<PAGE>

                                     FORM OF
                            PARTICIPATION AGREEMENT

                                  (ALL AWARDS)

       This Participation Agreement (the "AGREEMENT") is made and entered into
as of January 28, 2000 by and between Merrill Corporation, a Minnesota
corporation ("MERRILL") and _____________, an individual residing at
______________ (the "EMPLOYEE").

                                W I T N E S S E T H

       WHEREAS, on December 20, 1999, the Board of Directors and shareholders of
Merrill adopted the 1999 Merrill Corporation Stock Option Plan (the "OPTION
PLAN") authorizing the Compensation Committee of the Board of Directors of
Merrill to grant stock options to employees and independent contractors of
Merrill or any subsidiary of Merrill pursuant to the terms and conditions of the
Option Plan.

       WHEREAS, on December 20, 1999, the Board of Directors and shareholders of
Merrill adopted the 1999 Merrill Corporation Direct Investment Plan (the "DI
PLAN") authorizing the Compensation Committee of the Board of Directors of
Merrill to sell shares of Merrill's voting class B common stock, $0.01 par value
(the "COMMON STOCK") to employees and independent contractors of Merrill or any
subsidiary of Merrill pursuant to the terms and conditions of the DI Plan.

       WHEREAS, on or about December 21, 1999, the Employee received an award
letter (the "ELIGIBILITY NOTICE") from Merrill informing the Employee that
Merrill was offering the Employee (1) the opportunity to purchase Coinvestment
Shares (as defined in the DI Plan) pursuant to the terms and conditions of the
DI Plan, (2) the opportunity to purchase Reinvestment Shares (as defined in the
DI Plan) pursuant to the terms and conditions of the DI Plan and (3) an option
to purchase shares of  Common Stock.

       WHEREAS, the Employee must execute and deliver this Agreement as a
condition to participating in the DI Plan and Option Plan and receive the awards
the Employee was granted in the Eligibility Notice.

       WHEREAS, all capitalized terms not otherwise defined in this Agreement or
the attachments to this Agreement shall have such meanings given such terms in
the Option Plan and DI Plan, respectively.

       NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:

1.     STOCK OPTION GRANT.

       1.1.   As of the date of this Agreement ("DATE OF GRANT") Merrill hereby
       grants to the Employee the right, privilege, and option (the "OPTION") to
       purchase ____________ shares (the "OPTION SHARES") of Common Stock,
       according to the terms and subject to the conditions set forth in this
       Agreement, the "Terms and Conditions of Non-Statutory Stock Option
       Awards" attached to this Agreement and the Option Plan.  The Option is
       NOT intended to be an "incentive stock option," as that term is used in
       Section 422 of the Internal Revenue Code of 1986, as amended (the
       "CODE").

       1.2.   The per share price to be paid by Employee in the event of an
       exercise of the Option will be $22.00 per share.

<PAGE>

       1.3.   The Option will become exercisable with respect to fifty percent
       (50%) of the Option Shares in accordance with the "Time Vesting Option
       Schedule" attached to this Agreement, and the remaining fifty percent
       (50%) of the Option Shares will become exercisable in accordance with the
       "Performance Vesting Option Schedule" attached to this Agreement.

       1.4.   The Employee hereby acknowledges and agrees that by executing this
       Agreement, the Employee will be bound by the terms and conditions set
       forth in the "Terms and Conditions of Non-Statutory Stock Options"
       attached to this Agreement.

2.     STOCK PURCHASE GRANT.

       2.1.   The Employee hereby subscribes to purchase _____________
       Coinvestment Shares (the "COINVESTMENT SHARES") for a purchase price of
       $22.00 per share and upon the terms and conditions set forth in the
       "Terms and Conditions of Purchase of Common Stock" attached to this
       Agreement.  As payment for the Coinvestment Shares, the Employee:

              (a)    Has delivered to Merrill along with the executed copy of
              this Agreement a check or other cash payment payable to "Merrill
              Corporation" in an amount equal to thirty-five percent (35%) of
              the total purchase price for the Coinvestment Shares (or
              $__________).

              (b)    Promises to pay to the order of Merrill, its successors and
              assigns, at its office at One Merrill Circle, St. Paul, Minnesota
              55108, or such other place as the holder hereof may designate in
              writing from time to time, an amount equal to sixty-five percent
              (65%) of the total purchase price for the Coinvestment Shares, or
              the principal sum of $______________ in lawful money of the United
              States (the "PURCHASE LOAN"), together with interest from the date
              hereof on the unpaid balance of the Purchase Loan at a fixed rate
              of eight percent (8%) per annum (the "INTEREST RATE"). Interest on
              the Purchase Loan shall be computed on the actual number of days
              elapsed and a 365-day year. Interest will not be payable during
              the term of the Purchase Loan pursuant to the "Terms and
              Conditions of the Nonrecourse Purchase Loan" attached to this
              Agreement, but will be paid on the Maturity Date (as defined in
              the "Terms and Conditions of the Nonrecourse Purchase Loan"
              attached to this Agreement).  All accrued but unpaid interest on
              the Purchase Loan will be in addition to the principal balance of
              the Purchase Loan.  The Employee hereby acknowledges and agrees
              that by executing this Agreement, the Employee will be bound by
              the terms and conditions set forth in the "Terms and Conditions of
              the Nonrecourse Purchase Loan" attached to this Agreement.

              (c)    Grants to Merrill, as collateral for the Purchase Loan, a
              security interest in the Coinvestment Shares pursuant to the terms
              and conditions set forth in the "Terms and Conditions of the
              Pledge and Custody Agreement" attached to this Agreement.  The
              Employee hereby acknowledges and agrees that by executing this
              Agreement, the Employee will be bound by the terms and conditions
              set forth in the "Terms and Conditions of the Pledge and Custody
              Agreement" attached to this Agreement.

       2.2.   The Employee hereby subscribes to purchase _____________
       Reinvestment Shares (the "REINVESTMENT SHARES") for a purchase price of
       $22.00 per share and upon the terms and conditions set forth in the
       "Terms and Conditions of Purchase of Common Stock" attached to this
       Agreement.  A check or other cash payment payable to "Merrill
       Corporation" in the amount of $___________ for the Reinvestment Shares is
       also delivered to Merrill with an executed copy of this Agreement.

                                       2
<PAGE>

       2.3.   All Coinvestment Shares purchased by the Employee shall vest in
       accordance with the "Coinvestment Shares Vesting Schedule" attached to
       this Agreement.

       2.4.   The Employee acknowledges that Merrill is relying upon the
       accuracy and completeness of the representations contained in this
       Agreement and in the "Terms and Conditions of Purchase of Common Stock"
       attached to this Agreement in complying with its obligations under
       applicable securities laws and that the purchase of the Reinvestment
       Shares and Coinvestment Shares may be rejected for any reason.

       2.5.   The Employee represents and warrants to Merrill that the Employee
       is a bona fide resident of the State listed as Employee's residence in
       the introductory paragraph herein.

       2.6.   The Reinvestment Shares and Coinvestment Shares purchased by the
       Employee will be held in such Employee's individual name.

3.     INVESTORS' AGREEMENT.

       3.1.   In connection with the Employee's purchase of Common Stock upon
       the exercise of the Option pursuant to the Option Plan or upon the
       purchase of Coinvestment Shares and/or Reinvestment Shares pursuant to
       the DI Plan, the Employee hereby acknowledges and agrees that Employee
       has received and reviewed a copy of the Investors' Agreement, dated
       November 23, 1999, by and among Merrill and its shareholders (the
       "INVESTORS' AGREEMENT").  By execution of this Agreement, the Employee
       hereby acknowledges and agrees to be bound by the terms and conditions of
       the Investors' Agreement, as amended from time to time, in the same
       manner and to the same effect as if the Employee were an original party
       thereto, including, without limitation, acknowledgment that the Employee
       shall be considered a "Co-invest Management Stockholder" or "Other
       Stockholder" as such terms are defined in the Investors' Agreement.  The
       other shareholders of Merrill, and the Board of Directors of Merrill,
       shall be entitled to rely on this Agreement in the same manner as if a
       counterpart of the Investors' Agreement were executed by the Employee,
       and Merrill's Board of Directors may utilize this Agreement as evidence
       of the signature of the Employee and attach the same to a copy of the
       Investors' Agreement, with this Agreement having the same validity, force
       and effect as if the Investor's Agreement and any amendments thereto had
       been executed by the Employee.

       3.2.   Upon the exercise of the Option and pursuant to the Option Plan,
       unless otherwise notified by the Company, the Employee shall be deemed an
       "other" Stockholder within the meaning of the Investors' Agreement as of
       12:01 a.m., January 28, 2000 (the "EFFECTIVE DATE"), the Date of Grant of
       the Option to the Employee for all purposes of the Investors' Agreement.

       3.3.   Upon the issuance of the Reinvestment Shares and/or Coinvestment
       Shares and pursuant to the DI Plan, unless otherwise notified by the
       Company, the Employee shall be deemed an "other" Stockholder within the
       meaning of the Investors' Agreement as of the Effective Date for the
       issuance of Reinvestment Shares and/or Coinvestment Shares to the
       Employee for all purposes of the Investors' Agreement.

       3.4.   Merrill shall notify the Employee promptly if the Employee's
       status for purposes of the Investors' Agreement changes for any reason
       pursuant to the terms and conditions of the Option Plan and DI Plan,
       respectively.

                                       3
<PAGE>

4.     CONFIDENTIALITY AND NONCOMPETE AGREEMENT.

       4.1.   Upon the execution of this Agreement, the Employee hereby
       acknowledges and agrees to be bound by the terms and conditions of the
       "Confidentiality and Noncompete Provisions" attached to this Agreement.

5.     SECTION 83(b) ELECTION.

       5.1.   The Employee acknowledges and agrees that the Employee (i) has
       reviewed with the Employee's own tax advisors the federal, state, local
       and foreign tax consequences of the purchase of the Shares and the other
       transactions contemplated by the DI Plan, and (ii) is relying solely on
       such advisors and not on any statements or representations of Merrill or
       any of its agents.  Merrill strongly encourages the Employee to consult
       with such Employee's own tax advisor with respect to the making of an
       election pursuant to Section 83(b) of the Code.   THE EMPLOYEE
       ACKNOWLEDGES THAT IT IS THE EMPLOYEE'S SOLE RESPONSIBILITY AND NOT
       MERRILL'S RESPONSIBILITY TO FILE SUCH ELECTION ON A TIMELY BASIS, EVEN IF
       THE EMPLOYEE REQUESTS THAT MERRILL OR ITS REPRESENTATIVES MAKE SUCH
       FILING ON BEHALF OF THE EMPLOYEE.

       5.2.   Merrill has attached to this Agreement an 83(b) Election Form that
       may be used by the Employee in the event the Employee decides to make
       such an election.  Any such election, if made, must be filed with the
       Internal Revenue Service within thirty (30) days of the purchase of such
       Shares.

6.     TRUTH-IN-LENDING DISCLOSURE.

       6.1.   If Employee's Purchase Loan is less than or equal to $25,000, the
       Employee acknowledges and agrees that by executing this Agreement, the
       Employee has received and reviewed the "Truth-in-Lending Disclosure" and
       the related "Itemization of Amount Financed" attached to this Agreement
       prior to the Employee's execution of this Agreement.

7.     MISCELLANEOUS.

       7.1.   EMPLOYMENT OR SERVICE.  Nothing in this Agreement or any
       attachments hereto will interfere with or limit in any way the right of
       Merrill or any Subsidiary to terminate the employment or other service of
       the Employee at any time, nor confer upon the Employee any right to
       continue in the employ or other service of Merrill or any Subsidiary at
       any particular position or rate of pay or for any particular period of
       time.  Furthermore, if the Employee was an at-will employee prior to
       executing this Agreement, the Employee shall be an at-will employee after
       executing this Agreement, and if the Employee was bound by a written
       employment agreement prior to executing this Agreement, the Employee will
       continue to be bound by such agreement after executing this Agreement;
       provided, however, that such written agreement shall be subject to the
       terms and conditions in this Agreement and shall be deemed to be amended
       and superseded with respect to the subject matter contained in this
       Agreement.

       7.2.   BINDING EFFECT.  This Agreement, including all the attachments
       hereto, will be binding upon the heirs, executors, administrators and
       successors of the parties to this Agreement.

       7.3.   GOVERNING LAW.  This Agreement, including all the attachments
       hereto, and all rights and obligations under it will be construed in
       accordance with the Option Plan and the DI Plan,

                                       4
<PAGE>

       respectively, and governed by the laws of the State of Minnesota,
       without regard to conflicts of laws provisions.  Any legal proceeding
       related to this Agreement, including all the attachments hereto, will
       be brought in an appropriate Minnesota court, and the parties to this
       Agreement  consent to the exclusive jurisdiction of the court for this
       purpose.

       7.4.   ENTIRE AGREEMENT.  This Agreement, including all attachments
       hereto, the Option Plan and the DI Plan set forth the entire agreement
       and understanding of the parties to this Agreement with respect to the
       grant and exercise of the Option, the administration of the Option Plan,
       the purchase of Reinvestment Shares and/or Coinvestment Shares, the
       administration of the DI Plan, and supersede all prior agreements,
       arrangements, plans and understandings relating to the foregoing.

       7.5.   AMENDMENT AND WAIVER.  Other than as provided in this Agreement,
       including all attachments hereto, the Option Plan or the DI Plan, none of
       the terms or provisions of this Agreement, including all attachment to
       this Agreement may be amended, waived, supplemented,  canceled or
       otherwise modified only by a written instrument executed by the parties
       to this Agreement or, in the case of a waiver, by the party waiving
       compliance.

       7.6.     COUNTERPARTS.  This Agreement may be executed in several
       counterparts, each of which shall constitute an original, but all of
       which, when taken together, shall constitute but one agreement.

                                       5
<PAGE>

       IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first set forth above.

                                         MERRILL CORPORATION:

                                         By
                                           --------------------------------

                                         Its
                                           --------------------------------


                                         EMPLOYEE:

                                         ----------------------------------
                                         Signature

                                         ----------------------------------
                                         Name Typed or Printed

                                         ----------------------------------
                                         Address

                                         ----------------------------------
                                         City, State and Zip Code

                                         ----------------------------------
                                         Social Security Number


                        *  *  *  *  *  *  *  *


Upon execution of this Agreement the Employee acknowledges having been delivered
and reviewed a copy of the Option Plan, DI Plan, a Summary Plan Description for
each of the Option Plan and the DI Plan, the Investors' Agreement, the
Information Statement and all attachments to this Agreement.

                                      6
<PAGE>

                          TIME VESTING OPTION SCHEDULE

The following table sets forth the initial dates of exercisability of each
installment and the percentage of Option Shares as to which this Time Vesting
Option will become exercisable on such dates:


<TABLE>
<CAPTION>
------------------------------------------------------- -----------------------------------------------------

                                                                    PERCENTAGE OF OPTION SHARES
                DATE OF EXERCISABILITY                                 AVAILABLE FOR EXERCISE

------------------------------------------------------- -----------------------------------------------------
<S>                                                     <C>

             One year from Date of Grant                                0% of Option Shares

------------------------------------------------------- -----------------------------------------------------

             Two years from Date of Grant                               0% of Option Shares

------------------------------------------------------- -----------------------------------------------------

            Three years from Date of Grant                              25% of Option Shares

------------------------------------------------------- -----------------------------------------------------

            Four years from Date of Grant                               50% of Option Shares
------------------------------------------------------- -----------------------------------------------------

            Five years from Date of Grant                               75% of Option Shares

------------------------------------------------------- -----------------------------------------------------

             Six years from Date of Grant                              100% of Option Shares

------------------------------------------------------- -----------------------------------------------------
</TABLE>


In no event will this Time Vesting Option be exercisable after, and this Time
Vesting Option will become void and expire as to all unexercised Option Shares
at, 5:00 p.m. (St. Paul, Minnesota time) on December 20, 2009 (the "TIME OF
TERMINATION").

If a DLJMB Liquidation Event (as defined below) occurs, then, unless otherwise
provided by the Committee in its sole discretion, all unvested Time Vesting
Options will become immediately vested in full.

For purposes of this Time Vesting Option Schedule, the following terms shall
have the meanings set forth below:

1.   "DLJMB ENTITIES" shall mean DLJ Merchant Banking Partners II, L.P. and
     all its affiliated entities as described in the Investors' Agreement.

2.   "DLJMB LIQUIDATION EVENT" means, except for transfers to Permitted
     Transferees (as defined in the Investors' Agreement), (i) a sale or other
     transfer by the DLJMB Entities of 90% or more of its shares of common
     equity in Merrill (including all common equity originally purchased by
     the DLJMB Entities and any additional common equity purchased by the
     DLJMB Entities thereafter, whether voting, Class B or any other class of
     common equity created by Merrill)  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 Merrill's common equity, (ii) the
     sale, lease, exchange or

                                       7
<PAGE>

     other transfer, directly or indirectly, of substantially all of the
     assets of Merrill (in one transaction or in a series of related
     transactions) to a person or entity that is not controlled by Merrill,
     or (iii) a merger or consolidation to which Merrill is a party if the
     shareholders of Merrill 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.

                                       8
<PAGE>


                      PERFORMANCE VESTING OPTION SCHEDULE

This Performance Vesting Option will become vested and exercisable on the dates
and in the proportions indicated in Table 1 below if Merrill attains the Target
Implied Common Equity Value (as defined below) for the relevant fiscal years as
indicated in Table 1 below, but in any event will vest in full eight (8) years
from the Date of Grant. If a DLJMB Liquidation Event (as defined below) of the
DLJMB Entities (as defined below) occurs prior to eight (8) years from the Date
of Grant, however, and such Liquidation Event causes the DLJMB Entities to
realize a DLJMB IRR (as defined below) of at least 25%, the portion of the
Performance Vesting Option which has not previously become vested and
exercisable at the time of the DLJMB Liquidation Event will become vested and
exercisable based upon the level of the DLJMB IRR as indicated in Table 2.

For purposes of this Performance Vesting Option Schedule, the following terms
shall have the meanings set forth below:

1.   "DLJMB ENTITIES" shall mean DLJ Merchant Banking Partners II, L.P. and
     all its affiliated entities as described in the Investors' Agreement.

2.   "DLJMB IRR" means, as to the DLJMB Entities, the annual discount rate at
     which the net present value of (i) all investments and capital
     contributions by the DLJMB Entities in shares of Merrill's common equity
     and (ii) all distributions from Merrill to the DLJMB Entities and other
     amounts realized (whether from Merrill or third parties, including
     amounts realized upon a DLJMB Liquidation Event) by the DLJMB Entities
     with respect to the DLJMB Entities' shares of Merrill's common equity,
     equals zero.  The DLJMB IRR calculation shall be determined from and
     including the date upon which each investment and capital contribution is
     made by the DLJMB Entities to and including the date any distribution is
     made or other amount is realized on account thereof, calculated on the
     actual number of days elapsed over a 365 or 366-day year, as the case may
     be.  All calculations of the DLJMB IRR shall be determined on a pro-forma
     basis reflecting the Option Shares that have become vested prior to a
     DLJMB Liquidation Event and the Option Shares becoming vested as of the
     DLJMB Liquidation Event.

3.   "DLJMB LIQUIDATION EVENT" means, except for transfers to Permitted
     Transferees (as defined in the Investors' Agreement), (i) a sale or other
     transfer by the DLJMB Entities of 90% or more of its shares of common
     equity in Merrill (including all common equity originally purchased by
     the DLJMB Entities and any additional common equity purchased by the
     DLJMB Entities thereafter, whether voting, Class B or any other class of
     common equity created by Merrill)  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 Merrill's common equity, (ii) the
     sale, lease, exchange or other transfer, directly or indirectly, of
     substantially all of the assets of Merrill (in one transaction or in a
     series of related transactions) to a person or entity that is not
     controlled by Merrill, or (iii) a merger or consolidation to which
     Merrill is a party if the shareholders of Merrill 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.

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

                                       9
<PAGE>

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

6.   "TARGET IMPLIED COMMON EQUITY VALUE" shall mean a value calculated using
     the following formula: Enterprise Value - Total Debt -  Total Preferred
     Stock + Total Cash.

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

8.   "TOTAL DEBT" means any indebtedness of Merrill in respect of borrowed
     money or evidenced by bonds, notes, debentures or similar instruments or
     letters of credit (or reimbursement 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 Merrill's consolidated balance sheet as of its most recent
     fiscal year end.

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



                                                      TABLE 1
<TABLE>
<CAPTION>
------------------------------------- ----------------------------------- -----------------------------------

         FISCAL YEAR ENDED                 TARGET IMPLIED COMMON              PERCENTAGE OF OPTION
            JANUARY 31,*                      EQUITY VALUE                    SHARES AVAILABLE FOR
                                                                                    EXERCISE**
------------------------------------- ----------------------------------- -----------------------------------
<S>                                   <C>                                 <C>
                2001                             $150,000,000                    20% of Option Shares

------------------------------------- ----------------------------------- -----------------------------------

                2002                             $220,000,000                    40% of Option Shares

------------------------------------- ----------------------------------- -----------------------------------

                2003                             $330,000,000                    60% of Option Shares

------------------------------------- ----------------------------------- -----------------------------------

                2004                             $450,000,000                    80% of Option Shares

------------------------------------- ----------------------------------- -----------------------------------

                2005                             $520,000,000                   100% of Option Shares

------------------------------------- ----------------------------------- -----------------------------------
</TABLE>

* The percentage of Option Shares available for exercise shall vest on the last
day of the Fiscal Year indicated above.

** All such vesting shall be cumulative, i.e., the percentage set forth for each
Fiscal Year shall be vested as of the end of such Fiscal Year if the Target
Implied Common Equity Value for such Fiscal Year is achieved as of such date,
regardless of whether the Target Implied Common Equity Values have been achieved
in any previous year.

--------------------------------------------------------------------------------

                                       10
<PAGE>

                                      TABLE 2

<TABLE>
<CAPTION>
------------------------------------------------------- -----------------------------------------------------
                      DLJMB IRR                                 PERCENTAGE OF UNVESTED CLIFF VESTING
                                                                 SHARES AS TO WHICH THE PERFORMANCE
                                                                   VESTING OPTION BECOMES VESTED
                                                                     ON DLJMB LIQUIDATION EVENT

------------------------------------------------------- -----------------------------------------------------
<S>                                                     <C>
                    40% or greater                                              100%

------------------------------------------------------- -----------------------------------------------------

                     35.0 - 39.9%                                               75%

------------------------------------------------------- -----------------------------------------------------

                     30.0 - 34.9%                                               50%

------------------------------------------------------- -----------------------------------------------------

                     25.0 - 29.9%                                               25%

------------------------------------------------------- -----------------------------------------------------

                    Less than 25%                                                0
------------------------------------------------------- -----------------------------------------------------
</TABLE>

This Performance Vesting Option will not be exercisable after, and will become
void and expire as to all unexercised Option Shares at, 5:00 p.m. (St. Paul,
Minnesota time), on the earlier of (i) December 20, 2009 or (ii) the day
immediately following the completion of a DLJMB Liquidation Event (the "TIME OF
TERMINATION").

                                       11
<PAGE>

                                TERMS AND CONDITIONS
                                         OF
                         NON-STATUTORY STOCK OPTION AWARDS


Upon execution of the Participation Agreement, the Employee hereby
acknowledges and agrees to be bound by the following terms and conditions
relating to the Option:

1.   DURATION OF OPTION AND TIME OF EXERCISE.

     1.1. TERMINATION OF EMPLOYMENT OR OTHER SERVICE.

          (a)  TERMINATION FOR CAUSE.  In the event the Employee's employment
          or other service with Merrill and all Subsidiaries is terminated by
          Merrill or any Subsidiary for Cause, all rights of the Employee
          under the Option Plan with respect to the Option and the
          Participation Agreement will immediately terminate without notice
          of any kind, and the Option, whether exercisable or not on the date
          of termination, will immediately terminate without notice of any
          kind, and Merrill will also have the right to repurchase (the
          "REPURCHASE RIGHT") from the Employee all shares of Common Stock
          previously acquired upon exercise of the Option at a price equal to
          the exercise price paid by the Employee to acquire such shares of
          Common Stock in the manner set forth in Section 2 below.

          (b)  TERMINATION FOR REASONS OTHER THAN CAUSE.  In the event the
          Employee's employment or other service with Merrill and all
          Subsidiaries is terminated other than for Cause by reason of
          voluntary resignation, death, Disability or Retirement, the Option
          will remain exercisable, to the extent exercisable as of the date
          of such termination, for a period of one year following the date
          the Employee's employment or other service is terminated, and any
          portion of the Option which is not exercisable as of the date of
          such termination will immediately terminate without notice of any
          kind.

          (c)  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 Employee at the
          time of the Partial Termination, including, without limitation, the
          right to immediately terminate without notice of any kind all
          rights the Employee has in any unvested Options then held by the
          Employee at the time of the Partial Termination.

2.   EXERCISABILITY OF REPURCHASE RIGHT.

     If Merrill elects to exercise its Repurchase Right, Merrill shall give the
Employee written notice of its intent to exercise its Repurchase Right (the
"NOTICE OF REPURCHASE") within sixty (60) days of such Employee's termination of
employment or other service. The Notice of Repurchase shall specify (i) the
number of shares of Common Stock Merrill intends to repurchase, (ii) the
applicable purchase price for such shares of Common Stock, and (iii) the date
Merrill expects to purchase such shares of Common Stock from the Employee 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 Employee's
employment or other service is terminated (the "REPURCHASE DATE"). On or before
the Repurchase Date, the Employee shall deliver to Merrill the stock
certificates representing the shares of Common Stock being purchased by Merrill,
properly endorsed for transfer. By such delivery of such certificates, the
Employee warrants that (i) the Employee 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,

                                       12
<PAGE>

proxies, restrictions, options, transfers and other adverse claims, except
such as have been imposed by the Option Plan or the Investors' Agreement, and
except such restrictions on transfer as may be imposed by federal or state
securities laws, and (iii) the Employee shall hold harmless Merrill from all
costs, expenses and fees incurred in defending title and right to possession.
On the Repurchase Date, Merrill shall pay to the Employee the total purchase
price for the shares of Common Stock to be purchased by Merrill.
Notwithstanding anything to the contrary in the Option Plan, however, Merrill
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, Merrill, and any amounts not
paid to the Employee 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. Merrill shall only be required to repurchase shares of Common Stock
pursuant to this Section 2 to the extent that such repurchase does not
violate any applicable laws.

3.   MANNER OF OPTION EXERCISE.

     3.1. NOTICE.  The Option may be exercised by the Employee in whole or in
     part from time to time, subject to the conditions contained in the
     Option Plan and in the Participation Agreement, by delivery, in person,
     by facsimile or electronic transmission (with written confirmation via
     the mail to follow such electronic transmission) or through the mail, to
     Merrill at its principal executive office in St. Paul, Minnesota
     (Attention: Secretary), of a written notice of exercise. Such notice
     must be in a form satisfactory to the Committee, must identify the
     Option, must specify the number of Option Shares with respect to which
     the Option is being exercised, and must be signed by the person or
     persons so exercising the Option.  Such notice must be accompanied by
     payment in full of the total purchase price of the Option Shares
     purchased.  In the event that the Option is being exercised, as provided
     by the Option Plan and the Participation Agreement, by any person or
     persons other than the Employee, the notice must be accompanied by
     appropriate proof of right of such person or persons to exercise the
     Option.  As soon as practicable after the effective exercise of the
     Option, the Employee will be recorded on the stock transfer books of
     Merrill as the owner of the Option Shares purchased, and Merrill will
     deliver to the Employee one or more duly issued stock certificates
     evidencing such ownership.

     3.2. PAYMENT.  At the time of exercise of the Option, the Employee must
     pay the total purchase price of the Option Shares to be purchased
     entirely in cash (including a check, bank draft or money order, payable
     to the order of Merrill); provided, however, that the Committee, in its
     sole discretion, may allow such payment to be made, in whole or in part,
     by tender of a promissory note (on terms acceptable to the Committee in
     its sole discretion) or a Broker Exercise Notice or Previously Acquired
     Shares (as such terms are defined in the Option Plan), or by a
     combination of such methods.  In the event the Employee is permitted to
     pay the total purchase price of the Option in whole or in part with
     Previously Acquired Shares, the value of such shares will be equal to
     their Fair Market Value on the date of exercise of the Option.

4.   DLJMB LIQUIDATION EVENT.

     4.1. ACCELERATION OF VESTING.  Without limiting the authority of the
     Committee under the Option Plan, if a DLJ Liquidation Event (as defined
     in the Option Plan) occurs, then, unless otherwise provided by the
     Committee in its sole discretion all unvested Options will become
     immediately vested in full.

     4.2. LIMITATION ON PAYMENTS IN CONNECTION WITH A DLJMB LIQUIDATION
     EVENT. Notwithstanding anything in Section 4.1 above to the contrary,
     if, with respect to an Employee, the acceleration of the vesting of
     Options as provided in Section 4.1 (which acceleration or

                                       13
<PAGE>


     payment could be deemed a "payment" within the meaning of Section
     280G(b)(2) of the Code), together with any other "payments" that such
     Employee has the right to receive from Merrill or any corp oration 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 Merrill
     is a member, would constitute a "parachute payment" (as defined in
     Section 280G(b)(2) of the Code), then the "payments" to such Employee
     pursuant to Section 4.1 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 an
     Employee is subject to a separate agreement with Merrill or a Subsidiary
     that 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 Employee 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 4.2 will not apply, and any
     "payments" to the Employee pursuant to Section 4.1 will be treated as
     "payments" arising under such separate agreement.

5.   RIGHTS OF EMPLOYEE; TRANSFERABILITY.

     5.1. EMPLOYMENT OR SERVICE.  Nothing in the Participation Agreement or
     any attachments thereto will interfere with or limit in any way the
     right of Merrill or any Subsidiary to terminate the employment or other
     service of the Employee at any time, nor confer upon the Employee any
     right to continue in the employ or other service of Merrill or any
     Subsidiary at any particular position or rate of pay or for any
     particular period of time.

     5.2. RIGHTS AS A SHAREHOLDER.  The Employee will have no rights as a
     shareholder unless and until all conditions to the effective exercise of
     the Option (including, without limitation, the conditions set forth in
     Sections 3 and 6 of this attachment to the Participation Agreement) have
     been satisfied and the Employee has become the holder of record of such
     shares.  No adjustment will be made for dividends or distributions with
     respect to the Option as to which there is a record date preceding the
     date the Employee becomes the holder of record of such shares, except as
     may otherwise be provided in the Option Plan or determined by the
     Committee in its sole discretion.

     5.3. RESTRICTIONS ON TRANSFER. Unless approved by the Committee in its
     sole discretion, no right or interest of any Employee 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 Employee, either
     voluntarily or involuntarily, directly or indirectly, by operation of
     law or otherwise; provided, however, once an Employee 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.

6.   RESTRICTIONS REGARDING EMPLOYMENT OR SERVICE.

     6.1. EFFECT OF ADVERSE ACTION.  Notwithstanding anything in the Option
     Plan, the Participation Agreement or any attachments thereto and all
     attachments thereto to the contrary, in the event that an Employee takes
     an Adverse Action with respect to Merrill or any Subsidiary (1) prior to
     such Employee's termination of employment or other service with Merrill
     and all its Subsidiaries or (2) during the period ending twelve (12)
     months following the date of the Employee's termination of employment or
     other service with Merrill and all Subsidiaries without Cause, the
     Committee in its sole discretion will have the authority to terminate
     immediately all rights of the Employee under the Option Plan and any
     agreement evidencing Options then held by the Employee without notice of
     any kind.  In addition, to the extent that the Employee takes such
     Adverse Action during

                                       14
<PAGE>

     the period beginning twelve (12) months prior to, and ending twelve (12)
     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 Employee that were exercised
     during such period and to require the Participant to pay to Merrill,
     within ten (10) days of receipt from Merrill 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.  Merrill will be entitled to withhold and
     deduct from future wages of the Employee (or from other amounts that may
     be due and owing to the Employee from Merrill or a Subsidiary) or make
     other arrangements for the collection of all amounts necessary to
     satisfy such payment obligations.

     6.2. DEFINITION OF ADVERSE ACTION.  An "ADVERSE ACTION" will mean any
     action by an Employee that the Committee, in its sole discretion,
     determines to be adverse to the interests of Merrill or any Subsidiary,
     including, without limitation, (i) disclosing confidential information
     of Merrill or any Subsidiary to any person not authorized by Merrill 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 Merrill or any Subsidiary or (iii) interfering with the
     relationships of Merrill or any Subsidiary and their respective
     employees and customers.

7.   SECURITIES LAW AND OTHER RESTRICTIONS.

     Notwithstanding any other provision of the Option Plan, the Participation
Agreement or any attachments thereto and all attachments thereto, Merrill will
not be required to issue, and the Employee may not sell, assign, transfer or
otherwise dispose of, any Option Shares, unless (i) there is in effect with
respect to the Option Shares a registration statement under the Securities Act
of 1933, as amended, and any applicable state or foreign securities laws or an
exemption from such registration, 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. Merrill 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 Option Shares, as may be deemed necessary or advisable by Merrill
in order to comply with such securities law or other restrictions.

8.   WITHHOLDING TAXES.

     8.1. GENERAL RULES.  Merrill is entitled to (i) withhold and deduct from
     future wages of the Employee (or from other amounts that may be due and
     owing to the Employee from Merrill 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 the
     Option, including, without limitation, the grant or exercise of the
     Option or a disqualifying disposition of stock received upon exercise of
     an Incentive Stock Option, or (ii) require the Employee promptly to
     remit the amount of such withholding to Merrill before taking any
     action, including issuing any shares of Common Stock, with respect to
     the Option.

     8.2. SPECIAL RULES.  The Committee may, in its sole discretion and upon
     terms and conditions established by the Committee, permit or require an
     Employee to satisfy, in whole or in part, any withholding or
     employment-related tax obligation described in Section 8.1 of the Option
     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.

                                       15
<PAGE>

9.   ADJUSTMENTS.

     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 Merrill, affects the Option 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 Option Plan, the
Committee (or, if Merrill is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) shall, in such
manner as it deems equitable, adjust any or all of (i) the number of shares of
Common Stock of Merrill (or number and kind of other securities or property)
available for issuance or payment under the Option Plan, (ii) the number of
shares of Common Stock or other securities of Merrill (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.

10.  SUBJECT TO OPTION PLAN.

     The Option and the Option Shares granted and issued pursuant to the
Participation Agreement and the attachments thereto have been granted and issued
under, and are subject to the terms of, the Option Plan. The terms of the Option
Plan are incorporated by reference in the Participation Agreement and the
attachments thereto in their entirety, and the Employee, by execution of the
Participation Agreement, acknowledges having received a copy of the Option Plan.
The provisions of the Participation Agreement and attachments thereto will be
interpreted as to be consistent with the Option Plan, and any ambiguities in the
Participation Agreement or the attachments thereto will be interpreted by
reference to the Option Plan. In the event that any provision of the
Participation Agreement or the attachments thereto are inconsistent with the
terms of the Option Plan, the terms of the Option Plan will prevail.

                                       16
<PAGE>

                              TERMS AND CONDITIONS
                           OF PURCHASE OF COMMON STOCK


Upon execution of the Participation Agreement, the Employee acknowledges and
represents as follows:

1.   The Employee has received copies of all documents and any other information
     requested from Merrill and has had an opportunity to ask questions of and
     receive answers from the management of Merrill concerning the terms and
     conditions of the employee offering and to obtain any additional
     information desired or has elected to waive such opportunity. The Employee
     confirms that the Employee is fully informed regarding the financial
     condition of Merrill, the administration of its business affairs and its
     prospects for the future, and that Merrill makes no assurance whatsoever
     concerning the present and prospective value of the Reinvestment Shares or
     Coinvestment Shares to be acquired.

2.   The Employee realizes that the Reinvestment Shares and Coinvestment Shares,
     as an investment, are speculative and involve a high degree of risk. The
     Employee believes that an investment in the Reinvestment Shares and/or
     Coinvestment Shares is suitable for the Employee based upon the Employee's
     investment objectives and financial needs, and the Employee has the
     financial means to undertake the risks of an investment in the Reinvestment
     Shares and/or Coinvestment Shares, to hold the Reinvestment Shares and/or
     Coinvestment Shares for an indefinite period of time, and to withstand a
     complete loss of the Employee's investment in the Reinvestment Shares
     and/or Coinvestment Shares.

3.   The Employee, either alone or with the assistance of a professional
     advisor, has such knowledge and experience in financial and business
     matters that the Employee is capable of evaluating the merits and risks of
     an investment in the Reinvestment Shares and/or Coinvestment Shares. The
     Employee has obtained, to the extent deemed necessary, personal
     professional advice with respect to the risks inherent in, and the
     suitability of, an investment in the Reinvestment Shares and/or
     Coinvestment Shares in light of the Employee's financial condition and
     investment needs.

4.   The Reinvestment Shares and/or Coinvestment Shares are being purchased by
     the Employee for investment purposes in the Employee's name solely for the
     Employee's own beneficial interest and not as nominee for, or for the
     beneficial interest of, or with the intention to transfer to, any other
     person, trust or organization.

5.   The Employee acknowledges that (i) the Employee must bear the economic risk
     of an investment in the Reinvestment Shares and/or Coinvestment Shares for
     an indefinite period of time because neither the Reinvestment Shares or
     Coinvestment Shares have been registered under the Securities Act of 1933,
     as amended, or any applicable state securities laws and therefore may not
     be sold, transferred, assigned or otherwise disposed of unless such
     disposition is subsequently registered under such laws or exemptions from
     such registrations are available, and (ii) a legend will be placed on the
     certificate evidencing the Reinvestment Shares and/or Coinvestment Shares
     stating that the Reinvestment Shares and/or Coinvestment Shares have not
     been registered under the Securities Act of 1933, as amended, and
     referencing the restrictions on the transferability of the Reinvestment
     Shares and/or Coinvestment Shares.

                                       17
<PAGE>

                              TERMS AND CONDITIONS
                                       OF
                            NONRECOURSE PURCHASE LOAN


This Purchase Loan is made under the terms and provisions of the DI Plan and in
connection with the Employee's purchase of Coinvestment Shares. To the extent
the provisions of the DI Plan and this attachment to the Participation Agreement
are inconsistent, the terms of the DI Plan shall govern.

Upon execution of the Participation Agreement, the Employee and Merrill hereby
acknowledge and agree to be bound by the following terms and conditions relating
to the Purchase Loan:

The entire outstanding principal amount of the Purchase Loan, together with all
accrued and unpaid interest thereon from the date of the Purchase Loan, shall be
due and payable by the Employee in a single payment on the earliest of the
following dates (the "MATURITY DATE") and in the following manner; provided,
however, that Merrill in its sole discretion may extend the Maturity Date of the
Purchase Loan pursuant to the DI Plan:

         (i)      All outstanding principal and accrued interest shall be due
                  and payable upon the Repurchase Date in the fiscal year
                  immediately following the fiscal year in which the Employee's
                  employment or other service with Merrill and all its
                  Subsidiaries is terminated, regardless of the reason for such
                  termination;

         (ii)     All outstanding principal and accrued interest shall be due
                  and payable upon a DLJMB Liquidation Event;

         (iii)    All outstanding principal and accrued interest shall be due
                  and payable upon a sale or transfer of the Coinvestment Shares
                  in accordance with the terms and conditions of the Investors'
                  Agreement, other than transfers to Permitted Transferees (as
                  defined in the Investors' Agreement) or hardship repurchases
                  under the DI Plan;

         (iv)     Within 120 days following an initial public offering of
                  Merrill's equity securities in which case the outstanding
                  principal amount of the Purchase Loan and all accrued and
                  unpaid interest thereon must be paid in cash or the Committee
                  in its sole discretion may allow Merrill to repurchase the
                  Employee's Reinvestment Shares and vested Coinvestment Shares
                  at Fair Market Value, and the Employee's unvested Coinvestment
                  Shares at a purchase price determined by the Committee in its
                  sole discretion, and apply the proceeds Merrill owes the
                  Employee against the outstanding balance of the Purchase Loan
                  and all accrued and unpaid interest thereon; provided,
                  however, that if the Employee elects to repay the Purchase
                  Loan and all accrued and unpaid interest with the Employee's
                  Shares, the Employee will not be required to repay the
                  Purchase Loan and all accrued interest if the total purchase
                  price paid for such Shares does not exceed the outstanding
                  balance of the Purchase Loan, all accrued and unpaid interest
                  thereon and any tax liability of the Employee associated with
                  the sale of the Shares; or

         (v)      All outstanding principal and accrued interest shall be due
                  and payable on the eighth anniversary of the date of the
                  Participation Agreement.

The principal of the Purchase Loan may be prepaid in full or in part at any
time, without premium or penalty. Each such prepayment shall be accompanied by
the interest accrued on the amount prepaid to the date of the prepayment.
Merrill shall be entitled to apply any payments Merrill owes the Employee for

                                       18
<PAGE>

the repurchase of the Coinvestment Shares pursuant to the DI Plan, and all
dividends paid with respect to Coinvestment Shares (net of any tax withholdings)
to the outstanding principal balance and interest under the Purchase Loan. All
such payments shall be applied first to the payment of accrued interest and the
remainder to the outstanding principal of the Purchase Loan.

The Employee represents and warrants that the proceeds of the Purchase Loan will
be used solely for the purpose of purchasing Coinvestment Shares pursuant to the
DI Plan.

As security for the timely payment of all amounts due or to become due under the
Purchase Loan, the Employee pledges and grants to Merrill a security interest,
pursuant to the Participation Agreement and the attachments thereto, in (i) the
Coinvestment Shares to be acquired by the Employee pursuant to the DI Plan, (ii)
all securities, instruments and other property, rights or interests of any kind
at any time issued or issuable as an addition to, in substitution or exchange
for, or with respect to, the Coinvestment Shares, and (iii) all cash, dividends,
proceeds or other income or property accrued and hereafter accruing, received,
receivable or otherwise distributed in respect of, in exchange for, or upon the
sale or other disposition of the Coinvestment Shares. Merrill further
represents, and the Employee acknowledges, that the Purchase Loan is nonrecourse
against the Employee and that if the value of the Coinvestment Shares,
dividends, distributions and proceeds thereof pledged as security for repayment
of the Purchase Loan and all accrued interest on the Purchase Loan is
insufficient to repay the outstanding principal and interest thereunder, Merrill
may not proceed against the Employee to collect any remaining amount due
hereunder.

If an Event of Default, as defined below, shall occur, or if the Employee's
employment or other service with Merrill and all its Subsidiaries is terminated
or terminates for any reason, whether voluntary or involuntary, and whether
caused by death, Disability, Retirement or otherwise, Merrill may, without
notice, demand, presentment for payment and notice of nonpayment, all of which
the Employee hereby expressly waives, declare the indebtedness represented by
the Purchase Loan immediately due and payable and Merrill or other holder hereof
may, without notice, immediately exercise any and all rights and remedies
available at law or in equity for the collection of the Purchase Loan,
including, without limitation, enforcement of the security interest granted
herein. The term "Event of Default" shall mean any of the following events:

         (i)      the Employee shall default in the payment when due of any
                  principal or interest on the Purchase Loan;

         (ii)     the actual or attempted sale, conveyance, alienation, lease,
                  succession, assignment or other transfer of all or any part of
                  the Coinvestment Shares in violation of the DI Plan or the
                  Investors' Agreement;

         (iii)    the insolvency, bankruptcy, receivership, or occurrence of any
                  other adverse change in the financial condition of the
                  Employee; or

         (iv)     the Employee shall default in any of its obligations under the
                  Participation Agreement, including any attachments thereto.

If the Purchase Loan is placed with any attorney(s) for collection upon any
default, the Employee agrees to pay to Merrill or other holder its reasonable
attorneys' fees and all lawful costs and expenses of collection, whether or not
a suit is commenced.

Time is of the essence. No delay or omission on the part of Merrill or other
holder hereof in exercising any right or remedy hereunder shall operate as a
waiver of such right or of any other right or remedy

                                       19
<PAGE>

under the Purchase Loan or any other document or agreement executed in
connection herewith. All waivers by Merrill must be in writing to be
effective and a waiver on any occasion shall not be construed as a bar to or
a waiver of any similar right or remedy on a future occasion.

The Employee hereby consents to any extension or alteration of the time or terms
of payment hereon, any renewal, any release of all or any part of any security
given for the payment hereof, any acceptance of additional security of any kind,
and any release of, or resort to any party liable for payment hereof. Any
extension of time to pay of all or any part of the amount owing on the Purchase
Loan or any variation, modification or waiver of any term or condition of the
Purchase Loan shall not affect the liability of the Employee, and the Employee
shall be absolutely and primarily liable at all times for the payment of the
indebtedness evidenced by the Purchase Loan and all accrued interest thereon
until such amounts are actually paid in full, subject to the non-recourse
provisions set forth above. Merrill shall be entitled to offset against any
amounts owed to it under the Purchase Loan against any amounts owed by Merrill
to the Employee with respect to the Pledged Securities, including, without
limitation, any amounts owed by Merrill to the Employee in connection with the
repurchase by Merrill of the Coinvestment Shares pursuant to the DI Plan, and
any dividends or distributions owed by Merrill to the Employee on the
Coinvestment Shares.

No provision of the Participation Agreement or any attachment thereto shall
require the payment or permit the collection of interest in excess of the rate
permitted by applicable law.

Any payment due on any non-business day of Merrill shall be due upon the next
business day.

The Purchase Loan represents a loan negotiated, executed and to be performed in
the State of Minnesota and shall be construed, interpreted and governed by the
laws of said State.

The Employee hereby consents to the personal jurisdiction of the state and
federal courts located in the State of Minnesota in connection with any
controversy related to the Purchase Loan, and waives any argument that venue in
such forums is not convenient.

                                       20
<PAGE>

                              TERMS AND CONDITIONS
                                       OF
                          PLEDGE AND CUSTODY AGREEMENT


1.   DEFINED TERMS.  Unless otherwise defined herein, terms which are defined
in the DI Plan, the Participation Agreement or the attachments thereto and used
herein are used as so defined, and the following terms shall have the following
meanings:

     "COLLATERAL" means the Pledged Securities and all Proceeds.

     "COMMON STOCK" means the voting class B common stock, $0.01 par value per
share, of Merrill Corporation.

     "EVENT OF DEFAULT" means any event defined as such in the "Terms and
Conditions of the Nonrecourse Purchase Loan" attached to the Participation
Agreement.

     "OBLIGATIONS" means the unpaid principal of and interest on the Purchase
Loan and any other obligations of the Employee under the Participation
Agreement, including all attachments to the Participation Agreement, and the DI
Plan.

     "PLEDGED SECURITIES" means any Coinvestment Shares purchased by the
Employee pursuant to the DI Plan which are required to be pledged by the
Employee under the DI Plan and the Participation Agreement, and designated as
such on the books of Merrill.

     "PROCEEDS" means all "proceeds" as such term is defined in the Uniform
Commercial Code and, in any event, shall include, without limitation, all
dividends or other income from or distributions with respect to the Pledged
Securities or proceeds from the sale, disposition or other liquidation thereof.

2.   PLEDGE; GRANT OF SECURITY INTEREST.  The Employee grants to Merrill a
first priority security interest in the Collateral, as collateral security for
the prompt and complete payment and performance when due of the Obligations.
The Employee agrees and acknowledges that the pledge and security interest
granted hereby is a continuing security interest and shall continue in full
force and effect until the Purchase Loan, and all accrued and unpaid interest on
the Purchase Loan, is paid in full.

3.   CUSTODY; PERFECTION.  Promptly after the issuance of any Pledged
Securities in certificated form under the terms of the DI Plan, the Employee
shall deliver to Merrill the stock certificates representing the Pledged
Securities, together with stock transfer powers therefor executed in blank
granting Merrill the power to endorse and transfer the Pledged Securities.  If
at any time the Pledged Securities are in uncertificated form, Merrill as issuer
thereof may register itself as the owner thereof and comply with its own
instructions with respect thereto without further consent from the Employee.

4.   COVENANTS.  The Employee covenants and agrees with Merrill that, from and
after the date of the Participation Agreement until the Obligations are paid in
full, unless permitted by the terms of the DI Plan or the Investors' Agreement:

     4.1. Without the prior written consent of Merrill, the Employee will
     not (i) sell, assign, transfer, exchange or otherwise dispose of, or
     grant any option with respect to, the Collateral, or (ii) create, incur
     or permit to exist any lien or option in favor of, or claim of any person
     or entity with respect to, any of the Collateral, or any interest
     therein.

                                       21
<PAGE>

     4.2. At any time and from time to time, upon the written request of
     Merrill, and at the sole expense of the Employee, the Employee will
     promptly and duly execute and deliver such further instruments and
     documents and take such further actions as Merrill may reasonably request
     for the purposes of obtaining or preserving the full benefits of the
     Participation Agreement, including any attachments thereto and of the
     rights and powers herein granted.

5.   ADJUSTMENTS TO PLEDGED SECURITIES.  In the event that the aggregate
market value of the Pledged Securities increases, due to market appreciation, to
more than the Employee's Obligations, Merrill may in its sole discretion
pursuant to the terms of the DI Plan, upon request of the Employee, release to
the Employee such number of Pledged Securities representing any such excess.

6.   RIGHTS OF MERRILL.

     6.1. Immediately and without further notice, Merrill shall have the
     right to require any and all Proceeds be held as Collateral or to receive
     any and all Proceeds paid in respect of the Pledged Securities and make
     application thereof to the Obligations in such order as it may determine
     in its sole discretion, including, without limitation, the right to apply
     such Proceeds against the balance of the Purchase Loan and any accrued
     interest thereon and, subject to Section 7 hereof, to exercise all rights
     pertaining to the Pledged Securities as if Merrill were the absolute
     owner thereof, including, without limitation, the right to exercise all
     conversion, exchange, subscription or other rights, privileges or
     options, pertaining to any of the Pledged Securities and, in connection
     therewith, to deliver any of the Pledged Securities to any committee,
     depository, transfer agent, registrar or other designated agency upon
     such terms and conditions as may be determined, all without liability
     except to account for property actually received by it. Merrill, however,
     shall not have any duty to exercise any of the aforesaid rights,
     privileges or options and shall not be responsible for any failure to do
     so or delay in so doing.

     6.2. The rights of Merrill hereunder shall not be conditioned or
     contingent upon the pursuit by Merrill of any right or remedy against the
     Employee or against any other person or entity which may be or become
     liable in respect of all or any part of the Obligations or against any
     other collateral security therefor, guarantee thereof or right of offset
     with respect thereto.  Merrill shall not be liable for any failure to
     demand, collect or realize upon all or any part of the Collateral or for
     any delay in doing so, nor shall it be under any obligation to sell or
     otherwise dispose of any Collateral upon the request of the Employee or
     any other person or entity or to take any other action whatsoever with
     regard to the Collateral or any part thereof.

7.   RIGHTS OF THE EMPLOYEE.  The Employee shall be entitled to exercise any
and all voting and/or consensual rights and powers relating to or pertaining to
the Pledged Securities for any purpose not inconsistent with the terms of the
Participation Agreement or any attachment thereto or the DI Plan; provided,
however, that no vote shall be cast, and no consent shall be given or action
taken which would have the effect of impairing the position or interest of
Merrill in the Collateral.

8.   REMEDIES.  If an Event of Default shall occur and be continuing, Merrill
may exercise, in addition to all other rights and remedies granted in the
Participation Agreement or any attachment thereto, the DI Plan  or the
Investors' Agreement, all rights and remedies of a secured party under the
Minnesota Uniform Commercial Code.  Without limiting the generality of the
foregoing, Merrill, without demand of performance or other demand, presentment,
protest, advertisement or notice of any kind (except any notice required by law
referred to below) to or upon the Employee (all and each of which demands,
defenses, advertisements and notices are hereby expressly waived), may in such
circumstances upon at least ten (10) days prior written notice to the Employee,
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, or interest therein, and/or may deliver the Collateral or any part

                                       22
<PAGE>

thereof (or contract to do any of the foregoing) at public or private sale or
sales, upon such terms and conditions as it may deem advisable and at such
prices as it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk.  Merrill shall have the right upon any such
public sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Collateral so sold, free of any right or
equity or redemption in the Employee, which right or equity is hereby expressly
waived and released.  Any disposition made in accordance with the provisions of
this Section 8 shall be deemed to have been commercially reasonable.  Merrill
shall apply any Proceeds from time to time held by it and the net proceeds of
any such collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable costs and expenses of every kind incurred
therein, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations.  The
Employee agrees that if any Collateral is sold at any public or private sale,
Merrill may elect to sell only to a buyer who will give further assurances,
satisfactory in form and substance to Merrill, respecting compliance with the
requirements of the Securities Act of 1933, as amended, and applicable state
laws and regulations ("BLUE SKY LAWS"), and a sale subject to such condition
shall be deemed commercially reasonable.  If at any time when Merrill shall
determine to exercise its right to sell all or any part of the Collateral
pursuant to this Section 8, such Collateral or the part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the Securities
Act or registered or qualified under applicable Blue Sky Laws, as then in
effect. The Employee further agrees that in any sale of any of the Collateral,
Merrill is hereby authorized to comply with any limitation or restriction in
connection with such sale as it may be advised by counsel is necessary in order
to avoid any violation of applicable law (including, without limitation,
compliance with such procedures as may restrict the number of prospective
bidders and purchasers and/or further restrict such prospective bidders or
purchasers to persons who will represent and agree that they are purchasing for
their own account for investment and not with a view to the distribution or
resale of such Collateral), or in order to obtain any required approval of the
sale or of the purchaser by any governmental regulatory authority or official,
and the Employee further agrees that such compliance shall not result in such
sale being considered or deemed not to have been made in a commercially
reasonable manner, nor shall Merrill be liable or accountable to the Employee
for any discount allowed by reason of the fact that such Collateral is sold in
compliance with any such limitation or restriction.

9.   LIMITATION ON DUTIES REGARDING COLLATERAL.  Merrill's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession shall be to deal with it in the same manner as Merrill deals
with similar securities, instruments and property for its own account.  Neither
Merrill nor any of its affiliates, directors, officers, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any of the Collateral upon the request of the Employee
or otherwise.

10.  POWERS COUPLED WITH AN INTEREST.  All authorizations and agencies herein
contained with respect to the Collateral or any part thereof are irrevocable and
powers coupled with an interest.

11.  SEVERABILITY.  Any provision of the Participation Agreement, including
any attachment thereto,  which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

12.  NO WAIVER: CUMULATIVE REMEDIES.  Merrill shall not by any act (except by
a written instrument pursuant to paragraph 12 hereof), delay, indulgence,
omission or otherwise be deemed to have waived any right or remedy hereunder or
to have acquiesced in any default or Event of Default or in any breach of any of
the terms and conditions hereof.  No failure to exercise, nor any delay in
exercising, on the part of

                                       23
<PAGE>

Merrill, any right, power or privilege hereunder shall operate as a waiver
thereof.  No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  A waiver by Merrill of any
right or remedy hereunder on any one occasion shall not be construed as a bar
to any right or remedy which Merrill would otherwise have on any future
occasion.  The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.

                                       24
<PAGE>

                      COINVESTMENT SHARES VESTING SCHEDULE


On the Closing Date thirty-five percent (35%) of the Coinvestment Shares
purchased by the Employee shall immediately vest, and the vesting schedule for
the Coinvestment shall be as follows:


<TABLE>
<CAPTION>
------------------------------------------------------------ ---------------------------------------------------------
                                                                        PERCENTAGE OF COINVESTMENT SHARES
                       VESTING DATE                                        VESTED AS OF THE VESTING DATE*

------------------------------------------------------------ ---------------------------------------------------------
<S>                                                          <C>
One Year from Closing Date                                   35% of the Coinvestment Shares
                                                             purchased by the Employee
------------------------------------------------------------ ---------------------------------------------------------
Two Years from Closing Date                                  35% of the Coinvestment Shares
                                                             purchased by the Employee
------------------------------------------------------------ ---------------------------------------------------------
Three Years from Closing Date                                57% of the Coinvestment Shares
                                                             purchased by the Employee
------------------------------------------------------------ ---------------------------------------------------------
Four Years from Closing Date                                 79% of the Coinvestment Shares
                                                             purchased by the Employee
------------------------------------------------------------ ---------------------------------------------------------
Five Years from Closing Date                                 100% of Coinvestment Shares
                                                             purchased by the Employee
------------------------------------------------------------ ---------------------------------------------------------
</TABLE>


* In the event that the vesting of any Coinvestment Shares results in a
fractional Coinvestment Share, such fractional Coinvestment Share shall be
rounded up to the nearest whole Coinvestment Share.

                                       25
<PAGE>


                   CONFIDENTIALITY AND NONCOMPETE PROVISIONS


You are being offered equity participation benefits (see accompanying
documents). In consideration of these benefits, you agree to be bound by the
restrictions described below. In addition, if you have a written employment
agreement, you also agree to the compensation modifications of that employment
agreement as described below. If any provision of this Confidentiality Agreement
conflicts with any provision of your underlying employment agreement, the
provisions of this Confidentiality Agreement will control and govern the
interpretation of both documents. Minnesota law governs the interpretation of
this Confidentiality Agreement.

If you are working under a term employment agreement that covers all or part of
FY 01 (2/1/00-1/31/01), your FY 01 salary will be as stated in your agreement.
However, for any subsequent fiscal years covered by the term of your agreement,
your salary will be the lesser of either your salary as stated in your agreement
or 120% of what your total compensation (salary and bonus) would have otherwise
been under the Merrill compensation plan in effect during the previous year.

For example, if your salary is $100,000 per year and during FY 01 your
revenues/margins do not cover your $100,000 salary but instead cover only a
$60,000 salary, your salary for FY 02 would be $72,000 (120% of $60,000, which
is less than $100,000). Then, if during FY 02 your revenues/margins cover a
total compensation of $120,000 (in other words, you would receive a total bonus
for FY 02 of $48,000), your salary for FY 03 would return to $100,000 (which is
less than $144,000 [120% of $120,000]).

Should your salary be reduced as described above, your bonus during a reduced
salary year will be calculated and paid out on a quarterly basis, instead of the
normal annual basis. In most situations, the maximum quarterly bonus will be the
difference between your quarterly salary and your original quarterly guarantee.
In other words, under the example above during FY 02, you would be entitled to a
quarterly bonus if your revenues/margins are on pace to cover $100,000. For
example, if your revenues/margins coverage stream for the quarters were:

           -   1st qtr:  $45,000
           -   2nd qtr:  $5,000
           -   3rd qtr:  $15,000
           -   4th qtr:  $55,000

you would receive:

          -    a $7,000 bonus for the first quarter ($7,000 makes up the
               difference between your quarterly salary of $18,000 and your
               original quarterly guarantee of $25,000);

          -    another $7,000 bonus for the second quarter (since you remain on
               pace to cover $100,000, you still receive a bonus);

           -   no bonus for the third quarter (you are now not on pace to cover
               $100,000); and

          -    a $34,000 bonus for the fourth quarter (for the entire year, you
               would be entitled to a $48,000 bonus, but since you have already
               received $14,000 from earlier quarters, you get the balance at
               year-end).

                                       26
<PAGE>

Similarly, using this same example, if you covered nothing for your first
quarter, but covered $50,000 in the second quarter, you would get no bonus for
the first quarter, but would get a $14,000 bonus for the second quarter (since
you are on pace to cover $100,000, you will now in effect receive two quarterly
bonuses for your second quarter efforts).

These compensation modifications are not intended to alter the length of the
term of your agreement.

Merrill invests a significant amount of time and money on technology and
research in order to develop and maintain its goodwill and success. During your
employment, you will have access to Merrill's confidential information, which is
information that belongs to Merrill and is not generally known by third parties.
Confidential information includes, by way of example only, trade secrets,
financial information, customer lists, business plans and strategies, and
research and development work. You acknowledge that during your employment with
Merrill and for an indefinite period of time following the termination of your
employment, Merrill is entitled to protection from the use of such information
by you or a third party, or disclosure of such information to a third party. You
therefore agree that you will never disclose such information to any third
party, or use such information for your own benefit or for the benefit of
another.

One way Merrill invests in its business is to support your efforts to develop
and maintain close working relationships with Merrill's clients. You acknowledge
that for one year following the termination of your employment, Merrill is
entitled to protection from the use or disclosure of the client relationships
for the benefit of a third party or for your own benefit. You therefore agree
that for one year following the termination of your employment, you will not
directly or indirectly call upon, solicit, or provide any service or product to
any existing or potential Merrill client serviced by, assigned to, or solicited
by you working alone or in conjunction with another Merrill employee. These
restrictions apply only where the client is solicited to purchase a service or
product that competes with a service or product of Merrill. You further agree
that for one year after your employment with Merrill, you will not solicit or
cause to be solicited any employee of Merrill for the purpose of employment with
any competitor of Merrill.

If you violate these restrictions, you will cause irreparable harm to Merrill
and you agree that Merrill will be entitled to injunctive relief, in addition to
any other remedies allowed by law, and the costs incurred in enforcing the
restrictions, including reasonable attorney fees. Should a court rule that a
restriction is unreasonable or otherwise unenforceable, the court shall modify
the restriction to the extent necessary to make the provision enforceable.

You also acknowledge that while performing services for Merrill, any "Work
Product" (inventions, improvements, ideas, discoveries, works of authorship,
trademarks, trade secrets, processes, know-how, whether or not such are
patentable or copyrightable, and whether or not in writing or reduced to
practice) conceived or created by you alone or with others, belongs only to
Merrill. You will promptly disclose to Merrill all Work Product developed by
you. Such Work Product is considered a "work for hire" and is the sole and
exclusive property of Merrill and Merrill is the exclusive owner of all such
patents, copyrights and related rights. You will transfer and assign to Merrill
all rights to such Work Product and provide Merrill with all of the assistance
it reasonably requires in order for Merrill to perfect, protect, and use its
rights to such Work Product. This section does not apply to Work Product for
which no equipment, supplies, facility or trade secret information of Merrill's
was used and which was developed entirely on your own time and (1) which does
not relate (a) directly to Merrill's business or (b) to Merrill's actual or
demonstrably anticipated research or development, or (2) which does not result
from any work performed by you for Merrill.

                                       27
<PAGE>

                                83(B) ELECTION FORM

NOTE TO IRS:  PLEASE TIME STAMP ONE COPY WITH ENDORSEMENT OF RECEIPT AND RETURN
IN THE ENCLOSED STAMPED, ADDRESSED ENVELOPE.

                          ELECTION UNDER SECTION 83(B)
                OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED

The undersigned taxpayer hereby elects, pursuant to Section 83(b) of the
Internal Revenue Code of 1986, as amended, to include in the taxpayer's gross
income for the current taxable year, the amount of compensation, if any, taxable
to the taxpayer in connection with the receipt of the property described below:

1.   The name, address, taxpayer identification number, and taxable year of the
     taxpayer and spouse, if applicable, are as follows:

Name:   Taxpayer: __________________________   Spouse:_______________________

Address:_____________________________________________________

Tax ID#:____________________________________________

Taxable Year:______________________________


2.   The property with respect to which the election is made is described as
     follows:  _______ shares of the Class B Common Stock of Merrill
     Corporation, a Minnesota corporation (the "Company").

3.   The date on which the property was transferred is:  __________, ______.

4.   The property is subject to the following restrictions:  The right of
     Merrill to repurchase the shares, or a portion thereof, at a price per
     share as calculated pursuant to the 1999 Merrill Corporation Direct
     Investment Plan, in the event of the taxpayer's termination of service with
     Merrill.

5.   The fair market value at the time of transfer (determined without regard to
     the restrictions) of such property is:  $22.00 per share.

6.   The amount (if any) paid for the property is:  $22.00 per share.

The taxpayer has submitted a copy of this statement to the person for whom the
services were performed in connection with the taxpayer's receipt of the
property.  The taxpayer is the person performing the services in connection with
the transfer of such property.

THE UNDERSIGNED UNDERSTANDS THAT THE FOREGOING ELECTION MAY NOT BE REVOKED
EXCEPT WITH THE CONSENT OF THE COMMISSIONER.

Dated:________________________       _______________________________________
                                     (Signature of the Taxpayer)

The undersigned spouse of the taxpayer joins in this election.

Dated:________________________       _______________________________________
                                     (Signature of the Spouse)


                                       28

<PAGE>

Truth-in-Lending Disclosure

                                        FOR

                            CREDIT SALE OF CAPITAL STOCK
                                     ISSUED BY
                                MERRILL CORPORATION


                                -FIRSTNAME- -LASTNAME-

<TABLE>
<S>                       <C>                    <C>                     <C>                    <C>
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
 ANNUAL PERCENTAGE RATE      FINANCE CHARGE         AMOUNT FINANCED        TOTAL OF PAYMENTS      TOTAL SALE PRICE
The Cost of your credit     The dollar amount     The amount of credit    The amount you will     The total cost of
   as a yearly rate.      the credit will cost   provided to you or on    have paid after you     your purchase on
                                  you.                your behalf.           have made all        credit, including
                                                                              payments as       your down- payment of
                                                                              scheduled.            $-Cash_Down-
6.3789%
                                                   $-Amt_Financed-
                          $-Finance_Charge-                              $-Total_Payments-      $-Total_Sale_Price-
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
</TABLE>


You have the right to receive at this time an itemization of the Amount
Financed.

 /X/ I want an itemization.      / / I do not want an itemization.

Your payment schedule will be:

<TABLE>
<CAPTION>
------------------------------ ---------------------------- ----------------------------------------------------------
Number of Payments             Amount of Payments           When Payments Are Due
------------------------------ ---------------------------- ----------------------------------------------------------
<S>                            <C>                          <C>
              1                $-Total_Payments-            January 28, 2008
------------------------------ ---------------------------- ----------------------------------------------------------

------------------------------ ---------------------------- ----------------------------------------------------------
</TABLE>


SECURITY:  You are giving a security interest in:

/X/   the Coinvestment Shares you purchased pursuant to the Participation
Agreement, dated January 28, 2000, by and between you and Merrill Corporation.

PREPAYMENT:  If you pay off early, you

/ / may     /X/ will not     have to pay a penalty.


See your contract documents for any additional information about nonpayment,
default, any required repayment in full before the schedule date, and prepayment
refunds and penalties.

                                         29

<PAGE>


                         ITEMIZATION OF AMOUNT FINANCED

                                         FOR

                CREDIT SALE OF MERRILL CORPORATION CAPITAL STOCK


                              -FIRSTNAME- -LASTNAME-


Itemization of the Amount Financed of $-AMT_FINANCED-


          $-AMT_FINANCED- Amount credited to your account

                                           30