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                                                                   EXHIBIT 10.26

                         HUNTSMAN PACKAGING CORPORATION

                            2000 STOCK INCENTIVE PLAN

         SECTION 1. PURPOSE OF THE PLAN.

                  (a) The purpose of the Huntsman Packaging Corporation 2000
Stock Incentive Plan (the "Plan") is (i) to further the growth and success of
Huntsman Packaging Corporation, a Utah corporation (together with its successors
and assigns, the "Corporation"), and its Subsidiaries, by enabling directors,
officers, managers, employees and advisors of, the Corporation and its
Subsidiaries to acquire shares of Common Stock of the Corporation (the "Common
Stock"), thereby increasing their personal interest in such growth and success,
and (ii) to provide a means of rewarding outstanding performance by such
Persons.

                  (b) The options granted under the Plan (the "Options") shall
be non-qualified stock options. No Option shall be an "incentive stock option"
under the provisions of Section 422 of the Code. In lieu of Options, certain
senior managers of the Corporation designated by the Compensation Committee
shall have the right to purchase restricted stock on terms substantially similar
to the terms set forth in the Plan pursuant to agreements approved by the Board.

                  (c) For purposes of the Plan, the terms set forth below shall
have the respective meanings assigned thereto.

                      (i) "Affiliate" means, with respect to any Person, a

         Person that directly, or indirectly through one or more intermediaries,
         Controls, or is Controlled by, or is under common Control with, such
         Person.

                     (ii) "Board" has the meaning set forth in Section 2(a).

                    (iii) "Code" means the Internal Revenue Code of 1986, as
         amended.

                     (iv) "Committee" has the meaning set forth in Section 2(a).

                      (v) "Common Stock" has the meaning set forth in Section
         1(a).

                     (vi) "Control" means, (including, with correlative meaning,
         the terms "controlling," "controlled by" and "under common control
         with") with respect to any Person, the possession, directly or
         indirectly, of the power to direct or cause the direction of the
         management, policies or investment decisions of such Person, whether
         through the ownership of voting securities, by contract or otherwise.

                    (vii) "Corporation" has the meaning set forth in Section
         1(a)(i).

                   (viii) "Disability" means a condition or disease of the
         Participant that would cause the Participant to be considered
         "disabled" within the meaning of the Corporation's

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         long-term disability plan as in effect from time to time, as determined
         by the Company's long-term disability insurance carrier.

                     (ix) "Effective Date" has the meaning set forth in Section
         12.

                      (x) "Expiration Date" has the meaning set forth in Section
         13.

                     (xi) "Fair Market Value" means (A) the fair value of Common
         Stock (consistent, as applicable, with Section 422(c)(7) of the Code)
         on the date of any determination as reasonably determined in good faith
         by the Committee after taking into consideration all factors which it
         deems appropriate, including, without limitation, in respect of the
         Common Stock, recent sale and offer prices of the Common Stock in
         private transactions negotiated at arm's length or (B) if the Common
         Stock is Publicly Traded, the Market Price.

                    (xii) "Initial Public Offering" means the initial
         underwritten Public Offering of Common Stock for the account of the
         Corporation pursuant to a Registration Statement effective under the
         Securities Act.

                   (xiii) "Market Price" means, as to any Security, the closing
         price of such Security's sales on all domestic securities exchanges on
         which such Security may at the time be listed, or, if there have been
         no sales on any such exchange on any day, the average of the highest
         bid and lowest asked prices on all such exchanges at the end of such
         day, or, if on any day such Security is not so listed, the average of
         the representative bid and asked prices quoted in the NASDAQ System as
         of 4:00 P.M. local time in New York City on such day, or, if on any day
         such Security is not quoted in the NASDAQ System, the average of the
         highest bid and lowest asked prices on such day in the domestic
         over-the-counter market as reported by the National Quotation Bureau,
         Incorporated, or any similar or successor organization.

                    (xiv) "Option Agreement" has the meaning set forth in
         Section 5(b).

                     (xv) "Option Price" has the meaning set forth in Section
         6(a).

                    (xvi) "Options" has the meaning set forth in Section 1(b).

                   (xvii) "Participants" has the meaning set forth in Section
         5(a)(i).

                  (xviii) "Person" shall be construed as broadly as possible and
         shall include an individual or natural Person, a partnership (including
         a limited liability partnership), a corporation, an association, a
         joint stock company, a limited liability company, a trust, a joint
         venture, an unincorporated organization and a governmental authority.

                    (xix) "Plan" has the meaning set forth in Section 1(a).

                     (xx) "Prospectus" means the prospectus included in a
         Registration Statement, including any amendment or prospectus subject
         to completion, and any such prospectus as amended or supplemented by
         any prospectus supplement with respect to

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         the terms of the offering of any portion of Common Stock and, in each
         case, by all other amendments and supplements to such prospectus,
         including post-effective amendments, and in each case including all
         material incorporated by reference therein.

                    (xxi) "Public Offering" means the closing of a public
         offering of Common Stock pursuant to a Registration Statement declared
         effective under the Securities Act, except that a Public Offering shall
         not include an offering of securities to be issued as consideration in
         connection with a business acquisition or an offering of securities
         issuable pursuant to an employee benefit plan.

                   (xxii) "Publicly Traded" means, with respect to any Security,
         that such Security is (A) listed on any domestic securities exchange,
         (B) a price quoted in the NASDAQ System or (C) has a price quoted by
         the National Quotation Bureau, Incorporated.

                  (xxiii) "Registration Statement" means any registration
         statement of the Corporation which covers an offering of any Common
         Stock, and all amendments and supplements to any such Registration
         Statement, including post-effective amendments, in each case including
         the Prospectus contained therein, all exhibits thereto and all material
         incorporated by reference therein.

                   (xxiv) "Securities" means "securities" as defined in Section
         2(1) of the Securities Act and includes, with respect to any Person,
         such Person's capital stock or other equity interests or any options,
         warrants or other securities that are directly or indirectly
         convertible into, or exercisable or exchangeable for, such Person's
         capital stock or other equity or equity-linked interests, including
         phantom stock and stock appreciation rights. Whenever a reference
         herein to Securities is referring to any derivative Securities, the
         rights of a Participant shall apply to such derivative Securities and
         all underlying Securities directly or indirectly issuable upon
         conversion, exchange or exercise of such derivative securities.

                    (xxv) "Securities Act" means the Securities Act of 1933, as
         amended.

                   (xxvi) "Stockholder" means any Person holding Common Stock.

                  (xxvii) "Stockholders' Agreement" means the Stockholders'
         Agreement dated as of May 31, 2000, among the Corporation and the
         Stockholders signatory thereto, as amended, modified or supplemented
         from time to time.

                 (xxviii) "Subsidiaries" shall mean "Subsidiary Corporation" as
         defined in Section 424(f) of the Code.

                   (xxix) "Termination Date" means, with respect to a
         Participant who is an employee of the Corporation or its Subsidiaries,
         the date on which the Participant's employment with the Corporation or
         its Subsidiaries is terminated.

                    (xxx) "Termination for Cause" means termination of the
         Participant's employment by the Corporation or any of its Subsidiaries,
         as applicable, resulting from

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         (A) the conviction of the Participant of a crime involving his or her
         fraud, theft or dishonesty; (B) the material and willful breach by the
         Participant of his or her responsibilities or willful failure to comply
         with reasonable directives or policies of the Board, but only if the
         Corporation has given the Participant written notice specifying the
         breach or failure to comply, demanding that the Participant remedy the
         breach or failure to comply and giving the Participant an opportunity
         to be heard in connection with the breach or failure to comply, and the
         Participant either (1) failed to remedy the alleged breach or failed to
         comply within thirty days after receipt of the written notice or (2)
         failed to take all reasonable steps to that end during the thirty days
         after he or she received the notice; (C) the continued use of alcohol
         or drugs by the Participant to an extent that, in the good faith
         determination of the Board, such use interferes in any manner with the
         performance of the Participant's duties and responsibilities; or (D)
         the conviction of the Participant for violating any law constituting a
         felony (including the Foreign Corrupt Practices Act of 1977).

                   (xxxi) "Unvested Option" has the meaning set forth in Section
         7(b).

                  (xxxii) "Vested Option" has the meaning set forth in Section
         7(c).

         SECTION 2. ADMINISTRATION OF THE PLAN.

                  (a) Option Committee. The Plan shall be administered by the
Board of Directors of the Corporation (the "Board") or a committee appointed for
that purpose from time to time by the Board (the "Committee"). Any reference in
the Plan to action by the Corporation means action by or under the authority of
the Board or the Committee. Any vacancy on the Committee, whether due to action
of the Board or any other cause, shall be filled by the Board. The term
"Committee" shall, for all purposes of the Plan other than this Section 2, be
deemed to refer to the Board if the Board is administering the Plan.

                  (b) Procedures. If the Plan is administered by a Committee,
the Board shall from time to time select a Chairman from among the members of
the Committee. The Committee shall adopt such rules and regulations as it shall
deem appropriate concerning the holding of meetings and the administration of
the Plan. A majority of the entire Committee shall constitute a quorum and the
actions of a majority of the members of the Committee present at a meeting at
which a quorum is present, or actions approved in writing by all of the members
of the Committee, shall be the actions of the Committee.

                  (c) Interpretation. Except as otherwise expressly provided in
this Plan, the Committee shall have all powers with respect to the
administration of the Plan, including, without limitation, full power and
authority to interpret the provisions of the Plan and any Option Agreement and
to resolve all questions arising under the Plan. All decisions of the Board or
the Committee, as the case may be, shall be conclusive and binding on all
participants in the Plan absent manifest error of the Board or the Committee, as
applicable.

SECTION 3. SHARES SUBJECT TO THE PLAN.

                  (a) Maximum Number of Shares. Subject to the provisions of
Section 9(a) (relating to adjustments upon changes in capital structure and
other corporate transactions), the

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maximum number of shares of Common Stock subject at any one time to Options,
plus the number of shares of Common Stock theretofore issued and delivered
pursuant to the exercise of Options granted under the Plan, shall not exceed
47,704 shares of Common Stock. If and to the extent that Options terminate,
expire or are canceled without having been fully exercised, any unissued shares
of Common Stock which have been reserved to be issued upon the exercise of such
Options shall become available to be issued upon the exercise of Options
subsequently granted.

                  (b) Reservation of Shares. The number of shares of Common
Stock reserved for issuance under the Plan shall at no time be less than the
maximum number of shares which may be purchased at any time pursuant to
outstanding Options.

         SECTION 4. ELIGIBILITY.

                  Options may be granted under the Plan only to (a) Persons who
are employees of the Corporation or any of its Subsidiaries and (b) Persons who
are directors, officers, managers or advisors of the Corporation or any of its
Subsidiaries.

         SECTION 5. GRANT OF OPTIONS.

                  (a) General. Options may be granted under the Plan at any time
and from time to time on or prior to the tenth anniversary of the Effective
Date. Subject to the provisions of the Plan, the Committee shall, in its
discretion, determine:

                       (i) the Persons (from among the class of Persons eligible
         to receive Options under the Plan) to whom Options shall be granted
         (the "Participants");

                      (ii) the time or times at which Options shall be granted;

                     (iii) the number of shares of Common Stock subject to each
         Option;

                      (iv) the Option Price of the Common Stock subject to each
         Option; and

                       (v) the time or times when each Option shall become
         exercisable and the duration of the exercise period.

                  (b) Option Agreements. Each Option granted under the Plan
shall be evidenced by a written agreement (an "Option Agreement"), containing
such terms and conditions and in such form, as the Committee shall, in its
discretion, provide or otherwise in the form of Exhibit A attached hereto. Each
Option Agreement shall be executed by the Corporation and the Participant.
Option agreements need not be identical. Unless otherwise explicitly stated in
the Option Agreement, in the event of any conflict or inconsistency between any
provision of an Option Agreement and the Plan, the applicable provision of the
Plan shall govern.

                  (c) No Right of Employment or Service. Nothing contained in
the Plan or in any Option Agreement shall confer upon any Participant any
employment right with the Corporation or any of its Subsidiaries or interfere in
any way with the right of the Corporation or any such Subsidiary (subject to the
terms of any separate agreement to the contrary) at any time to

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terminate such employment or service or to increase or decrease the compensation
of the Participant from the rate in existence at the time of the grant of an
Option.

                  (d) Date of Grant. Except as otherwise determined by the
Committee, the date of grant of an Option under the Plan shall be the date as of
which the Committee approves the grant; provided, however, that the grant shall
in no event be earlier than the date as of which the Participant becomes an
employee, director, officer or manager of the Corporation or one of its
Subsidiaries.

         SECTION 6. OPTION PRICE.

                  Subject to Section 9(a), the price (the "Option Price") at
which each share of Common Stock subject to an Option granted under the Plan may
be purchased shall be no less than Fair Market Value on the date of grant of
such Option.

         SECTION 7. EXERCISABILITY OF OPTIONS.

                  (a) Committee Determination. Each Option granted under the
Plan shall be exercisable at such time or times, or upon the occurrence of such
event or events, and for such number of shares of Common Stock subject to the
Option, as shall be determined by the Committee and set forth in the Option
Agreement evidencing such Option. If an Option is not at the time of grant
immediately exercisable, the Committee may (i) in the Option Agreement
evidencing such Option, provide for the acceleration of the exercise date or
dates of the subject Option upon the occurrence of specified events and/or (ii)
at any time prior to the complete termination of an Option, accelerate the
exercise date or dates of such Option.

                  (b) Automatic Termination of Unvested Options. Any Option
which has not vested in accordance with the respective Participant's Option
Agreement (an "Unvested Option") shall automatically terminate and shall become
null and void and be of no further force or effect upon the first to occur of
(x) the end of the stated term of the Option and (y) if the Participant is an
employee, the Termination Date.

                  (c) Automatic Termination of Vested Options. The unexercised
portion of any Option which has vested in accordance with the respective
Participant's Option Agreement (a "Vested Option") shall automatically terminate
and shall become null and void and be of no further force or effect upon the
first to occur of (x) the end of the stated term of the Option and (y) if the
Participant is an employee, ninety (90) days after the Termination Date.

                  (d) Non-Assignability of Option Rights. No Option granted
under the Plan shall be Transferable by the Participant except by will or by the
laws of descent or distribution upon death of the Participant. An Option may be
exercised during the lifetime of the Participant only by the Participant or, if
the Participant has become Disabled, that Participant's legal representative. If
a Participant dies, his or her Option shall thereafter be exercisable, during
the period specified in Section 7(c), by his or her executors or administrators
to the full extent to which such Option was exercisable by the Participant at
the time of his or her death.

                  (e) Changes in Duties or Position of the Participant. Anything
contained in the Plan to the contrary notwithstanding, unless otherwise provided
in an Option Agreement, no

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Option granted under the Plan shall be affected by any change of duties or
position of the Participant (including a transfer to or from the Corporation or
one of its Subsidiaries), so long as such Participant continues to be an
employee of the Corporation or one of its Subsidiaries.

                  (f) Section 280G Limitation. Notwithstanding anything in the
Plan to the contrary, in the event that the provisions of Section 280G of the
Code, relating to "excess parachute payments" shall be applicable to any vesting
of Options (including pursuant to the provisions of any Option Agreement), which
determination shall be made by taking into account all payments to any
Participant which are parachute payments under Section 280G of the Code, then
the total number of the Options which would otherwise vest shall be reduced to
the largest amount such that Section 280G of the Code relating to "excess
parachute payments" shall no longer be applicable (or shall be applicable to the
reduced amount of "excess parachute payments" still remaining after the
reduction provided for in this sentence); provided, however, that if (i) the
Corporation is eligible to exempt such payments from treatment as "parachute
payments" by securing shareholder approval under Section 280G (b)(5)(A)(ii) of
the Code, and (ii) such shareholder approval is obtained, then there shall be no
reduction in the number of Options which vest. In the event of a disagreement
between the Corporation and any Participant as to whether Section 280G of the
Code is applicable or whether any other payment or benefit constitutes a
"parachute payment," such determination shall be made by an accounting or law
firm mutually acceptable to the Corporation and such Participant. All costs
relating to such determination shall be borne equally by the Corporation and
such Participant. Pending such determination, the number of Options whose
vesting is not in dispute shall continue to vest at the time and in the manner
provided for without reduction under this Section 7(f).

         SECTION 8. PROCEDURE FOR EXERCISE.

                  (a) Payment. Payment upon exercise of an Option shall be made
in cash or personal or certified check payable to the Corporation in an amount
equal to the aggregate Option Price of the Common Stock with respect to which
the Option is being exercised.

                  (b) Notice. A Participant (or other Person, as provided in
Section 7(d)) may exercise an Option granted under the Plan in whole or in part
(but for the purchase of whole shares only), as provided in the Option Agreement
evidencing his or her Option, by delivering written notice (the "Notice") to the
Secretary of the Corporation, as provided in the Option Agreement, and making
the requisite payment as specified in Section 8(a). The date on which the
Corporation receives the Notice from the Participant shall be the exercise date
of an Option.

                  (c) Issuance of Certificates. The Corporation shall issue a
certificate in the name of the Participant for the Common Stock as soon as
practicable after receipt of the Notice and payment of the aggregate Option
Price for such shares. The Participant shall not have any privileges as a holder
of shares with respect to any shares subject to an Option granted under the Plan
until the date the Corporation receives payment for such shares pursuant to the
Option.

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         SECTION 9. ADJUSTMENTS; APPROVED SALE.

            (a) Changes in Capital Structure.

                    (i) Subject to Section 9(b), if the Common Stock is changed
         by reason of a split, reverse split or recapitalization, or converted
         into or exchanged for other securities as a result of a merger,
         consolidation or reorganization, the Committee shall make such
         adjustments in the number and class of the Common Stock with respect to
         which Options may be granted under the Plan as shall be equitable and
         appropriate in order to make such Options, as nearly as may be
         practicable, equivalent to such Options immediately prior to such
         change. A corresponding adjustment increasing or decreasing the number
         and, if applicable, changing the class, of the Common Stock allocated
         to, and the Option Price of, each Option or portion thereof outstanding
         at the time of such change shall likewise be made.

                   (ii) No fractional shares shall be issued as a result of any
         adjustment, and any fractional shares resulting from the computations
         pursuant to Section 9(a)(i) shall be eliminated and the Participant
         shall receive cash consideration for such fractional share at the rate
         equal to the Fair Market Value for one share of Common Stock.

                  (iii) No adjustment shall be made for cash dividends or the
         issuance to holders of rights to subscribe for additional shares or
         other securities.

                   (iv) Any adjustments referred to in Section 9(a)(i) shall be
         made by the Board or Committee, as the case may be, in good faith and
         shall be conclusive and binding on all Persons holding Options granted
         under the Plan, absent the Board's or the Committee's, as applicable,
         manifest error.

            (b) Approved Sale. In the event of an Approved Sale (as defined in
the Stockholders' Agreement), each Participant shall comply with the provisions
of Section 2.5 of the Stockholders Agreement as if such Participant was a
"Stockholder" thereunder and as if the Vested Options were Stockholder Shares
(as defined in the Stockholders' Agreement).

         SECTION 10. RESTRICTIONS ON COMMON STOCK.

            (a) No Common Stock shall be issued to any Participant upon the
exercise of any Vested Option unless and until such Participant has executed and
delivered to the Corporation a Joinder Agreement (as defined in the
Stockholders' Agreement) whereupon such Participant shall become a party to the
Stockholders' Agreement as a Management Stockholder (as defined in the
Stockholders' Agreement).

            (b) If the Corporation at any time shall register an offering and
sale of shares of Common Stock under the Securities Act in an underwritten
offering pursuant to any other registration under the Securities Act (other than
on Form S-4 or Form S-8 promulgated under the Securities Act or any successor
forms thereto), no Participant who has exercised Vested Options pursuant to the
Plan shall sell, make any short sale of, grant any option for the purchase of,
or otherwise dispose of any Common Stock (other than the Common Stock included
for sale in such registration) without the prior written consent of the
Corporation for a period as shall be

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determined by the managing underwriters, which period cannot begin more than
seven (7) days prior to the effectiveness of such Registration Statement and
cannot last more than ninety (90) days (180 days in the case of the
Corporation's Initial Public Offering) after the effective date of such
Registration Statement.

         SECTION 11. COMPLIANCE WITH SECURITIES LAWS.

                  No Options shall be granted, and no Common Stock shall be
issued and delivered upon the exercise of Vested Options, unless and until the
Corporation and/or the Participant shall have complied with all applicable laws,
rules and regulations of all public agencies and authorities applicable to the
issuance and distribution of such Common Stock and, to the extent applicable, to
the listing of such Common Stock on any stock exchange on which any of the
Common Stock of the Corporation may be listed. As a condition of participating
in the Plan, each Participant agrees to comply with all such laws, rules and
regulations and agrees to furnish to the Corporation all information and
undertakings as may be required to permit compliance with such laws, rules and
regulations. The Committee in its discretion may, as a condition to the exercise
of any Option granted under the Plan, require a Participant (a) to represent in
writing that the shares received upon exercise of an Option are being acquired
for investment and not with a view to distribution and (b) to make such other
representations and warranties as are deemed appropriate by the Corporation.
Certificates representing shares acquired upon the exercise of Options that have
not been registered under the Securities Act shall bear such legends as are
required by the Stockholders' Agreement and such additional legends as may be
required by the Option Agreement evidencing a particular Option.

         SECTION 12. EFFECTIVE DATE OF PLAN.

                  The Plan shall become effective on May 31, 2000 (the
"Effective Date").

         SECTION 13. EXPIRATION AND TERMINATION OF PLAN.

                  Except with respect to Options then outstanding, the Plan
shall expire on the first to occur of (a) the tenth anniversary of the Effective
Date and (b) the date as of which the Board, in its sole discretion, determines
that the Plan shall terminate (the "Expiration Date"). Any Options outstanding
as of the Expiration Date shall remain in effect until they have been exercised
in accordance with, or terminated or have expired by, their respective terms. No
such termination of the Plan shall affect the terms or provisions of any Option
granted by the Corporation prior to the effectiveness of such termination unless
otherwise agreed to by the holder thereof.

         SECTION 14. AMENDMENT OF PLAN.

                  The Board may at any time prior to the Expiration Date modify
and amend the Plan in any respect. No such amendment to the Plan shall affect
the terms or provisions of any Option granted by the Corporation prior to the
effectiveness of such amendment unless (a) so permitted by the Option Agreement
or (b) not reasonably likely to have an adverse effect (as determined by the
Board in good faith) on the rights of the Participants holding Options
immediately prior to the effectiveness of such modification or amendment.

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         SECTION 15. CAPTIONS.

                  The use of captions in the Plan is for convenience only. The
captions are not intended to provide substantive rights.

         SECTION 16. ACCOUNTS AND STATEMENTS.

                  The Corporation shall maintain records of the Common Stock
held by each Participant and the details of each Option granted to the
Participant, including the number of shares of Common Stock held and their
Option Price; the number of shares of Common Stock subject to, and the Option
Price of, each Option; the number of shares of Common Stock in respect of which
the Option has been exercised, the dates of such exercise and the maximum number
of shares of Common Stock which the Participant may still purchase under the
Option. Upon the reasonable request therefor from a Participant and at such
other times as the Corporation shall determine, the Corporation shall furnish
the Participant with a statement setting forth the details of (a) his or her
shareholding arising from his or her exercise of his or her Options hereunder
and (b) his or her Options. Such statement shall be deemed to have been accepted
by the Participant as correct unless written notice to the contrary is given to
the Corporation within thirty (30) days after such statement is given to the
Participant.

         SECTION 17. WITHHOLDING TAXES.

                  Whenever under the Plan shares of Common Stock are to be
delivered to a Participant upon exercise of an Option, the Corporation shall be
entitled to require as a condition of delivery that the Participant remit or, in
appropriate cases, agree to remit when due, an amount sufficient to satisfy all
current or estimated future Federal, state and local income tax withholding with
respect to the employee's portion of any employment tax requirements relating
thereto.

         SECTION 18. GOVERNING LAW.

              The validity and construction of the Plan and the instruments
evidencing the Options granted hereunder shall be governed by and construed in
accordance with the domestic laws of the State of Utah without giving effect to
any choice or conflict of law provision or rule that would cause the application
of the laws of any jurisdiction other than the State of Utah.

                                    ********

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         As adopted by the Board of Directors and the holders of voting stock of
Huntsman Packaging Corporation as of May 31, 2000.

                                        /s/ RONALD G. MOFFITT
                                        --------------------------------------
                                        Name:  Ronald G. Moffitt
                                        Title:    Secretary

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<PAGE>   12
          The following amendment to the Huntsman Packaging Corporation 2000
Stock Incentive Plan (the "Plan") was adopted by the Board of Directors of
Huntsman Packaging Corporation on July 14, 2000.

               The Plan is hereby amended by striking out paragraph (a) of
     Section 3 of the Plan and by substituting in lieu of said paragraph, the
     following new paragraph (a):

            "Maximum Number of Shares.  Subject to the provisions of Section
            9(a) (relating to adjustments upon changes in capital structure and
            other corporate transactions), the maximum number of shares of
            Common Stock subject at any one time to Options, plus the number of
            shares of Common Stock theretofore issued and delivered pursuant to
            the exercise of Options granted under the Plan, shall not exceed
            51,010 shares of Common Stock. If and to the extent that Options
            terminate, expire or are canceled without having been fully
            exercised, any unissued shares of Common Stock which have been
            reserved to be issued upon the exercise of such Options shall become
            available to be issued upon the exercise of Options subsequently
            granted."

                                             /s/ Ronald G. Moffitt
                                             --------------------------
                                             Name: Ronald G. Moffitt
                                             Title: Secretary<PAGE>   1
                                                                   EXHIBIT 10.27

                                             SECOND AMENDED AND RESTATED
                                    EMPLOYEE OPTION AGREEMENT dated as of May
                                    31, 2000 (this "Agreement"), between
                                    Huntsman Packaging Company, a Utah
                                    corporation (the "Company"), and Jack E.
                                    Knott (the "Employee").

            The Company has previously granted the Employee options to acquire
shares of the Company's Class C Common Stock pursuant to an agreement dated
January 1, 1998, as amended and restated on February 22, 1999 (as amended, the
"Original Agreement"), between the Company and the Employee. The parties hereto
desire to amend and restate in its entirety the Original Agreement in accordance
with the terms herein.

            NOW THEREFORE, in consideration of the premises and of the mutual
agreements contained in this Agreement, the parties hereby agree as set forth
below.

         SECTION 1. AMENDMENT OF ORIGINAL AGREEMENT; THE PLAN.

            (a) The terms of the Original Agreement are hereby amended and
restated in their entirety as set forth herein.

            (b) The terms of this Agreement shall be subject to the terms of the
Huntsman Packaging Corporation Stock Option Plan (the "Plan") and, following the
exercise of the Options granted hereunder, the terms of the Stockholders'
Agreement dated as of May 31, 2000, among the Company and the stockholders of
the Company signatory thereto. Capitalized terms used herein and not otherwise
defined shall have the respective meanings set forth in the Plan.

         SECTION 2. GRANT OF OPTION.

            The Company has previously granted to the Employee a non-statutory
stock option to purchase 10,849 shares of the Company's Common Stock (the
"Option Stock"), at a price per share (the "Exercise Price"). The Employee has
exercised 1,587 Options. The Company acknowledges that the Employee has 8,902
remaining Options (the "Option" and, as to corresponding shares of Option Stock
(as defined below), "Options") which will be governed by, and subject to, the
terms of the Plan and this Agreement. The Employee acknowledges that the Options
shall be exercisable for the Company's Common Stock in lieu of the Company's
Class C Common Stock.

         SECTION 3. EXERCISE PRICE.

            The Exercise Price shall be $100 per share of Option Stock.

<PAGE>   2

         SECTION 4. TIME EXERCISE.

            The Options shall be immediately exercisable and shall remain
exercisable in accordance with the terms and conditions of this Agreement and
the Plan.

         SECTION 5. TERM OF OPTION.

            Subject to the terms of the Plan, the Option shall not be
exercisable after December 31, 2007.

         SECTION 6. PROCEDURE FOR EXERCISE.

            (a) The Option may be exercised from time to time in whole or in
part (but for the purchase of whole shares only), by delivery of a written
notice in the form attached hereto as Exhibit A (the "Exercise Notice") from the
Employee to the Secretary of the Company, which Exercise Notice shall state, or
be accompanied by, as the case may be:

                  (i) that the Employee elects to exercise the Option;

                 (ii) the number of Options with respect to which the Employee
         is exercising the Option;

                (iii) any representations of the Employee required under
         Section 8;

                 (iv) the date upon which the Employee desires to consummate
         the purchase of such Options (which date must be prior to the
         termination of the Option);

                  (v) payment for such Options; and

                 (vi) comply with such further provisions consistent with the
         Plan as the Committee may reasonably require.

            (b) The Company shall be entitled to require as a condition of
delivery of the Options that the Employee remit or, in appropriate cases, agree
to remit when due an amount in cash sufficient to satisfy all current or
estimated future federal, state and local income tax withholding and the
Employee's portion of any employment or payroll taxes, if any, relating thereto.

         SECTION 7. NO RIGHTS AS A HOLDER OF COMMON STOCK.

            The Employee shall not have any rights or privileges of a
shareholder of Common Stock with respect to any Option until the date of receipt
of payment by the Company for such shares pursuant to the exercise of such
Option.

                                       2
<PAGE>   3
         SECTION 8. ADDITIONAL PROVISIONS RELATED TO EXERCISE.

            In the event of the exercise of the Option at a time when there is
not in effect a Registration Statement relating to the Option, the Employee
hereby represents and warrants, and by virtue of such exercise shall be deemed
to represent and warrant, to the Company that the Option and any Options
purchased hereunder are being acquired for investment only and not with a view
to the distribution thereof. The Employee shall provide the Company with such
further representations and warranties as the Board may require in order to
ensure compliance with applicable federal and state securities, "blue sky" and
other laws. No Options shall be purchased upon the exercise of the Option unless
and until the Company and/or the Employee shall have complied with all
applicable federal or state or provincial registration, listing and/or
qualification requirements and all other requirements of law or of any
regulatory agencies having jurisdiction. Each of the Company and the Employee
shall use reasonable efforts to comply with all applicable federal or state
registration, listing and/or qualification requirements and all other
requirements of law or of any regulatory agencies having jurisdiction in
connection with the exercise of the Option.

         SECTION 9. NO GUARANTEE OF EMPLOYMENT.

            Nothing herein confers or shall confer on the Employee any right
to continue in the employment of the Company nor shall interfere with Company's
right to terminate the employment of the Employee at any time.

         SECTION 10. CERTAIN TAX CONSEQUENCES.

            The Employee acknowledges that the Option granted hereby is not an
incentive stock option for tax purposes and that both the award of the Option
and the exercise thereof may have various tax consequences under federal and
state law. The Employee has discussed such consequences with his personal tax
advisor. The Employee may be required to report the grant of the Option to the
Internal Revenue Service (Internal Revenue Code Reg. Section 1.61-15(c)) and he
may be required to be reported to state tax authorities under applicable state
law.

         SECTION 11. GOVERNING LAW.

            The Option shall be exercised in accordance with such
administrative regulations as the Board or the Committee shall from time to time
adopt. The Option and this Agreement shall be construed, administered and
governed in all respects under and by the laws of the State of Utah.

         SECTION 12. ENTIRE AGREEMENT; THE PLAN.

            (a) This Agreement and the Plan constitute the entire agreement
between the parties with respect to the subject matter hereof and supersede all
prior written or oral negotiations, commitments, representations and agreements
with respect thereto. The Employee acknowledges receipt of a copy of the Plan.

                                       3
<PAGE>   4

            (b) Notwithstanding anything to the contrary contained in the Plan
or in this Agreement, the rights and obligations of Section 9(a) of the Plan
shall not apply to any of the Options, Option Stock or Owned Shares.

                                     *******

                                       4
<PAGE>   5

            IN WITNESS WHEREOF, the parties hereto have executed this Second
Amended and Restated Option Agreement as of the date first above written.

                                    HUNTSMAN PACKAGING CORPORATION

                                    By:/s/ RICHARD P. DURHAM
                                       -------------------------------------
                                       Name:  Richard P. Durham
                                       Title: Chief Executive Officer

                                    /s/ JACK E. KNOTT
                                    ----------------------------------------
                                    Jack E. Knott

<PAGE>   6

                                                                       Exhibit A

                            [Form of Exercise Notice]

VIA CERTIFIED MAIL

Huntsman Packaging Company
500 Huntsman Way
Salt Lake City, Utah 84108
Attention: Secretary

Dear Sir or Madam:

              Reference is hereby made to the Option Agreement dated May 31,
2000 (the "Option Agreement"), between Huntsman Packaging Company, a Utah
corporation (the "Company"), and Jack E. Knott (the "Employee"). Capitalized
terms used herein and not otherwise defined shall have the respective meanings
set forth in the Option Agreement.

              Pursuant to the terms of the Option Agreement, the undersigned
Employee hereby elects to exercise the Employee's right to purchase [ ] shares
of Common Stock at an Option Price per share equal to $100. The date of the
exercise of the Options hereunder shall be [ ]. In connection with the
foregoing, please find enclosed [cash or personal or certified check] in an
amount equal to $[ ].

                                           Sincerely,

                                           -----------------------------------
                                           Name:

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