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                                                                  EXHIBIT 10.6


                               MERRILL CORPORATION
                             1999 STOCK OPTION PLAN

1.     PURPOSE OF PLAN.

       The purpose of the Merrill Corporation 1999 Stock Option Plan (the
"PLAN") is to advance the interests of Merrill Corporation (the "COMPANY") and
its shareholders by enabling the Company and its Subsidiaries to attract and
retain persons of ability to perform services for the Company and its
Subsidiaries by providing an incentive to such individuals through equity
participation in the Company and rewarding such individuals who contribute to
the achievement by the Company of its economic objectives.

2.     DEFINITIONS.

       In addition to the capitalized terms otherwise defined herein, the
following additional capitalized terms will have the meanings set forth below,
unless the context clearly otherwise requires:

       2.1    "ADVERSE ACTION" means the actions described in Section 10.5(b) of
the Plan.

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

       2.3    "BROKER EXERCISE NOTICE" means a written notice pursuant to which
a Participant, upon exercise of an Option, irrevocably instructs a broker or
dealer to sell a sufficient number of shares or loan a sufficient amount of
money to pay all or a portion of the exercise price of the Option and/or any
related withholding tax obligations and remit such sums to the Company and
directs the Company to deliver stock certificates to be issued upon such
exercise directly to such broker or dealer.

       2.4    "CAUSE" means (i) dishonesty, fraud, misrepresentation,
embezzlement or other act of dishonesty with respect to the Company or any
Subsidiary, (ii) any unlawful or criminal activity of a serious nature, (iii)
any intentional and deliberate breach of a duty or duties that, individually or
in the aggregate, are material in relation to the Participant's overall duties,
(iv) any material breach of any employment, service, confidentiality or
non-compete agreement entered into with the Company or any Subsidiary, or (v) an
Adverse Action.

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

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

       2.7    "COMMON STOCK" means the voting class B common stock of the
Company, $0.01 par value 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.

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

       2.9    "DLJMB" means DLJ Merchant Banking Partners II, L.P. and all its
affiliated entities as described in the Investors' Agreement.
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       2.10   "DLJMB LIQUIDATION EVENT" means, except for transfers to Permitted
Transferees (as defined in the Investors' Agreement), (i) a sale or other
transfer by DLJMB of 90% or more of its shares of common equity in the Company
(including all common equity originally purchased by DLJMB and any additional
common equity purchased by DLJMB thereafter, whether voting, Class B or any
other class of common equity created by the Company) to one or more persons or
entities (in one transaction or in a series of related transactions) other than
in connection with a public offering of the Company's common equity, (ii) the
sale, lease, exchange or other transfer, directly or indirectly, of
substantially all of the assets of the Company (in one transaction or in a
series of related transactions) to a person or entity that is not controlled by
the Company, or (iii) a merger or consolidation to which the Company is a party
if the shareholders of the Company immediately prior to the effective date of
such merger or consolidation do not have "beneficial ownership" (as defined in
Rule 13d-3 under the Exchange Act) immediately following the effective date of
such merger or consolidation of more than 50% of the combined voting power of
the surviving corporation's outstanding securities ordinarily having the right
to vote at elections of directors.

       2.11   "ENTERPRISE VALUE" means a value equal to six times the Pro-Forma
EBITDA as shown on the Company's consolidated statement of operations for its
most recent fiscal year end.

       2.12   "ELIGIBLE RECIPIENTS" means all employees of the Company or any
Subsidiary and any non-employee directors, consultants and independent
contractors of the Company or any Subsidiary.

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

       2.14   "FAIR MARKET VALUE" means, with respect to the Common Stock, as of
the Valuation Date (or, if no shares were traded or quoted on such date, as of
the next preceding date on which there was such a trade or quote) (a) the mean
between the reported high and low sale prices of the Common Stock if the Common
Stock is listed, admitted to unlisted trading privileges or reported on any
foreign or national securities exchange or on the NASDAQ National Market or an
equivalent foreign market on which sale prices are reported; (b) if the Common
Stock is not so listed, admitted to unlisted trading privileges or reported, the
closing bid price as reported by the NASDAQ SmallCap Market, OTC Bulletin Board
or the National Quotation Bureau, Inc. or other comparable service; or (c) if
the Common Stock is not so listed or reported, such price shall be the Formula
Value, or such other price as the Committee shall determine is appropriate in
its sole discretion.  The Committee's determination as to the Fair Market Value
of the Common Stock shall be final, conclusive and binding for all purposes and
on all persons, including, without limitation, the Company, shareholders of the
Company, the Participants and their respective successors-in-interest.  No
member of the Board or the Committee shall be liable for any determination
regarding current values of the Common Stock that is made in good faith.

       2.15   "FORMULA VALUE" means the price determined on a Valuation Date by
subtracting (i) Total Debt and (ii) Total Preferred Stock from the Enterprise
Value, adding Total Cash to this difference and dividing such sum by the
aggregate of the number of shares of capital stock of the Company outstanding on
such Valuation Date (including all vested and unvested Shares) and all shares of
common equity of the Company which may be issuable upon the exercise of options
and warrants of the Company outstanding on such Valuation Date (whether or not
then exercisable); provided, however, that any option which is not subject to a
specific vesting schedule and only becomes fully exercisable upon a DLJMB
Liquidation Event which realizes an internal rate of return in excess of fifty
percent shall not be included in the outstanding option number on such Valuation
Date.

       2.16   "INCENTIVE STOCK OPTION" means a right to purchase Common Stock
granted to an Eligible Recipient pursuant to Section 6 of the Plan that
qualifies as an "incentive stock option" within the meaning of Section 422 of
the Code.


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       2.17   "INVESTORS' AGREEMENT" means the Investors' Agreement, dated
November 23, 1999, by and among the Company and its shareholders, as amended
from time to time.

       2.18   "NON-STATUTORY STOCK OPTION" means a right to purchase Common
Stock granted to an Eligible Recipient pursuant to Section 6 of the Plan that
does not qualify as an Incentive Stock Option.

       2.19   "OPTION" means an Incentive Stock Option or a Non-Statutory Stock
Option.

       2.20   "PARTIAL TERMINATION" means a change in the Participant's
employment or other service with the Company and all its Subsidiaries such that
the number of hours worked by such Participant is substantially reduced for any
reason as the Committee in its sole discretion may determine from the number of
hours such Participant is required to work for the Company or Subsidiary and
such reduction is expected to extend for an indefinite period of time.

       2.21   "PARTICIPANT" means an Eligible Recipient who receives one or more
Options under the Plan, and to the extent such Participant transfers any Option
granted under this Plan to a Permitted Transferee (as defined in the Investors'
Agreement) in accordance with the terms of the Investors' Agreement such term
shall mean the Participant and such Permitted Transferee of such Participant.

       2.22   "PREVIOUSLY ACQUIRED SHARES" means shares of Common Stock that are
already owned by the Participant or, with respect to any Option, that are to be
issued upon the exercise of such Option.

       2.23   "PRO-FORMA EBITDA" means earnings before interest, taxes,
depreciation and amortization as computed using generally accepted accounting
principles on a pro-forma basis as allowed by Regulation S-X of the Securities
Act.

       2.24   "REPURCHASE DATE" means the date set forth in Section 7.7 of the
Plan.

       2.25   "REPURCHASE RIGHT" means the Company's irrevocable and exclusive
right to repurchase from the Participant all shares of Common Stock previously
acquired upon exercise of an Option, at a price equal to the exercise price paid
by the Participant to acquire such shares of Common Stock, in the event a
Participant's employment or other service with the Company and all its
Subsidiaries is terminated by the Company or any Subsidiary for Cause.

       2.26   "RETIREMENT" means termination of employment or service pursuant
to and in accordance with the regular (or, if approved by the Committee for
purposes of the Plan, early) retirement/pension plan or practice of the Company
or Subsidiary then covering the Participant, provided that if the Participant is
not covered by any such plan or practice, the Participant will be deemed to be
covered by the Company's plan or practice for purposes of this determination.

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

       2.28   "SUBSIDIARY" means any entity that is directly or indirectly
controlled by the Company or any entity in which the Company has a significant
equity interest, as determined by the Committee.

       2.29   "TAX DATE" means the date any withholding tax obligation arises
under the Code or other applicable tax statute for a Participant with respect to
an Option.

       2.30   "TOTAL CASH" means the total amount of cash and cash equivalents
shown on the Company's consolidated balance sheet as of its most recent fiscal
year end.

       2.31   "TOTAL DEBT" means any indebtedness of the Company in respect of
borrowed money or evidenced by bonds, notes, debentures or similar instruments
or letters of credit (or reimbursement


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agreements in respect thereof) or banker's acceptances, except any such balance
that constitutes an accrued expense, trade payable or customer contract advance,
if and to the extent that any of the foregoing (other than letters of credit)
would appear as a liability on the Company's consolidated balance sheet as of
its most recent fiscal year end.

       2.32   "TOTAL PREFERRED STOCK" means the total amount of the liquidation
preference on all of the Company's issued and outstanding preferred stock as of
its most recent fiscal year end.

       2.33   "VALUATION DATE" means a date on which the Committee shall
determine the Fair Market Value of the Common Stock, which date shall be no more
than ninety (90) days following the Company's fiscal year end.

3.     PLAN ADMINISTRATION.

       3.1    THE COMMITTEE.  The Plan will be administered by the Board or by a
committee of the Board.  So long as the Company has a class of its equity
securities registered under Section 12 of the Exchange Act, any committee
administering the Plan will consist solely of two or more members of the Board
who are "non-employee directors" within the meaning of Rule 16b-3 under the
Exchange Act and, if the Board determines in its sole discretion, who are
"outside directors" within the meaning of Section 162(m) of the Code.  As used
in the Plan, "Committee" will refer to the Board or to such a committee, if
established.  The committee, if established, will act by majority approval of
the members (but may also take action with the written consent of a majority of
the members of such committee), and a majority of the members of such a
committee will constitute a quorum.  To the extent consistent with corporate
law, the Committee may delegate to any officers of the Company the duties, power
and authority of the Committee under the Plan pursuant to such conditions or
limitations as the Committee may establish; provided, however, that only the
Committee may exercise such duties, power and authority with respect to Eligible
Recipients who are subject to Section 16 of the Exchange Act.  The Committee may
exercise its duties, power and authority under the Plan in its sole and absolute
discretion without the consent of any Participant or other party, unless the
Plan specifically provides otherwise.  Each determination, interpretation or
other action made or taken by the Committee pursuant to the provisions of the
Plan will be final, conclusive and binding for all purposes and on all persons,
including, without limitation, the Company, the shareholders of the Company, the
Participants and their respective successors-in-interest.  No member of the
Committee will be liable for any action or determination made in good faith with
respect to the Plan or any Option granted under the Plan.

       3.2    AUTHORITY OF THE COMMITTEE.

              (a)    In accordance with and subject to the provisions of the
       Plan, the Committee will have the authority to determine all provisions
       of Options as the Committee may deem necessary or desirable and as
       consistent with the terms of the Plan, including, without limitation, the
       following: (i) the Eligible Recipients to be selected as Participants;
       (ii) the nature and extent of the Options to be granted to each
       Participant (including the number of shares of Common Stock to be subject
       to each Option, the exercise price and the manner in which Options will
       become exercisable) and the form of written agreement, if any, evidencing
       such Option; (iii) the time or times when Options will be granted; (iv)
       the duration of each Option; and (v) the restrictions and other
       conditions to which the Options, or vesting of Options, may be subject.
       In addition, the Committee will have the authority under the Plan in its
       sole discretion to pay the economic value of any Option in the form of
       cash, Common Stock or any combination of both.

              (b)    The Committee will have the authority under the Plan to
       amend or modify the terms of any outstanding Option in any manner,
       including, without limitation, the authority to modify the number of
       shares or other terms and conditions of an Option, extend the term of an
       Option, accelerate the exercisability or otherwise terminate any
       restrictions or vesting relating to


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       an Option, accept the surrender of any outstanding Option or, to the
       extent not previously exercised or vested, authorize the grant of new
       Options in substitution for surrendered Options; provided, however that
       the amended or modified terms are permitted by the Plan as then in effect
       and that any Participant adversely affected by such amended or modified
       terms has consented to such amendment or modification. No amendment or
       modification to an Option, however, whether pursuant to this Section 3.2
       or any other provisions of the Plan, will be deemed to be a re-grant of
       such Option for purposes of this Plan.

              (c)    In the event of (i) any reorganization, merger,
       consolidation, recapitalization, liquidation, reclassification, stock
       dividend, stock split, combination of shares, rights offering,
       extraordinary dividend or divestiture (including a spin-off) or any other
       change in corporate structure or shares, (ii) any purchase, acquisition,
       sale or disposition of a significant amount of assets or a significant
       business, (iii) any change in accounting principles or practices, or
       (iv) any other similar change, in each case with respect to the Company
       or any other entity whose performance is relevant to the grant or vesting
       of an Option, the Committee (or, if the Company is not the surviving
       corporation in any such transaction, the board of directors of the
       surviving corporation) may, without the consent of any affected
       Participant, amend or modify the conditions to the exercisability of any
       outstanding Option that is based in whole or in part on the financial
       performance of the Company (or any Subsidiary or division thereof) or
       such other entity so as equitably to reflect such event, with the desired
       result that the criteria for evaluating such financial performance of the
       Company or such other entity will be substantially the same (in the sole
       discretion of the Committee or the board of directors of the surviving
       corporation) following such event as prior to such event; provided,
       however, that the amended or modified terms are permitted by the Plan as
       then in effect.

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 825,000 shares
of Common Stock.

       4.2    ACCOUNTING FOR OPTIONS.  Shares of Common Stock that are issued
under the Plan or that are subject to outstanding Options 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, is forfeited or for any reason is terminated
unexercised and any shares of Common Stock that are subject to an Option that is
settled or paid in cash or any form other than shares of Common Stock will
automatically again become available for issuance under the Plan.   In addition,
in the event that any shares of Common Stock that are issued under the Plan are
reacquired by the Company pursuant to any forfeiture provision, right of
repurchase or right of first refusal, such shares will automatically again
become available for issuance under the Plan, except that any such shares so
reacquired will not be available for issuance in connection with the exercise of
Incentive Stock Options unless permitted by Section 422 of Code and the rules
and regulations thereunder.

       4.3    ADJUSTMENTS TO SHARES AND OPTIONS.

              (a)    GENERAL. In the event that the Committee determines that
       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 similar change in the corporate structure or
       shares of the Company, affects the Options such that an adjustment is
       determined by the Committee, in its sole discretion, to be appropriate in
       order to prevent dilution or enlargement of the benefits or potential
       benefits intended to be made available under the Plan, the Committee (or,
       if the Company is not the surviving corporation in any such transaction,
       the board of directors of the surviving corporation)


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       shall, in such manner as it deems equitable, adjust any or all of (i) the
       number of shares of Common Stock of the Company (or number and kind of
       other securities or property) available for issuance or payment under the
       Plan, (ii) the number of shares of Common Stock or other securities of
       the Company (or number and kind of other securities or property) subject
       to outstanding Options, and (iii) the grant or exercise price with
       respect to any Options, or, if deemed appropriate, make provisions for a
       cash payment to the holder of an outstanding Option.

              (b)    MERGERS AND CONSOLIDATIONS.  Without limiting the authority
       of the Committee to take any actions deemed appropriate under Section
       4.3(a) of the Plan, in the event that the Company is a party to a merger
       or consolidation, outstanding Options under the Plan will be subject to
       the agreement of merger or consolidation, and such agreement, without the
       Participants' consent, may provide for the following:

              (i)    If the Company is the surviving corporation in connection
       with such merger or consolidation, the continuation of outstanding
       Options by the Company.


              (ii) If the Company is not the surviving corporation in connection
       with such merger or consolidation, the assumption of the Plan and the
       outstanding Options by the surviving corporation or its parent or the
       substitution by the surviving corporation or its parent of options with
       substantially similar terms for such outstanding Options.

5.     PARTICIPATION.

       Participants in the Plan will be those Eligible Recipients who, in the
judgment of the Committee, have contributed, are contributing or are expected to
contribute to the achievement of economic objectives of the Company or its
Subsidiaries.  Eligible Recipients may be granted from time to time one or more
Options as may be determined by the Committee in its sole discretion.  Options
will be deemed to be granted as of the date specified in the grant resolution of
the Committee, which date will be the date of any related agreement with the
Participant.

6.     OPTIONS.

       6.1    GRANT.  An Eligible Recipient may be granted one or more Options
under the Plan, and such Options will be subject to such terms and conditions,
consistent with the other provisions of the Plan, as may be determined by the
Committee in its sole discretion.  The Committee may designate whether an Option
is to be considered an Incentive Stock Option or a Non-Statutory Stock Option.
To the extent that any Incentive Stock Option granted under the Plan ceases for
any reason to qualify as an "incentive stock option" for purposes of Section 422
of the Code, such Incentive Stock Option will continue to be outstanding for
purposes of the Plan but will thereafter be deemed to be a Non-Statutory Stock
Option.

       6.2    EXERCISE PRICE.  The per share price to be paid by a Participant
upon exercise of an Option will be determined by the Committee in its discretion
at the time of the Option grant; provided, however, that (a) such price will not
be less than 100% of the Fair Market Value of one share of Common Stock on the
date of grant with respect to an Incentive Stock Option (110% of the Fair Market
Value if, at the time the Incentive Stock Option is granted, the Participant
owns, directly or indirectly, more than 10% of the total combined voting power
of all classes of stock of the Company or any parent or subsidiary corporation
of the Company), and (b) such price will not be less than 85% of the Fair Market
Value of one share of Common Stock on the date of grant with respect to a
Non-Statutory Stock Option (110% of the Fair Market Value if, at the time the
Non-Statutory Stock Option is granted, the Participant owns, directly or
indirectly, more than 10% of the total combined voting power of all classes of
stock of the Company or any parent or subsidiary corporation of the Company).


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       6.3    EXERCISABILITY AND DURATION.  Subject to Section 7 hereof, an
Option will become exercisable at such times and in such installments as may be
determined by the Committee in its sole discretion at the time of grant;
provided, however, that no Incentive Stock Option may be exercisable after ten
(10) years from its date of grant (five (5) years from its date of grant if, at
the time the Incentive Stock Option is granted, the Participant owns, directly
or indirectly, more than 10% of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary corporation of the Company).

       6.4    PAYMENT OF EXERCISE PRICE.  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); provided, however, that the
Committee, in its sole discretion and upon terms and conditions established by
the Committee, may allow such payments to be made, in whole or in part, by
tender of a Broker Exercise Notice, Previously Acquired Shares, a promissory
note (on terms acceptable to the Committee in its sole discretion) or by a
combination of such methods.

       6.5    MANNER OF EXERCISE.  An Option may be exercised by a Participant
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 or electronic transmission (with written confirmation via the mail to
follow such electronic transmission) or through the mail of written notice of
exercise to the Company (Attention: Secretary) 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 6.4 of the
Plan.

       6.6    AGGREGATE LIMITATION OF STOCK SUBJECT TO INCENTIVE STOCK OPTIONS.
To the extent that the aggregate Fair Market Value (determined as of the date an
Incentive Stock Option is granted) of the shares of Common Stock with respect to
which Incentive Stock Options are exercisable for the first time by a
Participant during any calendar year (under the Plan and any other incentive
stock option plans of the Company or any subsidiary or parent corporation of the
Company (within the meaning of the Code)) exceeds $100,000 (or such other amount
as may be prescribed by the Code from time to time), such excess Options will be
treated as Non-Statutory Stock Options.  The determination will be made by
taking Incentive Stock Options into account in the order in which they were
granted.  If such excess only applies to a portion of an Incentive Stock Option,
the Committee, in its discretion, will designate which shares will be treated as
shares to be acquired upon exercise of an Incentive Stock Option.

       6.7    INVESTORS' AGREEMENT.  Upon exercise of an Option under the Plan
each Participant shall become a party to the Investors' Agreement.  Each
Participant who (i) is an employee of the Company or any Subsidiary reporting
directly to the Chief Executive Officer ("CEO") or Chief Operating Officer
("COO") of the Company or (ii) acquires more than a certain percentage of the
Common Stock available for issuance under the Plan as determined by the
Committee in its sole discretion from time to time, shall be deemed a "Co-invest
Management Stockholder" for all purposes of the Investors' Agreement and all
other Participants who acquire shares of Common Stock under the Plan shall be
deemed "Other Stockholders" for purposes of the Investors' Agreement, including,
without limitation, all transfer restrictions and provisions thereof; provided,
however, if a Participant after the exercise of the Option is no longer required
to report directly to the CEO or COO such Participant shall thereafter be deemed
an "Other Stockholder," and any "Other Stockholder" who acquires more than the
percentage of the Common Stock available for issuance under the Plan as
determined by the Committee or reports directly to the CEO or COO after the
exercise of the Option shall thereafter be deemed a "Co-invest Management
Stockholder," for all purposes of the Investors' Agreement.  Notwithstanding
anything to the contrary in the Plan, if the Investors' Agreement has terminated
by its terms, the provisions of this Section 6.7 shall no longer apply.


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7.     EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.

       7.1    TERMINATION FOR CAUSE.  Unless otherwise provided by the Committee
in its sole discretion in the agreement evidencing an Option, in the event a
Participant's employment or other service with the Company and all its
Subsidiaries is terminated by the Company or any Subsidiary for Cause, all
rights of the Participant under the Plan and any agreements evidencing an Option
will immediately terminate without notice of any kind, and all Options then held
by the Participant, whether exercisable or not at the time of termination, will
immediately terminate without notice of any kind, and the Company shall also
have the right to exercise its Repurchase Right in the manner set forth in
Section 7.7.

       7.2    TERMINATION FOR REASONS OTHER THAN CAUSE.  Unless otherwise
provided by the Committee in its sole discretion in the agreement evidencing an
Option, in the event a Participant's employment or other service with the
Company and all Subsidiaries is terminated other than for Cause by reason of
voluntary resignation, death, Disability or Retirement, all outstanding Options
then held by the Participant will remain exercisable, to the extent exercisable
as of the date of such termination, for a period of one year following the date
the Participant's employment or other service is terminated, and any outstanding
Options not exercisable as of the date of such termination will immediately
terminate without notice of any kind.

       7.3    PARTIAL TERMINATIONS.  In the event of a Partial Termination, the
Committee shall have the right in its sole discretion to modify the terms of any
unvested Options then held by the Participant at the time of the Partial
Termination, including, without limitation, the right to immediately terminate
without notice of any kind all rights the Participant has in any unvested
Options then held by the Participant at the time of the Partial Termination.

       7.4    MODIFICATION OF RIGHTS UPON TERMINATION.  Notwithstanding the
other provisions of this Section 7, upon a Participant's termination of
employment or other service with the Company and all Subsidiaries, the Committee
may, in its sole discretion (which may be exercised at any time on or after the
date of grant, including following such termination), cause Options (or any part
thereof) then held by such Participant to become or continue to become
exercisable and/or remain exercisable following such termination of employment
or service; provided, however, that no Option may remain exercisable beyond its
expiration date.

       7.5    EXERCISE OF INCENTIVE STOCK OPTIONS FOLLOWING TERMINATION.  Any
Incentive Stock Option that remains unexercised more than one year following
termination of employment by reason of Disability or more than three months
following termination for any reason other than death or Disability will
thereafter be deemed to be a Non-Statutory Stock Option.

       7.6    DATE OF TERMINATION OF EMPLOYMENT OR OTHER SERVICE.  Unless the
Committee otherwise determines in its sole discretion, a Participant's
employment or other service will, for purposes of the Plan, be deemed to have
terminated on the date recorded on the personnel or other records of the Company
or the Subsidiary for which the Participant provides employment or other
service, as determined by the Committee in its sole discretion based upon such
records.

       7.7    EXERCISABILITY OF REPURCHASE RIGHT.  If the Company elects to
exercise its Repurchase Right, the Company shall give the Participant written
notice of its intent to exercise its Repurchase Right (the "NOTICE OF
REPURCHASE") within sixty (60) days of such Participants termination of
employment or other service.  The Notice of Repurchase shall specify (i) the
number of shares of Common Stock the Company intends to repurchase, (ii) the
applicable purchase price for such shares of Common Stock, and (iii) the date
the Company expects to purchase such shares of Common Stock from the Participant
which date shall be no later than thirty (30) days following the Valuation Date
in the fiscal year immediately following the fiscal year in which the
Participant's employment or other service is terminated (the


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"REPURCHASE DATE"). On or before the Repurchase Date, the Participant shall
deliver to the Company the stock certificates representing the shares of Common
Stock being purchased by the Company, properly endorsed for transfer. By such
delivery of such certificates, the Participant warrants that (i) the Participant
has good title to, the right to possession of, and the right to sell, the shares
of Common Stock, (ii) such shares of Common Stock are free and clear of all
pledges, liens, encumbrances, charges, proxies, restrictions, options, transfers
and other adverse claims, except such as have been imposed by the Plan or the
Investors' Agreement, and except such restrictions on transfer as may be imposed
by federal or state securities laws, and (iii) the Participant shall hold
harmless the Company from all costs, expenses and fees incurred in defending
title and right to possession. On the Repurchase Date, the Company shall pay to
the Participant the total purchase price for the shares of Common Stock to be
purchased by the Company. Notwithstanding anything to the contrary in the Plan,
however, the Company shall only be required to pay for such shares of Common
Stock as rapidly as permissible without violating any loan covenants or other
contractual restrictions applicable to, and binding upon, the Company, and any
amounts not paid to the Participant on the Repurchase Date will bear interest at
a fixed rate of interest equal to eight percent (8%) per annum; provided,
however, that such interest rate shall not exceed the rate permitted by
applicable law. The Company shall only be required to repurchase shares of
Common Stock pursuant to this Section 7.7 to the extent that such repurchase
does not violate any applicable laws.

8.     PAYMENT OF WITHHOLDING TAXES.

       8.1    GENERAL RULES.  The Company is entitled to (a) withhold and deduct
from future wages of the Participant (or from other amounts that may be due and
owing to the Participant from the Company or a Subsidiary), or make other
arrangements for the collection of, all legally required amounts necessary to
satisfy any and all foreign, federal, state and local withholding and
employment-related tax requirements attributable to an Option, including,
without limitation, the grant or exercise of an Option or a disqualifying
disposition of stock received upon exercise of an Incentive Stock Option, or (b)
require the Participant promptly to remit the amount of such withholding to the
Company before taking any action, including issuing any shares of Common Stock,
with respect to an Option.

       8.2    SPECIAL RULES.  The Committee may, in its sole discretion and upon
terms and conditions established by the Committee, permit or require a
Participant to satisfy, in whole or in part, any withholding or
employment-related tax obligation described in Section 8.1 of the Plan by
electing to tender Previously Acquired Shares, a Broker Exercise Notice or a
promissory note (on terms acceptable to the Committee in its sole discretion),
or by a combination of such methods.

9.     DLJMB LIQUIDATION EVENT.

       9.1    ACCELERATION OF VESTING.  Without limiting the authority of the
Committee under the Plan, if a DLJMB Liquidation Event occurs, then, unless
otherwise provided by the Committee in its sole discretion, all unvested Options
will vest in accordance with the terms and conditions of the written agreement
entered into with the Participant to evidence the Option.

       9.2    LIMITATION ON PAYMENTS IN CONNECTION WITH A DLJMB LIQUIDATION
EVENT. Notwithstanding anything in Section 9.1 of the Plan to the contrary, if,
with respect to a Participant, the acceleration of the vesting of Options as
provided in Section 9.1 (which acceleration or payment could be deemed a
"payment" within the meaning of Section 280G(b)(2) of the Code), together with
any other "payments" that such Participant has the right to receive from the
Company or any corporation that is a member of an "affiliated group" (as defined
in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of
which the Company is a member, would constitute a "parachute payment" (as
defined in Section 280G(b)(2) of the Code), then the "payments" to such
Participant pursuant to Section 9.1 of the Plan will be reduced to the largest
amount as will result in no portion of such "payments" being subject to the
excise tax imposed by Section 4999 of the Code; provided, however, that if a
Participant is subject to a separate agreement with the Company or a Subsidiary
that


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<PAGE>

expressly addresses the potential application of Sections 280G or 4999 of the
Code (including, without limitation, that "payments" under such agreement or
otherwise will be reduced, that the Participant will have the discretion to
determine which "payments" will be reduced, that such "payments" will not be
reduced or that such "payments" will be "grossed up" for tax purposes), then
this Section 9.2 will not apply, and any "payments" to a Participant pursuant to
Section 9.1 of the Plan will be treated as "payments" arising under such
separate agreement.

10.    RIGHTS OF ELIGIBLE RECIPIENTS AND PARTICIPANTS; TRANSFERABILITY.

       10.1   EMPLOYMENT OR SERVICE.  Nothing in the Plan will interfere with or
limit in any way the right of the Company or any Subsidiary to terminate the
employment or service of any Eligible Recipient or Participant at any time, nor
confer upon any Eligible Recipient or Participant any right to continue in the
employ or service of the Company or any Subsidiary.

       10.2   RIGHTS AS A SHAREHOLDER.  As a holder of Options, a Participant
will have no rights as a shareholder unless and until such Options are exercised
for, or paid in the form of, shares of Common Stock and the Participant 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 such
Options as to which there is a record date preceding the date the Participant
becomes the holder of record of such shares, except as the Committee may
determine in its discretion.

       10.3   RESTRICTIONS ON TRANSFER.  Unless approved by the Committee in its
sole discretion, no right or interest of any Participant 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 Participant, either voluntarily or
involuntarily, directly or indirectly, by operation of law or otherwise;
provided, however, once a Participant exercises an Option all shares of Common
Stock issued upon exercise of the Option will be subject to the transfer
restrictions and other provisions set forth in the Investors' Agreement.

       10.4   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.

       10.5   RESTRICTIONS REGARDING EMPLOYMENT OR SERVICE.

              (i)    Notwithstanding anything in the Plan to the contrary, in
       the event that a Participant takes an Adverse Action with respect to the
       Company or any Subsidiary (1) prior to such Participant's termination of
       employment or other service with the Company and all its Subsidiaries or
       (2) during the period ending twelve (12) months following the date of the
       Participant's termination of employment or other service with the Company
       and all Subsidiaries without Cause, the Committee in its sole discretion
       will have the authority to terminate immediately all rights of the
       Participant under the Plan and any agreement evidencing Options then held
       by the Participant without notice of any kind.  In addition, to the
       extent that the Participant takes such Adverse Action during the period
       beginning twelve (12) months prior to, and ending twelve months
       following, such date of termination of employment or other service, the
       Committee in its sole discretion will have the authority to rescind the
       exercise of any Options of the Participant that were exercised during
       such period and to require the Participant to pay to the Company, within
       ten (10) days of receipt from the Company of notice of such rescission,
       the amount of any gain realized as a result of such rescinded exercise.
       Such payment will be made in cash (including check, bank draft or money
       order) or, with the Committee's consent, shares of Common Stock with a
       Fair Market Value on the date of payment equal to the amount of such
       payment.  The Company will be entitled to withhold and deduct from future
       wages of the Participant (or from other amounts that may be due and owing
       to the Participant from the


                                       10
<PAGE>

       Company or a Subsidiary) or make other arrangements for the collection of
       all amounts necessary to satisfy such payment obligations.

              (ii) For purposes of the Plan, an "ADVERSE ACTION" will mean any
       action by a Participant that the Committee, in its sole discretion,
       determines to be adverse to the interests of the Company or any
       Subsidiary, including, without limitation, (i) disclosing confidential
       information of the Company or any Subsidiary to any person not authorized
       by the Company or Subsidiary to receive it, (ii) engaging, directly or
       indirectly, in any commercial activity that in the judgment of the
       Committee competes with the business of the Company or any Subsidiary or
       (iii) interfering with the relationships of the Company or any Subsidiary
       and their respective employees and customers.

11.    SECURITIES LAW AND OTHER RESTRICTIONS.

       11.1   SECURITIES LAW 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 a
Participant may not sell, assign, transfer or otherwise dispose of shares of
Common Stock issued pursuant to Options granted under the Plan, unless (i) there
is in effect with respect to such shares a registration statement under the
Securities Act and any applicable state or foreign securities laws or an
exemption from such registration under the Securities Act and applicable state
or foreign securities laws, and (ii) 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.

       11.2   OTHER RESTRICTIONS.  The Committee may impose such other
restrictions, including, without limitation, market stand-off provisions and
rights of first refusal, as it deems appropriate in its sole discretion and will
set forth any such restrictions that are not otherwise provided for by the Plan
in the agreement evidencing such Option.

12.    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 Options 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 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
Section 422 of the Code or the rules of any stock exchange or NASDAQ or similar
regulatory body.  No termination, suspension or amendment of the Plan may
adversely affect any outstanding Option without the consent of the affected
Participant; provided, however, that this sentence will not impair the right of
the Committee to take whatever action it deems appropriate under Sections 3.2,
4.3, 5, 7.3, 9 and 10.5 of the Plan.

13.    EFFECTIVE DATE AND DURATION OF THE PLAN.

       The Plan is effective as of December 20, 1999, the date it was adopted by
the Board.  The Plan will terminate at midnight on December 19, 2009, and may be
terminated prior to such time to by Board action, and no Option will be granted
after such termination.  Options outstanding upon termination of the Plan may
continue to be exercised in accordance with their terms.


                                       11
<PAGE>

14.    MISCELLANEOUS.

       14.1   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 the conflicts of laws
principles of any jurisdictions.

       14.2   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
Participants.


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