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                              NU-KOTE HOLDING, INC.

                         APPRECIATION RIGHT NOTIFICATION



     WHEREAS, ________________________ (the "Participant") is a senior executive
officer of Nu-kote Holding, Inc., a Delaware corporation (the "Company"); and

     WHEREAS, the grant of an Appreciation Right to the Participant, effective 
_______________________ , 199__ (the "Date of Grant"), and the execution of a 
Appreciation Right Notification in the form hereof have been duly authorized by 
a resolution of the Board duly adopted on _________________ , 199__ and 
incorporated herein by reference.

     NOW, THEREFORE, effective as of the Date of Grant, the Company hereby
grants to the Participant an Appreciation Right with respect to _______________
shares (the "Shares") of Common Stock pursuant to the Company's Senior
Management Stock Appreciation Rights Plan, as amended and/or restated from time
to time (the "Plan"), to receive upon exercise an amount (the "Payment Amount")
equal to the percentage set forth in the Certification (as hereinafter defined)
of the product of (i) the difference between the Market Value Per Share on the
date the Appreciation Right is exercised and $___________ per share (the "Grant
Price"), and (ii) the number of shares of Common Stock in respect of which this
Appreciation Right is exercised (such product being hereinafter referred to as
the "Spread"), all subject, however, to the terms and conditions hereinafter set
forth.  Capitalized terms used in this Agreement that are not otherwise defined
in this Notification are used as defined in the Plan.  For purposes of this
Appreciation Right, the term "Certification" shall mean the writing prepared by
the Board, or a committee thereof designated for such purpose, and delivered to
the Participant within 15 days after the expiration of the performance period
set forth in Exhibit A hereto (the "Performance Period") or such earlier period
or time otherwise required in this Notification, certifying to the performance
level achieved by the Participant pursuant to the Performance Objectives set
forth in Exhibit A hereto.

     1.   (A)  This Appreciation Right (until terminated as hereinafter
provided) shall become exercisable only after the expiration of the Performance
Period and delivery of the Certification, and then only in equal annual
installments (which shall be cumulative) of 20% of the Shares, commencing 30
days after the expiration of the Performance Period.  To the extent
exercisable, this Appreciation Right may be exercised in whole or in part from
time to time until this Appreciation Right shall terminate as provided in
paragraph 3, except that this Appreciation Right shall not be exercised with
respect to less than 1,000 shares of Common Stock unless the number of shares
with respect to which it remains exercisable is less than 1,000.

          (B)  Except as otherwise provided in paragraph 3, this Appreciation
Right shall be exercisable only if the Participant shall have been in
the continuous employ of the Company or a Subsidiary from the Date of Grant
until this Appreciation Right or any installment thereof shall become
exercisable.  For the purposes of this paragraph, leaves of absence approved by
the Board for physical or mental illness, military or governmental service, or
other cause, shall be considered as employment.

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          (C)  Notwithstanding the provisions of subparagraph (A) of this
paragraph 1, this Appreciation Right shall be exercisable to the extent of 100%
of the Shares at the time the Participant ceases to be an employee of the
Company or a Subsidiary upon the occurrence of any event described in
subparagraph (B) or (C) of paragraph 3, whether before or after the expiration
of the Performance Period, and upon any such occurrence, the Board shall
prepare, or cause to be prepared, and deliver to the Participant a Certification
based upon the Market Value Per Share on the date of such occurrence.

          (D)  Notwithstanding the provisions of subparagraph (A) of this
paragraph 1, this Appreciation Right shall be exercisable to the extent, and
only to the extent, of the lesser of (i) 33 1/3% of the Shares or (ii) the
shares in respect of which this Appreciation Right may be exercised under
subparagraph (A) of this paragraph 1 at the date of termination, if the
Participant is terminated as an employee of the Company or a Subsidiary for
Cause (as hereinafter defined) after the expiration of the Performance Period. 
For purposes of this paragraph, the term "Cause" shall mean (i) Participant's
willful failure to substantially perform his assigned duties with the Company or
a Subsidiary, other than any such failure resulting from his incapacity due to
physical or mental illness or Disability; (ii) the Participant's willfully
engaging in any serious misconduct which, in the good faith opinion of the
Board, is substantially injurious (monetarily or otherwise) to the Company or a
Subsidiary; or (iii) the Participant's willful performance of any act or acts of
dishonesty resulting or intended to result, directly or indirectly, in
significant gain or personal enrichment at the expense of the Company or a
Subsidiary.

          (E)  Notwithstanding the provisions of subparagraph (A) of this
paragraph 1, this Appreciation Right shall be exercisable to the extent of 100%
of the Shares (i) if the Participant is terminated as an employee of the Company
or a Subsidiary without Cause, or (ii) if the Participant voluntary resigns as
an employee of the Company or any Subsidiary with Good Reason (as hereinafter
defined) whether before or after the expiration of the Performance Period.  If
the termination or resignation set forth in the preceding sentence occurs before
the expiration of the Performance Period, the Board shall prepare, or cause to
be prepared, and deliver to the Participant a Certification based upon the
Market Value Per Share on the date of such occurrence.  For purposes of this
paragraph, the term "Good Reason" shall mean (i) a substantial reduction in the
Participant's duties and responsibilities, (ii) the assignment to the
Participant of duties and responsibilities materially inconsistent with the
Participant's position and status, (iii) a reduction of more than 25% in the
Participant's annual base salary as in effect on the Date of Grant or as the
same may be increased from time to time except for across-the-board salary
reductions similarly affecting employees having seniority, duties and
responsibilities comparable to those of the Participant, (iv) a transfer of the
Participant's office to a location more than 50 miles from the Company's
corporate headquarters, or (v) such other reason as the Board may, in its
discretion, approve at least six months before any resignation.

          (F)  Notwithstanding the provisions of subparagraph (A) of this
paragraph 1, this Appreciation Right shall be exercisable to the extent, and
only to the extent, of the lesser of (i) ___% of the Shares or (ii) the shares
in respect of which this Appreciation Right may be 

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exercised under subparagraph (A) of this paragraph 1 at the date of termination,
if the Participant voluntary resigns as an employee of the Company or a 
Subsidiary without Good Reason after the expiration of the Performance Period.

          (G)  Notwithstanding anything in this paragraph 1 to the contrary,
(i) if at any time before the termination of the Performance Period and the
delivery of a Certification the Common Stock shall not be listed for trading on
a national securities exchange ("Delisted"), the Board shall prepare, or cause
to be prepared, and deliver to the Participant a Certification based on the
Market Value Per Share on the last trading day of the Common Stock ("Last Market
Price") and such Certification shall be effective for any subsequent exercise of
this Appreciation Right or any installment thereof, and (ii) if the Common Stock
shall be Delisted after the delivery of any Certification, the Last Market Price
shall be used to compute the Spread for any subsequent exercise of this
Appreciation Right or any installment thereof.

          (H)  Notwithstanding any other provision of this paragraph 1, this
Appreciation Right may be exercised only when the Spread is a positive number.

     2.   The Payment Amount may be paid by the Company in (i) cash, (ii) shares
of Common Stock having an aggregate Market Value Per Share equal to the Payment
Amount (including Restricted Stock), (iii) Company Securities having an
aggregate Fair Market Value equal to the Payment Amount, or (iv) any combination
of the foregoing, as determined by the Board in its sole discretion at the time
of payment.  Notwithstanding anything herein to the contrary, the Payment
Amounts in respect of all exercises of this Appreciation Right shall not in any
event exceed in the aggregate $____________. 

     3.   This Appreciation Right shall terminate on the earliest of the
following dates:

          (A)  90 days after the termination of the Participant's employment
     with the Company or a Subsidiary (except by reason of death, Disability, or
     retirement at age 65, or early retirement with the consent of the Board) or
     the voluntary resignation of the Participant as an employee of the Company
     or a Subsidiary;

          (B)  One year after the Participant ceases to be an employee of the
     Company or a Subsidiary by reason of retirement at age 65 or early
     retirement with the consent of the Board;

          (C)  Two years after the death or Disability of the Participant if the
     Participant dies or becomes disabled while an employee of the Company or a
     Subsidiary; and

          (D)  ___ years from the Date of Grant.

Nothing contained in this Appreciation Right shall limit whatever right the
Company or a Subsidiary might otherwise have to terminate the employment of the
Participant.  Except as otherwise provided in subparagraphs (C), (D), (E) and
(F)  of paragraph 1, after the termination 

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of the Participant's employment or the voluntary resignation of the 
Participant as an employee of the Company or a Subsidiary, this Appreciation 
Right shall be exercisable in respect of the same number of shares for which 
it was exercisable prior to such termination or resignation until this 
Appreciation Right shall terminate as provided in this paragraph 3.

     4.   This Appreciation Right is not transferable or exercisable except as
provided in Paragraph 6 of the Plan.

     5.   (A)  This Appreciation Right may be exercised only by surrender to the
Company of the original copy of this Notification, along with a written request
specifying the number of shares in respect of which this Appreciation Right is
being exercised.  If this Appreciation Right is not being exercised in respect
of all the Shares and the Participant may thereafter be entitled to exercise it
in respect of additional shares, the Company shall make an appropriate notation
on the Appreciation Right and return it to the Participant, along with the
Payment Amount related to the current exercise.

          (B)  If the Company shall be required to withhold any Federal, state,
local or foreign tax in connection with the exercise of this Appreciation Right,
it shall be a condition to such exercise that the Participant or any transferee
of the Participant pay or make provision satisfactory to the Company for payment
of all such taxes.  The Participant or any transferee of the Participant may
elect that all or any part of such withholding requirement be satisfied by
retention by the Company of a portion of the Payment Amount to be received upon
exercise of this Appreciation Right in accordance with the provisions of the
Plan.  If such election is made and the Board determines to pay any portion of
the Payment Amount the Participant or such transferee would have received in
shares of Common Stock or Company Securities, any shares or securities so
retained shall be credited against such withholding requirement at their
aggregate Market Value Per Share or aggregate Fair Market Value, as the case may
be, at the date of exercise.

     6.   Upon an exercise of this Appreciation Right, and in the event the
Board determines to deliver shares of Common Stock and/or Company Securities in
payment of any portion of the Payment Amount, the Company as promptly as
practicable shall mail or deliver to the Participant or transferee of the
Participant a stock certificate or certificates representing the shares or
instruments representing the securities then purchased, and shall pay all stamp
taxes payable in connection therewith.  The issuance of such shares or
securities and delivery of the certificate or certificates representing such
shares or instruments representing such securities shall, however, be subject to
any delay necessary to complete (i) the listing of such shares or securities on
any stock exchange upon which shares or securities of the same class are then
listed, (ii) such registration or qualification of such shares or securities
under any state or federal law, rule or regulation as the Company may determine
to be necessary or advisable and (iii) the making of provision for the payment
or withholding of any taxes required to be withheld pursuant to any applicable
law in respect of the exercise of this Appreciation Right or the receipt of such
shares or securities.

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     7.   Notwithstanding any other provision of this Notification, the
Appreciation Right herein granted shall be subject to all the terms and
conditions of the Plan, which shall govern in the event of any conflict with the
terms and conditions hereof, and shall not be exercisable until the Plan shall
have been approved by the stockholders of the Company.  This Notification shall
be void and of no effect if stockholder approval of the Plan has not been
obtained prior to the disbursement of any Payment Amount which may become
payable hereunder.

     EXECUTED at Dallas, Texas this ____ day of June, 199__.

                              NU-KOTE HOLDING, INC.



                                   By:                                      
                                      ------------------------------------- 
                                      Name:                                 
                                           -------------------------------- 
                                      Title:                                
                                            ------------------------------- 

     The undersigned Participant hereby acknowledges receipt of an executed
original of this Appreciation Right Notification and accepts the Appreciation
Right granted thereunder.



                                      ------------------------------------- 
                                      Participant:                          
                                                  ------------------------- 












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