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                               MERRILL CORPORATION

                         1996 NON-EMPLOYEE DIRECTOR PLAN

1.   PURPOSE OF PLAN.

     The purpose of the Merrill Corporation 1996 Non-Employee Director Plan 
(the "Plan") is to advance the interests of Merrill Corporation (the 
"Company") and its shareholders by enabling the Company to attract and retain 
the services of experienced and knowledgeable non-employee directors and to 
increase the proprietary interests of such non-employee directors in the 
Company's long-term success and progress and their identification with the 
interests of the Company's shareholders.

2.   DEFINITIONS.

     The following terms will have the meanings set forth below, unless the
context clearly otherwise requires:

     2.1  "ANNUAL OPTION" means the right to purchase shares of Common Stock 
pursuant to Section 5.1(b) of the Plan.

     2.2  "BOARD" means the Board of Directors of the Company.

     2.3  "CODE" means the Internal Revenue Code of 1986, as amended.  

     2.4  "COMMITTEE" means the group of individuals administering the Plan, 
as provided in Section 3 of the Plan. 

     2.5  "COMMON STOCK" means the common stock of the Company, par value 
$0.01 per share, or the number and kind of shares of stock or other 
securities into which such Common Stock may be changed in accordance with 
Section 4.3 of the Plan. 

     2.6  "DISABILITY" means the disability of an Eligible Director such as 
would entitle the Eligible Director to receive disability income benefits 
pursuant to the long-term disability plan of the Company then covering the 
Eligible Director or, if no such plan exists or is applicable to the Eligible 
Director, the permanent and total disability of the Eligible Director within 
the meaning of Section 22(e)(3) of the Code.

     2.7  "ELIGIBLE DIRECTORS" means all directors of the Company who are not
employees of the Company or any subsidiary of the Company.

     2.8  "EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.

     2.9  "FAIR MARKET VALUE" means, with respect to the Common Stock, as of any
date (or, if no shares were traded on such date, as of the next preceding date
on which there was such a trade), the average of the reported high and low sales
prices of the Common Stock as reported by the Nasdaq National Market.

     2.10 "INCENTIVE AWARDS" means Options and Retainer Stock.

     2.11 "OPTIONS" means the One-Time Options and Annual Options.

     2.12 "ONE-TIME OPTION" means the right to purchase shares of Common Stock
pursuant to Section 5.1(a) of the Plan.

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     2.13 "RETAINER STOCK" means shares of Common Stock granted to an Eligible
Director pursuant to Section 6 of the Plan.

     2.14 "SECURITIES ACT" means the Securities Act of 1933, as amended.

3.   PLAN ADMINISTRATION.

     The Plan will be administered by a committee (the "Committee") 
consisting solely of two or more members of the Board.  All questions of 
interpretation of the Plan will be determined by the Committee, each 
determination, interpretation or other action made or taken by the Committee 
pursuant to the provisions of the Plan will be conclusive and binding for all 
purposes and on all persons, and no member of the Committee will be liable 
for any action or determination made in good faith with respect to the Plan 
or any Incentive Award granted under the Plan.  The Committee, however, will 
have no power to determine the eligibility for participation in the Plan, the 
number of shares of Common Stock to be subject to Incentive Awards, or the 
timing, pricing or other terms and conditions of Incentive Awards.

4.   SHARES AVAILABLE FOR ISSUANCE.

     4.1  MAXIMUM NUMBER OF SHARES AVAILABLE.  Subject to adjustment as 
provided in Section 4.3 of the Plan, the maximum number of shares of Common 
Stock that will be available for issuance under the Plan will be 200,000 
shares.  The shares available for issuance under the Plan shall be authorized 
but unissued shares.

     4.2  ACCOUNTING FOR INCENTIVE AWARDS.  Shares of Common Stock that are 
issued under the Plan or that are subject to outstanding Incentive Awards 
will be applied to reduce the maximum number of shares of Common Stock 
remaining available for issuance under the Plan.  Any shares of Common Stock 
that are subject to an Option that lapses, expires, or for any reason is 
terminated unexercised will automatically again become available for issuance 
under the Plan.

     4.3  ADJUSTMENTS TO SHARES AND INCENTIVE AWARDS.  In the event of any 
reorganization, merger, consolidation, recapitalization, liquidation, 
reclassification, stock dividend, stock split, combination of shares, rights 
offering, divestiture or extraordinary dividend (including a spin-off) or any 
other change in the corporate structure or shares of the Company, the 
Committee (or, if the Company is not the surviving corporation in any such 
transaction, the board of directors of the surviving corporation) will make 
appropriate adjustment (which determination will be conclusive) as to the 
number and kind of securities available for issuance under the Plan and, in 
order to prevent dilution or enlargement of the rights of Eligible Directors, 
the number, kind and, where applicable, exercise price of securities subject 
to outstanding Incentive Awards.

5.   OPTIONS.

     5.1  GRANT.

          (a)  At such time as new Eligible Directors are first elected or
     appointed to the Board to fill new directorships or to fill vacancies, such
     Eligible Directors will be granted automatically, on a one-time basis on
     the date of such election or appointment, a non-statutory stock option to
     purchase 10,000 shares of Common Stock (subject to adjustment as provided
     in Section 4.3 of the Plan).

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          (b)  Commencing with the annual meeting of shareholders of the Company
     that first occurs following the date that an Eligible Director is first
     elected or appointed to the Board, each Eligible Director who is elected or
     re-elected to the Board at an annual meeting of shareholders will be
     granted automatically, on the date of each such annual meeting, a non-
     statutory stock option to purchase 3,000 shares of Common Stock (subject to
     adjustment as provided in Section 4.3 of the Plan).

     5.2  EXERCISE PRICE OF OPTIONS.  The per share price to be paid by an 
Eligible Director upon exercise of an Option will be 100% of the Fair Market 
Value of one share of Common Stock on the date of grant.  The total purchase 
price of the shares to be purchased upon exercise of an Option must be paid 
entirely in cash (including check, bank draft or money order).

     5.3  EXERCISABILITY AND DURATION OF OPTIONS.  Each One-Time Option will 
become exercisable, on a cumulative basis, with respect to 20% of the shares 
originally subject to such One-Time Option on each anniversary of the date of 
grant of such One-Time Option.  Each Annual Option will become exercisable in 
full six months following the date of grant of such Annual Option.  Each 
Option will expire and will no longer be exercisable 10 years following the 
date of grant of such Option.  

     5.4  MANNER OF EXERCISE OF OPTIONS.  An Option may be exercised by an 
Eligible Director in whole or in part from time to time, subject to the 
conditions contained in the Plan and in the agreement evidencing such Option, 
by delivery in person, by facsimile (with written confirmation) or through 
the mail of written notice of exercise to the Company at its principal 
executive office in St. Paul, Minnesota and by paying in full the total 
exercise price for the shares of Common Stock to be purchased in accordance 
with Section 5.2 of the Plan.

6.   RETAINER STOCK.

     Commencing with the date of the annual meeting of shareholders of the 
Company to be held in 1996 and continuing on the date of each succeeding 
annual meeting of shareholders of the Company, each Eligible Director who 
continues to serve in such capacity following such annual meeting will 
receive, as part of such Eligible Director's annual retainer for the ensuing 
year, such number of shares of Common Stock (rounded to the nearest whole 
share) as equals $6,000 divided by the average of the Fair Market Value of 
one share of Common Stock for the 10 trading days immediately preceding the 
date of such annual meeting.

7.   TERMINATION OF SERVICE AS A DIRECTOR.  

     7.1  TERMINATION DUE TO DEATH OR DISABILITY.  In the event an Eligible 
Director's service as a director of the Company is terminated by reason of 
death or Disability, all outstanding Options then held by such Eligible 
Director will become immediately exercisable in full and will remain 
exercisable for a period of one year after such death or Disability (but in 
no event after the expiration date of any such Options).

     7.2  TERMINATION FOR REASONS OTHER THAN DEATH OR DISABILITY.  In the 
event an Eligible Director's service as a director of the Company is 
terminated for any reason other than death or Disability, all outstanding 
Options then held by such Eligible Director will remain exercisable to the 
extent exercisable as of such termination for a period of three months after 
such termination (but in no event after the expiration date of any such 
Options).

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     7.3  DATE OF TERMINATION.  An Eligible Director's service as a director 
of the Company will, for purposes of the Plan, be deemed to have terminated 
on the date recorded on the personnel or other records of the Company, as 
determined by the Committee based upon such records.

8.   RIGHTS OF ELIGIBLE DIRECTORS; TRANSFERABILITY OF INTERESTS.

     8.1  SERVICE AS A DIRECTOR.  Nothing in the Plan will interfere with or 
limit in any way the right of the shareholders to terminate an Eligible 
Director's service as a director of the Company at any time, and neither the 
Plan, nor the granting of an Incentive Award nor any other action taken 
pursuant to the Plan, will constitute or be evidence of any agreement or 
understanding, express or implied, that the shareholders will retain an 
Eligible Director as a director of the Company for any period of time or at 
any particular rate of compensation.

     8.2  RIGHTS AS A SHAREHOLDER.  An Eligible Director will have no rights 
as a shareholder unless and until Retainer Stock is issued or an Option is 
exercised and the Eligible Director becomes the holder of record of such 
shares. Except as otherwise provided in the Plan, no adjustment will be made 
for dividends or distributions with respect to Incentive Awards as to which 
there is a record date preceding the date the Eligible Director becomes the 
holder of record of such shares.

     8.3  RESTRICTIONS ON TRANSFER OF INTERESTS.  Except pursuant to 
testamentary will or the laws of descent and distribution or as otherwise 
expressly permitted by the Plan, no right or interest of any Eligible 
Director in an Option prior to the exercise of such Option will be assignable 
or transferable, or subjected to any lien, during the lifetime of the 
Eligible Director, either voluntarily or involuntarily, directly or 
indirectly, by operation of law or otherwise.  An Eligible Director will, 
however, be entitled to designate a beneficiary to receive an Option upon 
such Eligible Director's death, and in the event of an Eligible Director's 
death, payment of any amounts due under the Plan will be made to, and 
exercise of any Options (to the extent permitted pursuant to Section 7 of the 
Plan) may be made by, the Eligible Director's legal representatives, heirs 
and legatees.  

     8.4  NON-EXCLUSIVITY OF THE PLAN.  Nothing contained in the Plan is 
intended to modify or rescind any previously approved compensation plans or 
programs of the Company or create any limitations on the power or authority 
of the Board to adopt such additional or other compensation arrangements as 
the Board may deem necessary or desirable.

9.  SECURITIES LAW AND OTHER RESTRICTIONS.  

     Notwithstanding any other provision of the Plan or any agreements 
entered into pursuant to the Plan, the Company will not be required to issue 
any shares of Common Stock under this Plan, and an Eligible Director may not 
sell, assign, transfer or otherwise dispose of shares of Common Stock issued 
in connection with an Incentive Award granted under the Plan, unless (a) 
there is in effect with respect to such shares a registration statement under 
the Securities Act and any applicable state securities laws or an exemption 
from such registration under the Securities Act and applicable state 
securities laws, and (b) there has been obtained any other consent, approval 
or permit from any other regulatory body which the Committee, in its sole 
discretion, deems necessary or advisable. The Company may condition such 
issuance, sale or transfer upon the receipt of any representations or 
agreements from the parties involved, and the placement of any legends on 
certificates representing shares of Common Stock, as may be deemed necessary 
or advisable by the Company in order to comply with such securities law or 
other restrictions.

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10.  PLAN AMENDMENT, MODIFICATION AND TERMINATION

     The Board may suspend or terminate the Plan or any portion thereof at 
any time, and may amend the Plan from time to time in such respects as the 
Board may deem advisable in order that Incentive Awards granted under the 
Plan will conform to any change in applicable laws or regulations or in any 
other respect the Board may deem to be in the best interests of the Company; 
provided, however, that (a) no amendments to the Plan will be effective 
without approval of the shareholders of the Company if shareholder approval 
of the amendment is then required pursuant to Rule 16b-3 under the Exchange 
Act or the rules of the Nasdaq National Market, and (b) to the extent 
prohibited by Rule 16b-3 of the Exchange Act, the Plan may not be amended 
more than once every six months.  No termination, suspension or amendment of 
the Plan may adversely affect any outstanding Incentive Award without the 
consent of the affected Eligible Director; provided, however, that this 
sentence will not impair the right of the Committee to take whatever action 
it deems appropriate under Section 4.3 of the Plan.

11.  EFFECTIVE DATE AND DURATION OF THE PLAN

     The Plan will be effective as of the date it is adopted by the 
shareholders of the Company.  The Plan will terminate at midnight on May 21, 
2001 but may be terminated prior thereto by Board action.  No Incentive 
Awards may be granted after such termination, but Options outstanding upon 
termination of the Plan may continue to be exercised in accordance with their 
terms.

12.  MISCELLANEOUS

     12.1 GOVERNING LAW.  The validity, construction, interpretation, 
administration and effect of the Plan and any rules, regulations and actions 
relating to the Plan will be governed by and construed exclusively in 
accordance with the laws of the State of Minnesota, notwithstanding any 
conflicts of law principles.

     12.2 SUCCESSORS AND ASSIGNS.  The Plan will be binding upon and inure to 
the benefit of the successors and permitted assigns of the Company and the 
Eligible Directors.

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