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Exhibit 4.7    
    

Execution Version  

 

WARRANT

REGISTRATION RIGHTS AGREEMENT  

 MERRILL CORPORATION  

140,000
Warrants to Purchase Shares of Common Stock 

Dated
as of November 23, 1999 

DONALDSON, LUFKIN & JENRETTE

SECURITIES CORPORATION  

 

 

        This
Warrant Registration Rights Agreement (this "Agreement") is made and entered into as of November 23, 1999, between Merrill
Corporation, a Minnesota corporation (the "Issuer" or the "Company"), and Donaldson, Lufkin &
Jenrette Securities Corporation (the "Initial Purchaser"). 

        The
Issuer and the Initial Purchaser have entered into a Purchase Agreement, dated November 18, 1999 (the "Purchase Agreement"),
the Guarantors (as defined in the Purchase Agreement) and Viking Merger Sub, Inc. ("Viking"). The Purchase Agreement provides for the offering by
the Company of 140,000 Units, each consisting of $1,000 principal amount at maturity of the Company's 12% Senior Subordinated Notes due 2009 (the
"Notes") and one warrant initially representing the right to purchase 1.22987 Common Shares, par value $0.01 per share, of Viking
("Viking Common Shares"). 

        Pursuant
to the Purchase Agreement, Viking has entered into a Warrant Agreement (the "Warrant Agreement") with Norwest Bank Minnesota,
N.A., as warrant agent (the "Warrant Agent") providing for the issuance of 140,000 warrants (the
"Warrants") each initially representing the right to purchase 1.22987 shares of Viking Common Shares. 

        The
Company and Viking have entered into an Agreement and Plan of Merger dated as of July 14, 1999 pursuant to which Viking will merger (the
"Merger") with and into the Company. Upon consummation of the Merger, each Viking Common Share will become one share of Class B Common Stock of
the Company, par value $0.01 per share, and each Warrant by its terms will become exercisable to initially purchase 1.22987 shares of such Class B Common Stock of the Company and the Company
will succeed to all obligations of Viking under the Warrant Agreement and with respect to the Warrants. In addition, the Company will enter into a Warrant Assumption Agreement in accordance with
Section 8(l) of the Warrant Agreement providing for its assumption of the obligations of Viking thereunder. 

        In
order to induce the Initial Purchaser to purchase the Warrants, the Company has agreed to provide the registration rights set forth in this Agreement. The execution and delivery of
this Agreement is a condition to the obligations of the Initial Purchaser set forth in Section 9 of the Purchase Agreement. 

        Capitalized
terms used herein and not otherwise defined shall have the meaning assigned to them in the Warrant Agreement. 

        The
parties hereby agree as follows: 

1.     DEFINITIONS  

        As used in this Agreement, the following capitalized terms shall have the following meanings: 

        Act:    The Securities Act of 1933, as amended. 

        Affiliate:    As defined in Rule 144. 

        Black Out Notice:    As defined in Section 4(b) hereof. 

        Black Out Period:    As defined in Section 3(a) hereof. 

        Closing Date:    The date hereof. 

        Commission:    The Securities and Exchange Commission. 

        Exchange Act:    The Securities Exchange Act of 1934, as amended. 

        Expiration Date:    5:00 p.m. New York City time on May 1, 2009. 

        Holders:    As defined in Section 2 hereof. 

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        Prospectus:    The prospectus included in a Registration Statement at the time such Registration Statement is declared
effective, as amended or supplemented by any prospectus supplement and by all other amendments thereto, including post-effective amendments, and all material incorporated by reference into
such Prospectus. 

        Registration Statement:    Any registration statement of the Issuer relating to the registration for resale of Transfer
Restricted Securities that is filed pursuant to the provisions of this Agreement and including the Prospectus included therein, all amendments and supplements thereto (including
post-effective amendments) and all exhibits and material incorporated by reference therein. 

        Rule 144:    Rule 144 promulgated under the Act. 

        Transfer Restricted Securities:    (a) Each Warrant and Warrant Share held by an Affiliate of the Issuer and (b) each
other Warrant and Warrant Share until the earlier to occur of (i) the date on which such Warrant or Warrant Share (other than any Warrant Share issued upon exercise of a Warrant in accordance
with a Registration Statement) has been disposed of in accordance with a Registration Statement and (ii) the date on which such Warrant or Warrant Share (or the related Warrant) is distributed
to the public pursuant to Rule 144 under the Act. 

2.     HOLDERS  

        A Person is deemed to be a holder of Transfer Restricted Securities (each, a "Holder") whenever such Person is the
holder of record of Transfer Restricted Securities. 

3.     SHELF REGISTRATION  

        (a)    Shelf Registration.    The Issuer shall prepare and cause to be filed with the Commission on or before
120 days from the Closing Date pursuant to Rule 415 under the Securities Act a Registration Statement on the appropriate form relating to resales of Transfer Restricted Securities by the
Holders thereof and the issuance of Warrant Shares upon the exercise of the Warrants sold pursuant to such Registration Statement. The Company shall use its reasonable best efforts to cause the
Registration Statement to be declared effective by the Commission on or before 180 days after the Closing Date. 

        To
the extent necessary to ensure that the Registration Statement is available for sales of Transfer Restricted Securities by the Holders thereof entitled to the benefit of this
Section 3(a), the Issuer shall use its reasonable best efforts to keep any Registration Statement required by this Section 3(a) continuously effective, supplemented, amended and current
as required by and subject to the provisions of Section 4(a) hereof and in conformity with the requirements of this Agreement, the Act and the policies, rules and regulations of the Commission
as announced from time to time, until the later of (i) the second anniversary of the effective date of the Registration Statement and (ii) the earlier of (A) the Expiration Date
and (B) the first date as of which all Warrants have been exercised by the Holders thereof; provided that such obligation shall expire before
such date if the Issuer delivers to the Warrant Agent a written opinion of counsel to the Issuer (which opinion of counsel shall be satisfactory to the Initial Purchaser) that all Holders (other than
Affiliates of the Issuer) of Warrants and Warrant Shares may resell the Warrants and the Warrant Shares without registration under the Act and without restriction as to the manner, timing or volume of
any such sale; and provided, further, that notwithstanding the foregoing, any Affiliate of the Issuer may, with notice to the Issuer, require the Issuer
to keep the Registration Statement continuously effective for resales by such Affiliate for so long as such Affiliate holds Warrants or Warrant Shares, including as a result of any market-making
activities or other trading activities of such Affiliate. Notwithstanding the foregoing, the Issuer shall not be required to amend or supplement the Registration Statement, any related prospectus or
any document incorporated therein by reference, for a period (a "Black Out Period") not to exceed, for so long as this Agreement is in effect, an
aggregate of 60 days in any calendar year, in the event that 

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(i) an
event occurs and is continuing as a result of which the Registration Statement, any related prospectus or any document incorporated therein by reference as then amended or supplemented
would, in the Issuer's good faith judgment, contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and (ii)(A) the Issuer determines in its good faith judgment that the disclosure of such event at such time would have a material adverse
effect on the business, operations or prospects of the Issuer or (B) the disclosure otherwise relates to a material business transaction which has not yet been publicly disclosed;  provided that
such Black Out Period shall be extended for any period, not to exceed an aggregate of 30 days in any calendar year, during which
the Commission is reviewing any proposed amendment or supplement to the Registration Statement, any related prospectus or any document incorporated therein by reference which has been filed by the
Issuer; and provided, further, that no Black Out Period may be in effect during the three months prior to the Expiration Date. 

        (b)    Provision by Holders of Certain Information in Connection with the Registration Statement.    No Holder of
Transfer Restricted Securities may include any of its Transfer Restricted Securities in any Registration Statement pursuant to this Agreement unless and until such Holder furnishes to the Issuer in
writing, within 20 days after receipt of a request therefor, the information specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act for use in connection
with any Registration Statement or Prospectus or preliminary Prospectus included therein. Each selling Holder agrees to promptly furnish additional information required to be disclosed in order to
make the information previously furnished to the Issuer by such Holder not materially misleading. 

4.     REGISTRATION PROCEDURES  

        (a)   In
connection with the Registration Statement and any related Prospectus required by this Agreement, the Issuer shall: 

        (i)    Comply
with all the provisions of this Section 4(a) and use its reasonable best efforts to effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of distribution thereof (as indicated in the information furnished to the Issuer pursuant to Section 3(b) hereof), and
pursuant thereto the Issuer will prepare and file with the Commission a Registration Statement relating to the registration on any appropriate form under the Act, which form shall be available for the
sale of the Transfer Restricted Securities in accordance with the intended method or methods of distribution thereof within the time periods and otherwise in accordance with the provisions hereof; 

        (ii)   use
its reasonable best efforts to keep such Registration Statement continuously effective and provide all requisite financial statements for the period specified in
Section 3 of this Agreement. Upon the occurrence of any event that would cause any such Registration Statement or the Prospectus contained therein (A) to contain an untrue statement of
material fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading or (B) not to be
effective and usable for resale of Transfer Restricted Securities during the period required by this Agreement, the Issuer shall, subject to Section 3(a), file promptly an appropriate amendment
to such Registration Statement or a supplement to the Prospectus, as applicable, curing such defect, and, in the case of an amendment, use its reasonable best efforts to cause such amendment to be
declared effective as soon as practicable; 

        (iii)  prepare
and file with the Commission such amendments and post-effective amendments to the applicable Registration Statement as may be necessary to keep
such Registration Statement effective for the applicable period set forth in Section 3; cause the Prospectus to be supplemented 

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by
any required Prospectus supplement, and as so supplemented to be filed pursuant to Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as applicable, under the
Act in a timely manner; and comply with the provisions of the Act with respect to the disposition of all securities covered by such Registration Statement during the applicable period in accordance
with the intended method or methods of distribution by the sellers thereof set forth in such Registration Statement or supplement to the Prospectus; 

        (iv)  promptly
advise each Holder whose Transfer Restricted Securities have been included in the Registration Statement (each, a "Relevant
Holder") and the Initial Purchaser and, if requested by such Person, confirm such advice in writing, (A) when the Prospectus or any Prospectus supplement or
post-effective amendment has been filed, and, with respect to any applicable Registration Statement or any post-effective amendment thereto, when the same has become effective,
(B) of any request by the Commission for amendments to the Registration Statement or amendments or supplements to the Prospectus or for additional information relating thereto, (C) of
the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement under the Act or of the suspension by any state securities commission of the qualification
of the Transfer Restricted Securities for offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding purposes, and (D) of the existence of any fact or
the happening of any event that makes any statement of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement thereto or any document incorporated by reference
therein untrue, or that requires the making of any additions to or changes in the Registration Statement in order to make the statements therein not misleading, or that requires the making of any
additions to or changes in the Prospectus in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. If at any time the Commission shall
issue any stop order suspending the effectiveness of the Registration Statement, or any state securities commission or other regulatory authority shall issue an order suspending the qualification or
exemption from qualification of the Transfer Restricted Securities under state securities or Blue Sky laws, the Issuer shall use its reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time; 

        (v)   subject
to Section 4(a)(ii), if any fact or event contemplated by Section 4(a)(iv)(D) hereof shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related Prospectus or any document incorporated therein by reference or file any other required document so that, as thereafter
delivered to the purchasers of Transfer Restricted Securities, the Prospectus will not contain an untrue statement of a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances under which they were made, not misleading; 

        (vi)  furnish
to each Relevant Holder and the Initial Purchaser, before filing with the Commission, copies of any Registration Statement or any Prospectus included therein or
any amendments or supplements to any such Registration Statement or Prospectus (including all documents incorporated by reference after the initial filing of such Registration Statement), which
documents will be subject to the review and comment of such Persons in connection with such sale, if any, for a period of at least five Business Days, and the Issuer will not file any such
Registration Statement or Prospectus or any amendment or supplement to any such Registration Statement or Prospectus (including all such documents incorporated by reference) to which such Person shall
reasonably object within five Business Days after the receipt thereof. Such Person shall be deemed to have reasonably objected to such filing if such Registration Statement, amendment, Prospectus or
supplement, as applicable, as proposed to be filed, contains an untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading or fails to comply with the applicable requirements of the Act; 

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        (vii) promptly
prior to the filing of any document that is to be incorporated by reference into a Registration Statement or Prospectus, provide copies of such document to
each Relevant Holder and the Initial Purchaser, make the Issuer's representatives available for discussion of such document and other customary due diligence matters, and include such information in
such document prior to the filing thereof as such Persons may reasonably request; 

        (viii) make
available, at reasonable times, for inspection by each Relevant Holder and the Initial Purchaser and any attorney or accountant retained by the such Person, all
financial and other records, pertinent corporate documents of the Issuer and cause the Issuer's officers, directors and employees to supply all information reasonably requested by any such Person,
attorney or accountant in connection with such Registration Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its effectiveness, other than
the inspection of any records, documents or information which would have an adverse effect on the Issuer's competitive position; provided, however, that
any records, documents or information which are necessary to avoid or correct a material misstatement or omission in such Registration Statement or which are necessary to enable a Holder or the
Initial Purchaser and any attorney or accountant retained by any such Persons to exercise any applicable due diligence responsibilities will be released to such Holder or the Initial Purchaser. 

        (ix)  if
requested any Relevant Holder or by the Initial Purchaser, promptly include in any Registration Statement or Prospectus, pursuant to a supplement or
post-effective amendment if necessary, such information as any such Person reasonably requests to have included therein, including, without limitation, information relating to the "Plan of
Distribution" of the Transfer Restricted Securities and the use of the Registration Statement or Prospectus for market-making activities; and make all required filings of such Prospectus supplement or
post-effective amendment as soon as practicable after the Issuer is notified of the matters to be included in such Prospectus supplement or post-effective amendment; 

        (x)   furnish
to the Initial Purchaser and each Relevant Holder upon request, without charge, at least one copy of the Registration Statement, as first filed with the
Commission, and of each amendment thereto, including all documents incorporated by reference therein and all exhibits (including exhibits incorporated therein by reference); 

        (xi)  deliver
to the Initial Purchaser and each Relevant Holder, without charge, as many copies of the Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons reasonably may request; the Issuer hereby consents to the use (in accordance with law) of the Prospectus and any amendment or supplement thereto by each Person in
connection with the offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any amendment or supplement thereto and all market-making activities of the Initial
Purchaser, as the case may be; 

        (xii) upon
the request of any Relevant Holder or the Initial Purchaser, enter into such agreements (including underwriting agreements) as are customary in comparable
offerings and make such representations and warranties and take all such other actions in connection therewith in order to expedite or facilitate the disposition of the Transfer Restricted Securities
pursuant to any applicable Registration Statement contemplated by this Agreement as may be reasonably requested by any Person in connection with any sale or resale pursuant to any applicable 

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Registration
Statement. In such connection, and also in connection with market-making activities by the Initial Purchaser, the Issuer shall: 

        (A)  upon
request of any Person, furnish (or in the case of paragraphs (2) and (3), use its reasonable best efforts to cause to be furnished) to each Person, upon the
effectiveness of the Registration Statement: 

        (1)   a
certificate, dated such date, signed on behalf of the Issuer by (x) the President or any Vice President and (y) a principal financial or accounting
officer of the Issuer, confirming, as of the date thereof, the matters set forth in Sections 10(a) and 10(b) of the Purchase Agreement and such other similar matters as such Person may reasonably
request; 

        (2)   an
opinion, dated the date of effectiveness of the Registration Statement, of counsel for the Issuer covering matters similar to those set forth in Sections 10(f),
(g) and (h) of the Purchase Agreement and such other matters as such Person may reasonably request, and in any event including a statement to the effect that such counsel has
participated in conferences with officers and other representatives of the Issuer, representatives of the independent public accountants for the Issuer and have considered the matters required to be
stated therein and the statements contained therein, although such counsel has not independently verified the accuracy, completeness or fairness of such statements; and that such counsel advises that,
on the basis of the foregoing, no facts came to such counsel's attention that caused such counsel to believe that the applicable Registration Statement, at the time such Registration Statement or any
post-effective amendment thereto became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make
the statements therein not misleading, or that the Prospectus contained in such Registration Statement as of its date contained an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. Without limiting the foregoing, such counsel may state further
that such counsel assumes no responsibility for, and has not independently verified, the accuracy, completeness or fairness of the financial statements, notes and schedules and other financial data
included in any Registration Statement contemplated by this Agreement or the related Prospectus; and 

        (3)   a
customary comfort letter, dated the date of effectiveness of the Registration Statement, from the Issuer's independent accountants, in the customary form and covering
matters of the type customarily covered in comfort letters to underwriters in connection with underwritten offerings, and affirming the
matters set forth in the comfort letters delivered pursuant to Section 10(l) of the Purchase Agreement; and 

        (B)  deliver
such other documents and certificates as may be reasonably requested by such Person to evidence compliance with the matters covered in clause (A) above
and with any customary conditions contained in any agreement entered into by the Issuer pursuant to this clause; 

        (xiii) prior
to any public offering of Transfer Restricted Securities, cooperate with the selling Holders and their counsel in connection with the registration and
qualification of the Transfer Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling Holders may request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities covered by the applicable Registration Statement; provided,
however, that the Issuer shall not be required to register or qualify as a foreign corporation where it is not now so qualified or to take any action that would 

7

 

subject
it to the service of process in suits or to taxation, other than as to matters and transactions relating to the Registration Statement, in any jurisdiction where it is not now so subject; 

        (xiv) in
connection with any sale of Transfer Restricted Securities that will result in such securities no longer being Transfer Restricted Securities, cooperate with the
selling Holders to facilitate the timely preparation and delivery of certificates representing Transfer Restricted Securities to be sold and not bearing any restrictive legends; and to register such
Transfer Restricted Securities in such denominations and such names as the selling Holders may request at least two business days prior to such sale of Transfer Restricted Securities; 

        (xv) use
its reasonable best efforts to cause the disposition of the Transfer Restricted Securities covered by the Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary to enable the seller or sellers thereof to consummate the disposition of such Transfer Restricted Securities, subject to the
proviso contained in clause (xiii) above; 

        (xvi) provide
a CUSIP number for all Transfer Restricted Securities not later than the effective date of a Registration Statement covering such Transfer Restricted
Securities and provide the Warrant Agent with printed certificates for the Transfer Restricted Securities which are in a form eligible for deposit with The Depository Trust Company; 

        (xvii) otherwise
use its reasonable best efforts to comply with all applicable rules and regulations of the Commission so long as any provision of this Agreement shall be
applicable, and make generally available to its security holders with regard to any applicable Registration Statement, as soon as
practicable, a consolidated earnings statement meeting the requirements of Rule 158 (which need not be audited) covering a twelve-month period beginning after the effective date of the
Registration Statement (as such term is defined in Rule 158(c) under the Act); and 

        (xviii) provide
promptly to each Holder and the Initial Purchaser, upon request, each document filed after the date of this Agreement with the Commission pursuant to the
requirements of Section 13 or Section 15(d) of the Exchange Act. 

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        (b)    Restrictions on Holders.    Each Holder agrees by acquisition of a Transfer Restricted Security and the
Initial
Purchaser agrees that, upon receipt of the notice from the Issuer of the commencement of a Black Out Period (in each case, a "Black Out Notice"), such
Person will forthwith discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration Statement (i) such Person has received copies of the supplemented or
amended Prospectus referred to in Section 4(a)(v) hereof, or (ii) until such Person is advised in writing that the use of the Prospectus may be resumed, and has received copies of
any additional or supplemental filings that are incorporated by reference in the Prospectus. Each Person receiving a Black Out Notice hereby agrees that it will either (i) destroy any
Prospectuses, other than permanent file copies, then in such Person's possession which have been replaced by the Issuer with more recently dated Prospectuses or (ii) deliver to the Issuer (at
the Issuer's expense) all copies, other than permanent file copies, then in such Person's possession of the Prospectus covering such Transfer Restricted Securities that was current at the time of
receipt of the Black Out Notice. The time period regarding the effectiveness of such Registration Statement set forth in Section 3 hereof shall be extended by a number of days equal to the
number of days in the period from and including the date of delivery of the Suspension Notice to the Recommencement Date. 

5.     REGISTRATION EXPENSES  

        All expenses incident to the Issuer's performance of or compliance with this Agreement will be borne by the Issuer, regardless of whether a Registration Statement
becomes effective, including, without limitation: (i) all registration and filing fees and expenses; (ii) all fees and expenses of compliance with federal securities and state Blue Sky
or securities laws; (iii) all expenses of printing (including printing Prospectuses (whether for sales, market-making or otherwise)), messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel for the Issuer; (v) all application and filing fees in connection with listing the Warrant Shares on a national securities exchange or
automated quotation system pursuant to the requirements hereof; and (vi) all fees and disbursements of independent certified public accountants of the Issuer (including the expenses of any
special audit and comfort letters required by or incident to such performance). 

        The
Issuer will, in any event, bear its internal expenses (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties),
the expenses of any annual audit and the fees and expenses of any Person, including special experts, retained by the Issuer. 

6.     INDEMNIFICATION  

        (a)   The
Issuer agrees to indemnify and hold harmless each Holder, its directors, officers and each Person, if any, who controls such Holder (within the meaning of
Section 15 of the Act or Section 20 of the Exchange Act), from and against any and all losses, claims, damages, liabilities, judgments, (including, without limitation, any legal or other
expenses incurred in connection with investigating or defending any matter, including any action that could give rise to any such losses, claims, damages, liabilities or judgments) caused by any
untrue statement or alleged untrue statement of a material fact contained in any Registration Statement, preliminary prospectus or Prospectus (or any amendment or supplement thereto) provided by the
Issuer to any Holder or any prospective purchaser of Transfer Restricted Securities, or caused by any omission or alleged omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as such losses, claims, damages, liabilities or judgments are caused by an untrue statement or omission or alleged untrue
statement or omission that is based upon information relating to a Holder furnished in writing to the Issuer by such Holder. 

        (b)   Each
Holder of Transfer Restricted Securities agrees, severally and not jointly, to indemnify and hold harmless the Issuer, its directors and officers, and each person,
if any, who controls (within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Issuer, to the same extent 

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as
the foregoing indemnity from the Issuer set forth in Section 6(a) hereof, but only with reference to information relating to such Holder furnished in writing to the Issuer by such Holder
expressly for use in any Registration Statement. In no event shall any Holder, its directors, officers or any Person who controls such Holder be liable or responsible for any amount in excess of the
amount by which the total amount received by such Holder with respect to its sale of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid by such
Holder for such Transfer Restricted Securities and (ii) the amount of any damages that such Holder, its directors, officers or any Person who controls such Holder has otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged omission. 

        (c)   In
case any action shall be commenced involving any person in respect of which indemnity may be sought pursuant to Section 6(a) or 6(b) (the
"indemnified party"), the indemnified party shall promptly notify the person against whom such indemnity may be sought (the
"indemnifying party") in writing, and the indemnifying party shall assume the defense of such action, including the employment of counsel reasonably
satisfactory to the indemnified party and the payment of all fees and expenses of such counsel, as incurred (except that, in the case of any action in respect of which indemnity may be sought pursuant
to both Sections 6(a) and 6(b), a Holder shall not be required to assume the defense of such action pursuant to this Section 6(c), but may employ separate counsel and participate in the defense
thereof, but the fees and expenses of such counsel, except as provided below, shall be at the expense of the Holder). Any indemnified party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the indemnified party, unless (i) the employment of such counsel shall have
been specifically authorized in writing by the indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such action or employ counsel reasonably satisfactory
to the indemnified party or (iii) the named parties to any such action (including any impleaded parties) include both the indemnified party and the indemnifying party, and the indemnified party
shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the indemnifying party (in which case
the indemnifying party shall not have the right to assume the defense of such action on behalf of the indemnified party). In any such case, the indemnifying party shall not, in connection with any one
action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the fees and expenses of more than
one separate firm of attorneys (in addition to any local counsel) for all indemnified parties and all such fees and expenses shall be reimbursed as they are incurred. Such firm shall be designated in
writing by a majority of the Holders, in the case of the parties indemnified pursuant to Section 6(a), and by the Issuer, in the case of parties indemnified pursuant to Section 6(b). The
indemnifying party shall indemnify and hold harmless the indemnified party from and against any and all losses, claims, damages, liabilities and judgments by reason of any settlement of any action
(i) effected with its written consent or (ii) effected without the indemnifying party's written consent if the settlement is entered into more than twenty Business Days after the
indemnified party shall have received a request from the indemnified party for reimbursement for the fees and expenses of counsel (in any case where such fees and expenses are at the expense of the
indemnifying party) and, prior to the date of such settlement, the indemnifying party shall have failed to comply with such reimbursement request. The indemnifying party shall not, without the prior
written consent of the indemnified party, effect any settlement or compromise of, or consent to the entry of judgment with respect to, any pending or threatened action in respect of which the
indemnified party is or could have been a party and indemnity or contribution may be or could have been sought hereunder by the indemnified party, unless such settlement, compromise or judgment
(i) includes an unconditional release of the indemnified party from all liability on claims that are or could have been the subject matter of such action and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or on behalf of the indemnified party. 

10

 

        (d)   To
the extent that the indemnification provided for in this Section 6 is unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as
a result of such losses, claims, damages, liabilities or judgments (i) in such proportion as is appropriate to reflect the relative benefits received by the Issuer, on the one hand, and the
Holders, on the other hand, from their sale of Transfer Restricted Securities or (ii) if the allocation provided by clause 6(d)(i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred to in clause 6(d)(i) hereof but also the relative fault of the Issuer, on the one hand, and of the Holder,
on the other hand, in connection with the statements or omissions which resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant equitable considerations. The
relative fault of the Issuer, on the one hand, and of the Holder, on the other hand, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact relates to information supplied by the Issuer, on the one hand, or by the Holder, on the other hand, and the parties'
relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 

        The
Issuer and each Holder agree that it would not be just and equitable if contribution pursuant to this Section 6(d) were determined by pro
rata allocation (even if the Holders were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable
considerations referred to in the immediately preceding paragraph. The amount paid or payable by an indemnified party as a result of the losses, claims, damages, liabilities or judgments referred to
above shall be deemed to include, subject to the limitations set forth in the second paragraph of Section 6(a), any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any matter, including any action that could have given rise to such losses, claims, damages liabilities or judgments. Notwithstanding the provisions of this
Section 6, no Holder, its directors, its officers or any Person, if any, who controls such Holder shall be required to contribute, in the aggregate, any amount in excess of the amount by which
the total received by such Holder with respect to the sale of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid by such Holder for such Transfer
Restricted Securities and (ii) the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Holders' obligations to contribute pursuant to this Section 6(d) are several in proportion to the respective principal amount of Transfer Restricted Securities
held by each Holder hereunder and not joint. 

        (e)   The
Issuer agrees that the indemnity and contribution provisions of this Section 6 shall apply to the Initial Purchaser to the same extent, on the same
conditions, as it applies to Holders. 

7.     RULE 144  

        The Issuer agrees with each Holder, for so long as any Transfer Restricted Securities remain outstanding and during any period in which the Issuer (i) is
not subject to Section 13 or 15(d) of the Exchange Act, to make available, upon request of any Holder, to such Holder or beneficial owner of Transfer Restricted Securities in connection with
any sale thereof and any prospective purchaser of such Transfer Restricted Securities designated by such Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Act in
order to permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and (ii) is subject to Section 13 or 15(d) of the Exchange Act, to make all filings required
thereby in a timely manner in order to permit resales of such Transfer Restricted Securities pursuant to Rule 144. 

11

 

8.     MISCELLANEOUS  

        (a)    Remedies.    The Issuer acknowledges and agrees that any failure by the Issuer to comply with its obligations
under Section 3 hereof may result in material irreparable injury to the Initial Purchaser or the Holders for which there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure, the Initial Purchaser or any Holder may obtain such relief as may be required to specifically enforce the Issuer's
obligations under Section 3 hereof. The Issuer further agrees to waive the defense in any action for specific performance that a remedy at law would be adequate. 

        (b)    No Inconsistent Agreements.    The Issuer will not, on or after the date of this Agreement, enter into any
agreement with respect to its securities that is inconsistent with the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The Issuer has not previously
entered into any agreement granting any registration rights with respect to its securities to any Person that is currently effective other than the Registration Rights Agreement, dated as of the date
hereof, with respect to the Issuer's 12% Senior Subordinated Notes due 2009, and that certain Investors Agreement, dated as of the date hereof, among the Issuer and certain persons named therein. The
rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Issuer's securities under any agreement in effect on the
date hereof. 

        (c)    Amendments and Waivers.    The provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to or departures from the provisions hereof may not be given unless (i) in the case of this Section 8(c)(i), the Issuer has obtained the written consent of Holders of
all outstanding Transfer Restricted Securities, and (ii) in the case of all other provisions hereof, the Issuer has obtained the written consent of Holders of a majority of the outstanding
principal amount of Transfer Restricted Securities (excluding Transfer Restricted Securities held by the Issuer or its
Affiliates); provided that this Agreement may be amended without the consent of any Holder pursuant to Section 8(l) of the Warrant Agreement. 

        (d)    Third Party Beneficiary.    The Holders shall be third party beneficiaries to the agreements made hereunder
between the Issuer, on the one hand, and the Initial Purchaser, on the other hand, and shall have the right to enforce such agreements directly to the extent they may deem such enforcement necessary
or advisable to protect its rights or the rights of Holders hereunder. 

        (e)    Notices.    All notices and other communications provided for or permitted hereunder shall be made in writing
by hand-delivery, first-class mail (registered or certified, return receipt requested), telex, telecopier, or air courier guaranteeing overnight delivery: 

        (i)    if
to a Holder, at the address set forth on the records of the Warrant Agent, with a copy to the Warrant Agent; and 

        (ii)   if
to the Issuer: 

Merrill
Corporation

One Merrill Circle

St. Paul, MN 55108

Telecopier No.: (615) 632-4141

Attention: General Counsel 

With
a copy to: 

Oppenheimer
Wolff & Donnelly LLP

45 South Seventh Street

Suite 3400

12

 

Minneapolis,
MN 55402

Telecopier No.: (612) 607-7100

Attention: Bruce A. Machmeier, Esq. 

        All
such notices and communications shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when receipt acknowledged, if telecopied; and on the next Business Day, if timely delivered to an air courier guaranteeing overnight delivery. 

        Copies
of all such notices, demands or other communications shall be concurrently delivered by the Person giving the same to the Warrant Agent at the address specified in Warrant
Agreement. Upon the date of filing a Shelf Registration Statement, notice shall be delivered to the Initial Purchaser (in the form attached hereto as Exhibit A) and shall be addressed to:
Attention: Louise Guarneri (Compliance Department), 277 Park Avenue, New York, New York 10172. 

        (f)    Successors and Assigns.    This Agreement shall inure to the benefit of and be binding upon the successors and
assigns of each of the parties, including, without limitation, and without the need for an express assignment, subsequent Holders; provided that nothing
herein shall be deemed to permit any assignment, transfer or other disposition of Transfer Restricted Securities in violation of the terms hereof or of the Purchase Agreement or the Warrant Agreement.
If any transferee of any Holder shall acquire Transfer Restricted Securities in any manner, whether by operation of law or otherwise, such Transfer Restricted Securities shall be held subject to all
of the terms of this Agreement, and by taking and holding such Transfer Restricted Securities such Person shall be conclusively deemed to have agreed to be bound by and to perform all of the terms and
provisions of this Agreement, including the restrictions on resale set forth in this Agreement and, if applicable, the Purchase Agreement, and such Person shall be entitled to receive the benefits
hereof. 

        (g)    Counterparts.    This Agreement may be executed in any number of counterparts and by the parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. 

        (h)    Headings.    The headings in this Agreement are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof. 

        (i)    Governing Law.    THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW RULES THEREOF. 

        (j)    Severability.    In the event that any one or more of the provisions contained herein, or the application
thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained
herein shall not be affected or impaired thereby. 

        (k)    Entire Agreement.    This Agreement is intended by the parties as a final expression of their agreement and
intended to be a complete and exclusive statement of the agreement and understanding of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein with respect to the registration rights granted with respect to the Transfer Restricted Securities. This Agreement
supersedes all prior agreements and understandings between the parties with respect to such subject matter. 

13

 

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

	 	 	MERRILL CORPORATION
	

 	
 	
By:	

/s/  RICK R. ATTERBURY      
 Name: Rick R. Atterbury

Title: Executive Vice President

	DONALDSON, LUFKIN & JENRETTE

SECURITIES CORPORATION	 	 
	
By:	

/s/  OMAR KARAME      
 Name: Omar Karame

Title: Vice President	
 	

 

14

  

EXHIBIT A  

 
 

EXHIBIT A    
    
    NOTICE OF FILING OF
  WARRANT REGISTRATION STATEMENT    
    

	To:	 	Donaldson, Lufkin & Jenrette Securities Corporation

277 Park Avenue

New York, New York 10172

Attention: Louise Guarneri (Compliance Department)

Fax: (212) 892-7272
	

From:	
 	

Merrill Corporation

Warrants to Purchase Shares of Class B Common Stock

Date:

        For
your information only (NO ACTION REQUIRED): 

        Today,
                                         
       ,
we filed a Shelf Registration Statement with the Securities and Exchange Commission. We currently expect this registration statement to be declared effective
within    •    business days of the date hereof. 

1

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Exhibit 4.7

EXHIBIT A NOTICE OF FILING OF WARRANT REGISTRATION STATEMENTQuickLinks
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Exhibit 10.1    
    

 
 

MERRILL CORPORATION
  1999 STOCK OPTION PLAN    
    

1.    Purpose of Plan.    

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

2.    Definitions.    

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

        2.1    "Adverse Action" means the actions described in Section 10.5(b) of the Plan. 

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

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

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

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

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

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

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

        2.9    "DLJMB" means DLJ Merchant Banking Partners II, L.P. and all its affiliated entities as described in the Investors'
Agreement. 

        2.10    "DLJMB Liquidation Event" means, except for transfers to Permitted Transferees (as defined in the Investors' Agreement),
(i) a sale or other transfer by DLJMB of 90% or more of its shares of common equity in the Company (including all common equity originally purchased by DLJMB and any additional common equity
purchased by DLJMB thereafter, whether voting, Class B or any other class of common equity created by the Company) to one or more persons or entities (in one transaction or in a series of
related transactions) other than in connection with a public offering of the Company's common equity, (ii) the sale, lease, exchange or other transfer, directly or indirectly, of substantially
all 

 

of
the assets of the Company (in one transaction or in a series of related transactions) to a person or entity that is not controlled by the Company, or (iii) a merger or consolidation to which
the Company is a party if the shareholders of the Company immediately prior to the effective date of such merger or consolidation do not have "beneficial ownership" (as defined in
Rule 13d-3 under the Exchange Act) immediately following the effective date of such merger or consolidation of more than 50% of the combined voting power of the surviving
corporation's outstanding securities ordinarily having the right to vote at elections of directors. 

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

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

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

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

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

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

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

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

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

        2.20    "Partial Termination" means a change in the Participant's employment or other service with the Company and all its
Subsidiaries such that the number of hours worked by such Participant is 

2

 

substantially
reduced for any reason as the Committee in its sole discretion may determine from the number of hours such Participant is required to work for the Company or Subsidiary and such
reduction is expected to extend for an indefinite period of time. 

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

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

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

        2.24    "Repurchase Date" means the date set forth in Section 7.7 of the Plan. 

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

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

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

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

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

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

        2.31    "Total Debt" means any indebtedness of the Company in respect of borrowed money or evidenced by bonds, notes, debentures
or similar instruments or letters of credit (or reimbursement agreements in respect thereof) or banker's acceptances, except any such balance that constitutes an accrued expense, trade payable or
customer contract advance, if and to the extent that any of the foregoing (other than letters of credit) would appear as a liability on the Company's consolidated balance sheet as of its most recent
fiscal year end. 

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

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

3

 

3.    Plan Administration.    

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

        3.2    Authority of the Committee.    

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

        (b)   The
Committee will have the authority under the Plan to amend or modify the terms of any outstanding Option in any manner, including, without limitation, the authority
to modify the number of shares or other terms and conditions of an Option, extend the term of an Option, accelerate the exercisability or otherwise terminate any restrictions or vesting relating to an
Option, accept the surrender of any outstanding Option or, to the extent not previously exercised or vested, authorize the grant of new Options in substitution for surrendered Options; provided,
however that the amended or modified terms are permitted by the Plan as then in effect and that any Participant adversely affected by such amended or modified terms has consented to such amendment or
modification. No amendment or modification to an Option, however, whether pursuant to this Section 3.2 or any other provisions of the Plan, will be deemed to be a re-grant of such
Option for purposes of this Plan. 

        (c)   In
the event of (i) any reorganization, merger, consolidation, recapitalization, liquidation, reclassification, stock dividend, stock split, combination of
shares, rights offering, extraordinary dividend or divestiture (including a spin-off) or any other change in corporate structure or shares, (ii) any purchase, acquisition, sale or
disposition of a significant amount of assets or a significant 

4

 

business,
(iii) any change in accounting principles or practices, or (iv) any other similar change, in each case with respect to the Company or any other entity whose performance is
relevant to the grant or vesting of an Option, the Committee (or, if the Company is not the surviving corporation in any such transaction, the board of directors of the surviving corporation) may,
without the consent of any affected Participant, amend or modify the conditions to the exercisability of any outstanding Option that is based in whole or in part on the financial performance of the
Company (or any Subsidiary or division thereof) or such other entity so as equitably to reflect such event, with the desired result that the criteria for evaluating such financial performance of the
Company or such other entity will be substantially the same (in the sole discretion of the Committee or the board of directors of the surviving corporation) following such event as prior to such
event; provided, however, that the amended or modified terms are permitted by the Plan as then in effect. 

4.    Shares Available for Issuance.    

        4.1    Maximum Number of Shares Available.    Subject to adjustment as provided in Section 4.3 of the Plan, the
maximum number of shares of Common Stock that will be available for issuance under the Plan will be 825,000 shares of Common Stock. 

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

        4.3    Adjustments to Shares and Options.    

        (a)    General.    In the event that the Committee determines that any reorganization, merger, consolidation,
recapitalization, liquidation, reclassification, stock dividend, stock split, combination of shares, rights offering, divestiture or extraordinary dividend (including a spin-off) or any
other similar change in the corporate structure or shares of the Company, affects the Options such that an adjustment is determined by the Committee, in its sole discretion, to be appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, the Committee (or, if the Company is not the surviving corporation in any such
transaction, the board of directors of the surviving corporation) shall, in such manner as it deems equitable, adjust any or all of (i) the number of shares of Common Stock of the Company (or
number and kind of other securities or property) available for issuance or payment under the Plan, (ii) the number of shares of Common Stock or other securities of the Company (or number and
kind of other securities or property) subject to outstanding Options, and (iii) the grant or exercise price with respect to any Options, or, if deemed appropriate, make provisions for a cash
payment to the holder of an outstanding Option. 

        (b)    Mergers and Consolidations.    Without limiting the authority of the Committee to take any actions deemed
appropriate under Section 4.3(a) of the Plan, in the event that the Company is a party to a merger or consolidation, outstanding Options under the Plan will be subject to the 

5

 

agreement
of merger or consolidation, and such agreement, without the Participants' consent, may provide for the following: 

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

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

5.    Participation.    

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

6.    Options.    

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

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

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

        6.4    Payment of Exercise Price.    The total purchase price of the shares to be purchased upon exercise of an Option
must be paid entirely in cash (including check, bank draft or money order); provided, however, that the Committee, in its sole discretion and upon terms and conditions established 

6

 

by
the Committee, may allow such payments to be made, in whole or in part, by tender of a Broker Exercise Notice, Previously Acquired Shares, a promissory note (on terms acceptable to the Committee in
its sole discretion) or by a combination of such methods. 

        6.5    Manner of Exercise.    An Option may be exercised by a Participant in whole or in part from time to time,
subject to the conditions contained in the Plan and in the agreement evidencing such Option, by delivery in person, by facsimile or electronic transmission (with written confirmation via the mail to
follow such electronic transmission) or through the mail of written notice of exercise to the Company (Attention: Secretary) at its principal executive office in St. Paul, Minnesota and by paying in
full the total exercise price for the shares of Common Stock to be purchased in accordance with Section 6.4 of the Plan. 

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

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

7

  

7.    Effect of Termination of Employment or Other Service.    

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

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

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

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

        7.5    Exercise of Incentive Stock Options Following Termination.    Any Incentive Stock Option that remains
unexercised more than one year following termination of employment by reason of Disability or more
than three months following termination for any reason other than death or Disability will thereafter be deemed to be a Non-Statutory Stock Option. 

        7.6    Date of Termination of Employment or Other Service.    Unless the Committee otherwise determines in its sole
discretion, a Participant's employment or other service will, for purposes of the Plan, be deemed to have terminated on the date recorded on the personnel or other records of the Company or the
Subsidiary for which the Participant provides employment or other service, as determined by the Committee in its sole discretion based upon such records. 

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

8

 

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

8.    Payment of Withholding Taxes.    

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

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

9.    DLJMB Liquidation Event.    

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

        9.2    Limitation on Payments in Connection with a DLJMB Liquidation Event.    Notwithstanding anything in
Section 9.1 of the Plan to the contrary, if, with respect to a Participant, the acceleration of the vesting of Options as provided in Section 9.1 (which acceleration or payment could be
deemed a "payment" within the meaning of Section 280G(b)(2) of the Code), together with any other "payments" that such Participant has the right to receive from the Company or any corporation
that is a member of an "affiliated group" (as defined in Section 1504(a) of the Code without regard to Section 1504(b) of the Code) of which the Company is a member, would constitute a
"parachute payment" (as defined in Section 280G(b)(2) of the Code), then the "payments" to such Participant pursuant to Section 9.1 of the Plan will be reduced to the largest amount as
will result in no portion of such "payments" being subject to the excise tax imposed by Section 4999 of the Code; provided, however, that if a Participant is subject to a separate agreement
with the Company or a Subsidiary that expressly addresses the potential application of Sections 280G or 4999 of the Code (including, without limitation, that "payments" under such agreement or
otherwise will be reduced, that the Participant will 

9

 

have
the discretion to determine which "payments" will be reduced, that such "payments" will not be reduced or that such "payments" will be "grossed up" for tax purposes), then this Section 9.2
will not apply, and any "payments" to a Participant pursuant to Section 9.1 of the Plan will be treated as "payments" arising under such separate agreement. 

10.    Rights of Eligible Recipients and Participants; Transferability.    

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

        10.2    Rights as a Shareholder.    As a holder of Options, a Participant will have no rights as a shareholder unless
and until such Options are exercised for, or paid in the form of, shares of Common Stock and the Participant becomes the holder of record of such shares. Except as otherwise provided in the Plan, no
adjustment will be made for dividends or distributions with respect to such Options as to which there is a record date preceding the date the Participant becomes the holder of record of such shares,
except as the Committee may determine in its discretion. 

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

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

        10.5    Restrictions Regarding Employment or Service.    

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

10

 

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

11.    Securities Law and Other Restrictions.    

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

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

12.    Plan Amendment, Modification and Termination.    

        The
Board may suspend or terminate the Plan or any portion thereof at any time, and may amend the Plan from time to time in such respects as the Board may deem advisable in order that
Options under the Plan will conform to any change in applicable laws or regulations or in any other respect the Board may deem to be in the best interests of the Company; provided, however, that no
amendments to the Plan will be effective without approval of the shareholders of the Company if shareholder approval of the amendment is then required pursuant to Section 422 of the Code or the
rules of any stock exchange or NASDAQ or similar regulatory body. No termination, suspension or amendment of the Plan may adversely affect any outstanding Option without the consent of the affected
Participant; provided, however, that this sentence will not impair the right of the Committee to take whatever action it deems appropriate under Sections 3.2, 4.3, 5, 7.3, 9 and 10.5 of the Plan. 

13.    Effective Date and Duration of the Plan.    

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

14.    Miscellaneous.    

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

        14.2    Successors and Assigns.    The Plan will be binding upon and inure to the benefit of the successors and
permitted assigns of the Company and the Participants. 

11

 
 

FIRST AMENDMENT TO 1999 STOCK OPTION PLAN    
    

        THIS FIRST AMENDMENT TO 1999 STOCK OPTION PLAN, dated January 30, 2003, amends the 1999 Stock Option Plan of Merrill Corporation (the
"Plan"), such amendment being effective as of the date hereof. Except to the extent amended hereby, the Plan shall remain in full force and effect in
accordance with its terms. 

Increase in Maximum Number of Shares Available

        To
increase the maximum number of shares of Common Stock (as defined in the Plan) that will be available for issuance under the Plan, Section 4.1 of the Plan is hereby amended by
replacing the number "825,000" with "1,225,000". 

 
 

SECOND AMENDMENT TO 1999 STOCK OPTION PLAN    
    

        THIS SECOND AMENDMENT TO 1999 STOCK OPTION PLAN, effective as of December 1, 2003, amends the 1999 Stock Option Plan of Merrill Corporation (as previously
amended, the "Plan"). Except to the extent amended hereby, the Plan shall remain in full force and effect in accordance with its terms. The amendments
to the Plan herein shall only apply to grants under the Plan on or after the effective date hereof. 

        1.     The
Plan is hereby amended by adding the following provisions to the Plan as a new Section 9.3 (such new provisions to immediately follow the existing
Section 9.2 of the Plan): 

        9.3.    Additional Rights in Connection with a DLJMB Liquidation Event.    Without limiting the authority of the
Committee under the Plan, the Committee may elect, in its sole discretion, to proceed pursuant to this Section 9.3 in connection with the occurrence of a DLJMB Liquidation Event. 

        (a)   The
Committee may determine that no additional vesting of an Option shall occur in connection with or after such DLJMB Liquidation Event (without notice of any kind). In
connection therewith, the Committee may determine for each share of Common Stock subject to such Option (each an "Option Share") an amount that is equal to (i) the per-share amount
received in connection with such DLJMB Liquidation Event by a holder of shares of common equity of the Company who is not a DLJMB Entity, minus (ii) the per share price to be paid by the
Participant holding such Option in the event of an exercise of such Option (the result of the foregoing being the "Per-Option Share
Amount"). 

        (b)   For
the portion of such Option that is vested immediately prior to such DLJMB Liquidation Event, the Company may pay to such Participant, in cash, an amount equal to the
Per-Option Share Amount for each Option Share subject to such vested portion of such Option, with such payment being due on or before the 10th business day following the
effective date of such DLJMB Liquidation Event. 

        (c)   For
the portion of such Option that is not yet vested immediately prior to such DLJMB Liquidation Event, the Committee may cause the Company to, subject to
Section 9.3(d) below, on or before the 10th business day following the effective date of such DLJMB Liquidation Event, place an amount equal to the Per-Option Share
Amount for each Option Share subject to such unvested portion of such Option (along with any or all corresponding amounts payable to other Option holders under the Plan) in an escrow account, a
so-called "Rabbi Trust" or a similar account or fund under terms determined by the Company from time to time, in its discretion; provided,  however, that
(i) the Company shall pay (or cause to be paid) to such Participant such amount in installments over a period that is the shorter
of two years from the date of such DLJMB Liquidation Event or the remainder of the period in which such Option would otherwise have vested in full pursuant its vesting schedule (assuming, for purposes
of this clause, that such Option is governed entirely by the applicable Participant's time-based option vesting schedule, or if no such schedule exists, then as stated in the agreement
between such Participant and the Company governing such Option), (ii) such installments shall be allocated equally over such period and shall not be paid less frequently than once per calendar
quarter, (iii) any (if any) interest or other earnings or proceeds earned thereon shall be for the benefit of such Participant and (iv) the Company may cause such portion of such amount
to be prepaid to such Participant in whole or in part at any time and from time to time, including on or before such 10th business day following the effective date of such DLJMB
Liquidation Event. 

        (d)   If
the Committee elects to proceed pursuant to this Section 9.3, then notwithstanding any other provision herein, the following shall apply: 

          (i)  Such
Option shall be cancelled and terminated without notice of any kind, and such Participant shall have no right with respect thereto, except the right to receive
payment under the terms, and subject to the conditions, of this Section 9.3. If the 

 

Per-Option
Share Amount is less than or equal to $0, then such Option shall be cancelled and terminated without notice of any kind, and such Participant shall have no right with respect
thereto, including without limitation any right to receive any payment under this Section 9.3 or otherwise under any agreement regarding such Option or the Plan. 

         (ii)  If,
in connection with or after such DLJMB Liquidation Event, such Participant's employment or other service with the Company or any Subsidiary is terminated for Cause
or by resignation by such Participant (other than a bona fide retirement substantiated and documented as determined, and subject to conditions stated, by the Company), then after the effective date of
such termination or resignation (as applicable) no amount whatsoever shall be payable to such Participant regarding the portion of such Option that is not yet vested immediately prior to such DLJMB
Liquidation Event (including under Section 9.3(c) above) and all amounts in respect of such Option held in an escrow account, a so-called "Rabbi Trust" or a similar account or fund
pursuant to Section 9.3(c) above shall immediately revert to and be owned by the Company. 

        (iii)  In
electing how to proceed under Section 9.3(c) above, the Committee shall not place any amount in an escrow account, a so-called "Rabbi Trust" or a
similar account or fund (as contemplated in such Section), unless (A) such placement is not a taxable event in which income is presently recognized for any Option holder under the Plan at the
time the Company does so or (B) if such placement is a taxable event described in the preceding clause (A), then the Company causes there to be a payment of tax, or takes such other
action, so that such taxable event does not cause any reduction (from withholding or otherwise) in such Participant's usual and regular employment compensation. (As examples only, the Company could
withhold from such amount the taxes required to be withheld by it and then place only the balance in such an escrow account, so-called "Rabbi Trust" or similar account or fund, or the
Company could make a gross up payment to such Participant (and the corresponding withholdings therefrom) at the: time of such placement in an amount sufficient to pay such Participant's associated tax
obligations.) If the Company is not able to so place such amount without such placement being such a taxable event and the Company does not take any such action contemplated by the preceding
clause (B), then the Company shall pay to such Participant the amount owed under Section 9.3(c) regarding such unvested portion of the Option on or before the 10th business
day following the effective date of such DLJMB Liquidation Event. 

        (iv)  The
Company shall only be required to make payments in connection with this Section 9.3 as rapidly as is permissible to avoid breaching or violating, or creating
or accelerating any right or obligation with respect to, any loan, credit or debt arrangement, or any covenant, obligation or other contractual
restriction, then applicable to, or binding upon, the Company provided, however, that at and after a DLJMB Liquidation Event, the foregoing shall not restrict any such payment to a greater extent than
such payment could have been restricted based on any loan, credit or debt arrangement. or any covenant, obligation or other contractual restriction that applied to, or was binding upon, the Company
immediately prior to such DLJMB Liquidation Event. 

         (v)  For
purposes of this Section 9.3, the "Company" means, at any time prior to such DLJMB Liquidation Event, Merrill Corporation, and "Company" means, at any time
after such DLJMB Liquidation Event, Merrill Corporation or a successor entity of Merrill Corporation (or a successor to, or transferee of, all or substantially all of its assets) as a result of such
DLJMB Liquidation Event (including without limitation any surviving entity of a merger or consolidation with Merrill Corporation). 

        2.     Each
reference in Section 9.2 of the Plan is hereby amended to also be a reference to Section 9.3 of the Plan. 

2

 
 

THIRD AMENDMENT TO 1999 STOCK OPTION PLAN    
    

        THIS THIRD AMENDMENT TO 1999 STOCK OPTION PLAN, dated February 13, 2006, amends the 1999 Stock Option Plan of Merrill Corporation (the
"Plan") such amendment being effective as of the date hereof. Except to the extent amended hereby, the Plan shall remain in full force and effect in
accordance with its terms. 

 
 

Increase the Maximum Number of Shares Available  

        To
increase the maximum number of shares of Common Stock (as defined in the Plan) that will be available for issuance under the Plan, Section 4.1 of the Plan is hereby amended by
replacing the number "1,225,000" with "1,525,000". 

QuickLinks

Exhibit 10.1

MERRILL CORPORATION 1999 STOCK OPTION PLAN

FIRST AMENDMENT TO 1999 STOCK OPTION PLAN

SECOND AMENDMENT TO 1999 STOCK OPTION PLAN

THIRD AMENDMENT TO 1999 STOCK OPTION PLAN

Increase the Maximum Number of Shares Available

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