grants the option.

         (b)      Term and Exercisability of Nonqualified Stock Option. The term
                  during which any nonqualified stock option granted under the
                  Plan may be exercised shall be established in each case by the
                  Administrator. The Option Agreement shall state when the
                  nonqualified stock option becomes exercisable and shall also
                  state the maximum term during which the option may be
                  exercised. In the event a nonqualified stock option is
                  exercisable immediately, the manner of exercise of the option
                  in the event it is not exercised in full immediately shall be
                  specified in the stock option agreement. The Administrator may
                  accelerate the exercisability of any nonqualified stock option
                  granted hereunder which is not immediately exercisable as of
                  the date of grant.

         (c)      Withholding. The Company or its Subsidiary shall be entitled
                  to withhold and deduct from future wages of the Optionee all
                  legally required amounts necessary to satisfy any and all
                  withholding and employment-related taxes attributable to the
                  Optionee's exercise of a nonqualified stock option. In the
                  event the Optionee is required under the Option Agreement to
                  pay the Company, or make arrangements satisfactory to the
                  Company respecting payment of, such withholding and
                  employment-related taxes, the Administrator may, in its
                  discretion and pursuant to such rules as it may adopt, permit
                  the Optionee to satisfy such obligation, in whole or in part,
                  by electing to have the Company withhold shares of Common
                  Stock otherwise issuable to the Optionee as a result of the
                  option's exercise equal to the amount required to be withheld
                  for tax purposes. Any stock elected to be withheld shall be
                  valued at its Fair Market Value, as of the date the amount of
                  tax to be withheld is determined under applicable tax law. The
                  Optionee's election to have shares withheld for this purpose
                  shall be made on or before the date the option is exercised
                  or, if later, the date that the amount of tax to be withheld
                  is determined under applicable tax law. Such election shall be
                  approved by the Administrator and otherwise comply with such
                  rules as the Administrator may adopt to assure compliance with
                  Rule 16b-3, or any successor provision, as then in effect, of
                  the General Rules and Regulations under the Securities
                  Exchange Act of 1934, if applicable.

         (d)      Other Provisions. The Option Agreement authorized under this
                  Section 10 shall contain such other provisions as the
                  Administrator shall deem advisable.


         SECTION 11.

         TRANSFER OF OPTION

         No incentive stock option shall be transferable, in whole or in part,
         by the Optionee other than by will or by the laws of descent and
         distribution and, during the Optionee's lifetime, the option may be
         exercised only by the Optionee. If the Optionee shall attempt any
         transfer of any incentive stock option granted under the Plan during
         the Optionee's lifetime, such transfer shall be void and the incentive
         stock option, to the extent not fully exercised, shall terminate.

         The Administrator may, in its sole discretion, permit the Optionee to
         transfer any or all nonqualified stock options to any member of the
         Optionee's "immediate family" as such term is defined in Rule 16a-1(e)
         promulgated under the Securities Exchange Act of 1934, or any successor
         provision, or to one or more trusts whose beneficiaries are members of
         such Optionee's "immediate family" or partnerships in which such family
         members are the only partners; provided, however, that the Optionee
         receives no consideration for the transfer and such transferred
         nonqualified stock option shall continue to be subject to the same
         terms and conditions as were applicable to such nonqualified stock
         option immediately prior to its transfer.


         SECTION 12.

         RECAPITALIZATION, SALE, MERGER, EXCHANGE
         OR LIQUIDATION

         In the event of an increase or decrease in the number of shares of
         Common Stock resulting from a subdivision or consolidation of shares or
         the payment of a stock dividend or any other increase or decrease in
         the number of shares of Common Stock effected without receipt of
         consideration by the Company, the number of shares of Option Stock
         reserved under Section 6 hereof and the number of shares of Option
         Stock covered by each outstanding option and the price per share
         thereof shall be adjusted by the Board to reflect such change.
         Additional shares which may be credited pursuant to such adjustment
         shall be subject to the same restrictions as are applicable to the
         shares with respect to which the adjustment relates.

         Unless otherwise provided in the stock option agreement, in the event
         of an acquisition of the Company through the sale of substantially all
         of the Company's assets and the consequent discontinuance of its
         business or through a merger, consolidation, exchange, reorganization,
         reclassification, extraordinary dividend, divestiture or liquidation of
         the Company (collectively referred to as a "transaction"), all
         outstanding options shall become immediately exercisable, whether or
         not such options had become exercisable prior to the transaction;
         provided, however, that if the acquiring party seeks to have the
         transaction accounted for on a "pooling of interests" basis and, in the
         opinion of the Company's independent certified public accountants,
         accelerating the exercisability of such options would preclude a
         pooling of interests under generally accepted accounting principles,
         the exercisability of such options shall not accelerate. In addition to
         the foregoing, in the event of such a transaction, the Board may
         provide for one or more of the following:

         (a) the complete termination of this Plan and cancellation of
         outstanding options not exercised prior to a date specified by the
         Board (which date shall give Optionees a reasonable period of time in
         which to exercise the options prior to the effectiveness of such
         transaction);

         (b) that Optionees holding outstanding incentive or nonqualified
         options shall receive, with respect to each share of Option Stock
         subject to such options, as of the effective date of any such
         transaction, cash in an amount equal to the excess of the Fair Market
         Value of such Option Stock on the date immediately preceding the
         effective date of such transaction over the option price per share of
         such options; provided that the Board may, in lieu of such cash
         payment, distribute to such Optionees shares of stock of the Company or
         shares of stock of any corporation succeeding the Company by reason of
         such transaction, such shares having a value equal to the cash payment
         herein; or

         (c) the continuance of the Plan with respect to the exercise of options
         which were outstanding as of the date of adoption by the Board of such
         plan for such transaction and provide to Optionees holding such options
         the right to exercise their respective options as to an equivalent
         number of shares of stock of the corporation succeeding the Company by
         reason of such transaction.

         The Board may restrict the rights of or the applicability of this
         Section 12 to the extent necessary to comply with Section 16(b) of the
         Securities Exchange Act of 1934, the Internal Revenue Code or any other
         applicable law or regulation. The grant of an option pursuant to the
         Plan shall not limit in any way the right or power of the Company to
         make adjustments, reclassifications, reorganizations or changes of its
         capital or business structure or to merge, exchange or consolidate or
         to dissolve, liquidate, sell or transfer all or any part of its
         business or assets.


         SECTION 13.

         SECURITIES LAW COMPLIANCE

         No shares of Common Stock shall be issued pursuant to the Plan unless
         and until there has been compliance, in the opinion of Company's
         counsel, with all applicable legal requirements, including without
         limitation, those relating to securities laws and stock exchange
         listing requirements. As a condition to the issuance of Option Stock to
         Optionee, the Administrator may require Optionee to (a) represent that
         the shares of Option Stock are being acquired for investment and not
         resale and to make such other representations as the Administrator
         shall deem necessary or appropriate to qualify the issuance of the
         shares as exempt from the Securities Act of 1933 and any other
         applicable securities laws, and (b) represent that Optionee shall not
         dispose of the shares of Option Stock in violation of the Securities
         Act of 1933 or any other applicable securities laws.

         As a further condition to the grant of any incentive or nonqualified
stock option or the issuance of Option Stock to Optionee, Optionee agrees to the
following:

         (a)      In the event the Company advises Optionee that it plans an
                  underwritten public offering of its Common Stock in compliance
                  with the Securities Act of 1933, as amended, and the
                  underwriter(s) seek to impose restrictions under which certain
                  shareholders may not sell or contract to sell or grant any
                  option to buy or otherwise dispose of part or all of their
                  stock purchase rights of the underlying Common Stock, Optionee
                  will not, for a period not to exceed 180 days from the
                  prospectus, sell or contract to sell or grant an option to buy
                  or otherwise dispose of any incentive or nonqualified stock
                  option granted to Optionee pursuant to the Plan or any of the
                  underlying shares of Common Stock without the prior written
                  consent of the underwriter(s) or its representative(s).

         (b)      In the event the Company makes any public offering of its
                  securities and determines in its sole discretion that it is
                  necessary to reduce the number of issued but unexercised stock
                  purchase rights so as to comply with any states securities or
                  Blue Sky law limitations with respect thereto, the Board of
                  Directors of the Company shall have the right (i) to
                  accelerate the exercisability of any incentive or nonqualified
                  stock option and the date on which such option must be
                  exercised, provided that the Company gives Optionee prior
                  written notice of such acceleration, and (ii) to cancel any
                  options or portions thereof which Optionee does not exercise
                  prior to or contemporaneously with such public offering.

         (c)      In the event of a transaction (as defined in Section 12 of the
                  Plan) which is treated as a "pooling of interests" under
                  generally accepted accounting principles, Optionee will comply
                  with Rule 145 of the Securities Act of 1933 and any other
                  restrictions imposed under other applicable legal or
                  accounting principles if Optionee is an "affiliate" (as
                  defined in such applicable legal and accounting principles) at
                  the time of the transaction, and Optionee will execute any
                  documents necessary to ensure compliance with such rules.

The Company reserves the right to place a legend on any stock certificate issued
upon exercise of an option granted pursuant to the Plan to assure compliance
with this Section 13.


         SECTION 14.

         RIGHTS AS A SHAREHOLDER

         An Optionee (or the Optionee's successor or successors) shall have no
         rights as a shareholder with respect to any shares covered by an option
         until the date of the issuance of a stock certificate evidencing such
         shares. No adjustment shall be made for dividends (ordinary or
         extraordinary, whether in cash, securities or other property),
         distributions or other rights for which the record date is prior to the
         date such stock certificate is actually issued (except as otherwise
         provided in Section 12 of the Plan).


         SECTION 15.

         AMENDMENT OF THE PLAN

         The Board may from time to time, insofar as permitted by law, suspend
         or discontinue the Plan or revise or amend it in any respect; provided,
         however, that no such revision or amendment, except as is authorized in
         Section 12, shall impair the terms and conditions of any option which
         is outstanding on the date of such revision or amendment to the
         material detriment of the Optionee without the consent of the Optionee.
         Notwithstanding the foregoing, no such revision or amendment shall (i)
         materially increase the number of shares subject to the Plan except as
         provided in Section 12 hereof, (ii) change the designation of the class
         of employees eligible to receive options, (iii) decrease the price at
         which options may be granted, or (iv) materially increase the benefits
         accruing to Optionees under the Plan without the approval of the
         shareholders of the Company if such approval is required for compliance
         with the requirements of any applicable law or regulation. Furthermore,
         the Plan may not, without the approval of the shareholders, be amended
         in any manner that will cause incentive stock options to fail to meet
         the requirements of Section 422 of the Internal Revenue Code.


         SECTION 16.

         NO OBLIGATION TO EXERCISE OPTION

         The granting of an option shall impose no obligation upon the Optionee
         to exercise such option. Further, the granting of an option hereunder
         shall not impose upon the Company or any Subsidiary any obligation to
         retain the Optionee in its employ for any period.



                        INCENTIVE STOCK OPTION AGREEMENT

                         EAGLE PACIFIC INDUSTRIES, INC.
                             1997 STOCK OPTION PLAN



PARTIES:      Eagle Pacific Industries, Inc.                         ("COMPANY")
              2430 Metropolitan Centre
              333 South Seventh Street
              Minneapolis, Minnesota  55402

                                                                    ("OPTIONEE")
              _____________________________
              _____________________________
              _____________________________



DATE:         December 31, 1996

RECITALS:

         A.       The Company's Board of Directors (the "Board") has adopted a
stock option plan providing for the grant of stock options known as the "Eagle
Pacific Industries, Inc. 1997 Stock Option Plan" (the "Plan"). The Plan will be
submitted to the Company's shareholders for approval at the next annual
shareholder's meeting or, if earlier, within twelve (12) months of the Board's
adoption of the Plan. The capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Plan.

         B.       Optionee is an employee of the Company or one of its
subsidiaries.

         C.       This Incentive Stock Option Agreement is being entered into
pursuant to the terms of the Plan.

AGREEMENT:

The parties hereto, each intending to be legally bound, agree as follows:

         1.       Grant of Option. The Company hereby grants to the Optionee, on
the date of this Agreement, the option to purchase ________ shares of Common
Stock of the Company (the "Option Stock") subject to the terms and conditions
herein contained, and subject only to adjustment in such number of shares as
provided in Section 12 of the Plan. This option is intended to be an incentive
stock option within the meaning of Section 422, or any successor provision, of
the Internal Revenue Code of 1986, as amended (the "Code"), and the regulations
thereunder; provided, however, that if the Company's shareholders do not approve
the Plan within twelve (12) months of the date the Plan was adopted by the
Board, this option shall be treated as a nonqualified stock option.

         2.       Option Price. During the term of this option, the purchase
price for the shares of Option Stock granted herein is $2.75 per share, subject
only to adjustment of such price as provided in Section 12 of the Plan.

         3.       Term of Option. Unless terminated earlier under the provisions
of Sections 10 or 11 of this Agreement or under Sections 12 or 13 of the Plan,
this option shall terminate as of the close of business on December 30, 2006.
This option shall not be exercisable until July 1, 1997. During the period from
July 1, 1997, through December 30, 1997, this option shall be exercisable to the
extent of twenty-five percent (25%) of the Option Stock. Thereafter, this option
shall be exercisable to the extent of an additional twenty-five percent (25%) of
the Option Stock on each anniversary of the date hereof until the earlier of the
date on which this option shall have become exercisable to the extent of one
hundred percent (100%) of the Option Stock or the date the option terminates as
provided herein. Once the option becomes exercisable to the extent of one
hundred percent (100%) of the Option Stock, Optionee may continue to exercise
this option under the terms and conditions of this Agreement until the
termination of the option as provided herein. If Optionee does not purchase upon
an exercise of this option the full number of shares which Optionee is then
entitled to purchase, Optionee may purchase upon any subsequent exercise prior
to this option's termination such previously unpurchased shares in addition to
those Optionee is otherwise entitled to purchase.

         4.       Personal Exercise by Optionee. This option shall, during the
lifetime of the Optionee, be exercisable only by said Optionee and shall not be
transferable by the Optionee, in whole or in part, other than by will or by the
laws of descent and distribution.

         5.       Manner of Exercise of Option.

                  a. This option may be exercised by the Optionee (or by the
Optionee's successor or successors) by giving written notice to the Company of
an election to exercise such option. Such notice shall specify the number of
shares to be purchased hereunder and shall specify a date (not more than 30
calendar days from the date of delivery of the notice to the Company) on which
the Optionee shall deliver payment of the full purchase price for the shares
being purchased. Such notice shall be delivered to the Company at its principal
place of business. The option shall be deemed exercised at the time the Company
receives such notice. The option may be exercised with respect to any number or
all of the shares as to which it can then be exercised and, if partially
exercised, may be so exercised as to the unexercised shares any number of times
during the option period as provided herein.

                  b. Subject to approval by the Administrator, payment of the
option price by Optionee shall be in the form of cash, personal check, certified
check or previously acquired shares of Common Stock of the Company, or any
combination thereof. Any stock so tendered as part of such payment shall be
valued at its Fair Market Value as provided in the Plan. For purposes of this
Agreement, "previously acquired shares of Common Stock" shall include shares of
Common Stock that are already owned by Optionee at the time of exercise.

                  As soon as practicable after the effective exercise of all or
any part of the option, Optionee shall be recorded on the stock transfer books
of the Company as the owner of the shares purchased, and the Company shall
deliver to Optionee one or more duly issued stock certificates evidencing such
ownership. All requisite original issue or transfer documentary stamp taxes
shall be paid by the Company.

         6.       Rights as a Shareholder. The Optionee (or Optionee's successor
or successors) shall have no rights as a shareholder with respect to any shares
covered by this option until the date of the issuance of a stock certificate for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property), distributions or
other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 12 of the Plan.

         7.       Employment. This Agreement shall not confer on Optionee any
right with respect to continuance of employment by the Company or any of its
Subsidiaries, nor will it interfere in any way with the right of the Company to
terminate such employment, it being acknowledged and agreed that Optionee is an
employee at will of the Company.

         8.       Stock Option Plan. This option is granted pursuant to the
Plan, a copy of which has been made available to the Optionee and is hereby made
a part of this Agreement. This Agreement is subject to and in all respects
limited and conditioned as provided in the Plan. The Plan governs this option
and the Optionee, and in the event of any question as to the construction of
this Agreement or of a conflict between the Plan and this Agreement, the Plan
shall govern, except as the Plan otherwise provides.

         9.       Withholding Taxes on Disqualifying Disposition. In the event
of a disqualifying disposition of the shares acquired through the exercise of
this option, Optionee hereby agrees to inform the Company of such disposition.
Upon notice of a disqualifying disposition, the Company may take such action as
it deems appropriate to insure that, if necessary to comply with all applicable
federal or state income tax laws or regulations, all applicable federal and
state payroll, income or other taxes are withheld from any amounts payable by
the Company to Optionee. If the Company is unable to withhold such federal and
state taxes, for whatever reason, Optionee hereby agrees to pay to the Company
an amount equal to the amount the Company would otherwise be required to
withhold under federal or state law. Optionee may, subject to the approval and
discretion of the Administrator or such administrative rules it may deem
advisable, elect to have all or a portion of such tax withholding obligations
satisfied by delivering shares of the Company's Common Stock having a fair
market value equal to such obligations.

         10.      Termination of Employment. If Optionee ceases to be an
employee of the Company or any Subsidiary for any reason, other than because of
death or disability, this option shall completely terminate on the earlier of
(i) the close of business 30 days after the date of such termination of
employment, and (ii) the expiration date of this option stated in Section 3
above. In such period following such termination of employment, this option
shall be exercisable only to the extent the option was exercisable on the date
of Optionee's termination of employment, but had not previously been exercised.
To the extent this option was not exercisable upon the date of such termination
of employment, or if Optionee does not exercise the option within the time
specified in this Section 10, all rights of Optionee under this option shall be
forfeited.

         11.      Death or Disability of Optionee. If the Optionee dies or
ceases to be an employee of the Company or any Subsidiary due to disability (as
such term is defined in Code Section 22(e)(3), or any successor provision), this
option shall terminate on the earlier of (i) the close of business six months
after the date of the Optionee's death or termination of employment, and (ii)
the expiration date of this option stated in Section 3 above. In such period
following the date of Optionee's termination of employment or death, this option
may be exercised by the Optionee, or by the person or persons to whom the
Optionee's rights under this option shall have passed by the Optionee's will or
by the laws of descent and distribution, only to the extent the option was
exercisable on such date but had not previously been exercised. To the extent
this option was not exercisable upon the date of Optionee's termination of
employment or death, or if the option is not exercised within the time specified
in this Section 11, all rights of Optionee under this option shall be forfeited.

         12.      Recapitalizations, Sales, Mergers, Exchanges, Consolidations,
Liquidation. Pursuant to Section 12 of the Plan, certain changes in the number
or character of the Company's Common Stock (through sale, merger, consolidation,
exchange, reorganization, divestiture, liquidation, recapitalization, stock
split, stock dividend or similar transactions), shall result in an adjustment to
the number of shares of Option Stock and the option exercise price with respect
to the unexercised portion of this option. Similarly, in the event of a sale,
merger, consolidation, exchange, reorganization, divestiture, liquidation or
similar transaction, this option shall be adjusted as provided in Section 12 of
the Plan.

         13.      Shares Reserved. The Company shall at all times during the
term of this option reserve and keep available such number of shares as will be
sufficient to satisfy the requirements of this Agreement.

         14.      Securities Law Compliance. The exercise of all or any parts of
this option shall only be effective at such time as counsel to the Company shall
have determined that the issuance and delivery of Common Stock pursuant to such
exercise will not violate any state or federal securities or other laws.
Optionee may be required by the Company, as a condition of the effectiveness of
any exercise of this option, to agree in writing that all Common Stock to be
acquired pursuant to such exercise shall be held, until such time that such
Common Stock is registered and freely tradable under applicable state and
federal securities laws, for Optionee's own account without a view to any
further distribution thereof, that the certificates for such shares shall bear
an appropriate legend to that effect and that such shares will be not
transferred or disposed of except in compliance with applicable state and
federal securities laws.

         15.      Lockup Period Limitation. Optionee agrees that in the event
the Company advises Optionee that it plans an underwritten public offering of
its Common Stock in compliance with the Securities Act of 1933, as amended, and
that the underwriter(s) seek to impose restrictions under which certain
shareholders may not sell or contract to sell or grant any option to buy or
otherwise dispose of part or all of their stock purchase rights of the
underlying Common Stock, Optionee hereby agrees that for a period not to exceed
180 days from the prospectus, Optionee will not sell or contract to sell or
grant an option to buy or otherwise dispose of this option or any of the
underlying shares of Common Stock without the prior written consent of the
underwriter(s) or its representative(s).

         16.      Blue Sky Limitation. Notwithstanding anything in this
Agreement to the contrary, in the event the Company makes any public offering of
its securities and determines in its sole discretion that it is necessary to
reduce the number of issued but unexercised stock purchase rights so as to
comply with any state securities or Blue Sky law limitations with respect
thereto, the Board of Directors of the Company shall have the right (i) to
accelerate the exercisability of this option and the date on which this option
must be exercised, provided that the Company gives Optionee 15 days' prior
written notice of such acceleration, and (ii) to cancel any portion of this
option or any other option granted to Optionee pursuant to the Plan which is not
exercised prior to or contemporaneously with such public offering. Notice shall
be deemed given when delivered personally or when deposited in the United States
mail, first class postage prepaid and addressed to Optionee at the address of
Optionee on file with the Company.

         17.      Accounting Compliance. Optionee agrees that, in the event a
"change of control transaction" (as defined in Paragraph 4(g) above) is treated
as a "pooling of interests" under generally accepted accounting principles and
Optionee is an "affiliate" of the Company or any Subsidiary (as defined in
applicable legal and accounting principles) at the time of such change of
control transaction, Optionee will comply with all requirements of Rule 145 of
the Securities Act of 1933, as amended, and the requirements of such other legal
or accounting principles, and will execute any documents necessary to ensure
such compliance.

         18.      Stock Legend. The certificates for any shares of Common Stock
purchased by Optionee (or, in the case of death, Optionee's successors) shall
bear an appropriate legend to reflect the restrictions of Sections 14, 15, 16
and 17 of this Agreement.

         19.      Arbitration. Any dispute arising out of or relating to this
Agreement or the alleged breach of it, or the making of this Agreement,
including claims of fraud in the inducement, shall be discussed between the
disputing parties in a good faith effort to arrive at a mutual settlement of any
such controversy. If, notwithstanding, such dispute cannot be resolved, such
dispute shall be settled by binding arbitration. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall be a retired state or federal judge or an attorney
who has practiced securities or business litigation for at least 10 years. If
the parties cannot agree on an arbitrator within 20 days, any party may request
that the chief judge of the District Court for Hennepin County, Minnesota,
select an arbitrator. Arbitration will be conducted pursuant to the provisions
of this Agreement, and the commercial arbitration rules of the American
Arbitration Association, unless such rules are inconsistent with the provisions
of this Agreement. Limited civil discovery shall be permitted for the production
of documents and taking of depositions. Unresolved discovery disputes may be
brought to the attention of the arbitrator who may dispose of such dispute. The
arbitrator shall have the authority to award any remedy or relief that a court
of this state could order or grant; provided, however, that punitive or
exemplary damages shall not be awarded. The arbitrator may award to the
prevailing party, if any, as determined by the arbitrator, all of its costs and
fees, including the arbitrator's fees, administrative fees, travel expenses,
out-of-pocket expenses and reasonable attorneys' fees. Unless otherwise agreed
by the parties, the place of any arbitration proceedings shall be Hennepin
County, Minnesota.

         20.      Scope of Agreement. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns and the Optionee and any
successor or successors of the Optionee permitted by Section 4 above.

         IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement in the manner appropriate to each, as of the day and year first above
written.

                                     "COMPANY"

                                     EAGLE PACIFIC INDUSTRIES, INC.


                                     By:______________________________________
                                         Its:______________________________

                                     "OPTIONEE"


                                     _________________________________________





NONQUALIFIED STOCK OPTION AGREEMENT

                         EAGLE PACIFIC INDUSTRIES, INC.
                             1997 STOCK OPTION PLAN



PARTIES:    Eagle Pacific Industries, Inc.                           ("COMPANY")
            2430 Metropolitan Centre
            333 South Seventh Street
            Minneapolis, Minnesota  55402

                                                                    ("OPTIONEE")
            ______________________________
            ______________________________
            ______________________________



DATE:       ______________________________

RECITALS:

         A.       The Company's Board of Directors (the "Board") has adopted a
stock option plan providing for the grant of stock options known as the "Eagle
Pacific Industries, Inc. 1997 Stock Option Plan" (the "Plan"). THE PLAN WILL BE
SUBMITTED TO THE COMPANY'S SHAREHOLDERS FOR APPROVAL AT THE NEXT ANNUAL
SHAREHOLDER'S MEETING OR, IF EARLIER, WITHIN TWELVE (12) MONTHS OF THE BOARD'S
ADOPTION OF THE PLAN. The capitalized terms not otherwise defined herein shall
have the meanings ascribed to them in the Plan.

         B.       Optionee is an employee, consultant or director of or an
advisor to the Company or one of its Subsidiaries.

         C.       This Nonqualified Stock Option Agreement is being entered into
pursuant to the terms of the Plan.

AGREEMENT:

The parties hereto, each intending to be legally bound, agree as follows:

         1.       Grant of Option. The Company hereby grants to the Optionee, on
the date of this Agreement, the option to purchase ___________ shares of Common
Stock of the Company (the "Option Stock") subject to the terms and conditions
herein contained, and subject only to adjustment in such number of shares as
provided in Section 12 of the Plan. This option is not intended to be an
incentive stock option within the meaning of Section 422, or any successor
provision, of the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations thereunder.

         2.       Option Price. During the term of this option, the purchase
price for the shares of Option Stock granted herein is $_________ per share,
subject only to adjustment of such price as provided in Section 12 of the Plan.

         3.       Term of Option. Unless terminated earlier under the provisions
of Sections 10 or 11 of this Agreement or under Sections 12 or 13 of the Plan,
this option shall terminate as of the close of business on _____________. This
option shall not be exercisable until _______________. During the period
from______________ through _______________, this option shall be exercisable to
the extent of _____ percent (___%) of the Option Stock. Thereafter, this option
shall be exercisable to the extent of an additional ____ percent (___%) of the
Option Stock on each anniversary of the date hereof until the earlier of the
date on which this option shall have become exercisable to the extent of one
hundred percent (100%) of the Option Stock or the date the option terminates as
provided herein. Once the option becomes exercisable to the extent of one
hundred percent (100%) of the Option Stock, Optionee may continue to exercise
this option under the terms and conditions of this Agreement until the
termination of the option as provided herein. If Optionee does not purchase upon
an exercise of this option the full number of shares which Optionee is then
entitled to purchase, Optionee may purchase upon any subsequent exercise prior
to this option's termination such previously unpurchased shares in addition to
those Optionee is otherwise entitled to purchase.

         4.       Personal Exercise by Optionee. This option shall, during the
lifetime of the Optionee, be exercisable only by said Optionee and shall not be
transferable by the Optionee, in whole or in part, other than by will or by the
laws of descent and distribution.

         5.       Manner of Exercise of Option.

                  a. This option may be exercised by the Optionee (or by the
Optionee's successor or successors) by giving written notice to the Company of
an election to exercise such option. Such notice shall specify the number of
shares to be purchased hereunder and shall specify a date (not more than 30
calendar days from the date of delivery of the notice to the Company) on which
the Optionee shall deliver payment of the full purchase price for the shares
being purchased. Such notice shall be delivered to the Company at its principal
place of business. The option shall be deemed exercised at the time the Company
receives such notice. The option may be exercised with respect to any number or
all of the shares as to which it can then be exercised and, if partially
exercised, may be so exercised as to the unexercised shares any number of times
during the option period as provided herein.

                  b. Subject to approval by the Administrator, payment of the
option price by Optionee shall be in the form of cash, personal check, certified
check or previously acquired shares of Common Stock of the Company, or any
combination thereof. Any stock so tendered as part of such payment shall be
valued at its Fair Market Value as provided in the Plan. For purposes of this
Agreement, "previously acquired shares of Common Stock" shall include shares of
Common Stock that are already owned by Optionee at the time of exercise.

                  As soon as practicable after the effective exercise of all or
any part of the option, Optionee shall be recorded on the stock transfer books
of the Company as the owner of the shares purchased, and the Company shall
deliver to Optionee one or more duly issued stock certificates evidencing such
ownership. All requisite original issue or transfer documentary stamp taxes
shall be paid by the Company.

         6.       Rights as a Shareholder. The Optionee (or Optionee's successor
or successors) shall have no rights as a shareholder with respect to any shares
covered by this option until the date of the issuance of a stock certificate for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property), distributions or
other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 12 of the Plan.

         7.       Employment. This Agreement shall not confer on Optionee any
right with respect to continuance of employment by the Company or any of its
Subsidiaries, nor will it interfere in any way with the right of the Company to
terminate such employment, it being acknowledged and agreed that Optionee is an
employee at will of the Company.

         8.       Stock Option Plan. This option is granted pursuant to the
Plan, a copy of which has been made available to the Optionee and is hereby made
a part of this Agreement. This Agreement is subject to and in all respects
limited and conditioned as provided in the Plan. The Plan governs this option
and the Optionee, and in the event of any question as to the construction of
this Agreement or of a conflict between the Plan and this Agreement, the Plan
shall govern, except as the Plan otherwise provides.

         9.       Withholding Taxes. Upon an exercise of this option, the
Company may take such action as it deems appropriate to insure that, if
necessary to comply with all applicable federal or state income tax laws or
regulations, all applicable federal and state payroll, income or other taxes are
withheld from any amounts payable by the Company to Optionee. If the Company is
unable to withhold such federal and state taxes, for whatever reason, Optionee
hereby agrees to pay to the Company an amount equal to the amount the Company
would otherwise be required to withhold under federal or state law. Optionee
may, subject to the approval and discretion of the Administrator or such
administrative rules it may deem advisable, elect to have all or a portion of
such tax withholding obligations satisfied by delivering shares of the Company's
Common Stock having a fair market value equal to such obligations.

         10.      Termination of Employment. If Optionee ceases to be an
employee of the Company or any Subsidiary for any reason, other than because of
death or disability, this option shall completely terminate on the earlier of
(i) the close of business ______days after the date of such termination of
employment, and (ii) the expiration date of this option stated in Section 3
above. In such period following such termination of employment, this option
shall be exercisable only to the extent the option was exercisable on the date
of Optionee's termination of employment, but had not previously been exercised.
To the extent this option was not exercisable upon the date of such termination
of employment, or if Optionee does not exercise the option within the time
specified in this Section 10, all rights of Optionee under this option shall be
forfeited.

         11.      Death or Disability of Optionee. If the Optionee dies or
ceases to be an employee of the Company or any Subsidiary due to disability (as
such term is defined in Code Section 22(e)(3), or any successor provision), this
option shall terminate on the earlier of (i) the close of business ________
months after the date of the Optionee's death or termination of employment, and
(ii) the expiration date of this option stated in Section 3 above. In such
period following the date of Optionee's termination of employment or death, this
option may be exercised by the Optionee, or by the person or persons to whom the
Optionee's rights under this option shall have passed by the Optionee's will or
by the laws of descent and distribution, only to the extent the option was
exercisable on such date but had not previously been exercised. To the extent
this option was not exercisable upon the date of Optionee's termination of
employment or death, or if the option is not exercised within the time specified
in this Section 11, all rights of Optionee under this option shall be forfeited.

         12.      Recapitalizations, Sales, Mergers, Exchanges, Consolidations,
Liquidation. Pursuant to Section 12 of the Plan, certain changes in the number
or character of the Company's Common Stock (through sale, merger, consolidation,
exchange, reorganization, divestiture, liquidation, recapitalization, stock
split, stock dividend or similar transactions), shall result in an adjustment to
the number of shares of Option Stock and the option exercise price with respect
to the unexercised portion of this option. Similarly, in the event of a sale,
merger, consolidation, exchange, reorganization, divestiture, liquidation or
similar transaction, this option shall be adjusted as provided in Section 12 of
the Plan.

         13.      Shares Reserved. The Company shall at all times during the
term of this option reserve and keep available such number of shares as will be
sufficient to satisfy the requirements of this Agreement.

         14.      Securities Law Compliance. The exercise of all or any parts of
this option shall only be effective at such time as counsel to the Company shall
have determined that the issuance and delivery of Common Stock pursuant to such
exercise will not violate any state or federal securities or other laws.
Optionee may be required by the Company, as a condition of the effectiveness of
any exercise of this option, to agree in writing that all Common Stock to be
acquired pursuant to such exercise shall be held, until such time that such
Common Stock is registered and freely tradable under applicable state and
federal securities laws, for Optionee's own account without a view to any
further distribution thereof, that the certificates for such shares shall bear
an appropriate legend to that effect and that such shares will be not
transferred or disposed of except in compliance with applicable state and
federal securities laws.

         15.      Lockup Period Limitation. Optionee agrees that in the event
the Company advises Optionee that it plans an underwritten public offering of
its Common Stock in compliance with the Securities Act of 1933, as amended, and
that the underwriter(s) seek to impose restrictions under which certain
shareholders may not sell or contract to sell or grant any option to buy or
otherwise dispose of part or all of their stock purchase rights of the
underlying Common Stock, Optionee hereby agrees that for a period not to exceed
180 days from the prospectus, Optionee will not sell or contract to sell or
grant an option to buy or otherwise dispose of this option or any of the
underlying shares of Common Stock without the prior written consent of the
underwriter(s) or its representative(s).

         16.      Blue Sky Limitation. Notwithstanding anything in this
Agreement to the contrary, in the event the Company makes any public offering of
its securities and determines in its sole discretion that it is necessary to
reduce the number of issued but unexercised stock purchase rights so as to
comply with any state securities or Blue Sky law limitations with respect
thereto, the Board of Directors of the Company shall have the right (i) to
accelerate the exercisability of this option and the date on which this option
must be exercised, provided that the Company gives Optionee 15 days' prior
written notice of such acceleration, and (ii) to cancel any portion of this
option or any other option granted to Optionee pursuant to the Plan which is not
exercised prior to or contemporaneously with such public offering. Notice shall
be deemed given when delivered personally or when deposited in the United States
mail, first class postage prepaid and addressed to Optionee at the address of
Optionee on file with the Company.

         17.      Accounting Compliance. Optionee agrees that, in the event a
"change of control transaction" (as defined in Paragraph 4(g) above) is treated
as a "pooling of interests" under generally accepted accounting principles and
Optionee is an "affiliate" of the Company or any Subsidiary (as defined in
applicable legal and accounting principles) at the time of such change of
control transaction, Optionee will comply with all requirements of Rule 145 of
the Securities Act of 1933, as amended, and the requirements of such other legal
or accounting principles, and will execute any documents necessary to ensure
such compliance.

         18.      Stock Legend. The certificates for any shares of Common Stock
purchased by Optionee (or, in the case of death, Optionee's successors) shall
bear an appropriate legend to reflect the restrictions of Sections 14, 15, 16
and 17 of this Agreement.

         19.      Arbitration. Any dispute arising out of or relating to this
Agreement or the alleged breach of it, or the making of this Agreement,
including claims of fraud in the inducement, shall be discussed between the
disputing parties in a good faith effort to arrive at a mutual settlement of any
such controversy. If, notwithstanding, such dispute cannot be resolved, such
dispute shall be settled by binding arbitration. Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. The arbitrator shall be a retired state or federal judge or an attorney
who has practiced securities or business litigation for at least 10 years. If
the parties cannot agree on an arbitrator within 20 days, any party may request
that the chief judge of the District Court for Hennepin County, Minnesota,
select an arbitrator. Arbitration will be conducted pursuant to the provisions
of this Agreement, and the commercial arbitration rules of the American
Arbitration Association, unless such rules are inconsistent with the provisions
of this Agreement. Limited civil discovery shall be permitted for the production
of documents and taking of depositions. Unresolved discovery disputes may be
brought to the attention of the arbitrator who may dispose of such dispute. The
arbitrator shall have the authority to award any remedy or relief that a court
of this state could order or grant; provided, however, that punitive or
exemplary damages shall not be awarded. The arbitrator may award to the
prevailing party, if any, as determined by the arbitrator, all of its costs and
fees, including the arbitrator's fees, administrative fees, travel expenses,
out-of-pocket expenses and reasonable attorneys' fees. Unless otherwise agreed
by the parties, the place of any arbitration proceedings shall be Hennepin
County, Minnesota.

         20.      Scope of Agreement. This Agreement shall bind and inure to the
benefit of the Company and its successors and assigns and the Optionee and any
successor or successors of the Optionee permitted by Section 4 above.

         IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement in the manner appropriate to each, as of the day and year first above
written.

                                     "COMPANY"

                                     EAGLE PACIFIC INDUSTRIES, INC.


                                     By:______________________________________
                                         Its:______________________________

                                     "OPTIONEE"


                                     _________________________________________