
<PAGE>


                                     EXHIBIT 10.2
                            EAGLE HARDWARE & GARDEN, INC.
                      DIRECTORS' NONQUALIFIED STOCK OPTION PLAN


                                        II-21

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                            EAGLE HARDWARE & GARDEN, INC.

                      DIRECTORS' NONQUALIFIED STOCK OPTION PLAN

          This Nonqualified Stock Option Plan (the "Plan") provides for the
grant of options to acquire shares of Common Stock, without par value (the
"Common Stock"), of Eagle Hardware & Garden, Inc., a Washington corporation (the
"Company"). Stock options granted under this Plan (the "Options" or "Option")
are intended to be nonstatutory stock options under the Internal Revenue Code of
1986, as amended (the "Code").

          1. PURPOSE.

          The purpose of this Plan is to compensate certain directors of the
Company (the "Optionees" or "Optionee").

          2. ELIGIBILITY.

          Persons eligible to receive options under this Plan shall be all
directors of the Company who are not otherwise employed by the Company or any
Related Corporation, as defined below (the "Directors" or "Director"). Options
may be granted in substitution for outstanding Options of another corporation in
connection with the merger, consolidation, acquisition of property or stock or
other reorganization between such other corporation and the Company or any
subsidiary of the Company. Options also may be granted in exchange for
outstanding Options.

          As used in this Plan, the term "Related Corporation," when referring
to a subsidiary corporation, shall mean any corporation (other than the Company)
in an unbroken chain of corporations beginning with the Company if, at the time
of the granting of the Option, each of the corporations other than the last
corporation in the unbroken chain owns stock possessing fifty percent (50%) or
more of the total combined voting power of all classes of stock of one of the
other corporations in such chain. When referring to a parent corporation, the
term "Related Corporation" shall mean any corporation (other than the Company)
in an unbroken chain of corporations ending with the Company if, at the time of
granting of the Option, each of the corporations other than the Company owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock of one of the other corporations in such chain.

          3. STOCK.

          Subject to approval of the Plan by shareholders of the Company, each
current Director of the Company, and each individual who subsequently becomes a
Director of the Company, who is not otherwise an employee of the Company or any
Related Corporation shall automatically be issued options to acquire 20,000
shares of the Company's authorized but unissued, or reacquired, Common Stock.
Options to purchase a maximum of 700,000 shares of Common Stock in the aggregate
may be issued pursuant to the Plan LESS any shares issuable upon the exercise of
Options granted under the Company's 1991 Stock Option Plan. The number of
options available for a grant hereunder is subject to adjustment as set forth in
Section 4(k) hereof. In the event that any outstanding Option expires or is
terminated for any reason, those shares of Common Stock allocable to the
unexercised portion of such Option may be subject to one or more other Options
issued pursuant to the Plan.


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          4. TERMS AND CONDITIONS OF OPTIONS.

          Each Option shall be evidenced by a written agreement (the
"Agreement") in the form approved by the Company. Agreements may contain such
additional provisions, not inconsistent herewith, as the Company in its
discretion may deem advisable. All Options shall also comply with the following
requirements:

               (a) NUMBER OF SHARES.

          Each Agreement shall state the number of shares to which it pertains.

               (b) DATE OF GRANT.

          Each Option shall state the date the Company and the Director entered
into the Agreement (the "Date of Grant"), which shall be the date the Company's
Board of Directors of the Company (the "Board") approves this Plan or, in the
case of new Directors, the date the individual becomes a Director, whichever is
applicable.

               (c) OPTION PRICE.

          The exercise price for all Options granted hereunder shall be the fair
market value on Date of Grant. Such fair market value shall be the closing price
at which it was traded on a national securities exchange or the last sale price
quoted on the National Association of Securities Dealers Automated Quotation
System or any successor or substantially similar market thereto on the Date of
Grant. If the Common Stock shall be traded on more than one such market, the
exercise price shall be determined on the basis of the most active market. If no
such market exists, the exercise price shall be established at fair market value
based on the most recent arms-length transaction occurring within eighteen (18)
months preceding the Date of Grant by or among the Company or any
greater-than-ten-percent (>10%) shareholders of the Company or, if unavailable,
by a qualified appraiser selected by the Company.

               (d) VESTING SCHEDULE.

          All Options shall vest according to the following schedule:

<TABLE>
<CAPTION>
                                             Percentage of
               Number of Years               Total Option to
               Following Date of Grant       be Exercisable
               -----------------------       ---------------
               <S>                           <C>
                 1                              33 1/3%
                 2                              33 1/3%
                 3                              33 1/3%
</TABLE>

               (e) ACCELERATION OF VESTING.

          Options granted pursuant to the Plan shall become immediately vested
and fully exercisable upon the Director's termination as a director of the
Company by reason of the death or


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Disability (as defined in Section 4(f) below) of the Director. The vesting of
Options shall also be accelerated under the circumstances described in Sections
4(l) and 4(m) below.

               (f) TERMINATION OF OPTION.

          A vested Option shall terminate, to the extent not previously
exercised, upon the occurrence of the first of the following events:

                    (i) ten (10) years from the Date of Grant;

                    (ii) the expiration of ninety (90) days from the date of
     Optionee's termination as a Director of the Company for any reason other
     than death or Disability (as defined below); or

                    (iii) the expiration of one (1) year from the date of death
     of Optionee or the cessation of Optionee's service as a Director by reason
     of Disability (as defined below).

"Disability" shall mean that a person is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or that has lasted or can be
expected to last for a continuous period of not less than twelve (12) months. If
Optionee's service as a Director is terminated by death, any Option held by
Optionee shall be exercisable only by the person or persons to whom such
Optionee's rights under such Option shall pass by Optionee's will or by the laws
of descent and distribution of the state or country of Optionee's domicile at
the time of death. Each unvested Option granted pursuant hereto shall terminate
upon Optionee's termination as a Director for any reason whatsoever, including
death or Disability.

               (g) EXERCISE OF OPTIONS.

          Options shall be exercisable, either all or in part, at any time after
vesting. If less than all of the shares included in the vested portion of any
Option are purchased, the remainder may be purchased at any subsequent time
prior to the expiration of the Option term. No portion of any Option of less
than one (1) share (as adjusted pursuant to Section 4(l) hereof) may be
exercised; PROVIDED, that if the vested portion of any Option is less than fifty
(50) shares, it may be exercised with respect to all shares for which it is
vested. Only whole shares may be issued pursuant to an Option, and to the extent
that an Option covers less than one share, it is unexercisable. Options or
portions thereof may be exercised by giving to the Company an executed notice of
election to exercise, which notice shall specify the number of shares to be
purchased, and be accompanied by payment in the amount of the aggregate option
price for the Common Stock so purchased and in the form specified in Section
4(h) below. The Company shall not be obligated to issue, transfer or deliver a
certificate of Common Stock to any Director, or to his personal representative,
until the aggregate option price has been paid for all shares for which the
Option shall have been exercised and adequate provision has been made by the
Optionee for the satisfaction of any tax withholding obligations associated with
such exercise. During the lifetime of an Optionee, Options are exercisable only
by Optionee.

               (h) PAYMENT UPON EXERCISE OF OPTION.


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          Upon exercise of any Option, the aggregate option price shall be paid
to the Company in cash or by certified or cashier's check. Alternatively, a
Director may pay for all or any portion of the aggregate option exercise price
(i) by delivering to the Company shares of Common Stock previously held by such
Director, (ii) having shares withheld from the amount of shares of Common Stock
to be received by the Director or (iii) delivering an irrevocable subscription
agreement obligating the Director to take and pay for the shares of common Stock
to be purchased within one (1) year of the date of exercise. The shares of
Common Stock received or withheld by the Company as payment for shares of Common
Stock purchased upon the exercise of Options shall have a fair market value at
the date of exercise (as determined in accordance with Section 4(c) hereof)
equal to the aggregate option exercise price (or portion thereof) to be paid by
the Director upon exercise.

               (i) RIGHTS AS A SHAREHOLDER.

          An Optionee shall have no rights as a shareholder with respect to any
shares covered by the Option until such Optionee becomes a record holder of such
shares, irrespective of whether such Optionee has given notice of exercise.
Subject to the provisions of Sections 4(l) and 4(m) below, no rights shall
accrue to an Optionee and no adjustments shall be made on account of dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights declared on, or created in, the Common Stock for
which the record date is prior to the date the Optionee becomes a record holder
of the shares of Common Stock covered by the Option, irrespective of whether
such Optionee has given notice of exercise.

               (j) TRANSFER OF OPTION.

          Options granted under this Plan and the rights and privileges
conferred by this Plan may not be transferred, assigned, pledged or hypothecated
in any manner (whether by operation of law or otherwise) other than by will or
by applicable laws of descent and distribution, as defined by the Code, or the
Employee Retirement Income Security Act, or the rules and regulations
thereunder, and shall not be subject to execution, attachment or similar
process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise
dispose of any Option or of any right or privilege conferred by this Plan
contrary to the provisions hereof, or upon the sale, levy or any attachment or
similar process upon the rights and privileges conferred by this Plan, such
Option shall thereupon terminate and become null and void.

               (k) SECURITIES REGULATION AND TAX WITHHOLDING.

                    (1) Shares shall not be issued with respect to an Option
unless the exercise of such Option and the issuance and delivery of such shares
shall comply with all relevant provisions of law, including, without limitation,
any applicable state securities laws, the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, the rules and regulations
thereunder and the requirements of any stock exchange upon which such shares may
then be listed, and such issuance shall be further subject to the approval of
counsel for the Company with respect to such compliance, including the
availability of an exemption from registration for the issuance and sale of such
shares. The inability of the Company to obtain from any regulatory body the
authority deemed by the Company to be necessary for the lawful issuance and sale
of any shares under this Plan, or the unavailability of an exemption from
registration for the issuance and sale of any shares under this Plan, shall
relieve the Company of any liability with respect to the non-issuance or sale of
such shares.


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          As a condition to the exercise of an Option, the Company may require
the Optionee to represent and warrant in writing at the time of such exercise
that the shares are being purchased only for investment and without any
then-present intention to sell or distribute such shares. At the option of the
Company, a stop-transfer order against such shares may be placed on the stock
books and records of the Company, and a legend indicating that the stock may not
be pledged, sold or otherwise transferred unless an opinion of counsel is
provided stating that such transfer is not in violation of any applicable law or
regulation, may be stamped on the certificates representing such shares in order
to assure an exemption from registration. The Company also may require such
other documentation as may from time to time be necessary to comply with federal
and state securities laws. THE COMPANY HAS NO OBLIGATION TO UNDERTAKE
REGISTRATION OF OPTIONS OR THE SHARES OF STOCK ISSUABLE UPON THE EXERCISE OF
OPTIONS.

                    (2) As a condition to the exercise of any Option granted
under this Plan, the Optionee shall make such arrangements as the Company may
require for the satisfaction of any federal, state or local withholding tax
obligations that may arise in connection with such exercise.

                    (3) The issuance, transfer or delivery of certificates of
Common Stock pursuant to the exercise of Options may be delayed, at the
discretion of the Board, until the Company is satisfied that the applicable
requirements of the federal and state securities laws and the withholding
provisions of the Code have been met.

          (l) STOCK DIVIDEND REORGANIZATION OR LIQUIDATION.

                    (1) If (i) the Company shall at any time be involved in a
transaction described in Section 424(a) of the Code (or any successor provision)
or any "corporate transaction" described in the regulations thereunder; (ii) the
Company shall declare a dividend payable in, or shall subdivide or combine, its
Common Stock or (iii) any other event with substantially the same effect shall
occur, the number of shares of Common Stock and/or the exercise price per share
of each outstanding Option shall be proportionately adjusted so as to preserve
the rights of the Optionee substantially proportionate to the rights of the
Optionee prior to such event, and to the extent that such action shall include
an increase or decrease in the number of shares of Common Stock subject to
outstanding Options, the number of shares available under Section 4 of this Plan
shall automatically be increased or decreased, as the case may be,
proportionately, without further action on the part of the Company or the
Company's shareholders.

                    (2) If the Company is liquidated or dissolved, the holders
of any outstanding Options may exercise all or any part of the unvested portion
of the Options held by them; PROVIDED, that such Options must be exercised prior
to the effective date of such liquidation or dissolution. If the Option holders
do not exercise their Options prior to such effective date, each outstanding
Option shall terminate as of the effective date of the liquidation or
dissolution.

                    (3) The grant of an Option shall not affect in any way the
right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure, to merge,
consolidate or dissolve, to liquidate or to sell or transfer all or any part of
its business or assets.


                                        II-26

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               (m) CHANCE IN CONTROL; DECLARATION OF EXTRAORDINARY DIVIDEND.

                    (1) CHANGE IN CONTROL. If at any time there is a Change in
Control (as defined below) of the Company, all Options shall accelerate and
become fully vested and immediately exercisable for the duration of the Option
term. For purposes of this subsection (n)(1), "Change in Control" shall mean
either one of the following: (i) When any "person," as such term is used in
sections 13(d) and 14(d) of the Exchange Act (other than a shareholder of the
Company on the date of this Plan, the Company, a Subsidiary or an employee
benefit plan of the Company, including any trustee of such plan acting as
trustee) becomes, after the date of this Plan, the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of
securities of the Company representing fifty percent (50%) or more of the
combined voting power of the Company's then outstanding securities; or (ii) the
occurrence of a transaction requiring shareholder approval, and involving the
sale of all or substantially all of the assets of the Company or the merger of
the Company with or into another corporation.

                    (2) DECLARATION OF EXTRAORDINARY DIVIDEND. If at any time
the Company declares an Extraordinary Dividend (as defined below), all Options
shall accelerate and thereupon become fully vested and immediately exercisable
for the duration of the Option term. For purposes of this subsection (n)(2),
"Extraordinary Dividend" shall mean a cash dividend payable to holders of record
of the Common Stock in an amount in excess of ten percent (10%) of the then fair
market value of the Company's Common Stock. The fair market value of the
Company's Common Stock shall be determined in good faith by the Board.

          5. EFFECTIVE DATE: TERM.

          Subject to approval of this Plan by shareholders of the Company, this
Plan shall be effective as of the date it is approved by the Board and Options
may be issued from time to time thereafter until this Plan is terminated by the
Company. Termination of this Plan shall not terminate any Option granted prior
to such termination.

          6. NO OBLIGATIONS TO EXERCISE OPTION.

          The granting of an Option shall impose no obligation upon the Optionee
to exercise such Option.

          7. APPLICATION OF FUNDS.

          The proceeds received by the Company from the sale of Common Stock,
pursuant to the exercise of Options granted hereunder, will be used for general
corporate purposes.

          8. INDEMNIFICATION OF BOARD.

          In addition to all other rights or indemnification they may have as
directors of the Company or as members of the Board, members of the Board shall
be indemnified by the Company for all reasonable expenses and liabilities of any
type and nature, including reasonable attorneys' fees, incurred in connection
with any action, suit or proceeding to which they or any of them are a party by
reason of, or in connection with, the Plan or any Option granted hereunder, and
against all amounts paid


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by them in settlement thereof (provided such settlement is approved by
independent legal counsel selected by the Company), except to the extent that
such expenses relate to matters for which it is adjudged that such Board members
are liable for willful misconduct; PROVIDED, that within fifteen (15) days after
the institution of any such action, suit or proceeding, member(s) of the Board
shall, in writing, notify the Company of such action, suit or proceeding, so
that the Company may have the opportunity to make appropriate arrangements to
prosecute or defend the same.

          9. AMENDMENT OF PLAN.

          The Company may, at any time, modify, amend or terminate this Plan and
Options granted under this Plan, including, without limitation, such
modifications or amendments as are necessary to maintain compliance with
applicable statutes, rules or regulations; PROVIDED, that no amendment with
respect to an outstanding Option shall be made over the objection of the
Optionee thereof; and PROVIDED FURTHER, that after registration of any of the
Company's securities under Section 12 of the Securities Exchange Act of 1934, as
amended: (i) the approval of the holders of a majority of the Company's
outstanding shares of voting capital stock represented at a meeting at which a
quorum is present is required within twelve (12) months before or after the
adoption by the Board of any amendment that will permit the granting of Options
to a class of persons other than those currently eligible to receive Options
under this Plan or that would cause this Plan to no longer comply with
Securities and Exchange Commission Rule 16b-3, as amended, or any successor rule
or other regulatory requirements; and (ii) this Plan shall not be amended more
than once every six (6) months, other than to comport with changes in the Code,
the Employee Retirement Security Act, or the rules thereunder.


                                        Approved by Board of Company:





                                        Approved by Shareholders of Company:


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