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Exhibit 10.6    
    

 
  Executive-Option & Coinvest    
    

 
 

FIRST AMENDMENT TO PARTICIPATION AGREEMENT    
    

        THIS FIRST AMENDMENT TO PARTICIPATION AGREEMENT (this "Amendment") is entered into effective as of
February       , 2003, between Merrill Corporation, a Minnesota corporation ("Merrill"), and
                         (the "Employee"), to amend the Participation Agreement, dated
                        ,
            , between Merrill and the Employee (the "Agreement"). 

        NOW,
THEREFORE, in consideration of each party's undertakings herein and other good and valuable consideration, Merrill and the Employee hereby agree as follows: 

        1.    Amendment of Stock Option Vesting.    

        (a)   The
"Super Performance Vesting Schedule" attached to the Agreement (the "Vesting Schedule") is hereby amended by deleting
the first paragraph of the Vesting Schedule (which reads, "All Option Shares subject to this. .. available for exercise.") in its entirety and replacing such paragraph with the following: 

        "All
Option Shares subject to this Super Performance Vesting Schedule shall become immediately vested and available for exercise if (i) a DLJMB Liquidation Event (as defined
below) occurs and (ii) the per-share consideration received by DLJMB Entities (as defined below) in connection with such DLJMB Liquidation Event, with respect to shares of Common
Stock held by DLJMB Entities, is $33 or more (such consideration being the cash amount, if such consideration is paid in
cash, or the fair market value of such consideration as determined by the Committee, if paid in a form other than cash)." 

        (b)   The
paragraph of the Vesting Schedule that is numbered "2" (which contains the definition of "DLJMB IRR") is hereby deleted in its entirety, and the paragraph of the
Vesting Schedule that contains the definition of "DLJMB Liquidation Event" is hereby renumbered as paragraph number "2". 

        2.    Amendment of Interest Rate on Coinvestment Share Loan.    The first sentence of
Section 2.1(b) of the Agreement is hereby amended by deleting the parenthetical "(the 'Interest Rate')" and replacing such parenthetical with the
following: "through February 28, 2003, and at a fixed rate of 3.32% per annum commencing on March 1, 2003 (as in effect from time to time, the "Interest
Rate")". 

        3.    Amendment of Coinvestment Share Loan and Bonus Eligibility.    The attachment to the
Agreement entitled "Terms and Conditions of Nonrecourse Purchase Loan" is hereby amended by inserting at the end of such attachment the following: 

        "Bonus Eligibility and Debt Reduction.    Without limiting the Committee's or Merrill's other rights and powers under this
Agreement or the DI Plan, the following shall apply: 

        (a)    Bonus Eligibility.    Subject to the other provisions hereof, Merrill shall (or shall cause the applicable
Subsidiary to) pay to the Employee a bonus (the "Bonus") on April 15, 2008 (the "Payment Date"),
if the following conditions are satisfied: 

        (i)    the
Employee has been continuously employed by Merrill or any Subsidiary from the date of this Agreement through the Payment Date; and 

        (ii)   if
a DLJMB Liquidation Event (as defined in the DI Plan, for purposes of this Section entitled "Bonus Eligibility and Debt Reduction") does not occur prior to the
Payment Date, then either (A) the EBITDA (as defined below) for Merrill's fiscal year ended January 31, 2008 is $85 million or more or (B) the sum obtained by adding the
EBITDA for each of Merrill's fiscal years ended January 31, 2004 through January 31, 2008 is $372 million or more. 

 

        "EBITDA" means for any applicable period, the sum of consolidated (i) net income; (ii) depreciation and amortization and
other non-cash charges or expenses; (iii) income taxes; (iv) interest expense; (v) net loss realized in connection with any sale or other disposition of any asset or
any extraordinary or non-recurring loss; minus (vi) net gain realized in connection with any sale or other disposition of any asset or any extraordinary or non-recurring
gain. 

        (b)    Bonus Amount.    The amount of the Bonus (the "Bonus Amount")
shall be equal to the sum of the following (each to the extent applicable): 

        (i)    the
unpaid principal balance of the Purchase Loan as of the Payment Date, plus

        (ii)   the
accrued and unpaid interest on the Purchase Loan as of the Payment Date, plus

        (iii)  if
a DLJMB Liquidation Event occurs prior to the Payment Date, the amount applied as full or partial payment of the Purchase Loan (principal and interest) in
connection with such DLJMB Liquidation Event pursuant to Paragraph (e) below, plus

        (iv)  a
Gross Up Amount with respect to the sum of the immediately preceding clauses (i), (ii) and (iii). 

        "Gross Up Amount" means, with respect to any payment, an amount equal to the difference obtained by subtracting (1) the product of
(y) the dollar amount of such payment, multiplied by (z) the quotient of $1.00 divided by
x, where x is equal to $1.00 minus the sum of all federal, state, local and foreign income taxes that would be imposed on $1.00 of additional ordinary
income at the highest marginal rates in effect for the applicable individual for the year during which such payment is to be paid, taking into account whatever deduction for state income taxes is then
permitted by the Internal Revenue Code and whatever deduction for federal income taxes is then permitted by the laws of the applicable state (e.g., if
the sum of all such taxes were $0.43, then x would be $1.00 - $0.43, which is $0.57, and the multiplier from clause (z) would be 1.7544),  minus (2) the dollar amount of such payment.

        (c)    Application of Bonus.    Merrill (or the applicable Subsidiary) shall retain the amount of the Bonus and apply
such amount first to satisfy any tax withholding requirements related to the Bonus, then as full or partial payment of the Purchase Loan and all accrued and unpaid interest thereon, and then any (if
any) remaining portion of the Bonus shall be remitted to the Employee. 

        (d)    Further Limitations.    Merrill shall not have any obligation to pay (nor shall it have any obligation to cause
any Subsidiary to pay) the Bonus if an Event of Default shall have occurred. Merrill shall only (and shall only be required to cause the applicable Subsidiary to) pay the Bonus as rapidly as is
permissible to avoid breaching or violating, or creating or accelerating any right or obligation with respect to, any loan, credit or debt arrangement, or any covenant, obligation or other contractual
restriction, then applicable to, or binding upon, Merrill or any Subsidiary. 

        (e)    Application of DUMB Liquidation Event Consideration.    Merrill may obtain and retain any consideration or
other payment in respect of the Coinvestment Shares held by the Employee in connection with a DUMB Liquidation Event and apply such consideration or payment (or any portion thereof) as full or partial
payment of the Purchase Loan (including all accrued and unpaid interest thereon). If the total amount of such consideration or payment exceeds the amount so applied by Merrill to the Purchase Loan,
then Merrill shall remit such excess to the Employee. If such consideration or payment is in a form other than cash, then the Committee shall determine the fair market value of such consideration or
payment for purposes of such application. 

        (f)    Additional Effect of Adverse Action.    In addition to Merrill's rights regarding an Adverse Action described
in clause (I) or (2) of Section 8.7(b)(i) of the DI Plan, upon such an Adverse Action (i) the principal of the Purchase Loan and all accrued but unpaid interest thereon shall be
immediately due and payable by the Employee in a single payment, pursuant to the terms and 

2

 

conditions
of the DI Plan and the Agreement, (ii) the date (as determined by the Committee) of such Adverse Action shall be the Maturity Date, unless an earlier Maturity Date has already been
established and (iii) an Event of Default shall be deemed to have occurred." 

        4.    Other Provisions.    Merrill and the Employee shall each take and cause to be taken,
from time to time, all reasonable actions and things necessary, proper or advisable to cause the consummation of the matters contemplated hereby. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. Except to the extent amended hereby, the Agreement, including
each attachment thereto, shall remain in full force and effect in accordance with its terms. 

*          *          *          *          
*

IN
WITNESS WHEREOF, each party has executed this First Amendment to Participation Agreement, effective as of the date first above written. 

MERRILL
CORPORATION 

By:                                       
                   

Its:                                       
                   

3

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Exhibit 10.6

Executive-Option & Coinvest

FIRST AMENDMENT TO PARTICIPATION AGREEMENTQuickLinks
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Exhibit 10.7    
    

 
 

FIRST AMENDMENT TO PARTICIPATION AGREEMENT    
    

        THIS FIRST AMENDMENT TO PARTICIPATION AGREEMENT (this "Amendment") is entered into effective as of
April 30, 2003, between Merrill Corporation, a Minnesota corporation ("Merrill"), and
                        
(the "Employee"), to amend the Participation Agreement, dated as of January 28, 2000, between Merrill and the Employee (the
"Agreement"). 

        NOW,
THEREFORE, in consideration of each party's undertakings herein and other good and valuable consideration, Merrill and the Employee hereby agree as follows: 

        1.    Amendment of Stock Option Vesting.    

        (a)   The
"Performance Vesting Option Schedule" attached to the Agreement (the "Performance Vesting Schedule") is hereby
amended by deleting the second sentence of the first paragraph of the Performance Vesting Schedule (which reads, "If a DLJMB Liquidation ... in Table 2.") in its entirety and replacing such
sentence with the following: 

        "If
a DLJMB Liquidation Event (as defined below) occurs, then, unless otherwise provided by the Committee in its sole discretion, the portion of the Option governed by this Performance
Vesting Option Schedule will become immediately vested and exercisable in full." 

        (b)   The
Performance Vesting Schedule is hereby amended by deleting Table 2 thereof. For the avoidance of doubt, the sentence following such Table 2 (which reads,
"This Performance Vesting Option will ... Event (the 'Time of Termination').") shall remain unchanged. 

        2.    Amendment of Interest Rate on Coinvestment Share Loan.    The first sentence of
Section 2.1(b) of the Agreement is hereby amended by deleting the parenthetical "(the 'Interest Rate')" and replacing such parenthetical with the
following: "through March 31, 2003, and at a fixed rate of 2.97% per annum commencing on April 1, 2003 (as in effect from time to time, the "Interest
Rate")". 

        3.    Amendment of Coinvestment Share Loan and Bonus Eligibility.    The attachment to the
Agreement entitled "Terms and Conditions of Nonrecourse Purchase Loan" is hereby amended by inserting at the end of such attachment the following: 

        "Bonus Eligibility and Debt Reduction.    Without limiting the Committee's or Merrill's other rights and powers under this
Agreement or the DI Plan, the following shall apply: 

        (a)    Bonus Eligibility.    Subject to the other provisions hereof, Merrill shall (or shall cause the applicable
Subsidiary to) pay to the Employee a bonus (the "Bonus") on April 15, 2008 (the "Payment Date"),
if the following conditions are satisfied: 

        (i)    the
Employee has been continuously employed by Merrill or any Subsidiary from the date of this Agreement through the Payment Date; and 

        (ii)   if
a DLJMB Liquidation Event (as defined in the DI Plan, for purposes of this Section entitled "Bonus Eligibility and Debt Reduction") does not occur prior to the
Payment Date, then either (A) the EBITDA (as defined below) for Merrill's fiscal year ended January 31, 2008 is $85 million or more or (B) the sum obtained by adding the
EBITDA for each of Merrill's fiscal years ended January 31, 2004 through January 31, 2008 is $372 million or more. 

        "EBITDA" means for any applicable period, the sum of consolidated (i) net income; (ii) depreciation and amortization and
other non-cash charges or expenses; (iii) income taxes; (iv) interest expense; (v) net loss realized in connection with any sale or other disposition of any asset or
any extraordinary or non-recurring loss; minus (vi) net gain realized in connection with any sale or other disposition of any asset or any extraordinary or non-recurring
gain. 

 

        (b)    Bonus Amount.    The amount of the Bonus (the "Bonus Amount")
shall be equal to the sum of the following (each to the extent applicable): 

        (i)    the
unpaid principal balance of the Purchase Loan as of the Payment Date, plus

        (ii)   the
accrued and unpaid interest on the Purchase Loan as of the Payment Date, plus

        (iii)  if
a DLJMB Liquidation Event occurs prior to the Payment Date, the amount applied as full or partial payment of the Purchase Loan (principal and interest) in
connection with such DLJMB Liquidation Event pursuant to Paragraph (e) below, plus

        (iv)  a
Gross Up Amount with respect to the sum of the immediately preceding clauses (i), (ii) and (iii). 

        "Gross Up Amount" means, with respect to any payment, an amount equal to the difference obtained by subtracting (1) the product of
(y) the dollar amount of such payment, multiplied by (z) the quotient of $1.00 divided by
x, where x is equal to $1.00 minus the sum of all federal, state, local and foreign income taxes that would be imposed on $1.00 of additional ordinary
income at the highest marginal rates in effect for the applicable individual for the year during which such payment is to be paid, taking into account whatever deduction for state income taxes is then
permitted by the Internal Revenue Code and whatever deduction for federal income taxes is then permitted by the laws of the applicable state (e.g., if the sum of all such taxes were $0.43, then x
would be $1.00 - $0.43, which is $0.57, and the multiplier from clause (z) would be 1.7544), minus (2) the dollar
amount of such payment. 

        (c)    Application of Bonus.    Merrill (or the applicable Subsidiary) shall retain the amount of the Bonus and apply
such amount first to satisfy any tax withholding requirements related to the Bonus, then as full or partial payment of the Purchase Loan and all accrued and unpaid interest thereon, and then any (if
any) remaining portion of the Bonus shall be remitted to the Employee. 

        (d)    Further Limitations.    Merrill shall not have any obligation to pay (nor shall it have any obligation to cause
any Subsidiary to pay) the Bonus if an Event of Default shall have occurred. Merrill shall only (and shall only be required to cause the applicable Subsidiary to) pay the Bonus as rapidly as is
permissible to avoid breaching or violating, or creating or accelerating any right or obligation with respect to, any loan, credit or debt arrangement, or any covenant, obligation or other contractual
restriction, then applicable to, or binding upon, Merrill or any Subsidiary. 

        (e)    Application of DLJMB Liquidation Event Consideration.    Merrill may obtain and retain any consideration or
other payment in respect of the Coinvestment Shares held by the Employee in
connection with a DLJMB Liquidation Event and apply such consideration or payment (or any portion thereof) as full or partial payment of the Purchase Loan (including all accrued and unpaid interest
thereon). If the total amount of such consideration or payment exceeds the amount so applied by Merrill to the Purchase Loan, then Merrill shall remit such excess to the Employee. If such
consideration or payment is in a form other than cash, then the Committee shall determine the fair market value of such consideration or payment for purposes of such application. 

        (f)    Additional Effect of Adverse Action.    In addition to Merrill's rights regarding an Adverse Action described
in clause (1) or (2) of Section 8.7(b)(i) of the DI Plan, upon such an Adverse Action (i) the principal of the Purchase Loan and all accrued but unpaid interest thereon shall be
immediately due and payable by the Employee in a single payment, pursuant to the terms and conditions of the DI Plan and the Agreement, (ii) the date (as determined by the Committee) of such
Adverse Action shall be the Maturity Date, unless an earlier Maturity Date has already been established and (iii) an Event of Default shall be deemed to have occurred." 

        4.    Other Provisions.    Merrill and the Employee shall each take and cause to be taken,
from time to time, all reasonable actions and things necessary, proper or advisable to cause the consummation of 

2

 

the
matters contemplated hereby. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the
same instrument. Except to the extent amended hereby, the Agreement, including each attachment thereto, shall remain in full force and effect in accordance with its terms. 

*          *          *          *          
*

IN
WITNESS WHEREOF, each party has executed this First Amendment to Participation Agreement, effective as of the date first above written. 

MERRILL
CORPORATION 

By:                                       
                   

                John W. Castro 

	Its:
	Chief
Executive Officer 

3

QuickLinks

Exhibit 10.7

FIRST AMENDMENT TO PARTICIPATION AGREEMENT

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