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                             NU-KOTE HOLDING, INC.
                               SENIOR MANAGEMENT
                         STOCK APPRECIATION RIGHTS PLAN
                            AS AMENDED AND RESTATED
                               SEPTEMBER 27, 1996
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                             NU-KOTE HOLDING, INC.
                SENIOR MANAGEMENT STOCK APPRECIATION RIGHTS PLAN
 
    1.  GENERAL.
 
    (a) The purpose of this Plan is to attract and retain senior executive
officers for Nu-kote Holding, Inc., a Delaware corporation (the "Company"), and
its Subsidiaries and to provide to such persons incentives and rewards for
superior performance.
 
    (b) This Plan shall become effective on June 22, 1995; provided it is
approved by stockholders of the Company prior to the disbursement of any amounts
payable under any Award granted hereunder.
 
    (c) No Awards shall be made under this Plan more than 10 years after its
effective date; PROVIDED, HOWEVER, that this Plan and all Awards made hereunder
prior to such termination date shall remain in effect until such Awards have
been satisfied or terminated in accordance with this Plan and the terms of such
Awards.
 
    2.  DEFINITIONS.  As used in this Plan:
 
    "Appreciation Right" means a right granted pursuant to Paragraph 4 of this
Plan.
 
    "Appreciation Right Notification" means the notification delivered by the
Company to a Participant embodying the terms of an Appreciation Right granted
hereunder.
 
    "Award" means a grant of an Appreciation Right or Restricted Stock.
 
    "Board" means the Board of Directors of the Company.
 
    "Code" means the Internal Revenue Code of 1986, as in effect from time to
time.
 
    "Committee" means the committee to which the Board has delegated its
authority to administer this Plan pursuant to Paragraph 10 of this Plan.
 
    "Common Stock" means the Class A Common Stock, par value $.01 per share, of
the Company or any security into which such Common Stock may be changed by
reason of any transaction or event of the type described in Paragraph 7 of this
Plan.
 
    "Company Security" means any security (as that term is defined in Section
2(1) of the Securities Act of 1933) of the Company other than Common Stock.
 
    "Date of Grant" means the date specified by the Board on which a grant of an
Appreciation Right or a grant or sale of Restricted Stock shall become effective
(which date shall not be earlier than 90 days prior to the date on which the
Board takes action with respect thereto).
 
    "Disability" means total and permanent disability. An individual shall be
considered permanently and totally disabled if he is unable to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has lasted
or can be expected to last for a continuous period of not less than 12 months.
An individual shall not be considered to be disabled unless he furnishes proof
of the existence thereof in such form and manner, and at such times, as the
Board may require.
 
    "ERISA" means the Employee Retirement Income Security Act of 1974, as in
effect from time to time.
 
    "Fair Market Value" means the value of any Company Security as determined by
the Board in its sole discretion as of the date of any such determination.
 
    "Grant Price" means the price per share of Common Stock at which an
Appreciation Right is granted.
 
    "Market Value Per Share" means, at any date, the closing sale price of the
Common Stock on that date (or, if there are no sales on that date, the last
preceding date on which there was a sale) in the principal market in which the
Common Stock is traded, or if no market for the Common Stock exists, the price
determined by the Board in its sole discretion at the time of any such
determination.
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    "Participant" means a person who is selected by the Board to receive
benefits under this Plan and who is at the time a senior executive officer of
the Company or any of its Subsidiaries, or who has agreed to commence serving in
any such capacity within 90 days of the Date of Grant.
 
    "Performance Objectives" means the objectives, if any, established by the
Board that are to be achieved with respect to an Award granted under this Plan,
which may be described in terms of stock performance, results of operations,
return on equity or assets, or in other terms, and which shall relate to the
Performance Period determined by the Board. The Board may adjust Performance
Objectives if, in the sole judgment of the Board, events or transactions have
occurred which are unrelated to the performance of the Participant and result in
a distortion of the Performance Objectives.
 
    "Performance Period" means, in respect of an Award, a period of time
established by the Board within which the Performance Objectives relating to
such Award are to be achieved.
 
    "Restricted Stock" means shares of Common Stock granted or sold pursuant to
Paragraph 5 of this Plan as to which neither the substantial risk of forfeiture
nor the prohibitions or restrictions on transfer referred to therein has
expired.
 
    "Rule 16b-3" means Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, (or any successor rule to the same effect) as in effect from time to
time.
 
    "Spread" means the excess of the Market Value Per Share on the date when an
Appreciation Right is exercised over the Grant Price provided for in the
Appreciation Right, multiplied by the number of shares of Common Stock in
respect of which the Appreciation Right is exercised.
 
    "Subsidiary" means any corporation in which at the time the Company owns or
controls, directly or indirectly, not less than 50% of the total combined voting
power represented by all classes of stock issued by such corporation.
 
    3.  SHARES AVAILABLE UNDER PLAN.  Subject to adjustment as provided in
Paragraph 7 of this Plan, (i) the aggregate number of shares of Common Stock and
any other Company Security which may be delivered upon exercise of Appreciation
Rights or granted or sold as Restricted Stock and released from substantial risk
of forfeiture and prohibitions or restrictions on transfer thereof under this
Plan shall not exceed 1,600,000, and (ii) the maximum number of shares of Common
Stock and any other Company Security which may be delivered to any Participant
under this Plan is 800,000. Such shares may be authorized but unissued shares or
treasury shares or a combination of the foregoing. Upon exercise of any
Appreciation Right, there shall be deemed to have been delivered under this Plan
for purposes of this Paragraph 3 the number of shares of Common Stock in respect
of which such Appreciation Right is exercised, regardless of whether such
Appreciation Right is paid in cash, Company Securities or shares of Common
Stock. Subject to the provisions of the preceding sentence, any shares of Common
Stock (i) which are subject to an Appreciation Right that is terminated
unexercised, or forfeited or surrendered, or that expires for any reason, or
(ii) which are granted or sold as Restricted Stock that is forfeited or
surrendered, will again be available for issuance under this Plan.
 
    4.  APPRECIATION RIGHTS.  The Board may, from time to time and upon such
terms and conditions as it may determine, authorize the granting to any
Participant of Appreciation Rights. An Appreciation Right shall be a right of
the Participant who has been granted such Award to receive from the Company upon
exercise an amount which shall be determined by the Board (whether by reference
to Performance Objectives or otherwise) and shall be expressed as a percentage
(not greater than 100%) of the Spread at the time of exercise. Each grant of an
Appreciation Right may utilize any or all of the authorizations, and shall be
subject to all of the limitations, contained in the following provisions:
 
    (a) Each grant shall state the number of shares of Common Stock in respect
of which the Award is made.
 
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    (b) Each grant shall specify the Grant Price, which shall not be less than
50% of the Market Value Per Share on the Date of Grant.
 
    (c) Any grant may specify that the amount payable on exercise of an
Appreciation Right may be paid by the Company in (i) cash, (ii) shares of Common
Stock having an aggregate Market Value Per Share equal to the specified
percentage of the Spread (including Restricted Stock), (iii) Company Securities
having an aggregate Fair Market Value equal to the specified percentage of the
Spread, or (iv) any combination thereof, as determined by the Board in its sole
discretion at the time of payment.
 
    (d) Each grant shall specify that the amount payable on exercise of an
Appreciation Right (valuing shares of Common Stock for this purpose at their
Market Value Per Share at the date of exercise and valuing Company Securities
for this purpose at their Fair Market Value at the date of exercise) shall not
exceed a maximum fixed by the Board at the Date of Grant.
 
    (e) Each grant shall specify the required period or periods of continuous
service by the Participant with the Company or any Subsidiary and/or the
Performance Period related to any Performance Objectives specified by the Board
before the Appreciation Right or installments thereof will become exercisable,
and shall provide that no Appreciation Right may be exercised except at a time
when the Spread is positive.
 
    (f) Each grant shall be evidenced by a notification executed on behalf of
the Company by an officer and delivered to and accepted by the Participant
receiving the grant, which notification shall describe the Appreciation Right,
state that the Appreciation Right is subject to all the terms and conditions of
this Plan and contain such other terms and provisions, consistent with this
Plan, as the Board may approve.
 
    5.  RESTRICTED STOCK.  The Board may also authorize the granting or sale to
Participants of Restricted Stock. Each grant or sale of Restricted Stock may
utilize any or all of the authorizations, and shall be subject to all of the
limitations, contained in the following provisions:
 
    (a) Each grant or sale shall constitute an immediate transfer of the
ownership of shares of Common Stock to the Participant in consideration of the
performance of services, entitling such Participant to voting, dividend and
other ownership rights, but subject to the substantial risk of forfeiture and
prohibitions or restrictions on transfer hereinafter referred to.
 
    (b) Each grant or sale may be made without additional consideration or in
consideration of a payment by the Participant that is less than the Market Value
Per Share at the Date of Grant.
 
    (c) Each grant or sale shall provide that the shares of Restricted Stock
covered by such grant or sale shall be subject, for a period to be determined by
the Board at the Date of Grant, to a "substantial risk of forfeiture" within the
meaning of Section 83 of the Code and the regulations of the Internal Revenue
Service thereunder.
 
    (d) Each grant or sale shall provide that during the period for which a
substantial risk of forfeiture is to continue, the transferability of the
Restricted Stock shall be prohibited or restricted in a manner and to the extent
prescribed by the Board at the Date of Grant (which restrictions may include,
without limiting the generality of the foregoing, rights of repurchase or first
refusal in the Company or provisions subjecting the Restricted Stock to a
continuing substantial risk of forfeiture in the hands of any transferee).
 
    (e) Each grant or sale of Restricted Stock shall be evidenced by an
agreement executed on behalf of the Company by an officer and delivered to and
accepted by the Participant, and shall contain such other terms and provisions,
consistent with this Plan, as the Board may approve.
 
    6.  TRANSFERABILITY.  No Appreciation Right shall be transferable by a
Participant other than (i) by will or the laws of descent and distribution, (ii)
pursuant to a qualified domestic relations order as defined by the Code or Title
I of ERISA, or the rules or regulations thereunder, (iii) by gift to members of
the Participant's immediate family (i.e., spouse, child, stepchild or
grandchild), or (iv) in trust for the benefit of the Participant or any person
included under (iii) above; PROVIDED that the Participant's beneficiary, the
representative of the Participant's estate, the trustee of any trust, or other
such person acknowledges and
 
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agrees in writing, in a form reasonably acceptable to the Company, to be bound
by the provisions of the Plan (including the exercise procedures described
therein) and the Appreciation Right Notification covering such Appreciation
Right as if such beneficiary, estate, trust, or other person were the
Participant. Notwithstanding the foregoing, once an Appreciation Right is
transferred, it may not be subsequently transferred by the transferee except by
will or by the laws of descent and distribution.
 
    7.  ADJUSTMENTS.  The Board may make or provide for such adjustments in the
share amounts specified in Paragraph 3 of this Plan, in the number and type of
shares covered by outstanding Appreciation Rights, and/or in the Grant Price
applicable to such Appreciation Rights, as the Board in its sole discretion,
exercised in good faith, may determine is equitably required to prevent dilution
or enlargement of the rights of Participants that otherwise would result from
any stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Company, merger, consolidation,
spin-off, reorganization, partial or complete liquidation, issuance of rights or
warrants to purchase securities or any other corporate transaction or event
having an effect similar to any of the foregoing.
 
    8.  FRACTIONAL SHARES.  The Company shall not be required to issue any
fractional share of Common Stock or of any Company Security pursuant to this
Plan. The Board may provide for the elimination of fractions or for the
settlement of fractions in cash.
 
    9.  WITHHOLDING TAXES.  To the extent that the Company is required to
withhold Federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Company for such withholding are insufficient, it
shall be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory
to the Company for payment of the balance of such taxes required to be withheld,
which arrangements in the discretion of the Board may include relinquishment of
a portion of such benefit.
 
    10.  ADMINISTRATION OF THE PLAN.
 
    (a) This Plan shall be administered by the Board, which may from time to
time delegate all or any part of its authority under this Plan to a committee of
not less than two non-employee directors appointed by the Board, each of whom
shall be a "non-employee director" within the meaning of Rule 16b-3 and an
"outside director" within the meaning of Section 162(m) of the Code and the
regulations promulgated thereunder (the "Committee"). To the extent of such
delegation, references herein to the "Board" shall include the Committee. A
majority of the Committee shall constitute a quorum, and the action of a
majority of the members of the Committee present at any meeting at which a
quorum is present, or acts unanimously approved in writing, shall be the acts of
the Committee.
 
    (b) The interpretation and construction by the Board of any provision of
this Plan or of any notification, agreement or document evidencing the grant of
an Award and any determination by the Board pursuant to any provision of this
Plan or of any such notification, agreement or document shall be final and
conclusive. No member of the Board or the Committee shall be liable for any such
action or determination made in good faith.
 
    11.  AMENDMENTS, ETC.
 
    (a) This Plan may be amended from time to time by the Board, but no such
amendment shall in any manner adversely affect any Award theretofore granted
under this Plan, without the consent of the Participant holding such Award.
 
    (b) The Board may, with the concurrence of the affected Participant, cancel
any Award granted under this Plan. In the event of such cancellation, the Board
may authorize the granting of new Awards (which may or may not cover the same
number of shares which had been the subject of the prior Award) in such manner,
at such price and subject to the same terms, conditions and discretions as would
have been applicable under this Plan had the canceled Awards not been granted.
 
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    (c) In case of termination of employment by reason of death, Disability or
retirement at age 65, or early retirement with the consent of the Board, of a
Participant who holds an Appreciation Right not immediately exercisable in full
or any Restricted Stock as to which the substantial risk of forfeiture and the
prohibitions or restrictions on transfer have not lapsed, the Board may, in its
sole discretion, accelerate the time at which such Appreciation Right may be
exercised or the time at which such substantial risk of forfeiture and
prohibitions or restrictions on transfer will lapse.
 
    (d) This Plan shall not confer upon any Participant any right with respect
to continuance of employment or other service with the Company or any
Subsidiary, nor shall it interfere in any way with any right the Company or any
Subsidiary would otherwise have to terminate such Participant's employment or
other service at any time.
 
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