SECURITIES AND EXCHANGE COMMISSION
                              WASHINGTON, DC 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, 1997

                         Commission file number 0-18050

                         EAGLE PACIFIC INDUSTRIES, INC.
             (Exact Name of Registrant as Specified in Its Charter)

         Minnesota                                               41-1642846
(State of Other Jurisdiction of                                 (IRS Employer
Incorporation or Organization)                               Identification No.)

                            333 South Seventh Street
                            2430 Metropolitan Centre
                          Minneapolis, Minnesota 55402
               (Address of Principal Executive Offices) (Zip Code)

                                 (612) 305-0339
              (Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Act:  None
Securities registered pursuant to Section 12(g) of the Act:  Common Stock, 
                                                             $.01 par value

Indicate  by check  mark  whether  the  registrant:  (1) has filed  all  reports
required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
1934  during  the  preceding  12 months  (or for such  shorter  period  that the
registrant was required by file such reports),  and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not 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-K or any amendment to this
Form 10-K. [ ]

The  aggregate  market  value of  voting  stock  held by  non-affiliates  of the
registrant as of February 27, 1998 was approximately  $10,900,000  (based on the
closing  sale  price of $2.00  per  share as  reported  on the  Nasdaq  SmallCap
Market).

The number of shares of the registrant's Common Stock, $.01 par value per share,
outstanding as of February 27, 1998 was 6,816,174.

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      None
<PAGE>
                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Directors and Executive Officers:

     The  following  table  sets  forth the  names,  ages and  positions  of the
directors and executive  officers of the Company as of April 27, 1998. A summary
of the  background  and  experience of these  individuals is set forth after the
table.

  Name                        Age      Position

  Harry W. Spell(1)(2)        74       Chairman of the Board
  William H. Spell(2)         41       Chief Executive Office and Director
  Bruce A. Richard(1)(3)      68       Vice Chairman of the Board and Secretary
  G. Peter Konen              48       President and Director
  Patrick M. Mertens          34       Chief Financial Officer and Treasurer
  David P. Schnase            37       Senior Vice President-Sales and Marketing
  George R. Long(3)           67       Director
  Richard W. Perkins(1)(2)    67       Director
  Larry D. Schnase(2)         66       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 and served as Chief Executive Officer from January 1992 to January 1997. In
addition,  Mr.  Spell is Chief  Financial  Manager and  Chairman of the Board of
Spell Capital  Partners,  LLC, which is a private equity  investment  fund which
focuses  on  leveraged  acquisitions  of  established  businesses  in the  Upper
Midwest.  Mr. Spell has been involved in private equity investing since 1988. He
was employed by Northern  States Power,  a Fortune 500 company,  from 1949 until
August  1988,  where he served  as Senior  Vice  President  and Chief  Financial
Officer. Mr. Spell currently serves as a director of Appliance Recycling Centers
of America, Inc., as well as several private organizations.

     William H. Spell has been a director of the Company  since January 1992 and
Chief  Executive  Officer  since  January  1997,  and  served  as the  Company's
President  from January  1992 to January  1997.  In  addition,  Mr. Spell is the
President of Spell Capital  Partners,  LLC, which is a private equity investment
fund which focuses on leveraged  acquisitions  of established  businesses in the
Upper  Midwest.  Mr. Spell has been involved in private equity  investing  since
1988.  From 1981  through  1988,  Mr. Spell was vice  president  and director of
corporate  finance at John G.  Kinnard  and  Company,  Incorporated,  a regional
investment banking firm located in Minneapolis,  Minnesota. Mr. Spell has a B.S.
and an M.B.A. degree from the University of Minnesota.
<PAGE>

     Bruce A.  Richard  has been a director  of the  Company  since  March 1992,
Secretary  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 and as Treasurer  from mid-1993 to March 1998. In addition,  Mr. Richard is
affiliated  with  Spell  Capital  Partners,  LLC,  which  is  a  private  equity
investment   fund  which  focuses  on  leveraged   acquisitions  of  established
businesses in the Upper Midwest. Mr. Richard has been involved in private equity
investing  since 1988.  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 and
President of the Company since January 1997. In addition, he served as President
of Eagle  Plastics from February 1996 until  December  1997,  when it was merged
into the Company. He was Executive Vice President and Chief Operating Officer of
Eagle Plastics from 1984 to February  1996.  Prior to 1984, he was Plant Manager
with Western Plastics, a PVC pipe and PE tubing manufacturer. Mr. Konen has over
28 years of experience in the manufacturing and sales of plastic pipe.

     Patrick M. Mertens, who joined the Company in May 1995 as Controller of the
Company's  former  subsidiary,  Eagle  Plastics,  Inc.  ("Eagle  Plastics")  was
promoted  to  Chief  Financial  Officer  of the  Company  in  February  1996 and
Treasurer  in March  1998.  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  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.

     David P. Schnase,  was elected Senior Vice President-Sales and Marketing of
the Company in January 1998.  He joined Eagle  Plastics in April 1985 and served
as Senior  Vice  President-Sales  and  Marketing  of Eagle  Plastics  and of the
Company's other  subsidiaries  from February 1996 until December 1997, when such
subsidiaries were merged into the Company.

     George R. 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>

     Richard W. 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 had 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. Mr. Perkins
is also affiliated with Spell Capital  Partners,  LLC, which is a private equity
investment   fund  which  focuses  on  leveraged   acquisitions  of  established
businesses in the Upper  Midwest.  Mr.  Perkins is a director of various  public
companies, including:  Bio-Vascular, Inc., Lifecore Biomedical, Inc., Children's
Broadcasting  Corporation,  CNS, Inc., Quantech Ltd., Nortech Systems,  Inc. and
Vital Images, Inc.

     Larry D. Schnase has been a director of the Company since December 1993. He
was Chief  Executive  Officer of 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.  Larry D. Schnase is David P.
Schnase's father.

Compliance with Section 16(a) of the Exchange Act.:

     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, 1997 all
Section  16(a) filing  requirements  applicable  to Insiders  were complied with
except that one form covering one transaction was filed late by G. Peter Konen.

ITEM 11.  EXECUTIVE COMPENSATION

Summary Compensation Table

     The following table sets forth all cash  compensation paid or to be paid by
the Company and its former subsidiary,  Eagle Plastics, as well as certain other
compensation  paid or accrued,  during the last three  fiscal years to the Chief
Executive  Officer of the Company and the executive  officers of the Company and
Eagle Plastics who received more than $100,000 during fiscal 1997:


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


William H. Spell                 1997      $ 108,000(2)     $12,750        $7,200          100,000(3)       $  0
 Chief Executive                 1996      $  89,188(3)     $55,000        $7,200                0          $  0
 Officer of                      1995      $  74,648        $     0        $    0           50,000          $  0
 the Company and
 Chairman and CEO
 of Eagle Plastics

G. Peter Konen                   1997      $ 175,000(4)     $20,250         $7,200          80,000(3)       $  0
 President of the                1996      $ 145,000        $75,000         $6,000               0          $  0
 Company and                     1995      $ 118,000        $     0         $    0          75,000          $  0
 Eagle Plastics

David P. Schnase                 1997      $ 125,000        $ 8,750         $6,000          44,500(3)       $  0
 Sr. Vice President of the       1996      $  87,500(5)     $12,500         $    0               0          $  0
 Company and                     1995      $  87,500(5)     $     0         $    0          30,000          $  0
 Eagle Plastics
-----------------
</TABLE>

(1)  Compensation  to Messrs.  Peter Konen,  David Schnase and William Spell has
     been paid by Eagle Plastics,  the Company's  former  subsidiary,  which was
     acquired by the Company on December 17, 1993 and merged into the Company in
     December 1997.

(2)  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 $115,000) 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.

(3)  Such options were converted from options to acquire stock of Eagle Plastics
     in connection with  assumption by the Company of the Eagle  Plastics,  Inc.
     Stock Option Plan.  See "Executive  Compensation--Option/SAR  Grants During
     1997 Fiscal Year."

(4)  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  $182,000)  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.
<PAGE>

(5)  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
     $130,000).  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
     and $52,470 for years ended 1996 and 1995, respectively.

Option/SAR Grants During 1997 Fiscal Year

     In connection with the merger of the Company's  subsidiary,  Eagle Plastics
into the  Company  effective  December  31,  1997,  the  Company  assumed  Eagle
Plastics' Stock Option Plan and all options outstanding under such Plan, and all
such options were amended to provide  optionees  with an opportunity to purchase
an equivalent  number of shares of the Company's  Common Stock.  Options held by
the named  executive  officers  under the Eagle  Plastics  Plan were  amended as
options to purchase shares of the Company's Common Stock, as set forth below. No
other options were granted to the named executive officers during fiscal 1997.
<TABLE>
<CAPTION>
                                                                                    Potential Realizable Value at
                                                                                  Assumed Annual Rates of Stock Price
                             Individual Grants(1)                                   Appreciation for Option Term
--------------------------------------------------------------------------------  -----------------------------------
                  Number of     Percent of
                  Securities      Total
                  Underlying   Options/SARs    Exercise    Market
                 Options/SARs   Granted to     or Base    Price on
                   Granted      Employees      Price     Grant Date  Expiration
Name                 (#)       in Fiscal Year  ($/Sh)     ($/Sh)(2)    Date      0% ($)       5% ($)     10% ($)
----             ------------  --------------  --------- ----------  ----------  ------       ------     -------
<S>                <C>             <C>          <C>         <C>       <C>         <C>          <C>         <C>

William H. Spell   100,000         15.4%        $0.75       $1.75     11/30/00    $100,000     $127,584    $157,925

G. Peter Konen      80,000         12.3%        $0.75       $1.75     11/30/00   $  80,000     $102,068    $126,340

David Schnase       40,000          6.2%        $0.75       $1.75     11/30/00   $  40,000     $ 51,034    $ 63,170
                     4,500           .7%        $1.75       $1.75     05/12/01   $       0     $  1,241    $  2,607
</TABLE>

(1)  All options were 100% exercisable as of December 31, 1997.

(2)  These  options  were  converted  from  options to  acquire  shares of Eagle
     Plastics Common Stock,  initially granted in December 1993 and May 1994, to
     options to acquire shares of Company Common Stock on December 31, 1997. The
     Market  Price on Grant Date  reflects  the fair  market  value of shares of
     Eagle  Plastics  Common  Stock on the date of initial  grant of each of the
     options.

<PAGE>
Option/SAR Exercises in 1997 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,  1997 with
respect to the named executive officers:
<TABLE>
<CAPTION>
                                                                        Number of               Value of
                                                                       Unexercised             Unexercised
                                                                        Securities            In-the-Money
                                                                        Underlying            Options/SARs
                                                                       Options/SARs                at
                                    Shares                             at FY-End(#)           FY-End($)(1)
                                   Acquired           Value            Exercisable/           Exercisable/
            Name                 on Exercise         Realized         Unexercisable           Unexercisable
            ----                 -----------         --------        ---------------          -------------
<S>                                   <C>              <C>            <C>                      <C>

William H. Spell                      0                N/A              350,000/0              $403,281/0

G. Peter Konen                        0                N/A            240,000/10,000            155,000/0

David P. Schnase                      0                N/A            114,500/5,000              84,750/0
</TABLE>
-----------------------------

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

Directors' Compensation

     In  1997,  each  director  who  was not an  employee  of the  Company  or a
subsidiary  (other than the Chairman and the Vice  Chairman)  was entitled to an
annual fee of $9,000 for service as directors  and committee  members.  Harry W.
Spell,  Chairman of the Board, and Bruce A. Richard, Vice Chairman of the Board,
were each  compensated  for their services in such capacities at the annual rate
of $24,000.  In 1998,  Harry W. Spell and Bruce A.  Richard will receive fees of
$30,000 and George R. Long and Richard W.  Perkins  will receive fees of $12,000
and $21,000, respectively, for their roles as non-employee directors.


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                  MANAGEMENT

     The following table provides  information as of April 27, 1998,  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.

                                        Shares               Percent
Name and Address of                  Beneficially               of
 Beneficial Owner                       Owned                Class(1)
-------------------                  ------------            --------
William Blair Mezzanine               435,000                  6.3%
  Capital Fund, L.P.
222 West Adams Street
Chicago, IL 60606

Okabena Partnership K                 425,000                  6.2%
5140 Norwest Center
Minneapolis, MN 55402
<PAGE>

William H. Spell                      527,963(2)(3)(4)         7.5%
2430 Metropolitan Centre
Minneapolis, MN 55402

Harry W. Spell                        357,332(3)(4)(5)         5.2%
2430 Metropolitan Centre
Minneapolis, MN 55402

Richard W. Perkins                    151,942(4)(6)            2.2%
730 East Lake Street
Wayzata, MN 55391

George R. Long                        236,807(7)               3.4%
29 Las Brisas Way
Naples, FL  33963

Larry D. Schnase                      628,125(8)               8.4%
146 North Maple
Hastings, NE 68901

G. Peter Konen                        310,547(9)               4.4%
146 North Maple
Hastings, NE 68901

Bruce A. Richard                      146,597(4)(10)           2.1%
2458 Farrington Circle
Roseville, MN 55113

David P. Schnase                      134,500(11)              1.9%
146 North Maple
Hastings, NE 68901

All Directors and Officers          2,497,613(12)             30.6%
as a Group (9 persons)

(1)  Shares not outstanding but deemed beneficially owned by virtue of the right
     of a person to acquire  them as of April 27,  1998 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.
<PAGE>

(2)  Includes  210,000  shares which may be purchased upon exercise of currently
     exercisable options and 21,429 shares held by Mr. Spell's wife.

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

(4)  Messrs.  William Spell, Harry Spell, Richard Perkins and Bruce Richard have
     individually  acquired  securities  of the Company  from the Company and in
     open market transactions and each of them individually  anticipates that he
     will  acquire  additional  securities  of the Company in the  future.  Such
     persons have entered into an agreement  which  requires  that a majority of
     them  approve any sale of  securities  of the Company by any of them.  This
     agreement is designed to keep all of such persons interested and focused on
     the  long-term  success of the  Company  and  recognizes  that each of such
     persons  contributes  specific  expertise  to  the  Company  through  their
     positions as directors and/or officers. The agreement does not require that
     such persons vote their shares in any specific  manner or act in concert in
     connection with any purchase or sale of securities of the Company.

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

(6)  Includes  25,000  shares which may be purchased  upon exercise of currently
     exercisable  options and 11,429  shares held by a Profit  Sharing Trust for
     Mr. Perkins' benefit.

(7)  Includes  30,000  shares which may be purchased  upon exercise of currently
     exercisable options.

(8)  Includes  610,000  shares which may be purchased upon exercise of currently
     exercisable options.

(9)  Includes  240,000  shares which may be purchased upon exercise of currently
     exercisable options.

(10) Includes  25,000  shares which may be purchased  upon exercise of currently
     exercisable options.

(11) Includes  114,500  shares which may be purchased upon exercise of currently
     exercisable options.

(12) Includes 1,319,500 shares which may be purchased upon exercise of currently
     exercisable options.
<PAGE>

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Office Sharing.  The Company has an office sharing  arrangement  with Spell
Capital  Partners,  LLC pursuant to which the Company pays $10,000 per month for
space and administrative  support.  William H. Spell and Harry W. Spell are both
members of Spell Capital Partners, LLC.

     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 could have been acquired upon
exercise of Stock  Options  held by Larry  Schnase,  G. Peter Konen and David P.
Schnase;  and (iii) up to 338,357  shares  that could  have been  acquired  upon
exercise of future stock  options  granted  under the Eagle  Plastics 1993 Stock
Option Plan  (collectively the "Liquidity  Shares") had liquidity  rights.  Such
liquidity  rights provided that at any time after June 30, 1995, upon request by
a holder of Liquidity Shares, the Company would 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; or (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 could be presented to the Company pursuant
to the Agreement from June 30, 1995 through  December 31, 1995 and an additional
157,145 Liquidity Shares could be presented after January 1, 1997 and January 1,
1998.  The  determination  of which form of  liquidity to be provided was in the
sole  discretion  of the  Company.  During  Fiscal 1997,  the Company  purchased
272,757  shares  of Eagle  Plastics  Common  Stock  from  Larry  Schnase  for an
aggregate  purchase  price of  $748,717.93.  As a result of the  merger of Eagle
Plastics into the Company in December 1997, all options  granted under the Eagle
Plastics  Plan were  assumed by the  Company  and were  amended  to provide  the
holders with options to acquire shares of Company  Common Stock.  After December
1997, all liquidity rights of the Liquidity Shares were effectively terminated.

     Employment  and  Consulting  Agreements.   The  Company  has  entered  into
Employment  Agreements  with  William  H.  Spell,  G.  Peter  Konen and David P.
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.

     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 received monthly  compensation of
$10,000  during 1997 and will  receive  $8,333 per month  during  1998,  and was
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.
<PAGE>

                                   SIGNATURES

     Pursuant  to the  requirements  of  Section  13 or 15(d) of the  Securities
Exchange Act of 1934, the Registrant has duly caused this amendment to be signed
on its behalf by the  undersigned,  thereunto duly  authorized,  in Minneapolis,
Minnesota on the 29th day of April, 1998.

                                         EAGLE PACIFIC INDUSTRIES, INC.


                                         By  /s/ William H. Spell
                                              William H. Spell
                                              Chief Executive Officer