Document:

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                                MERRILL CORPORATION
                               DIRECT INVESTMENT PLAN

1.     PURPOSE.

       The purpose of the Merrill Corporation Direct Investment Plan (the
"PLAN") is to advance the interests of Merrill Corporation (the "COMPANY") and
its shareholders by facilitating the purchase of shares of the Company's voting
class B common stock, $0.01 par value per share ("COMMON STOCK") by Eligible
Employees (as defined below) of the Company.  These purchases are intended to
(i) increase Common Stock ownership among Eligible Employees of the Company and
its Subsidiaries; (ii) more closely align such Eligible Employees' financial
rewards with the financial rewards realized by all other holders of capital
stock of the Company; and (iii) increase such Eligible Employees' motivation to
manage the Company as owners.

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 any of the actions described in Section
              8.7(b) of the Plan.

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

       2.3    "CAUSE" means (i) dishonesty, fraud, misrepresentation,
              embezzlement or deliberate injury or attempted injury, in each
              case related 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.

       2.4    "CLOSING DATE" means the date the Company closes on the sale of
              Shares to Eligible Employees who are initially offered the right
              to purchase Shares under the Plan, which the Company expects to be
              on or before January 31, 2000.

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

       2.6    "COINVESTMENT SHARES" mean the shares of Common Stock offered to
              the Participant  pursuant to Section 5.2 of the Plan.

       2.7    "COMMITTEE" means the group of individuals administering the Plan,
              as provided in Section 3.1 of the Plan.

       2.8    "COMMON STOCK" shall have the meaning given such term in Section
              1, or the number and kind of shares of stock or other securities
              into which such Common Stock may be changed in accordance with
              Section 7.3 of the Plan.

       2.9    "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

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              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.

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

       2.11   "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 60% 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.

       2.12   "EFFECTIVE DATE" means the date set forth in Section 12.1 of the
              Plan.

       2.13   "ELIGIBLE EMPLOYEES" means any employee of the Company or any
              Subsidiary, and any non-employee director, consultant and
              independent contractor of the Company or any Subsidiary.

       2.14   "ELIGIBILITY NOTICE" means the notice described in Section 4.1 of
              the Plan.

       2.15   "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.

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

       2.17   "FAIR MARKET VALUE" means, with respect to the Common Stock, as of
              a 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) (i) 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;
              (ii) 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 (iii) 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

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              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.

       2.18   "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.

       2.19   "INTEREST RATE" means the rate of interest on the Purchase Loan as
              set forth in Section 6.2 of the Plan.

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

       2.21   "NOTE"  means the Nonrecourse Promissory Note in the form attached
              hereto as EXHIBIT A to be entered into by each Participant in
              connection with the purchase of Coinvestment Shares.

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

       2.23   "PARTICIPANT" means an Eligible Employee of the Company or any
              Subsidiary who is selected by the Committee to participate in the
              Plan, and to the extent such Participant transfers any Shares
              purchased 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.

       2.24   "PLEDGE AGREEMENT" means the Pledge and Custody Agreement in the
              form attached hereto as EXHIBIT B to be entered into by each
              Participant and the Company in connection with the purchase of
              Coinvestment Shares.

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

       2.26   "PRO RATA ADJUSTMENT" means a price per Share (which price
              could be negative)  determined by subtracting the Fair Market
              Value of such Share as determined on the Valuation Date in the
              fiscal year in which the Participant's employment or other
              service is terminated from the Fair Market Value of such Share
              as determined on the Valuation

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              Date in the fiscal year immediately following the fiscal year
              in which the Participant's employment or other service is
              terminated, and then multiplying such difference by a fraction,
              the numerator of which shall be the number of calendar days the
              Participant was employed by the Company or any Subsidiary in
              the fiscal year in which the Participant's employment or other
              services is terminated, and the denominator of which shall be
              the total number of calendar days in the fiscal year in which
              the Participant's employment or other services is terminated.

       2.27   "PURCHASE DATE" means the date, time and place the Company plans
              to close the sale of Shares and collect the payment of the
              purchase price for the Shares from the Participant as set forth in
              Section 4.1 of the Plan.

       2.28   "PURCHASE LOAN" means a nonrecourse interest bearing loan that may
              be made by the Company to the Participant to enable the
              Participant to purchase Coinvestment Shares pursuant to Section
              5.2  of the Plan which shall be evidenced by a Note.

       2.29   "REINVESTMENT SHARES" means the shares of Common Stock offered to
              the Participant pursuant to Section 5.1 of the Plan.

       2.30   "REPURCHASE DATE" means the date the Company will repurchase
              Shares from the Participant as set forth in Section 8.2 of the
              Plan.

       2.31   "REPURCHASE RIGHT" means the irrevocable and exclusive right the
              Company has to  repurchase Shares as set forth in Section 8 of the
              Plan.

       2.32   "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.

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

       2.34   "SHARES" means the Reinvestment Shares and the Coinvestment Shares
              offered to a Participant pursuant to Sections 5.1 and 5.2 of the
              Plan.

       2.35   "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.

       2.36   "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.

       2.37   "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.

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       2.38   "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.

       2.39   "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.     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 will act by majority approval of
              the members (but may also take action with the written consent of
              a majority of the members of the Committee), and a majority of the
              members of the 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 Employees 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.

       3.2    AUTHORITY OF THE COMMITTEE.

              (a)    Notwithstanding any other provision to the contrary in the
                     Plan, the Committee will have the authority in its sole
                     discretion to (i) determine the Eligible Employees to be
                     selected as Participants in the Plan, (ii) determine the
                     number of Shares such Participant is allowed to purchase,
                     or the Company is allowed to repurchase, under the Plan,
                     (iii) determine the periods or dates when Shares may be
                     purchased by the Participant, or repurchased by the
                     Company, under the Plan, (iv) determine the amount of
                     Purchase Loans to be made to Participants in connection
                     with the purchase of Coinvestment Shares  (which amount
                     shall not exceed sixty-five percent (65%) of the total
                     purchase price of the Coinvestment Shares), (v) determine
                     the terms and conditions of the Note and Pledge Agreement
                     as described in Section 6 hereof, (vi) adopt, alter, amend,
                     waive or repeal any administrative rules, guidelines,
                     practices and provisions governing the Plan or the
                     administration of the Plan as the Committee shall, from
                     time to time, deem advisable, (vii) interpret the terms and
                     provisions of the Plan (and any agreement or document
                     related hereto) and to supervise the administration of the
                     Plan, and (viii) determine the terms and conditions to
                     which the Shares may be

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                     subject upon a Participant's death, Disability, Retirement
                     or termination of employment or other service with the
                     Company or any Subsidiary, including, without limitation,
                     the right of the Company to accelerate the vesting of
                     unvested Coinvestment Shares and the right of the Company
                     to repurchase the Shares.

              (b)    The Committee will also have the authority under the Plan
                     to amend or modify the terms of any outstanding Shares in
                     any manner, including, without limitation, the terms and
                     conditions of any Shares or otherwise terminate any
                     restrictions relating to any Shares; 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.  The Committee shall also
                     have the authority to correct any defect, supply any
                     omission or reconcile any inconsistency in the Plan, any
                     Purchase Loan or any related document or agreement in the
                     manner and to the extent it shall deem desirable to carry
                     it into effect.

4.     PARTICIPATION.

       4.1    SELECTION OF PARTICIPANTS.  The Committee will have the authority
              to select from the Eligible Employees the Participants in the Plan
              in accordance with Section 3 hereof. Eligible Employees will be
              given written notice of their eligibility to participate in the
              Plan (the "ELIGIBILITY NOTICE").  The Eligibility Notice shall
              specify (i) the specific number of Reinvestment Shares and
              Coinvestment Shares the Participant shall have the right to
              purchase from the Company, (ii) the per share price the
              Participant must pay for Reinvestment Shares and Coinvestment
              Shares, (iii) the maximum amount the Participant may borrow from
              the Company to assist with the purchase price of the Coinvestment
              Shares (which in no event shall exceed sixty-five percent (65%) of
              the total purchase price for the Coinvestment Shares), and (iv)
              the date, time and place the Company plans to close the sale of
              Shares and collect the payment of the purchase price for the
              Shares from the Participant (the "PURCHASE DATE"). Eligible
              Employees will have fifteen (15) days from the date of the
              Eligibility Notice to elect to participate in the Plan, and if the
              Eligible Employee elects to participate in the Plan, he or she
              must satisfy all of the conditions set forth in Section 4.2 hereof
              on or prior to the Purchase Date determined by the Committee;
              provided, however, that the Eligible Employees initially selected
              to participate in the Plan shall have until the Closing Date to
              elect to participate in the Plan and to satisfy the conditions set
              forth in Section 4.2 hereof.  No Eligible Employee shall have at
              any time the right (i) to be selected as a Participant, (ii) to be
              entitled to purchase any Shares, or (iii) having been selected to
              purchase Shares, to purchase any additional Shares.

       4.2    ELECTION TO PARTICIPATE IN PLAN.  Eligible Employees are not
              required to participate in the Plan.  Each Eligible Employee who
              elects to participate in the Plan, however, shall satisfy the
              following requirements on or prior to the Purchase Date or the
              Closing Date, as applicable:

              (a)    Submit a completed, signed and irrevocable agreement to
                     purchase the Shares under the Plan, which agreement shall
                     specify the number of Coinvestment Shares and Reinvestment
                     Shares to be purchased by the Participant and the total
                     purchase price for such Shares;

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              (b)    Deliver to the Company in cash (including check, bank draft
                     or money order) the total purchase price for the
                     Reinvestment Shares purchased by the Participant pursuant
                     to Section 5.1 hereof, and that portion of the Coinvestment
                     Shares not covered by the Note pursuant to Section 5.2
                     hereof;

              (c)    Complete and sign all necessary agreements and other
                     documents relating to the Purchase Loan described in
                     Section 6 hereof in connection with the purchase of the
                     Coinvestment Shares;

              (d)    Execute and deliver to the Company an agreement to become a
                     party to the Investors' Agreement pursuant to Section 12.2
                     hereof;

              (e)    If required by the Committee, execute and deliver to the
                     Company an agreement acknowledging to be bound by a
                     confidentiality and non-compete agreement;

              (f)    If required by the Committee, execute an agreement to waive
                     or modify certain compensation provisions in any existing
                     employment agreement or arrangement between the Company and
                     the Participant; and

              (g)    Satisfy all other terms and conditions of participation
                     specified in the Plan, or as may be required from time to
                     time by the Committee after the Effective Date.

              The agreements and other documents specified in this Section 4.2
              shall be in such forms and shall be submitted at such times to
              such Participants as specified by the Committee or its
              designee(s).

5.     PURCHASE OF SHARES.

       5.1    REINVESTMENT SHARES.  Each Participant selected by the Committee
              to participate in the Plan shall be granted the right to purchase,
              out of such Participant's own funds, that number of Reinvestment
              Shares, at a price per share, as determined by the Committee. If a
              Participant elects to participate in the Plan, such Participant
              shall have the right to purchase any number of the Reinvestment
              Shares up to the total amount awarded the Participant in the
              Eligibility Notice.  Each Participant electing to purchase such
              Reinvestment Shares shall deliver to the Company on the Purchase
              Date or the Closing Date, as applicable, the total purchase price
              for the number of Reinvestment Shares such Participant is electing
              to purchase.  Each Participant electing to purchase Reinvestment
              Shares shall be solely responsible for paying the entire amount of
              the total purchase price of the Reinvestment Shares, and the
              Company will not lend any funds to the Participant to assist with
              the purchase of any Reinvestment Shares.  On the Purchase Date or
              the Closing Date, as applicable, the Participant will be recorded
              on the books of the Company as the owner of the Reinvestment
              Shares, and the Company will issue one or more duly issued and
              executed stock certificates to the Participant evidencing such
              Reinvestment Shares.

       5.2    COINVESTMENT SHARES.  Each Participant selected by the Committee
              to participate in the Plan may also be granted the right to
              purchase Coinvestment Shares as determined by the Committee.  Such
              Participant shall have the right to purchase any number of
              Coinvestment Shares up to the total amount awarded the Participant
              in the Eligibility Notice.  On the Purchase Date or the Closing
              Date, as applicable, the Company shall make a Purchase Loan to the
              Participant in an amount determined by the Committee in its

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              sole discretion (which amount shall not exceed sixty-five percent
              (65%) of the total purchase price of the Coinvestment Shares) to
              pay for a portion of the total purchase price for the number of
              Coinvestment Shares the Participant is electing to purchase, and
              the Participant shall be solely responsible for paying the
              remaining balance of such purchase price.  The proceeds of the
              Purchase Loan shall be used solely to assist the Participant with
              the purchase of the Coinvestment Shares. As a condition to the
              Company making the Purchase Loan, all of the Coinvestment Shares
              purchased by the Participant pursuant this Section 5.2 (whether
              purchased with the Participant's own funds or with the Purchase
              Loan) must be pledged as collateral for the Purchase Loan pursuant
              to Section 6.4 hereof.  The Coinvestment Shares purchased by the
              Participant shall vest in accordance with the vesting schedule set
              forth on an exhibit to the written agreement evidencing such
              purchase.  On the Purchase Date or the Closing Date, as
              applicable, the Participant will be recorded on the books of the
              Company as the owner of the Coinvestment Shares, and, subject to
              Section 6.4 hereof, the Company will issue one or more duly issued
              and executed stock certificates evidencing such Coinvestment
              Shares.

       5.3    RESTRICTIONS ON TRANSFERABILITY OF SHARES.  In no event will a
              Participant be entitled to sell or transfer any Shares purchased
              by the Participant pursuant to the Plan during the six (6) months
              following the Purchase Date or the Closing Date, as applicable.
              In addition, all Shares purchased by Participants under the Plan
              shall be subject to the transfer restrictions and other provisions
              of the Plan and the Investors' Agreement, and until such time as
              such restrictions on transfer expire, no right or interest of any
              Participant under the Plan shall be subject in any manner to
              alienation, sale, transfer, assignment, bankruptcy, pledge,
              attachment, charge or encumbrance of any kind nor in any manner be
              subject to the debts or liabilities of any person, and any attempt
              to so alienate or subject any such amount, whether presently or
              thereafter payable, or any such right shall be void, except as may
              otherwise be provided for in the Plan or the Investors' Agreement.
              Subject to Section 6.1 hereof, and in addition to the other
              restrictions contained in the Plan and the Investors' Agreement, a
              Participant may not sell, transfer, assign, pledge, attach, charge
              or encumber in any way or in any manner any unvested Coinvestment
              Shares.  To enforce the transfer restrictions set forth in the
              Plan and the Investors' Agreement, the Committee, in its sole
              discretion, may place a legend on the stock certificates
              evidencing that the Shares are subject to certain transfer
              restrictions and may require the Company to hold any stock
              certificates issued to the Participant for the Coinvestment
              Shares, together with stock powers executed in blank, in the
              custody of the Company or its transfer agent until the
              restrictions on the Coinvestment Shares have terminated.

6.     PURCHASE LOANS.

       6.1    NOTE.  All Purchase Loans shall be evidenced by the Participant's
              execution of a Note.  In the event that a Participant transfers
              all or a portion of his or her Coinvestment Shares to a Permitted
              Transferee (as defined in the Investors' Agreement), such
              Permitted Transferee, as a condition to the transfer of the
              Coinvestment Shares, shall agree to be bound by the terms and
              conditions of the Plan, any agreement evidencing the sale of the
              Shares to the Participant, and shall also agree to take such
              Shares subject to the terms and conditions of the Note and Pledge
              Agreement.  The Participant, however, shall remain  the primary
              obligor of all obligations outstanding under the Note and the
              Pledge Agreement regardless of such a transfer to a Permitted
              Transferee.

       6.2    INTEREST.  Purchase Loans will accrue at a fixed rate of interest
              equal to eight percent (8%) per annum beginning on the date the
              Note is executed to evidence the Purchase Loan;

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              provided, however, that such interest rate shall not exceed the
              rate permitted by applicable law (the "INTEREST RATE").  While
              interest on the Purchase Loan will accrue at the Interest Rate,
              interest will not be paid by the Participant during the term of
              the Note, but will be paid upon maturity of the Purchase Loan
              pursuant to Section 6.3 hereof and the terms of the Note.  Accrued
              but unpaid interest on the Purchase Loan will be in addition to
              the principal balance of the Purchase Loan.

       6.3    REPAYMENT.  The principal of the Purchase Loan and all accrued but
              unpaid interest will be due and payable by the Participant in a
              single payment, pursuant to the terms and conditions of the Plan
              and the Note, as of the earlier of (i) the Participant's
              termination of employment or other service with the Company and
              all its Subsidiaries in accordance with Section 8 hereof, (ii) a
              DLJMB Liquidation Event, (iii) a sale or transfer of the
              Coinvestment Shares in accordance with the terms and conditions of
              the Investors' Agreement (other than transfers to Permitted
              Transferees under the Investors' Agreement or hardship repurchases
              under Section 8.5 hereof), (iv) eight years from the Purchase Date
              or Closing Date, as applicable, for the Coinvestment Shares or (v)
              within 120 days following an initial public offering of the
              Company's equity securities in which case the principal of the
              Purchase Loan and all accrued interest thereon must be paid with
              cash, or the Committee in its sole discretion may allow the
              Company to repurchase the Participant's Reinvestment Shares and
              vested Coinvestment Shares at Fair Market Value, and the
              Participant's unvested Coinvestment Shares at a purchase price
              determined by the Committee in its sole discretion, and apply the
              proceeds the Company owes the Participant against the outstanding
              balance of the Note and all accrued interest; provided, however,
              that if the Participant elects to repay the Purchase Loan and all
              accrued interest with the Participant's Shares, the Participant
              will not be required to repay the Note and all accrued interest if
              the total purchase price paid for such Shares does not exceed the
              outstanding balance of the Note, all accrued interest and any tax
              liability of the Participant associated with the sale of the
              Shares.  Notwithstanding anything to the contrary in this Section
              6.3, however, the Committee may decide, in its sole discretion, to
              extend the maturity of the Note.  In the event that the
              Participant sells or transfers (other than transfers to Permitted
              Transferees under the Investors' Agreement or hardship repurchases
              under Section 8.5 hereof) all or a portion of the Coinvestment
              Shares in accordance with the Plan and the Investors' Agreement,
              the Purchase Loan will become immediately due and payable by the
              Participant to the extent of the lesser of (i) the total
              outstanding balance of unpaid principal and all accrued interest
              on the Purchase Loan or (ii) the net after tax proceeds realized
              upon such sale.  The Company shall have the right to apply any
              amounts it owes the Participant for the purchase of  Coinvestment
              Shares pursuant to Section 8 hereof towards the outstanding
              principal and accrued interest on the Note in accordance with
              Section 8.7(c) hereof, and, in the event the Participant sells or
              transfers the Coinvestment Shares in connection with a DLJMB
              Liquidation Event or pursuant to the provisions of the Investors'
              Agreement (other than to a Permitted Transferee, the Participant
              shall be required to use all proceeds received from such sale or
              transfer to repay the outstanding balance of the Note and all
              accrued interest.

       6.4    PLEDGE OF SHARES. As collateral for the Note, the Participant
              shall grant to the Company a security interest in the Coinvestment
              Shares by executing the Pledge Agreement.  Any stock certificates
              issued for Coinvestment Shares purchased pursuant to Section 5.2
              hereof shall be held by the Company as collateral for the Purchase
              Loan until such time as the Purchase Loan and all accrued interest
              on the Purchase Loan are paid in full; provided, however, that the
              Committee may in its sole discretion release, upon request of the
              Participant, Shares if the collateral for the Note exceeds the
              outstanding balance of

                                          9
<PAGE>

              the Purchase Loan and all accrued interest and the Committee
              determines in its sole discretion that the remaining collateral is
              sufficient to secure the outstanding balance of the Note and
              accrued interest.  If the Company repurchases the Coinvestment
              Shares so pledged in accordance with Section 8 hereof, the Company
              shall have the right to apply all proceeds it owes the Participant
              against the outstanding balance of the Purchase Loan and all
              accrued interest. Notwithstanding anything to the contrary in the
              Plan or in the Investors' Agreement, so long as Coinvestment
              Shares are pledged to the Company pursuant to this Section 6.4 in
              no event can such Coinvestment Shares (whether vested or unvested)
              be subject in any manner to alienation, sale, transfer,
              assignment, bankruptcy, pledge, attachment, charge or encumbrance
              of any kind nor in any manner be subject to the debts or
              liabilities of any person, except that such Coinvestment Shares
              may be transferred to Permitted Transferees (as defined in the
              Investors' Agreement).

7.     SHARES AVAILABLE FOR ISSUANCE.

       7.1    MAXIMUM NUMBER OF SHARES AVAILABLE.  Subject to adjustment as
              provided in Section 7.3 of the Plan, the maximum number of shares
              of Common Stock that will be available for issuance under the Plan
              will be 1,459,091 shares of Common Stock  of which 227,272 shares
              will be designated for Reinvestment Shares and 1,231,819 shares
              will be designated for Coinvestment Shares.

       7.2    ACCOUNTING FOR SHARES.  Shares of Common Stock that are sold under
              the Plan as Reinvestment Shares will be applied to reduce the
              number of shares of Common Stock designated for Reinvestment
              Shares remaining available for issuance under the Plan and shares
              of Common Stock that are sold under the Plan as Coinvestment
              Shares will be applied to reduce the number of shares of Common
              Stock designated for Coinvestment Shares remaining available for
              issuance under the Plan.  In addition, in the event that any
              Shares purchased under the Plan are reacquired by the Company
              pursuant to any right of repurchase, right of first refusal or
              forfeiture provisions, such Shares will automatically again become
              available for issuance under the Plan and such shares of Common
              Stock shall be divided by the Committee between Reinvestment
              Shares and Coinvestment Shares in such amounts as the Committee
              deems appropriate.

       7.3    ADJUSTMENTS TO SHARES.  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 Shares 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 of a Participant's investment in the Shares 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, make such adjustments, if any, to the number and kind
              of Shares (or number and kind of other securities or property)
              with respect to the Shares purchased under the Plan, as it deems
              appropriate and necessary.

8.     REPURCHASE RIGHTS UPON PARTICIPANT'S TERMINATION OF SERVICES.

       8.1    REPURCHASE RIGHT.  Subject to the other provisions of this Section
              8, in the event a Participant's employment or other service with
              the Company and all its Subsidiaries is terminated for any reason
              whatsoever, whether due to death, Disability, Retirement or

                                          10
<PAGE>

              termination with or without Cause, prior to a DLJMB Liquidation
              Event, the Company shall have the irrevocable and exclusive right
              to repurchase (the "REPURCHASE RIGHT") at the price determined in
              accordance with this Section 8.1 and in the manner set forth in
              Section 8.2 hereof all or any portion of the Participant's Shares;
              provided, however, that the Committee in its sole discretion may
              determine to pay a price other than the price determined in
              accordance with this Section 8.1 but in no event shall such price
              be less than the price determined in accordance with this Section
              8.1:

              (a)    If the Participant's employment or other service with the
                     Company and all its Subsidiaries is terminated during a
                     fiscal year by reason of voluntary resignation, death,
                     Disability, Retirement or termination by the Company
                     without Cause, the Company shall pay: (i)  for each
                     Coinvestment Share that is vested at the time of
                     termination and each Reinvestment Share, an amount equal to
                     the Fair Market Value of each Share as determined on the
                     Valuation Date in the fiscal year in which the
                     Participant's employment or other service is terminated
                     plus any Pro Rata Adjustment; and (ii) for each
                     Coinvestment Share that is not vested at the time of
                     termination, an amount equal to the lesser of (x) the Fair
                     Market Value of each Coinvestment Share as determined on
                     the Valuation Date in the fiscal year in which the
                     Participant's employment or other service is terminated
                     plus any Pro Rata Adjustment, or (y) the purchase price
                     paid by the Participant for each unvested Coinvestment
                     Share, plus all accrued and unpaid interest on the Purchase
                     Loan relating to such unvested Coinvestment Shares.

              (b)    If the Participant's employment or other service with the
                     Company and all its Subsidiaries is terminated during a
                     fiscal year by the Company for Cause, the Company shall pay
                     for each Share owned by the Participant (whether vested or
                     unvested) the lesser of (i) the Fair Market Value for each
                     Share as determined on the Valuation Date in the fiscal
                     year in which the Participant's employment or other service
                     is terminated plus any Pro Rata Adjustment, or (ii) the
                     purchase price paid by the Participant for each Share,
                     without any accrued and unpaid interest on the Purchase
                     Loan relating to the Coinvestment Shares being paid.

              (c)    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.

       8.2    EXERCISABILITY OF REPURCHASE RIGHT.  Subject to Section 8.7
              hereof, if the Company elects to exercise its Repurchase Right or
              any other right or obligation the Company may have to repurchase
              Shares pursuant to the Plan, 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
              Reinvestment Shares and Coinvestment Shares (including the number
              of vested and unvested Coinvestment Shares) the Company intends to
              repurchase and (ii) the date the Company expects to purchase the
              Reinvestment Shares and Coinvestment Shares 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

                                          11
<PAGE>

              Participant shall deliver to the Company the stock certificates
              representing the Reinvestment Shares and Coinvestment Shares being
              purchased by the Company, properly endorsed for transfer, unless
              the Company is holding such Coinvestment Shares pursuant to
              Section 6.4 hereof in which case such Coinvestment Shares shall be
              deemed to have been delivered to the Company.  By such delivery,
              or deemed 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 Reinvestment Shares and
              the Coinvestment Shares, (ii) such Reinvestment Shares and
              Coinvestment Shares 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 Reinvestment Shares
              and Coinvestment Shares purchased by the Company.

       8.3    ASSIGNABILITY OF REPURCHASE RIGHT. The Company, in its sole
              discretion, may assign its Repurchase Right to one or more
              employees, officers, directors, shareholders or other persons or
              organizations.  In the event the Company does assign its
              Repurchase Right to one or more employees, officers, directors,
              shareholders or other persons or organizations, such persons or
              organizations shall exercise such Repurchase Right in accordance
              with Section 8.2 hereof.

       8.4    PUT RIGHT. Subject to Section 8.7 hereof, in the event that
              neither the Company nor any assignee of the Company exercises the
              Repurchase Right and a Participant's employment or other service
              with the Company and all Subsidiaries is terminated by reason of
              voluntary resignation, death, Disability, Retirement or
              termination by the Company without Cause, the Participant shall
              have the right to require the Company to purchase, in the manner
              set forth in Section 8.2 hereof, (i) all or any portion of the
              Reinvestment Shares and vested Coinvestment Shares owned by the
              Participant at the time of termination at a purchase price per
              share equal to the Fair Market Value for each such Share as
              determined on the Valuation Date in the fiscal year in which the
              Participant's employment or other service is terminated plus any
              Pro Rata Adjustment; and (ii) all or any portion of the unvested
              Coinvestment Shares owned by the Participant at the time of
              termination at a purchase price per share equal to the lesser of
              (x) the Fair Market Value for each such unvested Coinvestment
              Share as determined on the Valuation Date in the fiscal year in
              which the Participant's employment or other service is terminated
              plus any Pro Rata Adjustment, or (y) the purchase price paid by
              the Participant for each such unvested Coinvestment Share, plus
              all accrued and unpaid interest on the Purchase Loan relating to
              such unvested Coinvestment Shares.

       8.5    HARDSHIP REPURCHASES.

              (a)    Subject to the provisions of Section 8.5(e) and Section 8.7
                     hereof, a Participant may request that the Committee
                     repurchase his or her Reinvestment Shares and vested
                     Coinvestment Shares if the Participant is deemed to be in
                     immediate and heavy financial need as determined in
                     accordance with Section 8.5(b) and (c) hereof.  A hardship
                     repurchase will be permitted only if the Committee
                     determines in its sole discretion that the repurchase is
                     being requested on account of an immediate and heavy
                     financial need of the Participant and is necessary to
                     satisfy such financial need.  The fact that the Committee
                     grants a hardship

                                          12
<PAGE>

                     repurchase to a Participant, however, will not impact the
                     discretion of the Committee in the future to determine
                     whether to grant additional hardship repurchases to such
                     Participant or any other Participant, and each application
                     for a hardship repurchase will be considered by the
                     Committee on an individual basis independent of any facts
                     or circumstances surrounding any previous hardship
                     repurchase grants.

              (b)    A repurchase will be deemed to be made on account of an
                     immediate and heavy financial need only if it is determined
                     by the Committee in its sole discretion to be on account
                     of: (i) expenses for medical care (as described in Code
                     section 213(d)), incurred or to be incurred by the
                     Participant, the Participant's spouse or the Participant's
                     dependent (as described in Code section 152), (ii) payments
                     necessary to prevent the eviction of the Participant from
                     his or her principal residence or foreclosure on the
                     mortgage on the Participant's principal residence, or (iii)
                     any other situation in which the Committee in its sole
                     discretion determines such Participant is in immediate and
                     heavy financial need.

              (c)    A hardship repurchase will be deemed to be necessary to
                     satisfy the immediate and heavy financial need of the
                     Participant only if the Committee determines in its sole
                     discretion that the aggregate purchase price the Company
                     must pay is not  more than the sum of the amount of the
                     immediate and heavy financial need of the Participant plus
                     the amount necessary to pay any federal, state or local
                     taxes or penalties that the Participant will incur in
                     connection with the repurchase, as estimated by the
                     Committee.

              (d)    The Committee's determination of the existence of a
                     Participant's financial hardship and the amount that may be
                     repurchased to satisfy the need created by such hardship
                     will be made in accordance with all applicable laws, and is
                     final and binding on the Participant. The Committee may
                     require the Participant to make representations and
                     certifications concerning his or her entitlement to a
                     repurchase pursuant to this Section 8.5 and is entitled to
                     rely on such representations and certifications unless the
                     Committee has actual knowledge to the contrary.  The
                     Committee is not obligated to supervise or otherwise verify
                     that amounts repurchased are applied in the manner
                     specified in the Participant's repurchase application.

              (e)    In addition to the provisions of Section 8.7 hereof, all
                     repurchases of Shares under this Section 8.5 shall be
                     subject to the following rules:

                     (i)    Applications for repurchases may be made at anytime
                            during the Company's fiscal year.  The Company,
                            however, will not be required to make any payments
                            for such Shares repurchased within any specific time
                            period designated by the Participant in his or her
                            repurchase application.  The Company will pay the
                            purchase price for such Shares being repurchased
                            pursuant to this Section 8.5 as soon as
                            administratively practicable after the Committee's
                            determination that the Participant is entitled to
                            have his or her Shares repurchased by the Company.

                     (ii)   The price to be paid by the Company to the
                            Participant for each Share shall be the Fair Market
                            Value for such Share as determined on the most
                            recent Valuation Date prior to the hardship
                            repurchase.

                                          13
<PAGE>

                     (iii)  No payment for Shares purchased by the Company under
                            this Section 8.5 will be made if the total purchase
                            price for such Shares is less than $1,000.

                     (iv)   All payments for Shares purchased will be made by
                            the Company in the form of a lump sum payment by
                            check.

                     (v)    The Company shall be permitted to repurchase Shares
                            pursuant to this Section 8.5 only to the extent that
                            the Fair Market Value of the Coinvestment Shares
                            held as collateral for the Note exceeds the
                            outstanding balance of the Purchase Loan and all
                            accrued interest, and at no time shall the Company
                            be permitted to repurchase Shares under this Section
                            8.5 if such repurchase would cause the collateral
                            securing the Note to be insufficient to repay the
                            Purchase Loan and all accrued interest in full.

       8.6    PARTIAL TERMINATIONS.  Subject to Section 8.7 hereof, in the event
              that there is a Partial Termination of the Participant, the
              Company shall have the irrevocable and exclusive right to
              repurchase, in the manner set forth in Section 8.2 hereof, all or
              any portion of the Participant's Coinvestment Shares (whether
              vested or unvested) at the time of the Partial Termination  as is
              determined by the Committee in its sole discretion, and the
              Company shall pay the Participant: (i)  for each Coinvestment
              Share that is vested at the time of the Partial Termination, an
              amount equal to the Fair Market Value of each share as determined
              on the Valuation Date in the fiscal year in which the Participant
              has a Partial Termination plus any Pro Rata Adjustment; and (ii)
              for each Coinvestment Share that is not vested at the time of the
              Partial Termination, an amount equal to the lesser of (x) the Fair
              Market Value of each Coinvestment Share as determined on the
              Valuation Date in the fiscal year in which the Participant has a
              Partial Termination plus any Pro Rata Adjustment, or (y) the
              purchase price paid by the Participant for such unvested
              Coinvestment Share, plus all accrued and unpaid interest on the
              Purchase Loan relating to such unvested Coinvestment Shares.

       8.7    OBLIGATIONS, LIMITATIONS AND RESTRICTIONS ON REPURCHASE SHARES.

              (a)    VIOLATION OF LAW AND CONTRACTUAL OBLIGATIONS.
                     Notwithstanding anything to the contrary in the Plan, the
                     Company shall only be required to repurchase any Shares
                     pursuant to this Section 8 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 in such case will bear interest at the
                     Interest Rate.  The Company shall only be required to
                     repurchase any Shares pursuant to this Section 8 to the
                     extent that such repurchase does not violate any applicable
                     laws.

              (b)    ADVERSE ACTIONS.

                     (i)    Notwithstanding anything in the Plan to the
                            contrary, in the event that a Participant takes
                            Adverse Actions 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

                                          14
<PAGE>

                            Subsidiaries by reason of voluntary resignation,
                            death, Disability, Retirement or termination by the
                            Company without Cause, the Committee in its sole
                            discretion will have the authority to treat such
                            Participant's termination of employment or other
                            service as a termination for Cause and to repurchase
                            all Shares held by such Participant in the manner
                            set forth in Section 8.2 hereof for the lesser of
                            (x) the Fair Market Value for each Share as
                            determined on the Valuation Date in the fiscal year
                            in which the Participant's employment or other
                            service is terminated plus any Pro Rata Adjustment
                            or (y) the purchase price paid by the Participant
                            for each Share.  In addition, to the extent a
                            Participant has received an amount in excess of such
                            purchase price in connection with a prior exercise
                            of the Company's Repurchase Right or the sale or
                            other transfer of such Shares either in the twelve
                            (12) months prior to, or the twelve (12) months
                            following, such Participant's termination of
                            employment or service, then the Participant shall be
                            required to pay to the Company any such excess.  The
                            Company shall be entitled to require the Participant
                            to pay to the Company, within ten (10) days of
                            receipt of notice from the Company, the amount of
                            any excess.  Such payment will be made in cash
                            (including check, bank draft or money order). The
                            Company will be entitled to off-set any amounts that
                            may be due and owing to the Participant from the
                            Company or any Subsidiary pursuant to Section 8.7(c)
                            or make other arrangements for the collection of all
                            amounts necessary to satisfy such payment
                            obligations.

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

              (c)    RIGHT OF OFF-SET.  The Company shall have the right to
                     set-off against any amounts owing by the Company to the
                     Participants, including, without limitation, any dividends
                     paid on the Shares, which amounts shall be applied first to
                     accrued interest on the Note and then to the outstanding
                     principal balance of the Note.  Neither the exercise of,
                     nor the failure to exercise, such right of set-off will
                     constitute an election of remedies nor limit the Company in
                     any manner in the enforcement of any other remedies that
                     may be available to it.

              (d)    REPAYMENT OF INTEREST.  In the event that the Company
                     repurchases Coinvestment Shares pursuant to Sections 8.1,
                     8.4, 8.6 or 8.7(b) hereof, the Committee, in its sole
                     discretion, shall on the Repurchase Date make an
                     appropriate adjustment to the purchase price paid on such
                     date to repay any interest that has accrued on the Purchase
                     Loan from the date of the Participant's termination of
                     employment or other services with the Company and all its
                     Subsidiaries until the date the Company repurchases the
                     Coinvestment Shares pursuant to this Section 8.

                                          15
<PAGE>

9.     SHAREHOLDER RIGHTS. Subject to the provisions of Section 5 and Section
       12.2 hereof, upon the Participant's purchase of the Shares (whether
       vested or unvested) such Participant shall have all the rights of a
       shareholder of the Company with respect to the Shares, including, without
       limitation, all voting rights, liquidation rights and rights to receive
       all dividends paid on the Shares at the same times and in the same
       amounts as all other shares of Common Stock; provided, however, that all
       dividends paid on the Coinvestment Shares shall be pledged as collateral
       for the Note until such time as the Note and all accrued interest is paid
       in full, and the Company shall be entitled to set-off against such
       dividends in accordance with Section 8.7(c) hereof.  Nothing in the Plan,
       however, 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
       Employee or Participant at any time, nor confer upon any Eligible
       Employee or Participant any right to continue in the employ or service of
       the Company.

10.    TAXES.

       10.1   GENERAL RULES FOR WITHHOLDING.  The Company is entitled to (i)
              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 the
              acquisition of the Shares, the receipt of dividends or
              distributions on the Shares or the termination of the security
              interest or restrictions applicable to the Shares, or (ii) require
              the Participant promptly to remit the amount of such withholding
              to the Company before taking any action, including issuing any
              Shares.  In the event the Company is unable to withhold such
              amounts, for whatever reasons, the Participant hereby agrees to
              pay to the Company an amount equal to the amount the Company would
              otherwise be required to withhold under foreign, federal, state or
              local law.

       10.2   SPECIAL RULES FOR WITHHOLDING.  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 10.1 hereof by electing to tender shares of
              the Company previously acquired by the Participant or a promissory
              note (on terms acceptable to the Committee in its sole
              discretion), or by a combination of such methods.

       10.3   SECTION 83(b) ELECTION.  The Participant has reviewed with the
              Participant's own tax advisors the federal, state, local and
              foreign tax consequences of the purchase of the Shares and the
              other transactions contemplated by the Plan.  The Participant is
              relying solely on such advisors and not on any statements or
              representations of the Company or any of its agents.  The
              Participant understands that the Participant (and not the Company)
              shall be responsible for the Participant's own tax liability that
              may arise as a result of the purchase of the Shares or the other
              transactions contemplated by this Agreement.  The Company
              recommends that each Participant consult with such Participant's
              own tax advisor with respect to the making of an election pursuant
              to Section 83(b) of the Code.  Any such election, if made, must be
              filed with the Internal Revenue Service within thirty (30) days of
              the purchase of such Shares.  THE PARTICIPANT ACKNOWLEDGES THAT IT
              IS THE PARTICIPANT'S SOLE RESPONSIBILITY AND NOT THE COMPANY'S
              RESPONSIBILITY TO FILE SUCH ELECTION ON A TIMELY BASIS, EVEN IF
              THE PARTICIPANT REQUESTS THAT THE COMPANY OR ITS REPRESENTATIVES
              MAKE SUCH FILING ON BEHALF OF THE PARTICIPANT.

                                          16
<PAGE>

11.    DLJMB LIQUIDATION EVENT.

       11.1   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 in an agreement with the Participant, all unvested
              Coinvestment Shares will become immediately vested in full.

       11.2   LIMITATION ON PAYMENTS IN CONNECTION WITH A DLJMB LIQUIDATION
              EVENT. Notwithstanding anything in Section 11.1 hereof to the
              contrary, if, with respect to a Participant, the acceleration of
              the vesting of Coinvestment Shares as provided in Section 11.1
              (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 11.1 hereof 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 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 11.2 will not apply, and any "payments" to a Participant
              pursuant to Section 11.1 hereof will be treated as "payments"
              arising under such separate agreement.

12.    MISCELLANEOUS.

       12.1   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 Shares
              will be granted after such termination.

       12.2   INVESTORS' AGREEMENT.  Each Participant who purchases Shares under
              the Plan 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 Common Stock available
              for sale 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 Purchase Date or
              Closing Date, as applicable, 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 Common Stock available for
              sale under the Plan as determined by the Committee or reports
              directly to the CEO or COO after the Purchase Date or Closing
              Date, as applicable, shall thereafter be deemed a "Co-invest
              Management Stockholder," for all purposes of the Investors'

                                          17
<PAGE>

              Agreement.  Notwithstanding anything to the contrary in the Plan,
              if the Investors' Agreement has terminated by its terms, the
              provisions of this Section 12.2 shall no longer apply.

       12.3   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.

       12.4   SECURITIES LAW AND OTHER 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
              under the Plan, and a Participant may not sell, assign, transfer
              or otherwise dispose of Shares issued 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, as may be deemed necessary or
              advisable by the Company in order to comply with such securities
              law or other restrictions.

       12.5   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 Shares issued or to be
              issued 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 Shares 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 in accordance with the terms and conditions of
              the Plan.

       12.6   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.

       12.7   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.

                                          18

<PAGE>

                                      EXHIBIT A
                             FORM OF SECURED DEMAND NOTE

<PAGE>

                                      EXHIBIT B
                        FORM OF PLEDGE AND CUSTODY AGREEMENT

<PAGE>

                                     EXHIBIT C
                      VESTING SCHEDULE FOR COINVESTMENT SHARES

                     (ONLY ATTACHED TO SUBSCRIPTION AGREEMENT)

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

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                                          PERCENTAGE OF COINVESTMENT SHARES
              VESTING DATE                  VESTED AS OF THE VESTING DATE*
              ------------                ---------------------------------
--------------------------------------------------------------------------------
<S>                                      <C>
 One Year from Purchase Date or          35% of the Coinvestment Shares
 Closing Date, as applicable             purchased by the Participant

--------------------------------------------------------------------------------
 Two Years from Purchase Date or         35% of the Coinvestment Shares
 Closing Date, as applicable             purchased by the Participant

--------------------------------------------------------------------------------
 Three Years from Purchase Date or       57% of the Coinvestment Shares
 Closing Date, as applicable             purchased by the Participant

--------------------------------------------------------------------------------
 Four Years from Purchase Date or        79% of the Coinvestment Shares
 Closing Date, as applicable             purchased by the Participant

--------------------------------------------------------------------------------
 Five Years from Purchase Date or        100% of Coinvestment Shares
 Closing Date, as applicable             purchased by the Participant

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

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

                                     FORM OF
                            PARTICIPATION AGREEMENT

                                  (ALL AWARDS)

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

                                W I T N E S S E T H

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

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

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

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

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

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

1.     STOCK OPTION GRANT.

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

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

<PAGE>

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

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

2.     STOCK PURCHASE GRANT.

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

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

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

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

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

                                       2
<PAGE>

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

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

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

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

3.     INVESTORS' AGREEMENT.

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

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

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

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

                                       3
<PAGE>

4.     CONFIDENTIALITY AND NONCOMPETE AGREEMENT.

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

5.     SECTION 83(b) ELECTION.

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

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

6.     TRUTH-IN-LENDING DISCLOSURE.

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

7.     MISCELLANEOUS.

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

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

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

                                       4
<PAGE>

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

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

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

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

                                       5
<PAGE>

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

                                         MERRILL CORPORATION:

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

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

                                         EMPLOYEE:

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

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

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

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

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

                        *  *  *  *  *  *  *  *

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

                                      6
<PAGE>

                          TIME VESTING OPTION SCHEDULE

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

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

                                                                    PERCENTAGE OF OPTION SHARES
                DATE OF EXERCISABILITY                                 AVAILABLE FOR EXERCISE

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

             One year from Date of Grant                                0% of Option Shares

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

             Two years from Date of Grant                               0% of Option Shares

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

            Three years from Date of Grant                              25% of Option Shares

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

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

            Five years from Date of Grant                               75% of Option Shares

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

             Six years from Date of Grant                              100% of Option Shares

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

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

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

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

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

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

                                       7
<PAGE>

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

                                       8
<PAGE>

                      PERFORMANCE VESTING OPTION SCHEDULE

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

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

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

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

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

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

                                       9
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                                       10
<PAGE>

                                      TABLE 2

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

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

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

                     35.0 - 39.9%                                               75%

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

                     30.0 - 34.9%                                               50%

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

                     25.0 - 29.9%                                               25%

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

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

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

                                       11
<PAGE>

                                TERMS AND CONDITIONS
                                         OF
                         NON-STATUTORY STOCK OPTION AWARDS

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

1.   DURATION OF OPTION AND TIME OF EXERCISE.

     1.1. TERMINATION OF EMPLOYMENT OR OTHER SERVICE.

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

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

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

2.   EXERCISABILITY OF REPURCHASE RIGHT.

     If Merrill elects to exercise its Repurchase Right, Merrill shall give the
Employee written notice of its intent to exercise its Repurchase Right (the
"NOTICE OF REPURCHASE") within sixty (60) days of such Employee's termination of
employment or other service. The Notice of Repurchase shall specify (i) the
number of shares of Common Stock Merrill intends to repurchase, (ii) the
applicable purchase price for such shares of Common Stock, and (iii) the date
Merrill expects to purchase such shares of Common Stock from the Employee which
date shall be no later than thirty (30) days following the Valuation Date in the
fiscal year immediately following the fiscal year in which the Employee's
employment or other service is terminated (the "REPURCHASE DATE"). On or before
the Repurchase Date, the Employee shall deliver to Merrill the stock
certificates representing the shares of Common Stock being purchased by Merrill,
properly endorsed for transfer. By such delivery of such certificates, the
Employee warrants that (i) the Employee has good title to, the right to
possession of, and the right to sell, the shares of Common Stock, (ii) such
shares of Common Stock are free and clear of all pledges, liens, encumbrances,
charges,

                                       12
<PAGE>

proxies, restrictions, options, transfers and other adverse claims, except
such as have been imposed by the Option Plan or the Investors' Agreement, and
except such restrictions on transfer as may be imposed by federal or state
securities laws, and (iii) the Employee shall hold harmless Merrill from all
costs, expenses and fees incurred in defending title and right to possession.
On the Repurchase Date, Merrill shall pay to the Employee the total purchase
price for the shares of Common Stock to be purchased by Merrill.
Notwithstanding anything to the contrary in the Option Plan, however, Merrill
shall only be required to pay for such shares of Common Stock as rapidly as
permissible without violating any loan covenants or other contractual
restrictions applicable to, and binding upon, Merrill, and any amounts not
paid to the Employee on the Repurchase Date will bear interest at a fixed
rate of interest equal to eight percent (8%) per annum; provided, however,
that such interest rate shall not exceed the rate permitted by applicable
law. Merrill shall only be required to repurchase shares of Common Stock
pursuant to this Section 2 to the extent that such repurchase does not
violate any applicable laws.

3.   MANNER OF OPTION EXERCISE.

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

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

4.   DLJMB LIQUIDATION EVENT.

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

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

                                       13
<PAGE>

     payment could be deemed a "payment" within the meaning of Section
     280G(b)(2) of the Code), together with any other "payments" that such
     Employee has the right to receive from Merrill or any corp oration that
     is a member of an "affiliated group" (as defined in Section 1504(a) of
     the Code without regard to Section 1504(b) of the Code) of which Merrill
     is a member, would constitute a "parachute payment" (as defined in
     Section 280G(b)(2) of the Code), then the "payments" to such Employee
     pursuant to Section 4.1 will be reduced to the largest amount as will
     result in no portion of such "payments" being subject to the excise tax
     imposed by Section 4999 of the Code; provided, however, that if an
     Employee is subject to a separate agreement with Merrill or a Subsidiary
     that expressly addresses the potential application of Sections 280G or
     4999 of the Code (including, without limitation, that "payments" under
     such agreement or otherwise will be reduced, that the Employee will have
     the discretion to determine which "payments" will be reduced, that such
     "payments" will not be reduced or that such "payments" will be "grossed
     up" for tax purposes), then this Section 4.2 will not apply, and any
     "payments" to the Employee pursuant to Section 4.1 will be treated as
     "payments" arising under such separate agreement.

5.   RIGHTS OF EMPLOYEE; TRANSFERABILITY.

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

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

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

6.   RESTRICTIONS REGARDING EMPLOYMENT OR SERVICE.

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

                                       14
<PAGE>

     the period beginning twelve (12) months prior to, and ending twelve (12)
     months following, such date of termination of employment or other
     service, the Committee in its sole discretion will have the authority to
     rescind the exercise of any Options of the Employee that were exercised
     during such period and to require the Participant to pay to Merrill,
     within ten (10) days of receipt from Merrill of notice of such
     rescission, the amount of any gain realized as a result of such
     rescinded exercise.  Such payment will be made in cash (including check,
     bank draft or money order) or, with the Committee's consent, shares of
     Common Stock with a Fair Market Value on the date of payment equal to
     the amount of such payment.  Merrill will be entitled to withhold and
     deduct from future wages of the Employee (or from other amounts that may
     be due and owing to the Employee from Merrill or a Subsidiary) or make
     other arrangements for the collection of all amounts necessary to
     satisfy such payment obligations.

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

7.   SECURITIES LAW AND OTHER RESTRICTIONS.

     Notwithstanding any other provision of the Option Plan, the Participation
Agreement or any attachments thereto and all attachments thereto, Merrill will
not be required to issue, and the Employee may not sell, assign, transfer or
otherwise dispose of, any Option Shares, unless (i) there is in effect with
respect to the Option Shares a registration statement under the Securities Act
of 1933, as amended, and any applicable state or foreign securities laws or an
exemption from such registration, and (ii) there has been obtained any other
consent, approval or permit from any other regulatory body which the Committee,
in its sole discretion, deems necessary or advisable. Merrill may condition such
issuance, sale or transfer upon the receipt of any representations or agreements
from the parties involved, and the placement of any legends on certificates
representing Option Shares, as may be deemed necessary or advisable by Merrill
in order to comply with such securities law or other restrictions.

8.   WITHHOLDING TAXES.

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

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

                                       15
<PAGE>

9.   ADJUSTMENTS.

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

10.  SUBJECT TO OPTION PLAN.

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

                                       16
<PAGE>

                              TERMS AND CONDITIONS
                           OF PURCHASE OF COMMON STOCK

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

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

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

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

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

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

                                       17
<PAGE>

                              TERMS AND CONDITIONS
                                       OF
                            NONRECOURSE PURCHASE LOAN

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

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

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

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

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

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

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

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

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

                                       18
<PAGE>

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

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

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

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

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

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

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

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

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

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

                                       19
<PAGE>

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

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

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

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

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

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

                                       20
<PAGE>

                              TERMS AND CONDITIONS
                                       OF
                          PLEDGE AND CUSTODY AGREEMENT

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

     "COLLATERAL" means the Pledged Securities and all Proceeds.

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

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

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

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

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

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

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

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

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

                                       21
<PAGE>

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

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

6.   RIGHTS OF MERRILL.

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

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

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

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

                                       22
<PAGE>

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

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

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

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

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

                                       23
<PAGE>

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

                                       24
<PAGE>

                      COINVESTMENT SHARES VESTING SCHEDULE

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

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

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

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

                                       25
<PAGE>

                   CONFIDENTIALITY AND NONCOMPETE PROVISIONS

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

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

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

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

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

you would receive:

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

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

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

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

                                       26
<PAGE>

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

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

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

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

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

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

                                       27
<PAGE>

                                83(B) ELECTION FORM

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

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

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

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

Name:   Taxpayer: __________________________   Spouse:_______________________

Address:_____________________________________________________

Tax ID#:____________________________________________

Taxable Year:______________________________

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

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

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

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

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

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

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

Dated:________________________       _______________________________________
                                     (Signature of the Taxpayer)

The undersigned spouse of the taxpayer joins in this election.

Dated:________________________       _______________________________________
                                     (Signature of the Spouse)

                                       28

<PAGE>

Truth-in-Lending Disclosure

                                        FOR

                            CREDIT SALE OF CAPITAL STOCK
                                     ISSUED BY
                                MERRILL CORPORATION

                                -FIRSTNAME- -LASTNAME-

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

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

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

Your payment schedule will be:

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

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

SECURITY:  You are giving a security interest in:

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

PREPAYMENT:  If you pay off early, you

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

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

                                         29

<PAGE>

                         ITEMIZATION OF AMOUNT FINANCED

                                         FOR

                CREDIT SALE OF MERRILL CORPORATION CAPITAL STOCK

                              -FIRSTNAME- -LASTNAME-

Itemization of the Amount Financed of $-AMT_FINANCED-

          $-AMT_FINANCED- Amount credited to your account

                                           30

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