FIRSTPAK INC
S-1/A, 1997-09-10
MANIFOLD BUSINESS FORMS
Previous: BERINGER WINE ESTATES HOLDINGS INC, S-1/A, 1997-09-10
Next: PREMIER PACKAGE & LABEL CORP, S-4/A, 1997-09-10



<PAGE>
   
   AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 10, 1997
    
   
                                                      REGISTRATION NO. 333-31653
    
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
   
                                AMENDMENT NO. 1
                                       TO
                                    FORM S-1
    
                          REGISTRATION STATEMENT UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------
   
                                 FIRSTPAK, INC.
    
             (Exact name of Registrant as specified in its charter)
 
   
<TABLE>
<S>                              <C>                            <C>
          CALIFORNIA                         2759                  94-3274014
 (State or other jurisdiction    (Primary Standard Industrial   (I.R.S. Employer
              of                 Classification Code Number)     Identification
incorporation or organization)                                      Number)
</TABLE>
    
 
                            ------------------------
                         114 SANSOME STREET, SUITE 1000
                          SAN FRANCISCO, CA 94104-3821
                                 (415) 362-9800
         (Address, including zip code, and telephone number, including
            area code, of Registrant's principal executive offices)
                            ------------------------
                               VINCENT F. TITOLO
   
                    VICE CHAIRMAN OF THE BOARD OF DIRECTORS
    
   
                                 FIRSTPAK, INC.
    
                         114 SANSOME STREET, SUITE 1000
                          SAN FRANCISCO, CA 94104-3821
                                 (415) 362-9800
           (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)
                            ------------------------
                                   COPIES TO:
 
   
        LARRY W. SONSINI, ESQ.                   RICHARD J. SANDLER, ESQ.
        MARTIN W. KORMAN, ESQ.                    DAVIS POLK & WARDWELL
          BRIAN C. ERB, ESQ.                       450 LEXINGTON AVENUE
   WILSON SONSINI GOODRICH & ROSATI              NEW YORK, NEW YORK 10017
       PROFESSIONAL CORPORATION                       (212) 450-4000
          650 PAGE MILL ROAD
     PALO ALTO, CALIFORNIA 94304
            (650) 493-9300
 
                            ------------------------
    
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this registration statement becomes effective.
                            ------------------------
    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / / ___________________
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / / ___________________
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
                            ------------------------
                        CALCULATION OF REGISTRATION FEE
 
   
<TABLE>
<CAPTION>
                                                                     PROPOSED
                                                    PROPOSED          MAXIMUM
                                                     MAXIMUM         AGGREGATE        AMOUNT OF
    TITLE OF EACH CLASS OF       AMOUNT TO BE    OFFERING PRICE   OFFERING PRICE    REGISTRATION
 SECURITIES TO BE REGISTERED      REGISTERED      PER SECURITY          (1)              FEE
<S>                             <C>              <C>              <C>              <C>
Common Stock, $0.001 par
  value.......................     4,230,283         $15.00         $63,454,245      $19,229(2)
</TABLE>
    
 
   
(1) Estimated solely for the purpose of calculating the registration fee in
    accordance with Rule 457.
    
 
   
(2) $19,152 was paid in connection with the initial filing of this Registration
    Statement on July 18, 1997.
    
                            ------------------------
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(a), MAY DETERMINE.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
<PAGE>
PROSPECTUS                   SUBJECT TO COMPLETION
   
                            DATED SEPTEMBER 10, 1997
    
   
4,230,283 SHARES
    
 
           [LOGO]
COMMON STOCK
(PAR VALUE $0.001 PER SHARE)
 
   
Of the 4,230,283 shares of common stock, par value $0.001 per share (the "Common
Stock"), offered hereby, 3,928,571 shares are being sold by FirstPak, Inc., a
Delaware corporation, and 301,712 shares are being sold by the Selling
Stockholders. See "Principal and Selling Stockholders." Concurrently with the
consummation of the Offering, the Company will acquire all of the capital stock
of the Operating Subsidiaries as described herein. See "Formation of the
Company." Following the Offering, the Company's officers, directors and 5%
stockholders will own approximately 38.1% of the outstanding shares of Common
Stock. The Company will not receive any of the proceeds from the sale of Common
Stock by the Selling Stockholders.
    
 
   
Prior to the Offering, there has been no public market for the Common Stock of
the Company. It is currently anticipated that the initial public offering price
will be between $13 and $15 per share. See "Underwriting" for information
relating to the factors to be considered in determining the initial public
offering price of the Common Stock. The Company has applied for listing of the
Common Stock on the Nasdaq National Market under the symbol "FPAK."
    
 
SEE "RISK FACTORS" COMMENCING ON PAGE 10 FOR CERTAIN INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
 
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
- --------------------------------------------------------------------------------
 
   
<TABLE>
<CAPTION>
                                                                                   PROCEEDS TO
                                PRICE TO         UNDERWRITING     PROCEEDS TO      SELLING
                                PUBLIC           DISCOUNT (1)     COMPANY (2)(3)   STOCKHOLDERS
<S>                             <C>              <C>              <C>              <C>
- --------------------------------------------------------------------------------------------------
Per Share                       $                $                $                $
- -------------------------------------------------------------------------------------------
Total (3)                       $                $                $                $
- -------------------------------------------------------------------------------------------
</TABLE>
    
 
(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
 
   
(2) Before deducting expenses of the Offering payable by the Company, estimated
at $3,500,000.
    
 
   
(3) The Company has granted the Underwriters an option to purchase up to an
additional 634,542 shares of Common Stock, on the same terms as set forth above,
solely to cover over-allotments, if any. If such option is exercised in full,
the total Price to Public, Underwriting Discount and Proceeds to Company will be
$     , $     and $     , respectively. See "Underwriting."
    
 
The shares of Common Stock being offered by this Prospectus are offered by the
Underwriters, subject to prior sale, when, as and if delivered to and accepted
by the Underwriters, and subject to approval of certain legal matters by Davis
Polk and Wardwell, counsel for the Underwriters. It is expected that delivery of
the shares of Common Stock will be made against payment therefor on or about
          , 1997 at the offices of J.P. Morgan Securities Inc., 60 Wall Street,
New York, New York.
 
J.P. MORGAN & CO.                                  ROBERTSON, STEPHENS & COMPANY
 
          , 1997
<PAGE>
                               [INSIDE COVER ART]
 
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVERALLOT IN CONNECTION WITH THE OFFERING,
AND MAY BID FOR, AND PURCHASE, SHARES OF THE COMMON STOCK IN THE OPEN MARKET.
FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."
 
                                       2
<PAGE>
No person has been authorized to give any information or to make any
representations not contained in this Prospectus and, if given or made, such
information or representations must not be relied upon as having been authorized
by the Company, the Selling Stockholders or any Underwriters. This Prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, the
Common Stock in any jurisdiction to any person to whom it is unlawful to make
such offer or solicitation.
 
No action has been or will be taken in any jurisdiction by the Company, the
Selling Stockholders or any Underwriter that would permit a public offering of
the Common Stock or possession or distribution of this Prospectus in any
jurisdiction where action for that purpose is required, other than in the United
States. Persons into whose possession this Prospectus comes are required by the
Company and the Underwriters to inform themselves about and to observe any
restrictions as to the offering of the Common Stock and the distribution of this
Prospectus.
 
                               TABLE OF CONTENTS
   
<TABLE>
<CAPTION>
                                                    Page
<S>                                              <C>
Prospectus Summary.............................           4
Risk Factors...................................          10
Formation of the Company.......................          19
Use of Proceeds................................          22
Dividend Policy................................          22
Capitalization.................................          23
Dilution.......................................          24
Selected Pro Forma Combined Financial
  Data.........................................          26
Management's Discussion and Analysis of
  Pro Forma Financial Condition and
  Pro Forma Results of Operations..............          29
Selected Financial Data of the
  Operating Subsidiaries.......................          33
 
<CAPTION>
                                                    Page
<S>                                              <C>
Management's Discussion and Analysis of
  Financial Condition and Results of Operations
  of the Operating Subsidiaries................          36
Business.......................................          52
Management.....................................          63
Certain Relationships and Related Party
  Transactions.................................          70
Principal and Selling Stockholders.............          77
Description of Capital Stock...................          78
Shares Eligible for Future Sale................          81
Underwriting...................................          83
Legal Matters..................................          84
Experts........................................          84
Additional Information.........................          85
Index to Financial Statements..................         F-1
</TABLE>
    
 
UNTIL             , 1997 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATIONS OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
The Company intends to furnish to its stockholders annual reports containing
consolidated financial statements audited by its independent auditors and
quarterly reports containing unaudited consolidated financial statements for
each of the first three quarters of each fiscal year.
 
                                       3
<PAGE>
                               PROSPECTUS SUMMARY
 
   
CONCURRENTLY WITH THE CONSUMMATION OF THE OFFERING MADE BY THIS PROSPECTUS (THE
"OFFERING"), FIRSTPAK, INC. WILL ACQUIRE, IN SEPARATE TRANSACTIONS (THE
"ACQUISITIONS"), ALL OF THE ISSUED AND OUTSTANDING CAPITAL STOCK OF WISCONSIN
LABEL CORPORATION ("WISCONSIN LABEL"), ST. LOUIS LITHOGRAPHING COMPANY ("ST.
LOUIS LITHO"), CALOPTICAL HOLDING CORPORATION ("CALOPTICAL") AND BLAKE PRINTING
AND PUBLISHING, INC. ("BLAKE PRINTING," AND, TOGETHER WITH WISCONSIN LABEL, ST.
LOUIS LITHO AND CALOPTICAL, THE "OPERATING SUBSIDIARIES") FOR AN AGGREGATE OF
6,072,012 SHARES OF COMMON STOCK, 220,000 SHARES OF SERIES A PREFERRED STOCK,
PAR VALUE $0.001 PER SHARE (THE "SERIES A PREFERRED STOCK"), AND OPTIONS TO
PURCHASE 909,193 SHARES OF COMMON STOCK OF FIRSTPAK, INC. TO BE ISSUED TO THE
STOCKHOLDERS OF THE OPERATING SUBSIDIARIES (THE "SELLERS") IN A STOCK-FOR-STOCK
EXCHANGE PURSUANT TO MERGER AGREEMENTS DATED JULY 17, 1997. SEE "FORMATION OF
THE COMPANY - THE ACQUISITIONS" AND "CERTAIN RELATIONSHIPS AND RELATED PARTY
TRANSACTIONS - THE ACQUISITIONS." UNLESS OTHERWISE INDICATED, ALL REFERENCES
HEREIN TO THE "COMPANY" OR "FIRSTPAK" MEAN FIRSTPAK, INC. AND THE OPERATING
SUBSIDIARIES ASSUMING EFFECTIVENESS OF THE ACQUISITIONS, AND REFERENCES HEREIN
TO "FIRSTPAK, INC." SHALL MEAN FIRSTPAK, INC. PRIOR TO THE EFFECTIVENESS OF THE
ACQUISITIONS.
    
 
   
THE FOLLOWING SUMMARY IS QUALIFIED IN ITS ENTIRETY BY, AND SHOULD BE READ IN
CONJUNCTION WITH, THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS,
INCLUDING THE NOTES THERETO, APPEARING ELSEWHERE IN THIS PROSPECTUS. UNLESS
OTHERWISE INDICATED, ALL INFORMATION SET FORTH HEREIN (i) HAS BEEN ADJUSTED TO
GIVE EFFECT TO THE ACQUISITIONS, (ii) REFLECTS THE REINCORPORATION OF FIRSTPAK,
INC. IN DELAWARE WHICH WILL OCCUR PRIOR TO CONSUMMATION OF THE OFFERING, (iii)
ASSUMES AN INITIAL PUBLIC OFFERING PRICE OF $14 PER SHARE, THE MIDPOINT OF THE
ASSUMED INITIAL PUBLIC OFFERING PRICES SET FORTH ON THE COVER OF THIS
PROSPECTUS, AND (iv) ASSUMES NO EXERCISE OF THE UNDERWRITERS' OVER-ALLOTMENT
OPTION.
    
 
                                  THE COMPANY
 
   
FirstPak, Inc. was formed in February 1996 to create a premier consolidator and
operator of labeling and packaging companies. Through its four Operating
Subsidiaries, the Company manufactures and sells a wide array of packaging
products, including pressure sensitive labels for the consumer products, food
packaging and direct mail industries, glue-applied labels for the liquor, wine,
candy and cigar industries, and specialty rigid packaging for the eyewear
industry. In addition, the Company provides commercial printing services,
foil-stamping for the trading card industry, promotional packaging and
materials, and certain flexible packaging solutions. The Company has more than
1,200 employees and services more than 4,500 customers in a variety of
industries nationwide. For the year ended December 31, 1996, the Company's sales
and operating income (on a pro forma basis) were $142.8 million and $7.5
million, respectively.
    
 
   
The segments of the packaging industry in the United States in which the Company
competes and intends to compete are large and highly fragmented. These segments
consist of more than 4,000 label producers, specialty rigid packaging
manufacturers and flexible packaging manufacturers with estimated combined sales
exceeding $20 billion in 1996. These segments consist primarily of
independently-owned companies with estimated average annual revenues of less
than $25 million.
    
 
The Company believes increasing demand for higher value-added packaging, the
consumer products industry's focus on limiting the number of packaging suppliers
and the costs associated with maintaining technologically advanced packaging
facilities are factors contributing to the consolidation within the packaging
industry. Labels and packaging function as the primary point-of-sale promotional
vehicle for many consumer products, and accordingly, manufacturers and other
producers are placing greater emphasis on value-added labels and packaging in
order to more effectively market their products. In addition, current
demographic trends, such as smaller households and an increasing number of women
in the workplace, are causing changes in consumer buying habits which in turn
are resulting in a demand for different sizes and types of labels, as well as
packaging with more convenient features. The Company also believes that the
recent focus in numerous industries on improved efficiency is causing many
customers to seek to reduce their number of label and packaging suppliers to a
select few that can offer both higher quality and a more complete line of
value-added products and services. The growing need for more specialized
packaging solutions, along with frequent advances in packaging technology, is
placing increased demands on smaller packaging companies which do not have the
resources or the geographic scope to address the needs of a growing number of
packaging customers. As a result, the Company believes that the segments of the
packaging industry in which the Company competes will continue to consolidate.
 
                                       4
<PAGE>
The Company intends to take advantage of the consolidation trend currently
underway in the packaging industry by aggressively pursuing strategic
acquisitions of packaging businesses that complement the product offerings and
customer base of the Operating Subsidiaries. By integrating acquisitions into
its existing operations and developing the cross-selling capabilities among its
constituent businesses, the Company believes that it will be able to provide
clients with a more comprehensive line of products and services. The Company
plans to conduct its operations with a decentralized management approach through
which individual management teams will be responsible for the businesses of each
of the Operating Subsidiaries. In addition, a Company-wide team of senior
management will provide the Operating Subsidiaries with strategic oversight and
guidance with respect to acquisitions, financing, marketing and operations.
Through this management structure, the Company believes each of the Operating
Subsidiaries will be able to continue to provide high quality service to local
customers as well as access to the capabilities of a large, diversified
packaging firm.
 
   
The mailing address of the Company is 114 Sansome Street, Suite 1000, San
Francisco, California 94104-3821.
    
 
                                    STRATEGY
 
The Company's goal is to become a premier consolidator and operator of label and
packaging companies. The main elements of the Company's strategy include the
following:
 
PURSUE STRATEGIC ACQUISITIONS
 
The Company intends to supplement internal growth through aggressive pursuit of
acquisitions to expand the Company's capacity and customer base, add new
products and services and extend its market reach. The Company's chief executive
officer, as well as other members of senior management, have significant
experience in effecting strategic acquisitions and integrating acquired
businesses. Although there are no formal agreements or letters of intent to
purchase any additional businesses at this time, the Company has evaluated
numerous potential acquisition candidates in the label and packaging segments.
In particular, management has evaluated companies that produce product
identification labels, flexible packaging and specialty rigid packaging for a
broad range of industries including consumer products, food, wine, liquor,
cosmetics and pharmaceuticals. Management believes the acquisition of such
companies will allow it to broaden its product portfolio and provide customers
with a more complete set of packaging solutions. The Company believes that it
can successfully integrate newly acquired operations in order to leverage more
effectively the sales, marketing and distribution capabilities of the Operating
Subsidiaries and operations that may be acquired in the future.
 
The Company has received a commitment letter from The Chase Manhattan Bank
("Chase") pursuant to which Chase has agreed, subject to consummation of the
Acquisitions and the Offering and to certain other closing conditions, to
provide the Company with a senior revolving credit facility (the "Facility") in
the amount of $80.0 million. Up to $60.0 million of the Facility may be used for
acquisitions by the Company. See "Management's Discussion and Analysis of Pro
Forma Financial Condition and Pro Forma Results of Operations - Liquidity and
Capital Resources."
 
CREATE A SINGLE SOURCE FOR VALUE-ADDED PACKAGING AND LABELS
 
The Company intends to offer its customers a single source for their value-added
packaging and label requirements. Management believes the cross-selling
potential of each of the Operating Subsidiaries, as well as of operations that
may be acquired in the future, will allow the Company to offer a comprehensive
range of products and services. In particular, the Company's goal is to develop
long-term relationships with customers who seek to consolidate sources of
packaging products and services as a means of achieving higher quality label and
packaging products at more competitive prices. As part of its strategy, the
Company will seek to craft value-added packaging solutions which address the
changing dynamics of the packaging industry. For instance, management believes
that the use of pressure sensitive labels in the wine and beer industries will
increase as production and application technologies become more cost effective.
By offering a comprehensive line of packaging products, the Company will benefit
from this and other changes in the mix of packaging solutions.
 
INCREASE OPERATING EFFICIENCIES
 
The Company believes that it will be able to increase operating efficiency and
achieve certain synergies among its constituent businesses. In particular,
through the implementation of its acquisition strategy, the Company
 
                                       5
<PAGE>
believes there will be substantial opportunity to increase and optimize plant
efficiencies. The Company also believes that it can reduce costs by purchasing
certain raw materials such as inks and paper on a larger scale. The Company also
plans to centralize the purchasing of medical and general liability insurance,
the banking relationships of its Operating Subsidiaries and future acquired
operations as well as the administration of various employee benefit programs in
order to effect general, administrative and interest savings. In addition, the
Company believes that its multiple-plant capacity will enable it to attract new
customers.
 
INVEST IN NEW TECHNOLOGIES TO INCREASE OPERATING RESPONSIVENESS
 
The market for label and packaging products is becoming increasingly specialized
as a result of the trends currently underway in the packaging industry. In
response to these trends, packaging customers have begun to frequently redesign
the packaging of their products by upgrading the quality and complexity of the
components or the design of the packaging application. Management believes that
investments in new packaging and labeling technologies will allow the Company to
provide packaging products with features that add value to the package which
will allow it to service its customer base more effectively. Pursuant to this
strategy, the Company is a participant in the Digital Label Alliance, an
industry consortium formed to develop and commercialize digital press technology
for the label industry.
 
                           THE OPERATING SUBSIDIARIES
 
The Company is being formed through the acquisition of four Operating
Subsidiaries that, on the basis of combined sales, had an average annual
compound growth rate of 17.6% for the three years ended December 31, 1996.
 
   
WISCONSIN LABEL.  In 1996, according to industry sources, Wisconsin Label was
the fifteenth largest U.S. producer, based on revenues, of pressure sensitive
labels and materials for use in a variety of consumer products, food packaging,
direct mail and industrial applications. Wisconsin Label's products include
premium packaging, promotional packaging and materials, folded cartons and
custom material constructions, coupons, mailers and product catalogs. Founded in
1966 and headquartered in Algoma, Wisconsin, Wisconsin Label's customers include
Sara Lee Corporation, Dittler Brothers Incorporated ("Dittler Brothers") and
Federal Express Corporation (through Graphic Systems, Incorporated). For the
year ended December 31, 1996, Wisconsin Label had sales of $93.9 million, which
represented 65.8% of the pro forma sales of the Company.
    
 
ST. LOUIS LITHO.  St. Louis Litho specializes in the production of high quality,
foil-laminated and metallized labels and wraps for use in the liquor, candy,
cigar and trading card industries. St. Louis Litho was operated as a subsidiary
of Pet Incorporated ("Pet") and its successor company Grand Metropolitan, plc
("Grand Metropolitan") until it was sold in a management buyout in May 1996.
Founded in 1921 and headquartered in St. Louis, Missouri, customers of St. Louis
Litho include Barton Incorporated, Heaven Hill Distilleries Inc. and Russel
Stover Candies, Inc. For the year ended December 31, 1996, St. Louis Litho had
sales of $20.3 million, which represented 14.2% of the pro forma sales of the
Company.
 
   
CALOPTICAL.  The Company believes that CalOptical is the leading provider of
specialized rigid eyewear packaging in the United States based on revenues, with
a product line consisting of decorative and highly functional eyeglass and
sunglass cases and accessories. CalOptical is the parent of California Optical
Leather, Inc. ("COL"), which was founded in 1935. CalOptical is headquartered in
San Leandro, California, and its customers include LensCrafters, Inc., Wal-Mart
Stores, Inc. and Eye Care Centers of America, Inc. For the year ended December
31, 1996, CalOptical had sales of $15.7 million, which represented 11.3% of the
pro forma sales of the Company.
    
 
   
BLAKE PRINTING.  The Company believes that Blake Printing is a leading provider
of value-added labels to the domestic wine industry, based on revenues. Through
its Poor Richard's Press division, Blake Printing also provides commercial
printing and publishing services to small companies and public sector
enterprises in the central coast region of California. Founded in 1949 and
headquartered in San Luis Obispo, California, Blake Printing's customers include
Sebastiani Vineyards, Inc., The Wine Group, Inc. and The Robert Mondavi
Corporation. For the year ended December 31, 1996, Blake Printing had sales of
$12.4 million, which represented 8.7% of the pro forma sales of the Company.
    
 
                                       6
<PAGE>
                                  THE OFFERING
 
   
<TABLE>
<S>                                           <C>
COMMON STOCK OFFERED:
     By the Company.........................  3,928,571 shares
     By the Selling Stockholders............  301,712 shares
     Total Offering (1).....................  4,230,283 shares
COMMON STOCK OUTSTANDING AFTER THE OFFERING
 (1)(2).....................................  11,111,250 shares
USE OF PROCEEDS BY THE COMPANY..............  Principally to repay substantially all of the
                                              approximately $44.3 million (as of June 30,
                                              1997) of indebtedness (including accrued
                                              interest and certain prepayment fees) of the
                                              Operating Subsidiaries incurred prior to the
                                              Acquisitions (including approximately $4.6
                                              million of indebtedness held by a holder of
                                              more than five percent of the Common Stock
                                              assuming consummation of the Acquisitions).
                                              See "Use of Proceeds."
RISK FACTORS................................  For a discussion of certain considerations
                                              relevant to an investment in the Common Stock,
                                              see "Risk Factors."
DIVIDEND POLICY.............................  The Company anticipates that it will not pay
                                              dividends on the Common Stock for the
                                              foreseeable future. See "Dividend Policy."
PROPOSED NASDAQ NATIONAL MARKET SYMBOL......  "FPAK"
</TABLE>
    
 
- ------------------------
(1)  Assumes no exercise of the Underwriters' over-allotment option. See
"Underwriting."
 
   
(2)  As of June 30, 1997. Includes the 1,110,667 shares of Common Stock of
FirstPak, Inc. outstanding prior to the Acquisitions and the 6,072,012 shares of
Common Stock to be issued to the Sellers in connection with the Acquisitions.
Excludes (a) 50,000 shares of Common Stock issuable upon exercise of options
granted to an officer of FirstPak, Inc. at an exercise price of $5.35 per share,
(b) 522,143 shares of Common Stock issuable pursuant to the Company's 1997 Stock
Plan (the "1997 Stock Plan") upon exercise of options to be granted to certain
directors, officers, employees and consultants of the Company at a weighted
average exercise price of $7.39 per share concurrently with the consummation of
this Offering and (c) an additional 1,477,857 shares of Common Stock reserved
for issuance pursuant to the 1997 Stock Plan, of which options to purchase
342,857 shares of Common Stock at an exercise price equal to the initial public
offering price will be issued to certain officers and employees of the Operating
Subsidiaries concurrently with the consummation of the Offering. Also excludes
options to purchase an aggregate of 909,193 shares of Common Stock at a weighted
average exercise price of $2.27 per share to be granted to or exchanged with
certain Sellers in connection with the Acquisitions or exchanged for outstanding
options to purchase Common Stock of the Operating Subsidiaries. See "Formation
of the Company - The Acquisitions," "Certain Relationships and Related Party
Transactions - The Acquisitions" and "Management 1997 Stock Plan."
    
 
                                       7
<PAGE>
                   SUMMARY PRO FORMA COMBINED FINANCIAL DATA
 
   
The following table presents summary pro forma combined financial data of the
Company as of the dates and for the periods indicated, giving effect to (i) the
consummation of the Acquisitions and (ii) the consummation of the Offering and
the application of the net proceeds therefrom. Upon consummation of the
Acquisitions, the former stockholders of Wisconsin Label will own, as a group,
approximately 48.6% of the Company's Common Stock and control approximately
50.2% of the Company's voting interests. As such Common Stock ownership and
voting interests will exceed (i) the separate Company ownership and voting
interests of the former stockholder groups for St. Louis Litho, CalOptical, or
Blake Printing, and (ii) the FirstPak stockholders' carryover ownership and
voting interests just prior to the consummation of the Acquisitions, the
Acquisitions will be accounted for as a "reverse acquisition" using the purchase
method of accounting, with Wisconsin Label treated as the acquirer for
accounting purposes. As a result, the Company's consolidated financial
statements for periods prior to the consummation of the Acquisitions prepared
for comparative purposes subsequent to the consummation of Acquisitions will be
the historical consolidated financial statements of Wisconsin Label with certain
amounts within "Stockholders' Equity" restated to reflect the impact of
FirstPak's acquisition of Wisconsin Label. The summary pro forma data are not
necessarily indicative of operating results or financial position that would
have been achieved had the events described above been consummated and should
not be construed as representative of future operating results or financial
position. The summary pro forma combined financial data should be read in
conjunction with the Pro Forma Combined Financial Statements and the notes
thereto included elsewhere in this Prospectus and with "Formation of the Company
- - The Acquisitions," "Management's Discussion and Analysis of Pro Forma
Financial Condition and Pro Forma Results of Operations" and "Certain
Relationships and Related Party Transactions - The Acquisitions."
    
 
   
<TABLE>
<CAPTION>
                                                               ---------------------------------
                                                               YEAR ENDED
                                                                 DECEMBER     SIX MONTHS ENDED
                                                                      31,         JUNE 30,
IN THOUSANDS, EXCEPT PER SHARE DATA                                  1996        1996       1997
                                                               -----------  ---------  ---------
<S>                                                            <C>          <C>        <C>
PRO FORMA COMBINED STATEMENTS OF INCOME DATA (1):
Sales........................................................   $ 142,784   $  72,620  $  74,300
Cost of sales................................................     104,663      53,120     54,122
                                                               -----------  ---------  ---------
Gross profit.................................................      38,121      19,500     20,178
Operating expenses...........................................      30,620      15,156     16,205
                                                               -----------  ---------  ---------
Operating income.............................................       7,501       4,344      3,973
Interest income..............................................         258         139         36
Interest expense.............................................        (271)       (136)      (136)
Other income (expense) net...................................         547         200        639
                                                               -----------  ---------  ---------
Income before income taxes and minority interest.............       8,035       4,547      4,512
Provision for income taxes...................................       3,485       1,996      1,800
                                                               -----------  ---------  ---------
Income before minority interest..............................       4,550       2,551      2,712
Minority interest............................................         (92)        (58)       (43)
                                                               -----------  ---------  ---------
Net income...................................................   $   4,458   $   2,493  $   2,669
                                                               -----------  ---------  ---------
                                                               -----------  ---------  ---------
Pro forma net income per share...............................   $    0.37   $    0.21  $    0.22
                                                               -----------  ---------  ---------
                                                               -----------  ---------  ---------
Shares used in computing pro forma net income per share
 (2).........................................................      12,150      12,150     12,150
OTHER DATA:
Pro forma combined cash flows provided by (used in):
    Operating activities.....................................   $   7,603   $   4,102  $   4,505
    Investing activities.....................................      (4,955)     (3,824)    (3,684)
    Financing activities.....................................        (198)     --           (291)
Pro forma combined EBITDA (3)................................      13,014       7,091      7,580
</TABLE>
    
 
                                       8
<PAGE>
 
   
<TABLE>
<CAPTION>
                                                                             ---------------
                                                                              AT JUNE 30,
IN THOUSANDS                                                                         1997
                                                                             ---------------
<S>                                                                          <C>
PRO FORMA COMBINED BALANCE SHEET DATA (1):
Cash and cash equivalents..................................................     $   2,902
Working capital............................................................        26,087
Goodwill...................................................................        30,798
Total assets...............................................................       114,284
Long-term debt and capital lease obligations, excluding current
 maturities................................................................            55
Redeemable preferred stock.................................................         9,440
Stockholders' equity.......................................................        87,521
</TABLE>
    
 
- ------------------------
   
(1)  Assumes that the consummation of the Acquisitions and the Offering had
occurred as of January 1, 1996, in the case of the pro forma combined statements
of income data and other data, and as of June 30, 1997, in the case of the pro
forma combined balance sheet data. The pro forma combined financial data are
based upon preliminary estimates, available information and certain assumptions
that management deems appropriate. The pro forma combined financial data
presented herein are not necessarily indicative of the results the Company would
have obtained had such events occurred at the beginning of the period or of the
future results of the Company. The pro forma combined financial data should be
read in conjunction with the other financial data and notes thereto included
elsewhere in this Prospectus. See "Formation of the Company - The Acquisitions"
and "Certain Relationships and Related Party Transactions - The Acquisitions."
    
 
(2)  Computed on the basis described in Note 6 of Notes to Pro Forma Combined
Financial Statements.
 
   
(3)  EBITDA represents operating income before depreciation, amortization and
stock based compensation minus or plus, on a pre-tax basis, any earnings or
losses, as applicable, attributable to minority interests and plus or minus any
income or losses, as applicable, from joint ventures. EBITDA is used by the
Company for the purpose of analyzing its operating performance, leverage and
liquidity. Such data are not a measure of financial performance under generally
accepted accounting principles and should not be considered as an alternative to
net income as an indicator of the Company's operating performance or as an
alternative to cash flows as a measure of liquidity. EBITDA information is
included herein because management believes that investors find it to be a
useful tool to assess the operations of a business without considering the
impact of financing and tax consequences that vary depending on the capital
structure and tax position of individual companies. EBITDA excludes significant
expenses, such as depreciation, amortization, interest and income taxes, which
are significant components in understanding the Company's financial performance.
These factors should be considered in evaluating EBITDA and trends in EBITDA.
Additionally, EBITDA as measured by the Company may not be comparable to
similarly titled measures of other companies.
    
 
                       FUTURE ONE-TIME CHARGE TO EARNINGS
 
   
The Company will incur a nonrecurring non-cash stock based compensation charge
to earnings of $24.3 million (based on an assumed initial public offering price
of $14 per share, resulting in a reduction in net income of $20.8 million, or
$1.71 per share) in the fiscal quarter in which the Offering is consummated
consisting of (i) a charge of $15.5 million related to 1,110,667 shares of
Common Stock issued to the founders of FirstPak, Inc. prior to the consummation
of the Acquisitions, (ii) a charge of $5.4 million for options to purchase
515,577 shares of Common Stock of the Company at an exercise price of $3.50 per
share granted to certain stockholders of Wisconsin Label upon consummation of
the Acquisitions and (iii) a charge of $3.4 million related to the grant of
options to purchase 332,143 shares of Common Stock of the Company at a weighted
average price per share of $3.92 per share granted to certain officers and
directors of the Company upon consummation of the Offering. Of the $24.3 million
charge, $15.5 million will not be deductible by the Company for U.S. federal
income tax purposes.
    
 
                                       9
<PAGE>
                                  RISK FACTORS
 
This Prospectus contains forward-looking statements regarding the intent, belief
and current expectations of the Company, its directors and its officers,
including statements with respect to the use of proceeds of the Offering and
trends affecting the Company's financial condition and results of operations.
Prospective investors are cautioned that such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties and that
actual results may differ materially from those anticipated in these
forward-looking statements as a result of various factors. The accompanying
information contained in this Prospectus, including the information set forth
below and under "Management's Discussion and Analysis of Pro Forma Financial
Condition and Pro Forma Results of Operations," "Management's Discussion and
Analysis of Financial Condition and Results of Operations of the Operating
Subsidiaries" and "Business" identifies important factors that could cause such
differences. Prospective purchasers of Common Stock should carefully consider
the risk factors set forth below, as well as the other information set forth in
this Prospectus.
 
ABSENCE OF COMBINED OPERATING HISTORY
 
   
FirstPak, Inc. was founded in February 1996 and has conducted no substantial
operations to date. FirstPak, Inc. has entered into agreements to acquire the
Operating Subsidiaries simultaneously with the consummation of this Offering.
The Operating Subsidiaries have historically operated independently, and there
can be no assurance that the Company will be able to successfully integrate
these businesses and their disparate operations, employees and management.
Moreover, the Company's management group, including its chief executive officer,
has been assembled only recently, and the management control structure is still
in the formative stages. In addition, the Company's management team has limited
experience in operating a large and diverse label and packaging products
enterprise. There can be no assurance that the Company's management will be able
to oversee the combined entity and effectively implement the Company's operating
strategies. See "Business - Personnel and Training" and "Management - Executive
Officers, Directors and Key Employees."
    
 
RISKS ASSOCIATED WITH ACQUISITION STRATEGY
 
The packaging industry is a mature industry and many companies serving the label
and packaging market have demonstrated limited growth over the past several
years. Accordingly, growth in the Company's sales and earnings will depend
significantly on the Company's ability to acquire businesses which, in turn,
will depend in large part on the Company's ability to manage expansion and
consolidate acquisitions into its existing operations. Acquisitions involve a
number of special risks, including the diversion of management's attention to
the assimilation of the operations and personnel of the acquired companies,
possible adverse short-term effects on the Company's operating results, and the
potential inability to integrate financial and management reporting systems of
the acquired companies. In addition, the Company will be required to amortize
intangible assets, including goodwill, if any, or may incur certain
acquisition-related expenses that may negatively impact the Company's results of
operations.
 
The timing and nature of future acquisitions will depend on various factors,
including the availability of suitable acquisition candidates, the negotiation
of acceptable terms, the Company's financial resources, the availability of
skilled employees to manage the acquired companies, and general economic and
business conditions. In addition, because the Facility provides that
acquisitions valued at over $15 million must be approved by the lenders, the
Company's ability to pursue acquisitions may depend on its ability to obtain
requisite approvals from its lenders. In addition, the Company believes that it
may compete for acquisition candidates with other larger companies,
consolidators and investors in the packaging industry that have substantially
greater resources than the Company. Increased competition for acquisition
candidates could have the effect of increasing the cost to the Company of
pursuing its growth strategy or could reduce the number of attractive
acquisition candidates.
 
There can be no assurance that the Company will identify acquisition candidates
that would result in successful combinations, that acquisitions will be
consummated on acceptable terms or at all, or that the Company will successfully
integrate any future acquisitions into its business or operate any acquired
business profitably. Because the Company's future growth is integrally linked to
its acquisition strategy, the failure on the part of the Company to successfully
execute its acquisition strategy could have a material adverse effect on the
Company's business. See "Business - Strategy."
 
                                       10
<PAGE>
   
A significant portion of the Company's capital resources may be used for
acquisitions. The Company believes that it will have sufficient cash flow from
operations following the Offering to fund its operations for the foreseeable
future. Under the terms of the Facility, up to $60.0 million of such amount may
be used for acquisitions by the Company. If the Company does enter into the
Facility and generates anticipated cash from operations, the Company may seek an
increase in the capital available to it under the Facility or otherwise obtain
additional debt or equity financing, depending upon the amount of capital
required to pursue future growth opportunities or address other needs. There can
be no assurance that such increase or additional financing will be available to
the Company on acceptable terms, if at all. The Facility will contain certain
restrictive covenants including limiting the payment of dividends and other
distributions to stockholders and covenants requiring the Company to maintain
certain financial ratios and to meet certain financial tests, including minimum
debt service and interest coverage, maximum leverage and maximum capital
expenditures. A substantial portion of the Company's cash flow from operations
may be dedicated to the payment of the principal of and interest on indebtedness
under the Facility, thereby reducing funds available for operations and future
acquisitions. Borrowings under the Facility will be at floating rates of
interest, causing the Company to be vulnerable to increases in interest rates.
In the event that the Company incurs a substantial degree of leverage pursuant
to the Facility, the Company could become more vulnerable to a downturn in
general economic conditions. The Company's ability to make scheduled payments of
principal or interest on or to refinance indebtedness under the Facility will
depend on its future operating performance and cash flow which are subject to
prevailing economic conditions, primary interest rate levels and financial,
competitive, business and other factors, many of which are beyond the Company's
control. The inability of the Company to service its indebtedness or incur
additional indebtedness would have a material adverse impact on the Company's
ability to pursue future acquisitions. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations of the Operating Subsidiaries -
Liquidity and Capital Resources."
    
 
Furthermore, to the extent the Company uses its capital stock for all or a
portion of the consideration to be paid for future acquisitions, dilution may be
experienced by existing stockholders, including the purchasers of Common Stock
in the Offering. In addition, if the market value of the Company's stock
decreases as a result of stock market fluctuations or otherwise, the Company may
not be able to use its stock as consideration for future acquisitions which in
turn would impact the ability of the Company to pursue its acquisition strategy.
See "Dilution," "Use of Proceeds" and "Management's Discussion and Analysis of
Pro Forma Financial Condition and Pro Forma Results of Operations - Liquidity
and Capital Resources."
 
POTENTIAL INABILITY TO MANAGE GROWTH
 
The Operating Subsidiaries have significantly expanded their operations on a
combined basis in the past several years. Although there can be no assurance
that the Operating Subsidiaries will maintain their historical growth rates in
the future, any future expansion, internally or through acquisitions, will place
significant demands on the Company's management, operational, administrative and
financial resources. Expansion within the Company's existing markets could
adversely affect the financial performance of the Operating Subsidiaries or the
Company's overall results of operations. The Company's future performance and
profitability in existing markets will depend on a number of factors, including
the successful maintenance of existing customer relationships, the effective and
timely initiation and development of new customer relationships, the effective
marketing of expanded product offerings, the ability to maintain a high quality
of services, the ability to recruit, motivate and retain qualified personnel,
and the implementation of enhancements to the Company's operational and
financial systems. Expansion into new markets may present operating and
marketing challenges that are different from those currently encountered by the
Company in its existing markets. In addition, unforseen expenses, difficulties,
complications or delays frequently encountered in connection with the rapid
expansion of operations may inhibit the Company's growth. There can be no
assurance that the Company will maintain or accelerate its growth or anticipate
all of the changing demands that expanding operations will impose on its
management and management information and financial systems. Any failure by the
Company to do so could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business - Strategy."
 
                                       11
<PAGE>
DEPENDENCE ON KEY CUSTOMERS; ABSENCE OF LONG-TERM CONTRACTS WITH CUSTOMERS
 
   
The Company's 10 largest customers accounted for approximately 25% of the
Company's sales (on a pro forma basis) for the year ended December 31, 1996. The
Company's two largest customers, Dittler Brothers and Sara Lee Corporation
accounted for approximately 5% and 5% of the Company's sales (on a pro forma
basis) for the year ended December 31, 1996 and accounted for approximately 7%
and 7% of the sales of Wisconsin Label in 1996, respectively. Lenscrafters and
Wal-Mart accounted for approximately 26% and 11%, respectively, of the sales of
CalOptical in calendar 1996. Sebastiani accounted for approximately 12% of the
sales of Blake Printing in 1996. Barton accounted for approximately 16% of the
sales of St. Louis Litho in 1996. There can be no assurance that the Company or
the Operating Subsidiaries will be able to maintain the current level of sales
derived from these or any other customer in the future.
    
 
The Company generally does not enter into long-term sales contracts with its
customers requiring them to make purchases from the Company. The Company's sales
are generally evidenced by a purchase order and similar documentation limited to
a specific sale. As a result, a customer from whom the Company generates
substantial revenue in one period may not be a substantial source of revenue in
a subsequent period. In addition, the Company's customers generally have the
right to terminate their relationships with the Company without penalty and on
little or no notice. In the absence of such long-term contracts, there can be no
assurance that these customers will continue to purchase products from the
Company, and thus there can be no assurance that the Company will be able to
maintain a consistent level of sales.
 
The termination of the Company's business relationship with any of its
significant customers or a material reduction in sales to a significant customer
could have a material adverse effect on the Company's business, financial
condition and results of operations. See "Business - Sales and Marketing."
 
   
POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
    
 
   
The Company may in the future experience significant quarterly fluctuations in
sales, operating income and cash flows as a result of certain factors, including
the volume and timing of customer orders received during the quarter, the timing
and magnitude of customers' marketing campaigns, the loss of a major customer,
the availability and pricing of materials for the Company's products, increased
selling, general and administrative expenses incurred in connection with
acquisitions or the introduction of new products, the costs and timing of any
future acquisitions, the timing and magnitude of capital expenditures, and
changes in the Company's product mix or in the relative contribution to sales of
the various Operating Subsidiaries. Due to the foregoing factors, it is possible
that in some future quarter the Company's operating results may be below the
expectations of public market analysts and investors. In such event, the price
of the Company's Common Stock would likely be materially and adversely affected.
See "Management's Discussion and Analysis of Pro Forma Financial Condition and
Pro Forma Results of Operations" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations of the Operating Subsidiaries."
    
 
POSSIBLE NEED FOR ADDITIONAL FINANCING; POTENTIAL INABILITY TO FINANCE
REDEMPTION OF SERIES A PREFERRED STOCK
 
   
A substantial portion of the proceeds from the Offering will be used to repay
approximately $44.3 million (on a pro forma combined basis at June 30, 1997) of
the Company's indebtedness (including accrued interest and certain prepayment
fees). The Company currently estimates that cash generated from operations will
be sufficient to finance its current operations and planned capital expenditure
requirements at least through the next twelve months. There can be no assurance,
however, that the Company will not be required to seek additional capital at an
earlier date. The Company may, from time to time, seek additional funding
through public or private financing, including equity financing. There can be no
assurance that adequate funding will be available as needed or on terms
acceptable to the Company. If additional funds are raised by issuing equity
securities, or acquisitions are consummated using the Company's equity
securities, existing stockholders may experience dilution. See "Use of Proceeds"
and "Management's Discussion and Analysis of Pro Forma Financial Condition and
Pro Forma Results of Operations - Liquidity and Capital Resources." The Company
had EBITDA of $13.0 million in 1996 and cash and cash equivalents of $2.9
million at June 30, 1997 (in each case on a pro forma combined basis).
    
 
                                       12
<PAGE>
   
In connection with the acquisition of Wisconsin Label, FirstPak, Inc. will issue
to the shareholders of Wisconsin Label 220,000 shares of redeemable Series A
Preferred Stock. The redemption of the Series A Preferred Stock may be triggered
by events which do not generate cash proceeds to the Company or which generate
cash proceeds less than the redemption price of $11 million. In the event the
Company does not have cash from operating activities available to redeem the
Series A Preferred Stock, the Company would be required to seek third-party
sources of financing to meet such obligations. There can be no assurance that
such third-party sources of financing, if required, will be available on
acceptable terms, if at all. In the event that the Company does not have
sufficient funds legally available to redeem the total number of shares of
Series A Preferred Stock to be redeemed on any given date, those funds which are
legally available will be used to redeem the maximum possible number of shares
of Series A Preferred Stock pro rata among the holders of such Series A
Preferred Stock according to the number of shares held by each holder thereof.
Any shares of Series A Preferred Stock that are not redeemed due to insufficient
funds will remain outstanding. At any time thereafter, when additional funds of
the Company are legally available for redemption of the Series A Preferred
Stock, such funds will immediately be used to redeem the balance of the shares
that the Company has become obligated to redeem. In the event that the Company
is required to redeem all or a portion of the Series A Preferred Stock, such
redemption would require the use of resources that would otherwise be available
for future acquisitions. See "Management's Discussion and Analysis of Pro Forma
Financial Condition and Pro Forma Results of Operations," "Certain Relationships
and Related Party Transactions - Certain Transactions of the Operating
Subsidiaries - Wisconsin Label" and "Description of Capital Stock - Preferred
Stock."
    
 
COMPETITION
 
There is substantial competition in the packaging industry. The Company competes
with distributors and manufacturers of packaging products based in the United
States and, to a limited extent, overseas. Many of the Company's competitors
have greater name recognition, established operating histories and, in many
cases, substantially greater financial and other resources than the Company.
Such competitors may use their economic strength to influence the market to
continue to buy their products which compete with the Company's products.
 
In addition, new competitors may arise and may develop products which compete
with the Company's products. Moreover, some of the Company's current customers
presently, or in the future may, compete with the Company. There can be no
assurance that new or proprietary technology will not be introduced by an
existing or new competitor that may make the Company's products or services
obsolete. To the extent that the Company is unable to compete successfully
against its existing and future competitors, its business, operating results and
financial condition would be materially adversely affected. See "Business -
Competition." While the Company believes that it competes effectively within the
packaging industry, there are several factors that could reduce the Company's
ability to compete effectively. The Company cannot assure that additional
competitors with greater resources than the Company will not enter the industry
and compete effectively against the Company or that the consolidation trend in
the industry will continue. See "Business - Competition."
 
DEPENDENCE ON NEW PRODUCT OFFERINGS
 
The Company's future growth will depend in part on its ability to successfully
develop and manufacture new product offerings that meet the evolving needs of
customers. The development and manufacture of new products depends in part on
the Company's ability to upgrade current production technology and methods as
well as to develop the processes required to create such new products. The
Company may not be successful in anticipating customer needs or in selecting and
developing new and enhanced machinery, technology or processes on a timely
basis. There can be no assurance that the Company will have the financial
resources or will otherwise be able to upgrade its production technology and
methods or that the Company will be able to introduce new products that meet the
future needs of customers. Failure to regularly develop and introduce new
products successfully could materially and adversely impact the Company's future
growth and profitability. See "Business - Product Development."
 
DEPENDENCE ON KEY PERSONNEL
 
   
The Company's business will depend to a significant extent on the efforts and
abilities of the executive officers of the Company and its Operating
Subsidiaries. These executive officers include: William T. Leith, Chairman of
the
    
 
                                       13
<PAGE>
   
Board, President and Chief Executive Officer of FirstPak, Vincent F. Titolo,
Vice Chairman of the Board of FirstPak, Eric R. Roberts, Senior Vice President
and CFO of FirstPak, Terrence R. Fulwiler, Chief Executive Officer of Wisconsin
Label and Director of FirstPak, Richard C. Blake, Chief Executive Officer of
Blake Printing and Director of FirstPak, Ben Kraft, Chief Executive Officer of
St. Louis Litho and Larry Nathanson, Chief Executive Officer of CalOptical. The
loss of the services of any one or more of these persons could have a material
adverse effect on the Company's business, financial condition and results of
operations. The Company's business will also be dependent on its ability to
continue to attract and retain qualified personnel, including key management, in
connection with future acquisitions. See "Business Personnel and Training" and
"Management - Executive Officers, Directors and Key Employees."
    
 
CERTAIN RELATIONSHIPS AND TRANSACTIONS
 
   
FirstPak, Inc. was founded by certain individuals associated with Menke Titolo
Capital Corp. II ("Menke Titolo") as a holding company to acquire the businesses
of the Operating Subsidiaries. In connection with its formation, FirstPak, Inc.
issued shares of Common Stock to Vincent F. Titolo, John D. Menke and Eric R.
Menke, representing in the aggregate approximately 10.0% of the outstanding
capital stock of the Company to be outstanding upon consummation of the
Offering, subject to certain adjustments. See "Formation of the Company." In
addition, Menke Titolo, which is owned by Vincent F. Titolo and John D. Menke,
is a limited partner of MBR Associates, L.P., which is the general partner of
MBR Investment Associates L.P. MBR Investment Associates L.P. owns a substantial
portion of the outstanding capital stock of CalOptical and St. Louis Litho, and
Vincent F. Titolo serves as Chairman of the Boards of Directors of these
Operating Subsidiaries. Upon consummation of the Acquisitions, MBR Investment
Associates L.P. will receive shares of Common Stock of the Company in exchange
for its shares of capital stock of CalOptical and St. Louis Litho. See
"Principal and Selling Stockholders." The interests of the foregoing persons in
certain of the Operating Subsidiaries may conflict with the interests of such
persons in their respective capacities as senior management and stockholders of
the Company.
    
 
The Company is subject to risks associated with potential conflicts of interest
that may arise out of the interrelationships among certain of its officers,
directors, significant stockholders and third parties. For a more detailed
description of these and certain other related party transactions, see "Certain
Relationships and Related Party Transactions." In addition to the possible
effect upon the Company's ability to integrate the Operating Subsidiaries
described in "Absence of Combined Operating History," the interests of the
foregoing persons in their capacities with third parties may come into conflict
with the interests of such persons in their respective capacities with the
Company in ways that cannot currently be foreseen.
 
HOLDING COMPANY STRUCTURE
 
   
FirstPak, Inc. is a holding company with no substantial operations and,
consequently, is dependent on dividends and other payments from the Operating
Subsidiaries for virtually all of its cash flow, including cash flow for
management salaries and overhead, to service debt, to make equity investments,
to finance the growth of its subsidiaries and to pay dividends to its
stockholders. See "Dividend Policy" and "Management's Discussion and Analysis of
Pro Forma Financial Condition and Pro Forma Results of Operations - Liquidity
and Capital Resources."
    
 
AMORTIZATION OF INTANGIBLE ASSETS
   
Approximately $30.8 million, or 27.0%, of the Company's total pro forma assets
as of June 30, 1997 consisted of goodwill. Goodwill is an intangible asset that
represents the difference between the aggregate purchase price of the assets
acquired and the amount of such purchase price allocated to identifiable assets
for purposes of the Company's pro forma balance sheet. The Company is required
to amortize the goodwill from the Acquisitions over a period of time, with the
amount amortized in a particular period constituting an expense that will reduce
the Company's net income for that period. In addition, the Company will be
required to amortize the goodwill, if any, from any future acquisitions. A
reduction in net income resulting from the amortization of goodwill may have an
adverse impact on the market price of the Company's Common Stock. See "Formation
of the Company - The Acquisitions."
    
 
                                       14
<PAGE>
DEPENDENCE ON LIMITED MANUFACTURING FACILITIES
 
Certain of the Company's products are manufactured at either a single
manufacturing facility or a limited number of manufacturing facilities. Since
the Company does not currently operate duplicate facilities in different
geographic areas, a disruption of the Company's manufacturing operations
resulting from various factors, including human error, government intervention
or a natural disaster such as fire, earthquake or flood, could cause the Company
to cease or limit its manufacturing operations and consequently could have a
material adverse effect on the Company's business, financial condition and
results of operations. See "Business - Facilities."
 
SOURCES OF SUPPLY
 
The Company generally does not have long-term agreements with its key sources of
supply. Lead times for materials ordered by the Company can vary significantly
and depend on factors such as the specific supplier, contract terms and demand
for particular materials at a given time. From time to time, the Company has
experienced fluctuations in materials prices. Shortages or disruptions in the
supply of materials, or the inability of the Company to procure such materials
from alternate sources at acceptable prices in a timely manner, could lead to
the loss of customers due to the failure to timely meet orders which in turn
could result in a material adverse effect on the Company's business, financial
condition and results of operations. See "Business - Sources of Supply."
 
HAZARDOUS MATERIALS; ENVIRONMENTAL REGULATIONS
 
Certain of the Operating Subsidiaries use hazardous materials in their
manufacturing operations. As a result, the Company is subject to federal, state
and local regulations governing the storage, use and disposal of such materials.
The use and disposal of hazardous materials involves the risk that the Company
could be required to incur substantial expenditures for preventive or remedial
action, reduction of chemical exposure, or waste treatment or disposal. The
liability in the event of an accident or the costs of such actions could exceed
the Company's resources or otherwise have a material adverse effect on the
Company's business, financial condition or results of operations. See "Business
- - Environmental Regulations."
 
POTENTIAL INFLUENCE OF EXISTING STOCKHOLDERS
 
   
Following this Offering, the Company's officers, directors and five percent
stockholders will own approximately 38.1% of the outstanding shares of Common
Stock (approximately 36.0% if the Underwriters' over-allotment option is
exercised in full). In particular, the employee stock ownership plan of
Wisconsin Label will own approximately 10.0% of the outstanding shares of Common
Stock of the Company (approximately 9.5% if the Underwriters' over-allotment
option is exercised in full) after this Offering, subject to certain
adjustments. See "Formation of the Company." Accordingly, these stockholders, if
acting together, would be able to control the election of directors and matters
requiring the approval of stockholders of the Company. This concentration of
ownership by existing stockholders may also have the effect of delaying or
preventing a change in control of the Company. See "Principal and Selling
Stockholders."
    
 
   
In connection with the Acquisitions, certain stockholders of the Company will
enter into a stockholders agreement with the Company (the "Stockholders'
Agreement") pursuant to which such stockholders will vote for two nominees of
the former shareholders of Wisconsin Label (the "Wisconsin Label Nominees") who
will be nominated to the Board of Directors of the Company at the first annual
meeting of stockholders. In addition, the Stockholders' Agreement provides that
one of the Wisconsin Label Nominees will resign from the Board of Directors on
or after August 1, 1998 upon the approval and appointment by the Board of
Directors of an additional independent director. See "Management - Executive
Officers, Directors and Key Employees." In addition, the Company's Restated
Certificate of Incorporation provides that in the event Terrence R. Fulwiler or
either of the Wisconsin Label Nominees leaves the Board prior to the date that
is three years from the consummation of the Offering in the case of Terrence
Fulwiler and prior to the date that is four years from the consummation of the
Offering in the case of either of the Wisconsin Label Nominees, as a result of
death, resignation, disqualification, removal or certain other causes, the Board
will appoint a nominee of the former Wisconsin Label shareholders to serve out
the term of the departing board member.
    
 
                                       15
<PAGE>
   
The Company's Restated Certificate of Incorporation provides that the Company
will form an Executive Committee of the Board of Directors. The responsibilities
of the Executive Committee will include to undertake, between board meetings,
those functions of the Board of Directors regarding the regular operation of the
Company over which the full Board of Directors has authority. The Executive
Committee will consist of not less than three members and, the Company's
Restated Certificate of Incorporation provides that for a period of three years
after the Offering, so long as Terrence Fulwiler continues to serve as a member
of the Board of Directors, Terrence Fulwiler will serve as one of the members of
the Executive Committee.
    
 
   
The Company's Restated Certificate of Incorporation provides that the Company
will form a Nominating Committee of the Board of Directors. The Nominating
Committee will report to the Board of Directors regarding nominees for directors
to be presented to the Company's stockholders for election. The Company's
Restated Certificate of Incorporation provides that for so long as the former
Wisconsin Label shareholders hold, in the aggregate, not less than 20% of the
outstanding Common Stock and a Wisconsin Label Nominee continues to serve as a
member of the Board of Directors, one member of the Nominating Committee will be
a Wisconsin Label Nominee chosen by the Board of Directors.
    
 
   
The Company's Restated Certificate of Incorporation provides that for a period
of three years after the Offering the Company shall not, without obtaining the
approval of either (a) Terrence R. Fulwiler and either of the Wisconsin Label
Nominees, or (b) both of the Wisconsin Label Nominees, approve (i) issuances of
equity securities under certain circumstances (but not including securities to
be issued pursuant to stock option plans or in connection with acquisitions),
(ii) the termination of the chief executive officer of Wisconsin Label, (iii)
the closing of a label production manufacturing facility of Wisconsin Label
which closing would result in the termination of in excess of 50 employees
thereof, (iv) removal of a member of the Board of Directors without cause (v) an
increase in the number of authorized directors of the Company to a number
greater than eleven; (vi) altering the provision in the Company's Restated
Certificate of Incorporation for cumulative voting for the Board of Directors or
the provision described herein; and (vii) altering certain other provisions in
the Company's Restated Certificate of Incorporation regarding the composition of
the Board of Directors.
    
 
SHARES ELIGIBLE FOR FUTURE SALE
 
   
The 4,230,283 shares of Common Stock being sold in this Offering will be freely
tradeable after the Offering unless acquired by affiliates of the Company. The
6,072,012 shares of Common Stock to be issued to the Sellers (including the
301,712 shares to be sold in the Offering) in connection with the Acquisitions
will be registered under the Securities Act and, subject to the contractual
restrictions on resale set forth below, will be freely tradeable unless acquired
by affiliates of the Company or persons who were affiliates of the Operating
Subsidiaries prior to the Acquisitions. An aggregate of 1,110,667 unregistered
shares of Common Stock will be outstanding immediately following consummation of
the Offering. The market price of the Common Stock could be adversely affected
by the sale of substantial amounts of Common Stock in the public market
following the Offering or the perception that such sales could occur. The
Company, each of its directors and officers and the holders of all of the shares
and options or warrants to purchase shares of Common Stock that are or will be
outstanding subsequent to consummation of the Acquisitions and the Offering, and
certain related persons, have agreed with the Underwriters not to offer, sell or
otherwise dispose of any shares of Common Stock or securities convertible into
or exercisable or exchangeable for such shares for a period of one year (180
days in the case of the Company) after the date of this Prospectus without the
prior written consent of J.P. Morgan Securities Inc., except (i) that the
Company may (a) issue shares of Common Stock for the purpose of consideration in
connection with future acquisitions and (b) grant options in respect of shares
of Common Stock provided in each case that the recipient of such shares or
options agrees to be bound by the terms of the restrictions set forth above and
(ii) for certain other limited exceptions. Each of the directors and officers of
the Company and certain stockholders of the Company have also agreed, for a
period of one year after the expiration of the lock-up period, to sell their
shares only in compliance with the volume limitations set forth in Rule 144
under the Securities Act ("Rule 144") as in effect on the date of this
Prospectus. In addition, certain affiliates of the Operating Subsidiaries and of
the Company have agreed, as a condition to the closing of the Acquisitions, to
enter into agreements (each, an "Affiliate Agreement") restricting resales of
shares of Common Stock to be in accordance with the provisions of Rule 145 under
the Securities Act. In addition, (i) 50,000 shares of Common Stock are issuable
upon exercise of options granted to an officer of FirstPak, Inc. at an exercise
price of $5.35 per share,
    
 
                                       16
<PAGE>
   
(ii) 522,143 shares of Common Stock are issuable under the 1997 Stock Plan upon
exercise of options to be granted to certain directors, officers and employees
of the Company at a weighted average exercise price of $7.39 per share
concurrently with consummation of this Offering, (iii) 342,857 shares of Common
Stock will be issuable upon exercise of options to be granted to certain
officers and employees of the Operating Subsidiaries under the 1997 Stock Plan
upon consummation of this Offering at an exercise price equal to the initial
public offering price set forth on the cover page of this Prospectus, and (iv)
909,193 shares of Common Stock are issuable upon exercise of options to be
granted to or exchanged with certain Sellers at a weighted average exercise
price of $2.27 concurrently with the closing of the Acquisitions. The issuance
of shares upon the exercise of options could result in the dilution of the
voting power of the shares of Common Stock purchased in the Offering and could
have a dilutive effect on earnings per share. The Company intends to file a
registration statement under the Securities Act to register the sale of the 2.0
million shares of Common Stock reserved for issuance pursuant to the 1997 Stock
Plan and certain other options to be granted prior to or concurrently with the
Offering. See "Shares Eligible for Future Sale."
    
 
NO PRIOR PUBLIC MARKET; POSSIBLE VOLATILITY OF SHARE PRICE
 
Prior to this Offering, there has been no public market for the Common Stock,
and there can be no assurance that an active trading market will develop and
continue after the Offering or that the market price of the Common Stock will
not decline below the initial public offering price. The Company will be
required to appoint one additional person who is not an officer or employee of
the Company or the Operating Subsidiaries to the Board of Directors within 90
days after consummation of the Offering to maintain its listing on the Nasdaq
National Market. In the event the Company does not add such independent director
within 90 days following the Offering, the Company could be delisted from the
Nasdaq National Market, which could have an adverse effect on the liquidity and
price of the Common Stock. See "Management - Executive Officers, Directors and
Key Employees."
 
The initial public offering price will be determined by negotiations among the
Company, the Selling Stockholders and the representatives of the Underwriters.
See "Underwriting" for a discussion of the factors to be considered in
determining the initial public offering price. The trading price of the Common
Stock could be subject to significant fluctuations in response to variations in
quarterly operating results, changes in market conditions affecting the markets
served by the Company, changes in earnings estimates by analysts or reported
results that vary materially from such estimates, and other events or factors.
In addition, the stock market in the past has experienced significant price and
value fluctuations often unrelated to companies' operating performance. The
volatility of the stock market could adversely affect the market price of the
Common Stock and the ability of the Company to raise equity in the public
markets.
 
ANTI-TAKEOVER EFFECTS OF CERTIFICATE OF INCORPORATION, BYLAWS AND DELAWARE LAW
 
Certain provisions of the Company's Bylaws impose procedures and limitations
applicable to stockholders' meetings, the proposal of business and the
nomination of directors that could have the effect of making it more difficult
for a third party to acquire, or discouraging a third party from attempting to
acquire control of the Company. In addition, directors of the Company are
divided into three classes and are elected to serve staggered three-year terms
and can be removed only for cause. Such provisions may limit the price that
certain investors may be willing to pay in the future for shares of the Common
Stock. These provisions may also reduce the likelihood of an acquisition of the
Company at a premium price by another person or entity. In addition, under the
Company's Certificate of Incorporation, the Board of Directors has the authority
to issue up to 10,000,000 shares of preferred stock and to fix the rights and
preferences, including voting rights, of the preferred stock without further
action of the stockholders. Therefore, preferred stock could be issued, without
stockholder approval, that could have voting, liquidation and dividend rights
superior to that of existing stockholders. The issuance of preferred stock could
adversely affect the voting power of holders of Common Stock and the likelihood
that such holders would receive dividend payments and payments on liquidation,
and could have the effect of delaying, deferring or preventing a change in
control of the Company.
 
The Company is subject to the anti-takeover provisions of Section 203 of the
Delaware General Corporation Law which prohibit the Company from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder,
 
                                       17
<PAGE>
unless the business combination is approved in a prescribed manner. The
application of Section 203 could also have the effect of delaying or preventing
a change in control of the Company. See "Management - Executive Officers,
Directors and Key Employees" and "Description of Capital Stock."
The Company's Restated Certificate of Incorporation provides that, for a period
of seven years after the Offering, stockholders may cumulate votes in elections
of directors. In an election of directors, each stockholder will be entitled to
cast a number of votes equal to the number of directors to be elected multiplied
by the number of votes to which such stockholder's shares are normally entitled.
A stockholder that gives proper notice of its intention to cumulate votes may
cast all the votes to which it is entitled for one candidate, or it may
distribute such votes among any or all of the candidates as it sees fit.
 
These provisions may have the effect of delaying or preventing a change of
control of the Company. See "Description of Capital Stock - Certain Provisions
of Delaware Law and the Company's Restated Certificate of Incorporation and
Bylaws."
 
DILUTION
 
   
The purchasers of shares of Common Stock offered hereby will experience
immediate dilution of $8.90 per share in the pro forma as adjusted net tangible
book value of their shares. In the event the Company issues additional shares of
Common Stock in the future, including shares which may be issued in connection
with future acquisitions, purchasers of Common Stock in the Offering may
experience further dilution in the net tangible book value per share of the
Common Stock. See "Dilution" and "Use of Proceeds."
    
 
                                       18
<PAGE>
                            FORMATION OF THE COMPANY
 
   
FIRSTPAK, INC.
    
 
   
FirstPak, Inc. was incorporated in California in February 1996 and will be
reincorporated in Delaware prior to consummation of the Offering. FirstPak, Inc.
was founded by certain individuals associated with Menke Titolo as a holding
company to acquire businesses in the label and packaging industry. Subsequent to
the Acquisitions and the Offering, the individuals who founded FirstPak, Inc.
will directly own in the aggregate approximately 10.0% of the outstanding shares
of Common Stock of the Company. See "Certain Relationships and Related Party
Transactions - Organization of FirstPak, Inc."
    
 
The Company maintains its principal executive offices at 114 Sansome Street,
Suite 1000, San Francisco, California 94104. The telephone number of its
principal executive offices is (415) 362-9800.
 
THE ACQUISITIONS
 
   
Concurrently with and as a condition to the consummation of the Offering,
FirstPak, Inc. will acquire in four separate transactions all of the outstanding
capital stock of each of the Operating Subsidiaries for an aggregate of
6,072,012 shares of Common Stock of FirstPak, Inc., 220,000 shares of Series A
Preferred Stock and options to purchase 909,193 shares of Common Stock at a
weighted average exercise price of $2.27 per share in a stock-for-stock exchange
as follows:
    
 
   
<TABLE>
<CAPTION>
                         ------------------------------------------------------------------
                                                            PERCENTAGE OWNERSHIP OF
                                                            COMMON STOCK AFTER THE
                                          PERCENTAGE         ACQUISITIONS AND THE       VALUE OF
                          SHARES OF   OWNERSHIP OF COMMON          OFFERING             SHARES OF
                           COMMON       STOCK AFTER THE     (INCLUDING COMMON STOCK      COMMON
OPERATING SUBSIDIARIES      STOCK        ACQUISITIONS        SOLD IN THE OFFERING)      STOCK(1)
- -----------------------  -----------  -------------------  -------------------------  -------------
<S>                      <C>          <C>                  <C>                        <C>
Wisconsin Label           3,495,911(2)           48.7%                  31.5%          $48,942,754
St. Louis Litho           1,164,438(3)           16.2                   10.5            16,302,132
CalOptical                  714,467(4)            9.9                    6.4            10,002,538
Blake Printing              697,196(5)            9.7                    6.3             9,760,744
                         -----------             ---                     ---          -------------
  Total                   6,072,012             84.5%                   54.7%          $85,008,168
                         -----------             ---                     ---          -------------
                         -----------             ---                     ---          -------------
</TABLE>
    
 
- ------------------------------
   
(1)  Based upon an assumed initial public offering price of $14 per share.
    
 
   
(2)  Excludes 220,000 shares of Series A Preferred Stock and options to purchase
515,577 shares of Common Stock at a weighted average exercise price of $3.50 per
share to be issued to the stockholders of Wisconsin Label in connection with the
Acquisitions. The Series A Preferred Stock is redeemable by the Company under
certain circumstances for an aggregate of $11.0 million and has a deemed
aggregate value for purposes hereof of $9.4 million. See Note 6, "Capital
Stock," of Notes to Financial Statements of the Company; "Description of Capital
Stock - Preferred Stock." In connection with Acquisitions, the Company will use
approximately $21.4 to repay substantially all of the indebtedness of Wisconsin
Label incurred prior to the Acquisitions and outstanding on the date of this
Prospectus.
    
 
   
(3)  Excludes options to purchase 24,258 shares of Common Stock at a weighted
average exercise price of $0.11 per share to be issued to the stockholders of
St. Louis Litho in connection with the Acquisitions. In connection with the
Acquisitions, the Company will use approximately $17.1 million to repay
substantially all of the indebtedness of St. Louis Litho incurred prior to the
Acquisitions and outstanding on the date of this Prospectus.
    
 
   
(4)  Excludes options to purchase 195,059 shares of Common Stock at a weighted
average price of $0.30 per share to be issued to the stockholders of CalOptical
in connection with the Acquisitions. In connection with the Acquisitions, the
Company will use approximately $2.2 million to repay substantially all of the
indebtedness of CalOptical incurred prior to the Acquisitions and outstanding on
the date of this Prospectus.
    
 
   
(5)  Excludes options to purchase 174,299 shares of Common Stock at a weighted
average price of $1.14 per share to be issued to the stockholders of Blake
Printing in connection with the Acquisitions. In connection with the
Acquisitions, the Company will use approximately $3.7 million to repay
substantially all of the indebtedness of Blake Printing incurred prior to the
Acquisitions and outstanding on the date of this Prospectus.
    
 
   
The 3,495,911 shares of Common Stock to be received by the Wisconsin Label
shareholders in exchange for their shares of Wisconsin Label common stock in
connection with the Acquisitions is based on an assumed initial public offering
price of $14 per share. The actual number of shares of Common Stock to be issued
to the Wisconsin Label shareholders will be adjusted according to a formula that
is based on the initial public offering
    
 
                                       19
<PAGE>
   
price. In accordance with the Wisconsin Label merger agreement, based upon such
formula, the Wisconsin Label shareholders may receive up to 248,448 additional
shares of Common Stock or up to 103,114 fewer shares of Common Stock, depending
upon the initial public offering price. To the extent the Wisconsin Label
shareholders receive such number of additional or fewer shares of Common Stock,
the initial founders of the Company will retain a correspondingly smaller or
larger number of shares of Common Stock. Assuming an initial public offering
price range of $13 to $15 per share, the initial founders' ownership interest
may be adjusted down to a minimum of 7.8% or up to a maximum of 10.9% of the
outstanding Common Stock upon the consummation of the Offering, in which case
the Wisconsin Label shareholders would own approximately 33.7% or 30.5%,
respectively, of the outstanding Common Stock upon the consummation of the
Offering.
    
 
   
The respective purchase prices for each of the Operating Subsidiaries were
determined based on negotiations among FirstPak, Inc. and the individual
Operating Subsidiary. The factors considered by the parties in determining the
purchase prices included, among other things, cash flows, historical operating
results, growth rates, levels of indebtedness and estimated business prospects
of each of the Operating Subsidiaries. With the exception of the number of
shares to be issued to the stockholders of the Operating Subsidiaries and the
issuance of the Series A Preferred Stock to the shareholders of Wisconsin Label,
the acquisition of each of the Operating Subsidiaries is subject to
substantially the same terms and conditions. The agreements relating to the
Acquisitions provide for a portion of the shares of Common Stock to be issued to
the Sellers to be held in escrow after the consummation of the Acquisitions to
satisfy potential obligations of the Sellers in connection with the
Acquisitions.
    
 
   
The Company has filed a registration statement relating to the issuance of the
shares of Common Stock to the Sellers in connection with the Acquisitions. See
"Shares Eligible for Future Sale." The Company will pay approximately $800,000
of transaction costs directly related to the Acquisitions.
    
 
THE OPERATING SUBSIDIARIES
 
WISCONSIN LABEL
 
   
Wisconsin Label was incorporated in Wisconsin in 1966. The operations of
Wisconsin Label are carried out through six operating entities - American
Creative Packaging (acquired in 1992), Label Graphix (formed in 1987), Victory
Graphics (acquired in 1992), Voxcom (acquired in 1995), Wisconsin Label
Corporation (founded in 1966) and Wisconsin Screen Graphics (formed in 1988). As
of June 30, 1997, approximately 32.0% of the capital stock of Wisconsin Label
was owned by Wisconsin Label's employee stock ownership plan. Subsequent to the
Acquisitions and the Offering, the employee stock ownership plan will own
approximately 9.7% of the outstanding shares of Common Stock of the Company. The
Company will use approximately $21.4 million of the net proceeds of this
Offering to repay indebtedness (including accrued interest) of Wisconsin Label
incurred prior to the Acquisitions. See "Use of Proceeds."
    
 
ST. LOUIS LITHO
 
   
St. Louis Litho was originally incorporated in Missouri in 1921. St. Louis Litho
was acquired by Pet in 1969. In February 1995, Grand Metropolitan acquired Pet,
and the Company became an indirect wholly-owned subsidiary of Grand
Metropolitan. In May 1996, St. Louis Litho was acquired from Grand Metropolitan
by certain of its officers and employees and an investment partnership
affiliated with Menke Titolo for approximately $20.3 million in cash (the
"Management Buy-out" or "MBO"). In connection with the acquisition, St. Louis
Litho incurred approximately $18.1 million of indebtedness. The Company will use
approximately $17.1 million of the net proceeds of this Offering to repay all of
the remaining outstanding principal and accrued interest from the acquisition
and other indebtedness (including accrued interest) of St. Louis Litho incurred
prior to the Acquisitions. See "Use of Proceeds."
    
 
CALOPTICAL
 
California Optical Leather, Inc., the subsidiary of CalOptical, was founded in
1935. CalOptical was incorporated in Delaware in July 1992 by certain of
CalOptical's current officers and employees and an investment partnership
affiliated with Menke Titolo for the purpose of acquiring the business of COL.
In connection with the acquisition of COL, CalOptical incurred approximately
$4.2 million of indebtedness. The Company will use
 
                                       20
<PAGE>
   
approximately $2.2 million of the net proceeds of this Offering to repay all of
the remaining outstanding principal and accrued interest from the acquisition
and other indebtedness (including accrued interest) of CalOptical incurred prior
to the Acquisitions. See "Use of Proceeds."
    
 
BLAKE PRINTING
 
   
Blake Printing was founded in 1949 and was incorporated in California in 1960.
Blake Printing conducts its operations through two divisions - Blake Printery
and Poor Richard's Press. The Company will use approximately $3.7 million of the
net proceeds of this Offering to repay indebtedness (including accrued interest
and certain prepayment fees) of Blake Printing incurred prior to the
Acquisitions. See "Use of Proceeds."
    
 
                                       21
<PAGE>
                                USE OF PROCEEDS
 
   
The net proceeds to the Company from the sale of the shares of Common Stock
offered by the Company hereby, after deducting estimated underwriting discounts
and other offering expenses, all of which are payable by the Company, are
estimated to be approximately $47,650,000 (approximately $55,900,000 if the
Underwriters' over-allotment option is exercised in full), assuming an initial
public offering price of $14 per share. The Company will not receive any of the
net proceeds from the sale of shares of Common Stock by the Selling
Stockholders. The Company intends to use the net proceeds from the sale of
shares of Common Stock to be sold by it to (i) repay substantially all of the
approximately $44.3 million (as of June 30, 1997) of indebtedness (including
accrued interest and certain prepayment fees) of the Operating Subsidiaries
incurred prior to the Acquisitions (including approximately $4.6 million of
indebtedness held by a holder of more than five percent of the Common Stock
assuming consummation of the Acquisitions), (ii) pay approximately $800,000 of
transaction costs directly related to the Acquisitions, (iii) pay $600,000 of
credit facility fees and (iv) pay approximately $750,000 of other current
liabilities incurred by FirstPak since its formation. The balance of the
proceeds, approximately $1.6 million, will be used for working capital and other
corporate purposes. The $44.3 million of indebtedness to be repaid has a
weighted average interest rate of 8.75% and a weighted average maturity of 42
months.
    
 
                                DIVIDEND POLICY
 
The Company intends to retain any future earnings to finance the expansion of
its business and for general corporate purposes and, therefore, does not
anticipate paying any cash dividends on its Common Stock in the foreseeable
future. Furthermore, the terms of the Facility may prohibit the Company from
paying dividends on the Common Stock. See "Use of Proceeds." As a holding
company, the ability of the Company to pay dividends to its stockholders will be
dependent on dividends and other payments from the Operating Subsidiaries. Any
payment of dividends in the future will be at the discretion of the Board of
Directors and will depend upon, among other things, the Company's earnings,
financial condition, capital requirements, level of indebtedness, other
contractual restrictions with respect to the payment of dividends and other
relevant factors.
 
                                       22
<PAGE>
                                 CAPITALIZATION
 
   
The following table sets forth at June 30, 1997 the combined capitalization of
FirstPak, Inc., Wisconsin Label, St. Louis Litho, CalOptical and Blake Printing
and the capitalization of the Company on a pro forma basis assuming an initial
public offering price of $14 to reflect (i) the Acquisitions, including the
issuance to the Sellers of 6,072,012 shares of Common Stock (at an average fair
value of $10.01 per share) and 220,000 shares of Series A Preferred Stock (at a
fair value of $42.91 per share), and the effect of the "reverse acquisition" for
accounting purposes by Wisconsin Label of FirstPak, Inc. and the other Operating
Subsidiaries, and (ii) the sale of the 3,928,571 shares of Common Stock by the
Company in connection with the Offering (at an assumed initial public offering
price of $14 per share) and application of the net proceeds to the Company
therefrom. See "Selected Pro Forma Combined Financial Data" and the Pro Forma
Combined Financial Statements included elsewhere in this Prospectus.
    
 
   
<TABLE>
<CAPTION>
                                                                          ------------------------
                                                                               JUNE 30, 1997
DOLLARS IN THOUSANDS                                                        COMBINED    PRO FORMA
                                                                          -----------  -----------
<S>                                                                       <C>          <C>
Short-term debt, notes payable and long-term debt, current maturities      $   9,722    $      62
                                                                          -----------  -----------
                                                                          -----------  -----------
Long-term debt, excluding current maturities                               $  34,523    $      55
Redeemable Preferred Stock                                                         -        9,440
Warrants with put option                                                       2,240            -
Stockholders' Equity (1)(2):
  Preferred Stock                                                                  -            -
  Common Stock                                                                   314           12
  Additional paid-in capital                                                   5,728       94,593
  Unamortized stock based compensation                                          (114)           -
  Retained earnings (deficit) (3)                                             15,212       (7,084)
                                                                          -----------  -----------
    Total stockholders' equity                                                21,140       87,521
                                                                          -----------  -----------
      Total capitalization                                                 $  57,903    $  97,016
                                                                          -----------  -----------
                                                                          -----------  -----------
</TABLE>
    
 
- ------------------------
   
(1)  At June 30, 1997, the stockholders' equity of the predecessor of FirstPak,
Inc. was comprised of Common Stock, $.01 par value, 100 shares authorized, 25
issued and outstanding. FirstPak, Inc.'s total capitalization at June 30, 1997
was a $413,000 deficit ($2,000 for Common Stock and additional paid in capital
and a $415,000 deficit and retained earnings).
    
   
(2)  Pro Forma Stockholders' Equity is comprised of Preferred Stock, $.001 par
value, 10,000,000 shares authorized, 220,000 issued and outstanding, and Common
Stock, $.001 par value, 100,000,000 shares authorized, 11,111,250 shares issued
and outstanding. Excludes (a) 50,000 shares of Common Stock issuable upon
exercise of options granted to an officer of FirstPak, Inc. at an exercise price
of $5.35 per share prior to this Offering, (b) 522,143 shares of Common Stock
issuable pursuant to the 1997 Stock Plan upon exercise of options to be granted
to certain officers, directors, employees and consultants of the Company at a
weighted average exercise price of $7.39 per share concurrently with the
consummation of this Offering, and (c) an additional 1,477,857 shares of Common
Stock reserved for issuance pursuant to the 1997 Stock Plan, of which options to
purchase 342,857 shares of Common Stock at an exercise price equal to the
initial public offering price will be issued to certain officers and employees
of the Operating Subsidiaries concurrently with consummation of the Offering.
Also excludes options to purchase an aggregate of 909,193 shares of Common Stock
at a weighted average exercise price of $2.27 per share to be granted to or
exchanged with certain Sellers in connection with the Acquisitions. See
"Formation of the Company - The Acquisitions," "Certain Relationships and
Related Party Transactions - The Acquisitions" and "Management - 1997 Stock
Plan."
    
   
(3)  Pro forma retained earnings (deficit) includes $20.8 million ($24.3
million, pre-tax) expense for stock based compensation to be recorded in the
Company's statement of income in the period the Offering is consummated.
    
 
                                       23
<PAGE>
                                    DILUTION
   
The Company had a pro forma net tangible book value at June 30, 1997 of $9.2
million, or $1.28 per share of Common Stock. Pro forma net tangible book value
per share is determined by dividing the pro forma net tangible book value of the
Company (tangible assets less liabilities) by the pro forma number of shares of
Common Stock outstanding. Adjusting for the sale by the Company of the 3,928,571
shares of Common Stock offered by the Company hereby at an assumed initial
public offering price of $14 per share, and the application of the estimated net
proceeds therefrom as described under "Use of Proceeds," the pro forma net
tangible book value of the Company, as adjusted, at June 30, 1997 would have
been $56.7 million, or $5.10 per share. This amount represents an immediate
dilution to new investors of $8.90 per share and an immediate increase in pro
forma as adjusted net tangible book value per share to existing stockholders of
$3.82 per share. The following table illustrates this per share dilution to new
investors:
    
 
   
<TABLE>
<S>                                                                            <C>        <C>
                                                                               --------------------
Assumed initial public offering price per share                                           $   14.00
  Pro forma net tangible book value per share at June 30, 1997                 $    1.28
  Increase in pro forma net tangible book value per share resulting from the
   Offering                                                                         3.82
                                                                               ---------
Pro forma as adjusted net tangible book value per share after the Offering                     5.10
                                                                                          ---------
Pro forma as adjusted dilution to new investors                                           $    8.90
                                                                                          ---------
                                                                                          ---------
</TABLE>
    
 
   
If the options granted, or to be granted, to purchase 1,276,336 shares of Common
Stock which vest concurrently with the Offering are exercised in full, the
increase in pro forma net tangible book value per share resulting from such
exercise, pro forma as adjusted net tangible book value per share after such
exercise, and pro forma as adjusted dilution to new investors would be $3.58,
$4.86 and $9.14, respectively.
    
 
   
If the Underwriters' over-allotment option is exercised in full, the increase in
pro forma net tangible book value per share resulting from the Offering, pro
forma as adjusted net tangible book value per share after the Offering, and pro
forma as adjusted dilution to new investors would be $4.25, $5.53 and $8.47,
respectively.
    
 
   
The following table sets forth at June 30, 1997, after giving effect to the
Acquisitions and the sale of the Common Stock offered by the Company in the
Offering: (i) the number of shares of Common Stock purchased by existing
stockholders from the Company and the total consideration (including the fair
value of the shares of Common Stock and options to purchase Common Stock issued
to the Sellers in connection with the Acquisitions) and average price per share
paid to the Company for such shares; (ii) the number of shares of Common Stock
purchased by new investors in the Offering from the Company and the total
consideration and the price per share paid by them for such shares; and (iii)
the percentage of shares purchased from the Company by existing stockholders and
the new investors and the percentages of consideration paid to the Company for
such shares by existing stockholders and new investors.
    
 
   
<TABLE>
<CAPTION>
                                            -------------------------------------------------------------
                                                                                                 AVERAGE
                                                 SHARES OWNED         TOTAL CONSIDERATION          PRICE
                                               NUMBER     PERCENT        AMOUNT     PERCENT    PER SHARE
                                            ---------  -----------  -----------  -----------  -----------
<S>                                         <C>        <C>          <C>          <C>          <C>
Existing stockholders(1)                    7,182,679          65%  $70,861,500          56%   $    9.87
New investors                               3,928,571          35    54,999,994          44    $   14.00
                                            ---------       -----   -----------       -----
    Total                                   11,111,250       100%   $125,861,494       100%
                                            ---------       -----   -----------       -----
                                            ---------       -----   -----------       -----
</TABLE>
    
 
- ------------------------
 
   
(1)  Consists of the Sellers and the stockholders of FirstPak, Inc. prior to the
consummation of the sale of the shares of Common Stock offered hereby. Sales by
the Selling Stockholders in the Offering will reduce the outstanding number of
shares held by existing stockholders to 6,880,967 shares, or approximately 62%
of the total number of shares of Common Stock outstanding after the Offering,
and will increase the number of shares to be held by new stockholders to
4,230,283 shares, or approximately 38% of the total number of shares of Common
Stock outstanding after the Offering. See "Principal and Selling Stockholders."
Excludes (a) 50,000
    
 
                                       24
<PAGE>
   
shares of Common Stock issuable upon exercise of options granted to an officer
of FirstPak, Inc. at an exercise price of $5.35 per share, (b) 522,143 shares of
Common Stock pursuant to the Company's 1997 Stock Plan (the "1997 Stock Plan")
issuable upon exercise of options to be granted to certain directors, officers,
employees and consultants of the Company at a weighted average exercise price of
$7.39 per share concurrently with the consummation of this Offering and (c) an
additional 1,477,857 shares of Common Stock reserved for issuance pursuant to
the Company's 1997 Stock Plan (the "Stock Plan"), of which options to purchase
342,857 shares of Common Stock at an exercise price equal to the initial public
offering price will be issued to certain officers, employees and consultants of
the Operating Subsidiaries concurrently with consummation of the Offering. Also
excludes options to purchase an aggregate of 909,193 shares of Common Stock at
an average weighted exercise price of $2.27 per share to be granted to or
exchanged with certain Sellers in connection with the Acquisitions or exchanged
for outstanding options to purchase Common Stock of the Operating Subsidiaries.
See "Formation of the Company - The Acquisitions," "Certain Relationships and
Related Party Transactions - The Acquisitions" and "Management 1997 Stock Plan."
If the options granted, or to be granted, to purchase 1,276,336 shares of Common
Stock which vest concurrently with the Offering are exercised in full, the
percentage of shares owned by the existing stockholders and new investors would
be 68% and 32%, respectively, and their respective portions of total
consideration paid would be 57% and 43%.
    
 
                                       25
<PAGE>
                   SELECTED PRO FORMA COMBINED FINANCIAL DATA
 
   
The following unaudited pro forma combined financial data give effect to the
issuance of Common Stock and Series A Preferred Stock to the Sellers upon
consummation of the Acquisitions and the issuance of Common Stock to the public
upon the closing of the Offering at an assumed initial public offering price of
$14 per share and the application of the net proceeds to the Company therefrom.
Upon consummation of the Acquisitions, the former stockholders of Wisconsin
Label will, as a group, own approximately 48.6% of the Company's Common Stock
and control approximately 50.2% of the Company's voting interests. As such
Common Stock ownership and voting interests will exceed (i) the separate Company
ownership and voting interests of the former stockholder groups for St. Louis
Litho, CalOptical, or Blake Printing, or (ii) the FirstPak stockholders'
carryover ownership and voting interests just prior to the consummation of the
Acquisitions, the Acquisitions will occur simultaneously with the closing of the
Offering and will be accounted for as a "reverse acquisition" by Wisconsin Label
as the accounting acquirer using the purchase method of accounting. As a result,
the Company's consolidated financial statements for periods prior to the
consummation of the Acquisitions prepared for comparative purposes subsequent to
the consummation of Acquisitions will be the historical consolidated financial
statements of Wisconsin Label with certain amounts within "Stockholders' Equity"
restated to reflect the impact of FirstPak's acquisition of Wisconsin Label. The
unaudited selected pro forma combined financial data are based on the historical
financial statements of FirstPak, Inc. and the Operating Subsidiaries included
elsewhere in this Prospectus (except for St. Louis Litho for the six months
ended June 30, 1996 and the year ended December 31, 1996, which are discussed in
Note 2 to the Notes to Pro Forma Combined Financial Statements) and the
estimates and assumptions set forth below and in the Pro Forma combined
Financial Statements. See the Pro Forma Combined Financial Statements and
related notes thereto included elsewhere in this Prospectus.
    
 
   
The unaudited pro forma combined balance sheet gives effect to the Acquisitions
and the Offering as if they had occurred on June 30, 1997. The unaudited pro
forma combined statements of income give effect to the Acquisitions and the
Offering as if they had occurred on January 1, 1996.
    
 
   
The unaudited pro forma combined financial data presented herein are not
necessarily indicative of (i) the results or financial position the Company
would have experienced had such events occurred on the dates indicated or (ii)
the future operating results or financial position of the Company and should not
be construed as representative of future operating results or financial
position. The unaudited pro forma combined financial data should be read in
conjunction with the Pro Forma Combined Financial Statements and notes thereto
as well as the historical financial statements and notes thereto of FirstPak,
Inc. and each of the Operating Subsidiaries included elsewhere in this
Prospectus.
    
 
                                       26
<PAGE>
 
   
<TABLE>
<CAPTION>
                                           ------------------------------------------------------------------
                                            YEAR ENDED
                                              DECEMBER                     SIX MONTHS ENDED JUNE 30,
                                                   31,             ------------------------------------------
IN THOUSANDS, EXCEPT PER SHARE DATA               1996          %       1996          %       1997          %
                                           -----------  ---------  ---------  ---------  ---------  ---------
<S>                                        <C>          <C>        <C>        <C>        <C>        <C>
PRO FORMA COMBINED STATEMENTS OF INCOME
 DATA:
Sales....................................    $ 142,784      100.0% $  72,620      100.0% $  74,300      100.0%
Cost of sales............................      104,663       73.3     53,120       73.1     54,122       72.8
                                           -----------  ---------  ---------  ---------  ---------  ---------
Gross profit.............................       38,121       26.7     19,500       26.9     20,178       27.2
Operating expenses.......................       30,620       21.5     15,156       21.0     16,205       21.8
                                           -----------  ---------  ---------  ---------  ---------  ---------
Operating income.........................        7,501        5.2      4,344        5.9      3,973        5.4
Interest income..........................          258        0.2        139        0.2         36          -
Interest expense.........................         (271)     (0.2)       (136)     (0.2)       (136)     (0.2)
Other income (expense) net...............          547        0.4        200        0.3        639        0.9
                                           -----------  ---------  ---------  ---------  ---------  ---------
Income before income taxes and minority
 interest................................        8,035        5.6      4,547        6.2      4,512        6.1
Provision for income taxes...............        3,485        2.4      1,996        2.7      1,800        2.4
                                           -----------  ---------  ---------  ---------  ---------  ---------
Income before minority interest..........        4,550        3.2      2,551        3.5      2,712        3.7
Minority interest........................          (92)     (0.1)        (58)     (0.1)        (43)     (0.1)
                                           -----------  ---------  ---------  ---------  ---------  ---------
Net income...............................    $   4,458        3.1% $   2,493        3.4% $   2,669        3.6%
                                           -----------  ---------  ---------  ---------  ---------  ---------
                                           -----------  ---------  ---------  ---------  ---------  ---------
Pro forma net income per share...........    $    0.37             $    0.21             $    0.22
                                           -----------             ---------             ---------
                                           -----------             ---------             ---------
Shares used in computing pro forma net
 income per share (1)....................       12,150                12,150                12,150
OTHER DATA:
Pro forma combined cash flows provided by
 (used in):
    Operating activities.................    $   7,603          -  $   4,102          -  $   4,505          -
    Investing activities.................       (4,955)         -     (3,824)         -     (3,684)         -
    Financing activities.................         (198)         -          -          -       (291)         -
Pro forma combined EBITDA (2)............       13,014          -      7,091          -      7,580          -
</TABLE>
    
 
   
<TABLE>
<CAPTION>
                                                                             ----------------
                                                                             AT JUNE 30, 1997
                                                                             ----------------
<S>                                                                          <C>
PRO FORMA COMBINED BALANCE SHEET DATA:
Cash and cash equivalents..................................................         $   2,902
Working capital............................................................            26,087
Goodwill...................................................................            30,798
Total assets...............................................................           114,284
Long-term debt and capital lease obligations, excluding current
 maturities................................................................                55
Redeemable preferred stock.................................................             9,440
Stockholders' equity.......................................................            87,521
</TABLE>
    
 
- ------------------------
 
                                                     FOOTNOTES ON FOLLOWING PAGE
 
                                       27
<PAGE>
- ------------------------
(1)  Computed on the basis described in Note 6 of Notes to Pro Forma Combined
Financial Statements.
 
   
(2)  EBITDA represents operating income before depreciation, amortization and
stock based compensation minus or plus, on a pre-tax basis, any earnings or
losses, as applicable, attributable to minority interests and plus or minus any
income or losses, as applicable, from joint ventures. EBITDA is used by the
Company for the purpose of analyzing its operating performance, leverage and
liquidity. Such data are not a measure of financial performance under generally
accepted accounting principles and should not be considered as an alternative to
net income as an indicator of the Company's operating performance or as an
alternative to cash flows as a measure of liquidity. EBITDA information is
included herein because management believes that investors find it to be a
useful tool to assess the operations of a business without considering the
impact of financing and tax consequences that vary depending on the capital
structure and tax position of individual companies. EBITDA excludes significant
expenses, such as depreciation, amortization, interest and income taxes, which
are significant components in understanding the Company's financial performance.
These factors should be considered in evaluating EBITDA and trends in EBITDA.
Additionally, EBITDA as measured by the Company may not be comparable to
similarly titled measures of other companies.
    
 
                                       28
<PAGE>
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                        OF PRO FORMA FINANCIAL CONDITION
                      AND PRO FORMA RESULTS OF OPERATIONS
 
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE SELECTED PRO
FORMA COMBINED FINANCIAL DATA OF THE COMPANY AND THE PRO FORMA COMBINED
FINANCIAL STATEMENTS AND RELATED NOTES THERETO APPEARING ELSEWHERE IN THIS
PROSPECTUS.
 
The Company's sales are derived primarily from the production of pressure
sensitive and glue-applied labels and specialty rigid packaging. The Company has
achieved significant growth in recent years through internal growth,
acquisitions and strategic equity investments. The combined sales of the
Operating Subsidiaries have grown from $103.4 million in 1994 to $142.8 million
in 1996. See "Selected Financial Data of the Operating Subsidiaries."
 
The Company's cost of sales consist primarily of materials, such as paper, inks,
dies and plate material, direct and indirect labor associated with the
manufacturing process, freight, manufacturing overhead, depreciation and
insurance. Gross profit of the Operating Subsidiaries as a percentage of sales
has fluctuated during the period 1994 to 1996 primarily due to customer and
product mix. In addition, the fixed and variable indirect overhead costs of the
Operating Subsidiaries have fluctuated in recent years due to internal growth
which has had an impact on overall margins. Although the Operating Subsidiaries
have been able to pass on most of their direct material price increases to
customers, there can be no assurance that they will be able to continue to do so
in the future. The Company expects to experience continued cost of sales
fluctuations as a percentage of sales.
 
The Company has entered into agreements to acquire the Operating Subsidiaries
simultaneously with the consummation of the sale of the Common Stock offered
hereby. The Operating Subsidiaries have historically operated independently. The
Acquisitions and the Offering may present opportunities to reduce costs through
economies of scale, particularly in obtaining greater volume discounts from
suppliers, as well as maximization of plant utilization. However, the
Acquisitions and the Offering may also necessitate additional costs and
expenditures for corporate management and administration, corporate expenses
related to being a public company, systems integration and facilities expansion.
These various costs and possible cost-savings may make comparison of future
operating results with historical results difficult.
   
PRO FORMA RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 COMPARED
TO THE SIX MONTHS ENDED JUNE 30, 1996
    
 
   
SALES.  Sales increased $1.7 million, or 2.3%, to $74.3 million in the six
months ended June 30, 1997 from $72.6 million in the six months ended June 30,
1996. Despite increased sales to new and existing customers, primarily in the
eyewear packaging products market, sales increased only slightly due to a
reduction in sales, as discussed below, to Dittler Brothers.
    
 
   
In the six months ended June 30, 1996, the Company had sales of $5.5 million to
Dittler Brothers related to a special promotional label project. Dittler
Brothers initially intended to conduct the project through its joint venture
with the Company. See "Business." However, due to start-up delays, the joint
venture did not become fully operational until late 1996. Excluding the special
promotional sales program in 1996, sales increased $7.2 million or 10.7%
primarily due to sales to existing customers. The terms of the joint venture
provide that projects such as the special promotional project conducted in the
six months ended June 30, 1996 will be performed through the joint venture and
accordingly the earnings related to such projects in the future will be recorded
as "other income." The Company had pre tax earnings of $259,000 from the joint
venture in the six months ended June 30, 1997. See "Business" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Operating Subsidiaries" for Wisconsin Label and St. Louis Litho.
    
 
   
COST OF SALES.  Cost of sales increased $1.0 million, or 1.9%, to $54.1 million
in the six months ended June 30, 1997 from $53.1 million in the six months ended
June 30, 1996. As a percentage of sales, cost of sales decreased to 72.8% in the
six months ended June 30, 1997 from 73.1% in the six months ended June 30, 1996.
The decrease in cost of sales as a percentage of sales was due primarily to
changes in product mix as well as the nonrecurrence in the six months ended June
30, 1997 of the Dittler Brothers special promotional label project in
    
 
                                       29
<PAGE>
   
the six months ended June 30, 1996 discussed above which had relatively more
expensive material content. The decrease in cost of sales as a percentage of
sales was offset in part by sales to lower-margin customers in the six months
ended June 30, 1997.
    
 
   
OPERATING EXPENSES.  Operating expenses increased $1.0 million, or 6.9%, to
$16.2 million in the six months ended June 30, 1997 from $15.2 million in the
six months ended June 30, 1996 due to increased marketing costs, stock based
compensation and costs associated with the start-up of an equipment sales,
servicing and programming division in the third quarter of 1996. As a percentage
of sales, operating expenses increased in the six months ended June 30, 1997 to
21.8% from 21.0% in the six months ended June 30, 1996.
    
 
   
INTEREST EXPENSE.  The Company intends to use the proceeds from the Offering to
pay off substantially all indebtedness of the Operating Subsidiaries.
Consequently, on a pro forma basis, interest expense reflects amortization of
the new Facility fee and related annual committment fees and interest expense
for capital leases.
    
 
   
OTHER INCOME (EXPENSE) NET.  Net other income increased $439,000 to $639,000 in
the six months ended June 30, 1997. This increase was due primarily to Dittler
Brothers equity income and joint venture income discussed above in the six
months ended June 30, 1997. See "- Sales."
    
 
   
INCOME TAXES.  The effective tax rate for the six months ended June 30, 1997
decreased to 39.9% from 43.9% for the six months ended June 30, 1996 principally
due to the utilization of net operating losses in the six months ended June 30,
1997 by a majority subsidiary not previously consolidated for tax purposes.
    
 
   
INCOME BEFORE MINORITY INTEREST.  Income before minority interest increased
$161,000, or 6.3%, to $2.7 million, for the six months ended June 30, 1997 from
$2.6 million for the six months ended June 30, 1996. As a percentage of sales,
income before minority interest increased to 3.7% for the six months ended June
30, 1997 from 3.5% for the six months ended June 30, 1996.
    
 
   
NET INCOME.  Net income increased $176,000, or 7.1%, to $2.7 million for the six
months ended June 30, 1997 from $2.5 million for the six months ended June 30,
1996. As a percentage of sales, net income increased to 3.6% for the six months
ended June 30, 1997 from 3.4% for the six months ended June 30, 1996.
    
 
LIQUIDITY AND CAPITAL RESOURCES
 
   
A substantial portion of the proceeds from the Offering will be used to repay
substantially all of the Company's existing short-term and long-term debt. As of
June 30, 1997, the Company had cash and cash equivalents (on a pro forma basis)
of approximately $2.9 million. Although there can be no assurances, the Company
expects to fund its future cash requirements from funds generated from
operations, from funds available under the Facility or from other sources. See
"Risk Factors - Possible Need for Additional Financing; Potential Inability to
Finance Redemption of Series A Preferred Stock." The Company has received a
commitment letter from The Chase Manhattan Bank pursuant to which Chase has
agreed, subject to certain conditions, to provide the Company with a senior
revolving credit facility in the amount of $80.0 million. Up to $60.0 million of
the Facility may be used for acquisitions by the Company. The remaining $20.0
million is for working capital purposes. Borrowings under the working capital
Facility will be limited to certain percentages of eligible accounts receivable
and inventory. Borrowings under the Facility will be secured by the capital
stock of the Operating Subsidiaries, and the Operating Subsidiaries will be
required to guarantee the repayment of amounts outstanding under the Facility.
The Facility will contain covenants requiring the Company to maintain certain
financial ratios and to meet certain financial tests, including minimum interest
coverage, maximum leverage and maximum capital expenditures. In addition, the
consent of the lenders may be required for acquisitions. The obligation of Chase
to provide the Facility is subject to consummation of the Acquisitions and the
Offering and to certain other closing conditions. There can be no assurance that
these conditions will be satisfied. If the Company were unable to obtain the
Facility for any reason, the Company would be required to seek financing for
working capital and acquisitions from other sources. There can be no assurance
that alternative financing would be available to the Company on acceptable terms
or at all.
    
 
   
The Company's capital expenditures for the twelve months ended December 31, 1996
and six months ended June 30, 1996 and 1997 were $4.3 million, $3.5 million and
$3.3 million, respectively, primarily for machinery, office equipment and
computers, building additions and facility upgrades. The Company believes that
the level of
    
 
                                       30
<PAGE>
capital expenditures during these periods was consistent with its internal
growth strategy and expects a similar level of capital expenditures for
machinery and equipment for the foreseeable future. The Company believes that
funds generated from operations, together with the proceeds from the Offering
and the Facility will be sufficient to finance its current operations, and
planned capital expenditure requirements at least through 1998. To the extent
the Company is successful in consummating acquisitions, it may be necessary to
finance such acquisitions through additional borrowings or the issuance of
additional debt or equity securities.
 
   
In connection with the acquisition of Wisconsin Label, FirstPak, Inc. will issue
to the stockholders of Wisconsin Label 220,000 shares of Series A Preferred
Stock. The Series A Preferred Stock will be redeemable for $11 million upon (i)
a sale, merger or other business combination of DB Acquisition Corp., the parent
of Dittler Brothers, or of Dittler Brothers for cash and/or publicly traded
securities, (ii) the date that is six months after the closing of a firm
commitment underwritten public offering of DB Acquisition Corp. common stock
that represents not less than 20% of the outstanding capital stock of DB
Acquisition Corp. and results in aggregate gross proceeds to DB Acquisition
Corp. in excess of $15 million, (iii) the exercise of certain put or call
options attached to Wisconsin Label's interest in DB Acquisition Corp., the
exercise of which, in certain circumstances, must (a) be with respect to not
less than 75% of the shares of DB Acquisition Corp. owned by Wisconsin Label and
the receipt of funds (in any amount) due to the Company upon such exercise or
(b) cause the Company to receive not less than $6 million in the aggregate
pursuant to such exercise, (iv) the sale by the Company of (a) not less than 75%
of the shares of DB Acquisition Corp. owned by Wisconsin Label that results in
the receipt of funds (in any amount) by the Company upon such sale or (b) all or
any part of its equity interest in DB Acquisition Corp. pursuant to which the
Company receives not less than $6 million, or (v) the dissolution, liquidation
or winding-up of Dittler Brothers. The redemption of the Series A Preferred
Stock may be triggered by events which do not generate cash proceeds to the
Company or which may generate cash proceeds less than the redemption price of
$11 million. In the event the Company does not have cash from operating
activities available to meet its obligations under the terms of the Series A
Preferred Stock, the Company would be required to seek third-party sources of
financing to meet such obligations. There can be no assurance that such
third-party sources of financing, if required, will be available on acceptable
terms, if at all. See "Risk Factors - Possible Need for Additional Financing;
Potential Inability to Finance Redemption of Sources of Preferred Stock,"
"Certain Relationships and Related Party Transactions - Certain Transactions of
the Operating Subsidiaries - Wisconsin Label" and "Description of Capital Stock
- - Preferred Stock."
    
 
   
POTENTIAL FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
    
 
   
The Company may in the future experience significant quarterly fluctuations in
sales, operating income and cash flows as a result of certain factors, including
the volume and timing of customer orders received during the quarter, the timing
and magnitude of customers' marketing campaigns, the loss of a major customer,
the availability and pricing of materials for the Company products, increased
selling, general and administrative expenses incurred in connection with
acquisitions or the introduction of new products, the costs and timing of any
future acquisitions, the timing and magnitude of capital expenditures, and
changes in the Company's product mix or in the relative contribution to sales of
the various Operating Subsidiaries. Due to the foregoing factors, it is possible
that in some future quarter the Company's operating results may be below the
expectations of public market analysts and investors. In such event, the price
of the Company's Common Stock would likely be materially and adversely affected.
    
 
The Operating Subsidiaries generally do not enter into long-term sales contracts
with their customers requiring them to make purchases. The Operating
Subsidiaries' sales are generally evidenced by a purchase order and
documentation limited to a specific sale. As a result, a customer from whom one
of the Operating Subsidiaries generates substantial revenue in one period may
not be a substantial source of revenue in a subsequent period. In addition,
customers of the Operating Subsidiaries generally have the right to terminate
their relationships without penalty and on little or no notice. In the absence
of such long-term contracts, there can be no assurance that current customers
will continue to purchase products from any of the Operating Subsidiaries, and
thus there can be no assurance that the Company will be able to maintain a
consistent level of sales. As a result, the Company may in the future experience
significant quarterly fluctuations in sales, operating income and cash flows.
 
                                       31
<PAGE>
   
The Company will incur a nonrecurring, non-cash stock based compensation charge
to earnings of $24.3 million (based on an assumed initial public Offering price
of $14 per share, resulting in a reduction in net income of $20.8 million after
tax, or $1.71 per share) in the fiscal quarter in which the Offering is
consummated consisting of (i) a charge of $15.5 million related to 1,110,667
shares of Common Stock issued to the founders of FirstPak, Inc. prior to the
consummation of the Acquisitions, (ii) a charge of $5.4 million for options to
purchase 515,577 shares of Common Stock of the Company at an exercise price of
$3.50 per share granted to certain stockholders of Wisconsin Label upon
consummation of the Acquisitions and (iii) a charge of $3.4 million related to
the grant of options to purchase 332,143 shares of Common Stock of the Company
at a weighted average exercise price of $3.92 per share granted to certain
officers and directors of the Company upon consummation of the Offering. Of the
$24.3 million charge, $15.5 million will not be deductible by the Company for
U.S. federal income tax purposes.
    
 
                                       32
<PAGE>
             SELECTED FINANCIAL DATA OF THE OPERATING SUBSIDIARIES
 
THE SELECTED FINANCIAL DATA OF THE OPERATING SUBSIDIARIES SET FORTH BELOW ARE
DERIVED IN PART FROM THE MORE DETAILED FINANCIAL STATEMENTS AND NOTES OF THE
INDIVIDUAL OPERATING SUBSIDIARIES INCLUDED ELSEWHERE IN THIS PROSPECTUS, AND IN
PART FROM THE DETAILED FINANCIAL STATEMENTS AND UNDERLYING ACCOUNTING RECORDS OF
THE OPERATING SUBSIDIARIES NOT INCLUDED HEREIN, AS FOLLOWS:
 
   
WISCONSIN LABEL.  With respect to the selected financial data of Wisconsin
Label, (i) the balance sheet data and statements of income data as of December
31, 1995 and 1996 and for the years ended December 31, 1994, 1995 and 1996 have
been derived from the audited consolidated financial statements included
elsewhere herein, (ii) the balance sheet data and statements of income data as
of June 30, 1997 and for the six months ended June 30, 1996 and 1997 have been
derived from the unaudited consolidated financial statements included elsewhere
herein, and (iii) the balance sheet data and statements of income data as of
December 31, 1992, 1993 and 1994 and for the years ended December 31, 1992 and
1993 have been derived from the unaudited consolidated financial statements not
included herein.
    
 
   
ST. LOUIS LITHO.  With respect to the selected financial data of St. Louis
Litho, (i) the balance sheet data and statements of income data as of December
31, 1995 (predecessor company) and 1996 (successor company) and for the years
ended December 31, 1994 and 1995 (predecessor company) have been derived from
the audited financial statements included elsewhere herein, (ii) the balance
sheet data and statements of income data as of June 30, 1997 (successor company)
and for the six months ended June 30, 1997 (successor company) have been derived
from the unaudited financial statements included elsewhere herein, (iii) the
statements of income data for the year ended December 31, 1996 (pro forma) and
six months ended June 30, 1996 (pro forma) have been derived from the unaudited
pro forma statements of operations included elsewhere herein, and (iv) the
balance sheet data and statements of income data as of December 31, 1992, 1993,
and 1994 and for the years ended December 31, 1992 and 1993 have been derived
from unaudited financial statements not included herein.
    
 
   
CALOPTICAL.  With respect to the selected financial data of CalOptical, (i) the
balance sheet data and statements of income data as of December 31, 1995 and
1996 and for the years ended December 31, 1994, 1995 and 1996 have been derived
from the audited consolidated financial statements included elsewhere herein,
(ii) the balance sheet data and statements of income data as of June 30, 1997
and for the six months ended June 30, 1996 and 1997 have been derived from the
unaudited consolidated financial statements included elsewhere herein, and (iii)
the balance sheet data and statements of income data as of December 31, 1992,
1993 and 1994 and for the years ended December 31, 1992 and 1993 have been
derived from the unaudited consolidated financial statements not included
herein.
    
 
   
BLAKE PRINTING.  With respect to the selected financial data of Blake Printing,
(i) the balance sheet data and statements of income data as of December 31, 1995
and December 29, 1996 and for the years ended January 1, 1995, December 31, 1995
and December 29, 1996 have been derived from the audited financial statements
included elsewhere herein, (ii) the balance sheet data and statements of income
data as of June 29, 1997 and for the six months ended June 30, 1996 and June 29,
1997 have been derived from the unaudited financial statements included
elsewhere herein, and (iii) the balance sheet data and statements of income data
as of January 3, 1993, January 2, 1994, and January 1, 1995 and for the years
ended January 3, 1993 and January 2, 1994 have been derived from unaudited
financial statements not included herein. The financial statements of Blake
Printing and Publishing, Inc. presented herein are prepared on a 52/53 week
convention with the fiscal year ending on the Sunday closest to December 31. The
operations for years ended January 1, 1995, December 31, 1995 and December 29,
1996 each include 52 weeks, and the operations for the six months ended June 30,
1996 and June 29, 1997 each include 26 weeks. For convenience, the fiscal year
end and six month period end of Blake Printing & Publishing, Inc. in this
Prospectus are indicated as ending on the last day of the applicable calendar
year or six month period.
    
 
In the opinion of the Company, the unaudited financial statements of the
Operating Subsidiaries reflect all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the financial
position and results of operations of the Operating Subsidiaries for the periods
indicated in accordance with generally accepted accounting principles. The
selected financial data of the Operating Subsidiaries for periods less than a
year are not necessarily indicative of the results to be expected for a full
year. The selected financial data for each Operating Subsidiary should be read
in conjunction with its financial statements and related notes referred to above
and included elsewhere herein and with its section in the "Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Operating Subsidiaries."
 
                                       33
<PAGE>
 
   
<TABLE>
<CAPTION>
                        ---------------------------------------------------------------------------
                                                                                 SIX MONTHS ENDED
                                      YEARS ENDED DECEMBER 31,                       JUNE 30,
                             1992       1993       1994       1995       1996       1996       1997
                        ---------  ---------  ---------  ---------  ---------  ---------  ---------
IN THOUSANDS
<S>                     <C>        <C>        <C>        <C>        <C>        <C>        <C>
STATEMENTS OF INCOME DATA:
WISCONSIN LABEL
Sales                   $  37,921  $  47,043  $  57,175  $  70,852  $  93,914  $  47,898  $  46,919
Gross profit                8,739     10,887     13,538     16,821     22,170     11,082     10,968
Operating income            2,309      2,880      4,127      4,736      6,278      3,104      2,685
Income before income
 taxes and minority
 interest                   1,793      2,400      3,204      4,358      5,533      2,699      2,551
Net income                  1,058      1,358      1,590      2,259      3,055      1,426      1,656
 
ST. LOUIS LITHO (1)
Sales                   $  19,813  $  22,124  $  23,867  $  22,873  $  20,304  $  10,434  $  11,215
Gross profit                5,498      6,089      6,962      5,628      5,151      2,673      3,083
Operating income            3,310      3,880      4,679      3,188      2,133      1,286      1,445
Income before income
 taxes                      3,309      3,798      4,679      3,059        269        354        522
Net income                  1,935      2,223      2,734      1,716         77        170        267
 
CALOPTICAL(2)
Sales                   $   8,261  $   9,315  $  11,248  $  13,775  $  15,664  $   7,427  $   8,982
Gross profit                3,300      3,420      4,261      4,947      5,711      2,688      3,288
Operating income
 (loss)                       574         (8)       690        781        961        386        567
Income (loss) before
 income taxes                 457       (497)       228        324        529        149        430
Net income (loss)             282       (364)       156        166        298         71        240
 
BLAKE PRINTING (3)
Sales                   $  10,171  $   9,836  $  10,663  $  11,139  $  12,362  $   6,586  $   6,894
Gross profit                2,916      3,389      3,600      4,220      4,839      2,927      2,692
Operating income
 (loss)                       (20)       357        289        559        937        972        680
Income (loss) from
 continuing operations
 before income taxes         (113)       163         67        257        687        867        532
Net income                    (48)       191         59        183        459        514        319
</TABLE>
    
 
- ------------------------
 
   
(1)  Selected financial data for St. Louis Litho for the years ended December
31, 1992, 1993, 1994 and 1995 represent data for the predecessor of St. Louis
Litho. In May 1996, St. Louis Litho was acquired in the MBO. The pro forma
selected financial information for the year ended December 31, 1996 and the six
months ended June 30, 1996 assumes the acquisition of St. Louis Litho as of
January 1, 1996. Accordingly, operating expenses for the year ended December 31,
1996 and the six months ended June 30, 1996 have been increased by $155,000 (for
goodwill amortization of $89,000, stock based compensation of $16,000 and
management fees of $50,000) and interest expense for the year ended December 31,
1996 and the six months ended June 30, 1996 has been increased by $777,000,
representing the estimated amounts of these items for the period January 1, 1996
through May 31, 1996.
    
 
   
(2)  In October 1992, CalOptical acquired the business of COL. Selected
financial data for 1992 represents the combined results of operations of COL for
the ten months ended October 31, 1992 (without pro forma adjustments) and
CalOptical for the two months ended December 31, 1992.
    
 
   
(3)  Selected financial data for Blake Printing for 1992 and 1993 reflect the
following adjustments to the unaudited financial statements of the Company: (i)
operating results and the gain from sale of a division have been reclassified to
"income (loss) from discontinued operations" and accordingly are not reflected
in sales, gross profit, operating income or income from continuing operations
before income taxes noted above; and (ii) in 1993
    
 
                                       34
<PAGE>
the Company elected to convert from a S Corporation to a C Corporation for
income tax purposes. The 1992 and 1993 statements of income data include pro
forma adjustments to reflect income taxes as if the Company had been a C
Corporation as of January 1, 1992.
 
   
<TABLE>
<CAPTION>
                                            ----------------------------------------------------------------
                                                                                                          AT
                                                               AT DECEMBER 31,                      JUNE 30,
IN THOUSANDS                                     1992       1993       1994       1995       1996       1997
                                            ---------  ---------  ---------  ---------  ---------  ---------
<S>                                         <C>        <C>        <C>        <C>        <C>        <C>
BALANCE SHEET DATA:
WISCONSIN LABEL
Cash and cash equivalents                   $    (307) $     517  $     188  $     100  $     703  $   1,158
Working capital                                 2,610      2,781      5,529      4,454      4,839      9,055
Goodwill                                          243        213          -          -          -          -
Total assets                                   17,292     21,544     26,519     40,742     46,187     48,628
Long-term debt, excluding current
 maturities                                     5,085      5,569      7,737     10,169      9,216     14,421
Stockholders' equity                            5,262      6,162      7,571     10,831     14,020     15,676
 
ST. LOUIS LITHO (1)
Cash and cash equivalents                   $       -  $       -  $       -  $       1  $       1  $       1
Working capital                                 3,694      3,831      4,388      3,183      3,243      2,998
Goodwill                                          378        363        348        337      8,517      8,410
Total assets                                   15,262     16,146     18,047     17,763     25,221     25,519
Long-term debt, excluding current
 maturities                                         -          -          -          -     16,741     15,878
Stockholders' equity                           14,504     12,527     15,261     15,277      2,925      3,211
 
CALOPTICAL
Cash and cash equivalents                   $     230  $       1  $      26  $     151  $       1  $       1
Working capital                                 1,480      1,101      1,398      1,480      1,750      2,069
Goodwill                                        1,110      1,016        928        827        726        675
Total assets                                    5,903      5,603      5,631      6,241      6,226      6,671
Long-term debt, excluding current
 maturities                                     3,397      3,166      2,620      2,040      1,546      1,289
Warrants with put option                          341        597        814      1,299      1,885      2,240
Stockholders' equity                              725        171        280        217        185        483
 
BLAKE PRINTING (2)
Cash and cash equivalents                   $       5  $     142  $      11  $       9  $      44  $     109
Working capital                                  (183)       213       (126)      (142)      (385)     1,051
Goodwill                                           18         17         17         16         16         16
Total assets                                    4,684      4,326      4,338      5,446      6,458      7,222
Long-term debt, excluding current
 maturities                                     1,031      1,112      1,204      1,366      2,273      2,935
Stockholders' equity                            1,072      1,263      1,322      1,505      1,864      2,183
</TABLE>
    
 
- ------------------------
 
(1)  Balance sheet data for St. Louis Litho at December 1, 1992, 1993, 1994 and
1995 represent data for the predecessor of St. Louis Litho.
 
   
(2)  In 1993 Blake Printing elected to convert from a S Corporation to a C
Corporation for income tax purposes. Selected balance sheet financial data for
Blake Printing for 1992 reflect a proforma adjustment to Shareholders Equity to
reflect the effect of income taxes as if the Company had been a C Corporation as
of January 1, 1993.
    
 
                                       35
<PAGE>
                    MANAGEMENT'S DISCUSSION AND ANALYSIS OF
  FINANCIAL CONDITION AND RESULTS OF OPERATIONS OF THE OPERATING SUBSIDIARIES
 
THE FOLLOWING DISCUSSION SHOULD BE READ IN CONJUNCTION WITH THE SELECTED
FINANCIAL DATA OF THE OPERATING SUBSIDIARIES AND THE FINANCIAL STATEMENTS AND
RELATED NOTES THERETO OF THE OPERATING SUBSIDIARIES APPEARING ELSEWHERE IN THIS
PROSPECTUS.
 
WISCONSIN LABEL
 
OVERVIEW
 
Wisconsin Label produces pressure sensitive labels and materials for use in a
variety of consumer products, food packaging, direct mail and industrial
applications. A majority of Wisconsin Label's sales are to customers in the
food, direct mail, distribution, and consumer durables markets. Wisconsin
Label's products include premium packaging, promotional packaging and materials,
folded cartons and custom material constructions, coupons, mailers and product
catalogs.
 
From January 1, 1994 through December 31, 1996, Wisconsin Label's sales have
grown at an average annual compound growth rate of 28.2%, primarily as a result
of internal growth and, to a lesser extent, acquisitions. Internal growth has
resulted from both new customers and expansion of new business from existing
customers. The Company believes that its ability to grow internally has been the
result of a high level of customer service and the ability to provide innovative
solutions to its customers' packaging needs.
 
The cost of the Company's principal raw material, pressure sensitive label
stock, is correlated to changes in pulp pricing. Pulp prices have fluctuated in
recent years and increased significantly in 1995. The Company manages changes in
raw material costs through close management of pricing of customer jobs.
Although Wisconsin Label has historically passed through raw material price
increases to its customers, there can be no assurance that it will be able to do
so in the future. While Wisconsin Label has generally experienced relatively
stable operating margins on an annual basis, operating margins have fluctuated,
and may in the future fluctuate on a quarterly basis, as a result of the timing
of significant orders, investment in sales and marketing efforts and the
introduction of new technologies and product offerings.
 
On August 1, 1995, Wisconsin Label acquired Voxcom, Inc. ("Voxcom"), a specialty
coater, converter and printer of pressure sensitive labels and tapes located in
the southeastern United States, for stock, cash and assumption of liabilities
totaling $3.1 million. The acquisition was accounted under the purchase method
of accounting. Voxcom's sales increased by $8.8 million, or 96.0%, to $18.0
million in calendar year 1996 from $9.2 million in calendar year 1995 (the year
in which Voxcom was acquired). Wisconsin Label has also made minority equity
investments in other printing enterprises to provide strategic opportunities
within the marketplace.
 
Wisconsin Label owns a 20% equity interest in DB Acquisition Corp., the parent
of Dittler Brothers, a commercial printer servicing the airline, hospitality,
governmental, gaming, retail and commercial printing markets. Wisconsin Label
has also entered into a joint venture with Dittler Brothers, pursuant to which
Wisconsin Label and Dittler Brothers have agreed to jointly undertake certain
specialty printing business and to share equally in any profits and losses. In
fiscal 1996, sales to Dittler Brothers accounted for approximately 7% of the
overall sales of Wisconsin Label. See "Certain Relationship, and Related Party
Transactions - Certain Transactions Involving the Operating Subsidiaries."
 
                                       36
<PAGE>
RESULTS OF OPERATIONS
 
The following table sets forth selected financial data and data as a percentage
of sales for the periods indicated.
   
<TABLE>
<CAPTION>
                                               -------------------------------------------------
                                                           YEARS ENDED DECEMBER 31,
DOLLARS IN THOUSANDS                               1994      %      1995      %      1996      %
                                               --------  -----  --------  -----  --------  -----
<S>                                            <C>       <C>    <C>       <C>    <C>       <C>
Sales                                          $ 57,175  100.0% $ 70,852  100.0% $ 93,914  100.0%
Cost of sales                                    43,637   76.3    54,031   76.3    71,744   76.4
                                               --------  -----  --------  -----  --------  -----
Gross profit                                     13,538   23.7    16,821   23.7    22,170   23.6
Operating expenses                                9,411   16.5    12,085   17.0    15,892   16.9
                                               --------  -----  --------  -----  --------  -----
Operating income                                  4,127    7.2     4,736    6.7     6,278    6.7
Interest expense                                    681    1.2     1,262    1.8     1,451    1.6
Other income (expense) net                         (242)  (0.4)      884    1.2       706    0.8
                                               --------  -----  --------  -----  --------  -----
Income before income taxes
 and minority interest                            3,204    5.6     4,358    6.2     5,533    5.9
Provision for income taxes                        1,561    2.7     2,025    2.9     2,400    2.5
Minority interest                                   (53)  (0.1)      (74)  (0.1)      (78)  (0.1)
                                               --------  -----  --------  -----  --------  -----
Net income                                     $  1,590    2.8  $  2,259    3.2  $  3,055    3.3
                                               --------  -----  --------  -----  --------  -----
                                               --------  -----  --------  -----  --------  -----
Net cash provided by (used in):
  Operating activities                         $   (319)     -  $   (272)     -  $  3,261      -
  Investing activities                           (2,331)     -    (6,456)     -    (4,203)     -
  Financing activities                            2,321      -     6,640      -     1,545      -
 
EBITDA                                            5,292      -     6,336      -     7,822      -
 
<CAPTION>
 
                                                  SIX MONTHS ENDED JUNE 30,
DOLLARS IN THOUSANDS                               1996      %      1997      %
                                               --------  -----  --------  -----
<S>                                            <C>       <C>    <C>       <C>
Sales                                          $ 47,898  100.0% $ 46,919  100.0%
Cost of sales                                    36,816   76.9    35,951   76.6
                                               --------  -----  --------  -----
Gross profit                                     11,082   23.1    10,968   23.4
Operating expenses                                7,978   16.6     8,283   17.7
                                               --------  -----  --------  -----
Operating income                                  3,104    6.5     2,685    5.7
Interest expense                                    739    1.6       724    1.6
Other income (expense) net                          334    0.7       590    1.3
                                               --------  -----  --------  -----
Income before income taxes
 and minority interest                            2,699    5.6     2,551    5.4
Provision for income taxes                        1,215    2.5       852    1.8
Minority interest                                   (58)  (0.1)      (43)  (0.1)
                                               --------  -----  --------  -----
Net income                                     $  1,426    3.0  $  1,656    3.5
                                               --------  -----  --------  -----
                                               --------  -----  --------  -----
Net cash provided by (used in):
  Operating activities                         $  2,057      -  $  1,096      -
  Investing activities                           (2,817)     -    (3,023)     -
  Financing activities                              660      -     2,382      -
EBITDA                                            3,772      -     3,812      -
</TABLE>
    
 
   
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
    
 
   
SALES.  Sales decreased $979,000, or 2.0%, to $46.9 million in the six months
ended June 30, 1997 from $47.9 million in the six months ended June 30, 1996. In
the first six months of 1996, Wisconsin Label had sales of $5.5 million from
Dittler Brothers related to a special promotional project. Dittler Brothers
initially intended to conduct the project through its joint venture with
Wisconsin Label. See "Business." However, due to start-up delays, the joint
venture did not become fully operational until late 1996. The terms of the joint
venture provide that projects such as the special promotional project conducted
in the first quarter of 1996 will be performed through the joint venture and
accordingly the earnings related to such projects will be recorded as "other
income." Wisconsin Label had equity income of $259,000 from the joint venture in
the first six months of 1997. Excluding the special promotional sales program in
1996, sales increased $4.5 million or 10.7% primarily due to increased sales
volumes to existing customers.
    
 
   
COST OF SALES.  Cost of sales consists primarily of base material, dies, plate
material, labor directly related to the printing process, freight, manufacturing
overhead, depreciation and insurance. Cost of sales decreased $865,000, or 2.3%,
to $36.0 million in the six months ended June 30, 1997 from $36.8 million in the
six months ended June 30, 1996. As a percentage of sales, cost of sales
decreased to 76.6% in the six months ended June 30, 1997 from 76.9% in the
comparable period in the previous year. The decrease in cost of sales resulted
primarily from the nonrecurrence in the first quarter of 1997 of the Dittler
Brothers' special promotional label project that ran during the first six months
of 1996 and had a relatively more expensive material content and, to a lesser
extent, from an increase in sales of higher margin products and increases in
plant efficiencies. The decrease in cost of sales as a percentage of sales for
the six months ended June 30, 1997 was primarily due to changes in product mix
and a slight reduction in customer rebates.
    
 
   
OPERATING EXPENSES.  Operating expenses consist of selling, general and
administrative expenses, amortization of goodwill and stock based compensation
expense. Selling expenses are predominantly commissions, trade show expenses,
travel expenses and expenses related to customer service personnel who manage
the manufacturing process. Administration expense is comprised of corporate
management, pension, information systems, office supply, telephone, legal and
auditing expenses. Operating expenses increased $305,000, or 3.8%, to $8.3
million in the six months ended June 30, 1997 from $8.0 million in the six
months ended June 30, 1996 due to costs
    
 
                                       37
<PAGE>
   
associated with the start-up of an equipment sales, servicing and programming
division which commenced in the third quarter of 1996, and increased marketing
efforts related to trade shows, acquisition of mailing lists and the hiring of a
marketing director.
    
 
   
INTEREST EXPENSE.  Interest expense decreased $15,000, or 2.0%, to $724,000 in
the six months ended June 30, 1997 from $739,000 in the six months ended June
30, 1996 as a result of lower interest rates in the six months ended June 30,
1997.
    
 
   
OTHER INCOME (EXPENSE) - NET.  Other income (expense) is the net of interest
income, gain or loss on the sale of fixed assets, and equity income or loss from
equity investments. Other income increased $256,000 to $590,000 in the six
months ended June 30, 1997 from $334,000 in the six months ended June 30, 1996.
This increase resulted from a decrease in income from Wisconsin Label's equity
investment in Dittler Brothers of $96,000 and a $547,000 increase in income from
the joint venture with Dittler Brothers in the six months ended June 30, 1997.
This increase was partially offset by losses associated with the investment
which will be spun off to the shareholders of Wisconsin Label prior to the
consummation of the Offering.
    
 
   
INCOME TAXES.  Wisconsin Label's effective income tax rate was 33.4% in the six
months ended June 30, 1997 compared to 45.0% in the six months ended June 30,
1996 due to the utilization of net operating losses ("NOLs") in the six months
ended June 30, 1997 by a majority-owned subsidiary not previously consolidated
for tax purposes. The NOLs are only available to reduce current income generated
by the subsidiary because the NOLs were generated prior to the subsidiary being
consolidated for tax purposes.
    
 
   
NET INCOME.  Net income increased $230,000, or 16.1%, to $1,656,000 in the six
months ended June 30, 1997 from $1,426,000 in the six months ended June 30,
1996. As a percentage of sales, net income increased to 3.5% in the six months
ended June 30, 1997 from 3.0% in the comparable period in 1996.
    
 
1996 COMPARED TO 1995
 
SALES.  Sales increased $23.1 million, or 32.5%, to $93.9 million in 1996 from
$70.9 million in 1995. This increase in sales was the result of increased sales
volume from existing customers of approximately $16.0 million and the inclusion
of the results of Voxcom for the full year 1996 compared to five months of 1995.
Voxcom's sales increased $13.7 million, or 318.6%, to $18.0 million in the 12
months ended December 31, 1996 compared to $4.3 million in the five months ended
December 31, 1995 (five month's operating results).
 
COST OF SALES.  Cost of sales increased $17.7 million, or 32.8%, to $71.7
million in 1996 from $54.0 million in 1995, in line with the increase in sales.
As a percentage of sales, cost of sales remained stable at 76.4% in 1996
compared to 76.3% the previous year. The Company has been able to maintain
relatively stable gross margins on an annual basis through the management of
costs and its ability to pass on raw material cost increases to its customers.
 
OPERATING EXPENSES.  Operating expenses increased $3.8 million, or 31.5%, to
$15.9 million in 1996 from $12.1 million in 1995 as the result of increased
sales, as well as the added administrative costs associated with Voxcom and the
addition of sales personnel. As a percentage of sales, operating expenses
decreased to 16.9% in 1996 from 17.0% in 1995.
 
INTEREST EXPENSE.  Interest expense increased $189,000, or 15.0%, to $1.5
million in 1996 from $1.3 million in 1995. Additional working capital and
capital expenditures increased the need for additional debt which increased
interest expense. The increase in interest expense in 1996 was partially offset
by lower interest rates.
 
OTHER INCOME (EXPENSE) - NET.  Other income (expense) decreased to $706,000 in
1996 from $884,000 in 1995 as the result of a gain on the sale of fixed assets
realized in 1995 of $244,000 offset by an increase in income from equity
investments of $108,000.
 
INCOME TAXES.  Wisconsin Label's effective income tax rate was 43.4% in 1996
compared to 46.5% in 1995. The reduction in the tax rate was primarily the
result of a decreased proportion of overall taxable income by a subsidiary which
incurred a loss but was not consolidated for tax purposes.
 
NET INCOME.  Net income increased $796,000, or 35.2%, to $3.1 million in 1996
from $2.3 million in 1995. As a percentage of sales, net income increased to
3.3% in 1996 from 3.2% in 1995.
 
                                       38
<PAGE>
1995 COMPARED TO 1994
 
SALES.  Sales increased $13.7 million, or 23.9%, to $70.9 million in 1995 from
$57.2 million in 1994. This increase in sales was the result of increased sales
volume from existing customers and the inclusion of the results of Voxcom for
five months of 1995.
 
COST OF SALES.  Cost of sales increased $10.4 million, or 23.8%, to $54.0
million in 1995 from $43.6 million in 1994. As a percentage of sales, cost of
sales remained constant at 76.3% in 1995 and 1994.
 
OPERATING EXPENSES.  Operating expenses increased $2.7 million, or 28.4%, to
$12.1 million in 1995 from $9.4 million in 1994 as a result of the added
administrative costs associated with Voxcom and the addition of sales personnel
to support increased sales. As a percentage of sales, operating expenses
increased to 17.0% in 1995 from 16.5% in 1994.
 
INTEREST EXPENSE.  Interest expense increased $581,000, or 85.3%, to $1.3
million in 1995 from $681,000 in 1994 as a result of additional indebtedness
incurred in 1995 for working capital and capital expenditures.
 
OTHER INCOME (EXPENSE) - NET.  Other income (expense) - net was $884,000 income
- - net in fiscal 1995 compared to $242,000 expense - net in fiscal 1994 as the
result of equity income of $400,000 in 1995 compared to a nominal equity loss in
1994 and a gain on sale of fixed assets of $300,000 in 1995.
 
INCOME TAXES.  Wisconsin Label's effective income tax rate was 46.5% in 1995
compared to 48.7% in 1994. The reduction in the tax rate was primarily the
result of a decreased proportion of overall taxable income by a subsidiary which
incurred a loss but was not consolidated for tax purposes.
 
NET INCOME.  Net income increased by $669,000, or 42.1%, to $2.3 million in 1995
from $1.6 million in 1994. As a percentage of sales, net income increased to
3.2% in 1995 from 2.8% the previous year.
 
LIQUIDITY AND CAPITAL RESOURCES
 
   
The Company has funded its working capital requirements and capital expenditures
(including acquisitions) from net cash provided by operating activities,
borrowings under its bank credit facilities and other indebtedness. The Company
maintains a line of credit and revolving credit facilities for an aggregate of
$22.0 million of borrowing capacity of which $18.6 million was outstanding at
June 30, 1997. At June 30, 1997, Wisconsin Label had additional outstanding
borrowings of $2.8 million. The following table sets forth selected information
from Wisconsin Label's statements of cash flows for the periods indicated.
    
 
   
<TABLE>
<CAPTION>
                                                                  -----------------------------------------------------
                                                                                                        SIX MONTHS
                                                                     YEARS ENDED DECEMBER 31,         ENDED JUNE 30,
IN THOUSANDS                                                           1994       1995       1996       1996       1997
                                                                  ---------  ---------  ---------  ---------  ---------
<S>                                                               <C>        <C>        <C>        <C>        <C>
Net cash provided by (used in) operating activities               $    (319) $    (272) $   3,261  $   2,057  $   1,096
Net cash used in investment activities                               (2,331)    (6,456)    (4,203)    (2,817)    (3,023)
Net cash provided by financing activities                             2,321      6,640      1,545        660      2,382
</TABLE>
    
 
   
Net cash provided by operating activities, along with net cash provided by
financing activities was used to support capital expenditures of $2.4 million
and $2.5 million in the first six months of 1997 and 1996, respectively. Net
cash provided by operating activities, in the six months ended June 30, 1997 and
the six months ended June 30, 1996 was $1.1 million and $2.1 million,
respectively. Net cash provided by financing activities, in the six months ended
June 30, 1997 and the six months ended June 30, 1996 was $2.4 million and
$660,000, respectively
    
 
Net cash provided by operating activities in 1996 was $3.3 million, which
reduced the need for borrowing to support investing activities which are
primarily capital expenditures. In 1995, net cash used in operating activities
resulted from increases in accounts receivable, inventories and prepaid expenses
and other current assets.
 
Wisconsin Label's capital expenditures aggregated $3.6 million in fiscal 1996.
These expenditures were primarily for machinery and equipment, building
additions, and office equipment primarily used in the art department. The
building addition was for warehouse space to replace existing warehouse space
which was converted to manufacturing facilities to accommodate new machinery and
equipment. Also, in 1996, the Company invested
 
                                       39
<PAGE>
   
approximately $634,000 in its joint venture with Dittler Brothers. In 1995,
capital expenditures were $2.8 million primarily for machinery and equipment,
and a building addition. In 1995, Wisconsin Label also made a direct equity
investment in Dittler Brothers of $3.3 million. The Company's capital
expenditures for 1994 were $2.2 million, primarily for building additions and
remodeling, and machinery and equipment.
    
 
   
For the six months ended June 30, 1997 capital expenditures, principally for
machinery and equipment, were $2.4 million and investment for the Dittler
Brothers joint venture was $470,000 compared to $2.5 million and $350,000,
respectively, for the six months ended June 30, 1996.
    
 
Since 1994, Wisconsin Label has renegotiated loans annually to accommodate the
growth of its business and reflect market interest rates. Net cash provided by
financing activities in 1996 was $1.5 million which was used to fund capital
expenditures. In 1995, net cash provided by financing activities was $6.6
million which was primarily used to fund investing activities. In 1995, the
purchase of Voxcom and other equity investments amounted to $3.6 million,
capital expenditures were $2.8 million and the balance was used to fund
operating activities. In 1994, net cash provided by financing activities was
$2.3 million and was used primarily for capital expenditures.
 
ST. LOUIS LITHO
 
OVERVIEW
 
St. Louis Litho was founded in 1921 and specializes in the production of high
quality, foil-laminated and metallized labels and wraps for use in the liquor,
trading card, candy and cigar industries.
 
Sales to the liquor industry represented 81% of sales in 1996. The domestic
liquor market is mature and has experienced a slight decline in sales over the
past 10 years, according to the Distilled Spirits Council of the United States.
While the overall liquor market has declined, a number of premium brands have
experienced growth in sales, some of which are customers of St. Louis Litho.
Partially in response to declining domestic sales, St. Louis Litho has begun to
develop export markets through the use of international brokers. St. Louis Litho
has a customer base that has been relatively stable for a number of years. In
some cases, these customers have been customers of St. Louis Litho for more than
40 years. In 1996, St. Louis Litho's 10 largest customers accounted for
approximately 52% of total sales.
 
St. Louis Litho's trading card business represented 8.4% of sales in 1996. St.
Louis Litho specializes in hot stamping and embossing for the trading card
market and generally operates as a subcontractor to other trading card printing
vendors who provide printing and coating services to the trading card customer.
Substantially all of the trading card sales of St. Louis Litho are to vendors
who supply Fleer Corp. and Pinnacle Trading Card Company, Inc., leading printers
and coaters of sports trading cards. Prior to November 1996, St. Louis Litho was
contractually committed to work with a trading card printing vendor selected by
its former parent company, Grand Metropolitan. St. Louis Litho terminated its
relationship with this vendor in November 1996 because of the vendor's default
on certain amounts due to St. Louis Litho and the vendor's loss of Fleer Corp.
as a customer. St. Louis Litho is now working with a new primary printing
vendor, Constable-Hodgins Printing Company, Inc. As a result, St. Louis Litho
has re-established its relationship with Fleer Corp., a leading printer and
coater of sports trading cards. The overall sports card market incurred
significant declines in 1995 and 1996 due primarily to work stoppages in
baseball and hockey and due to the saturation of the trading card market by card
producers. St. Louis Litho believes that sales in the sports card industry have
stabilized.
 
Sales of candy box wrappers to Russell Stover Candies, Inc. represented 5.7% of
the sales of St. Louis Litho in 1996, compared to 5.4% in 1995. Sales of premium
cigar box wrappers represented 2.7% of sales in 1996, compared to 1.4% in 1995.
St. Louis Litho currently provides cigar box wrappers to General Cigar Company,
the largest premium cigar company in the United States.
 
St. Louis Litho was acquired by Pet in 1969. In February 1995, Grand
Metropolitan acquired Pet, and the Company became an indirect wholly-owned
subsidiary of Grand Metropolitan. In early 1995, Grand Metropolitan announced
its intention to sell St. Louis Litho together with another specialty printing
division of Grand Metropolitan. In May 1996, 16 months after Grand Metropolitan
announced that St. Louis Litho was for sale, St. Louis Litho was acquired from
Grand Metropolitan in a merger transaction by a financial investor, certain
 
                                       40
<PAGE>
officers and employees and an investment partnership affiliated with Menke
Titolo for $20.3 million. See Note 2 of Notes to financial statements of St.
Louis Litho. St. Louis Litho did not incur significant management or employee
turnover as a result of the sale. Subsequent to its sale, St. Louis Litho has
incurred additional administrative costs, such as management fees, outside audit
and legal fees, and banking and payroll processing charges. In addition St.
Louis Litho has incurred a significant increase in interest expense and
amortization expense attributable to the buyout.
 
   
While St. Louis Litho has generally experienced relatively stable operating
margins on an annual basis, operating margins have fluctuated, and may fluctuate
in the future on a quarterly basis as a result of the ordering patterns,
production demands and marketing decisions of its customers. St. Louis Litho
experiences a modest amount of seasonality in the liquor label business,
primarily related to bottling schedules of its customers. Typically, St. Louis
Litho's sales and operating income are lowest in the fourth quarter of each
calendar year.
    
 
RESULTS OF OPERATIONS
 
   
The following table sets forth selected financial data and data as a percentage
of sales of St. Louis Litho for the periods indicated. The pro forma selected
financial information for the year ended December 31, 1996 and the six months
ended June 30, 1996 assumes the acquisition of St. Louis Litho as of January 1,
1996. Accordingly, operating expenses for the year ended December 31, 1996 and
the six months ended June 30, 1996 have been increased by $777,000 of interest
expense, $89,000 of goodwill amortization expense, $16,000 of stock-based
compensation expense and $50,000 of management fees representing the estimated
amounts of these items for the period January 1, 1996 through May 31, 1996.
    
   
<TABLE>
<CAPTION>
                                          -------------------------------------------------
                                                      YEARS ENDED DECEMBER 31,
                                                    PREDECESSOR                PRO FORMA
                                          --------------------------------  ---------------
IN THOUSANDS                                  1994      %      1995      %      1996      %
                                          --------  -----  --------  -----  --------  -----
<S>                                       <C>       <C>    <C>       <C>    <C>       <C>
Sales                                     $ 23,867  100.0% $ 22,873  100.0% $ 20,304  100.0%
Cost of sales                               16,905   70.8    17,245   75.4    15,153   74.6
                                          --------  -----  --------  -----  --------  -----
Gross profit                                 6,962   29.2     5,628   24.6     5,151   25.4
Operating expenses                           2,283    9.6     2,440   10.7     3,018   14.9
                                          --------  -----  --------  -----  --------  -----
Operating income                             4,679   19.6     3,188   13.9     2,133   10.5
Interest expense                                 -      -         -      -     1,864    9.2
Other income (expense) net                       -      -      (129)  (0.5)        -      -
                                          --------  -----  --------  -----  --------  -----
Income before income taxes                   4,679   19.6     3,059   13.4       269    1.3
Provision for income taxes                   1,945    8.2     1,343    5.9       192    0.9
                                          --------  -----  --------  -----  --------  -----
Net income (loss)                         $  2,734   11.4  $  1,716    7.5  $     77    0.4
                                          --------  -----  --------  -----  --------  -----
                                          --------  -----  --------  -----  --------  -----
Net cash provided by (used in):
  Operating activities                    $  2,412      -  $  2,388      -  $    335      -
  Investing activities                      (2,412)     -      (688)     -       (11)     -
  Financing activities                           -      -    (1,700)     -      (324)     -
 
EBITDA                                       5,528      -     4,043      -     3,275      -
 
<CAPTION>
 
                                             SIX MONTHS ENDED JUNE 30,
                                             PRO FORMA        SUCCESSOR
                                          ---------------  ---------------
IN THOUSANDS                                  1996      %      1997      %
                                          --------  -----  --------  -----
<S>                                       <C>       <C>    <C>       <C>
Sales                                     $ 10,434  100.0% $ 11,215  100.0%
Cost of sales                                7,761   74.4     8,132   72.5
                                          --------  -----  --------  -----
Gross profit                                 2,673   25.6     3,083   27.5
Operating expenses                           1,387   13.3     1,638   14.6
                                          --------  -----  --------  -----
Operating income                             1,286   12.3     1,445   12.9
Interest expense                               932    8.9       923    8.2
Other income (expense) net                      --     --        --     --
                                          --------  -----  --------  -----
Income before income taxes                     354    3.4       522    4.7
Provision for income taxes                     184    1.8       255    2.3
                                          --------  -----  --------  -----
Net income (loss)                         $    170    1.6  $    267    2.4
                                          --------  -----  --------  -----
                                          --------  -----  --------  -----
Net cash provided by (used in):
  Operating activities                    $    341      -  $  1,034      -
  Investing activities                         (11)     -      (233)     -
  Financing activities                        (330)     -      (801)     -
EBITDA                                       1,938      -     2,070      -
</TABLE>
    
 
   
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO PRO FORMA SIX MONTHS ENDED JUNE 30,
1996
    
 
   
SALES.  Sales increased $781,000 or 7.5%, to $11.2 million in the first six
months of 1997 from $10.4 million in the first six months of 1996 primarily due
to increased liquor label sales into the international market, comprised
primarily of sales to customers in the Russian market through a U.S.
distributor. There was also a significant increase in sales of box candy
wrappers associated with a customer's expansion into the Australian market in
1997. These sales increases were partially offset by decreased sales in the
domestic liquor label market primarily due to a reduction in the inventory
requirements of several large customers in the first six months of 1997 as
compared to the prior year. There was little change in the trading card market.
As a result, the growth in the international business more than offset the
decline experienced in the domestic liquor business.
    
 
   
COST OF SALES.  Cost of sales consists of direct labor, raw materials, plant
overhead and depreciation on equipment. Cost of sales increased $371,000, or
4.8%, to $8.1 million for the six months ended June 30, 1997
    
 
                                       41
<PAGE>
   
compared to $7.8 million in the six months ended June 30, 1996. As a percentage
of sales, cost of sales decreased from 74.4% in 1996 to 72.5% for the 1997
period. The decrease in cost of sales as a percentage of sales is due primarily
to the impact of fixed manufacturing overhead costs and increasing sales.
    
 
   
OPERATING EXPENSES.  Operating expenses consist of selling, general and
administrative expenses, amortization of goodwill and stock based compensation
expenses. Selling expenses consist of salaries, incentive payments, travel and
benefit expenses. Administrative expenses include general management salaries
and benefits, management fees, travel, audit fees, legal expenses, 401(k)
expenses, data processing costs and payroll processing costs. Operating expenses
increased $251,000, or 18.1%, to $1.6 million in the first six months of 1997
from $1.4 million in the comparable period in 1996 as a result of added costs,
including higher salaries, employee benefits and legal expenses as well as
audit, bank and payroll processing charges related to operating as a stand alone
business in 1997.
    
 
   
INTEREST EXPENSE.  Interest expense is due to indebtedness incurred in
connection with the acquisition in May 1996. Interest expense decreased $9,000,
or 1%, to $923,000 in the six months ended June 30, 1997 from $932,000 in the
six months ended June 30, 1996. The pro forma adjustment to the six months ended
June 30, 1996 totals $777,000 and represents the estimated interest for the
period had the MBO taken place on January 1, 1996. The decrease of $9,000 is due
to the reduction of total indebtedness during the six months ended June 30, 1997
as compared to same period in 1996.
    
 
   
INCOME TAXES.  St. Louis Litho's effective income tax rate was 48.9% in the six
months ended June 30, 1997 compared to 52.0% for the six months ended June 30,
1996. These effective tax rates exceed St. Louis Litho's marginal combined
federal and state rate of 40% due primarily to the non-deductibility of goodwill
for tax purposes.
    
 
   
NET INCOME.  Net income increased $97,000, or 57.1% to $267,000 in the six
months ended June 30, 1997 from $170,000 in the six months ended June 30, 1996.
As a percentage of sales, net income increased to 2.4% in the six months ended
June 30, 1997 from 1.6% in the comparable period in 1996.
    
 
   
PRO FORMA 1996 COMPARED TO 1995
    
 
SALES.  Sales declined $2.6 million, or 11.2%, to $20.3 million in 1996 from
$22.9 million in 1995 primarily as a result of a decline in St. Louis Litho's
trading card business and, to a lesser extent, a decline in the liquor label
business. The decline in trading card business was attributable to player
strikes in the professional baseball and hockey leagues that occurred in 1995
resulting in significantly reduced demand for sports collectibles, including
sports trading cards. In addition, in 1996, a major customer of St. Louis
Litho's trading card business was purchased by another sports trading card
company which changed certain product specifications and required St. Louis
Litho to re-qualify its trading card business. Finally, in the second half of
1996, St. Louis Litho's former trading card printing vendor lost a major sports
trading card account. St. Louis Litho believes that the decline in the liquor
label business in 1996 was primarily due to the transition of ownership which
was finalized in May 1996 and which caused many customers to defer label orders.
 
COST OF SALES.  Cost of sales decreased by $2.0 million, or 12.0%, to $15.2
million in 1996 from $17.2 million in 1995. As a percentage of sales, cost of
sales decreased to 74.6% in 1996 from 75.4% in 1995. The decrease in cost of
sales was primarily due to reduced sales volume and lower raw material cost as a
result of the implementation of a sheeting operation in 1996 which allowed the
Company to begin producing its own label stock.
 
OPERATING EXPENSES.  Operating expenses increased $578,000, or 23.7%, from $2.4
million in 1995 to $3.0 million in 1996. This increase is primarily due to
increases in administrative and employee benefit expenses. In addition, St.
Louis incurred an expense of $258,000 in 1996 in connection with the default on
amounts due to St. Louis Litho by its former trading card printing vendor. These
expenses were offset in part by decreases in depreciation expense and incentive
compensation in 1996. Pro forma amortization expenses increased $214,000 in 1996
as a result of the amortization of goodwill arising from the acquisition in May
1996.
 
INTEREST EXPENSE.  Interest expense increased to $1.9 million in 1996 primarily
due to indebtedness incurred as a result of the acquisition in May 1996.
 
                                       42
<PAGE>
INCOME TAXES.  St. Louis Litho's effective income tax rate was 71.4% in 1996
compared to 43.9% in 1995. In 1996, St. Louis Litho's effective tax rate
exceeded its marginal combined federal and state rate of 40% due primarily to
the fact that amortization of goodwill incurred in connection with the
acquisition was not deductible for tax purposes.
 
NET INCOME.  Net income was $77,000 in 1996 compared to net income of $1.7
million in 1995. As a percentage of sales, net income decreased to 0.4% in 1996
from 7.5% in 1995.
 
1995 COMPARED TO 1994
 
SALES.  Sales decreased $994,000, or 4.2%, to $22.9 million in 1995 compared to
$23.9 million in 1994, primarily due to a decline in liquor label sales in 1995
after the announcement by Grand Metropolitan of its intention to sell St. Louis
Litho. 1995 sales were also negatively impacted compared to 1994 due to product
introductions by two major customers in 1994 that did not recur in 1995. Sales
of sports trading cards also declined in 1995 primarily due to the player
strikes in the professional baseball and hockey leagues that occurred in 1995
and the resulting decline in sales of sports collectibles, including sports
trading cards, and the saturation of the sports card market.
 
COST OF SALES.  Cost of sales increased $340,000, or 2.0%, to $17.2 million in
1995 from $16.9 million in 1994. As a percentage of sales, cost of sales
increased to 75.4% in 1995 from 70.8% in 1994. This increase was primarily due
to higher direct labor and raw material costs associated with jobs produced in
1995 and to lower average selling prices on trading card jobs, as a result of
more competitive pricing in the marketplace in 1995.
 
OPERATING EXPENSES.  Operating expenses increased $157,000, or 6.9%, to $2.4
million in 1995 from $2.3 million primarily related to higher employee benefit
cost. The higher benefit costs were the result of the change in ownership when
Pet was acquired by Grand Metropolitan in February 1995 as Grand Metropolitan
billed a higher cost to St. Louis Litho for employee benefit programs.
 
OTHER INCOME (EXPENSE) - NET.  Other income (expense) - net included a $219,000
net expense for obsolete assets in connection with the sale of Pet to Grand
Metropolitan in February 1995, offset by $90,000 in interest income received
from Grand Metropolitan.
 
INCOME TAXES.  Prior to the acquisition of St. Louis Litho in May 1996, income
taxes were allocated to St. Louis Litho by Pet. The effective income tax rates
for such allocations were 41.6% in 1994 and 43.9% in 1995.
 
NET INCOME.  Net income decreased $1.0 million, or 37.2%, to $1.7 million in
1995 from $2.7 million in 1994. As a percentage of sales, net income decreased
to 7.5% in 1995 from 11.4% in 1994.
 
LIQUIDITY AND CAPITAL RESOURCES
 
The following table sets forth selected information from St. Louis Litho's
statement of cash flows for the periods indicated.
 
   
<TABLE>
<CAPTION>
                                     ----------------------------------------------------------------------------
                                     TWELVE MONTHS ENDED                    PERIOD FROM
                                                            PERIOD FROM    JUNE 1, 1996
                                         DECEMBER 31,        JANUARY 1,       THROUGH     ONE MONTH   SIX MONTHS
                                         PREDECESSOR        1996 THROUGH   DECEMBER 31,   ENDED JUNE  ENDED JUNE
                                     --------------------   MAY 31, 1996       1996        30, 1996    30, 1997
                                       1994       1995      PREDECESSOR      SUCCESSOR    SUCCESSOR    SUCCESSOR
                                     ---------  ---------  --------------  -------------  ----------  -----------
IN THOUSANDS
<S>                                  <C>        <C>        <C>             <C>            <C>         <C>
Net cash provided by (used in)
 operating activities                $   2,412  $   2,388       $      28      $    (373)  $    (367)   $   1,034
Net cash used in investment
 activities                             (2,412)      (688)            (28)       (20,493)    (20,493)        (233)
Net cash provided by (used in)
 financing activities                        -     (1,700)              -         20,866      20,866         (801)
</TABLE>
    
 
St. Louis Litho's principal source of liquidity historically has been cash flow
from operating activities. St. Louis Litho generated sufficient cash for the
years 1994, 1995 and five months ended May 31, 1996 to acquire $3.2 million in
equipment and transfer the remaining $2.7 million in cash as well as pay a $1.7
million cash dividend to its parent company.
 
                                       43
<PAGE>
In connection with the acquisition of St. Louis Litho for $20.3 million in May,
1996, St. Louis Litho incurred approximately $18.1 million of indebtedness, of
which all of the remaining $17.5 million principal and accrued interest
outstanding (plus certain prepayment fees) will be repaid from the net proceeds
of this Offering. See "Use of Proceeds." Subsequent to the acquisition in May
1996, St. Louis Litho has paid $1.5 million in interest on indebtedness and
$750,000 in repayments of principal on long-term debt.
 
   
In the six months ended June 30, 1997, cash generated from operations amounted
to $1,034,000 and was used for capital additions in the amount of $233,000 and
to pay down the debt of $801,000.
    
 
   
CALOPTICAL
    
 
OVERVIEW
 
CalOptical manufactures and distributes specialized rigid eyewear packaging,
including decorative and highly functional eyeglass and sunglass cases and
accessories.
 
   
CalOptical sells its products to more than 15,000 independent opticians,
optometrists and opthamologists, national optical chains, retail chains, HMOs
and other non-optical customers. CalOptical's two largest customers accounted
for approximately 26% and 11% of CalOptical's sales in the year ended December
31, 1996 and 19% and 12% of sales in the six months ended June 30, 1997. See
"Risk Factors - Dependence on Key Customers; Absence of Long-Term Contracts with
Customers" and "Business - Sales and Marketing."
    
 
While CalOptical has generally experienced relatively stable operating margins
on an annual basis, operating margins have fluctuated, and may in the future
fluctuate, on a quarterly basis as a result of product mix and the timing and
number of orders by large customers. In addition, CalOptical generally realizes
lower gross margins from sales to its larger retail customers. However,
management believes that it can realize higher operating margins as a result of
the spreading of certain fixed expenses over increased sales to these customers.
CalOptical experiences a modest amount of seasonality leading to lower sales and
operating income, primarily related to the larger number of holidays, in the
fourth calendar quarter.
 
In 1992, CalOptical granted performance based stock options to Larry Nathanson,
its president and chief executive officer. Compensation expense with respect to
such options is recognized as the options vest upon attainment of certain
performance criteria. No additional options will vest after June 1997.
Accordingly, CalOptical will not incur any additional compensation expense
relating to these options after that time.
 
                                       44
<PAGE>
   
RESULTS OF OPERATIONS
    
 
The following table sets forth selected financial data of CalOptical and data as
a percentage of sales for the periods indicated.
   
<TABLE>
<CAPTION>
                                          -------------------------------------------------
                                                      YEARS ENDED DECEMBER 31,
IN THOUSANDS                                 1994       %     1995       %     1996       %
                                          -------  ------   ------  ------   ------  ------
<S>                                       <C>      <C>      <C>     <C>      <C>     <C>
Sales                                     $11,248   100.0%  $13,775  100.0%  $15,664  100.0%
Cost of sales                               6,987    62.1    8,828    64.1    9,953    63.5
                                          -------  ------   ------  ------   ------  ------
Gross profit                                4,261    37.9    4,947    35.9    5,711    36.5
Operating expenses                          3,571    31.8    4,166    30.2    4,750    30.4
                                          -------  ------   ------  ------   ------  ------
Operating income                              690     6.1      781     5.7      961     6.1
Interest expense                              462     4.1      457     3.3      432     2.7
                                          -------  ------   ------  ------   ------  ------
Income before income taxes and
 extraordinary item                           228     2.0      324     2.4      529     3.4
Provision for income taxes                     72     0.6      158     1.2      231     1.5
                                          -------  ------   ------  ------   ------  ------
Income before extraordinary item              156     1.4      166     1.2      298     1.9
Extraordinary item                              -       -        -       -       58     0.4
                                          -------  ------   ------  ------   ------  ------
Net income                                $   156     1.4   $  166     1.2   $  240     1.5
                                          -------  ------   ------  ------   ------  ------
                                          -------  ------   ------  ------   ------  ------
Net cash provided by (used in):
  Operating activities                    $   817       -   $  427       -   $1,128       -
  Investing activities                       (114)      -     (305)      -     (258)      -
  Financing activities                       (678)      -        3       -   (1,020)      -
 
EBITDA                                      1,433       -    1,601       -    1,860       -
 
<CAPTION>
 
                                             SIX MONTHS ENDED JUNE 30,
IN THOUSANDS                                1996       %     1997       %
                                          ------  ------   ------  ------
<S>                                       <C>     <C>      <C>     <C>
Sales                                     $7,427   100.0%  $8,982   100.0%
Cost of sales                              4,739    63.8    5,694    63.4
                                          ------  ------   ------  ------
Gross profit                               2,688    36.2    3,288    36.6
Operating expenses                         2,302    31.0    2,721    30.3
                                          ------  ------   ------  ------
Operating income                             386     5.2      567     6.3
Interest expense                             237     3.2      137     1.5
                                          ------  ------   ------  ------
Income before income taxes and
 extraordinary item                          149     2.0      430     4.8
Provision for income taxes                    78     1.1      190     2.1
                                          ------  ------   ------  ------
Income before extraordinary item              71     0.9      240     2.7
Extraordinary item                             -       -        -       -
                                          ------  ------   ------  ------
Net income                                $   71     0.9   $  240     2.7
                                          ------  ------   ------  ------
                                          ------  ------   ------  ------
Net cash provided by (used in):
  Operating activities                    $  483       -   $1,047       -
  Investing activities                      (129)      -     (250)      -
  Financing activities                      (504)      -     (797)      -
EBITDA                                       816       -    1,315       -
</TABLE>
    
 
   
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
    
 
   
SALES.  Sales are comprised of gross sales less freight and discounts. Sales
increased $1.6 million, or 20.9%, to $9.0 million in the six months ended June
30, 1997 from $7.4 million in the six months ended June 30, 1996. This increase
was primarily due to sales to new customers and an increase in sales to existing
customers. Sales to CalOptical's two largest customers represented 19% and 12%
of sales in the six months ended June 30, 1997 compared to 27% and 12% of sales
in the six months ended June 30, 1996.
    
 
   
COST OF SALES.  Cost of sales includes raw materials, direct labor and materials
and indirect factory and other overhead. Cost of sales increased to $5.7 million
in the six months ended June 30, 1997 compared to $4.7 million in the six months
ended June 30, 1996. As a percentage of sales, cost of sales decreased to 63.4%
in the six months ended June 30, 1997 from 63.8% in the comparable period the
prior year. This percentage decrease was primarily the result of the impact of
fixed overhead costs and increasing sales.
    
 
   
OPERATING EXPENSES.  Operating expenses consist of selling, general and
administrative expenses, amortization of goodwill and stock based compensation
expense. Operating expenses increased $419,000, or 18.2%, to $2.7 million in the
six months ended June 30, 1997 from $2.3 million in the six months ended June
30, 1996. As a percentage of sales, operating expenses decreased to 30.3% in the
six months ended June 30, 1997 from 31.0% in the six months ended June 30, 1996
primarily as a result of the impact of certain fixed expenses versus increased
sales. The increase in operating expenses in absolute dollars was primarily the
result of an increase in stock based compensation expense from $137,000 to
$413,000. Compensation expense for stock options is measured as the excess, if
any, of the estimated fair value of the stock underlying the option, at the
measurement date of the vested stock options earned in the period, over the
amount an employee must pay to acquire the stock. Such stock based compensation
expense will terminate upon consummation of the Offering.
    
 
   
INTEREST EXPENSE.  Interest expense decreased $100,000, or 42.2%, to $137,000 in
the six months ended June 30, 1997 from $237,000 in the six months ended June
30, 1996 as a result of the refinancing of certain subordinated long-term debt
with a lower interest bank note in September 1996.
    
 
                                       45
<PAGE>
   
INCOME TAXES.  CalOptical's effective income tax rate was 44.2% in the six
months ended June 30, 1997 compared to 52.3% in the six months ended June 30,
1996. The reduction in the tax rate was primarily the result of the reduced
effect of non-deductible expenses, primarily related to the amortization of
goodwill, on pre-tax income.
    
 
   
NET INCOME.  Net income increased $169,000 to $240,000 in the six months ended
June 30, 1997 from $71,000 in the six months ended June 30, 1996. As a
percentage of sales, net income was 2.7% in the six months ended June 30, 1997
as compared to 0.9% in the six months ended June 30, 1996.
    
 
   
1996 COMPARED 1995
    
 
   
SALES.  Sales increased $1.9 million, or 13.7%, to $15.7 million in the year
ended December 31, 1996 from $13.8 million in the year ended December 31, 1995.
The increase was primarily due to the increase in sales to existing customers
and, to a lesser extent, sales to new customers. In October 1995, CalOptical
terminated a distributor that represented 4% of sales for the year ended
December 31, 1995. For the year ended December 31, 1996, direct sales to
customers in the territories previously served by this distributor represented
4% of sales.
    
 
   
COST OF SALES.  Cost of sales was $10.0 million in the year ended December 31,
1996 compared to $8.9 million in the previous year. As a percentage of sales,
cost of sales decreased to 63.5% in the year ended December 31, 1996 from 64.1%
in the comparable period of the prior year. This decrease in percentage terms
was the result of a higher proportion of sales to higher margin independent
eyecare professionals.
    
 
   
OPERATING EXPENSES  Operating expenses increased $584,000, or 14.0%, to $4.8
million in the year ended December 31, 1996 from $4.2 million in the year ended
December 31, 1995. This increase was primarily the result of audit expenses and
an increase in stock based compensation expense from $256,000 in the year ended
December 31, 1995 to $314,000 for the year ended December 31, 1996, as well as
increased advertising and marketing expenses. As a percentage of sales,
operating expenses increased to 30.4% in the year ended December 31, 1996 from
30.2% in the year ended December 31, 1995.
    
 
   
INTEREST EXPENSE.  Interest expense decreased $25,000, or 5.5%, to $432,000 in
the year ended December 31, 1996 from $457,000 in the year ended December 31,
1995 as a result of the refinancing in September 1996 of certain subordinated
long term debt with a lower interest bank note. This resulted in an
extraordinary loss of $96,000 as a result of writing off the remaining debt
issuance costs and unamortized debt discount. See "Extraordinary Item" below.
    
 
   
INCOME TAXES.  CalOptical's effective income tax rate was 43.7% in the year
ended December 31, 1996 compared to 48.8% in the year ended December 31, 1995.
The reduction in the tax rate was primarily the result of the reduced effect of
non-deductible expenses, primarily related to the amortization of goodwill, on
pre-tax income.
    
 
   
EXTRAORDINARY ITEM.  In September 1996 CalOptical repaid certain subordinated
notes and recorded the extraordinary loss of $58,000 (net of income tax benefit
of $38,000).
    
 
   
NET INCOME.  Net income increased $74,000 to $240,000 in the year ended December
31, 1996 from $166,000 in the year ended December 31, 1995. As a percentage of
sales, net income increased to 1.5% in the year ended December 31, 1996 compared
to 1.2% in the comparable period in the prior year. Before extraordinary item,
net income increased $132,000 from $166,000 to $298,000, and as percentage of
sales, net income before extraordinary item increased to 1.9% from 1.2%.
    
 
   
1995 COMPARED 1994
    
 
   
SALES.  Sales increased $2.5 million, or 22.5%, to $13.8 million in 1995 from
$11.2 million in 1994. The increase was primarily due to an increase in sales to
existing customers and, to a lesser extent, sales to new customers.
    
 
                                       46
<PAGE>
   
COST OF SALES.  Cost of sales increased to $8.8 million for 1995 compared to
$7.0 million for the previous year. As a percentage of sales, cost of sales
decreased to 64.1% in 1995 from 62.1% in 1994. This percentage increase was the
result of lower than average selling prices and a higher percentage of sales to
lower margin customers.
    
 
   
OPERATING EXPENSES  Operating expenses increased $595,000, or 16.7%, to $4.2
million in 1995 from $3.6 million in 1994. The increase was primarily the result
of increased stock based compensation expense and increased advertising and
marketing expenses. Also, during 1995 CalOptical wrote off accounts receivable
and incurred legal expenses amounting to $275,000 related to a distributor who
was subsequently terminated. As a percentage of sales, operating expenses
decreased to 30.2% in 1995 from 31.8% in 1994 primarily as a result of the
impact of fixed overhead costs versus increased sales.
    
 
   
INTEREST EXPENSE.  Interest expense decreased $5,000, or 1.1%, to $457,000 for
1995 from $462,000 for 1994. During 1995, long-term debt interest expense was
reduced due to principal repayments. Short-term debt expense increased in 1995
due to increased working capital required by growth in sales. Interest rates
remained the same.
    
 
   
INCOME TAXES.  CalOptical's effective income tax rate was 48.8% in the year
ended December 31, 1995 compared to 31.6% in the year ended December 31, 1994
due primarily to, in 1994, reversing certain deferred income tax asset valuation
allowances related to prior net operating losses which were utilized in 1994.
    
 
   
NET INCOME.  Net Income increased $10,000 to $166,000 in the year ended December
31, 1995 from $156,000 in the year ended December 31, 1994. As a percentage of
sales, net income decreased to 1.2% in 1995 compared to 1.4% in 1994.
    
 
LIQUIDITY AND CAPITAL RESOURCES
 
CalOptical's principal sources of liquidity have been cash flows from operations
and available borrowings under bank line of credit facilities. The following
table sets forth selected information from CalOptical's statements of cash flows
for the periods indicated.
 
   
<TABLE>
<CAPTION>
                                                             -----------------------------------------------------------
                                                                                                  SIX MONTHS ENDED JUNE
                                                                  YEARS ENDED DECEMBER 31,
                                                                                                           30,
IN THOUSANDS                                                       1994         1995        1996        1996        1997
                                                                  -----        -----   ---------       -----   ---------
<S>                                                          <C>          <C>          <C>        <C>          <C>
Net cash provided by operating activities                     $     817    $     427   $   1,128   $     483   $   1,047
Net cash used in investing activities                              (114)        (305)       (258)       (129)       (250)
Net cash provided by (used in) financing activities                (678)           3      (1,020)       (504)       (797)
</TABLE>
    
 
   
From January 1, 1994 through June 30, 1997, CalOptical generated $3.4 million in
cash from operating activities. During this period, $3.9 million of cash was
generated before the impact of changes in operating assets and liabilities, and
$541,000 of cash was used for working capital (excluding cash and current
maturities of long-term debt). Additional working capital changes were
principally related to increases in inventory and increases in accounts
receivable resulting from an increase in sales.
    
 
   
Cash used in investing activities of $927,000 for the above periods was
attributable to equipment, including computer equipment and manufacturing
equipment in 1996, and other capital to support CalOptical's growth, primarily
through purchase of manufacturing and distribution equipment, leasehold
improvements, intellectual property rights, reorganization costs and
expenditures for information technology equipment and software.
    
 
Financing activities for the above periods consisted of the following borrowing
activities.
 
   
On September 30, 1996, CalOptical entered into an agreement with a bank for a
one-year, $2.5 million revolving line of credit. At June 30, 1997 there was
$193,000 outstanding under the facility. The Company currently expects to repay
amounts outstanding under the facility from proceeds from this Offering. See
"Use of Proceeds."
    
 
   
On September 30, 1996, CalOptical obtained a $730,000 bank term note. This
financing replaced a $730,000 14% subordinated note due October 1997. At June
30, 1997, there was $405,000 outstanding on the note with an annual interest
rate of 9.75%. The Company currently expects to repay amounts outstanding under
the note from proceeds from this Offering. See "Use of Proceeds."
    
 
                                       47
<PAGE>
   
From July 1, 1995 through December 31, 1996, CalOptical financed certain
equipment purchases through term financing agreements. The financing agreements
are secured by the related equipment and other assets of CalOptical. As of June
30, 1997 outstanding obligations under term financing agreements with the
various lending institutions totaled $215,000, with a weighted average interest
rate of 9.75%.
    
 
   
CalOptical has provided for deferred tax assets primarily relating to stock
option compensation. At June 30, 1997, the associated asset was $490,000. This
asset would be realized when the stock options were exercised.
    
 
BLAKE PRINTING
 
OVERVIEW
 
Blake Printing operates through two divisions, Blake Printery and Poor Richard's
Press. Blake Printery is a specialty label printer, primarily engaged in
providing labels to the domestic wine industry. Blake Printery also provides
certain high end, value-added commercial printing services. Poor Richard's Press
is the commercial printing division of Blake Printing, specializing in the
production of brochures, promotional materials, digital printing and general
business printing. Sales of the Blake Printery division represented
approximately 59.8% of overall sales in fiscal 1996.
 
Sales by Blake Printing to the wine industry represented approximately 51.5% of
sales in 1996, while Blake Printing's commercial printing business represented
approximately 33.7% of sales. Blake Printing's largest customer accounted for
approximately 11.5% of sales in 1996. See "Risk Factors - Dependence on Key
Customers; Absence of Long-Term Contracts with Customers" and "Business - Sales
and Marketing."
 
While Blake Printing has generally experienced relatively stable operating
margins on an annual basis, operating margins have fluctuated, and may in the
future fluctuate, on a quarterly basis as a result of the ordering patterns,
production demands and marketing decisions of its customers. Blake Printery
experiences a modest amount of seasonality in its wine label business, primarily
related to bottling schedules of its customers. Poor Richard's Press also
experiences some seasonality primarily related to the holidays of governmental
and educational institutions. Typically, Blake Printing's sales and operating
income are lowest in the fourth quarter of each calendar year.
 
Blake Printing experiences some fluctuations in the cost of certain of its raw
materials, salaries, employee benefits and other general and administrative
costs. Blake Printing is generally able to offset these increases by modifying
its operations. The ability of Blake Printing to adjust selling prices is
limited by competitive pressures in its market areas.
 
RESULTS OF OPERATIONS
 
The following table sets forth selected financial data of Blake Printing and
data as a percentage of sales for the periods indicated.
 
   
<TABLE>
<CAPTION>
                                              -----------------------------------------------------------------------------
                                                         YEARS ENDED DECEMBER 31,               SIX MONTHS ENDED JUNE 30,
IN THOUSANDS                                     1994      %     1995      %     1996      %     1996      %    1997      %
                                              -------  -----  -------  -----  -------  -----  -------  -----  ------  -----
<S>                                           <C>      <C>    <C>      <C>    <C>      <C>    <C>      <C>    <C>     <C>
Sales                                         $10,663  100.0% $11,139  100.0% $12,362  100.0% $ 6,586  100.0% $6,894  100.0%
Cost of sales                                   7,063  66.2     6,919  62.1     7,523  60.9     3,659  55.6    4,202  61.0
                                              -------  -----  -------  -----  -------  -----  -------  -----  ------  -----
Gross profit                                    3,600  33.8     4,220  37.9     4,839  39.1     2,927  44.4    2,692  39.0
Operating expenses                              3,311  31.0     3,661  32.9     3,902  31.6     1,955  29.7    2,012  29.1
                                              -------  -----  -------  -----  -------  -----  -------  -----  ------  -----
Operating income                                  289   2.7       559   5.0       937   7.6       972  14.7      680   9.9
Interest expense                                  245   2.3       287   2.6       293   2.4       127   1.9      178   2.6
Other income (expense) net                         23   0.2       (15) (0.1 )      43   0.4        22   0.3       30   0.4
                                              -------  -----  -------  -----  -------  -----  -------  -----  ------  -----
Income before income taxes                         67   0.6       257   2.3       687   5.6       867  13.1      532   7.7
Income taxes                                        8   0.1        74   0.7       228   1.8       353   5.3      213   3.1
                                              -------  -----  -------  -----  -------  -----  -------  -----  ------  -----
Net income                                    $    59   0.6   $   183   1.6   $   459   3.7   $   514   7.8   $  319   4.6
                                              -------  -----  -------  -----  -------  -----  -------  -----  ------  -----
                                              -------  -----  -------  -----  -------  -----  -------  -----  ------  -----
Net cash provided by (used in):
  Operating activities......................  $   729     -   $   665     -   $ 2,022     -   $ 1,211     -   $  466     -
  Investing activities......................     (111)    -      (410)    -      (455)    -      (839)    -     (178)    -
  Financing activities......................     (749)    -      (257)    -    (1,532)    -      (359)    -     (223)    -
 
EBITDA                                            966     -     1,424     -     2,059     -     1,415     -    1,297     -
</TABLE>
    
 
                                       48
<PAGE>
   
SIX MONTHS ENDED JUNE 29, 1997 COMPARED TO SIX MONTHS ENDED JUNE 30, 1996
    
 
   
SALES.  Sales increased $308,000, or 4.7%, in the period ended June 29, 1997 to
$6.9 million from $6.6 million in the same period in 1996. The Blake Printery
division increased sales $167,000 or 4.1% to $4.2 million and the Poor Richard's
Press Division increased sales $141,000 or 5.6% to $2.7 million. Blake
Printing's ten largest customers accounted for 37.8% of sales in the first six
months of 1997 compared to 34.5% in the same period in 1996.
    
 
   
COST OF SALES.  Cost of sales consist primarily of production labor, paper,
foil, ink and coatings, and depreciation. Cost of sales increased $543,000, or
14.8%, in the first six months of 1997 to $4.2 million from $3.7 million in the
same period in 1996. As a percentage of sales, cost of sales increased to 61.0%
in the first six months of 1997 from 55.6% in the same period in 1996. The
increase in cost of sales is due to the increase in sales, as well as increases
in depreciation and production labor. Depreciation increased in the period due
to acquisitions of new equipment in the third quarter of 1996. Production labor
increased due to the hiring and training of personnel needed for a third
production shift. These increases were offset by a decrease in paper costs, the
second largest individual component of cost of sales.
    
 
   
OPERATING EXPENSES.  Operating expenses consist of selling, general and
administrative expenses, amortization of goodwill and stock based compensation
expense. Operating expenses increased approximately $57,000 or 2.9% to
approximately $2.0 million in the six months ended June 29, 1997. The increase
in operating expenses in the six months ended June 29, 1997 was primarily due to
increased personnel costs in customer and production support departments. As a
percentage of sales, operating expenses remained relatively stable at 29.1% in
the six months ended June 29, 1997 compared to 29.7% in the six months ended
June 30, 1996.
    
 
   
INTEREST EXPENSE.  Interest expense increased $51,000, or 40.2%, to $178,000 in
the first six months of 1997 from $127,000 in the same period of 1996. Average
outstanding borrowings and average interest rates were $3.8 million and 9.4%
respectively in the first six months of 1997 compared to $2.6 million and 9.9%
respectively in the same period of the prior year.
    
 
   
INCOME TAXES.  Blake Printing's effective tax rate was 40.0% in the six months
end June 29, 1997 compared to 40.7% in the six months ended June 30, 1996.
    
 
   
NET INCOME.  Net income decreased $195,000 to $319,000 in the first six months
of 1997 from $514,000 in the six months ended June 30, 1996. As a percentage of
sales, net income decreased to 4.6% in the six months ended June 29, 1997 from
7.8% in the six months ended June 30, 1996.
    
 
   
YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995
    
 
SALES.  Sales increased $1.2 million, or 11.0%, in 1996 to $12.4 million from
$11.1 million in 1995 as a result of increased sales by both divisions to
significant customers. The majority of this increase was attributed to Blake
Printery, which increased sales 14.5% in 1996 to $7.4 million from $6.5 million
in 1995, with the ten largest customers accounting for $4.1 million of total
sales in 1996 as compared to $3.4 million in 1995.
 
COST OF SALES.  Cost of sales increased $604,000, or 8.7%, in 1996 to $7.5
million from $6.9 million in 1995, but decreased as a percentage of sales to
60.9% in 1996 from 62.1% in 1995. The decrease in cost of sales as a percentage
of sales, was primarily due to continued efforts to increase productivity and
efficiencies. Consequently, productivity measured by chargeable hours per
production employee increased, and paper costs, the second largest component of
cost of sales, continued to decrease as a percentage of sales. In addition, in
1996, Blake Printing entered into favorable purchasing programs with significant
vendors. These improvements were offset somewhat by increased depreciation in
1996 (as compared to 1995) due to increased capital additions placed in service
in the second half of 1995 and 1996.
 
OPERATING EXPENSES.  Operating expenses increased $241,000, or 6.6%, to $3.9
million in 1996 from $3.7 million in 1995. This increase was primarily the
result of consulting, training and education expenses related to capital
expenditures, an increase in sales commissions due to sales growth, a one-time
compensation
 
                                       49
<PAGE>
expense of $100,000 related to a stock option grant to an officer of the Company
and increased employee 401(k) contributions as a result of increased pretax
profits in 1996. As a percentage of sales, operating expenses decreased to 31.6%
in 1996 from 32.9% in 1995.
 
INTEREST EXPENSE.  Interest expense remained consistent at approximately
$300,000 in 1996 and 1995. Average outstanding borrowings increased to $3.0
million in 1996 from $2.6 million in 1995, but average interest rate decreased
on borrowings to 9.9% in 1996 from 10.8% in 1995. As a percentage of sales,
interest expense, net, decreased to 2.4% in 1996 from 2.6% in 1995.
 
INCOME TAXES.  Blake Printing's effective income tax rate was 33.2% in 1996
compared to 28.8% in 1995. The rate increased and is less than 40% primarily due
to the impact of state manufacturing credits.
 
NET INCOME.  Net income increased $276,000 to $459,000 in the year ended
December 31, 1996 from $183,000 in the year ended December 31, 1995. As a
percentage of sales, net income increased to 3.7% in 1996 compared to 1.6% in
1995.
 
YEAR ENDED DECEMBER 31, 1995 COMPARED TO YEAR ENDED DECEMBER 31, 1994
 
SALES.  Sales increased $476,000, or 4.5%, to $11.1 million in 1995 from $10.7
million in 1994. The increase was due primarily to increased sales to
significant customers at Blake Printery which increased sales 21.9% in 1995 to
$6.5 million from $5.3 million in 1994, with the ten largest customers
accounting for $3.4 million of total sales in 1995 as compared to $2.4 million
in 1994. This increase was offset in part by the elimination of certain low
margin activity in 1995 and 1994, including Blake Printing's book publication
unit, which accounted for a decrease in sales of $650,000 in 1995 as compared to
1994.
 
COST OF SALES.  Cost of sales decreased $144,000, or 2.0%, in 1995 to $6.9
million from $7.1 million in 1994 and decreased as a percentage of sales to
62.1% in 1995 from 66.2% in 1994. With the elimination of certain low margin
activity in 1995 and 1994, management focused on increasing the productivity and
efficiency of operations. As a result, cost of sales decreased as a percentage
of sales in 1995 as productivity increased and paper costs decreased as a
percentage of sales.
 
OPERATING EXPENSES.  Operating expenses increased $350,000, or 10.6%, to $3.7
million in 1995 from $3.3 million in 1994. This increase was primarily the
result of a one-time write-off of $157,000 of pre-publication costs in
conjunction with the licensing of certain publications owned by Blake Printing.
As a percentage of sales, operating expenses increased to 32.9% in 1995 from
31.1% in 1994 primarily as a result of the increased payroll costs as a
percentage of sales due to the elimination of certain book publication business
for which Blake Printing elected not to immediately terminate related personnel.
 
INTEREST EXPENSE.  Interest expense increased 17.1% in 1995 to $287,000 from
$245,000 in 1994. Average outstanding borrowings increased to $2.6 million in
1995 from $2.4 million in 1994, but average interest rate increased on such
borrowings to 10.8% in 1995 from 10.3% in 1994. As a percentage of sales,
interest expense, net, increased to 2.6% in 1995 from 2.3% in 1994.
 
INCOME TAXES.  The effective income tax rate was 28.8% in 1995 compared to 11.9%
in 1994. The rate increased and is less than 40% primarily due to the impact of
state manufacturing credits.
 
NET INCOME.  Net income increased $124,000 to $183,000 in 1995 from $59,000 in
1994. As a percentage of sales, net income increased to 1.6% in 1995 compared to
0.6% in 1994.
 
                                       50
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
 
Blake Printing's principal sources of liquidity have been cash flows from
operations and available borrowings under its credit facilities with banks and
capital equipment vendors. The following table sets forth selected information
from Blake Printing's statements of cash flows for the periods indicated:
 
   
<TABLE>
<CAPTION>
                                                    ------------------------------
                                                                        SIX MONTHS
                                                       YEARS ENDED        ENDED
                                                       DECEMBER 31,      JUNE 30,
IN THOUSANDS                                        1994  1995    1996  1996  1997
                                                    ----  ----  ------  ----  ----
<S>                                                 <C>   <C>   <C>     <C>   <C>
Net cash provided by (used in) operating
 activities                                         $729  $665  $2,022  $1,211 $466
Net cash used in investment activities              (111) (410)   (455) (839) (178)
Net cash provided by (used in) financing
 activities                                         (749) (257) (1,532) (359) (223)
</TABLE>
    
 
   
For the six months ended June 29, 1997, Blake Printing generated $466,000 in net
cash from operating activities. During this period, $972,000 of cash was
generated primarily from income, which was reduced by $506,000 of cash used to
fund increases in working capital. For the six months ended June 30, 1996, $1.2
million was generated from operating activities (comprised of $950,000 from
income and $261,000 reduction in working capital).
    
 
   
Cash used in investment activities was attributable to equipment and other
capital assets, primarily the purchase of pressroom, copier and computer
equipment, to support Blake Printing's growth. Capital expenditures for the six
months ended June 29, 1997 were $146,000 compared to $830,000 for the six months
ended June 30, 1996.
    
 
   
Cash provided by financing activities included $462,000 of borrowings under the
Company's line of credit facility, offset by $394,000 used in the payment of
long-term debt and capital lease obligations, resulting in net cash used by
financing activities of $223,000 for the six months ended June 29, 1997. For the
six months ended June 30, 1996, long-term borrowings were $58,000 and repayments
under the line of credit and capital leases were $417,000.
    
 
   
For the six months ended June 29, 1997, Blake Printing financed certain
equipment purchases through long-term financing agreements and capital leases
with a lending institution. The financing agreements are secured by the
equipment and other assets of Blake Printing. As of June 29, 1997, outstanding
obligations under term financing agreements totaled $3.7 million, with a
weighted average interest rate of 9.4%.
    
 
From 1994 through the end of 1996, Blake Printing generated $3.4 million in net
cash from operating activities. During this period, $3.6 million of cash was
generated primarily from net income plus non-cash charges which was reduced by
$191,000 of cash used to fund increases in working capital.
 
Cash used in investment activities from 1994 through fiscal 1996 was
attributable to equipment and other capital assets to support Blake Printing's
growth, primarily in the purchase of electronic prepress, pressroom and copier
equipment, and management information and application systems. Capital
expenditures during this period of $4.9 million (including $3.8 million of
acquisition cost of equipment financed through notes payable with a lending
institution which are non-cash activities and not reflected in net cash used in
investment activities) were funded with working capital, long-term debt and
capital leases.
 
Cash used in financing activities from 1994 through fiscal 1996 included
borrowing activity and, in fiscal 1996, the repayment of $1.1 million in long
term debt and capital lease obligations and the repurchase and retirement of
common stock for $200,000.
 
   
On May 30, 1997, Blake Printing entered into an agreement with a bank for a
two-year revolving line of credit. The credit facility has a maximum borrowing
limit of $1.3 million, of which $1.0 million was drawn at June 29, 1997. The
credit facility is secured by trade accounts receivable and inventory, and has
been personally guaranteed by a stockholder of Blake Printing and a related
partnership. All amounts outstanding under this agreement will be repaid from
the proceeds of this Offering. See "Use of Proceeds."
    
 
From 1993 through March 31, 1997, Blake Printing financed certain equipment
purchases through long-term financing agreements and capital leases with a
lending institution. The financing agreements are secured by the related
equipment and other assets of Blake Printing. As of March 31, 1997, outstanding
obligations under term financing agreements totaled $3.7 million, with a
weighted average interest rate of 9.4%.
 
                                       51
<PAGE>
                                    BUSINESS
 
   
FirstPak, Inc. was formed in February 1996 to create a premier consolidator and
operator of labeling and packaging companies. Through its four Operating
Subsidiaries, the Company manufactures and sells a wide array of packaging
products, including pressure sensitive labels for the consumer products, food
packaging and direct mail industries, glue-applied labels for the liquor, wine,
candy and cigar industries, and specialty rigid packaging for the eyewear
industry. In addition, the Company provides commercial printing services,
foil-stamping for the trading card industry, promotional packaging and
materials, and certain flexible packaging solutions. The Company has more than
1,200 employees and services more than 4,500 customers in a variety of
industries nationwide. For the year ended December 31, 1996, the Company's sales
and operating income (on a pro forma basis) were $142.8 million and $7.5
million, respectively.
    
 
PACKAGING INDUSTRY OVERVIEW
 
The segments of the packaging industry in the United States in which the Company
competes and intends to compete are highly fragmented and consist of more than
4,000 label producers, specialty rigid packaging manufacturers and flexible
packaging manufacturers with estimated combined sales exceeding $20 billion in
1996. These segments are made up predominantly of independently-owned companies
with average annual revenues of less than $25 million. Label producers
manufacture promotional, informational and decorative product labels and
materials that are affixed to packages or other objects for use in a broad range
of consumer, industrial and commercial applications. Rigid packaging consists of
a wide range of structured packaging types, including specialty packaging such
as eyeglass and sunglass cases, jewelry boxes and cosmetics cases. Flexible
packaging includes all non-structured packaging products for a multitude of
consumer and industrial products, including candy wrappers and potato chip bags.
The Operating Subsidiaries are industry leaders in the design and printing of
promotional, informational and decorative labels and materials and in certain
specialty areas within the rigid packaging segment of the packaging industry.
The Company also operates to a limited extent in the flexible packaging segment,
producing specialty packaging for use in certain consumer products.
 
Management believes there are a number of important trends currently underway in
the packaging industry which are driving the need for more value-added
packaging. Because packaging functions as the primary point-of-sale promotional
vehicle for many consumer products, manufacturers and other producers have begun
to place an increasingly greater emphasis on higher value-added labels and other
packaging applications in order to more effectively market their products. In
addition, current demographic trends, such as smaller households and an
increasing number of women in the workplace, are causing changes in consumer
buying habits which in turn are resulting in a demand for different sizes and
types of labels, as well as packaging with more convenient features. Moreover,
recent regulatory and environmental developments, such as changes to food
labeling laws and increased resource reduction and recycling efforts, have led
to numerous consumer package redesigns and demand for new labeling materials.
 
Management also believes that the ongoing emphasis on cost reduction in the food
and other consumer products industries has caused many packaging clients to
engage a limited number of suppliers that can offer high quality and a complete
line of products. To identify those manufacturers that can accommodate a wider
range of packaging needs and maintain quality over large production runs, label
and packaging customers are increasingly requiring manufacturers to demonstrate
their capabilities through a lengthy and expensive qualification process. The
qualification process generally takes several months and involves extensive
trial runs in order to reach agreement on all aspects of the job. However, the
process allows customers to readily identify suppliers that are best qualified
to handle their business and allows label and packaging producers the benefit of
repeat business. It is expected that the shift toward a limited number of
suppliers will favor larger, more diverse packaging companies that can offer a
wide product range and enhanced printing capacity as well as certain technical
strengths.
 
The growing need for more specialized packaging solutions, along with frequent
advances in packaging technology, is placing increased demands on smaller
packaging companies which do not have the resources or the
 
                                       52
<PAGE>
geographic scope to address the needs of a growing number of packaging clients.
As a result, the Company believes that the segments of the packaging industry in
which the Company competes are particularly well-positioned for consolidation.
 
THE LABEL MARKET
 
Label producers manufacture a wide range of products and provide services for
nearly every sector of the economy. Labels are used in both the rigid and
flexible packaging segments, and, in a number of cases (especially in many
flexible packaging applications), the label itself is an integral component of
the package. Label printers are divided among specialties based on either the
products of the label customer (such as labels for the wine and liquor markets)
or the technology used by the label company (pressure sensitive or glue-
applied). According to the Flexographic Technical Association, revenues from the
sale of labels in the United States were approximately $4.5 billion in 1996,
comprised primarily of production identification labels and, to a lesser extent,
information processing labels and specialty labels.
 
Product identification labels, which are used to describe the contents of a
particular package, are generally produced for consumer products markets, such
as the food and beverage industry. Information processing labels include mailing
labels, office labels and bar code labels. Specialty label companies produce
labels for use in specialized applications, including tamper evident seals and
holographic stickers. In fiscal 1996, the Company derived approximately 76% of
its pro forma sales from the sale of product identification labels.
 
Labels are either pressure sensitive or glue-applied. Pressure sensitive labels
adhere to packaging by press-on contact and tend to cost more than glue-applied
labels. Glue-applied labels are less expensive to produce and lend themselves
more readily to high-end visual enhancements such as embossing and foil
stamping.
 
Label producers can be categorized as either converters or label stock
producers. Converters such as the Operating Subsidiaries are generally smaller,
more specialized companies that engage in embossing, printing, stamping and
die-cutting labels to customer specifications. Converters rely on a broad range
of printing techniques, in-house design functions and highly specialized
equipment to differentiate their products. Converters generally service clients
within a limited niche, either geographically or by product type. According to
the Tag and Label Manufacturers Institute, there are approximately 2,500 to
3,000 converters in the United States, many of which are independent producers
with revenues of less than $10 million. The Company believes that label
converters accounted for a significant majority of the revenues of the label
production market in 1996. Label stock producers are typically large companies
that specialize in commodity production of information processing labels, such
as mailing labels, office labels and bar code labels.
 
THE SPECIALTY RIGID PACKAGING MARKET
 
Specialty rigid packaging includes a wide range of structured packaging types,
such as eyeglass and sunglass cases, jewelry boxes and watch boxes, but excludes
such commodity type items as bottles, cans, and generic cardboard boxes. The
Company believes based upon industry data that revenues from the sale of
eyeglass and sunglass cases, jewelry boxes and watch boxes in the United States
were approximately $400 million in 1996. The Company believes most producers and
suppliers in the specialty rigid packaging segment are small to medium size and
service either specific industries, such as the gift, jewelry or eyewear
markets, or select geographic regions. In fiscal 1996, the Company derived
approximately 10% of its pro forma revenues from the sale of specialty rigid
container packaging.
 
THE FLEXIBLE PACKAGING MARKET
 
Flexible packaging includes all non-structured packaging products, from foil to
plastic sacks, and includes such items as candy wrappers and potato chip bags.
According to the Flexible Packaging Association, revenues in the flexible
packaging segment of the overall packaging market exceeded $15 billion in the
United States in 1996. The flexible packaging industry in the United States is
comprised of approximately 650 small to medium size companies with average
annual revenues of less than $25 million. These smaller producers tend to focus
on narrow product lines, often emphasizing custom work, rapid turnaround and
small order processing. The Company has recently expanded its packaging
offerings to include a limited selection of flexible packaging products and
intends to pursue strategic acquisitions or business alliances within the
flexible packaging segment. In fiscal 1996, the Company derived approximately 3%
of its pro forma sales from the sale of flexible packaging.
 
                                       53
<PAGE>
                                    STRATEGY
 
The Company's goal is to become a premier consolidator and operator of label and
packaging companies. The Company intends to take advantage of the consolidation
trend currently underway in the packaging industry by aggressively pursuing
strategic acquisitions of packaging businesses that complement the product
offerings and customer base of each of the Operating Subsidiaries. By
integrating acquisitions into its existing operations and developing the
cross-selling capabilities among its constituent businesses, the Company
believes that it will be able to provide clients with a more comprehensive line
of products and services. The Company plans to conduct its operations with a
decentralized management approach through which individual management teams will
be responsible for the businesses of each of the Operating Subsidiaries. In
addition, a Company-wide team of senior management will provide the Operating
Subsidiaries with strategic oversight and guidance with respect to acquisitions,
financing, marketing and operations. Through this management structure, the
Company believes each of the Operating Subsidiaries will be able to continue to
provide high quality service to local customers as well as access to the
capabilities of a large, diversified packaging firm. The main elements of the
Company's strategy include the following:
 
PURSUE STRATEGIC ACQUISITIONS
 
The Company intends to supplement internal growth through aggressive pursuit of
acquisitions to expand the Company's capacity and customer base, add new
products and services and extend its market reach. The Company's chief executive
officer, as well as other members of senior management, have significant
experience in effecting strategic acquisitions and integrating acquired
businesses. Although there are no formal agreements or letters of intent to
purchase any additional businesses at this time, the Company has evaluated
numerous potential acquisition candidates in the label and packaging segments.
In particular, management has evaluated companies that produce product
identification labels, flexible packaging and specialty rigid packaging for a
broad range of industries including consumer products, food, wine, liquor,
cosmetics and pharmaceuticals. Management believes the acquisition of such
companies will allow it to broaden its product portfolio and provide customers
with a more complete set of packaging solutions. The Company believes that it
can successfully integrate newly acquired operations in order to leverage more
effectively the sales, marketing and distribution capabilities of the Operating
Subsidiaries and such acquired operations.
 
The Company has received a commitment letter from Chase pursuant to which Chase
has agreed, subject to consummation of the Acquisitions and the Offering and to
certain other closing conditions, to provide the Company with a senior revolving
credit facility in the amount of $80.0 million. Up to $60.0 million of the
Facility may be used for acquisitions by the Company. See "Management's
Discussion and Analysis of Pro Forma Financial Condition and Pro Forma Results
of Operations - Liquidity and Capital Resources."
 
CREATE A SINGLE SOURCE FOR VALUE-ADDED PACKAGING AND LABELS
 
The Company intends to offer its customers a single source for their value-added
packaging and label requirements. Management believes the cross-selling
potential of each of the Operating Subsidiaries, as well as of operations that
may be acquired in the future, allow the Company to offer a comprehensive range
of products and services. In particular, the Company's goal is to develop
long-term relationships with customers who seek to consolidate sources of
packaging products and services as a means of achieving higher quality label and
packaging products at more competitive prices. As part of its strategy, the
Company will seek to craft value-added packaging solutions which address the
changing dynamics of the packaging industry. For instance, management believes
that the use of pressure sensitive labels in the wine and beer industries will
increase as production and application technologies become more cost effective.
By offering a comprehensive line of packaging products, the Company will benefit
from this and other changes in the mix of packaging solutions.
 
INCREASE OPERATING EFFICIENCIES
 
The Company believes that it will be able to increase operating efficiency and
achieve certain synergies among its constituent businesses. In particular,
through the implementation of its acquisition strategy, the Company believes
there will be substantial opportunity to increase and optimize plant
efficiencies. The Company also believes that it can reduce costs by purchasing
certain raw materials such as inks and paper on a larger scale. The Company also
plans to centralize the purchasing of medical and general liability insurance,
the banking
 
                                       54
<PAGE>
relationships of its Operating Subsidiaries and future acquired operations as
well as the administration of various employee benefit programs in order to
effect general, administrative and interest savings. In addition, the Company
believes that its multiple-plant capacity will enable it to attract new
customers and retain existing customers.
 
INVEST IN NEW TECHNOLOGIES TO INCREASE OPERATING RESPONSIVENESS
 
The market for label and packaging products is becoming increasingly specialized
as a result of the trends currently underway in the packaging industry. In
response to these trends, packaging customers have begun to frequently redesign
the packaging of their products by upgrading the quality and complexity of the
components or the design of the packaging application. Management believes that
investments in new packaging and labeling technologies will allow the Company to
provide packaging products with features that add value to the package and
provide the Company with added operating flexibility which will allow it to
service its customer far more effectively. Pursuant to this strategy, the
Company is a participant in the Digital Label Alliance, an industry consortium
formed to develop and commercialize digital press technology for the label
industry.
 
PRODUCTS AND SERVICES
 
Through its Operating Subsidiaries, the Company provides a wide array of
packaging products, including pressure sensitive labels for the consumer
products, food packaging and direct mail industries, glue-applied labels for the
liquor, wine, candy and cigar industries, and specialty rigid packaging for the
eyewear industry. In addition, the Company provides commercial printing
services, foil-stamping for the trading card industry, promotional packaging and
materials, and, to a lesser extent, flexible packaging solutions.
 
LABEL PRODUCTION
 
The Company's Wisconsin Label, St. Louis Litho and Blake Printery Operating
Subsidiaries have more than 150 years combined experience in the label
production segment of the packaging industry. These Operating Subsidiaries
together provide a full range of label design and printing products and services
to more than 4,000 customers throughout the United States and abroad. In fiscal
1996, approximately 79% of the Company's pro forma sales were derived from the
sale of labels. The table below sets forth a representative selection of the
leading customers of these three Operating Subsidiaries.
 
   
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
 
WISCONSIN LABEL                      ST. LOUIS LITHO                                 BLAKE PRINTING
- -----------------------------------  ----------------------------------------------  ----------------------------------------------
<S>                                  <C>                                             <C>
Sara Lee Corporation                 Barton Incorporated                             Sebastiani Vineyards, Inc.
Dittler Brothers, Incorporated       Heaven Hill Distilleries, Inc.                  The Wine Group, Inc.
Federal Express Corporation          Russel Stover Candies, Inc.                     The Robert Mondavi Corporation
 (through Graphic Systems,           United Distillers Inc.                          Fetzer Vineyards
 Incorporated)                       Heublein, Inc.                                  C. Mondavi & Sons
Fingerhut Corporation                David Sherman Enterprises, Inc.                 James Mirassou
American Family Publishing           United States Distilled Products                (d/b/a Mirassou Vineyards)
 Corporation                         Company                                         Chateau Julien, Inc.
Graphic Management Corporation       McCormick & Company,                            Sutter Home Winery, Inc.
Trico Solutions, Inc.                Incorporated                                    Schramsberg Vineyards Company
Beatrice Foods Co.                   Seagram Inc.
H.J. Heinz Company                   Constable-Hodgins Printing Co.,
                                     Inc. (for Fleer Corp. and Sky Box
                                     International Incorporated)
</TABLE>
    
 
   
WISCONSIN LABEL.  According to industry sources, Wisconsin Label was the
fifteenth largest U.S. label converter in 1996, based on revenues, specializing
in the production of pressure sensitive labels including consumer products
labels, industrial labels and direct mail labels. Consumer products labels are
used by companies such as Sara Lee Corporation, Beatrice Company and H.J. Heinz
Company to identify, describe or add value to their products. Wisconsin Label is
a primary supplier of thermal direct mail labels to Federal Express.
    
 
                                       55
<PAGE>
In addition to pressure sensitive labels, Wisconsin Label specializes in several
types of niche printing, including commercial sheet fed offset printing of litho
labels, product sheets and folded coupons. Wisconsin Label also provides screen
printing for large banners, original equipment manufacturer decals and
safety/emergency markings for industrial applications.
 
Wisconsin Label owns a 20% equity interest in DB Acquisition Corp., the parent
of Dittler Brothers, a commercial printer servicing the airline, hospitality,
governmental, gaming, retail and commercial printing markets. Wisconsin Label
has also entered into a joint venture with Dittler Brothers, pursuant to which
Wisconsin Label and Dittler Brothers have agreed to jointly undertake certain
specialty printing business. In fiscal 1996, sales to Dittler Brothers accounted
for approximately 7% of the overall sales of Wisconsin Label. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Operating Subsidiaries - Wisconsin Label" and "Certain Relationships and Related
Party Transactions - Certain Transactions Involving the Operating Subsidiaries."
 
Wisconsin Label is a founding partner of the Digital Label Alliance, a
consortium of label converters and printing equipment suppliers that develops
and commercializes innovative digital press technology for the label converting
industry.
 
Approximately 87% of Wisconsin Label's revenues in fiscal 1996 was derived from
the sale of label products and services.
 
ST. LOUIS LITHO.  St. Louis Litho is one of the premier printers of high quality
product labels for the liquor and candy industries, and a leading provider of
specialized printing to the trading card industry. St. Louis Litho possesses
expertise in several processes with which it produces more colorful, detailed
and distinctive labels than those produced by many traditional label printers.
 
St. Louis Litho has special expertise in printing labels on foil-laminated and
metallized paper. The reflective traits of this paper give labels a higher
quality appearance than traditional paper stock. The metallized printing process
is also used to apply significant value-added enhancements to trading cards. St.
Louis Litho is one of a small number of printers in the trading card industry
segment with the capability to print on foil-laminated and metallized paper. St.
Louis Litho also uses other specialized processes such as gold embossing and
bronzing to add additional color and texture to the labels and cards it
produces, thus further enhancing their appearance. St. Louis Litho's production
capabilities also include eight-color printing with special colors for producing
elaborate labels, gloss coating for scuff resistance and precision cutting for
distinctive shapes.
 
Approximately 81% of St. Louis Litho's revenues in fiscal 1996 were derived from
the sale of labels to the liquor industry.
 
BLAKE PRINTING.  Blake Printing is a specialty printer of value-added labels for
the domestic wine industry. The label on a wine bottle is the primary marketing
tool used to differentiate the product of one winery from that of another. Wine
producers are, therefore, highly sensitive to the quality of the labels placed
on their bottles. To meet these customers' demands for distinctive label
products, Blake Printery offers a range of special printing processes designed
to differentiate the wine bottle and enhance its value. These processes include
textured multi-level embossing, intricate foil stamping, die cutting of exotic
shapes and high gloss scuff-resistant coating. In addition, Blake Printing
produces its wine labels on computerized, state-of-the-art printing presses
capable of applying six colors of ink in a single pass.
 
Approximately 51.5% of the revenues of Blake Printing in fiscal 1996 were
derived from the sale of labels to the wine industry.
 
SPECIALTY RIGID PACKAGING
 
   
CALOPTICAL.  The Company believes that CalOptical is the largest manufacturer
and distributor of quality eyeglass and sunglass cases in the United States
based on revenues, and specializes in providing distinctive, value-added
packaging. In the year ended June 30, 1996, CalOptical sold more than 10 million
eyeglass and sunglass cases. CalOptical's philosophy is to create products that
its customers can use to enhance the eyewear they sell. To this
    
 
                                       56
<PAGE>
end, CalOptical brings a fashion oriented approach to its packaging by sourcing
the latest styles, materials and designs. While approximately 75% of its
products are manufactured at its own plant in California, approximately 25% of
its products are imported from China.
 
CalOptical sells its products to more than 15,000 national optical chains,
retail chains, HMOs and independent eye care professionals, as well as several
non-optical customers. The table below sets forth a representative selection of
the leading customers of CalOptical.
 
<TABLE>
<S>                                    <C>
LensCrafters, Inc.                     Kaiser Permanente
Wal-Mart Stores, Inc.                  Lantis Eyewear Corporation
Eye Care Centers of America, Inc.      Price Costco International, Inc.
KMart Corporation                      The Timberland Company
Cases Unlimited, Inc.                  Minneapolis Optical Case Co., Inc.
</TABLE>
 
CalOptical holds two patents: the "Vertical Divider" and the "Nose Block
Insert," both of which provide more protection for eyewear than is commonly
found in traditional eyewear packaging.
 
Substantially all of the revenues of CalOptical in fiscal 1996 were derived from
the sale of eyeglass and sunglass packaging.
 
PRINTING AND PUBLISHING
 
   
Blake Printing, through its Poor Richard's Press division, produces brochures,
promotional material and general business printing. Poor Richard's Press
operates five state-of-the-art commercial printing facilities, each of which is
the largest commercial printer in the community it serves. These operations have
the capability to accept information digitally from customers via the Internet
or a floppy disk, transfer the information to an electronic printer, and print,
assemble and bind the output with no manual manipulation. According to CAP
Ventures, a specialist in the print-on-demand industry, the on-demand digital
printing and imaging sector of the graphic communications industry grew from
approximately $3 billion in 1992 to approximately $8 billion in 1996, a
compounded annual growth rate of 28%. Customers of Poor Richard's Press include
California State University, the Coastal Unified School District and San Luis
Obispo County Government. In fiscal 1996, Blake Printing derived approximately
48.5% of its sales from its printing and publishing business. In addition,
Wisconsin Label prints instant redeemable coupons, direct mail pieces, product
identification tags, and other promotional material. In the year ended December
31, 1996, approximately 8.1% of the pro forma revenues of the Company were
derived from Printing and Publishing services.
    
 
FLEXIBLE PACKAGING
 
Through its American Creative Packaging division, Wisconsin Label has recently
expanded its packaging offerings to include a limited selection of flexible
packaging solutions. American Creative Packaging produces promotional packaging
for sales development, special events and marketing programs. American Creative
Packaging provides FDA-approved materials and white room capability for shrink
wrapping, overwrapping, bandoliering, skin packaging and blister packaging. The
Company intends to pursue strategic acquisitions of, or business alliances with,
packaging companies to enhance its offerings of flexible packaging products and
services. Three percent of the total sales of Wisconsin Label were derived from
flexible packaging in fiscal 1996. There can be no assurance that the Company's
new flexible packaging products will gain market acceptance or that the Company
will be able to complete acquisitions of other flexible container packaging
manufacturers or that any such acquisition, if completed, will be successful.
See "Risk Factors - Risks Associated with Expansion."
 
SALES AND MARKETING
 
The Company's marketing strategy involves providing label and packaging
solutions tailored to each customer's packaging needs. Each Operating Subsidiary
has its own sales personnel, and, as of March 31, 1997, there were a total of 68
salespersons employed by all of the Operating Subsidiaries. The Company intends
to focus sales personnel on cross-selling opportunities resulting from the
integration of the Operating Subsidiaries. In addition, the Company's
incentive-based compensation program encourages employees to build existing
business and generate new business leads.
 
                                       57
<PAGE>
The Company intends to leverage its production resources across all its
Operating Subsidiaries to maximize cost savings, increase productivity and build
the range of products and services it offers its customers. Further, the Company
plans to conduct Company-wide training of its sales personnel to improve sales
skills and to create opportunities for the cross-selling of its products and
services to existing and new customers.
 
Wisconsin Label sells its products through 30 salespersons employed directly by
the Company who are paid a combination of salary and commission. Salespeople
generally sell a broad range of Wisconsin Label products across a geographic
region, though some salespersons sell only specific product lines or to specific
customers. In addition, Wisconsin Label contracts with 17 independent agents
paid on a commission basis.
 
St. Louis Litho employs six sales representatives, each of whom works out of the
Company's St. Louis office and is assigned to a particular account or accounts.
The sales force is compensated through salary and commission. In addition, St.
Louis Litho has contracts with four independent brokers. Senior management of
St. Louis Litho is also directly involved in sales as well as helping build
long-term relationships with customers.
 
The Blake Printery division of Blake Printing markets its products and services
through six commissioned-based, direct salespersons, who each sell an assigned
range of labels. Most large wineries, which comprise a significant portion of
the Company's customer base, require a lengthy qualification process before a
sale to a new customer can be completed. This process, which often takes several
months, involves trial runs in which agreements on all aspects of the job,
including order entry, production and final invoicing are made. After
qualification, however, labels are often reordered on a regular basis for
several years. Poor Richard's Press markets its products and services through
television and direct mail. Brochures, displays, and business trade shows are
also utilized. Larger businesses and governmental agencies are contacted
directly at their place of business by in-house salespersons.
 
CalOptical sells its products to national eye care chains and retailers through
its president and sales managers. In addition, products are sold through direct
sales representatives and direct mail advertising to individual eye care
professionals and small eyeglass and sunglass chains. CalOptical employs three
sales managers, five traveling salespersons and two telemarketers, each of whom
is compensated through salary and commission. CalOptical also has contracts with
eighteen independent traveling salespersons and four independent
representatives, each of whom is compensated through commission only. CalOptical
also utilizes two exclusive distributors who maintain their own sales force,
inventory and distribution facilities in certain territories in the United
States. CalOptical advertises in national trade publications and quarterly large
direct mail campaigns. CalOptical's management also frequently attends trade
shows in the optical and retail industries.
 
The Company generally does not enter into long-term sales contracts with its
customers requiring them to make purchases from the Company. A significant
amount of the Company's work is contracted for on an individual project basis,
with the pricing terms for such projects determined by a bidding process. The
Company's sales are generally evidenced by a purchase order and similar
documentation limited to a specific sale. As a result, a customer from whom the
Company generates substantial revenue in one period may not be a substantial
source of revenue in a subsequent period. In addition, the Company's customers
generally have the right to terminate their relationships with the Company
without penalty and on little or no notice. In the absence of such long-term
contracts, there can be no assurance that these customers will continue to
purchase products from the Company, and thus there can be no assurance that the
Company will be able to maintain a consistent level of sales. The termination of
the Company's business relationship with any of its significant customers or a
material reduction in sales to a significant customer could have a material
adverse effect on the Company's business, financial condition and results of
operations.
 
COMPETITION
 
There is substantial competition in the packaging industry. The Company competes
with distributors and manufacturers of packaging products based in the United
States and, to a limited extent, overseas. Many of the Company's competitors
have greater name recognition, established operating histories and, in many
cases, substantially greater financial and other resources than the Company.
Such competitors may use their economic strength to influence the market to
continue to buy their products which compete with the Company's products.
 
                                       58
<PAGE>
   
Within the pressure sensitive label markets, the Company competes with large
nationally recognized packaging companies as well as numerous smaller local
competitors in this market. Avery Dennison Corporation, Sonoco Products Company
and Lawson Mardon Packaging USA Inc. are among the larger direct competitors,
although the bulk of the competition that the Company faces comes from printing
companies that are smaller than the Company and that operate within particular
niche markets. The Company believes that it is one of the largest producers of
glue-applied wine and liquor labels, although other major label producers for
these industries include Fleming Packaging Corporation and Lawson Mardon
Packaging USA Inc. Within the trading card industry, there are only a few
competitors that have the ability to produce the quantities of metallized paper
needed to compete effectively. Within the optical packaging market, the Company
believes it is the largest manufacturer and distributor of quality eyeglass and
sunglass cases. In addition, there are a small number of smaller regional
competitors who compete with the Company for various regional accounts.
    
 
In addition, new competitors may arise and may develop products which compete
with the Company's products. Moreover, some of the Company's current customers
presently, or in the future may, compete with the Company. There can be no
assurance that new or proprietary technology will not be introduced by an
existing or new competitor that may make the Company's products or services
obsolete. To the extent that the Company is unable to compete successfully
against its existing and future competitors, its business, operating results and
financial condition would be materially adversely affected. See "Risk Factors -
Competition." While the Company believes that it competes effectively within the
packaging industry, there are several factors that could reduce the Company's
ability to compete effectively. The Company cannot assure that additional
competitors with greater resources than the Company will not enter the industry
and compete effectively against the Company or that the consolidation trend in
the industry will continue.
 
PRODUCT DEVELOPMENT
 
   
The Company maintains research and development efforts in all of its Operating
Subsidiaries in order to explore new product ideas and marketing strategies. A
central focus of this effort is to adapt existing products and design new
products to meet the rapidly changing demands of its customers and enable the
Company to become a single source supplier for its customers. Wisconsin Label is
an active participant in the Digital Label Alliance, an industry consortium
formed to develop and commercialize digital press technology for the label
industry. The Poor Richard's Press division of Blake Printing, for example, is
in the forefront of developing electronic printing methods that allow the
Company to accept material for printing digitally. CalOptical is exploring the
potential to distribute products that are complementary to its current optical
case product line, including eyeglass chains, cleaning cloths and reading
glasses, as well as other specialty rigid packaging products.
    
 
The Company's future growth will depend in part on its ability to successfully
develop and manufacture new product offerings that meet the evolving needs of
customers. The development and manufacture of new products depends in part on
the Company's ability to upgrade current production technology and methods as
well as to develop the processes required to create such new products. The
Company may not be successful in anticipating customer needs or in selecting and
developing new and enhanced machinery, technology or processes on a timely
basis. There can be no assurance that the Company will have the financial
resources or will otherwise be able to upgrade its production technology and
methods or that the Company will be able to introduce new products that meet the
future needs of customers. Failure to regularly develop and introduce new
products successfully could materially and adversely impact the Company's future
growth and profitability. See "Risk Factors - Dependence on New Product
Offerings."
 
SOURCES OF SUPPLY
 
The Company generally does not have long-term agreements with its key sources of
supply. The Company believes that it has good relationships with its suppliers
and has alternate sources of supply for its raw materials. Lead times for
materials ordered by the Company can vary significantly and depend on factors
such as the specific supplier, contract terms and demand for particular
materials at a given time. From time to time, the Company has experienced
fluctuations in materials prices. The Company generally has been able to pass
through raw material cost increases to its customers. However, there can be no
assurance that the Company will be able to pass on such costs in the future. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." Shortages or disruptions in the supply of materials, or the
inability of the Company to
 
                                       59
<PAGE>
procure such materials from alternate sources at acceptable prices in a timely
manner, could lead to the loss of customers due to the failure to timely meet
orders which in turn could result in a material adverse effect on the Company's
business, financial condition and results of operations.
 
PERSONNEL AND TRAINING
 
   
As of June 30, 1997, the Company on a combined basis employed 1,190 people on a
full time basis and 103 people on a part time basis. The Company provides
training upon hire, as well as advanced and follow-up training depending on the
technical level of the position. Certain of the Company's employees in its St.
Louis Litho Subsidiary are represented by the Graphic Communications
International Union (the "GCIU"). Two collective bargaining agreements are in
place between the Company and the GCIU. Both of these agreements expire at the
end of July, 1999. The Operating Subsidiaries have never experienced a work
stoppage. The Company believes that its relations with its employees are good.
    
 
Each of the Operating Subsidiaries has implemented various incentive and profit
sharing programs that have been fundamental to the growth and success of the
Operating Subsidiaries' businesses. For example, Wisconsin Label has implemented
a "share-the-profits" program that provides each of its employees with a bonus
based on Wisconsin Label's profitability. The Company intends to continue and
enhance the incentive and profit sharing programs throughout the Company after
the Offering.
 
Following consummation of the Offering, the Company's business will depend to a
significant extent on the efforts and abilities of the executive officers of the
Company and its Operating Subsidiaries. The loss of the services of any one or
more of these persons could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company's business
will also be dependent on its ability to continue to attract and retain
qualified personnel, including key management, in connection with future
acquisitions.
 
                                       60
<PAGE>
FACILITIES
 
   
The Company's corporate headquarters are located in a 4,500 square foot leased
space in San Francisco, California. The lease expires in 1999. In addition, as
of June 30, 1997, the Company maintained material facilities listed below. The
Company believes that these existing facilities, as well as planned facilities,
are adequate for the Company's current and near-term future operations.
    
 
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
   OPERATING                            SQUARE
  SUBSIDIARY           LOCATION         FOOTAGE                 TYPE OF FACILITY
- ---------------  --------------------  ---------  ---------------------------------------------
<S>              <C>                   <C>        <C>
WISCONSIN LABEL  Algoma, WI (1)          135,290  Headquarters and production
                 Algoma, WI (2)            7,500  Wisconsin Screen division headquarters and
                                                    production
                 Palatine, IL (3)          8,000  Distribution
                 Heath, OH (1)            35,000  Label Graphix division headquarters and
                                                    production
                 Peachtree City, GA       42,000  Voxcom division headquarters and production
                 (1)
                 Oak Creek, WI (4)        67,780  American Creative Packaging and Victory
                                                    Graphics division headquarters and
                                                    production
ST. LOUIS LITHO  St. Louis, MO (1)        89,000  Headquarters and production
                 St. Louis, MO (5)        24,000  Warehousing
CALOPTICAL       San Leandro, CA (6)      48,600  Headquarters, production and warehousing
                 Memphis, TN (7)           7,500  Distribution warehousing
BLAKE PRINTING   San Luis Obispo, CA      38,000  Headquarters and production
                 (8)
                 Arroyo Grande, CA           (9)  Poor Richard's Press location
                 (10)
                 Santa Maria, CA (11)        (9)  Poor Richard's Press location
                 Paso Robles, CA (12)        (9)  Poor Richard's Press location
                 Atascadero, CA (13)         (9)  Poor Richard's Press location
</TABLE>
 
- ------------------------
(1)  Facility is owned by Operating Subsidiary.
(2)  Lease expires in March 2001.
   
(3)  Lease expires in August 1998.
    
(4)  Lease expires in March 2004.
(5)  Lease expires in May 1999.
(6)  This facility is covered by two leases, which expire in October 2002 and
April 2003.
(7)  Lease expires in January 1999.
(8)  Facility is leased from an executive officer of Blake Printing. Lease
expires December 2001.
(9)  Total square footage of all four Poor Richard's Press locations is 17,000.
One of these locations is leased from an executive officer of Blake Printing.
(10) Lease expires in June 1998.
(11) Lease expires in December 2001.
(12) Lease expires in December 1997.
(13) Lease expires in July 1998.
 
Certain of the Company's products are manufactured at either a single
manufacturing facility or a limited number of manufacturing facilities. Since
the Company does not currently operate multiple facilities in different
geographic areas, a disruption of the Company's manufacturing operations
resulting from various factors, including human error, government intervention
or a natural disaster such as fire, earthquake or flood, could cause the Company
to be required to cease or limit its manufacturing operations and consequently
could have a material adverse effect on the Company's business, financial
condition or results of operations.
 
ENVIRONMENTAL REGULATIONS
 
Certain of the Operating Subsidiaries use hazardous materials in their
manufacturing operations. As a result, the Company is subject to federal, state
and local regulations governing the storage, use and disposal of such materials.
The use and disposal of hazardous materials involves the risk that the Company
could be required to incur substantial expenditures for preventive or remedial
action, reduction of chemical exposure, or waste treatment or disposal. The
liability in the event of an accident or the costs of such actions could exceed
the Company's resources or otherwise have a material adverse effect on the
Company's business, financial condition or results of operations. The Company is
not aware of any non-compliance with any environmental or hazardous materials
regulation that would have a material adverse effect on the Company's business,
financial condition or results of operations.
 
                                       61
<PAGE>
CAPITAL EQUIPMENT
 
   
As of June 30, 1997, the Company owned and operated the capital equipment listed
below. The Company believes that this existing capital equipment, as well as
planned capital expenditures, are adequate for the Company's current and
near-term future operations.
    
 
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------
OPERATING
SUBSIDIARY         TYPE OF EQUIPMENT                                 UNITS
- -----------------  -------------------------------------------  -----------
<S>                <C>                                          <C>
WISCONSIN LABEL    Narrow web flexographic press                        43
                   14-color narrow web flexographic press                1
                   6-color sheet fed commercial offset
                    printing press                                       2
                   4-color sheet fed commercial offset
                    printing press                                       2
                   Computer workstation for production of
                    artwork                                             39
                   Folder                                                9
                   Saddle stitcher                                       2
                   Cutter                                                8
                   Overwrapper                                          13
ST. LOUIS LITHO    8-color press                                         1
                   6-color press                                         1
                   2-color press                                         1
                   Pre-press work station                                5
                   Digital color proofer                                 1
                   Imagesetter                                           1
                   Imposer                                               1
                   Embosser                                              1
                   Embosser/stamper                                      5
                   Bronzer                                               2
                   Coater                                                1
                   Cutter                                               12
                   Shrink wrap machine                                   2
                   Sheeter                                               1
CALOPTICAL         Fabric cutting machine                                5
                   Sewing machine                                       44
                   Lining machine                                       10
BLAKE PRINTING     6-color press                                         2
                   4-color press                                         1
                   2-color press                                         9
                   1-color press                                         6
                   Drum scanner                                          1
                   Flatbed scanner                                       4
                   Imagesetter                                           1
                   Image assembler                                       1
                   Electronic printer                                    6
                   High-speed copier                                     8
                   Foil/embossing press                                  6
                   Paper cutter                                          7
                   Saddlewire stitcher                                   1
                   Paper folder                                          6
                   Perfect binder                                        1
</TABLE>
 
LEGAL PROCEEDINGS
 
   
None of FirstPak, Inc. or any of Operating Subsidiaries is currently engaged in
any legal proceedings that are expected, individually or in the aggregate, to
have a material adverse effect on the business, financial condition or results
of operations of the Company.
    
 
                                       62
<PAGE>
                                   MANAGEMENT
 
EXECUTIVE OFFICERS, DIRECTORS AND KEY EMPLOYEES
 
The following table sets forth certain information concerning the executive
officers, directors and key employees of the Company following the consummation
of this Offering.
 
   
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NAME                  AGE                    POSITION WITH THE COMPANY
- ------------------    ---     --------------------------------------------------------
<S>                   <C>     <C>
William T. Leith      50      Chairman of the Board of Directors, President and Chief
                               Executive Officer
Vincent F. Titolo     57      Vice Chairman of the Board of Directors
Eric R. Roberts       52      Senior Vice President and Chief Financial Officer
Eric R. Menke         30      Vice President, Business Development
Gary S. Yellin        46      Vice President and Controller
John D. Menke         55      Director
R. Michael Mondavi    53      Director
Terrence R.           46      Chief Executive Officer, Wisconsin Label, and Director
 Fulwiler
Richard C. Blake      49      Chief Executive Officer, Blake Printing, and Director
Ben Kraft             47      Chief Executive Officer, St. Louis Litho
Larry Nathanson       53      Chief Executive Officer, CalOptical
Daniel R. Fulwiler    38      Chief Operating Officer, Wisconsin Label, and Director
Jay K. Tomcheck       37      Vice President of Finance, Wisconsin Label, and Director
</TABLE>
    
 
   
The Company's Restated Certificate of Incorporation and Bylaws provide for three
classes of directors. Messrs. Tomcheck and Daniel Fulwiler are Class I directors
and will serve until the annual meeting of stockholders in 1998. Messrs. John D.
Menke, Mondavi and Blake are Class II directors and will serve until the annual
meeting of stockholders in 1999. Messrs. Titolo, Leith and Terrence Fulwiler are
Class III directors and will serve until the annual meeting of stockholders in
2000. After these directors' initial terms expire, newly elected directors shall
serve for a three-year term or until their successors are duly elected and
qualified.
    
 
The Company's Bylaws provide for a Board of Directors comprised of between five
and eleven members, as determined by the Board of Directors. The Board is
currently set at eight members. After consummation of the Offering, the Board of
Directors will, by resolution, increase the number of directors to nine, thereby
creating one vacancy, which the Company's Bylaws authorize the Board of
Directors to fill. The Company intends to appoint one additional person who is
not an officer or employee of the Company or the Operating Subsidiaries to the
Board of Directors within 90 days after consummation of the Offering and is
required to do so to maintain its listing on the Nasdaq National Market. The
additional independent director will be appointed as a Class I director. In the
event the Company does not add such independent director within 90 days
following the Offering, the Company could be delisted from the Nasdaq National
Market, which could have an adverse effect on the liquidity and price of the
Common Stock.
 
   
Messrs. Terrence Fulwiler, Blake, Daniel Fulwiler and Tomcheck have been
appointed to the Board of Directors in connection with the Acquisitions. Certain
stockholders of the Company will enter into the Stockholders' Agreement pursuant
to which such stockholders will agree to vote for two nominees of the former
shareholders of Wisconsin Label (the "Wisconsin Label Nominees") who will be
nominated to the Board of Directors of the Company at the first annual meeting
of stockholders. The Stockholders' Agreement provides that one of the Wisconsin
Label Nominees will resign from the Board of Directors on or after August 1,
1998 upon the approval and appointment by the Board of Directors of an
additional independent director. In addition, the Company's Restated Certificate
of Incorporation provides that in the event Terrence Fulwiler or either of the
Wisconsin Label Nominees leaves the Board prior to the date that is three years
from the consummation of the Offering in the case of Terrence Fulwiler and prior
to the date that is four years from the consummation of the Offering in the case
of either of the Wisconsin Label Nominees, as a result of death, resignation,
disqualification, removal or certain other causes, the Board will appoint a
nominee of the former Wisconsin Label shareholders to serve out the term of the
departing board member.
    
 
                                       63
<PAGE>
Subject to the employment agreements described below, all executive officers of
the Company hold office at the discretion of the Board of Directors. The Company
intends to appoint a Chief Financial Officer prior to consummation of the
Offering.
 
   
WILLIAM T. LEITH. Effective September 1, 1997, Mr. Leith became Chairman of the
Board of Directors, President and Chief Executive Officer of the Company. From
1980 to 1996, Mr. Leith served in various positions, most recently as President
and Chief Executive Officer of Unisource Worldwide, Inc., then a division of
Alco Standard Corporation. Mr. Leith received a B.B.A. degree from Marshall
University.
    
 
   
VINCENT F. TITOLO. Mr. Titolo has served as Vice Chairman of the Board of
Directors of the Company since September 1997. From February 1996 until
September 1997, Mr. Titolo served as Chairman of the Board of Directors of the
Company. From February 1996 until June 1997 Mr. Titolo was also Chief Executive
Officer of the Company. From June 1989 to the present, Mr. Titolo has been the
Chief Executive Officer of Menke Titolo Capital Corporation, an investment
banking firm specializing in ESOP and management buyouts. Mr. Titolo received a
B.S. degree from Fordham University.
    
 
   
ERIC R. ROBERTS. Mr. Roberts has served as Chief Financial Officer of the
Company since August 1997. From 1968 to August 1997, Mr. Roberts served in
various positions, most recently (since 1978) as a partner of Deloitte & Touche
LLP. Mr. Roberts received both a B.S. degree and an M.B.A. degree from the
University of California, Berkeley. Mr. Roberts is a certified public
accountant.
    
 
ERIC R. MENKE. Mr. Menke has served as Vice President for Corporate Development
of the Company since its founding in February 1996. From March 1995 to the
present, Mr. Menke has been Vice President of Menke Titolo Capital Corporation.
From May 1993 to February 1995, Mr. Menke was an ESOP investment adviser with
Kidder, Peabody & Co., Incorporated. Mr. Menke received a B.A. degree from the
University of Southern California and an M.B.A. from Northwestern University.
 
GARY S. YELLIN. Mr. Yellin has served as Vice President and Controller of the
Company since its founding in February 1996. From 1995 to the present, Mr.
Yellin has been Senior Vice President of Menke Titolo Capital Corporation. From
1991 to 1995, Mr. Yellin was Chief Financial Officer with Sunderland Insurance
Services, Inc. Mr. Yellin received a B.A. from the State University of New York
at Binghamton and an M.B.A. from California State University at Hayward. Mr.
Yellin is a certified public accountant.
 
JOHN D. MENKE. Mr. Menke has been a Director of the Company since its founding
in February 1996. From June 1989 to present, Mr. Menke has been the President of
Menke Titolo Capital Corporation. Mr. Menke received a B.A. degree from the
University of Texas and an L.L.B. from Yale Law School.
 
R. MICHAEL MONDAVI. Mr. Mondavi has served as a Director of the Company since
May 1997. Mr. Mondavi co-founded The Robert Mondavi Corporation in 1966 and
currently serves as its President and Chief Executive Officer. Mr. Mondavi has
served as Chairman of the Wine Institute and of the Napa Valley Vintners
Association and as a director of the American Vineyard Foundation. Mr. Mondavi
received a bachelor's degree from Santa Clara University.
 
TERRENCE R. FULWILER. Mr. Fulwiler has served as Chief Executive Officer of
Wisconsin Label since 1986. Mr. Fulwiler will continue to serve as Chief
Executive Officer of Wisconsin Label and will become a member of the Board of
Directors of the Company following consummation of the Acquisitions and the
Offering. Mr. Fulwiler serves on the Board of Directors of the Tag & Label
Manufacturer's Institute and of Dittler Brothers, Incorporated. Mr. Fulwiler is
also Vice Chairman of Bellin Health Systems, Inc. in Green Bay, Wisconsin. Mr.
Fulwiler received a B.S. degree from the University of Michigan.
 
RICHARD C. BLAKE. Mr. Blake has served as Chief Executive Officer of Blake
Printing since 1972. Mr. Blake will continue to serve as Chief Executive Officer
of Blake Printing and will become a member of the Board of Directors of the
Company following consummation of the Acquisitions and the Offering. Mr. Blake
received a B.S. degree from the University of California at Berkeley.
 
                                       64
<PAGE>
BEN KRAFT. Mr. Kraft has served as President and Chief Executive Officer of St.
Louis Litho since 1987. Mr. Kraft will continue to serve as Chief Executive
Officer of St. Louis Litho following consummation of the Acquisitions and the
Offering. Mr. Kraft is a member of the executive committee and is past president
of the Label Printing Industries of America. Mr. Kraft received a B.S. degree
from Southeast Missouri State University.
 
LARRY NATHANSON. Mr. Nathanson has served as President of CalOptical since 1992.
Mr. Nathanson will continue to serve as Chief Executive Officer of CalOptical
following consummation of the Acquisitions and the Offering. From 1987 to 1992,
Mr. Nathanson served as President of International Apparel Sourcing. Mr.
Nathanson received a B.S. degree from California State University.
 
DANIEL R. FULWILER. Mr. Fulwiler has served as Chief Operating Officer of
Wisconsin Label since 1991. Mr. Fulwiler will continue to serve as Chief
Operating Officer of Wisconsin Label and will become a member of the Board of
Directors of the Company following consummation of the Acquisitions and the
Offering. Mr. Fulwiler received a B.S. degree from the University of Wisconsin
Green Bay.
 
JAY K. TOMCHECK. Mr. Tomcheck has served as Vice President of Finance of
Wisconsin Label since 1991. Mr. Tomcheck will continue to serve as Vice
President of Finance of Wisconsin Label and will become a member of the Board of
Directors of the Company following consummation of the Acquisitions and the
Offering. Mr. Tomcheck received a B.S. degree from the University of Wisconsin
Stevens Point and an M.B.A. from the University of Wisconsin Oshkosh.
 
John Menke is Eric Menke's father. Terrence Fulwiler and Daniel Fulwiler are
brothers. There are no other family relationships among the directors and
executive officers of the Company. Certain executive officers, directors and
employees of the Company are or have in the past been parties to transactions
with the Company or the Operating Subsidiaries. See "Certain Relationships and
Related Party Transactions."
 
COMMITTEES OF THE BOARD OF DIRECTORS
 
Within 90 days after consummation of the Offering, the Company's Board of
Directors will establish an Executive Committee, an Audit Committee, a
Compensation Committee and a Nominating Committee.
 
The Company's Restated Certificate of Incorporation provides that the Company
will form an Executive Committee of the Board of Directors. The responsibilities
of the Executive Committee will include to undertake, between board meetings,
those functions of the Board of Directors regarding the regular operation of the
Company over which the full Board of Directors has authority. The Executive
Committee will consist of not less than three members and, the Company's
Restated Certificate of Incorporation provides that for a period of three years
after the Offering, so long as Terrence Fulwiler continues to serve as a member
of the Board of Directors, Terrence Fulwiler will serve as one of the members of
the Executive Committee.
 
The responsibilities of the Audit Committee will include recommending to the
Board of Directors the independent auditors to be selected to conduct the annual
audit of the books and records of the Company, reviewing the proposed scope of
such audit and approving the audit fees to be paid, reviewing the accounting and
financial controls of the Company with the independent auditors and the
Company's financial and accounting staff, and reviewing and approving
transactions between the Company and its directors, officers and affiliates. It
is currently anticipated that the Audit Committee will be composed of three
independent directors.
 
The Compensation Committee will provide a general review of the Company's
compensation plans to ensure that they meet corporate objectives. The
responsibilities of the Compensation Committee will also include administering
the Company's 1997 Stock Plan, including selecting the officers and salaried
employees to whom awards will be granted. It is currently anticipated that the
Compensation Committee will be composed of three independent directors.
 
The Company's Restated Certificate of Incorporation provides that the Company
will form a Nominating Committee of the Board of Directors. The Nominating
Committee will report to the Board of Directors regarding nominees for directors
to be presented to the Company's stockholders for election. The Company's
Restated Certificate of Incorporation provides that for so long as the former
Wisconsin Label shareholders hold, in the
 
                                       65
<PAGE>
aggregate, not less than 20% of the outstanding Common Stock and a Wisconsin
Label Nominee continues to serve as a member of the Board of Directors, one
member of the Nominating Committee will be a Wisconsin Label Nominee chosen by
the Board of Directors.
 
DIRECTOR COMPENSATION
 
   
Directors who are not officers or employees of the Company or an Operating
Subsidiary are entitled to receive an annual retainer fee of $10,000, plus
$1,000 and reimbursement of expenses for each meeting of the Board of Directors
and $750 and reimbursement of expenses for each committee meeting that they
attend in person. In addition, non-employee directors will receive certain
formula grants of non-qualified stock options under the Company's 1997 Stock
Plan. See "--1997 Stock Plan." Directors who are also officers or employees of
the Company or an Operating Subsidiary will not receive any additional
compensation for serving on the Board of Directors. In connection with his
agreement to join the Board in June 1997, Mr. Mondavi will be granted options to
purchase 20,000 shares of Common Stock of the Company at an exercise price of
$10.50 per share which will vest upon consummation of the Offering.
    
 
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
 
The Company's Restated Certificate of Incorporation limits the liability of
directors to the maximum extent permitted by Delaware law. Delaware law provides
that a corporation's certificate of incorporation may contain a provision
eliminating or limiting the personal liability of a director for monetary
damages for breach of their fiduciary duties as directors, except for liability
(i) for any breach of their duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) for unlawful
payments of dividends or unlawful stock repurchases or redemptions as provided
in Section 174 of the DGCL, or (iv) for any transaction from which the director
derived an improper personal benefit. See "Description of Capital Stock -
Limitation of Liability; Indemnification."
 
The Company's Bylaws provide that the Company shall indemnify its directors and
officers and may indemnify its employees and agents to the fullest extent
permitted by Delaware law. See "Description of Capital Stock - Limitation of
Liability; Indemnification."
 
The Company intends to enter into agreements to indemnify its directors and
officers in addition to the indemnification provided for in the Company's
Restated Certification of Incorporation and Bylaws. These agreements, among
other things, will indemnify the Company's directors and officers for certain
expenses (including attorneys' fees), judgments, fines and settlement amounts
incurred by any such person in any action or proceeding, including any action by
or in the right of the Company, arising out of such person's services as a
director or officer of the Company, any subsidiary of the Company or any other
company or enterprise to which the person provides services at the request of
the Company. The Company believes that these provisions and agreements are
necessary to attract and retain qualified individuals to serve as directors and
officers.
 
At present, there is no pending litigation or proceeding involving any director,
officer, promoter, employee or agent of the Company where indemnification will
be required or permitted. The Company is not aware of any threatened litigation
or proceeding that might result in a claim for such indemnification.
 
EXECUTIVE COMPENSATION
 
   
The predecessor to FirstPak, Inc. was incorporated in February 1996 and has
conducted no substantial operations to date. Effective upon consummation of the
Acquisitions and for the balance of 1997, the Company anticipates that it will,
pursuant to employment agreements, pay compensation based on the following
annual salaries to
    
 
                                       66
<PAGE>
William T. Leith, its Chief Executive Officer, and to the three other
individuals named below who are executive officers of the Company and who the
Company believes will be its three other most highly compensated executive
officers in 1997 (together, the "Named Executive Officers").
 
   
<TABLE>
<CAPTION>
                                                  -------------------------------------------
                                                                                  LONG-TERM
                                                                                COMPENSATION
                                                                                   AWARDS
                                                                                -------------
                                                                                   SECURITIES
                                                           ANNUAL COMPENSATION     UNDERLYING
NAME AND POSITION                                     SALARY($)       BONUS($)     OPTIONS(#)
- ------------------------------------------------  -------------  -------------  -------------
<S>                                               <C>            <C>            <C>
 William T. Leith (1)                                   $50,000(1)        50,000(1)       407,143(2)
   Chairman of the Board of Directors, President
   and Chief Executive Officer
 Vincent F. Titolo                                      300,000              -              -
   Vice Chairman of the Board of Directors
 Eric R. Roberts                                        225,000         50,000         85,000(2)
   Senior Vice President and Chief Financial
   Officer
 Eric R. Menke                                          135,000              -              -
   Vice President, Business Development
 Gary S. Yellin                                         135,000              -         50,000(3)
   Vice President and Controller
</TABLE>
    
 
- ------------------------
   
(1)  Mr. Leith's employment contract provides for an annual base salary for the
first two years of employment of $50,000 which shall increase thereafter to an
amount based on increases in certain operating performance criteria during Mr.
Leith's employment term.
    
   
(2)  Mr. Leith has been granted 257,143 options and Mr. Roberts has been granted
55,000 Options at an exercise price of $3.50 per share (based upon an assumed
initial public offering price of $14.00 per share) which will vest upon
consummation of this Offering. The shares of Common Stock issuable upon exercise
of these options may not be sold for two years from the date of grant. In
addition, Mr. Leith has been granted options to purchase 150,000 shares and Mr.
Roberts has been granted options to purchase 30,000 shares at the initial public
offering price; these options will vest in two equal annual installments
commencing on the first anniversary of the date of grant.
    
   
(3)  Options granted at an exercise price of $5.35 per share (the fair market
value of the Common Stock of FirstPak, Inc. on the date of grant), 25,000 of
which will vest upon consummation of this Offering; the balance of the options
will vest in four equal annual installments commencing on the first anniversary
of the date of grant.
    
 
EMPLOYMENT AGREEMENTS
 
   
Effective as of the consummation of the Offering, the Company will enter into
five-year employment agreements with each of the Named Executive Officers,
except Mr. Menke, with whom the Company will enter into a three-year employment
agreement. Each agreement provides that if, prior to expiration of the term, the
employee dies, becomes permanently and totally disabled, is terminated without
cause or resigns for good reason (as defined therein), the employee will be
entitled to the continuation of base salary payments and health, dental and
vision insurance for a period equal to one-half of the initial term of the
agreement. In addition, each of the agreements provides, subject to certain
exceptions, that if, prior to the expiration of the term, the employee dies,
becomes permanently and totally disabled, is terminated without cause or resigns
for good reason (as defined therein), 100% of the unvested portion of any stock
option or restricted stock held by the employee will accelerate and become
exercisable. The base salaries for each of the above listed individuals are as
follows: Vincent F. Titolo, $300,000; William T. Leith, $50,000; Eric R.
Roberts, $225,000; Eric R. Menke, $135,000; and Gary S. Yellin, $135,000. Each
of these individuals has also entered into a non-compete agreement which
provides that, during the term of their employment with the Company and for a
period of two years following termination thereof (with certain limited
exceptions), the employee will not compete with the Company, assist other
persons or businesses that compete with the Company, or induce any employees of
the Company or its affiliates to engage in such activities or to terminate their
employment. After completion of one year of service with the Company, Mr.
Leith's
    
 
                                       67
<PAGE>
   
annual bonus will be increased from $50,000 to $125,000 and thereafter Mr. Leith
will be entitled to an annual bonus of up to 100% of his base salary based on
meeting certain objectives set forth in the Company's business plan. Upon
completion of the Offering, Mr. Leith will receive a one-time signing bonus of
$225,000 and a payment of $150,000 in return for his contribution to the Company
of an industry analysis prepared by him. Pursuant to Mr. Leith's employment
agreement, Mr. Leith will receive a benefits package in such an amount and of
such nature customary in the industry for an individual with his level of
responsibility. Mr. Roberts' employment agreement provides for bonuses of not
less than $50,000 and $112,500 payable prior to April 15, 1998 and 1999,
respectively; thereafter Mr. Roberts will be entitled to an annual bonus of up
to 100% of his base salary based on meeting objectives set forth in the
Company's business plan. In connection with the Acquisitions, certain officers
and key employees of the Company who were formerly officers of the Operating
Subsidiaries have entered into employment agreements with the Company on
substantially the same terms and conditions, other than initial term and salary,
as the Company's agreements with the Named Executive Officers. See "Certain
Relationships and Related Party Transactions."
    
 
1997 STOCK PLAN
 
   
The Company's 1997 Stock Plan (the "1997 Stock Plan") was approved by the Board
of Directors and the stockholders of the Company in May 1997. The 1997 Stock
Plan provides for the grant of incentive stock options within the meaning of
Section 422 of the Code to employees (including officers and employee directors)
and for the grant of nonstatutory stock options and stock purchase rights
("SPRs") to employees, directors and consultants. An aggregate of 2,000,000
shares of Common Stock have been reserved for issuance pursuant to the 1997
Stock Plan of which options to purchase 865,000 shares of Common Stock will be
outstanding upon consummation of the Offering. Such options will include (a)
options to purchase an aggregate of 522,143 shares of Common Stock at a weighted
average exercise price of $7.39 to be granted to certain officers, directors,
employees and consultants of FirstPak concurrently with the consummation of the
Acquisitions and the Offering and (b) options to purchase an aggregate of
342,857 shares of Common Stock at an exercise price equal to the initial public
offering price set forth on the cover page of this Prospectus to be granted to
certain officers and employees of the Operating Subsidiaries concurrently with
the consummation of the Acquisitions and the Offering. Unless terminated sooner,
the 1997 Stock Plan will terminate automatically in 2007.
    
 
The 1997 Stock Plan may be administered by the Board of Directors or a committee
of the Board of Directors (as applicable, the "Administrator"). The
Administrator has the power to determine the terms of the options or SPRs
granted, including the exercise price of the option or SPR, the number of shares
subject to each option or SPR, the exercisability thereof, and the form of
consideration payable upon such exercise. In addition, the Administrator has the
authority to amend, suspend or terminate the 1997 Stock Plan, provided that no
such action may affect any share of Common Stock previously issued and sold or
any option previously granted under the 1997 Stock Plan.
 
Incentive stock options granted under the 1997 Stock Plan may only be granted to
employees (including officers and directors) of the Company. Nonstatutory stock
options and SPRs may be granted to employees, directors and consultants (as
defined in the 1997 Stock Plan) of the Company. Options and SPRs granted under
the 1997 Stock Plan are not generally transferable by the optionee, and each
option and SPR is exercisable during the lifetime of the optionee only by such
optionee. Options granted under the 1997 Stock Plan that are vested must
generally be exercised within three months after termination of the optionee's
status as an employee, director or consultant of the Company, or within twelve
months after such optionee's termination by death or disability, but in no event
later than the expiration of the option's term. Shares represented by any
unvested portions of the option revert back to the 1997 Stock Plan. SPRs will be
exercisable pursuant to the terms of a restricted stock purchase agreement (the
"Restricted Stock Purchase Agreement"). Once the SPR has been exercised, the
purchaser shall have all rights of a stockholder. Unless the Administrator
determines otherwise, the Restricted Stock Purchase Agreement shall grant the
Company a repurchase option exercisable upon the voluntary or involuntary
termination of the Purchaser's employment with the Company for any reason
(including death or disability). The purchase price for shares repurchased
pursuant to the Restricted Stock Purchase Agreement shall be the original price
paid by the Purchaser and may be paid by cancellation of any indebtedness of the
Purchaser to the Company. The repurchase option shall lapse at a rate determined
by the Administrator.
 
                                       68
<PAGE>
   
The exercise price of all incentive stock options granted under the 1997 Stock
Plan as determined by the Administrator must be at least equal to the fair
market value of the Common Stock on the date of grant. The exercise price of
nonstatutory stock options and SPRs granted under the 1997 Stock Plan is
determined by the Administrator, but with respect to nonstatutory stock options
intended to qualify as "performance-based compensation" within the meaning of
Section 162(m) of the Internal Revenue Code of 1986, as amended, the exercise
price must at least be equal to the fair market value of the Common Stock on the
date of grant. Options may be granted with an exercise price less than fair
market value pursuant to a merger or other corporate transaction. With respect
to any participant who owns stock representing more than 10% of the voting power
of all classes of the Company's outstanding capital stock, the exercise price of
any incentive stock option granted must equal at least 110% of the fair market
value on the grant date and the term of such incentive stock option must not
exceed five years. The term of all other options granted under the 1997 Stock
Plan may not exceed ten years. Until shares are issued upon exercise of options,
optionees have no right to vote or receive dividends or any other rights as
stockholders by virtue of their having been granted options. The 1997 Stock Plan
provides that no employee, director or consultant may be granted, in any fiscal
year of the Company, options and SPRs to purchase more than 400,000 shares of
Common Stock. Notwithstanding this limit, however, in connection with an
employee's, director's or consultant's initial employment, he or she may be
granted options or SPRs to purchase up to an additional 400,000 shares of Common
Stock.
    
 
In addition, the 1997 Stock Plan provides that each director that is not also an
employee of the Company or an Operating Subsidiary shall be automatically
granted an option to purchase 20,000 shares of Common Stock on the later of the
effective date of the plan or the date on which such person first becomes a
non-employee director. Each non-employee director shall also be automatically
granted an option to purchase 5,000 shares on July 1 of each year provided he or
she is then a non-employee director and if, as of such date, he or she shall
have served on the Company's Board of Directors for at least the preceding six
months. Options granted to non-employee directors vest in three annual
installments commencing on the first anniversary of the date of grant, and have
a term of ten years. The exercise price of options granted to non-employee
directors shall be 100% of the fair market value per share of Common Stock on
the date of grant.
 
The 1997 Plan provides that in the event of a merger of the Company with or into
another corporation, or a sale of substantially all of the Company's assets,
each option and SPR shall be assumed or an equivalent option or SPR substituted
for by the successor corporation. If the outstanding options or SPRs are not
assumed or substituted for by the successor corporation, the Administrator shall
provide for the optionee to have the right to exercise the option or SPR as to
all of the optioned stock, including shares which would not otherwise be vested
or exercisable.
 
MANAGEMENT BONUS PLAN
 
   
The Company plans to adopt the Management Bonus Plan (the "Bonus Plan") pursuant
to which the Company may grant bonuses to officers and key employees of up to
100% of each of their annual salaries. Bonuses under the Bonus Plan will be
determined by the Compensation Committee based upon the attainment of
performance goals established by the Compensation Committee.
    
 
                                       69
<PAGE>
              CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
 
   
Set forth below is a description of certain transactions and relationships
between FirstPak, Inc. and certain persons who will become officers and
directors and principal stockholders of the Company following the Acquisitions
and the Offering. In addition, set forth below is certain information regarding
transactions and relationships prior to the Acquisitions between certain of the
Operating Subsidiaries and their respective officers, directors and principal
stockholders.
    
 
   
ORGANIZATION OF FIRSTPAK, INC.
    
 
   
FirstPak, Inc. was founded by certain individuals associated with Menke Titolo
as a holding company to acquire businesses in the label and packaging industry.
In connection with its formation, FirstPak, Inc. issued, after giving effect to
a recapitalization that will take place upon consummation of the Offering, and
subject to certain adjustments discussed below, 1,110,667 shares of Common Stock
in exchange for certain property, including the business plan for FirstPak,
Inc., contributed by the founding stockholders to the following founding
stockholders: Vincent F. Titolo, 444,267 shares; John D. Menke, 444,267 shares;
and Eric R. Menke, 222,134 shares. Subsequent to the Acquisitions and the
Offering, the 1,110,667 shares of Common Stock issued to the founders in
connection with the formation of FirstPak, Inc. will represent in the aggregate
approximately 10.0% of the outstanding shares of Common Stock of the Company.
    
 
For information regarding certain employment arrangements between the Company
and certain directors, officers and key employees, see "Management - Employment
Agreements."
 
THE ACQUISITIONS
 
   
Concurrently with and as a condition to the consummation of the Offering,
FirstPak, Inc. will acquire in four separate transactions all of the issued and
outstanding capital stock of each of the Operating Subsidiaries for an aggregate
of 6,072,012 shares of Common Stock, 220,000 shares of Series A Preferred Stock
and options to purchase 909,193 shares of Common Stock at a weighted average
exercise price of $2.27 per share in a stock-for-stock exchange as follows:
    
 
   
<TABLE>
<CAPTION>
                         ------------------------------------------------------------------
                                                            PERCENTAGE OWNERSHIP OF
                                                             COMMON STOCK OFFER TO
                                          PERCENTAGE         ACQUISITIONS AND THE       VALUE OF
                          SHARES OF   OWNERSHIP OF COMMON     OFFERING (INCLUDING       SHARES OF
                           COMMON       STOCK AFTER THE    COMMON STOCK SOLD IN THE      COMMON
OPERATING SUBSIDIARIES      STOCK        ACQUISITIONS              OFFERING)            STOCK(1)
- -----------------------  -----------  -------------------  -------------------------  -------------
<S>                      <C>          <C>                  <C>                        <C>
Wisconsin Label           3,495,911(2)           48.7%                  31.5%          $48,942,754
St. Louis Litho           1,164,438(3)           16.2                   10.5            16,302,132
CalOptical                  714,467(4)            9.9                    6.4            10,002,538
Blake Printing              697,196(5)            9.7                    6.3             9,760,744
                         -----------             ---                     ---          -------------
    Total                 6,072,012             84.5%                   54.7%          $85,008,168
                         -----------             ---                     ---          -------------
                         -----------             ---                     ---          -------------
</TABLE>
    
 
- ------------------------------
   
(1)  Based upon an assumed initial public offering price of $14 per share.
    
   
(2)  Excludes 220,000 shares of Series A Preferred Stock and options to purchase
515,577 shares of Common Stock at a weighted average exercise price of $3.50 per
share to be issued to the stockholders of Wisconsin Label in connection with the
Acquisitions. The Series A Preferred Stock is redeemable by the Company under
certain circumstances for an aggregate of $11.0 million and has a deemed
aggregate fair value for purposes hereof of $9.4 million. See Note 6, "Capital
Stock," of Notes to Financial Statements of the Company; "Description of Capital
Stock - Preferred Stock." In connection with the Acquisitions, the Company will
use approximately $21.4 to repay substantially all of the indebtedness of
Wisconsin Label incurred prior to the Acquisitions and outstanding on the date
of this Prospectus.
    
   
(3)  Excludes options to purchase 24,258 shares of Common Stock at a weighted
average exercise price of $0.11 per share to be issued to the stockholders of
St. Louis Litho in connection with the Acquisitions. In connection with the
Acquisitions, the Company will use approximately $17.1 million to repay
substantially all of the indebtedness of St. Louis Litho incurred prior to the
Acquisitions and outstanding on the date of this Prospectus.
    
   
(4)  Excludes options to purchase 195,059 shares of Common Stock at a weighted
average price of $0.30 per share to be issued to the stockholders of CalOptical
in connection with the Acquisitions. In connection with the Acquisitions, the
Company will use approximately $2.2 million to repay substantially all of the
indebtedness of CalOptical incurred prior to the Acquisitions and outstanding on
the date of this Prospectus.
    
 
                                       70
<PAGE>
   
(5)  Excludes options to purchase 174,299 shares of Common Stock at a weighted
average price of $1.14 per share to be issued to the stockholders of Blake
Printing in connection with the Acquisitions. In connection with the
Acquisitions, the Company will use approximately $3.7 million to repay
substantially all of the indebtedness of Blake Printing incurred prior to the
Acquisitions and outstanding on the date of this Prospectus.
    
 
   
The 3,495,911 shares of Common Stock to be received by the Wisconsin Label
shareholders in exchange for their shares of Wisconsin Label common stock in
connection with the Acquisitions is based on an assumed initial public offering
price of $14 per share. The actual number of shares of Common Stock to be issued
to the Wisconsin Label shareholders will be adjusted according to a formula that
is based on the initial public offering price. In accordance with the Wisconsin
Label merger agreement, and based upon such formula, the Wisconsin Label
shareholders may receive up to 248,448 additional shares of Common Stock or up
to 103,114 fewer shares of Common Stock, depending upon the initial public
offering price. To the extent the Wisconsin Label shareholders receive such
number of additional or fewer shares of Common Stock, the initial founders of
the Company will retain a correspondingly smaller or larger number of shares of
Common Stock. Assuming an initial public offering price range of $13 to $15 per
share, the initial founders' ownership interest may be adjusted down to a
minimum of 7.8% or up to a maximum of 10.9% of the outstanding Common Stock upon
the consummation of the Offering, in which case the Wisconsin Label shareholders
would own approximately 33.7% or 30.5%, respectively, of the outstanding Common
Stock upon the consummation of the Offering.
    
 
   
The respective purchase prices for each of the Operating Subsidiaries were
determined based on negotiations among FirstPak, Inc. and the individual
Operating Subsidiary. The factors considered by the parties in determining the
purchase prices included, among other things, cash flows, historical operating
results, growth rates, levels of indebtedness and estimated business prospects
of each of the Operating Subsidiaries. With the exception of the number of
shares to be issued to the stockholders of the Operating Subsidiaries and the
issuance of the Series A Preferred Stock to the shareholders of Wisconsin Label,
the acquisition of each of the Operating Subsidiaries is subject to
substantially the same terms and conditions. The agreements relating to the
Acquisitions provide for a portion of the shares of Common Stock to be issued to
the Sellers to be held in escrow after the consummation of the Acquisitions to
satisfy potential obligations of the Sellers in connection with the
Acquisitions.
    
 
   
The Company has filed a registration statement relating to the issuance of the
shares of Common Stock to the Sellers in connection with the Acquisitions. See
"Shares Eligible for Future Sale." In addition, the Company, each of its
directors and officers and the holders of all of the shares, and options or
warrants to purchase shares, of Common Stock that are or will be outstanding
subsequent to the consummation of the Acquisitions and the Offering, and certain
related persons, have agreed with the Underwriters not to (i) offer, pledge,
sell, contract to sell, sell any option or contract to purchase, purchase any
option or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any shares of directly or indirectly, or file
or cause to be filed a registration statement in respect of, Common Stock or
securities convertible into or exercisable or exchangeable for such shares or
any similar securities or (ii) enter into any swap or other agreement that
transfers, in whole or in part, any of the economic consequences of ownership of
any shares of Common Stock for a period of one year (180 days in the case of the
Company) after the date of this Prospectus without the prior written consent of
J.P. Morgan Securities Inc., except (i) that the Company may (a) issue shares of
Common Stock for the purpose of consideration in connection with future
acquisitions and (b) grant options in respect of shares of Common Stock provided
that the recipient of such shares or options agrees to be bound by the terms of
the restrictions set forth above and (ii) for certain other limited exceptions.
In addition, each of the directors and officers of the Company and certain
stockholders of the Company have agreed, for a period of one year after the
expiration of the lock-up period, to sell their shares only in compliance with
the volume limitations set forth in Rule 144 under the Securities Act as in
effect on the date of this Prospectus.
    
 
WISCONSIN LABEL
 
   
In connection with the Acquisitions, Terrence R. Fulwiler, the Chief Executive
Officer and a stockholder of Wisconsin Label, will become a Director of the
Company. Mr. Fulwiler will receive 368,905 shares of Common Stock, options to
purchase 11,531 shares of Common Stock at an exercise price per share equal to
25% of the
    
 
                                       71
<PAGE>
   
initial public offering price and 23,215 shares of Series A Preferred Stock in
exchange for his shares of capital stock of Wisconsin Label in connection with
the Acquisitions. Mr. Fulwiler will enter into a two-year covenant not to
compete and a five-year employment agreement providing for an annual base salary
of $300,000.
    
 
   
In connection with the Acquisitions, Daniel R. Fulwiler and Jay K. Tomcheck, the
Chief Operating Officer and the Vice President of Finance, respectively, and
stockholders of Wisconsin Label, will become Directors of the Company. Messrs.
Daniel Fulwiler and Tomcheck will receive 161,974 and 32,438 shares of Common
Stock, respectively, options to purchase 86,479 and 107,522 shares of Common
Stock, respectively, at an exercise price per share equal to 25% of the initial
public offering price, and 10,193 and 2,044 shares of Series A Preferred Stock,
respectively, in exchange for their shares of capital stock of Wisconsin Label
in connection with the Acquisitions. Each of Mr. Daniel Fulwiler and Mr.
Tomcheck will enter into two-year covenants not to compete and five-year
employment agreements providing for annual base salaries of $155,000 and
$135,000, respectively.
    
 
   
In addition, in connection with the Acquisitions, certain former stockholders of
Wisconsin Label, will be granted options to purchase an aggregate of 310,045
shares of Common Stock of the Company at an exercise price per share equal to
25% of the initial public offering price.
    
 
ST. LOUIS LITHO
 
   
In connection with the Acquisitions, Ben Kraft, the Chief Executive Officer and
a stockholder of St. Louis Litho, will receive 77,991 shares of Common Stock and
options to purchase 9,702 shares of Common Stock at an exercise price of $0.11
per share in exchange for his shares of capital stock of St. Louis Litho. Mr.
Kraft will enter into a two-year covenant not to compete and a five-year
employment agreement providing for an annual base salary of $150,000.
    
 
CALOPTICAL
 
   
In connection with the Acquisitions, Larry Nathanson, the Chief Executive
Officer of CalOptical, will receive 29,722 shares of Common Stock in exchange
for his shares of CalOptical and will also exchange options to purchase 16,407
shares of common stock of CalOptical (representing approximately 21% of the
fully diluted capital stock of CalOptical) at a weighted average exercise price
of $3.59 per share for options to purchase 195,059 shares of Common Stock of the
Company at an exercise price of $0.30 per share. Mr. Nathanson will enter into a
two-year covenant not to compete and a five-year employment agreement providing
for an annual base salary of $250,000.
    
 
BLAKE PRINTING
 
   
In connection with the Acquisitions, Richard C. Blake, the Chief Executive
Officer and a stockholder of Blake Printing, will become a Director of the
Company. Mr. Blake will receive 610,046 shares of Common Stock in exchange for
his shares of capital stock of Blake Printing. Mr. Blake will enter into a
two-year covenant not to compete and a five-year employment agreement providing
for an annual base salary of $200,000. In connection with the Acquisitions,
Michael P. Glavin, an Executive Vice President of Blake Printing, will receive
87,149 shares of Common Stock of the Company in exchange for his shares of Blake
Printing and will exchange options to purchase an aggregate of 40 shares of
common stock of Blake Printing (representing approximately 20% of the
outstanding capital stock of Blake Printing) for options to purchase 174,299
shares of Common Stock of the Company at an exercise price of $1.14 per share.
    
 
R. Michael Mondavi, a Director of the Company, is the President and Chief
Executive Officer of The Robert Mondavi Corporation, a customer of Blake
Printing. In the year ended December 31, 1996, sales by Blake Printing to The
Robert Mondavi Corporation were approximately $450,000.
 
CERTAIN TRANSACTIONS INVOLVING THE OPERATING SUBSIDIARIES
 
WISCONSIN LABEL
 
Wisconsin Label owns a 20% equity interest in DB Acquisition Corp., the parent
of Dittler Brothers, a commercial printer servicing the airline, hospitality,
governmental, gaming, retail and commercial printing markets. Dittler Brothers
is a customer of Wisconsin Label, and Mr. Terrence Fulwiler is a member of the
board
 
                                       72
<PAGE>
of directors of DB Acquisition Corp. In fiscal 1996, sales to Dittler Brothers
accounted for approximately 7% of the overall sales of Wisconsin Label. In
conjunction with its purchase of its interest in DB Acquisition Corp., Wisconsin
Label entered into a joint venture with Dittler Brothers (the "Joint Venture")
to produce certain specialty labels for Dittler Brothers, Wisconsin Label and
their respective affiliates. Wisconsin Label and Dittler Brothers share equally
in profits and losses of the Joint Venture and, subject to certain limitations,
Dittler Brothers has agreed to purchase from Wisconsin Label at least 95% (based
on total dollar volume) of Dittler Brothers' label requirements not sourced from
the Joint Venture. Additionally, Dittler Brothers and Wisconsin Label hold
reciprocal non-exclusive rights to produce and sell certain proprietary
technology of the other and have established a joint selling program to develop
and sell new products and new applications of existing products. Either party
may terminate the Joint Venture without cause upon 90 days' prior written notice
or upon 30 days' prior written notice in the event of a material breach of the
terms and conditions of the Joint Venture. Wisconsin Label and Dittler Brothers
have agreed that, during the term of the Joint Venture and for a period of 18
months following termination thereof, they will not provide any product,
equipment or service competitive or potentially competitive with any product,
equipment or service sold, provided or under development by the other during the
two year period prior to termination of the Joint Venture.
 
   
Wisconsin Label is a party to the DB Acquisition Corp. Shareholders' Agreement
dated October 6, 1995 (the "DB Shareholders' Agreement"). The DB Shareholders'
Agreement places certain restrictions on the ability of Wisconsin Label to
transfer its shares in DB Acquisition Corp. The DB Shareholders' Agreement also
provides for co-sale rights and obligations under certain circumstances with
respect to the shares of DB Acquisition Corp. held by Wisconsin Label. In
addition, DB Acquisition Corp. has a right to call the shares of stock
representing Wisconsin Labels' interest in DB Acquisition Corp. after the
earliest to occur of certain events, including the termination of the Joint
Venture, a change of control in Wisconsin Label and the third anniversary of the
DB Shareholders' Agreement. The exercise price of DB Acquisition Corp.'s call
option may be less than the redemption price of $11 million for the Series A
Preferred Stock of the Company to be issued to the former shareholders of
Wisconsin Label in connection with the Acquisitions, which redemption can be
triggered by the exercise of DB Acquisition Corp.'s call option. See
"Description of Capital Stock - Preferred Stock." In addition, under certain
conditions, Wisconsin Label has the right to put such shares back to DB
Acquisition Corp. after the earliest to occur of certain events, including the
fifth anniversary of the DB Shareholders' Agreement, the initial public offering
of DB Acquisition Corp., or any of its subsidiaries, termination of the Joint
Venture or the transfer of shares by management shareholders of DB Acquisition
Corp. representing more than 20% of the outstanding shares of DB Acquisition
Corp. However, under the terms of the DB Shareholders' Agreement, DB Acquisition
Corp is not obligated to honor Wisconsin Label's put right if to do so would
violate the terms of any of DB Acquisition Corp.'s credit facilities. The call
and put options are exercisable at a price determined by a formula based on the
EBITDA of DB Acquisition Corp. and Dittler Brothers over a recent 12-month
period multiplied by five, less total debt outstanding. Dittler Brothers has the
right to terminate the Joint Venture contemporaneously with a call of all of
Wisconsin Label's stock in DB Acquisition Corp. DB Acquisition Corp. has
executed a written waiver of any right to purchase the shares of DB Acquisition
Corp. held by Wisconsin Label that would be triggered by the Acquisitions or the
Offering. DB Acquisition Corp. also has a right of first refusal with respect to
certain transfers by Wisconsin Label of its interest in DB Acquisition Corp.
Pursuant to the Registration Rights Agreement dated October 6, 1995, among DB
Acquisition Corp. and Wisconsin Label, Wisconsin Label has the right to require
DB Acquisition Corp. to register Wisconsin Label's shares of DB Acquisition
Corp. under certain circumstances.
    
 
The DB Shareholders' Agreement also contains a covenant which provides that for
so long as Wisconsin Label is a shareholder of DB Acquisition Corp. and for two
years thereafter, it will not, without the prior written consent of DB
Acquisition Corp., engage in any business that is directly competitive with the
business of DB Acquisition Corp. in the areas of (i) scratch-off instant win
lottery tickets and games used for retail promotion, (ii) airline timetables and
hotel directories, and (iii) direct response printing. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations of the
Operating Subsidiaries - Wisconsin Label," "Business - Products and Services -
Label Production."
 
   
In connection with the acquisition of Wisconsin Label, FirstPak, Inc. will issue
to the stockholders of Wisconsin Label 220,000 shares of Series A Preferred
Stock. The Series A Preferred Stock will be redeemable for
    
 
                                       73
<PAGE>
   
$11 million upon (i) a sale, merger or other business combination for cash or
stock of DB Acquisition Corp., the parent of Dittler Brothers, or of Dittler
Brothers, (ii) the date that is six months after the closing of a firm
commitment underwritten public offering of DB Acquisition Corp. common stock
that represents not less than 20% of the outstanding capital stock of DB
Acquisition Corp. and results in aggregate gross proceeds to DB Acquisition
Corp. in excess of $15 million, (iii) the sale by the Company of (a) not less
than 75% of the shares of DB Acquisition Corp. owned by Wisconsin Label and
result in the receipt of funds (in any amount) to the Company upon such sale or
(b) all or any part of its equity interest in DB Acquisition Corp. pursuant to
which the Company receives not less than $6 million, (iv) the dissolution,
liquidation or winding-up of Dittler Brothers or (v) the exercise of the put or
call options described above as well as certain other call rights held by DB
Acquisition Corp. in connection with Wisconsin Label's interest in DB
Acquisition Corp., the exercise of which, in certain circumstances, must (a) be
with respect to not less than 75% of the shares of DB Acquisition Corp. owned by
Wisconsin Label and the receipt of funds (in any amount) due to the Company upon
such exercise or (b) cause the Company to receive not less than $6 million in
the aggregate pursuant to such exercise. The redemption of the Series A
Preferred Stock may be triggered by events which do not generate any cash
proceeds to the Company or which may generate cash proceeds substantially less
than the redemption price of $11 million. See "Risk Factors - Possible Need for
Additional Financing; Potential Inability to Finance Redemption of Series A
Preferred Stock," "Management's Discussion and Analysis of Pro Forma Financial
Condition and Pro Forma Results of Operations" and "Description of Capital Stock
- - Preferred Stock."
    
 
   
A majority-owned subsidiary of Wisconsin Label leases a building from a limited
liability company owned by certain members of management of Wisconsin Label,
including Messrs. Terrence Fulwiler and Tomcheck. The lease term is ten years
beginning April 1, 1994, with a base annual rent of $150,000. Payment of the
lease is guaranteed by Wisconsin Label. Lease payments in fiscal 1994, 1995 and
1996, and for the six months ended June 30, 1997, were $112,000, $150,000,
$150,000 and $75,000, respectively. A majority-owned subsidiary of Wisconsin
Label leases a printing press from a limited liability company owned by certain
members of management of Wisconsin Label, including Messrs. Terrence Fulwiler,
Daniel Fulwiler and Tomcheck. The lease term is seven years beginning March 1,
1996, with a base annual rent of $173,000. Payment of the lease is guaranteed by
Wisconsin Label. Lease payments in fiscal 1996 and for the six months ended June
30, 1997 were $144,000 and $86,000, respectively. Wisconsin Label leases certain
printing equipment from a partnership of which the partners are also directors
and stockholders of Wisconsin Label. The lease term ends July 13, 1998 and
provides for a base annual rent of $21,000. Lease payments in fiscal 1994, 1995
and 1996, and for the six months ended June 30, 1997, were $53,000, $34,000,
$21,000 and $10,000, respectively. Payment of the base rent is guaranteed by
Wisconsin Label.
    
 
In August 1995, Wisconsin Label purchased all of the outstanding shares of
Voxcom in exchange for shares of common stock of Wisconsin Label and cash.
Stanley Fulwiler, a stockholder of Wisconsin Label, along with Mary Fulwiler,
Jill Truitt, David Good, Jan Fulwiler, Robin Gates and Mark Shadle, owned all of
the capital stock of Voxcom. In connection with the purchase, Stanley Fulwiler,
David Good and Jill Truitt entered into earn-out arrangements pursuant to which
each were entitled to receive shares of common stock Wisconsin Label. Pursuant
to such arrangements, in 1996, Mr. Stanley Fulwiler received 1,113 shares of
common stock of Wisconsin Label and Mr. Good received 1,010 shares of common
stock of Wisconsin Label. No shares were earned in either 1995 or 1997. Ms.
Truitt terminated her employment with Wisconsin Label in 1996 and did not
receive any shares. The earn-out arrangements for Mr. Stanley Fulwiler and Mr.
Good were terminated in June 1997.
 
Wisconsin Label guarantees a $150,000 line of credit of Innovative Packaging
Partners, Inc., a label and packaging company in which it owns a 40% equity
interest.
 
   
In connection with the Acquisitions, Wisconsin Label's equity interest in Media
Solutions, Inc.(at June 30, 1997 negative book value of $185,000), a label
production company in which the former stockholders of Wisconsin Label own a 36%
equity interest, will be transferred to a company owned by the former
shareholders of Wisconsin Label.
    
 
ST. LOUIS LITHO
 
In May 1996, St. Louis Litho was acquired in a merger transaction from its
previous owner by certain of its officers and employees, including Ben Kraft,
the President and Chief Executive Officer of St. Louis Litho,
 
                                       74
<PAGE>
Churchill ESOP Capital Partners ("Churchill") and an investment partnership
affiliated with Menke Titolo for approximately $20.3 million in cash. The
purchase price of $20.3 million and acquisition costs were financed through $3.0
million of contributed equity, $11.5 million of senior debt, $4.6 million of
senior subordinated debt, and a revolving line-of-credit of approximately $2.1
million. In exchange for the contributed equity, St. Louis Litho issued 100,000
shares of common stock to the new stockholders. Mr. Kraft contributed $200,000
in return for the issuance of 6,800 shares of common stock of St. Louis Litho.
An investment partnership associated with Menke Titolo contributed $1.0 million
in return for the issuance of 34,000 shares of common stock of St. Louis Litho.
 
Pursuant to a consulting agreement entered into in connection with the
acquisition, Menke Titolo provides certain management and financial consulting
and advisory services to the St. Louis Litho in return for $10,000 per month.
Payments to Menke Titolo under the consulting agreement from the date of the
buyout through December 31, 1996 and in the three months ended March 31, 1997
were $70,000 and $30,000, respectively. The consulting agreement will be
terminated upon consummation of the Offering.
 
   
In connection with the management buyout, St. Louis Litho issued to Churchill
warrants to purchase 27,701 shares of common stock of St. Louis Litho
(representing approximately 21% of the outstanding capital stock of St. Louis
Litho) at an exercise price of $0.01 per share. Churchill has notified the
Company that it will exercise the warrant concurrently with the consummation of
the Acquisitions and the Offering and will sell in the Offering the 242,593
shares of Common Stock of FirstPak, Inc. to be issued in connection with the
Acquisitions in exchange for the common stock of St. Louis Litho issuable upon
exercise of the warrant. See "Principal and Selling Stockholders."
    
 
CALOPTICAL
 
In July 1992, CalOptical was formed by certain of its current officers and
employees, BW Capital Corporation ("BW Capital") and an investment partnership
affiliated with Menke Titolo to acquire the business of COL. In connection with
the acquisition of COL, CalOptical obtained a total of $3.6 million ($2.5
million in subordinated notes, $200,000 in notes payable and $850,000 in equity)
to finance the acquisition. As part of the acquisition of COL, CalOptical
entered into a non-competition agreement with the former owners of COL that
provides for quarterly payments to the former owners of $94,000 through October
1997.
 
   
Pursuant to a consulting agreement entered into in connection with the
acquisition, Menke Titolo provides certain management and financial consulting
and advisory services to CalOptical in return for $10,000 per month. Payments to
Menke Titolo under the consulting agreement in the twelve months ended December
31, 1994, 1995, 1996, and in the six months ended June 30, 1997, were $120,000,
$120,000, $120,000 and $60,000, respectively. The consulting agreement will be
terminated upon consummation of the Offering.
    
 
   
In connection with the acquisition of CalOptical in October 1992, CalOptical
issued to BW Capital, (i) warrants to purchase 13% of the capital stock of
CalOptical (or approximately 9,945 shares) at an aggregate exercise price of
$97,680 (the "13% Warrant") and (ii) warrants to purchase an additional 10% of
the capital stock of CalOptical (or approximately 7,650 shares) at an exercise
price of $0.01 per share (the "10% Warrant"). Upon consummation of the
Acquisitions, MBR Investment Associates, L.P., a stockholder of CalOptical and
an affiliate of Menke Titolo, will be entitled to purchase the 10% Warrant from
BW Capital for an aggregate purchase price of $30.00. MBR has informed the
Company that it intends to exercise its right to purchase the 10% Warrant
concurrently with the consummation of the Acquisitions and the Offering. Upon
the Acquisitions and its exercise of the 10% Warrant, MBR will receive 90,953
shares of Common Stock of the Company in exchange for the shares of CalOptical
it will receive upon exercise of the 10% Warrant.
    
 
   
BW Capital has informed the Company that it will exercise the 13% Warrant
concurrently with the consummation of the Acquisitions and the Offering and will
sell in the Offering 59,119 of the 136,072 shares of Common Stock of the Company
it will receive in connection with the Acquisitions in exchange for the common
stock of CalOptical issuable upon its exercise of the 13% Warrant. See
"Principal and Selling Stockholders."
    
 
                                       75
<PAGE>
BLAKE PRINTING
 
   
Blake Printing has entered into a line of credit which is guaranteed by Richard
C. Blake, its president and chief executive officer, and a partnership of which
Mr. Blake is the sole partner. The line of credit will be substantially repaid
from the proceeds of this Offering. See "Use of Proceeds." The partnership also
has two installment notes with respect to which Blake Printing is a guarantor.
At December 31, 1995, December 29, 1996 and March 30, 1997, the aggregate
outstanding principal amount of these notes was $1.5 million, $1.4 million and
$1.4 million, respectively. Blake Printing also leases certain manufacturing
facilities and office space from this partnership. The lease term is five years
beginning January 1, 1997, with a base annual rent of $290,000. Total lease
payments to the partnership were $273,000, $290,000, $290,000 and $145,000 in
fiscal 1994, 1995 and 1996, and in the six months ended June 30, 1997,
respectively.
    
 
COMPANY POLICY
 
In the future, transactions with officers, directors and affiliates will be
approved by a majority of the Board of Directors, including a majority of the
disinterested members of the Board of Directors, and will be on terms no less
favorable to the Company than could be obtained from unaffiliated third parties.
 
                                       76
<PAGE>
                       PRINCIPAL AND SELLING STOCKHOLDERS
 
   
Prior to the Acquisitions and the Offering, all of the Common Stock of FirstPak,
Inc. was held by certain individuals associated with Menke Titolo. The following
table sets forth certain information regarding the beneficial ownership of the
Common Stock of the Company (a) as of June 30, 1997 assuming consummation of the
Acquisitions, and (b) as adjusted to reflect the sale of the Common Stock being
offered hereby and the issuance of options to certain officers and employees of
the Company upon consummation of the Offering, by (i) each person (or group of
affiliated persons) known by the Company to be the beneficial owner of more than
five percent of the outstanding Common Stock; (ii) each Named Executive Officer
of the Company; (iii) each director of the Company; (iv) all of the Company's
directors and executive officers as a group; and (v) the Selling Stockholders.
    
 
   
<TABLE>
<CAPTION>
                                                              ---------------------------------------------------------------
                                                                  SHARES BENEFICIALLY                           SHARES TO BE
                                                                          OWNED PRIOR                     BENEFICIALLY OWNED
                                                                      TO THE OFFERING    NUMBER OF        AFTER THE OFFERING
                                                              ------------------------      SHARES   ------------------------
                                                                  NUMBER                     BEING       NUMBER
BENEFICIAL OWNER (1)                                           OF SHARES     PERCENT       OFFERED    OF SHARES     PERCENT
- ------------------------------------------------------------  -----------  -----------  -----------  -----------  -----------
<S>                                                           <C>          <C>          <C>          <C>          <C>
William T. Leith (2)........................................     257,143          3.5                   257,143          2.3
Vincent F. Titolo (3).......................................     510,998          7.1                   510,998          4.6
Eric R. Roberts (4).........................................      55,000        *                        55,000        *
Eric R. Menke (5)...........................................     222,133          3.1                   222,133          2.0
Gary S. Yellin (6)..........................................      25,000        *                        25,000        *
John D. Menke (7)...........................................   1,278,808         17.8                 1,278,808         11.5
R. Michael Mondavi (8)......................................      20,000        *                        20,000        *
Terrence R. Fulwiler (9)....................................     380,435          5.3                   380,435          3.4
Richard C. Blake............................................     610,046          8.5                   610,046          5.5
Daniel R. Fulwiler (10).....................................     248,453          3.4                   248,453          2.2
Jay K. Tomcheck (11)........................................     140,005          1.9                   140,005          1.3
Churchill ESOP Capital Partners (12)........................     671,712          9.4      242,593      429,119          3.9
  2400 Metropolitan Centre
  333 South Seventh Street
  Minneapolis, Minnesota 55402
BW Capital Corporation (13).................................     136,072          1.9       59,119       76,953        *
  2540 Camino Diablo, Suite 110
  Walnut Creek, California 94556
Wisconsin Label ESOP (14)...................................   1,111,479         15.5                 1,111,479         10.0
MBR Investment Associates, L.P..............................     834,541         11.6                   834,541          7.5
All directors and executive officers as a group (10 persons)
 (15).......................................................   3,748,021         48.4                 3,748,021         32.1
</TABLE>
    
 
- ------------------------------
*  Less than one percent.
   
(1)  Beneficial ownership is determined in accordance with the rules of the
Commission. In computing the number of shares beneficially owned by a person and
the percentage ownership of that person, shares of Common Stock subject to
options held by that person that are currently exercisable or exercisable within
60 days of June 30, 1997 are deemed outstanding. Such shares, however, are not
deemed outstanding for the purpose of computing the percentage ownership of any
other person. Except as indicated in the footnotes to this table and pursuant to
applicable community property laws, each stockholder named in the table has sole
voting and investment power with respect to the shares set forth opposite such
stockholder's name.
    
   
(2)  Includes 257,143 shares of Common Stock issuable upon exercise of options.
Mr. Leith will be granted options to purchase an additional 150,000 shares of
Common Stock upon the consummation of the Offering. The shares of Common Stock
issuable upon exercise of the options may not be sold for two years from the
date of grant.
    
   
(3)  Includes 66,731 shares beneficially owned by Menke Titolo pursuant to its
ownership interest in MBR Investment Associates, L.P. The number of shares
beneficially owned by Mr. Titolo is subject to certain adjustments. See
"Formation of the Company." Mr. Titolo is a stockholder and director of Menke
Titolo, a limited partner of MBR Associates, L.P., the general partner of MBR
Investment Associates, L.P. Mr. Titolo disclaims beneficial ownership of the
shares held by such entity except to the extent of his beneficial ownership in
such entity.
    
   
(4)  Includes 55,000 shares of Common Stock issuable upon exercise of options.
Mr. Roberts will be granted options to purchase an additional 30,000 shares of
Common Stock upon consummation of the Offering. The shares of Common Stock
issuable upon exercise of the options may not be sold for two years from the
date of grant.
    
   
(5)  The number of shares beneficially owned by Mr. Menke is subject to certain
adjustments. See "Formation of the Company."
    
   
(6)  Comprised of 25,000 shares of Common Stock issuable upon exercise of
options.
    
   
(7)  Includes 834,541 shares beneficially owned by MBR Investment Associates,
L.P. Mr. Menke is (x) a stockholder and director of the corporate general
partner (y) an individual general partner and (z) a stockholder and director of
Menke Titolo, a limited partner of MBR Associates, L.P., the general partner of
MBR Investment Associates, L.P. Mr. Menke disclaims beneficial ownership of the
shares held by such entity except to the extent of his beneficial ownership in
such entity. The number of shares beneficially owned by Mr. Menke is subject to
certain adjustments. See "Formation of the Company."
    
   
(8)  Mr. Mondavi will be granted options to purchase 20,000 shares of Common
Stock issuable upon exercise of options upon consummation of the Offering.
    
   
(9)  Includes 11,531 shares of Common Stock issuable upon exercise of options.
The number of shares beneficially owned by Mr. Fulwiler is subject to certain
adjustments. See "Formation of the Company."
    
   
(10)  Includes 86,479 shares of Common Stock issuable upon exercise of options.
The number of shares beneficially owned by Mr. Fulwiler is subject to certain
adjustments. See "Formation of the Company."
    
   
(11)  Includes 107,522 shares of Common Stock issuable upon exercise of options.
The number of shares beneficially owned by Mr. Tomcheck is subject to certain
adjustments. See "Formation of the Company."
    
   
(12)  Includes 242,593 shares of Common Stock issuable upon exercise of
warrants.
    
   
(13)  Includes 118,238 shares of Common Stock issuable upon exercise of
warrants.
    
   
(14)  The number of shares beneficially owned by the Wisconsin Label ESOP is
subject to certain adjustments. See "Formation of the Company."
    
   
(15)  Shares beneficially owned prior to the Offering for all directors and
executive officers as a group includes an aggregate of 562,675 shares of Common
Stock issuable upon exercise of options. Shares beneficially owned after the
offering includes an aggregate of 562,675 shares of Common Stock issuable upon
exercise of options.
    
 
                                       77
<PAGE>
                          DESCRIPTION OF CAPITAL STOCK
 
The authorized capital stock of the Company consists of 100,000,000 shares of
Common Stock, par value $0.001 per share, and 10,000,000 shares of preferred
stock, par value $0.001 per share (the "Preferred Stock"). The following summary
description of the capital stock of the Company does not purport to be complete
and is subject to the detailed provisions of, and is qualified in its entirety
by reference to, the Restated Certificate of Incorporation and Bylaws of the
Company, copies of which have been filed as exhibits to the registration
statement of which this Prospectus is a part, and to the applicable provisions
of the General Corporation Law of the State of Delaware (the "DGCL").
 
COMMON STOCK
 
Holders of Common Stock are entitled to one vote for each share held of record
on all matters submitted to a vote of the stockholders. Subject to the rights of
any holders of Preferred Stock, holders of Common Stock are entitled to receive
ratably such dividends as may be declared by the Board of Directors out of funds
legally available. In the event of a liquidation, dissolution or winding up of
the Company, holders of Common Stock are entitled to share ratably in the
distribution of all assets remaining after payment of liabilities, subject to
the rights of any holders of Preferred Stock. Holders of Common Stock have no
preemptive rights to subscribe for additional shares of the Company and no right
to convert their Common Stock into any other securities. In addition, there are
no redemption or sinking fund provisions applicable to the Common Stock. All of
the outstanding shares of Common Stock are, and the Common Stock offered hereby
will be, fully paid and nonassessable.
 
PREFERRED STOCK
 
The Board of Directors is authorized, without further action by the
stockholders, to issue any or all shares of authorized Preferred Stock as a
class without series or in one or more series and to fix the rights,
preferences, restrictions and designations thereof, including dividend rights,
conversion rights, voting rights, terms of redemption (including sinking fund
provisions), liquidation preferences and the number of shares constituting any
series. The issuance of Preferred Stock could adversely affect the voting power
of holders of Common Stock and could have the effect of delaying, deferring or
impeding a change in control of the Company. Except as discussed in the next
paragraph, as of the date of this Prospectus, the Company has not authorized the
issuance of any Preferred Stock, and there are no plans, agreements or
understandings for the issuance of any shares of Preferred Stock.
 
   
In connection with the acquisition of Wisconsin Label, FirstPak, Inc. will issue
to the former stockholders of Wisconsin Label 220,000 shares of its Series A
Preferred Stock. The Series A Preferred Stock will entitle its holder to one
vote for each share held on all matters presented to stockholders for approval.
Holders of shares of Series A Preferred Stock are entitled to an aggregate of up
to $11 million upon liquidation of the Company in preference to the holders of
Common Stock but will not be entitled to receive any dividends. The Series A
Preferred Stock will be redeemable for $11 million upon (i) a sale, merger or
other business combination for cash or stock of DB Acquisition Corp., the parent
of Dittler Brothers, or of Dittler Brothers, (ii) the date that is six months
after the closing of a firm commitment underwritten public offering of DB
Acquisition Corp. common stock that represents not less than 20% of the
outstanding capital stock of DB Acquisition Corp. and results in aggregate gross
proceeds to DB Acquisition Corp. in excess of $15 million, (iii) the sale by the
Company of (a) not less than 75% of the shares of DB Acquisition Corp. owned by
Wisconsin Label and that results in receipt of funds (in any amount) to the
Company upon such sale or (b) all or any part of its equity interest in DB
Acquisition Corp. pursuant to which the Company receives not less than $6
million, (iv) the dissolution, liquidation or winding-up of Dittler Brothers or
(v) the exercise of certain put or call options attached to Wisconsin Label's
interest in DB Acquisition Corp., the exercise of which, in certain
circumstances, must (a) be with respect to not less than 75% of the shares of DB
Acquisition Corp. owned by Wisconsin Label and the receipt of funds (in any
amount) due to the Company upon such exercise or (b) cause the Company to
receive not less than $6 million in the aggregate pursuant to such exercise. The
exercise price of DB Acquisition Corp.'s call options may be less than the
redemption price of $11 million for the Series A Preferred Stock, which
redemption can be triggered by the exercise of DB Acquisition Corp.'s call
options. See "Risk Factors - Possible Need for
    
 
                                       78
<PAGE>
Additional Financing; Potential Inability to Finance Redemption of Series A
Preferred Stock," "Management's Discussion and Analysis of Pro Forma Financial
Condition and Pro Forma Results of Operations" and "Certain Relationships and
Related Party Transactions - Certain Transactions Involving the Operating
Subsidiaries - Wisconsin Label."
 
CERTAIN PROVISIONS OF DELAWARE LAW AND THE COMPANY'S RESTATED CERTIFICATE OF
INCORPORATION AND BYLAWS
 
The Company is subject to the provisions of Section 203 of the DGCL. Section 203
prohibits a publicly-held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless the business combination is approved in a prescribed manner.
A "business combination" includes a merger, asset sale or other transaction
resulting in a financial benefit to the interested stockholder. Subject to
certain exceptions, an "interested stockholder" is a person who, together with
affiliates and associates, owns, or within three years prior to the proposed
business combination has owned 15% or more of the corporation's voting stock.
 
The Company's Restated Certificate of Incorporation provides that for a period
of three years after the Offering the Company shall not, without obtaining the
approval of either (a) Terrence R. Fulwiler and either of the Wisconsin Label
Nominees, or (b) both of the Wisconsin Label Nominees, approve (i) issuances of
equity securities under certain circumstances (but not including securities to
be issued pursuant to stock option plans or in connection with acquisitions),
(ii) the termination of the chief executive officer of Wisconsin Label, (iii)
the closing of a label production manufacturing facility of Wisconsin Label
which closing would result in the termination of in excess of 50 employees
thereof, (iv) removal of a member of the Board of Directors without cause (v) an
increase in the number of authorized directors of the Company to a number
greater than eleven; (vi) altering the provision in the Company's Restated
Certificate of Incorporation for cumulative voting for the Board of Directors or
the provision described herein; and (vii) altering certain other provisions in
the Company's Restated Certificate of Incorporation regarding the composition of
the Board of Directors.
 
The Bylaws of the Company provide that stockholders must follow an advance
notification procedure for certain stockholder nominations of candidates for the
Board of Directors and for certain other stockholder business to be conducted at
an annual meeting. The Company's Restated Certificate of Incorporation divides
the Board of Directors into three classes of directors with each class serving a
staggered three-year term. The classification system of electing directors may
tend to discourage a third party from making a tender offer or otherwise
attempting to obtain control of the Company and may maintain the incumbency of
the Board of Directors, as it generally makes it more difficult for stockholders
to replace a majority of the directors. These provisions could, under certain
circumstances, operate to delay, defer or prevent a change in control of the
Company.
 
The Company's Restated Certificate of Incorporation, provides that, for a period
of seven years after the Offering, stockholders may cumulate votes in elections
of directors. In an election of directors, each stockholder will be entitled to
cast a number of votes equal to the number of directors to be elected multiplied
by the number of votes to which such stockholder's shares are normally entitled.
A stockholder that gives proper notice of its intention to cumulate votes may
cast all the votes to which it is entitled for one candidate, or it may
distribute such votes among any or all of the candidates as it sees fit.
 
In addition, the Company's Restated Certificate of Incorporation provides that
in the event Terrence Fulwiler or either of the Wisconsin Label Nominees leaves
the Board prior to the date that is three years from the consummation of the
Offering in the case of Terrence Fulwiler and prior to the date that is four
years from the consummation of the Offering in the case of either of the
Wisconsin Label Nominees, as a result of death, resignation, disqualification,
removal or certain other causes, the Board will appoint a nominee of the former
Wisconsin Label shareholders to serve out the term of the departing board
member.
 
The Company's Restated Certificate of Incorporation also provides that approval
of holders of not less than 90% of the Common Stock is required to alter the
provisions of the Restated Certificate of Incorporation that call for (i)
cumulative voting for the Board of Directors, (ii) three classes of directors,
(iii) the requirement of approval of
 
                                       79
<PAGE>
either (a) Terrence Fulwiler and either of the Wisconsin Label Nominees, or (b)
both of the Wisconsin Label Nominees for certain actions by the Company and (iv)
replacement of Terrence Fulwiler or either of the Wisconsin Label Nominees upon
leaving the Board under certain circumstances.
 
LIMITATION OF LIABILITY; INDEMNIFICATION
 
The Company's Restated Certificate of Incorporation contains certain provisions
permitted under the DGCL relating to the liability of directors. These
provisions eliminate a director's personal liability for monetary damages
resulting from a breach of fiduciary duty, except in certain circumstances
involving certain wrongful acts, including (i) for any breach of the director's
duty of loyalty to the Company or its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) under Section 174 of the DGCL or (iv) for any transaction from
which the director derives an improper personal benefit. These provisions do not
limit or eliminate the rights of the Company or any stockholder to seek
non-monetary relief, such as an injunction or rescission, in the event of a
breach of a director's fiduciary duty. These provisions will not alter a
director's liability under federal securities laws. The Company's Bylaws also
contain provisions indemnifying the directors and officers of the Company to the
fullest extent permitted by the DGCL. See "Management - Limitation of Liability
and Indemnification Matters."
 
TRANSFER AGENT AND REGISTRAR
 
The Transfer Agent and Registrar for the Common Stock is BankBoston.
 
                                       80
<PAGE>
                        SHARES ELIGIBLE FOR FUTURE SALE
 
   
Upon completion of this Offering and the Acquisitions, the Company will have
11,111,250 shares of Common Stock outstanding. The 4,230,283 shares of Common
Stock sold in this Offering will be freely tradeable without restriction or
further registration under the Securities Act, unless acquired by an "affiliate"
of the Company as that term is defined in Rule 144. The 5,770,300 (net of shares
sold in the Offering) shares of Common Stock to be issued to the Sellers in
connection with the Acquisitions will be registered under the Securities Act
and, subject to the contractual restrictions on resale set forth below, will be
freely tradeable unless acquired by affiliates of the Company or persons who
were affiliates of the Operating Subsidiaries prior to the Acquisitions. The
1,110,667 shares of Common Stock outstanding prior to consummation of the
Acquisitions will be deemed "restricted" securities within the meaning of Rule
144 under the Securities Act ("Restricted Shares") and may not be resold without
registration under the Securities Act or pursuant to an exemption from
registration, including exemptions provided by Rule 144 under the Securities
Act. All of the Restricted Shares are subject to lock-up agreements (as
described under "Underwriting"). The Restricted Shares will become eligible for
sale beginning one year after the date of this Prospectus upon expiration of
such lock-up agreements and subject to compliance with Rule 144.
    
 
   
In general, under Rule 144 as currently in effect, a stockholder who has
beneficially owned for at least one year shares privately acquired directly or
indirectly from the Company or from an affiliate of the Company, and persons who
are affiliates of the Company who have acquired the shares in registered
transactions, will be entitled to sell within any three-month period a number of
shares that does not exceed the greater of (i) one percent of the outstanding
shares of Common Stock (approximately 111,112 shares immediately after
consummation of the Offering); or (ii) the average weekly trading volume in the
Common Stock during the four calendar weeks preceding such sale. Sales under
Rule 144 are also subject to certain requirements relating to the manner and
notice of sale and the availability of current public information about the
Company. A person who is not deemed to have been an affiliate of the Company at
any time during the three months preceding a sale and who has beneficially owned
the shares proposed to be sold for at least two years, is entitled to sell such
shares under Rule 144(k) without regard to the volume limitations or other
requirements described above. The foregoing summary of Rule 144 is not intended
to be a complete description of that rule.
    
 
   
The Company has authorized 2.0 million shares of Common Stock for issuance under
the 1997 Stock Plan. Concurrently with the consummation of the Acquisitions and
the Offering, the Company will grant options to purchase an aggregate of 342,857
shares of Common Stock at an exercise price equal to the initial public offering
price set forth on the cover page of this Prospectus to certain officers and
employees of the Operating Subsidiaries under the 1997 Stock Plan. In addition,
options to purchase 50,000 shares of Common Stock were granted to an officer of
the Company prior to this Offering and the Company intends to grant options to
purchase an aggregate of 522,143 shares of Common Stock to certain officers,
directors, consultants and employees under the 1997 Stock Plan concurrently with
the consummation of this Offering. The Company intends to file a registration
statement on Form S-8 as soon as practicable after the consummation of the
Offering with respect to all or a portion of the shares of Common Stock issuable
upon exercise of such options.
    
 
   
The Company, each of its directors and officers and the holders of all of the
shares, and options or warrants to purchase shares, of Common Stock that are or
will be outstanding subsequent to the consummation of the Acquisitions and the
Offering, and certain related persons, have agreed with the Underwriters not to
(i) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer or dispose of any shares of directly
or indirectly, or file or cause to be filed a registration statement in respect
of, Common Stock or securities convertible into or exercisable or exchangeable
for such shares or any similar securities or (ii) enter into any swap or other
agreement that transfers, in whole or in part, any of the economic consequences
of ownership of any shares of Common Stock for a period of one year (180 days in
the case of the Company) after the date of this Prospectus without the prior
written consent of J.P. Morgan Securities Inc., except (i) that the Company may
(a) issue shares of Common Stock for the purpose of consideration in connection
with future acquisitions and (b) grant options in respect of shares of Common
Stock provided that in each case the recipient of such shares or options agrees
to be bound by the terms of the restrictions set forth above and (ii) for
certain other limited exceptions. In addition,
    
 
                                       81
<PAGE>
each of the directors and officers of the Company and certain stockholders of
the Company have agreed, for a period of one year after the expiration of the
lock-up period, to sell their shares only in compliance with the volume
limitations set forth in Rule 144 under the Securities Act as in effect on the
date of the Prospectus.
 
Prior to this Offering, there has been no market for the Common Stock. No
predictions can be made with respect to the effect, if any, that public sales of
shares of Common Stock or the availability of shares for sale will have on the
market price of the Common Stock after consummation of the Offering. Sales of
substantial amounts of Common Stock in the public market following the Offering,
or the perception that such sales may occur, could adversely affect the market
price of the Common Stock or the ability of the Company to raise capital through
sales of its equity securities. See "Risk Factors - No Prior Public Market;
Possible Volatility of Stock Price."
 
Each of the members of the Board of Directors and certain officers of the
Operating Subsidiaries have agreed, as a condition to the closing of the
Acquisitions, to enter into an Affiliate Agreement restricting sales,
dispositions and other transactions which would reduce their risk of investment
with respect to the shares of Common Stock received by them in the Acquisitions
so as to comply with the requirements of applicable federal securities and tax
laws.
 
                                       82
<PAGE>
                                  UNDERWRITING
 
Under the terms and subject to the conditions contained in an Underwriting
Agreement dated the date of this Prospectus (the "Underwriting Agreement"), the
Underwriters named below, for whom J.P. Morgan Securities Inc. and Robertson,
Stephens & Company LLC are acting as representatives (the "Representatives"),
have severally agreed to purchase, and the Company and the Selling Stockholders
have agreed to sell to them, the respective numbers of shares of Common Stock
set forth opposite their names below. Under the terms and conditions of the
Underwriting Agreement, the Underwriters are obligated to take and pay for all
such shares of Common Stock, if any are taken. Under certain circumstances, the
commitments of nondefaulting Underwriters may be increased as set forth in the
Underwriting Agreement.
 
   
<TABLE>
<CAPTION>
                                                                         -----------------
UNDERWRITERS                                                             NUMBER OF SHARES
- -----------------------------------------------------------------------  -----------------
<S>                                                                      <C>
J.P. Morgan Securities Inc.
Robertson, Stephens & Company LLC
 
                                                                         -----------------
    Total                                                                     4,230,283
                                                                         -----------------
                                                                         -----------------
</TABLE>
    
 
   
The Underwriters propose initially to offer the Common Stock directly to the
public at the price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of $      per
share. The Underwriters may allow, and such dealers may reallow, a concession
not in excess of $      per share to other dealers. After the initial public
offering of the Common Stock, the public offering price and such concession may
be changed.
    
 
   
The Company has granted to the Underwriters an option, expiring at the close of
business on the 30th day after the date of this Prospectus, to purchase up to
634,542 additional shares of Common Stock at the initial public offering price,
less the underwriting discount. The Underwriters may exercise such option solely
for the purpose of covering over-allotments, if any. To the extent the
Underwriters exercise the option, each Underwriter will have a firm commitment,
subject to certain conditions, to purchase approximately the same percentage of
such additional shares as the number set forth next to such Underwriter's name
in the preceding table bears to the total number of shares of Common Stock
offered hereby.
    
 
The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act.
 
   
The Company, each of its directors and officers, the Sellers and the holders of
all of the shares, and options or warrants to purchase shares, of Common Stock
that are or will be outstanding subsequent to the consummation of the
Acquisitions and the Offering, and certain related persons, have agreed with the
Underwriters not to (a) offer, pledge, sell, contract to sell, sell any option
or contract to purchase, purchase any option or contract to sell, grant any
option, right or warrant to purchase or otherwise transfer or dispose of,
directly or indirectly, or file or cause to be filed a registration statement in
respect of, any shares of Common Stock or securities convertible into or
exercisable or exchangeable for such shares or any similar securities or (b)
enter into any swap or other agreement that transfers, in whole or in part, any
of the economic consequences of ownership of any shares of Common Stock for a
period of one year (180 days in the case of the Company) after the date of this
Prospectus without the prior written consent of J.P. Morgan Securities Inc.,
except (i) that the Company may (x) issue shares of Common Stock for the purpose
of consideration in connection with future acquisitions and (y) grant options in
respect of shares of Common Stock provided, in each such case, that the
recipient of such shares or options agrees to be bound by the terms of the
restrictions set forth above and (ii) for certain other limited exceptions. In
addition, each of the directors and officers of the Company and certain
stockholders of the Company have agreed, for a period of one year after the
expiration of the lock-up period, to sell their shares only in compliance with
the volume limitations set forth in Rule 144 under the Securities Act as in
effect on the date of this Prospectus.
    
 
                                       83
<PAGE>
   
The Company has applied for listing of the Common Stock on the Nasdaq National
Market, under the trading symbol "FPAK."
    
 
The Underwriters have advised the Company that they do not expect that sales to
accounts over which they exercise discretionary authority will exceed 5% of the
shares offered hereby.
 
   
At the request of the Company, the Underwriters have reserved up to 314,300
shares of Common Stock offered hereby for sale at the initial public offering
price to certain employees of the Company. The number of shares available for
sale to the general public will be reduced to the extent that such persons
purchase such reserved shares. Any reserved shares not so purchased will be
offered by the Underwriters to the general public on the same basis as the other
shares of Common Stock offered hereby.
    
 
The Representatives have advised the Company and the Selling Stockholders that,
in connection with the Offering, the Underwriters may engage in transactions
that stabilize, maintain or otherwise affect the price of the Common Stock.
Specifically, the Underwriters may overallot the Offering, creating a syndicate
short position. In addition, the Underwriters may bid for, and purchase, shares
of Common Stock in the open market to cover syndicate short positions or to
stabilize the price of the Common Stock. Finally, the underwriting syndicate may
reclaim selling concessions allowed to an underwriter or dealer for distributing
the Common Stock in the Offering, if the syndicate repurchases previously
distributed shares of Common Stock in syndicate covering transactions, in
stabilization transactions or otherwise. Any of these activities may stabilize
or maintain the market price of the Common Stock above independent market
levels. The Underwriters are not required to engage in these activities and may
end any of these activities at any time.
 
Prior to this Offering, there has been no public market for the Common Stock.
The initial public offering price for the shares of Common Stock offered hereby
will be determined by agreement among the Company, the Selling Stockholders and
the Underwriters. Among the factors to be considered in making such
determination will be the history of and the prospects for the industry in which
the Company competes, an assessment of the Company's management, the present
operations of the Company, the historical results of operations of the Operating
Subsidiaries and the trend of their revenues and earnings, the prospects for
future earnings of the Company, the general conditions of the securities markets
at the time of the Offering and the prices of similar securities of generally
comparable companies. There can be no assurance that an active trading market
will develop for the Common Stock or that the Common Stock will trade in the
public market subsequent to the Offering at or above the initial public offering
price.
 
                                 LEGAL MATTERS
 
The validity of the shares of Common Stock offered hereby will be passed upon
for the Company by Wilson Sonsini Goodrich & Rosati, Professional Corporation,
Palo Alto, California. Certain legal matters relating to the shares of Common
Stock offered hereby will be passed upon for the Underwriters by Davis Polk &
Wardwell, New York, New York.
 
                                    EXPERTS
 
The financial statements or consolidated financial statements, as applicable, as
of and for the periods and companies listed below included in this Prospectus
and the related financial statement schedules included elsewhere in the
Registration Statement have been audited by Deloitte & Touche LLP, independent
auditors, as stated in their reports herein and elsewhere in the Registration
Statement, and such financial statements and schedules are included in reliance
upon the reports of such firm given upon their authority as experts in
accounting and auditing.
 
The companies and periods referred to above are:
 
   
FirstPak, Inc. as of December 31, 1996 and for the period from inception
(February 23, 1996) to December 31, 1996.
    
 
Wisconsin Label Corporation and subsidiaries as of December 31, 1995 and 1996
and for the years ended December 31, 1994, 1995 and 1996.
 
                                       84
<PAGE>
St. Louis Lithographing Company and Predecessor as of December 31, 1995
(Predecessor) and 1996 (Successor) and for the years ended December 31, 1994 and
1995 and for the period from January 1, 1996 to May 31, 1996 (Predecessor) and
for the period from June 1, 1996 (date of acquisition) to December 31, 1996
(Successor).
 
   
CalOptical Holding Corporation and subsidiary as of December 31, 1995 and 1996
and for the years ended December 31, 1994, 1995 and 1996.
    
 
Blake Printing and Publishing, Inc. as of December 31, 1995 and December 29,
1996 and for the years ended January 1, 1995, December 31, 1995 and December 29,
1996.
 
                             ADDITIONAL INFORMATION
 
   
The Company has filed with the Securities and Exchange Commission (the
"Commission") a Registration Statement on Form S-1 (herein, together with all
amendments thereto, called the "Registration Statement") under the Securities
Act and the rules and regulations promulgated thereunder, covering the Common
Stock offered hereby. This Prospectus omits certain information contained in the
Registration Statement, and reference is made to the Registration Statement and
the exhibits and schedules thereto for further information with respect to the
Company and the Common Stock offered hereby. Statements contained in this
Prospectus as to the contents of any contract, agreement or other document filed
as an exhibit to the Registration Statement summarize the material terms of such
documents but are not necessarily complete, and in each instance, reference is
made to the exhibit for a more complete description of the matter involved, each
such statement being qualified in its entirety by such reference. The
Registration Statement, including the exhibits thereto, may be inspected and
copied at the public reference facilities maintained by the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
regional offices of the Commission maintained at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of such materials may be obtained from the Public
Reference Section of the Commission, Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates. In addition,
registration statements and certain other filings made with the Commission
through its Electronic Data Gathering, Analysis and Retrieval ("EDGAR") system
are publicly available through the Commission's site on the Internet's World
Wide Web, located at http://www.sec.gov. The Registration Statement, including
all exhibits thereto and amendments thereof, has been filed with the Commission
through EDGAR.
    
 
                                       85
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
                         INDEX TO FINANCIAL STATEMENTS
    
 
   
<TABLE>
<CAPTION>
                                                                                                               Page
<S>                                                                                                          <C>
FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
PRO FORMA COMBINED FINANCIAL STATEMENTS:
  Basis of Presentation....................................................................................        F-3
  Pro Forma Combined Balance Sheet, June 30, 1997..........................................................        F-4
  Pro Forma Combined Statements of Income:
    Year Ended December 31, 1996...........................................................................        F-5
    Six Months Ended June 30, 1996.........................................................................        F-6
    Six Months Ended June 30, 1997.........................................................................        F-7
  Notes to Pro Forma Combined Financial Statements.........................................................        F-8
FIRSTPAK, INC.:
  Independent Auditors' Report.............................................................................       F-18
  Balance Sheets as of December 31, 1996 and June 30, 1997.................................................       F-19
  Statements of Loss and Accumulated Deficit for the Period from February 23, 1996 (Inception) to December
    31, 1996 and for the Six Months Ended June 30, 1997....................................................       F-20
  Statements of Cash Flows for the Period from February 23, 1996 (Inception) to December 31, 1996 and for
    the Six Months Ended June 30, 1997.....................................................................       F-21
  Notes to Financial Statements............................................................................       F-22
WISCONSIN LABEL CORPORATION AND SUBSIDIARIES:
  Independent Auditors' Report.............................................................................       F-28
  Consolidated Balance Sheets as of December 31, 1995 and 1996 and June 30, 1997...........................       F-29
  Consolidated Statements of Income for the Years Ended December 31, 1994, 1995 and 1996 and for the Six
    Months Ended June 30, 1996 and 1997....................................................................       F-30
  Consolidated Statements of Stockholders' Equity for the Years Ended December 31, 1994, 1995 and 1996 and
    for the Six Months Ended June 30, 1997.................................................................       F-31
  Consolidated Statements of Cash Flows for the Years Ended December 31, 1994, 1995 and 1996 and for the
    Six Months Ended June 30, 1996 and 1997................................................................       F-32
  Notes to Consolidated Financial Statements...............................................................       F-33
ST. LOUIS LITHOGRAPHING COMPANY AND PREDECESSOR COMPANY:
  Independent Auditors' Report.............................................................................       F-44
  Balance Sheets as of December 31, 1995 (Predecessor Company) and 1996
    (Successor Company) and June 30, 1997 (Successor Company)..............................................       F-45
  Statements of Operations for the Years Ended December 31, 1994 and 1995 and for the Period From January
    1, 1996 through May 31, 1996 (Predecessor Company) and for the Period from June 1, 1996 (Date of
    Acquisition) through December 31, 1996, for the One Month Ended June 30, 1996 and for the Six Months
    Ended June 30, 1997 (Successor Company) and Pro Forma Statements of Operations for the Six Months Ended
    June 30, 1996 and for the Year Ended December 31, 1996.................................................       F-46
  Statements of Changes in Stockholders' Equity for the Years Ended December 31, 1994 and 1995 and for the
    Period From January 1, 1996 through May 31, 1996 (Predecessor Company) and for the Period from June 1,
    1996 (Date of Acquisition) through December 31, 1996 and for the Six Months Ended June 30, 1997
    (Successor Company)....................................................................................       F-47
  Statements of Cash Flows for the Years Ended December 31, 1994 and 1995 and for the Period From January
    1, 1996 through May 31, 1996 (Predecessor Company) and for the Period from June 1, 1996 (Date of
    Acquisition) through December 31, 1996, for the One Month Ended June 30, 1996 and for the Six Months
    Ended June 30, 1997 (Successor Company)................................................................       F-48
  Notes to Financial Statements............................................................................       F-49
</TABLE>
    
 
                                      F-1
<PAGE>
   
<TABLE>
<CAPTION>
                                                                                                               Page
<S>                                                                                                          <C>
CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY:
  Independent Auditors' Report.............................................................................       F-58
  Consolidated Balance Sheets as of December 31, 1995 and 1996 and June 30, 1997...........................       F-59
  Consolidated Statements of Operations for the Years Ended December 31, 1994, 1995 and 1996, and for the
    Six Months Ended June 30, 1996 and 1997................................................................       F-60
  Consolidated Statements of Shareholders' Equity for the Years Ended December 31, 1994, 1995 and 1996, and
    for the Six Months Ended June 30, 1997.................................................................       F-61
  Consolidated Statements of Cash Flows for the Years Ended December 31, 1994, 1995 and 1996, and for the
    Six Months Ended June 30, 1996 and 1997................................................................       F-62
  Notes to Consolidated Financial Statements...............................................................       F-63
BLAKE PRINTING AND PUBLISHING, INC.:
  Independent Auditors' Report.............................................................................       F-72
  Balance Sheets as of December 31, 1995, December 29, 1996 and June 29, 1997..............................       F-73
  Statements of Income for the Years Ended January 1, 1995, December 31, 1995 and December 29, 1996 and for
    the Six Months Ended June 30, 1996 and June 29, 1997...................................................       F-74
  Statements of Changes in Stockholders' Equity for the Years Ended January 1, 1995, December 31, 1995 and
    December 29, 1996 and for the Six Months Ended June 29, 1997...........................................       F-75
  Statements of Cash Flows for the Years Ended January 1, 1995, December 31, 1995 and December 29, 1996 and
    for the Six Months Ended June 30, 1996 and June 29, 1997...............................................       F-76
  Notes to Financial Statements............................................................................       F-77
</TABLE>
    
 
                                      F-2
<PAGE>
                    PRO FORMA COMBINED FINANCIAL STATEMENTS
                       BASIS OF PRESENTATION (UNAUDITED)
 
   
The following unaudited pro forma combined financial statements give effect to
the Acquisitions by FirstPak, Inc. ("FirstPak" or "FPI") of (i) Wisconsin Label
("WL"), (ii) St. Louis Litho ("SLL"), (iii) CalOptical ("COH") and (iv) Blake
Printing ("BPP"). These Acquisitions will occur simultaneously with the closing
of FirstPak, Inc.'s Offering. Upon consummation of the Acquisitions at an
assumed initial public offering price of $14 per share, the former stockholders
of Wisconsin Label will, as a group, own approximately 48.6% of the Company's
Common Stock and control approximately 50.2% of the Company's voting interests.
As such Common Stock ownership and voting interests will exceed (i) the separate
Company ownership and voting interests of the former stockholder groups for St.
Louis Litho, CalOptical, or Blake Printing, or (ii) the FirstPak stockholders'
carryover ownership and voting interests just prior to the consummation of the
Acquisitions, the Acquisitions will be accounted for as a "reverse acquisition"
by Wisconsin Label as the accounting acquirer using the purchase method of
accounting. As a result, the Company's comparative consolidated financial
statements for periods prior to the consummation of the Acquisitions prepared
for comparative purposes subsequent to the consummation of the Acquisitions will
be the historical consolidated financial statements of Wisconsin Label with
certain amounts within "Stockholders' Equity" restated to reflect the impact of
FirstPak's acquisition of Wisconsin Label. The unaudited pro forma combined
financial statements also give effect to the issuance of (i) Common Stock and
Series A Preferred Stock to be issued by FirstPak, Inc. to the sellers of the
Operating Subsidiaries (the "Sellers") upon the closing of the Acquisitions and
(ii) the Common Stock issued to the public upon the closing of the Offering.
These pro forma combined financial statements are based on the historical
financial statements of FirstPak, Inc. and the Operating Subsidiaries included
elsewhere in this Prospectus, except for St. Louis Litho's financial statements
for the six months ended June 30, 1996 and for the year ended December 31, 1996,
which are discussed in Note 2 to the notes to pro forma combined financial
statements, and the estimates and assumptions set forth below and in the notes
to the unaudited pro forma combined financial statements.
    
 
   
The unaudited pro forma combined balance sheet gives effect to the Acquisitions
and the Offering (collectively, the "Transactions"), at an assumed initial
public Offering price of $14 per share, as if they had occurred on June 30,
1997. The unaudited pro forma combined statements of income give effect to the
Transactions as if they had occurred on January 1, 1996.
    
 
   
The pro forma adjustments are based on preliminary estimates, currently
available information and certain assumptions that management deems appropriate.
In management's opinion, the preliminary estimates regarding allocation of
purchase price are not expected to materially differ from the final adjustments.
These adjustments will be finalized after the closing of the Transactions. The
unaudited pro forma combined financial statements presented herein are not
necessarily indicative of (i) the results the Company would have experienced had
such events occurred at January 1, 1996, (ii) the future results of the Company,
(iii) its financial position had such events occurred on June 30, 1997 or (iv)
the future financial position of the Company. The unaudited pro forma combined
financial statements should be read in conjunction with the other financial
statements and notes included elsewhere in this Prospectus.
    
 
                                      F-3
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
                  PRO FORMA COMBINED BALANCE SHEET (UNAUDITED)
                                 JUNE 30, 1997
    
   
<TABLE>
<CAPTION>
                                             -------------------------------------------------------------------------------
                                                                                                                   PURCHASE
                                                                                                                 ACCOUNTING
                                                                  HISTORICAL                                      PRO FORMA
(IN THOUSANDS)                                      WL        FPI        SLL        COH        BPP    COMBINED   ADJUSTMENTS
                                             ---------  ---------  ---------  ---------  ---------  -----------  -----------
<S>                                          <C>        <C>        <C>        <C>        <C>        <C>          <C>
ASSETS
Current assets:
  Cash and cash equivalents................  $   1,158  $       5  $       1  $       1  $     109   $   1,274    $       -
  Accounts receivable - net................     14,629          -      3,348      2,163      1,794      21,934            -
  Inventories..............................      8,665          -      2,599      2,181        677      14,122           73
  Prepaid expenses and other...............        713      1,803        411        151        435       3,513         (289)
                                             ---------  ---------  ---------  ---------  ---------  -----------  -----------
    Total current assets...................     25,165      1,808      6,359      4,496      3,015      40,843         (216)
Property and equipment - net...............     16,450          -     10,586        832      4,121      31,989        2,498
Other assets...............................      7,013        273        164        668         70       8,188          185
Goodwill...................................          -          -      8,410        675         16       9,101       21,697
                                             ---------  ---------  ---------  ---------  ---------  -----------  -----------
Total assets...............................  $  48,628  $   2,081  $  25,519  $   6,671  $   7,222   $  90,121    $  24,164
                                             ---------  ---------  ---------  ---------  ---------  -----------  -----------
                                             ---------  ---------  ---------  ---------  ---------  -----------  -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Short-term debt and notes payable........  $   4,603  $       -  $       -  $     193  $       -   $   4,796    $       -
  Current maturities of long-term debt.....      2,374          -      1,187        515        850   $   4,926            -
  Accounts payable.........................      6,413      2,494        901        873        653      11,334          558
  Accrued liabilities......................      2,349          -        984        624        346       4,303            -
  Income taxes payable.....................        371          -        289        222         73         955            -
  Other current liabilities................          -          -          -          -         42          42            -
                                             ---------  ---------  ---------  ---------  ---------  -----------  -----------
    Total current liabilities..............     16,110      2,494      3,361      2,427      1,964      26,356          558
Long-term debt.............................     14,421          -     15,878      1,289      2,935      34,523            -
Deferred compensation......................        813          -          -          -          -         813            -
Deferred income taxes......................      1,350          -      3,069          -        140       4,559       (2,415)
Minority interest and other................        258          -          -        232          -         490            -
Redeemable preferred stock.................          -          -          -          -          -           -        9,440
Warrants with put option...................          -          -          -      2,240          -       2,240       (2,240)
Stockholders' equity:
  Common stock.............................        294          2          1          1         16         314         (306)
  Additional paid-in capital...............      1,681          -      3,154        482        411       5,728       41,219
  Unamortized stock based compensation.....          -          -       (114)         -          -        (114)         114
  Retained earnings (accumulated
   deficit)................................     13,701       (415)       170          -      1,756      15,212      (22,206)
                                             ---------  ---------  ---------  ---------  ---------  -----------  -----------
    Total stockholders' equity (deficit)...     15,676       (413)     3,211        483      2,183      21,140       18,821
                                             ---------  ---------  ---------  ---------  ---------  -----------  -----------
Total liabilities and stockholders'
 equity....................................  $  48,628  $   2,081  $  25,519  $   6,671  $   7,222   $  90,121    $  24,164
                                             ---------  ---------  ---------  ---------  ---------  -----------  -----------
                                             ---------  ---------  ---------  ---------  ---------  -----------  -----------
 
<CAPTION>
 
                                              PRO FORMA     OFFERING
                                                COMPANY    PRO FORMA    PRO FORMA
(IN THOUSANDS)                               PRE-OFFERING ADJUSTMENTS     COMPANY
                                             -----------  -----------  -----------
<S>                                          <C>          <C>          <C>
ASSETS
Current assets:
  Cash and cash equivalents................   $   1,274    $   1,628    $   2,902
  Accounts receivable - net................      21,934            -       21,934
  Inventories..............................      14,195            -       14,195
  Prepaid expenses and other...............       3,224       (2,097)       1,127
                                             -----------  -----------  -----------
    Total current assets...................      40,627         (469)      40,158
Property and equipment - net...............      34,487            -       34,487
Other assets...............................       8,373          468        8,841
Goodwill...................................      30,798            -       30,798
                                             -----------  -----------  -----------
Total assets...............................   $ 114,285    $      (1)   $ 114,284
                                             -----------  -----------  -----------
                                             -----------  -----------  -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Short-term debt and notes payable........   $   4,796    $  (4,796)   $       -
  Current maturities of long-term debt.....       4,926       (4,864)          62
  Accounts payable.........................      11,892       (3,052)       8,840
  Accrued liabilities......................       4,303         (131)       4,172
  Income taxes payable.....................         955            -          955
  Other current liabilities................          42            -           42
                                             -----------  -----------  -----------
    Total current liabilities..............      26,914      (12,843)      14,071
Long-term debt.............................      34,523      (34,468)          55
Deferred compensation......................         813            -          813
Deferred income taxes......................       2,144          (61)       2,083
Minority interest and other................         490         (189)         301
Redeemable preferred stock.................       9,440            -        9,440
Warrants with put option...................           -            -            -
Stockholders' equity:
  Common stock.............................           8            4           12
  Additional paid-in capital...............      46,947       47,646       94,593
  Unamortized stock based compensation.....           -            -            -
  Retained earnings (accumulated
   deficit)................................      (6,994)         (90)      (7,084)
                                             -----------  -----------  -----------
    Total stockholders' equity (deficit)...      39,961       47,560       87,521
                                             -----------  -----------  -----------
Total liabilities and stockholders'
 equity....................................   $ 114,285    $      (1)   $ 114,284
                                             -----------  -----------  -----------
                                             -----------  -----------  -----------
</TABLE>
    
 
             See notes to pro forma combined financial statements.
 
                                      F-4
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
               PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
                          YEAR ENDED DECEMBER 31, 1996
    
   
<TABLE>
<CAPTION>
                                            -------------------------------------------------------------------------------
<S>                                         <C>        <C>        <C>        <C>        <C>        <C>          <C>
                                                                                                                  PURCHASE
                                                                                                                ACCOUNTING
                                                                 HISTORICAL                                      PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA)              WL        FPI        SLL        COH        BPP    COMBINED   ADJUSTMENTS
                                            ---------  ---------  ---------  ---------  ---------  -----------  -----------
Sales.....................................  $  93,914  $       -  $  20,304  $  15,664  $  12,362   $ 142,244    $     540
Cost of sales.............................     71,744          -     15,153      9,953      7,523     104,373          290
                                            ---------  ---------  ---------  ---------  ---------  -----------  -----------
Gross profit..............................     22,170          -      5,151      5,711      4,839      37,871          250
 
Operating expenses:
  Selling, general and administrative
   expenses...............................     15,722        214      2,766      4,335      3,801      26,838        2,350
  Amortization of goodwill................         36          -        214        101          1         352          494
  Stock based compensation................        134          -         38        314        100         586            -
                                            ---------  ---------  ---------  ---------  ---------  -----------  -----------
    Total operating expenses..............     15,892        214      3,018      4,750      3,902      27,776        2,844
                                            ---------  ---------  ---------  ---------  ---------  -----------  -----------
Operating income..........................      6,278       (214)     2,133        961        937      10,095       (2,594)
Interest income...........................        258          -          -          -          -         258            -
Interest expense..........................     (1,451)         -     (1,864)      (432)      (293)     (4,040)          (4)
Other income (expense) - net..............        448          -          -          -         43         491           56
                                            ---------  ---------  ---------  ---------  ---------  -----------  -----------
Income before income taxes and minority
 interest.................................      5,533       (214)       269        529        687       6,804       (2,542)
Provision for income taxes................      2,400        (84)       192        231        228       2,967         (991)
                                            ---------  ---------  ---------  ---------  ---------  -----------  -----------
Income before minority interest and
 extraordinary item.......................      3,133       (130)        77        298        459       3,837       (1,551)
Minority interest.........................        (78)         -          -          -          -         (78)         (14)
Extraordinary item........................          -          -          -        (58)         -         (58)          58
                                            ---------  ---------  ---------  ---------  ---------  -----------  -----------
Net income (loss).........................  $   3,055  $    (130) $      77  $     240  $     459   $   3,701    $  (1,507)
                                            ---------  ---------  ---------  ---------  ---------  -----------  -----------
                                            ---------  ---------  ---------  ---------  ---------  -----------  -----------
Pro forma net income per share............
Shares used in computing pro forma net
 income per share.........................
 
<CAPTION>
 
<S>                                         <C>          <C>            <C>
 
                                             PRO FORMA      OFFERING
                                               COMPANY     PRO FORMA     PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA)       PRE-OFFERING ADJUSTMENTS       COMPANY
                                            -----------  -------------  -----------
Sales.....................................   $ 142,784     $       -     $ 142,784
Cost of sales.............................     104,663             -       104,663
                                            -----------       ------    -----------
Gross profit..............................      38,121             -        38,121
Operating expenses:
  Selling, general and administrative
   expenses...............................      29,188             -        29,188
  Amortization of goodwill................         846             -           846
  Stock based compensation................         586             -           586
                                            -----------       ------    -----------
    Total operating expenses..............      30,620             -        30,620
                                            -----------       ------    -----------
Operating income..........................       7,501             -         7,501
Interest income...........................         258             -           258
Interest expense..........................      (4,044)        3,773          (271)
Other income (expense) - net..............         547             -           547
                                            -----------       ------    -----------
Income before income taxes and minority
 interest.................................       4,262         3,773         8,035
Provision for income taxes................       1,976         1,509         3,485
                                            -----------       ------    -----------
Income before minority interest and
 extraordinary item.......................       2,286         2,264         4,550
Minority interest.........................         (92)            -           (92)
Extraordinary item........................           -             -             -
                                            -----------       ------    -----------
Net income (loss).........................   $   2,194     $   2,264     $   4,458
                                            -----------       ------    -----------
                                            -----------       ------    -----------
Pro forma net income per share............   $    0.27                   $    0.37
                                            -----------                 -----------
                                            -----------                 -----------
Shares used in computing pro forma net
 income per share.........................       8,221                      12,150
                                            -----------                 -----------
                                            -----------                 -----------
</TABLE>
    
 
             See notes to pro forma combined financial statements.
 
                                      F-5
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
               PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
                         SIX MONTHS ENDED JUNE 30, 1996
    
   
<TABLE>
<CAPTION>
                                                  -------------------------------------------------------------------------------
<S>                                               <C>        <C>        <C>        <C>        <C>        <C>          <C>
                                                                                                                       PURCHASE
                                                                                                                      ACCOUNTING
                                                                       HISTORICAL                                      PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA)                WL         FPI        SLL        COH        BPP      COMBINED    ADJUSTMENTS
                                                  ---------  ---------  ---------  ---------  ---------  -----------  -----------
Sales...........................................  $  47,898  $       -  $  10,434  $   7,427  $   6,586   $  72,345    $     275
Cost of sales...................................     36,816          -      7,761      4,739      3,659      52,975          145
                                                  ---------  ---------  ---------  ---------  ---------  -----------  -----------
Gross profit....................................     11,082          -      2,673      2,688      2,927      19,370          130
Operating expenses:
  Selling, general and administrative
   expenses.....................................      7,950          -      1,261      2,114      1,955      13,280        1,289
  Amortization of goodwill......................         28          -        107         51          -         186          245
  Stock based compensation......................          -          -         19        137          -         156            -
                                                  ---------  ---------  ---------  ---------  ---------  -----------  -----------
    Total operating expenses....................      7,978          -      1,387      2,302      1,955      13,622        1,534
                                                  ---------  ---------  ---------  ---------  ---------  -----------  -----------
Operating income................................      3,104          -      1,286        386        972       5,748       (1,404)
Interest income.................................        139          -          -          -          -         139            -
Interest expense................................       (739)         -       (932)      (237)      (127)     (2,035)           -
Other income (expense) - net....................        195          -          -          -         22         217          (17)
                                                  ---------  ---------  ---------  ---------  ---------  -----------  -----------
Income before income taxes and minority
 interest.......................................      2,699          -        354        149        867       4,069       (1,421)
Provision for income taxes......................      1,215          -        184         78        353       1,830         (594)
                                                  ---------  ---------  ---------  ---------  ---------  -----------  -----------
Income before minority interest.................      1,484          -        170         71        514       2,239         (827)
Minority interest...............................        (58)         -          -          -          -         (58)           -
                                                  ---------  ---------  ---------  ---------  ---------  -----------  -----------
Net income (loss)...............................  $   1,426  $       -  $     170  $      71  $     514   $   2,181    $    (827)
                                                  ---------  ---------  ---------  ---------  ---------  -----------  -----------
                                                  ---------  ---------  ---------  ---------  ---------  -----------  -----------
Pro forma net income per share..................
Shares used in computing pro forma net income
 per share......................................
 
<CAPTION>
 
<S>                                               <C>          <C>            <C>
 
                                                   PRO FORMA     OFFERING
                                                    COMPANY      PRO FORMA     PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA)             PRE-OFFERING  ADJUSTMENTS     COMPANY
                                                  -----------  -------------  -----------
Sales...........................................   $  72,620     $       -     $  72,620
Cost of sales...................................      53,120             -        53,120
                                                  -----------       ------    -----------
Gross profit....................................      19,500             -        19,500
Operating expenses:
  Selling, general and administrative
   expenses.....................................      14,569             -        14,569
  Amortization of goodwill......................         431             -           431
  Stock based compensation......................         156             -           156
                                                  -----------       ------    -----------
    Total operating expenses....................      15,156             -        15,156
                                                  -----------       ------    -----------
Operating income................................       4,344             -         4,344
Interest income.................................         139             -           139
Interest expense................................      (2,035)        1,899          (136)
Other income (expense) - net....................         200             -           200
                                                  -----------       ------    -----------
Income before income taxes and minority
 interest.......................................       2,648         1,899         4,547
Provision for income taxes......................       1,236           760         1,996
                                                  -----------       ------    -----------
Income before minority interest.................       1,412         1,139         2,551
Minority interest...............................         (58)            -           (58)
                                                  -----------       ------    -----------
Net income (loss)...............................   $   1,354     $   1,139     $   2,493
                                                  -----------       ------    -----------
                                                  -----------       ------    -----------
Pro forma net income per share..................   $    0.16                   $    0.21
                                                  -----------                 -----------
                                                  -----------                 -----------
Shares used in computing pro forma net income
 per share......................................       8,221                      12,150
                                                  -----------                 -----------
                                                  -----------                 -----------
</TABLE>
    
 
             See notes to pro forma combined financial statements.
 
                                      F-6
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
               PRO FORMA COMBINED STATEMENT OF INCOME (UNAUDITED)
                         SIX MONTHS ENDED JUNE 30, 1997
    
   
<TABLE>
<CAPTION>
                                              ---------------------------------------------------------------------------------
 
<S>                                           <C>        <C>        <C>        <C>        <C>        <C>          <C>
                                                                                                                     PURCHASE
                                                                                                                   ACCOUNTING
                                                                   HISTORICAL                                       PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA)                WL        FPI        SLL        COH        BPP    COMBINED   ADJUSTMENTS
                                              ---------  ---------  ---------  ---------  ---------  -----------  -------------
Sales.......................................  $  46,919  $       -  $  11,215  $   8,982  $   6,894   $  74,010     $     290
Cost of sales...............................     35,951          -      8,132      5,694      4,202      53,979           143
                                              ---------  ---------  ---------  ---------  ---------  -----------        -----
Gross profit................................     10,968          -      3,083      3,288      2,692      20,031           147
Operating expenses:
  Selling, general and administrative
   expenses.................................      8,206        474      1,512      2,257      2,010      14,459           831
  Amortization of goodwill..................         57          -        107         51          2         217           246
  Stock based compensation..................         20          -         19        413          -         452             -
                                              ---------  ---------  ---------  ---------  ---------  -----------        -----
      Total operating expenses..............      8,283        474      1,638      2,721      2,012      15,128         1,077
                                              ---------  ---------  ---------  ---------  ---------  -----------        -----
Operating income............................      2,685       (474)     1,445        567        680       4,903          (930)
Interest income.............................         36          -                                           36             -
Interest expense............................       (724)         -       (923)      (137)      (178)     (1,962)            -
Other income (expense) - net................        554          -          -          -         30         584            55
                                              ---------  ---------  ---------  ---------  ---------  -----------        -----
Income before income taxes and minority
 interest...................................      2,551       (474)       522        430        532       3,561          (875)
Provision for income taxes..................        852       (189)       255        190        213       1,321          (250)
                                              ---------  ---------  ---------  ---------  ---------  -----------        -----
Income before minority interest.............      1,699       (285)       267        240        319       2,240          (625)
Minority interest...........................        (43)         -          -          -          -         (43)            -
                                              ---------  ---------  ---------  ---------  ---------  -----------        -----
Net income (loss)...........................  $   1,656  $    (285) $     267  $     240  $     319   $   2,197     $    (625)
                                              ---------  ---------  ---------  ---------  ---------  -----------        -----
                                              ---------  ---------  ---------  ---------  ---------  -----------        -----
Pro forma net income per share..............
Shares used in computing pro forma net
 income per share...........................
 
<CAPTION>
 
<S>                                           <C>          <C>            <C>
 
                                               PRO FORMA      OFFERING
                                                 COMPANY     PRO FORMA     PRO FORMA
(IN THOUSANDS, EXCEPT PER SHARE DATA)         PRE-OFFERING ADJUSTMENTS       COMPANY
                                              -----------  -------------  -----------
Sales.......................................   $  74,300     $       -     $  74,300
Cost of sales...............................      54,122             -        54,122
                                              -----------       ------    -----------
Gross profit................................      20,178             -        20,178
Operating expenses:
  Selling, general and administrative
   expenses.................................      15,290             -        15,290
  Amortization of goodwill..................         463             -           463
  Stock based compensation..................         452             -           452
                                              -----------       ------    -----------
      Total operating expenses..............      16,205             -        16,205
                                              -----------       ------    -----------
Operating income............................       3,973             -         3,973
Interest income.............................          36             -            36
Interest expense............................      (1,962)        1,826          (136)
Other income (expense) - net................         639             -           639
                                              -----------       ------    -----------
Income before income taxes and minority
 interest...................................       2,686         1,826         4,512
Provision for income taxes..................       1,071           729         1,800
                                              -----------       ------    -----------
Income before minority interest.............       1,615         1,097         2,712
Minority interest...........................         (43)            -           (43)
                                              -----------       ------    -----------
Net income (loss)...........................   $   1,572     $   1,097     $   2,669
                                              -----------       ------    -----------
                                              -----------       ------    -----------
Pro forma net income per share..............   $    0.19                   $    0.22
                                              -----------                 -----------
                                              -----------                 -----------
Shares used in computing pro forma net
 income per share...........................       8,221                      12,150
                                              -----------                 -----------
                                              -----------                 -----------
</TABLE>
    
 
             See notes to pro forma combined financial statements.
 
                                      F-7
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
    
 
          NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED)
 
   
1.  FIRSTPAK, INC. BACKGROUND
    
   
FirstPak, Inc.'s predecessor was incorporated in California on February 23,
1996. Accordingly, no historical financial information is available prior to
February 23, 1996. Additionally, FirstPak, Inc. had no activities prior to July
1996. FirstPak, Inc. was formed for the purpose of creating a consolidator and
national operator of packaging and labeling products and service enterprises.
    
 
   
Through June 30, 1997, FirstPak, Inc. has not engaged in any activities other
than to develop and refine its strategy and search for, plan and negotiate
potential acquisitions of label and packaging companies meeting its strategic
goals. FirstPak, Inc. has conducted no other activities and is expected to
acquire the Operating Subsidiaries simultaneously with the closing of the
Offering. See "Risk Factors", "Certain Relationships and Related Party
Transactions" and page F-3 for additional information.
    
 
2.  HISTORICAL FINANCIAL STATEMENTS
   
The historical financial statements represent the financial position and results
of operations for FirstPak, Inc. and the Operating Subsidiaries and were derived
from (i) their financial statements as of June 30, 1997 and for the six months
ended June 30, 1996 (except for St. Louis Litho) and 1997 (June 30, 1996 and
June 29, 1997 with respect to Blake Printing) included elsewhere in this
Prospectus or (ii) except for St. Louis Litho, their financial statements for
the year ended December 31, 1996 (December 29, 1996 with respect to Blake
Printing) included elsewhere in this Prospectus. With respect to St. Louis Litho
for the six months ended June 30, 1996 and for the year ended December 31, 1996,
its historical financial statements for the year ended December 31, 1996 are
discussed below.
    
 
   
St. Louis Litho was acquired by an investor group on May 31, 1996 (the "MBO").
Consequently, St. Louis Litho's historical financial statements for the six
months ended June 30, 1996 and for the year ended December 31, 1996, included
elsewhere in this Prospectus, are presented on a pro forma basis as if the MBO
of St. Louis Litho had occurred on January 1, 1996.
    
 
3.  REVERSE ACQUISITION AND ACQUISITIONS OF OPERATING BUSINESSES
   
The Acquisitions will occur simultaneously with the closing of FirstPak, Inc.'s
Offering. Upon consummation of the Acquisitions, the former stockholders of
Wisconsin Label will, as a group, own approximately 48.6% of the Company's
Common Stock and control approximately 50.2% of the Company's voting interests.
As such Common Stock ownership and voting interests will exceed (i) the separate
Company ownership and voting interests of the former stockholder groups for St.
Louis Litho, CalOptical, or Blake Printing, or (ii) the FirstPak stockholders'
carryover ownership and voting interests just prior to the consummation of the
Acquisitions, the Acquisitions, in accordance with Staff Accounting Bulletin No.
97, BUSINESS COMBINATIONS PRIOR TO A PUBLIC OFFERING, will be accounted for as a
"reverse acquisition" by Wisconsin Label as the accounting acquirer using the
purchase method of accounting. As a result, the Company's consolidated financial
statements for periods prior to the consummation of the Acquisitions prepared
for comparative purposes subsequent to the consummation of Acquisitions will be
the historical consolidated financial statements of Wisconsin Label with certain
amounts within "Stockholders' Equity" restated to reflect the impact of
FirstPak's acquisition of Wisconsin Label.
    
 
   
The total estimated purchase price to be recorded by Wisconsin Label (the
accounting acquirer) is approximately $65.8 million and consists of (i) $25.9
million fair value of 2,274,389 shares of FirstPak, Inc. Common Stock and
options to purchase 393,616 shares of FirstPak, Inc. Common Stock (at an average
exercise price of $0.66 per share) issued to the St. Louis Litho, CalOptical and
Blake Printing Sellers with "lockups" ($9.80 per share), (ii) $4.2 million fair
value of 301,712 shares of FirstPak, Inc. Common Stock issued to the St. Louis
Litho and CalOptical Sellers and simultaneously sold by such Sellers in
conjunction with the Offering ($14.00 per share), (iii) $34.9 million fair value
of liabilities assumed in conjunction with the Acquisitions, and (iv) $800,000
transaction costs directly related to the Acquisitions.
    
 
                                      F-8
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
    
 
    NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
 
3.  REVERSE ACQUISITION AND ACQUISITIONS OF OPERATING BUSINESSES (CONTINUED)
   
The 2,274,389 shares and options to purchase 393,616 shares of FirstPak, Inc.
Common Stock issued to the St. Louis Litho, CalOptical and Blake Printing
Sellers with lockups were valued at a 30% discount to the Offering price of $14
per share ($9.80 per share, net after discount) based upon an appraisal of the
impact to fair value for the lack of liquidity of the shares. As discussed
elsewhere in the Prospectus, the holders of these shares have agreed to not
offer, sell, or otherwise dispose of any of these shares for a period of one
year after the closing of the Offering and, for an additional year thereafter,
sell such shares in compliance with certain volume limitations.
    
 
   
The total estimated purchase price of $65.8 million has been allocated to the
assets acquired (and liabilities assumed included in the total estimated
purchase price) based on their estimated fair values in accordance with the
purchase method of accounting for business combinations as described in Note 4
"Unaudited Pro Forma Combined Balance Sheet Adjustments", below.
    
 
   
Additionally (based on an assumed initial public offering price of $14 per
share), $24.3 million will be recorded as stock based compensation expense by
the Company concurrent with the closing of the Transactions, as follows: (i)
$15.5 million for 1,110,667 shares of FirstPak, Inc. Common Stock owned by the
FirstPak, Inc. stockholders just prior to the closing of the Transactions
(representing compensation of $14.00 per share), (ii) $5.4 million for options
to purchase 515,577 shares of FirstPak, Inc. Common Stock at $3.50 per share to
be granted to certain Wisconsin Label stockholders contingent upon the closing
of the Transactions (representing $14.00 per share less $3.50 per share, or
compensation of $10.50 per share) and (iii) $3.4 million for options to purchase
332,143 shares of FirstPak, Inc. Common Stock at an average per share price of
$3.92 granted to certain FirstPak, Inc. employees contingent upon the closing of
the Transactions (representing $14.00 per share less $3.92 per share, or
compensation of $10.08 per share).
    
 
                                      F-9
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
    
 
    NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
 
4.  UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS
A summary of the unaudited pro forma combined balance sheet adjustments follows:
 
   
<TABLE>
<CAPTION>
                                -------------------------------------
                                         UNAUDITED PRO FORMA
                                 COMBINED BALANCE SHEET ADJUSTMENTS
                                      PURCHASE               OFFERING
                                --------------         --------------
(IN THOUSANDS)
<S>                             <C>                    <C>
ASSETS
Current assets:
  Cash........................  $            -         $        1,628(i)
  Accounts receivable.........               -                      -
  Inventories.................              73(a)                   -
  Prepaid expenses and
   other......................            (289)(b)             (2,097) (i)
                                --------------         --------------
    Total current assets......            (216)                  (469)
Property and equipment -
 Net..........................           2,498(c)                   -
Other assets..................             185(d)                 468(i)
Goodwill......................          21,697(b)                   -
                                --------------         --------------
Total assets..................  $       24,164         $           (1)
                                --------------         --------------
                                --------------         --------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Short-term debt and notes
   payable....................  $            -         $       (4,796)(i)
  Current maturities of
   long-term debt.............               -                 (4,864)(i)
  Accounts payable............             558(e)              (3,052)(i)
  Accrued liabilities.........               -                   (131)(i)
  Income taxes payable........               -                      -
  Other current liabilities...               -                      -
                                --------------         --------------
    Total current
     liabilities..............             558(e)             (12,843)
Long-term debt................               -                (34,468)(i)
Deferred compensation.........               -                      -
Deferred income taxes.........          (2,415)(f)                (61)(i)
Minority interest and other...               -                   (189)(i)
Redeemable preferred stock....           9,440(g)                   -
Warrants with put option......          (2,240)(g)                  -
Stockholders' equity:
  Common stock................            (306)(g)                  4(j)
  Additional paid-in capital
   and warrants with put
   option.....................          41,219(g)              47,646(j)
  Unamortized stock based
   compensation...............             114(g)                   -
  Retained earnings...........         (22,206)(h)                (90)(i)
                                --------------         --------------
    Total stockholders'
     equity...................          18,821                 47,560
                                --------------         --------------
Total liabilities and
 stockholders' equity.........  $       21,164         $           (1)
                                --------------         --------------
                                --------------         --------------
</TABLE>
    
 
PURCHASE accounting pro forma adjustments allocate the estimated purchase price
to the assets acquired and liabilities assumed based on their estimated fair
values in accordance with the purchase method of accounting:
 
   
a.  To reflect the fair value of finished goods and work in process inventories
    at estimated selling prices less the estimated sum of costs to complete,
    costs of selling and a reasonable profit allowance for the selling effort.
    
 
   
b.  To reflect the excess of total estimated purchase price over identifiable
    tangible and intangible assets acquired.
    
 
                                      F-10
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
    
 
    NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
 
4.  UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS (CONTINUED)
   
c.  To reflect the current replacement cost of depreciable property and
    equipment.
    
 
   
d.  To reflect the transfer of ownership of a Wisconsin Label equity investment
    to its stockholders.
    
 
   
e.  To reflect additional estimated transaction costs directly related to the
    Acquisitions.
    
 
   
f.  To reflect the increase in the basis of assets and liabilities, including
    the impact of stock based compensation discussed below, for financial
    reporting purposes over their basis for tax reporting purposes at enacted
    tax rates.
    
 
   
g.  To reflect the (in millions):
    
 
   
<TABLE>
<C>         <S>                                                                   <C>
       (i)  issuance of FirstPak, Inc. Common Stock, options to purchase Common
            Stock and Preferred Stock to the Sellers in exchange for their
            ownership in the Operating Subsidiaries.............................    $    73.8
      (ii)  stock based compensation discussed below............................         24.3
     (iii)  elimination of historical warrants with put option, common stock,
            additional paid-in capital and unamortized stock compensation
            amounts for the Operating
            Subsidiaries........................................................         (6.2)
      (iv)  elimination of FirstPak, Inc. Common Stock and Preferred Stock
            issued to the Wisconsin Label Sellers and other adjustments as a
            result of the reverse acquisition by Wisconsin Label................        (43.7)
                                                                                  -----------
            Total pro forma adjustment..........................................    $    48.2
                                                                                  -----------
                                                                                  -----------
</TABLE>
    
 
   
   Such total pro forma adjustment represents the following pro forma
    adjustments (in millions):
    
 
   
<TABLE>
<S>                                                                       <C>
Redeemable preferred stock..............................................    $     9.4
Warrants with put option................................................         (2.2)
Common stock............................................................         (0.3)
Additional paid in capital..............................................         41.2
Unamortized stock based compensation....................................          0.1
                                                                          -----------
        Total pro forma adjustment......................................    $    48.2
                                                                          -----------
                                                                          -----------
</TABLE>
    
 
   The Series A Preferred Stock ($11,000,000 redemption value) has been
    reflected at its estimated fair value of $9,440,000.
 
   
h.  To reflect: (i) stock based compensation expense ($15.5 million) related to
    the FirstPak, Inc. Common Stock owned by the FirstPak, Inc. stockholders
    just prior to the closing of the Transactions, (ii) stock based compensation
    expense ($8.8 million gross; $5.3 million, net of taxes) related to the
    options granted to certain Wisconsin Label stockholders and FirstPak, Inc.
    employees contingent upon the closing of the Transactions, (iii) elimination
    of historical retained earnings ($1.5 million) amounts for FirstPak, Inc.,
    St. Louis Litho, CalOptical and Blake Printing, (iv) gain ($100,000) related
    to transfer of ownership of a Wisconsin Label equity investment to its
    stockholders.
    
 
   
Offering pro forma adjustments reflect the anticipated issuance of FirstPak,
Inc. Common Stock to the public and the proposed use of the net proceeds:
    
 
   
i.  To reflect the proposed use of proceeds, principally to (i) repay
    substantially all of the approximately $44.3 million (as of June 30, 1997)
    of indebtedness (including accrued interest and certain repayment fees, (ii)
    pay approximately $800,000 of transaction costs directly related to the
    Acquisitions, (iii) pay $600,000 of credit facility fees and (iv) pay
    approximately $750,000 of other current liabilities incurred by FirstPak
    since its formation. The balance of the proceeds is approximately $1.6
    million.
    
 
                                      F-11
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
    
 
    NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
 
4.  UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS (CONTINUED)
   
j.  To reflect the issuance of 3,928,571 shares of FirstPak, Inc. Common Stock
    at $14 per share, net of underwriters' discount and other expenses (net
    proceeds to FirstPak, Inc. of $12.13 per share).
    
 
   
At June 30, 1997 Wisconsin Label's (the accounting acquiror) stockholders'
equity reconciles to the Company's pro forma stockholders' equity as follows (in
millions):
    
 
   
<TABLE>
<C>        <S>                                                                       <C>
Wisconsin Label stockholders' equity, June 30, 1997................................    $    15.7
      (i)  issuance of Common Stock and options to purchase Common Stock to the St.
           Louis Litho, CalOptical and Blake Printing Sellers......................         30.1
     (ii)  increase in "additional paid-in capital" for stock-based compensation...         24.3
    (iii)  issuance of Common Stock in the Offering................................         47.7
     (iv)  reclassify from stockholders' equity Series A Preferred Stock...........         (9.4)
      (v)  stock based compensation expensed, net of taxes.........................        (20.8)
     (vi)  Other - net.............................................................          (.1)
                                                                                     -----------
Company pro forma stockholders' equity, June 30, 1997..............................    $    87.5
                                                                                     -----------
                                                                                     -----------
</TABLE>
    
 
                                      F-12
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
    
 
    NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
 
5.  UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME ADJUSTMENTS
A summary of the unaudited pro forma combined statements of income adjustments
follows:
   
<TABLE>
<CAPTION>
                                          ----------------------------------------------------------------------------
                                                  UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME ADJUSTMENTS
                                          ----------------------------------------------------------------------------
                                                                                                                 TOTAL
                                                                                                            CONFORMING
                                                              CONFORMING               PURCHASE           AND PURCHASE
                                                         ---------------         --------------         --------------
(IN THOUSANDS)
<S>                                       <C>                                    <C>                    <C>
YEAR ENDED DECEMBER 31, 1996
Sales.....................................                          $ 540(a)            $     -                $   540
Cost of sales.............................                              -                   290(c)                 290
                                                             -----------         --------------         --------------
Gross profit..............................                            540                  (290)                   250
Operating expenses:
  Selling, general and administrative
   expenses...............................                            536(a)(b)           1,814(d)               2,350
  Amortization of goodwill................                              -                   494(e)                 494
  Stock based compensation................                              -                     -                      -
                                                             -----------         --------------         --------------
    Total operating expenses..............                            536                 2,308                  2,844
                                                             -----------         --------------         --------------
Operating income..........................                              4                (2,598)                (2,594)
Interest income...........................                              -                     -                      -
Interest expense..........................                             (4)(b)                 -                     (4)
Other income - Net........................                              -                    56(f)                  56
                                                             -----------         --------------         --------------
Income before income taxes................                              -                (2,542)                (2,542)
Provision for income taxes................                              -                  (991)(g)               (991)
Minority interest.........................                              -                   (14)(h)                (14)
Extraordinary item........................                              -                    58(i)                  58
                                                             -----------         --------------         --------------
Net income (loss).........................                          $   -               $(1,507)               $(1,507)
                                                             -----------         --------------         --------------
                                                             -----------         --------------         --------------
 
SIX MONTHS ENDED JUNE 30, 1996
Sales.....................................                          $ 275(a)            $     -                   $275
Cost of sales.............................                              -                   145(c)                 145
                                                             -----------         --------------         --------------
Gross profit..............................                            275                  (145)                   130
Operating expenses:
  Selling, general and administrative
   expenses...............................                            275(a)              1,014(d)               1,289
  Amortization of goodwill................                              -                   245(e)                 245
  Stock based compensation................                              -                     -                      -
                                                             -----------         --------------         --------------
    Total operating expenses..............                            275                 1,259                  1,534
                                                             -----------         --------------         --------------
Operating income..........................                              -                (1,404)                (1,404)
Interest income...........................                              -                     -                      -
Interest expense..........................                              -                     -                      -
Other income - Net........................                              -                   (17)(f)                (17)
                                                             -----------         --------------         --------------
Income before income taxes................                              -                (1,421)                (1,421)
Provision for income taxes................                              -                  (594)(g)               (594)
Minority interest.........................                              -                     -                      -
                                                             -----------         --------------         --------------
Net income (loss).........................                          $   -                 $(827)                 $(827)
                                                             -----------         --------------         --------------
                                                             -----------         --------------         --------------
 
<CAPTION>
 
                                                  OFFERING
                                            --------------
(IN THOUSANDS)
<S>                                       <C>      <C>
YEAR ENDED DECEMBER 31, 1996
Sales.....................................          $    -
Cost of sales.............................               -
                                            --------------
Gross profit..............................               -
Operating expenses:
  Selling, general and administrative
   expenses...............................               -
  Amortization of goodwill................               -
  Stock based compensation................               -
                                            --------------
    Total operating expenses..............               -
                                            --------------
Operating income..........................               -
Interest income...........................               -
Interest expense..........................           3,773(j)
Other income - Net........................               -
                                            --------------
Income before income taxes................           3,773
Provision for income taxes................           1,509(k)
Minority interest.........................               -
Extraordinary item........................               -
                                            --------------
Net income (loss).........................         $ 2,264
                                            --------------
                                            --------------
SIX MONTHS ENDED JUNE 30, 1996
Sales.....................................         $     -
Cost of sales.............................               -
                                            --------------
Gross profit..............................               -
Operating expenses:
  Selling, general and administrative
   expenses...............................               -
  Amortization of goodwill................               -
  Stock based compensation................               -
                                            --------------
    Total operating expenses..............               -
                                            --------------
Operating income..........................               -
Interest income...........................               -
Interest expense..........................           1,899(j)
Other income - Net........................               -
                                            --------------
Income before income taxes................           1,899
Provision for income taxes................             760(k)
Minority interest.........................               -
                                            --------------
Net income (loss).........................          $1,139
                                            --------------
                                            --------------
</TABLE>
    
 
                                      F-13
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
    
 
    NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
 
5.  UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME ADJUSTMENTS (CONTINUED)
          UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME ADJUSTMENTS
 
   
<TABLE>
<CAPTION>
                                                      ---------------------------------------------------
                                                                                         TOTAL
                                                                                    CONFORMING
(IN THOUSANDS)                                        CONFORMING     PURCHASE     AND PURCHASE     OFFERING
                                                      ----------     --------     ------------     ------
<S>                                                   <C>            <C>          <C>              <C>
SIX MONTHS ENDED JUNE 30, 1997
Sales.............................................      $  290(a)    $     -         $ 290         $   -
Cost of sales.....................................           -           143(c)        143             -
                                                      ----------     --------       ------         ------
Gross profit......................................         290          (143)          147             -
Operating expenses:
  Selling, general and administrative expenses....         290(a)        541(d)        831             -
  Amortization of goodwill........................           -           246(e)        246             -
  Stock based compensation........................           -             -             -             -
                                                      ----------     --------       ------         ------
      Total operating expenses....................         290           787         1,077             -
                                                      ----------     --------       ------         ------
Operating income..................................           -          (930)         (930)            -
Interest income...................................           -             -             -             -
Interest expense..................................           -             -             -         1,826 (j)
Other income - Net................................           -            55(f)         55             -
                                                      ----------     --------       ------         ------
Income before income taxes........................           -          (875)         (875)        1,826
Provision for income taxes........................           -          (250)(g)      (250)          729 (k)
                                                      ----------     --------       ------         ------
Net income (loss).................................      $    -       $  (625)        $(625)        $1,097
                                                      ----------     --------       ------         ------
                                                      ----------     --------       ------         ------
</TABLE>
    
 
   
CONFORMING accounting pro forma adjustments reclassify and restate the
historical financial statements of FirstPak, Inc., St. Louis Litho, CalOptical
and Blake Printing so as to be consistent with the accounting and financial
reporting policies of Wisconsin Label (the accounting acquirer):
    
 
   
<TABLE>
<CAPTION>
                                                                        -----------------------------------
                                                                         YEAR ENDED      SIX MONTHS ENDED
                                                                        DECEMBER 31,         JUNE 30,
(IN THOUSANDS)                                                                 1996         1996       1997
                                                                        -------------  ---------  ---------
<S>        <C>                                                          <C>            <C>        <C>
a.         To reclassify CalOptical freight costs from a reduction in
            sales to selling expenses.................................    $     540    $     275  $     290
                                                                        -------------  ---------  ---------
                                                                        -------------  ---------  ---------
 
b.         To reclassify miscellaneous and individually insignificant
            amounts                                                       $      (4)      --         --
</TABLE>
    
 
                                      F-14
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
    
 
    NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
 
5.  UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME ADJUSTMENTS (CONTINUED)
PURCHASE accounting pro forma adjustments reflect the results of the purchase
accounting pro forma adjustments made to the unaudited pro forma combined
balance sheet giving effect to the Acquisitions as if they had occurred on
January 1, 1996:
 
   
<TABLE>
<CAPTION>
(IN THOUSANDS)
                                                                        -----------------------------------
                                                                                            SIX MONTHS
                                                                         YEAR ENDED           ENDED
                                                                        DECEMBER 31,         JUNE 30,
                                                                               1996         1996       1997
                                                                        -------------  ---------  ---------
<S>        <C>                                                          <C>            <C>        <C>
c.         To reflect depreciation expenses for increases in pro forma
            depreciable property and equipment using the straight line
            method over an average remaining useful life of seven
            years.....................................................    $     290    $     145  $     143
                                                                        -------------  ---------  ---------
                                                                        -------------  ---------  ---------
d.         To reflect:
           Depreciation expenses for increases in pro forma
            depreciable property and equipment using the straight-line
            method over an average remaining useful life of seven
            years.....................................................    $      68    $      34  $      43
           Estimated increases in corporate and related expenses, see
            below.....................................................        1,746          980        498
                                                                        -------------  ---------  ---------
           Total selling, general and administrative expenses purchase
            accounting pro forma adjustments..........................    $   1,814    $   1,014  $     541
                                                                        -------------  ---------  ---------
                                                                        -------------  ---------  ---------
e.         To reflect:
           Goodwill amortization for increases in pro forma goodwill
            using the straight line method over its estimated life of
            40 years..................................................    $     544    $     270  $     271
           Historical CalOptical recorded goodwill was amortized over
            20 years, purchase will be 40 years (on straight-line
            method)...................................................          (50)         (25)       (25)
                                                                        -------------  ---------  ---------
           Total goodwill purchase accounting pro forma adjustments...    $     494    $     245  $     246
                                                                        -------------  ---------  ---------
                                                                        -------------  ---------  ---------
f.         To reflect the reversal of equity income for investments to
            be transferred to Wisconsin Label stockholders prior to
           the Acquisitions...........................................    $      56    $     (17) $      55
                                                                        -------------  ---------  ---------
                                                                        -------------  ---------  ---------
</TABLE>
    
 
                                      F-15
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
    
 
    NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
 
5.  UNAUDITED PRO FORMA COMBINED STATEMENTS OF INCOME ADJUSTMENTS (CONTINUED)
 
   
<TABLE>
<CAPTION>
(IN THOUSANDS)
                                                                        -----------------------------------
                                                                                            SIX MONTHS
                                                                         YEAR ENDED           ENDED
                                                                        DECEMBER 31,         JUNE 30,
                                                                               1996         1996       1997
                                                                        -------------  ---------  ---------
<S>        <C>                                                          <C>            <C>        <C>
g.         To reflect:
           Income tax benefit related to above adjustments............    $    (819)   $    (470) $    (250)
           Reversal of Wisconsin Label tax provision for subsidiary
            loss not consolidated for tax purposes, subsidiary
            (effective March 1997) now consolidated for tax
            purposes..................................................         (172)        (124)         -
                                                                        -------------  ---------  ---------
           Total provision for income tax purchase accounting pro
            forma adjustments.........................................    $    (991)   $    (594) $    (250)
                                                                        -------------  ---------  ---------
                                                                        -------------  ---------  ---------
h.         To reflect impact on minority interest of March 1997
            additional ownership interest by Wisconsin Label in
           majority owned subsidiary as if such additional interest
           had occurred on January 1, 1996............................    $      14    $       -  $       -
                                                                        -------------  ---------  ---------
                                                                        -------------  ---------  ---------
i.         To reflect reversal of CalOptical extraordinary item as it
            is non-recurring..........................................    $      58    $       -  $       -
                                                                        -------------  ---------  ---------
                                                                        -------------  ---------  ---------
</TABLE>
    
 
   
The Company has estimated the annual operating cost of its corporate
headquarters, including compensation for its executive and staff personnel, to
be $1,960,000. This amount is reflected in pro forma adjustment "d" (less actual
costs incurred by FirstPak, Inc. during the appropriate pro forma period). This
amount reflects (i) employment agreements entered into with the Company's
Chairman, President and Chief Executive Officer, Vice Chairman and Chief
Financial Officer which provide for minimum annual compensation of $575,000 and
(ii) estimated annual costs related to: (a) annual compensation for additional
corporate staff to be hired, (b) executive and staff performance based
compensation and insurance and other employee benefits, (c) leasing corporate
offices, (d) depreciation and leasing costs for office furniture and equipment,
and (e) other corporate costs.
    
 
   
OFFERING pro forma adjustments reflect the results of the proposed use of net
proceeds from the issuance of FirstPak, Inc. Common Stock to the public:
    
 
   
<TABLE>
<CAPTION>
                                                                                       -----------------------------------
                                                                                                           SIX MONTHS
                                                                                        YEAR ENDED           ENDED
                                                                                       DECEMBER 31,         JUNE 30,
(IN THOUSANDS)                                                                                1996         1996       1997
                                                                                       -------------  ---------  ---------
<S>        <C>                                                                         <C>            <C>        <C>
j.         To reflect:
           Reduction in interest expenses resulting from the use of Offering
           proceeds, the proposed payoff of debt.....................................    $   4,033    $   2,029  $   1,956
           Amortization of the revolving credit facility signing fee, using the
            straight line method over the facility's six year life...................         (100)         (50)       (50)
           Periodic revolving credit facility committment fees.......................         (160)         (80)       (80)
                                                                                       -------------  ---------  ---------
           Total interest expense pro forma adjustments..............................    $   3,773    $   1,899  $   1,826
                                                                                       -------------  ---------  ---------
                                                                                       -------------  ---------  ---------
k.         To reflect the income tax expense related to the above adjustment.........    $   1,509    $     760  $     729
                                                                                       -------------  ---------  ---------
                                                                                       -------------  ---------  ---------
</TABLE>
    
 
                                      F-16
<PAGE>
   
                   FIRSTPAK, INC. AND OPERATING SUBSIDIARIES
    
 
    NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
 
6.  PRO FORMA NET INCOME PER SHARE
   
The weighted average shares outstanding used to calculate pro forma net income
per share is based on the estimated average number of shares of FirstPak, Inc.
Common Stock and common stock equivalents outstanding during the period (and
giving effect to the Transactions as if they occurred on January 1, 1996) as
follows:
    
 
   
<TABLE>
<S>                                                                 <C>
Shares issued in the formation of FirstPak, Inc...................     1,214,000
Shares issued to the Sellers......................................     5,969,000
Shares issued to the public in the Offering.......................     3,928,000
                                                                    ------------
    Total.........................................................    11,111,000
                                                                    ------------
 
Shares assumed to be issued for exercise of options under the
 treasury stock method:
  Options granted to or exchanged with the Sellers................       762,000
  Options granted to FirstPak, Inc. employees, director and
   consultant.....................................................       277,000
                                                                    ------------
    Total.........................................................     1,039,000
                                                                    ------------
Total.............................................................    12,150,000
                                                                    ------------
                                                                    ------------
</TABLE>
    
 
                                      F-17
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
   
To the Board of Directors and Stockholders
FirstPak, Inc.:
    
 
   
We have audited the accompanying balance sheet of FirstPak, Inc. ("FirstPak") as
of December 31, 1996, and the related statements of loss and accumulated deficit
and of cash flows for the period from February 23, 1996 (inception) through
December 31, 1996. These financial statements are the responsibility of the
FirstPak's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
    
 
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
 
   
In our opinion, such financial statements present fairly, in all material
respects, the financial position of FirstPak, Inc. as of December 31, 1996, and
the results of its operations and its cash flows for the period from February
23, 1996 (inception) through December 31, 1996 in conformity with generally
accepted accounting principles.
    
 
   
DELOITTE & TOUCHE LLP
San Francisco, California
August 27, 1997
    
 
                                      F-18
<PAGE>
   
                                 FIRSTPAK, INC.
                                 BALANCE SHEETS
    
 
   
<TABLE>
<CAPTION>
                                                       --------------------
                                                        DECEMBER
                                                             31,   JUNE 30,
                                                            1996       1997
                                                       ---------  ---------
(IN THOUSANDS, EXCEPT SHARE DATA)                                 (UNAUDITED)
<S>                                                    <C>        <C>
ASSETS
Cash.................................................      $   3      $   5
Deferred public offering costs.......................          -      1,803
Deferred income taxes................................         84        273
                                                       ---------  ---------
Total assets.........................................      $  87     $2,081
                                                       ---------  ---------
                                                       ---------  ---------
 
LIABILITIES AND STOCKHOLDERS' DEFICIT
Liabilities:
  Accounts payable...................................      $   1     $1,875
  Due to related parties.............................        214        619
                                                       ---------  ---------
    Total liabilities................................        215      2,494
                                                       ---------  ---------
Stockholders' deficit:
  Preferred stock, $.001 par value: 10,000,000 shares
   authorized; no shares issued and outstanding......          -          -
  Common stock, $.001 par value: 100 million shares
   authorized; 25 shares issued and outstanding......          2          2
  Accumulated deficit................................       (130)      (415)
                                                       ---------  ---------
    Total stockholders' deficit......................       (128)      (413)
                                                       ---------  ---------
Total liabilities and stockholders' deficit..........      $  87     $2,081
                                                       ---------  ---------
                                                       ---------  ---------
</TABLE>
    
 
                       See notes to financial statements.
 
                                      F-19
<PAGE>
   
                                 FIRSTPAK, INC.
                   STATEMENTS OF LOSS AND ACCUMULATED DEFICIT
    
 
   
<TABLE>
<CAPTION>
                                                      --------------------
                                                         PERIOD
                                                           FROM
                                                       FEBRUARY
                                                            23,
                                                           1996
                                                      (INCEPTION)       SIX
                                                        THROUGH     MONTHS
                                                       DECEMBER      ENDED
                                                            31,   JUNE 30,
                                                           1996       1997
                                                      ---------  ---------
(IN THOUSANDS)                                                   (UNAUDITED)
<S>                                                   <C>        <C>
Operating expenses:
  Acquisition search and related costs..............      $ 122      $ 271
  General and administrative........................         92        203
                                                      ---------  ---------
    Total operating expenses and loss before income
     taxes..........................................        214        474
  Income tax benefit................................        (84)      (189)
                                                      ---------  ---------
    Net loss........................................        130        285
 
Accumulated deficit:
  Beginning of period...............................          -        130
                                                      ---------  ---------
  End of period.....................................      $ 130      $ 415
                                                      ---------  ---------
                                                      ---------  ---------
</TABLE>
    
 
                       See notes to financial statements.
 
                                      F-20
<PAGE>
   
                                 FIRSTPAK, INC.
                            STATEMENTS OF CASH FLOWS
    
 
   
<TABLE>
<CAPTION>
                                                                --------------------------------
                                                                  PERIOD FROM
                                                                FEBRUARY 23, 1996          SIX
                                                                  (INCEPTION)           MONTHS
                                                                      THROUGH            ENDED
                                                                DECEMBER 31, 1996  JUNE 30, 1997
                                                                -----------------  -------------
(IN THOUSANDS)                                                                      (UNAUDITED)
<S>                                                             <C>                <C>
Cash Flows From Operating Activities:
  Net loss....................................................      $    (130)       $    (285)
  Adjustment to reconcile loss to net cash used in operating
   activities:
    Deferred public offering costs............................              -           (1,803)
    Change in accounts payable................................              1            1,874
    Change in due to related parties..........................            214              405
    Deferred income taxes.....................................            (84)            (189)
                                                                       ------           ------
      Net cash from operating activities......................              1                2
 
Cash Flows From Financing Activities -
  Capital contribution........................................              2                -
 
Cash At Beginning Of Period...................................              -                3
                                                                       ------           ------
Cash At End Of Period.........................................      $       3        $       5
                                                                       ------           ------
                                                                       ------           ------
</TABLE>
    
 
                       See notes to financial statements.
 
                                      F-21
<PAGE>
   
                                 FIRSTPAK, INC.
    
 
                         NOTES TO FINANCIAL STATEMENTS
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
1.  BASIS OF PRESENTATION
   
FirstPak, Inc.'s ("FirstPak") predecessor was initially incorporated in
California on February 23, 1996. Accordingly, no historical financial
information is available prior to February 23, 1996. Additionally, FirstPak had
no activities prior to July 1996. FirstPak was formed for the purpose of
creating a consolidator and national operator of packaging and labeling products
and service enterprises.
    
 
   
Through June 30, 1997, FirstPak has not engaged in any activities other than to
develop and refine its strategy and search for, plan and negotiate potential
acquisitions of label and packaging companies meeting its strategic goals.
FirstPak has conducted no other activities and is expected to acquire the
Operating Subsidiaries (See Note 3, "Probable Acquisitions and Accounting
Acquirer") simultaneously with the closing of the Offering (See Note 4,
"Probable Offering").
    
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
USE OF ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates and assumptions affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
 
   
DEFERRED PUBLIC OFFERING COSTS - Costs related to the public offering of
FirstPak securities (see Note 4, "Probable Offering") are deferred until the
closing of such offering at which time such costs are deducted from the offering
proceeds. Should FirstPak determine the closing of an offering is not probable,
such costs are expensed in the period of such determination.
    
 
   
ACQUISITION SEARCH AND RELATED COSTS - FirstPak expenses acquisition search and
related costs as incurred. In accordance with Staff Accounting Bulletin No. 79,
Accounting for Expenses or Liabilities Paid by Principal Stockholders FirstPak
includes in such costs direct out of pocket costs incurred and paid by its
principal stockholders and related entities. FirstPak intends to reimburse its
stockholders and related entities for such costs (classified on FirstPak's
balance sheet as "Due to Related Parties") from the proceeds from the sale of
Common Stock (see Note 4, "Probable Offering").
    
 
   
INTERIM FINANCIAL STATEMENTS - Unaudited interim financial information as of and
for the six months ended June 30, 1997 has been prepared on the same basis as
the financial statements as of and for the period ended December 31, 1996. In
the opinion of management, such unaudited interim information includes all
adjustments (consisting only of normal recurring adjustments) necessary for a
fair presentation of the interim financial information. The results of
operations and cash flows for the interim period presented are not necessarily
indicative of the expected results for the full year.
    
 
   
INCOME TAXES - FirstPak accounts for income taxes under the liability method,
whereby deferred income taxes are determined based on the future tax effects of
differences between the basis of assets and liabilities for financial statement
purposes and tax purposes given the provisions of the enacted tax laws. At
December 31, 1996 and June 30, 1997 FirstPak had deferred tax assets of $84,000
and $273,000 related to incurred book losses. FirstPak's effective tax rate is
40%, reflecting federal statutory rate of 34% and state rate of 6% (net of
federal effect).
    
 
   
STOCK BASED COMPENSATION - Statement of Financial Accounting Standards No. 123,
ACCOUNTING FOR STOCK BASED COMPENSATION ("SFAS 123") encourages, but does not
require, companies to record compensation cost for stock-based employee
compensation plans at fair value. FirstPak has chosen to continue to account for
stock-based compensation using the intrinsic value method prescribed by
Accounting Principles Board Opinion No. 25,
    
 
                                      F-22
<PAGE>
   
                                 FIRSTPAK, INC.
    
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
   
ACCOUNTING FOR STOCK ISSUED TO EMPLOYEES, and related Interpretations.
Accordingly, compensation cost for stock awards is measured as the excess, if
any, of the estimated fair value of FirstPak's stock at the measurement date
over the amount an employee must pay to acquire the stock.
    
 
   
NEW ACCOUNTING PRONOUNCEMENTS - In June 1997, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 130, REPORTING
COMPREHENSIVE INCOME, which requires that an enterprise report, by major
components and as a single total, the change in its net assets during the period
from nonowner sources; and Statement of Financial Accounting Standards No. 131,
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION, which
establishes annual and interim reporting standards for an enterprise's operating
segments and related diclosures about its products, services, geographic areas,
and major customers. Adoption of these statements will not impact FirstPak's
financial position, results of operations or cash flows, and any effect will be
limited to the form and content of its disclosures. Both statements are
effective for fiscal years beginnning after December 15, 1997, with earlier
application permitted.
    
 
3.  PROBABLE ACQUISITIONS AND ACCOUNTING ACQUIRER
   
On July 17, 1997, FirstPak executed merger agreements to acquire (i) Wisconsin
Label Corporation and subsidiaries ("Wisconsin Label"), (ii) St. Louis
Lithographing Company ("St. Louis Litho"), (iii) CalOptical Holding Corporation
and subsidiary ("CalOptical") and (iv) Blake Printing and Publishing, Inc.
("Blake Printing") (collectively, the "Operating Subsidiaries" and their
stockholders, the "Sellers"). These acquisitions (the "Acquisitions") are
expected to occur simultaneously with the closing of FirstPak's Offering (see
Note 4, "Probable Offering"). Upon consummation of the Acquisitions, the former
stockholders of Wisconsin Label will, as a group, own in excess of 47.0% of
FirstPak's common stock and control in excess of 48.0% of the FirstPak's voting
interests. As such common stock ownership and voting interests will exceed (i)
the separate FirstPak ownership and voting interests of the former stockholder
groups for St. Louis Litho, CalOptical, or Blake Printing, or (ii) the FirstPak
stockholders' carryover ownership and voting interests just prior to the
consummation of the Acqusitions, the Acquisitions will be accounted for as a
"reverse acquisition" by Wisconsin Label Corporation and subsidiaries as the
accounting acquirer using the purchase method of accounting. As a result,
FirstPak's consolidated financial statements for periods prior to the
consummation of the Acquisitions prepared for comparative purposes subsequent to
the consummation of the Acquisitions will be the historical consolidated
financial statements of Wisconsin Label with certain amounts within
"Stockholders' Equity" restated to reflect the impact of FirstPak's acquisition
of Wisconsin Label.
    
 
   
The total estimated purchase price to be recorded by Wisconsin Label (the
accounting acquirer) is approximately $65.8 million and consists of (i) $25.9
million fair value of the shares of FirstPak Common Stock and options to
purchase shares of FirstPak Common Stock to be issued to the St. Louis Litho,
CalOptical and Blake Printing Sellers with "lockups", (ii) $4.2 million fair
value of FirstPak Common Stock to be issued to the St. Louis Litho and
CalOptical Sellers and simultaneously sold by such Sellers in conjunction with
the Offering, (iii) $34.9 million fair value of St. Louis Litho, CalOptical and
Blake Printing liabilities assumed (based on June 30, 1997 data) in conjunction
with the Acquisitions, and (iv) $800,000 transaction costs directly related to
the Acquisitions. The actual purchase price will be dependent upon (i) the
actual number of shares of FirstPak Common Stock and options to purchase
FirstPak Common Stock issued to the Sellers, (ii) the actual initial public
offering price per share of FirstPak Common Stock, (iii) the fair value of the
actual liabilities assumed on the date the Acquisitions close, and (iv) the
actual transaction costs incurred.
    
 
   
The shares and options to purchase shares of FirstPak Common Stock to be issued
to St. Louis Litho, CalOptical and Blake Printing Sellers with lockups will be
valued at a 30% discount to the initial public offering price based upon an
appraisal of the impact to fair value for the lack of liquidity of the shares.
As discussed elsewhere
    
 
                                      F-23
<PAGE>
   
                                 FIRSTPAK, INC.
    
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
3.  PROBABLE ACQUISITIONS AND ACCOUNTING ACQUIRER (CONTINUED)
in the Prospectus, the holders of these shares have agreed to not offer, sell,
or otherwise dispose of any of these shares for a period of one year after the
closing of the Offering and, under certain circumstances, (i) the shares are not
be freely tradable for up to two years subsequent to the closing of the Offering
and (ii) certain shares are not freely tradeable.
 
The total estimated purchase price will be allocated to the assets acquired (and
liabilities assumed included in the total estimated purchase price) based on
their fair values in accordance with the purchase method of accounting for
business combinations.
 
   
Additionally, approximately $24.3 million will be recorded as stock based
compensation expense concurrent with the closing of the Transactions, related
to: (i) FirstPak Common Stock owned by the FirstPak employees just prior to the
closing of the Transactions (ii) options to purchase shares of FirstPak Common
Stock to be granted to certain Wisconsin Label employee stockholders at a price
per share equal to 25% of the initial public offering price contingent upon the
closing of the Transactions, and (iii) options to purchase shares of FirstPak
Common Stock at a weighted average exercise price per share equal to
approximately 28% of the initial public offering price granted to certain
FirstPak employees contingent upon the closing of the Transactions.
    
 
   
Pro forma unaudited results of operations for the year ended December 31, 1996
and for the six months ended June 30, 1996 and 1997 as if the Acquisitions had
occurred on January 1, 1996 follows:
    
 
   
<TABLE>
<CAPTION>
                                                           --------------------------------------
                                                                 YEAR ENDED    SIX MONTHS ENDED
                                                               DECEMBER 31,        JUNE 30,
                                                                       1996       1996       1997
                                                           ----------------  ---------  ---------
                                                             (UNAUDITED)         (UNAUDITED)
(IN THOUSANDS)
<S>                                                        <C>               <C>        <C>
 
Pro forma sales..........................................         $ 142,784  $  72,620  $  74,300
Pro forma operating income...............................             7,501      4,344      3,973
Pro forma net income.....................................             4,458      2,493      2,669
</TABLE>
    
 
4.  PROBABLE OFFERING ("OFFERING")
   
In connection with the probable Acquisitions (see Note 3, "Probable Acquisitions
and Accounting Acquirer"), FirstPak intends to issue approximately (i) 1.2
million shares of Common Stock, through a split of the 25 shares of Common Stock
of FirstPak currently outstanding, subject to certain adjustments, (ii) 9.9
million shares of Common Stock (approximately 6.0 million shares to the Sellers,
subject to certain adjustments, and approximately 3.9 million shares to the
public) and (iii) 220,000 shares of its Series A Preferred Stock to the
Wisconsin Label Sellers. The actual numbers of shares of FirstPak Common Stock
to be issued is dependent upon the initial public offering price per share and
other factors.
    
 
5.  PROBABLE CREDIT AGREEMENT
   
FirstPak has received a commitment letter from The Chase Manhattan Bank
("Chase") pursuant to which Chase has agreed, subject to certain conditions, to
provide FirstPak with a senior revolving credit facility (the "Facility") in the
amount of $80 million. Up to $60 million of the Facility may be used for
acquisitions by FirstPak. The remaining $20 million is for working capital
purposes. Borrowings under the working capital Facility will be limited to
certain percentages of eligible accounts receivable and inventory. Borrowings
under the Facility will be secured by the capital stock of the Operating
Subsidiaries, and the Operating Subsidiaries will be required to guarantee the
repayment of amounts outstanding under the Facility. The Facility will contain
covenants requiring FirstPak to maintain certain financial ratios and to meet
certain financial tests, including minimum debt service
    
 
                                      F-24
<PAGE>
   
                                 FIRSTPAK, INC.
    
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
5.  PROBABLE CREDIT AGREEMENT (CONTINUED)
coverage, maximum leverage, maximum capital expenditures and minimum tangible
net worth. In addition, consent of the lender may be required for certain
acquisitions. The obligation of Chase to provide the Facility is subject to
consummation of the Acquisitions and the Offering and to certain other
conditions.
 
6.  CAPITAL STOCK
   
The authorized capital stock of FirstPak consists of 100,000,000 shares of
Common Stock, par value $0.001 per share, and 10,000,000 shares of preferred
stock, par value $0.001 per share (the "Preferred Stock").
    
 
COMMON STOCK - Holders of Common Stock are entitled to one vote for each share
held of record on all matters submitted to a vote of the stockholders. Subject
to the rights of any holders of Preferred Stock, holders of Common Stock are
entitled to receive ratably such dividends as may be declared by the Board of
Directors out of funds legally available. In the event of a liquidation,
dissolution or winding up of the Company, holders of Common Stock are entitled
to share ratably in the distribution of all assets remaining after payment of
liabilities, subject to the rights of any holders of Preferred Stock. Holders of
Common Stock have no preemptive rights to subscribe for additional shares of the
Company and no right to convert their Common Stock into any other securities. In
addition, there are no redemption or sinking fund provisions applicable to the
Common Stock.
 
   
PREFERRED STOCK - The Board of Directors is authorized, without further action
by the stockholders, to issue any or all shares of authorized Preferred Stock as
a class without series or in one or more series and to fix the rights,
preferences, restrictions and designations thereof, including dividend rights,
conversion rights, voting rights, terms of redemption, liquidation preferences
and the number of shares constituting any series. The issuance of Preferred
Stock could adversely affect the voting power of holders of Common Stock and
could have the effect of delaying, deferring or impeding a change in control of
FirstPak.
    
 
   
In connection with the Acquisitions FirstPak will issue 220,000 shares of its
Series A Preferred Stock, $0.001 par value, to the former stockholders of
Wisconsin Label. The Series A Preferred Stock will be redeemable for $11,000,000
upon either (i) a sale, merger or other business combination for cash or stock
of a certain investment of Wisconsin Label in another printing company, (ii) a
date six months after the closing of a firm commitment underwritten public
offering of such printing company's common stock that represents not less than
20% of the outstanding capital stock of such printing company and results in
aggregate gross proceeds to such printing company in excess of $15,000,000,
(iii) the sale by FirstPak of (a) not less than 75% of the shares of such other
printing company owned by Wisconsin Label and the receipt of funds (in any
amount) due to FirstPak upon such sale or (b) all or any part of its equity
interest in such other printing company pursuant to which FirstPak receives not
less than $6 million, (iv) the dissolution, liquidation or winding-up of such
other printing company or (v) the exercise of certain put or call options
attached to Wisconsin Label's interest in such other printing company, the
exercise of which, in certain circumstances, must (a) be with respect to not
less than 75% of the shares of such other printing company owned by Wisconsin
Label and the receipt of funds (in any amount) due to FirstPak upon such
exercise or (b) cause FirstPak to receive not less than $6 million in the
aggregate pursuant to such exercise. The Series A Preferred Stock will entitle
its holder to one vote for each share on all matters presented to stockholders
for approval. The Series A Preferred Stock will be recorded at its estimated
fair value (approximately $9,440,000). The $1,560,000 estimated discount will be
recorded similar to a preferred stock dividend when the Series A Preferred Stock
is redeemed.
    
 
7.  STOCK OPTIONS
   
FirstPak issued stock options to an employee on February 14, 1997 to purchase
50,000 new shares of FirstPak's Common Stock. The options vest as follows:
25,000 upon the earlier of the successful completion of a public offering (see
Note 4, "Probable Offering") or over a four year period at 25% per year and the
remaining 25,000
    
 
                                      F-25
<PAGE>
   
                                 FIRSTPAK, INC.
    
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
7.  STOCK OPTIONS (CONTINUED)
over a four-year period at 25% per year. The exercise price of the options was
set at $5.35 which was management's estimate of the fair value of the options at
issuance. Accordingly, no compensation expense has been recorded for such
options.
 
   
SFAS 123 requires the disclosure of pro forma net income had FirstPak adopted
the fair value method as of the beginning of 1997 (the beginning of the period
when FirstPak first issued stock options). Under SFAS 123, the fair value of
stock-based awards to employees is calculated through the use of option pricing
models. These models require subjective assumptions, including future stock
price volatility and expected time to exercise, which greatly affect the
calculated values. FirstPak's calculation for its one existing employee stock
option agreement was made using the Black-Scholes option pricing model with the
following average assumptions; expected life of 5 years; stock volatility,
..001%; risk free interest rates, 5.53%; and no dividends during the expected
term. If the computed fair values of the agreement was included in expense, pro
forma net loss for the six months ended June 30, 1997 would not change
materially from the amount reported in the accompanying statements of loss.
    
 
   
FirstPak's 1997 Stock Plan (the "1997 Stock Plan") was approved by the Board of
Directors and the stockholders of FirstPak in May 1997. The 1997 Stock Plan
provides for the grant of incentive stock options to employees (including
officers and employee directors) and for the grant of nonstatutory stock options
and stock purchase rights ("SPRs") to employees, directors and consultants.
Unless terminated sooner, the 1997 Stock Plan will terminate automatically in
2007.
    
 
   
In June 1997, FirstPak agreed to grant options to purchase 150,000 shares and
257,143 shares of its Common Stock to its President and Chief Executive Officer
at an exercise price of 100% and 25%, respectively, of FirstPak's Common Stock
price in the Offering and agreed to grant options to purchase 20,000 shares of
its Common Stock to a Director at an exercise price of 75% of FirstPak's Common
Stock price in the Offering (see Note 4, "Probable Offering"). In August 1997,
FirstPak agreed to grant options to purchase 30,000 shares and 55,000 shares of
its Common Stock to its Chief Financial Officer at an exercise price of 100% and
25%, respectively, of FirstPak's Common Stock price in the Offering and agreed
to grant options to purchase 10,000 shares of its Common Stock to a consultant
at an exercise price of 25% of FirstPak's Common Stock price in the Offering
(see Note 4, "Probable Offering"). Also, in June 1997, FirstPak, as discussed
above (see Note 3, "Probable Acquisitions and Accounting Acquiror"), agreed to
grant, contingent upon the closing of the Transactions, options to purchase
515,577 shares of its Common Stock, dependent upon the initial offering price
per share, to certain employee stockholders of Wisconsin Label at an exercise
price of 25% of FirstPak's Common Stock price in the Offering. Such options vest
and are exercisable concurrent with the closing of the Transactions. As
discussed above (see Note 3 "Probable Acquisitions and Accounting Acquirer"),
FirstPak will record approximately $24.3 million of stock based compensation, of
which $8.8 million relates to options, concurrent with the closing of the
Transactions.
    
 
   
Concurrent with the closing of the Transactions, FirstPak will assume the stock
option obligations of St. Louis Litho, CalOptical and Blake Printing. Such
obligations will entitle certain employees of St. Louis Litho, CalOptical and
Blake Printing to purchase 393,424 shares of FirstPak Common Stock at a weighted
average exercise price of $0.66 per share, dependent upon the (i) the actual
number of shares of FirstPak Common Stock issued to Sellers and sold in the
Offering and (ii) the actual initial public offering price per share.
    
 
The 1997 Stock Plan may be administered by the Board of Directors or a committee
of the Board of Directors (as applicable, the "Administrator"). The
Administrator has the power to determine the terms of the options or SPRs
granted, including the exercise price of the option or SPR, the number of shares
subject to each option or SPR, the exercisability thereof, and the form of
consideration payable upon such exercise. In addition, the
 
                                      F-26
<PAGE>
   
                                 FIRSTPAK, INC.
    
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
7.  STOCK OPTIONS (CONTINUED)
Administrator has the authority to amend, suspend or terminate the 1997 Stock
Plan, provided that no such action may affect any share of Common Stock
previously issued or sold or any option previously granted under the 1997 Stock
Plan.
 
   
Options and SPRs granted under the 1997 Stock Plan are not generally
transferable by the optionee, and each option and SPR is exercisable during the
lifetime of the optionee only by such optionee. Options granted under the 1997
Stock Plan must generally be exercised within three months after the end of
optionee's status as an employee, director of consultant of FirstPak, or within
twelve months after such optionee's termination by death or disability, but in
no event later than the expiration of the option's ten-year term. SPRs will be
exercisable pursuant to a restricted stock purchase agreement (the "Restricted
Stock Purchase Agreement"). Unless the Administrator determines otherwise, the
Restricted Stock Purchase Agreement shall grant FirstPak a repurchase option
exercisable upon the voluntary or involuntary termination of the purchaser's
employment with FirstPak for any reason (including death or disability). The
purchase price for shares repurchased pursuant to the Restricted Stock Purchase
Agreement shall be the original price paid by the purchaser and may be paid by
cancellation of any indebtedness of the purchaser to FirstPak. The repurchase
option shall lapse at a rate determined by the Administrator. The exercise price
of all incentive stock options granted under the 1997 Stock Plan must be at
least equal to the fair market value of the Common Stock on the date of grant.
The exercise price of nonstatutory stock options and SPRs granted under the 1997
Stock Plan is determined by the Administrator, but with respect to nonstatutory
stock options intended to qualify as "performance-based compensation" within the
meaning of Section 162(m) of the Internal Revenue Code of 1986, as amended, the
exercise price must at least be equal to the fair market value of the Common
Stock on the date of grant. With respect to any participant who owns stock
possessing more than 10% of the voting power of all classes of FirstPak's
outstanding capital stock, the exercise price of any incentive stock option
granted must equal at least 110% of the fair market value on the grant date and
the term of such incentive stock option must not exceed five years. The term of
all other options granted under the 1997 Stock Plan may not exceed ten years.
    
 
   
In addition, the 1997 Stock Plan provides that each director that is not also an
officer or employee of FirstPak or an Operating Subsidiary shall be
automatically granted an option to purchase 20,000 shares of Common Stock on the
later of the effective date of the plan or the date on which such person first
becomes a nonemployee director. Each nonemployee director shall also be
automatically granted an option to purchase 5,000 shares on July 1 of each year
provided he or she is then a nonemployee director and if, as of such date, he or
she shall have served on FirstPak's Board of Directors for at least the
preceding six months. Options granted to nonemployee directors vest ratably over
three years, and have a term of ten years. The exercise price of options granted
to nonemployee directors shall be 100% of the fair market value per share of
Common Stock on the date of grant.
    
 
   
The 1997 Plan provides that in the event of a merger of FirstPak with or into
another corporation, or a sale of substantially all of FirstPak's assets, each
option shall be assumed or an equivalent option substituted for by the successor
corporation. If the outstanding options are not assumed or substituted for by
the successor corporation, the Administrator shall provide for the optionee to
have the right to exercise the option or SPR as to all of the optioned stock,
including shares as to which it would not otherwise be exercisable.
    
 
                                      F-27
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors and Stockholders
 of Wisconsin Label Corporation:
 
We have audited the accompanying consolidated balance sheets of Wisconsin Label
Corporation and subsidiaries (the "Company") as of December 31, 1995 and 1996,
and the related consolidated statements of income, stockholders' equity, and the
cash flows for each of the three years in the period ended December 31, 1996.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of Wisconsin Label Corporation and
subsidiaries at December 31, 1995 and 1996, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1996 in conformity with generally accepted accounting principles.
 
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
March 31, 1997 (July 17, 1997 as to Note 13)
 
                                      F-28
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
 
   
<TABLE>
<CAPTION>
                                                                 ---------------------------------
                                                                     DECEMBER 31,        JUNE 30,
                                                                      1995       1996        1997
                                                                 ---------  ---------  -----------
                                                                                       (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                                              <C>        <C>        <C>
ASSETS
Current assets:
  Cash.........................................................  $     100  $     703   $   1,158
  Accounts receivable - trade - less allowance for doubtful
   accounts of $300, $838, and $310 at December 31, 1995 and
   1996 and June 30, 1997, respectively........................     11,805     14,553      14,629
  Inventories..................................................      7,662      8,812       8,665
  Prepaid expenses and other...................................      2,562      1,165         713
                                                                 ---------  ---------  -----------
    Total current assets.......................................     22,129     25,233      25,165
                                                                 ---------  ---------  -----------
Property and equipment - Net...................................     13,343     14,936      16,450
                                                                 ---------  ---------  -----------
Other assets:
  Equity method investments....................................      3,764      4,834       5,952
  Other........................................................      1,506      1,184       1,061
                                                                 ---------  ---------  -----------
    Total other assets.........................................      5,270      6,018       7,013
                                                                 ---------  ---------  -----------
Total assets...................................................  $  40,742  $  46,187   $  48,628
                                                                 ---------  ---------  -----------
                                                                 ---------  ---------  -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Current maturities of long term debt.........................  $   5,646  $   1,456   $   2,374
  Notes payable - bank.........................................      2,821      8,343       4,603
  Accounts payable.............................................      6,532      7,660       6,413
  Accrued employee compensation................................      1,930      2,370       2,203
  Other accrued expenses.......................................        565        128         146
  Income taxes payable.........................................        181        437         371
                                                                 ---------  ---------  -----------
    Total current liabilities..................................     17,675     20,394      16,110
                                                                 ---------  ---------  -----------
Noncurrent liabilities:
  Long term debt...............................................     10,169      9,216      14,421
  Deferred compensation........................................        689        673         813
  Deferred income taxes........................................      1,180      1,609       1,350
                                                                 ---------  ---------  -----------
    Total liabilities..........................................     29,713     31,892      32,694
Minority interest..............................................        198        275         258
Commitments and contingencies
Stockholders' equity:
  Common stock - $1 par value - 500,000 shares authorized......        292        294         294
  Additional paid-in capital...................................      1,549      1,681       1,681
  Retained earnings............................................      8,990     12,045      13,701
                                                                 ---------  ---------  -----------
    Total stockholders' equity.................................     10,831     14,020      15,676
                                                                 ---------  ---------  -----------
  Total liabilities and stockholders' equity...................  $  40,742  $  46,187   $  48,628
                                                                 ---------  ---------  -----------
                                                                 ---------  ---------  -----------
</TABLE>
    
 
                See notes to consolidated financial statements.
 
                                      F-29
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME
 
   
<TABLE>
<CAPTION>
                                                             -----------------------------------------------------
                                                                       YEARS ENDED              SIX MONTHS ENDED
                                                                      DECEMBER 31,                  JUNE 30,
                                                                  1994       1995       1996       1996       1997
                                                             ---------  ---------  ---------  ---------  ---------
                                                                                                  (UNAUDITED)
<S>                                                          <C>        <C>        <C>        <C>        <C>
(IN THOUSANDS)
Sales......................................................  $  57,175  $  70,852  $  93,914  $  47,898  $  46,919
 
Cost of sales..............................................     43,637     54,031     71,744     36,816     35,951
                                                             ---------  ---------  ---------  ---------  ---------
      Gross profit                                              13,538     16,821     22,170     11,082     10,968
                                                             ---------  ---------  ---------  ---------  ---------
Operating expenses:........................................
  Selling, general and administrative expenses.............      9,300     11,912     15,722      7,950      8,206
  Amortization of goodwill.................................        111        173         36         28         57
  Stock based compensation.................................          -          -        134          -         20
                                                             ---------  ---------  ---------  ---------  ---------
      Total operating expenses.............................      9,411     12,085     15,892      7,978      8,283
                                                             ---------  ---------  ---------  ---------  ---------
Operating income...........................................      4,127      4,736      6,278      3,104      2,685
                                                             ---------  ---------  ---------  ---------  ---------
Other income (expense):
  Interest income..........................................         48        278        258        139         36
  Interest expense.........................................       (681)    (1,262)    (1,451)      (739)      (724)
  Equity income (loss).....................................        (16)       357        465        249        575
  Other - net..............................................       (274)       249        (17)       (54)       (21)
                                                             ---------  ---------  ---------  ---------  ---------
      Total other expense - net............................       (923)      (378)      (745)      (405)      (134)
                                                             ---------  ---------  ---------  ---------  ---------
Income before provision for income taxes and minority
 interest..................................................      3,204      4,358      5,533      2,699      2,551
 
Provision for income taxes.................................      1,561      2,025      2,400      1,215        852
                                                             ---------  ---------  ---------  ---------  ---------
Income before minority interest............................      1,643      2,333      3,133      1,484      1,699
 
Minority interest in subsidiaries' earnings................        (53)       (74)       (78)       (58)       (43)
                                                             ---------  ---------  ---------  ---------  ---------
 
Net income.................................................  $   1,590  $   2,259  $   3,055  $   1,426  $   1,656
                                                             ---------  ---------  ---------  ---------  ---------
                                                             ---------  ---------  ---------  ---------  ---------
</TABLE>
    
 
                See notes to consolidated financial statements.
 
                                      F-30
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
 
   
<TABLE>
<CAPTION>
                                          ------------------------------------------------------
                                                            ADDITIONAL                     TOTAL
                                           COMMON STOCK        PAID IN   RETAINED  STOCKHOLDERS'
                                           SHARES  AMOUNT      CAPITAL   EARNINGS         EQUITY
                                          -------  ------   ----------   --------  -------------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                       <C>      <C>      <C>          <C>       <C>
Balance, January 1, 1994................  274,946   $ 275    $     665   $  5,141     $    6,081
Net income..............................        -       -            -      1,590          1,590
                                          -------  ------   ----------   --------  -------------
Balance, December 31, 1994..............  274,946     275          665      6,731          7,671
Issuance of common stock in connection
 with Voxcom acquisition................   17,175      17          884          -            901
Net income..............................        -       -            -      2,259          2,259
                                          -------  ------   ----------   --------  -------------
Balance, December 31, 1995..............  292,121     292        1,549      8,990         10,831
Issuance of common stock in connection
 with Voxcom acquisition................    2,123       2          132          -            134
Net income..............................        -       -            -      3,055          3,055
                                          -------  ------   ----------   --------  -------------
Balance, December 31, 1996..............  294,244   $ 294    $   1,681   $ 12,045     $   14,020
Net income (Unaudited)..................        -       -            -      1,656          1,656
                                          -------  ------   ----------   --------  -------------
Balance, June 30, 1997 (Unaudited)......  294,244   $ 294    $   1,681   $ 13,701     $   15,676
                                          -------  ------   ----------   --------  -------------
                                          -------  ------   ----------   --------  -------------
</TABLE>
    
 
                See notes to consolidated financial statements.
 
                                      F-31
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
<TABLE>
<CAPTION>
                                                    -------------------------------------------
                                                           YEARS ENDED         SIX MONTHS ENDED
                                                          DECEMBER 31,             JUNE 30,
(IN THOUSANDS)                                         1994     1995     1996     1996     1997
                                                    -------  -------  -------  -------  -------
                                                                                 (UNAUDITED)
<S>                                                 <C>      <C>      <C>      <C>      <C>
Cash flows from operating activities:
  Net income......................................  $ 1,590  $ 2,259  $ 3,055  $ 1,426  $ 1,656
  Adjustments to reconcile net income to net cash
   provided by (used in) operating activities:
    Minority interest in subsidiaries earnings....       53       74       78       58       43
    Depreciation and amortization.................    1,218    1,674    2,006      876      964
    Provision for deferred income taxes...........      203      435      351       44       12
    Equity (income) loss..........................       16     (357)    (465)    (249)    (575)
    Issuance of common stock as compensation......        -        -      134        -       20
    Changes in operating assets and liabilities,
     excluding the effect of business acquisition:
      Accounts receivable.........................   (2,514)  (1,442)  (2,748)  (4,215)     (76)
      Inventories.................................   (1,405)  (2,028)  (1,150)     271      129
      Other current assets........................     (240)  (1,581)     629    2,284      669
      Accounts payable............................      686        7    1,128    1,321   (1,246)
      Accrued and other liabilities...............      213      565      (13)    (198)    (443)
      Accrued income taxes........................     (139)     122      256      439      (57)
                                                    -------  -------  -------  -------  -------
        Net cash provided by (used in) operating
         activities...............................     (319)    (272)   3,261    2,057    1,096
 
Cash flows from investing activities:
  Capital expenditures............................   (2,226)  (2,810)  (3,569)  (2,497)  (2,436)
  Equity investments in affiliates................     (105)  (3,318)    (634)    (320)    (587)
  Acquisition of Voxcom...........................              (328)                -        -
                                                    -------  -------  -------  -------  -------
        Net cash used in investing activities.....   (2,331)  (6,456)  (4,203)  (2,817)  (3,023)
 
Cash flows from financing activities:
  Proceeds from issuance of debt..................    8,617   14,549    1,165    1,207    5,462
  Repayments of debt..............................   (6,341)  (8,885)  (5,142)    (907)    (478)
  Line of credit borrowings.......................       45      976    5,522      360   (2,602)
                                                    -------  -------  -------  -------  -------
        Net cash provided by financing
         activities...............................    2,321    6,640    1,545      660    2,382
 
Net increase (decrease) in cash and cash
 equivalents......................................     (329)     (88)     603     (100)     455
 
Cash and cash equivalents, beginning of period....      517      188      100      100      703
                                                    -------  -------  -------  -------  -------
Cash and cash equivalents, end of period..........  $   188  $   100  $   703  $     -  $ 1,158
                                                    -------  -------  -------  -------  -------
                                                    -------  -------  -------  -------  -------
Supplemental cash flow information:
  Cash paid during the year for:
    Interest......................................  $   813  $ 1,301  $ 1,777  $   731  $   765
    Income taxes..................................    1,257    1,463    1,676      655      820
</TABLE>
    
 
                See notes to consolidated financial statements.
 
                                      F-32
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
THE BUSINESS -
 
Wisconsin Label Corporation and subsidiaries (the "Company") provides printed
pressure sensitive labels, tapes, and specialty items primarily to customers
located throughout North America. The Company also affixes labels and provides
overwrapping services.
 
PRINCIPLES OF CONSOLIDATION -
 
The accompanying consolidated financial statements include the accounts of
Wisconsin Label Corporation and its wholly owned subsidiaries and its
majority-owned subsidiaries. All significant intercompany accounts and
transactions have been eliminated. The equity of the minority ownership interest
of majority owned subsidiaries is shown as minority ownership interest in the
consolidated balance sheets.
 
Investments in affiliates in which the Company has the ability to exercise
significant influence over operations and financial policies are accounted for
using the equity method, with cost adjusted for the Company's proportionate
share of their undistributed earnings or losses.
 
USE OF ESTIMATES IN PREPARATION OF CONSOLIDATED FINANCIAL STATEMENTS -
 
The preparation of consolidated financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions. These estimates and assumptions affect the reported amounts of
assets, liabilities, revenues and expenses and the disclosure of contingent
assets and liabilities in the consolidated financial statements. Actual results
may differ from those estimates.
 
ALLOWANCE FOR DOUBTFUL ACCOUNTS -
 
   
The Company provides for an allowance for doubtful accounts when the
collectability of trade accounts receivable becomes unlikely. The expense for
doubtful accounts was $304,000, $262,000 and $768,000 for the years ended
December 31, 1994, 1995 and 1996 and $583,061 and $94,915 for the six months
ended June 30, 1996 and 1997, respectively.
    
 
INVENTORIES -
 
The Company's inventories are carried at the lower of cost or market. The cost
of inventories is determined using the first-in, first-out ("FIFO") method.
 
PROPERTY AND EQUIPMENT -
 
Property and equipment are carried at cost. Maintenance and repair costs are
charged to expense as incurred. Gains or losses on disposition of property and
equipment are reflected in income. Depreciation is computed on the straight-line
method over the estimated useful lives of the respective classes of assets as
follows:
 
<TABLE>
<CAPTION>
                                                                                      ---------
                                                                                        YEARS
                                                                                      ---------
<S>                                                                                   <C>
Buildings...........................................................................     40
Machinery and equipment.............................................................   5 - 10
Vehicles............................................................................      5
Office equipment....................................................................      5
</TABLE>
 
CASH EQUIVALENTS -
 
Marketable securities that are highly liquid and are purchased with a maturity
of three months or less are classified as cash.
 
                                      F-33
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
INCOME TAXES -
 
Deferred tax assets and liabilities are determined based upon the difference
between the financial statement and tax basis of assets and liabilities as
measured by the enacted tax rates.
 
REVENUE RECOGNITION -
 
Revenue is generally recognized upon shipment.
 
FAIR VALUE OF FINANCIAL INSTRUMENTS -
 
Unless otherwise specified, the Company believes the carrying value of its
financial instruments (notes payable and long-term debt) approximates their fair
value.
 
ASSET IMPAIRMENT -
 
Statement of Financial Accounting Standards No. 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of
("SFAS 121"), was adopted as of January 1, 1996. SFAS 121 standardized the
accounting practices for the recognition and measurement of impairment losses on
certain long-lived assets. The adoption of SFAS 121 had no impact to the
Company's results of operations or financial position.
 
INTERIM FINANCIAL INFORMATION -
 
   
Unaudited interim financial information as of and for the six months ended June
30, 1996 and 1997 has been prepared on the same basis as the annual financial
statements. In the opinion of management, such unaudited interim information
includes all adjustments (consisting only of normal recurring adjustments)
necessary for a fair presentation of the interim financial information. The
results of operations and cash flows for the interim periods presented are not
necessarily indicative of the expected results for the full year.
    
 
STOCK BASED COMPENSATION -
 
   
Effective January 1, 1996 the Company adopted Statement of Financial Accounting
Standards No. 123, Accounting for Stock Based Compensation ("SFAS 123"). SFAS
123 encourages, but does not require, companies to record compensation cost for
stock-based employee compensation plans at fair value. The Company has chosen to
continue to account for stock-based compensation using the intrinsic value
method prescribed by Accounting Principles Board Opinion No. 25, Accounting for
Stock Issued to Employees, and related Interpretations. Accordingly,
compensation cost for stock awards is measured as the excess, if any, of the
estimated fair value of the Company's stock at the measurement date over the
amount an employee must pay to acquire the stock. If the computed fair values of
stock based compensation, using the Black-Scholes model with the following
average assumptions: expected life of 10 years; stock volatility, 10%; risk free
interest rates, 6%; and no dividends during the expected term, were included in
expense, pro forma net income for the year ended December 31, 1996 or the six
months ended June 30, 1996 or 1997 would not change materially from amounts
reported in the accompanying consolidated statements of income.
    
 
   
NEW ACCOUNTING PRONOUNCEMENTS -
    
 
   
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME, which
requires that an enterprise report, by major components and as a single total,
the change in its net assets during the period from nonowner sources; and
Statement of Financial Accounting Standards No. 131, DISCLOSURES ABOUT SEGMENTS
OF AN ENTERPRISE AND RELATED INFORMATION, which establishes annual and interim
reporting standards for an enterprise's operating segments and related
disclosures
    
 
                                      F-34
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
1.  THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
   
about its products, services, geographic areas, and major customers. Adoption of
these statements will not impact the Company's consolidated financial position,
results of operations or cash flows, and any effect will be limited to the form
and content of its disclosures. Both statements are effective for fiscal years
beginning after December 15, 1997, with earlier application permitted.
    
 
2.  BUSINESS ACQUISITION
On August 1, 1995, the Company acquired all of the outstanding stock of Voxcom,
Inc. ("Voxcom") in a transaction accounted for as a purchase and, accordingly,
the assets and liabilities were recorded at their estimated fair values as of
the acquisition date. The results of operations of Voxcom, Inc. are included in
the accompanying consolidated financial statements since the date of
acquisition. The purchase price consisted of the following (in thousands):
<TABLE>
<CAPTION>
                                                                      ---------
<S>                                                                   <C>
Wisconsin Label Corporation stock issued............................       $901
Net cash............................................................        328
Liabilities assumed.................................................      1,910
                                                                      ---------
Total purchase price................................................     $3,139
                                                                      ---------
                                                                      ---------
The purchase price was allocated among the assets of Voxcom as follows (in
thousands):
 
<CAPTION>
                                                                      ---------
<S>                                                                   <C>
Current assets......................................................     $1,269
Property and equipment..............................................      1,581
Other assets........................................................        289
                                                                      ---------
Total assets acquired...............................................     $3,139
                                                                      ---------
                                                                      ---------
</TABLE>
 
In addition, former shareholders of Voxcom entered into agreements with the
Company which call for payments of Wisconsin Label Corporation stock based on
Voxcom, Inc. achieving specific levels of future profitability as outlined in
the agreements. The payments can occur in up to three of the first five years
following the acquisition. The maximum additional amount of Wisconsin Label
Corporation stock which could be issued under these agreements is 4,246 shares.
The additional stock issued will be accounted for as contingent purchase
consideration when earned.
 
Pro forma unaudited results of operations for the years ended December 31, 1994
and 1995 as if the acquisition had occurred in January 1, 1994 follow:
 
<TABLE>
<CAPTION>
                                                    --------------------
                                                    YEARS ENDED DECEMBER
                                                            31,
                                                       1994         1995
                                                    -------  -----------
(IN THOUSANDS)                                          (UNAUDITED)
<S>                                                 <C>      <C>
Pro forma sales...................................  $64,569      $76,224
Pro forma operating income........................    4,098        4,977
Pro forma net income..............................    1,531        2,454
</TABLE>
 
                                      F-35
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
3.  INVENTORIES
Inventories consist of the following:
 
   
<TABLE>
<CAPTION>
                                      -------------------------------------
                                            DECEMBER 31,           JUNE 30,
                                             1995         1996         1997
                                      -----------  -----------  -----------
IN THOUSANDS                                                    (UNAUDITED)
<S>                                   <C>          <C>          <C>
Raw materials.......................       $3,939       $3,829       $3,934
Work in process.....................          369          893          999
Finished products...................        3,354        4,090        3,732
                                      -----------  -----------  -----------
Total...............................       $7,662       $8,812       $8,665
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
4.  PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
 
   
<TABLE>
<CAPTION>
                                      -------------------------------------
                                            DECEMBER 31,           JUNE 30,
                                             1995         1996         1997
                                      -----------  -----------  -----------
IN THOUSANDS                                                    (UNAUDITED)
<S>                                   <C>          <C>          <C>
Land and land improvements..........         $435         $435         $435
Buildings...........................        4,799        5,297        5,496
Machinery and equipment.............       13,771       16,031       17,576
Vehicles............................          483          487          499
Office equipment....................        3,131        3,884        4,305
Construction in progress............          323          378          830
                                      -----------  -----------  -----------
  Total property and equipment - at
   cost.............................       22,942       26,512       29,141
Less accumulated depreciation.......        9,599       11,576       12,691
                                      -----------  -----------  -----------
Property and equipment - net........      $13,343      $14,936      $16,450
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
5.  EQUITY INVESTMENTS
   
The Company makes equity investments in other labeling and related businesses.
At December 31, 1996 and June 30, 1997, the Company had total equity investments
of $4,834,000 and $5,952,000, respectively, of which approximately $4,531,000
and $4,912,084, respectively, represented a twenty percent ownership interest in
another printing company. The Company's investment in this affiliate includes
approximately $1,750,000 of cost
    
 
                                      F-36
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
5.  EQUITY INVESTMENTS (CONTINUED)
in excess of book value at the time of the investment (October 1, 1995), which
is being amortized over 40 years. The Company also has a 50% joint venture
arrangement with such printing company. A summary of combined financial
information for all the Company's investments is as follows (in thousands):
 
<TABLE>
<S>                                                             <C>
AT DECEMBER 31, 1996:
                                                                -----------
Current assets................................................   $  24,503
Noncurrent assets.............................................      18,092
                                                                -----------
Total assets..................................................   $  42,595
                                                                -----------
                                                                -----------
Current liabilities...........................................   $  18,471
Noncurrent liabilities........................................      10,180
                                                                -----------
    Total liabilities.........................................      28,651
Equity........................................................      13,944
                                                                -----------
Total liabilities and equity..................................   $  42,595
                                                                -----------
                                                                -----------
FOR THE YEAR ENDED DECEMBER 31, 1996:
Revenues......................................................   $ 120,392
Operating income..............................................      10,378
Net income....................................................       4,525
</TABLE>
 
Operating results include the Company's proportionate share of income or loss
from its equity investments, including the joint venture referred to above,
since the respective dates of those investments.
 
Through a shareholders agreement with the other printing company referred to
above dated October 6, 1995 (the "Agreement"), the Company has the right (the
"Put Option") to require such printing company to purchase some or all of the
Company's 20% investment upon the earlier of (i) the fifth anniversary of the
date of the Agreement, (ii) the initial public offering of such printing
company's stock, (iii) the termination of the joint venture arrangement, or (iv)
the transfer of more than 20% of such printing company's outstanding shares to
unrelated parties.
 
The other printing company referred to above has the right (the "Call Option")
to require the Company to sell all of its investment upon the earlier of (i) the
third anniversary of the date of the Agreement, (ii) the termination of the
joint venture arrangement, (iii) the date on which the Company dissolves or
sells substantially all of its assets, or (iv) a change in the controlling
stockholders of the Company. (See Note 13, "Subsequent Events").
 
The purchase price per share under the Put Option or the Call Option is the
Corporate Equity Value per share as defined in the Agreement. Such Corporate
Equity Value approximates such printing company's consolidated earnings less
interest, taxes, depreciation and amortization for any 12 month period within
the last 24 month period times five; then reduced by such printing company's
average outstanding long-term debt (including capital lease obligations and
current maturities) during such 12 month period.
 
Additionally, the other printing company referred to above has the right to call
all or some of the Company's investment for certain Termination Causes as
defined in the Agreement. The purchase price per share for a Termination Cause
call is the lesser of such printing company's fully diluted net book value per
share or 80% of Fair Market Value per share as define in the Agreement. Fair
Market Value approximates Corporate Equity Value.
 
6.  NOTES PAYABLE -- BANK
At December 31, 1996 the Company had a $14,000,000 line of credit which was
collateralized by substantially all assets of the Company and $8,343,000 was
outstanding. The interest rate on $6,000,000 was 2% over LIBOR
 
                                      F-37
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
6.  NOTES PAYABLE -- BANK (CONTINUED)
   
(7.375%) and the rate on the remainder was the prime rate (8.25%). As of June
30, 1997 the Company has an $8,000,000 line of credit which was collateralized
by substantially all assets of the Company and $4,603,000 was outstanding. The
interest rate on $2,000,000 was 1.7% over LIBOR (7.3875%) and the rate on the
remainder was the prime rate (8.50%). The line of credit agreement places
restrictions on the borrowing allowed for each of the rates charged. The line of
credit expires in September 1997.
    
 
7.  LONG-TERM DEBT
Long-term debt consist of the following:
 
   
<TABLE>
<CAPTION>
                                                       ---------------------------------
 
                                                           DECEMBER 31,        JUNE 30,
(IN THOUSANDS)                                              1995       1996        1997
                                                       ---------  ---------  -----------
                                                                             (UNAUDITED)
<S>                                                    <C>        <C>        <C>
Bank note, collateralized by substantially all assets
 of the Company, payable at $2,000,000 annually,
 first principal payment due June 2, 1998, interest
 payable monthly at LIBOR plus 1.7%, effective
 February 28, 1997 (7.4375%, 7.375%, and 7.3875% at
 December 31, 1995 and 1996 and June 30, 1997,
 respectively), due September 14, 2000...............  $   8,000  $   8,000   $  14,000
 
Industrial Revenue Bond, collateralized by
 substantially all assets of Wisconsin Label
 Corporation, payable at $21,000 per month plus
 interest at LIBOR plus 1.0% (6.375% at December 31,
 1996 and 6.69141% at June 30, 1997 and 6.4375 at
 June 30, 1996) and prime minus 0.75% (7.75% at
 December 31, 1995), due January 1, 2005.............      2,271      2,021       1,896
 
Bank notes, collateralized by specific assets of the
 Company, payable monthly at an average interest rate
 of 8.9%.............................................      5,544        651         898
                                                       ---------  ---------  -----------
 
  Total..............................................     15,815     10,672      16,794
 
Less current maturities..............................      5,646      1,456       2,373
                                                       ---------  ---------  -----------
 
Long-term portion....................................  $  10,169  $   9,216   $  14,421
                                                       ---------  ---------  -----------
                                                       ---------  ---------  -----------
</TABLE>
    
 
                                      F-38
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
7.  LONG-TERM DEBT (CONTINUED)
 
   
Required payments of principal on long-term debt at December 31, 1996 and June
30, 1997, including current maturities, are summarized as follows (in
thousands):
    
 
   
<TABLE>
<CAPTION>
                                                   ------------------------
                                                      DECEMBER
                                                           31,     JUNE 30,
                                                          1996         1997
                                                   -----------  -----------
                                                                (UNAUDITED)
<S>                                                <C>          <C>
 
1997.............................................       $1,456         $178
1998.............................................        1,456        2,377
1999.............................................        1,456        2,384
2000.............................................        1,675       10,612
2001.............................................        3,682          298
Thereafter.......................................          947          945
                                                   -----------  -----------
Total............................................      $10,672      $16,794
                                                   -----------  -----------
                                                   -----------  -----------
</TABLE>
    
 
The notes payable are supported by loan agreements which provide for certain
restrictive covenants, including maintenance of various financial ratios and
limitations on additional borrowing or payment of dividends.
 
8.  EMPLOYEE BENEFIT PLANS
   
Wisconsin Label Corporation sponsors an employee stock ownership plan ("ESOP")
which is a noncontributory defined contribution plan established to acquire
shares of the Company's common stock for the benefit of all eligible
participants (substantially all employees of Wisconsin Label Corporation).
Contributions to the plan are made at the discretion of the Board of Directors.
Expenses under the ESOP were $328,000, $373,000, and $420,000 for the years
ended December 31, 1994, 1995 and 1996 and $179,746 and $210,000 for the six
months ended June 30, 1996 and 1997, respectively. Contributions were cash. At
December 31, 1996 and June 30, 1997, 93,551 shares of the Company's stock were
held by the ESOP Trust, which was established to fund the ESOP.
    
 
   
Certain subsidiaries of the Company sponsor 401(k) profit-sharing and related
plans that cover substantially all their employees. Company contributions are at
the discretion of management. Company contributions made during the period from
January 1, 1994 through June 30, 1997 were not significant.
    
 
The Company has entered into deferred compensation agreements with two former
officers and current stockholders. The agreements provide for monthly payments
of $5,000 to each individual. The payments shall continue for the term of the
executives' lives unless they directly or indirectly compete with the Company.
 
                                      F-39
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
9.  INCOME TAXES
The provision for income taxes consists of the following:
 
   
<TABLE>
<CAPTION>
                                      -----------------------------------------------------
                                                YEARS ENDED              SIX MONTHS ENDED
                                               DECEMBER 31,                  JUNE 30,
(IN THOUSANDS)                             1994       1995       1996       1996       1997
                                      ---------  ---------  ---------  ---------  ---------
                                                                           (UNAUDITED)
<S>                                   <C>        <C>        <C>        <C>        <C>
Current tax expense:
  Federal...........................  $   1,070  $   1,312  $   1,737  $   1,049  $     691
  State.............................        288        278        312        166        161
                                      ---------  ---------  ---------  ---------  ---------
    Total current...................      1,358      1,590      2,049      1,215        852
Deferred tax expense:
  Federal...........................        164        361        283          -          -
  State.............................         39         74         68          -          -
                                      ---------  ---------  ---------  ---------  ---------
    Total deferred..................        203        435        351          -          -
                                      ---------  ---------  ---------  ---------  ---------
Total provision for income taxes....  $   1,561  $   2,025  $   2,400  $   1,215  $     852
                                      ---------  ---------  ---------  ---------  ---------
                                      ---------  ---------  ---------  ---------  ---------
</TABLE>
    
 
A reconciliation of the federal statutory income tax rate to effective income
tax rates is as follows:
 
   
<TABLE>
<CAPTION>
                                     -------------------------------------------------------------
                                                                               SIX MONTHS ENDED
                                                  YEARS ENDED
                                                 DECEMBER 31,                      JUNE 30,
                                           1994         1995         1996         1996        1997
                                          -----        -----        -----        -----   ---------
                                                                                 (UNAUDITED)
<S>                                  <C>          <C>          <C>          <C>          <C>
Federal statutory rate.............        34.0%        34.0%        34.0%        34.0%       34.0%
State income taxes - net of federal
 income tax benefit................         6.7          6.1          5.9          6.0         6.0
Tax effect of subsidiary loss not
 consolidated for tax purposes.....         7.7          3.5          3.6          3.6           -
Utilization of net operating
 losses............................           -            -            -            -        (7.1)
Other..............................         0.3          2.9         (0.1)         1.4         0.5
                                            ---          ---          ---          ---   ---------
Effective rate.....................        48.7%        46.5%        43.4%        45.0%       33.4%
                                            ---          ---          ---          ---   ---------
                                            ---          ---          ---          ---   ---------
</TABLE>
    
 
                                      F-40
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
9.  INCOME TAXES (CONTINUED)
Deferred income taxes are provided for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities. The major components of the net deferred tax liability are as
follows:
 
   
<TABLE>
<CAPTION>
                                                  ---------------------------------
                                                      DECEMBER 31,        JUNE, 30
(IN THOUSANDS)                                         1995       1996        1997
                                                  ---------  ---------  -----------
                                                                        (UNAUDITED)
<S>                                               <C>        <C>        <C>
Deferred tax assets:
Accruals and reserves...........................  $     255  $     272   $     272
Deferred compensation...........................        275        269         269
Net operating loss carryforwards................        880      1,060       1,060
                                                  ---------  ---------  -----------
Gross deferred tax assets.......................      1,410      1,601       1,601
Valuation allowance.............................       (880)    (1,060)     (1,060)
                                                  ---------  ---------  -----------
    Net deferred tax assets.....................        530        541         541
                                                  ---------  ---------  -----------
Deferred tax liabilities:
  Depreciation..................................     (1,225)    (1,408)     (1,408)
  Equity income.................................       (135)      (285)       (285)
  Other.........................................       (156)      (185)       (198)
                                                  ---------  ---------  -----------
    Gross deferred tax liabilities..............     (1,516)    (1,878)     (1,891)
                                                  ---------  ---------  -----------
Net deferred tax liability......................  $    (986) $  (1,337)  $  (1,350)
                                                  ---------  ---------  -----------
                                                  ---------  ---------  -----------
</TABLE>
    
 
Deferred income taxes are shown on the consolidated balance sheets as follows:
 
   
<TABLE>
<CAPTION>
                                                  ---------------------------------
                                                      DECEMBER 31,        JUNE 30,
(IN THOUSANDS)                                         1995       1996        1997
                                                  ---------  ---------  -----------
                                                                        (UNAUDITED)
<S>                                               <C>        <C>        <C>
Prepaid expenses and other......................  $     194  $     272   $       -
Deferred income tax liability...................     (1,180)    (1,609)     (1,350)
                                                  ---------  ---------  -----------
Net deferred income tax liability...............  $    (986) $  (1,337)  $  (1,350)
                                                  ---------  ---------  -----------
                                                  ---------  ---------  -----------
</TABLE>
    
 
One majority owned subsidiary of the Company is not consolidated for federal
income tax purposes. Its net operating losses of approximately $2,400,000 will
begin to expire in the year 2006. Other subsidiaries have state net operating
losses of approximately $1,300,000 which begin to expire in the year 2008.
 
10. RELATED-PARTY TRANSACTIONS
   
At December 31, 1994, 1995 and 1996 and June 30, 1997 a majority owned
subsidiary of the Company was leasing a building from a Wisconsin limited
liability company which, in turn, is owned by management of the Company. The
lease term is ten years beginning April 1, 1994, with a base annual rent of
$150,000 payable in twelve equal monthly payments. The lease is accounted for as
an operating lease and the lease payment is guaranteed by Wisconsin Label
Corporation. Rent expense on this lease was $112,000, $150,000 and $150,000 for
the years ended December 31, 1994, 1995 and 1996 and $75,000 and $75,000 for the
six months ended June 30, 1996 and 1997, respectively. The majority owned
subsidiary subleases a portion of the building to a wholly owned subsidiary of
the Company for $88,000 per year payable at $7,000 per month. The term of this
agreement matches the term of the lease with the majority owned subsidiary.
    
 
                                      F-41
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
10. RELATED-PARTY TRANSACTIONS (CONTINUED)
   
At December 31, 1996 and March 31, 1997, the majority owned subsidiary was
leasing a printing press from another Wisconsin limited liability company which,
in turn, is also owned by management of the Company. The lease term is seven
years beginning March 1, 1996, with a base annual rent of $173,000 payable in
twelve equal monthly payments. The lease is accounted for as an operating lease
and the lease payment is guaranteed by Wisconsin Label Corporation. Rent expense
on this lease for the year ended December 31, 1996 was $144,000 and $57,600 and
$86,400 for the six months ended June 30, 1996 and 1997, respectively. Wisconsin
Label Corporation is leasing equipment from a partnership of which the partners
are also stockholders of Wisconsin Label Corporation. The original lease term
was three years beginning July 13, 1992. The original lease has been extended
through July 13, 1998. Rent expense was $53,000, $34,000 and $21,000 for the
years ended December 31, 1994, 1995 and 1996 and $10,000 and $10,000 for the six
months ended June 30, 1996 and 1997, respectively. The lease is accounted for as
an operating lease.
    
 
The majority owned subsidiary was leasing a building from a Wisconsin general
partnership, which in turn, is owned by the minority stockholders of the
majority owned subsidiary and a stockholder of Wisconsin Label Corporation. The
lease term was ten years beginning May 1, 1992. Rent expense was $65,000 and
$27,000 for the years ended December 31, 1994 and 1995, respectively. The lease
was accounted for as an operating lease. The lease was terminated by mutual
consent during 1995.
 
   
During 1995 and 1996 and the six months ended June 30, 1996 and 1997, the
Company had sales of $424,000, $6,612,000, $5,502,805 and $114,935,
respectively, to companies in which it has minority equity interests (see Note
4, "Equity Investments"). In addition, at December 31, 1996 and March 31, 1997,
accounts receivable include an amount owed from Dittler Brothers of $794,000 and
$4,857, respectively. The account is not collateralized as it is the Company's
policy not to require collateral on trade receivables.
    
 
11. LEASES
The Company leases various buildings and equipment from nonrelated parties, all
classified as operating leases. Future minimum payments, by year and in the
aggregate, under the noncancelable operating leases with initial or remaining
terms in excess of one year consist of the following:
 
<TABLE>
<CAPTION>
                                                       ------------------------
 
                                                       NONRELATED      RELATED
(IN THOUSANDS)                                            PARTIES      PARTIES
                                                       -----------  -----------
<S>                                                    <C>          <C>
 
1997.................................................   $     201    $     353
1998.................................................         107          335
1999.................................................          44          323
2000.................................................          59          323
2001.................................................           5          323
Thereafter...........................................           -          539
                                                            -----   -----------
Total................................................   $     416    $   2,196
                                                            -----   -----------
                                                            -----   -----------
</TABLE>
 
   
Rent expense for all operating leases with unrelated parties was $124,000,
$149,000, and $196,000 for the years ended December 31, 1994, 1995, and 1996,
and $116,334 and $117,934 for the six months ended June 30, 1996 and 1997,
respectively. Related party rent expense was $231,000, $212,000, and $320,000
for the years ended December 31, 1994, 1995, and 1996, and $132,600 and $161,400
for the six months ended June 30, 1996 and 1997, respectively.
    
 
                                      F-42
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
12. COMMITMENTS AND CONTINGENCIES
The Company has entered into an agreement with all stockholders which places
restrictions on the transfer of the Company's common stock. The agreement
provides the Company with the right of first refusal for purchase of any stock
at a price defined by the agreement.
 
13. SUBSEQUENT EVENTS
   
On July 17, 1997, the Company executed a merger agreement to be acquired by
FirstPak, Inc. ("FirstPak"). If the merger is consummated, it will close
concurrently with the proposed offering of FirstPak Common Stock. Just prior to
such merger, the Company intends to transfer ownership in one equity investment
and two R&D projects to three Limited Liability Companies owned by the Company's
stockholders. Such equity investment and R&D projects were not significant.
    
 
                                      F-43
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors and Shareholders of
St. Louis Lithographing Company:
 
We have audited the accompanying balance sheet of St. Louis Lithographing
Company as of December 31, 1996, and the related statements of operations,
stockholders' equity, and cash flows for the period from June 1, 1996 (date of
acquisition) through December 31, 1996 (the "Successor Company"). We have also
audited the accompanying balance sheet of St. Louis Lithographing Company as of
December 31, 1995 and the related statements of operations, shareholder's
equity, and cash flows for the period from January 1, 1996 through May 31, 1996
and for the years ended December 31, 1995 and 1994 (the "Predecessor Company").
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the St. Louis Lithographing
Company as of December 31, 1996, and the results of its operations and its cash
flows for the period from June 1, 1996 (date of acquisition) through December
31, 1996 in conformity with generally accepted accounting principles. Also, in
our opinion, the above-mentioned financial statements of the predecessor of the
Company present fairly, in all material respects, the financial position of the
Predecessor Company as of December 31, 1995 and the results of its operations
and its cash flows for the period from January 1, 1996 through May 31, 1996 and
for the years ended December 31, 1995 and 1994, in conformity with generally
accepted accounting principles.
 
DELOITTE & TOUCHE LLP
St. Louis, Missouri
March 28, 1997 (July 17, 1997 as to Note 12)
 
                                      F-44
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
                                 BALANCE SHEETS
 
   
<TABLE>
<CAPTION>
                                             ------------------------------------
                                             PREDECESSOR         SUCCESSOR
                                                DECEMBER     DECEMBER
                                                     31,          31,    JUNE 30,
(IN THOUSANDS, EXCEPT SHARE DATA)                   1995         1996        1997
                                             -----------  -----------  ----------
                                                                       (UNAUDITED)
<S>                                          <C>          <C>          <C>
ASSETS
Current assets:
  Cash.....................................    $       1    $       1   $       1
  Accounts receivable (net of allowance of
   $50, $40 and $40, respectively).........        2,504        2,846       3,348
  Intercompany receivable..................            -
  Inventory................................        3,137        2,547       2,599
Prepaid expenses and other assets..........           27           38         187
Deferred income taxes......................            -          243         224
                                             -----------  -----------  ----------
      Total current assets.................        5,669        5,675       6,359
Property, plant and equipment - net........       11,686       10,834      10,586
Goodwill...................................          337        8,517       8,410
Other long-term assets.....................           71          195         164
                                             -----------  -----------  ----------
Total......................................    $  17,763    $  25,221   $  25,519
                                             -----------  -----------  ----------
                                             -----------  -----------  ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
  Accounts payable.........................    $     535    $     681   $     901
  Intercompany payable.....................          331            -
  Accrued expenses.........................          820          626         984
  Current portion of long-term debt........            -        1,125       1,187
  Income taxes payable.....................          800            -         289
                                             -----------  -----------  ----------
      Total current liabilities............        2,486        2,432       3,361
Deferred income taxes......................            -        3,123       3,069
Revolving debt.............................            -        2,266       1,965
Long-term debt.............................            -        9,875       9,313
Subordinated debt to shareholder...........            -        4,600       4,600
                                             -----------  -----------  ----------
      Total liabilities....................        2,486       22,296      22,308
                                             -----------  -----------  ----------
Shareholders' equity:
  Common stock; $.01 par value, 200,000
   authorized, 105,263 outstanding.........            -            1           1
  Common stock, $1 par value, 151,200
   authorized and outstanding..............          151            -
  Additional paid-in capital...............           25        3,154       3,154
  Unamortized expense of restricted stock
   awards..................................            -         (133)       (114)
  Retained earnings (accumulated
   deficit)................................       15,101          (97)        170
                                             -----------  -----------  ----------
      Total shareholders' equity...........       15,277        2,925       3,211
                                             -----------  -----------  ----------
Total......................................    $  17,763    $  25,221   $  25,519
                                             -----------  -----------  ----------
                                             -----------  -----------  ----------
</TABLE>
    
 
                       See notes to financial statements.
 
                                      F-45
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
                            STATEMENTS OF OPERATIONS
 
   
<TABLE>
<CAPTION>
                -----------------------------------------------------------------------------------------------------
                           PREDECESSOR                              PRO FORMA                  PRO FORMA   SUCCESSOR
                                                     SUCCESSOR
                                      PERIOD FROM    PERIOD FROM                  SUCCESSOR
                                       JANUARY 1,   JUNE 1, 1996                    ONE MONTH
                                                         THROUGH
                   YEARS ENDED       1996 THROUGH   DECEMBER 31,                                  SIX MONTHS ENDED
                   DECEMBER 31,      MAY 31, 1996           1996     YEAR ENDED    ENDED JUNE         JUNE 30,
                ------------------  -------------  -------------   DECEMBER 31,      30, 1996  ----------------------
(IN THOUSANDS)      1994      1995                                         1996  ------------        1996        1997
                --------  --------                                -------------                ----------  ----------
                                                                                 (UNAUDITED)
                                                                                                    (UNAUDITED)
<S>             <C>       <C>       <C>            <C>            <C>            <C>           <C>         <C>
Sales.........  $ 23,867  $ 22,873  $       8,854  $      11,450  $      20,304  $      1,580  $   10,434  $   11,215
Cost of
 sales........    16,905    17,245          6,597          8,556         15,153         1,164       7,761       8,132
                --------  --------  -------------  -------------  -------------  ------------  ----------  ----------
  Gross
   profit.....     6,962     5,628          2,257          2,894          5,151           416       2,673       3,083
Operating
 expenses:
  Selling,
   general and
administrative
   expenses...     2,268     2,429            970          1,746          2,766           201       1,261       1,512
  Amortization
   of
   goodwill...        15        11              -            125            214            18         107         107
  Stock based
   compensation...        -        -             -            23             38             3          19          19
                --------  --------  -------------  -------------  -------------  ------------  ----------  ----------
Total
 operating
 expenses.....     2,283     2,440            970          1,894          3,018           222       1,387       1,638
                --------  --------  -------------  -------------  -------------  ------------  ----------  ----------
Operating
 income.......     4,679     3,188          1,287          1,000          2,133           194       1,286       1,445
Other income
 (expenses):
Interest
 income.......         -        90              -              -              -             -           -          --
Interest
 expense......         -         -              -         (1,068)        (1,831)         (151)       (916)       (907)
Amortization
 of loan
 fees.........         -         -              -            (19)           (33)           (3)        (16)        (16)
Other
 expenses.....         -      (219)             -              -              -             -           -          --
                --------  --------  -------------  -------------  -------------  ------------  ----------  ----------
Total other
 income
 (expenses)...         -      (129)             -         (1,087)        (1,864)         (154)       (932)       (923)
                --------  --------  -------------  -------------  -------------  ------------  ----------  ----------
Income (loss)
 before income
 taxes........     4,679     3,059          1,287            (87)           269            40         354         522
Income tax
 expense......     1,945     1,343            643             10            192            23         184         255
                --------  --------  -------------  -------------  -------------  ------------  ----------  ----------
Net income
 (loss).......  $  2,734  $  1,716  $         644  $         (97) $          77  $         17  $      170         267
                --------  --------  -------------  -------------  -------------  ------------  ----------  ----------
                --------  --------  -------------  -------------  -------------  ------------  ----------  ----------
</TABLE>
    
 
                       See notes to financial statements.
 
                                      F-46
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
                 STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
 
   
<TABLE>
<CAPTION>
                                          -------------------------------------------------------------------------
                                                                             RETAINED
                                                            ADDITIONAL       EARNINGS     RESTRICTED
                                                 COMMON        PAID-IN   (ACCUMULATED          STOCK
(IN THOUSANDS)                                    STOCK        CAPITAL       DEFICIT)         AWARDS          TOTAL
                                          -------------  -------------  -------------  -------------  -------------
<S>                                       <C>            <C>            <C>            <C>            <C>
PREDECESSOR COMPANY
Balance, December 31, 1993..............          $ 151          $  25       $ 12,351           $  -       $ 12,527
  Net income............................              -              -          2,734              -          2,734
                                          -------------  -------------  -------------  -------------  -------------
Balance, December 31, 1994..............            151             25         15,085              -         15,261
  Net income............................              -              -          1,716              -          1,716
  Dividend to parent....................              -              -         (1,700)             -         (1,700)
                                          -------------  -------------  -------------  -------------  -------------
Balance, December 31, 1995..............            151             25         15,101              -         15,277
  Net income through May 31, 1996.......              -              -            644              -            644
                                          -------------  -------------  -------------  -------------  -------------
Balance, May 31, 1996 (Date of
 Acquisition)...........................          $ 151          $  25       $ 15,745           $  -       $ 15,921
                                          -------------  -------------  -------------  -------------  -------------
                                          -------------  -------------  -------------  -------------  -------------
 
SUCCESSOR COMPANY
Common stock and warrants issued........           $  1        $ 2,999            $ -           $  -        $ 3,000
Restricted stock awards issued..........              -            155              -           (155)             -
Amortization of restricted stock
 awards.................................              -              -              -             22             22
Net loss for the period June 1, 1996 to
 December 31, 1996......................              -              -            (97)             -            (97)
                                          -------------  -------------  -------------  -------------  -------------
Balance, December 31, 1996..............              1          3,154            (97)          (133)         2,925
Net income for the six months ended June
 30, 1997 (unaudited)...................              -              -            267              -            267
Amortization of restricted stock awards
 (unaudited)............................              -              -              -             19             19
                                          -------------  -------------  -------------  -------------  -------------
Balance, June 30, 1997 (unaudited)......          $   1        $ 3,154          $ 170         $ (114)       $ 3,211
                                          -------------  -------------  -------------  -------------  -------------
                                          -------------  -------------  -------------  -------------  -------------
</TABLE>
    
 
                       See notes to financial statements.
 
                                      F-47
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
                            STATEMENTS OF CASH FLOWS
 
   
<TABLE>
<CAPTION>
                                    ------------------------------------------------------------------------
                                               PREDECESSOR
                                                          PERIOD FROM                SUCCESSOR
                                                           JANUARY 1,   PERIOD FROM
                                        YEARS ENDED              1996  JUNE 1, 1996
                                        DECEMBER 31,          THROUGH       THROUGH   ONE MONTH   SIX MONTHS
                                    --------------------      MAY 31,  DECEMBER 31,  ENDED JUNE   ENDED JUNE
IN THOUSANDS                             1994       1995         1996          1996    30, 1996     30, 1997
                                    ---------  ---------  -----------  ------------  ----------  -----------
                                                                                           (UNAUDITED)
<S>                                 <C>        <C>        <C>          <C>           <C>         <C>
CASH FLOWS FROM OPERATING
 ACTIVITIES:
Net income (loss).................  $   2,734  $   1,716    $     644     $     (97)  $      40    $     267
Adjustments to reconcile net
 income (loss) to net cash
 provided by (used in) operating
 activities:
  Depreciation....................        834        844          378           513          74          470
  Amortization of goodwill and
   other items....................         15         11            -           166          24          140
  Loss on sale of assets..........          -        219            -             -
  Changes in assets and
   liabilities:
    Accounts receivable...........        506       (308)         516          (859)       (808)        (502)
    Prepaid expenses..............        (87)       109          (24)           55         184         (121)
    Inventory.....................       (704)       103           58           532          57          (52)
    Accounts payable..............       (343)         -          165           (18)       (113)         220
    Deferred tax asset............          -          -            -           (47)          2           19
    Deferred tax liability........          -          -            -            57          (8)         (54)
    Intercompany including income
     taxes........................       (520)      (498)      (1,728)            -
    Accrued expenses..............        (23)       192           19          (675)        181          358
    Income tax payable............          -          -            -             -           -          289
                                    ---------  ---------  -----------  ------------  ----------  -----------
Net cash provided by (used in)
 operating activities.............      2,412      2,388           28          (373)       (367)       1,034
                                    ---------  ---------  -----------  ------------  ----------  -----------
CASH FLOWS FROM INVESTING
 ACTIVITIES:
Acquisition of business...........          -          -            -       (21,190)    (21,190)           -
Acquisition of property and
 equipment........................     (2,412)      (688)         (28)          (11)        (11)        (233)
Subsequent adjustment of purchase
 price of business................          -          -            -           708         708            -
                                    ---------  ---------  -----------  ------------  ----------  -----------
Net cash provided by (used in)
 investing activities.............     (2,412)      (688)         (28)      (20,493)    (20,493)        (233)
                                    ---------  ---------  -----------  ------------  ----------  -----------
CASH FLOWS FROM FINANCING
 ACTIVITIES:
Proceeds from issuance of common
 stock............................          -          -            -         3,000       3,000            -
Proceeds from issuance of
 long-term debt...................          -          -            -        18,190      18,190            -
Proceeds (paydown) of revolving
 loan.............................          -          -            -           176        (330)        (301)
Repayments of long-term debt......          -          -            -          (500)          -         (500)
Dividend to parent................          -     (1,700)           -             -           -            -
                                    ---------  ---------  -----------  ------------  ----------  -----------
Net cash used in financing
 activities.......................          -     (1,700)           -        20,866      20,860         (801)
                                    ---------  ---------  -----------  ------------  ----------  -----------
Net Increase in Cash..............          -          -            -             -           -            -
Cash, Beginning of Period.........          1          1            1             1           1            1
                                    ---------  ---------  -----------  ------------  ----------  -----------
Cash, End of Period...............  $       1  $       1    $       1     $       1   $       1    $       1
                                    ---------  ---------  -----------  ------------  ----------  -----------
                                    ---------  ---------  -----------  ------------  ----------  -----------
Supplemental Disclosure of Cash
 Flow Information - Cash paid for
 interest.........................                                        $   1,068
                                                                       ------------
                                                                       ------------
</TABLE>
    
 
                       See notes to financial statements.
 
                                      F-48
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
 
                         NOTES TO FINANCIAL STATEMENTS
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
1.  ORGANIZATION AND BUSINESS
St. Louis Lithographing Company (the "Company"), incorporated in Delaware,
prints and markets product labels primarily for the distilled spirits and wine
industry. Additional printing products include trading cards and high quality
candy wraps. The Company has been in the lithographing business since 1921.
Prior to May 31, 1996, St. Louis Lithographing Company was a wholly-owned
subsidiary (the "Predecessor Company") of Pillsbury Co., Incorporated
("Pillsbury"). On February 19, 1995, Pillsbury acquired Pet Incorporated
("Pet"), who was the Company's parent prior to that time. There were no changes
in the basis of the Company's assets and liabilities in the accompanying
financial statements resulting from the Pillsbury acquisition of Pet.
Accordingly, prior to May 31, 1996, the predecessor financial statements include
various expenses allocated from Pillsbury and Pet (hereafter collectively
referred to as "Parent").
 
2.  ACQUISITION
On May 31, 1996, SLL Acquisition Co. ("SLL") merged into St. Louis Lithography
Company, a Missouri Corporation. The merger consideration paid to Pillsbury was
$20,250,000 (net of working capital adjustment of $603,000 subsequently received
from seller) The Company was reincorporated in Delaware on June 10, 1996 (the
"Successor Company"). The purchase price and acquisition costs were financed
through $3,000,000 of contributed equity, $11,500,000 of senior term debt,
$4,600,000 of senior subordinated debt, and the revolving line-of-credit. In
exchange for the contributed equity, the Company issued 100,000 shares of ($.01
par value) capital stock to its stockholders. In addition, pursuant to a warrant
agreement between the Company and the lender of the senior subordinated debt,
the Company sold the lender warrants for $59,000 which provide the lender the
right to purchase 27,701 shares of its common stock for $.01 per share at any
time prior to either May 31, 2006 or the closing of an initial public offering,
whichever comes first.
 
The purchase price, consisting of $20,250,000 initial cash payment (net of
working capital adjustment of $603,000 subsequently received from seller),
$1,403,000 in acquisition costs and the tax effects (primarily due to
depreciation, accrued expenses and allowance for doubtful accounts) of SFAS 109,
was allocated to the fair market value of assets acquired and liabilities
assumed in accordance with APB 16 as follows (in thousands):
 
<TABLE>
<S>                                                              <C>
ASSETS ACQUIRED:
                                                                 -----------
  Cash.........................................................   $       1
  Accounts receivable..........................................       1,988
  Inventory....................................................       3,079
  Deferred income taxes........................................         196
  Property, plant and equipment................................      11,336
  Prepaid and other assets.....................................         287
                                                                 -----------
Total assets acquired..........................................      16,887
                                                                 -----------
LIABILITIES ASSUMED:
  Accounts payable.............................................         699
  Accrued expenses.............................................         714
  Deferred income taxes........................................       3,066
                                                                 -----------
Total liabilities assumed......................................       4,479
                                                                 -----------
GOODWILL.......................................................       8,642
                                                                 -----------
PURCHASE PRICE.................................................   $  21,050
                                                                 -----------
                                                                 -----------
</TABLE>
 
                                      F-49
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
2.  ACQUISITION (CONTINUED)
The excess purchase price over net assets acquired was attributable to goodwill.
The Company's customer list was considered to have an indeterminate asset life
based on the longevity of these customers and the almost nonexistent customer
turnover. As a result, the customer list was considered inseparable from the
Company as a whole and the excess net purchase price was determined to be
goodwill and amortizable over a forty-year life.
 
   
The unaudited pro forma statement of operations for the year ended December 31,
1996 and for the six months ended June 30, 1996 has been prepared as if the
acquisition occurred on January 1, 1996 and is not necessarily indicative of (i)
the results the Company would have experienced had such acquisition occurred at
January 1, 1996 or (ii) the future results of the Company.
    
 
3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
SALES - Sales are recognized at the date of shipment.
 
INVENTORIES - Inventories are carried at the lower of cost or market, using the
first-in, first-out ("FIFO") cost flow assumption.
 
PROPERTY, PLANT AND EQUIPMENT - Property, plant and equipment is stated at cost
less accumulated depreciation. Depreciation is provided using the straight-line
method over estimated useful lives of 20-30 years for buildings and 3-10 years
for furniture and equipment.
 
GOODWILL - Goodwill is amortized over 40 years.
 
OTHER LONG-TERM ASSETS - Other long-term assets of the Successor Company consist
primarily of loan origination fees which will be amortized over the loan period
of five years.
 
   
FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying amounts of cash, accounts
receivable, accounts payable and accrued expenses are reflected in the financial
statements at approximate fair value due to the short nature of those
instruments. The carrying amount of the revolving, long-term and subordinated
debt approximates fair value at December 31, 1995 and 1996 and June 30, 1997
based on interest rates available to the Company and debt instruments with
similar terms.
    
 
ESTIMATES - The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements. Actual results could differ from those estimates.
 
INCOME TAXES - The Successor Company accounts for income taxes under the
provisions of Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes ("SFAS 109"). SFAS 109 utilizes the liability method, whereby
deferred income taxes are determined based on the estimated future tax effects
of differences between the financial statements and tax bases of assets and
liabilities given the provisions of the enacted tax laws. The Predecessor
Company's income taxes represent an allocation from its Parent Company and
deferred income taxes were maintained at the Parent Company level.
 
CONCENTRATION OF CREDIT RISK - Financial instruments which subject the Company
to credit risk consist primarily of accounts receivable. Concentration of credit
risk with respect to accounts receivable is generally concentrated due to a
relatively few number of entities comprising the Company's customer base. The
Company performs ongoing credit evaluations of its customers and maintains an
allowance for potential credit losses.
 
   
INTERIM FINANCIAL INFORMATION - Unaudited interim financial information as of
and for the six months ended June 30, 1997, for the five months ended May 31,
1996 and one month ended June 30, 1996 have been prepared on the same basis as
the annual financial statements. In the opinion of management, such unaudited
    
 
                                      F-50
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
3.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
information includes all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of this interim information. The
results of operations and cash flows for the interim periods presented are not
necessarily indicative of results for the full year.
 
   
NEW ACCOUNTING PRONOUNCEMENTS - In June 1997, the Financial Accounting Standards
Board issued Statement of Financial Accounting Standards No. 130, REPORTING
COMPREHENSIVE INCOME, which requires that an enterprise report, by major
components and as a single total, the change in its net assets during the period
from nonowner sources; and Statement of Financial Accounting Standards No. 131,
DISCLOSURES ABOUT SEGMENTS OF AN ENTERPRISE AND RELATED INFORMATION, which
establishes annual and interim reporting standards for an enterprise's operating
segments and related disclosures about its products, services, geographic areas,
and major customers. Adoption of these statements will not impact the Company's
financial position, results of operations or cash flows, and any effect will be
limited to the form and content of its disclosures. Both statements are
effective for fiscal years beginning after December 15, 1997, with earlier
application permitted.
    
 
4.  INVENTORIES
   
Inventories consist of the following at December 31, 1995 and 1996 and June 30,
1997, respectively:
    
   
<TABLE>
<CAPTION>
                                       ----------------------------------------
<S>                                    <C>           <C>           <C>
                                       PREDECESSOR           SUCCESSOR
                                       DECEMBER 31,  DECEMBER 31,      JUNE 30,
IN THOUSANDS                                   1995          1996          1997
                                       ------------  ------------  ------------
 
<CAPTION>
                                                                   (UNAUDITED)
<S>                                    <C>           <C>           <C>
Raw materials........................     $     789     $     662     $     717
Work-in-process......................         1,224           917           852
Finished goods.......................         1,124           968         1,030
                                       ------------  ------------  ------------
Total................................     $   3,137     $   2,547     $   2,599
                                       ------------  ------------  ------------
                                       ------------  ------------  ------------
</TABLE>
    
 
5.  PROPERTY, PLANT AND EQUIPMENT
   
Property, plant and equipment at December 31, 1995 and 1996 and June 30, 1997,
respectively, consists of the following:
    
 
   
<TABLE>
<CAPTION>
                                       ----------------------------------------
                                       PREDECESSOR           SUCCESSOR
                                       DECEMBER 31,  DECEMBER 31,      JUNE 30,
(IN THOUSANDS)                                 1995          1996          1997
                                       ------------  ------------  ------------
                                                                   (UNAUDITED)
<S>                                    <C>           <C>           <C>
Land and land improvements...........     $     380     $     380     $     380
Building.............................         2,175         2,082         2,082
Machinery and equipment..............         8,877         8,175         8,398
Computer equipment...................           671           618           618
Furniture and fixtures...............            93            92            92
                                       ------------  ------------  ------------
    Total............................        12,196        11,347        11,570
Accumulated depreciation.............           510           513           984
                                       ------------  ------------  ------------
Property, plant and equipment -
 net.................................     $  11,686     $  10,834     $  10,586
                                       ------------  ------------  ------------
                                       ------------  ------------  ------------
</TABLE>
    
 
                                      F-51
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
 
   
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
6.  FINANCING ARRANGEMENTS (SUCCESSOR COMPANY)
The Company entered into several financing arrangements in accordance with the
Acquisition. These arrangements and their respective provisions are as follows:
 
   
<TABLE>
<CAPTION>
                                                    ----------------------------
                                                             SUCCESSOR
                                                     DECEMBER 31,       JUNE 30,
IN THOUSANDS                                                 1996           1997
                                                    -------------  -------------
                                                                    (UNAUDITED)
<S>                                                 <C>            <C>
Term loan at a base rate plus 1/2% (8.75% and 8.9%
 at December 31, 1996 and June 30, 1997,
 respectively) due May 31, 2001, payable to a bank
 in various quarterly installments beginning in
 September of 1997................................      $   9,500      $   9,500
Term loan at a base rate plus 2% (10.25% and 10.4%
 at December 31, 1996 and June 30, 1997,
 respectively) due May 31, 1998, payable to a bank
 in $250,000 quarterly installments beginning in
 September of 1996................................          1,500          1,000
                                                           ------         ------
    Total.........................................         11,000         10,500
Less current portion of long-term debt............          1,125          1,187
                                                           ------         ------
Total.............................................      $   9,875      $   9,313
                                                           ------         ------
                                                           ------         ------
</TABLE>
    
 
The base rate for the term loans and the Company's revolving line-of-credit is
based on the three-month LIBOR rate plus 2.75%. The Company has entered into an
interest rate swap agreement with the bank to convert $7,000,000 of the
$9,500,000 term loan to a fixed rate whereby the Company pays 6.88% for the term
loan and receives the three-month LIBOR rate. Accordingly, the Company's
interest rate on the $7,000,000 will be 10.13% through the term of the swap (May
31, 2001).
 
SUBORDINATED DEBT - A loan payable to a stockholder of the Company is
subordinated to the aforementioned principal borrowings. The total loan
outstanding as of December 31, 1996 is $4,600,000 and is payable in $575,000
quarterly installments beginning August of 2001. The loan carries an interest
rate of 12% and is due May 31, 2003.
 
   
LINE-OF-CREDIT - The Company has a revolving line-of-credit available of
$5,000,000. Interest on the outstanding portion of the line-of-credit is stated
at a base rate plus 1/2%, payable monthly. At December 31, 1996, the interest
rate was 8.75%. The borrowing base varies based upon the level of eligible
inventory and accounts receivable. The unused line has a commitment fee of
0.25%, payable monthly. Any amounts outstanding on the line-of-credit are due on
May 31, 2001. At December 31, 1996 and June 30, 1997 the outstanding balance on
this line-of-credit was $2,266,000 and $1,965,000, respectively. The Company is
required to pay an early termination fee of 2% and 1% of the portion of
revolving credit commitment for terminating the line prior to the first and
second anniversary date, respectively.
    
 
COLLATERAL - Each of the aforementioned financing arrangements are secured by
the Company's accounts receivable, inventory, property, plant and equipment and
various intangible assets. The Subordinated Loan has second priority to this
collateral.
 
The Company is required to be in compliance with certain debt covenants
contained in the various debt agreements. Such covenants restrict the Company
from making certain payments, investments and capital expenditures. Furthermore,
they require the Company to maintain certain financial ratios and to maintain
certain levels of financial performance. At December 31, 1996, the Company was
in violation of the "Debt Service
 
                                      F-52
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
 
   
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
6.  FINANCING ARRANGEMENTS (SUCCESSOR COMPANY) (CONTINUED)
Coverage Ratio" and the "Net Worth" provisions of the agreement. The Company has
received a waiver from the bank regarding the violation of the Debt Service
Coverage Ratio. The bank also amended the Net Worth provision to eliminate any
noncompliance.
 
Future maturities on all debt as of December 31, 1996 are as follows (in
thousands):
 
<TABLE>
<CAPTION>
                                                                     ---------
<S>                                                                  <C>
1997...............................................................  $   1,125
1998...............................................................      1,250
1999...............................................................      1,250
2000...............................................................      1,250
2001...............................................................      9,540
Thereafter.........................................................      3,450
                                                                     ---------
Total..............................................................  $  17,866
                                                                     ---------
                                                                     ---------
</TABLE>
 
7.  INCOME TAXES
The provision for income taxes consists of the following:
 
   
<TABLE>
<CAPTION>
                                                    -------------------------------
                                                               SUCCESSOR
                                                       PERIOD FROM
                                                      JUNE 1, 1996
                                                           THROUGH       SIX MONTHS
                                                      DECEMBER 31,            ENDED
IN THOUSANDS                                                  1996    JUNE 30, 1997
                                                    --------------  ---------------
                                                                      (UNAUDITED)
<S>                                                 <C>             <C>
Current (refundable):
  Federal.........................................       $     (48)       $     255
  State...........................................              (9)              35
                                                             -----            -----
    Total current.................................             (57)             290
Deferred..........................................              67              (35)
                                                             -----            -----
Total.............................................       $      10        $     255
                                                             -----            -----
                                                             -----            -----
</TABLE>
    
 
                                      F-53
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
 
   
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
7.  INCOME TAXES (CONTINUED)
Deferred taxes are recorded based upon differences between the financial
statement and tax bases of assets and liabilities. Deferred tax assets and
liabilities are comprised of the following:
 
   
<TABLE>
<CAPTION>
                                                    ----------------------------
                                                             SUCCESSOR
                                                     DECEMBER 31,
IN THOUSANDS                                                 1996  JUNE 30, 1997
                                                    -------------  -------------
                                                                    (UNAUDITED)
<S>                                                 <C>            <C>
Deferred tax liability - Property, plant and
 equipment........................................      $   3,123      $   3,069
                                                    -------------  -------------
                                                    -------------  -------------
Accounts receivable...............................      $      16      $      16
Accrued expenses..................................            161            191
Net operating loss carryforwards..................             57
Restricted stock awards...........................              9             17
                                                    -------------  -------------
Deferred tax assets...............................      $     243      $     224
                                                    -------------  -------------
                                                    -------------  -------------
</TABLE>
    
 
Differences between income tax expense (benefit) computed using the U.S. Federal
income tax statutory rate of 34% and income tax expense (benefit) recorded by
the Company are attributable to the following:
 
   
<TABLE>
<CAPTION>
                                                    ------------------------------
                                                              SUCCESSOR
                                                       PERIOD FROM
                                                      JUNE 1, 1996
                                                           THROUGH      SIX MONTHS
                                                      DECEMBER 31,  ENDED JUNE 30,
IN THOUSANDS                                                  1996            1997
                                                    --------------  --------------
                                                                     (UNAUDITED)
<S>                                                 <C>             <C>
Income tax expense (benefit) using the U.S.
 statutory
 rate of 34%......................................       $     (30)      $     177
State income taxes - net..........................              (5)             32
Goodwill..........................................              43              43
Meals and entertainment...........................               2               3
                                                             -----           -----
Total.............................................       $      10       $     255
                                                             -----           -----
                                                             -----           -----
</TABLE>
    
 
See Note 10 to the financial statements for the predecessor company's income tax
practices and related disclosures.
 
                                      F-54
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
 
   
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
8.  COMMITMENTS AND CONTINGENCIES
The Company leases a portion of its operating facility used primarily for
storage under a noncancelable operating lease from a third party. Future minimum
lease payments required under the above operating lease as of December 31, 1996
are as follows (in thousands):
 
<TABLE>
<CAPTION>
                                                                       ---------
<S>                                                                    <C>
1997.................................................................  $     138
1998.................................................................        138
1999.................................................................        124
2000.................................................................        105
2001.................................................................         94
Thereafter...........................................................        216
                                                                       ---------
Total................................................................  $     815
                                                                       ---------
                                                                       ---------
</TABLE>
 
   
Rental expenses totaled $81,000 for the period from June 1, 1996 to December 31,
1996, $57,000 for the period from January 1, 1996 to May 31, 1996, $118,000 in
1995, and $116,000 in 1994 and $56,000 and $59,000 for the six months ended June
30, 1996 and 1997, respectively.
    
 
At the time of the acquisition on May 31, 1996, the Company entered into a
Consulting Agreement ("Agreement") with a stockholder affiliated company,
whereby such affiliate will provide to the Company management, financial
consulting and other advisory services as requested by the Company for a period
of eight years. The Company's payment to such affiliate under this Agreement is
$10,000 per month.
 
Also, the Company is party to Employment Agreements ("Agreements") with certain
key employees. These Agreements are generally for five years with an option to
renew. Total annual compensation expense related to these agreements is
approximately $460,000. These Agreements contain payment provisions to employees
in the event of a "change in control" as defined in the Agreements, if the
obligations of these Agreements are not assumed by the surviving entity.
 
9.  EMPLOYEE BENEFIT PLANS (SUCCESSOR COMPANY)
On May 31, 1996 stockholders approved the Management Incentive Plan for certain
key employees of the Company. This plan authorizes the Company to issue up to
35,245 shares of common stock.
 
Restricted share awards for 5,263 shares were granted on May 31, 1996 and vest
ratably over a five year period through 2001. The restricted stock awards were
set up as a reduction in equity for the fair market value at the date of grant
and are amortized over the vesting period. In the event of a change in ownership
of the Company, restricted share awards will be fully vested.
 
The Company has granted incentive stock options to purchase up to 29,982 shares
of common stock. These options allow the purchase of shares for $1 at December
31, 2001 based on achieving certain performance thresholds established by the
Company. These options will expire, if not exercised, after 10 years from the
date of the award. In the event of a change in the ownership of the Company, and
if equivalent options are not provided by the surviving entity, the performance
options terminate and the employees shall have the right to exercise the
Performance Options immediately prior to the change in the ownership.
 
Statement of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK BASED
COMPENSATION ("SFAS 123") establishes a fair value method for accounting for
stock-based compensation plans either through recognition or disclosure. The
Company adopted the disclosure option under the statement. Accordingly, the
Company accounts for its Performance Stock Options in accordance with APB
Opinion 25, which requires compensation cost to be
 
                                      F-55
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
 
   
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
9.  EMPLOYEE BENEFIT PLANS (SUCCESSOR COMPANY) (CONTINUED)
recorded for the difference between the market price of the stock and the
exercise price over the related service period of the employee. No accrual for
compensation cost has been made at December 31, 1996, as achievement of the
performance levels specified in the stock option plans are not probable. Based
on the expected level of options vesting under the specified performance goals,
using the Black-Scholes model with the following assumptions: expected life of 5
years; stock volatility, .001%; risk free interest rates, 5.5%; and no dividends
during the expected term, the affect on pro forma net income, under SFAS 123
would not be material.
 
   
In June of 1996, the Company established the St. Louis Lithographing Salaried
401(k) Plan (the "Plan"). Salaried employees who have completed one year of
service, attained the age of 21, and completed 1,000 hours of service are
eligible to participate in the Plan. Participants may contribute up to 15% of
their salary. The Company will match employee contributions up to 6% of the
participant's salary. Participants are 100% vested in their contributions upon
acceptance into the Plan. The Company contributed $71,000 to the Plan for the
period from June 1, 1996 to December 31, 1996 and $68,000 for the six months
ended June 30, 1997.
    
 
10. INTERCOMPANY ALLOCATIONS (PREDECESSOR COMPANY)
 
INTERCOMPANY ALLOCATIONS - As discussed in Note 1 to the financial statements,
the Predecessor Company was a wholly-owned subsidiary of Pet stand alone or
through Pillsbury. Certain functions such as income taxes, data processing,
legal services, insurance, payroll and employee benefits were administered by
the Company's Parent and the Company's share of such charges were allocated
through intercompany accounts.
 
Such allocations were based on the Company's workforce or other applicable
basis. Predecessor Company financial statements are prepared under the
above-mentioned intercompany allocation methodology.
 
Intercompany charges allocated to the Predecessor Company were as follows:
 
   
<TABLE>
<CAPTION>
                                       ----------------------------------------
                                                     PREDECESSOR
                                                                    PERIOD FROM
                                                                     JANUARY 1,
                                        YEARS ENDED DECEMBER 31,   1996 THROUGH
(IN THOUSANDS)                                 1994          1995  MAY 31, 1996
                                       ------------  ------------  ------------
<S>                                    <C>           <C>           <C>
Payroll and employee benefits........     $   8,292     $   7,614     $   3,151
Income taxes.........................         1,945         1,343           643
Insurance............................           442           467           209
</TABLE>
    
 
INCOME TAXES - Predecessor Company income was included in the consolidated tax
returns of its Parent. Income taxes were allocated to the Predecessor Company
through intercompany charges and no breakout was made between current and
deferred income taxes as deferred income taxes were maintained at the Parent
Company level.
 
CASH MANAGEMENT - Predecessor Company's cash management was administered by its
Parent. Accordingly, the Company's cash, other than petty cash, was maintained
at its Parent and the related cash transactions were recorded through the
intercompany account.
 
EMPLOYEE BENEFITS - Prior to the acquisition, employees of the Company
participated in its Parent's employee benefit plans.
 
                                      F-56
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
 
   
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                      JUNE 30, 1996 AND 1997 IS UNAUDITED)
    
 
10. INTERCOMPANY ALLOCATIONS (PREDECESSOR COMPANY) (CONTINUED)
 
INTERCOMPANY BALANCES - Prior to May 31, 1996 the Company provided certain
stamping services to an affiliated company. Sales to this affiliate were as
follows:
 
   
<TABLE>
<CAPTION>
                                       ----------------------------------------
                                                     PREDECESSOR
                                                                    PERIOD FROM
                                                                     JANUARY 1,
                                       (YEARS ENDED DECEMBER 31,)  1996 THROUGH
(IN THOUSANDS)                                 1994          1995  MAY 31, 1996
                                       ------------  ------------  ------------
<S>                                    <C>           <C>           <C>
Sales................................     $   3,140     $   1,904     $     677
</TABLE>
    
 
11. MAJOR CUSTOMER
   
A substantial portion of the Company's sales are concentrated in a relatively
few number of customers in the distilled spirits and wine industry. Sales to one
customer represented 14% for the period from June 1, 1996 to December 31, 1996,
18% for the period from January 1, 1996 to May 31, 1996, 12% in 1995, 9% in 1994
and 11.4% and 10.9% for the six months ended June 30, 1996 and 1997 of total
sales, respectively.
    
 
12. SUBSEQUENT EVENTS
   
On July 17, 1997, the Company executed a merger agreement to be acquired by
FirstPak, Inc. ("FirstPak"). If the merger is consummated, it will close
concurrently with the proposed offering of FirstPak Common Stock. Certain
FirstPak stockholders are affiliated with Company stockholders and certain
FirstPak stockholders are members of the Company's Board of Directors.
    
 
                                      F-57
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors and Shareholders of
CalOptical Holding Corporation and Subsidiary:
 
   
We have audited the accompanying consolidated balance sheets of CalOptical
Holding Corporation and subsidiary (the "Company") as of December 31, 1995 and
1996, and the related consolidated statements of operations, shareholders'
equity and cash flows for each of the three years in the period ended December
31, 1996. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
    
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
 
   
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 1995
and 1996, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles.
    
 
DELOITTE & TOUCHE LLP
Oakland, California
   
August 1, 1997
    
 
                                      F-58
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
                          CONSOLIDATED BALANCE SHEETS
 
   
<TABLE>
<CAPTION>
                                                    ---------------------------------
                                                                            JUNE 30,
                                                        DECEMBER 31,            1997
(IN THOUSANDS, EXCEPT SHARE DATA)                     1995       1996     -----------
                                                    ---------  ---------
                                                                          (UNAUDITED)
<S>                                                 <C>        <C>        <C>
ASSETS
Current assets:
  Cash............................................  $     151  $       1   $       1
  Accounts receivable (net of allowance for
   doubtful accounts of $65, $44, and $62,
   respectively)..................................      1,385      1,775       2,163
  Inventory.......................................      2,328      2,257       2,181
  Prepaid expenses and other......................        140        118         151
                                                    ---------  ---------  -----------
Total current assets..............................      4,004      4,151       4,496
                                                    ---------  ---------  -----------
Property and equipment -- net.....................        846        894         832
                                                    ---------  ---------  -----------
Other assets:
  Intangibles - net...............................      1,325        924         806
  Deferred income taxes...........................         63        254         427
  Other...........................................          3          3         110
                                                    ---------  ---------  -----------
Total other assets................................      1,391      1,181       1,343
                                                    ---------  ---------  -----------
Total assets......................................  $   6,241  $   6,226   $   6,671
                                                    ---------  ---------  -----------
                                                    ---------  ---------  -----------
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
  Accounts payable................................  $     382  $     630   $     873
  Accrued expenses................................        400        537         624
  Short-term debt.................................      1,023        552         193
  Income taxes payable............................        133         42         222
  Current portion of long-term debt:
    Related party.................................        569        362         184
    Other.........................................         17        278         331
                                                    ---------  ---------  -----------
Total current liabilities.........................      2,524      2,401       2,427
                                                    ---------  ---------  -----------
Long-term debt:
  Related party...................................      1,971      1,000       1,000
  Other...........................................         69        546         289
                                                    ---------  ---------  -----------
Total long-term debt..............................      2,040      1,546       1,289
                                                    ---------  ---------  -----------
Accrued interest and other........................        161        209         232
                                                    ---------  ---------  -----------
Total liabilities.................................      4,725      4,156       3,948
                                                    ---------  ---------  -----------
Warrants with put option..........................      1,299      1,885       2,240
                                                    ---------  ---------  -----------
Commitments and contingencies (Note 12)
Shareholders' equity:
  Capital stock:
    Preferred - $0.05 per share par value;
     authorized 20,000; none outstanding
    Common - $0.01 per share par value; authorized
     100,000; 42,500 shares issued and
     outstanding..................................          1          1           1
  Additional paid-in capital......................        348        184         482
  Accumulated deficit.............................       (132)         -           -
                                                    ---------  ---------  -----------
Total shareholders' equity........................        217        185         483
                                                    ---------  ---------  -----------
Total liabilities and shareholders' equity........  $   6,241  $   6,226   $   6,671
                                                    ---------  ---------  -----------
                                                    ---------  ---------  -----------
</TABLE>
    
 
                See notes to consolidated financial statements.
 
                                      F-59
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF OPERATIONS
 
   
<TABLE>
<CAPTION>
                                                 -----------------------------------------------------
                                                                                    SIX MONTHS ENDED
                                                    YEARS ENDED DECEMBER 31,              JUNE
                                                      1994       1995       1996       1996       1997
                                                 ---------  ---------  ---------  ---------  ---------
(IN THOUSANDS)                                                                        (UNAUDITED)
<S>                                              <C>        <C>        <C>        <C>        <C>
Sales..........................................  $  11,248  $  13,775  $  15,664  $   7,427  $   8,982
Cost of sales..................................      6,987      8,828      9,953      4,739      5,694
                                                 ---------  ---------  ---------  ---------  ---------
Gross profit...................................      4,261      4,947      5,711      2,688      3,288
Operating expenses:
  Selling, general and administrative
   expenses....................................      3,288      3,809      4,335      2,114      2,257
  Amortization of goodwill.....................        101        101        101         51         51
  Stock based compensation.....................        182        256        314        137        413
                                                 ---------  ---------  ---------  ---------  ---------
Total operating expenses.......................      3,571      4,166      4,750      2,302      2,721
                                                 ---------  ---------  ---------  ---------  ---------
Operating income...............................        690        781        961        386        567
Interest expense...............................        462        457        432        237        137
                                                 ---------  ---------  ---------  ---------  ---------
Income before income taxes and extraordinary
 item..........................................        228        324        529        149        430
Provision for income taxes.....................         72        158        231         78        190
                                                 ---------  ---------  ---------  ---------  ---------
Income before extraordinary item...............        156        166        298         71        240
Extraordinary item - Loss on early
 extinguishment of debt (net of income tax
 benefit of $38)...............................          -          -         58          -          -
                                                 ---------  ---------  ---------  ---------  ---------
Net income.....................................  $     156  $     166  $     240  $      71  $     240
                                                 ---------  ---------  ---------  ---------  ---------
                                                 ---------  ---------  ---------  ---------  ---------
</TABLE>
    
 
                See notes to consolidated financial statements.
 
                                      F-60
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
                CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
 
   
<TABLE>
<CAPTION>
                                           -------------------------------------------------------------------
                                                                    ADDITIONAL                           TOTAL
                                                COMMON STOCK           PAID-IN     ACCUMULATED   SHAREHOLDERS'
                                              SHARES      AMOUNT       CAPITAL         DEFICIT          EQUITY
                                           ---------  -----------  -----------  --------------  --------------
(IN THOUSANDS)
<S>                                        <C>        <C>          <C>          <C>             <C>
Balance, January 1, 1994.................     42,500   $       1     $     612       $    (454)      $     159
Net income...............................          -           -             -             156             156
Stock based compensation.................          -           -           182               -             182
Warrant accretion........................          -           -          (217)              -            (217)
                                           ---------       -----         -----           -----           -----
Balance, December 31, 1994...............     42,500           1           577            (298)            280
Net income...............................          -           -             -             166             166
Stock based compensation.................          -           -           256               -             256
Warrant accretion........................          -           -          (485)              -            (485)
                                           ---------       -----         -----           -----           -----
Balance, December 31, 1995...............     42,500           1           348            (132)            217
Net income...............................          -           -             -             240             240
Stock based compensation.................          -           -           314               -             314
Warrant accretion........................          -           -          (478)           (108)           (586)
                                           ---------       -----         -----           -----           -----
Balance, December 31, 1996...............     42,500           1           184               -             185
Net income (Unaudited)...................          -           -             -             240             240
Stock based compensation (Unaudited).....          -           -           413               -             413
Warrant accretion (Unaudited)............          -           -          (115)           (240)           (355)
                                           ---------       -----         -----           -----           -----
Balance, June 30, 1997 (Unaudited).......     42,500   $       1     $     482       $       -       $     483
                                           ---------       -----         -----           -----           -----
                                           ---------       -----         -----           -----           -----
</TABLE>
    
 
                See notes to consolidated financial statements.
 
                                      F-61
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
 
   
<TABLE>
<CAPTION>
                                                         -----------------------------------------------------
                                                                                            SIX MONTHS ENDED
                                                             YEAR ENDED DECEMBER 31,            JUNE 30,
                                                              1994       1995       1996       1996       1997
                                                         ---------  ---------  ---------  ---------  ---------
(IN THOUSANDS)                                                                                (UNAUDITED)
<S>                                                      <C>        <C>        <C>        <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.............................................  $     156  $     166  $     240  $      71  $     240
Adjustments to reconcile net income to net cash
 provided by operating activities:
  Loss on early extinguishment of debt.................          -          -         96          -          -
  Depreciation and amortization........................        632        669        625        360        378
  Deferred income taxes................................        (67)       (51)      (155)       (88)      (176)
  Provision for doubtful accounts......................         18         28        (22)       (31)        18
  Stock based compensation.............................        182        256        314        137        413
  Changes in operating assets and liabilities:
    Accounts receivable................................       (441)        73       (369)      (565)      (406)
    Inventory..........................................       (200)      (878)        71        170         76
    Other current assets...............................        185         40        (15)       (44)       (29)
    Accounts payable...................................        113         48        250        350        243
    Accrued expenses...................................        103         79        184         29        110
    Income taxes payable...............................        136         (3)       (91)        94        180
                                                         ---------  ---------  ---------  ---------  ---------
Net cash provided by operating activities..............        817        427      1,128        483      1,047
                                                         ---------  ---------  ---------  ---------  ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment....................       (114)      (305)      (258)      (129)       (63)
Other..................................................          -          -          -          -       (187)
                                                         ---------  ---------  ---------  ---------  ---------
Net cash used in investing activities..................       (114)      (305)      (258)      (129)      (250)
                                                         ---------  ---------  ---------  ---------  ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on long-term debt.............................       (493)      (618)    (1,422)      (346)      (594)
Long-term borrowings...................................          -         86        872          -        157
Short-term borrowings (repayments) - net...............       (185)       535       (470)      (158)      (360)
                                                         ---------  ---------  ---------  ---------  ---------
Net cash provided by (used in) financing activities....       (678)         3     (1,020)      (504)      (797)
                                                         ---------  ---------  ---------  ---------  ---------
Net increase (decrease) in cash........................         25        125       (150)      (150)         -
Cash beginning of period...............................          1         26        151        151          1
                                                         ---------  ---------  ---------  ---------  ---------
Cash end of period.....................................  $      26  $     151  $       1  $       1  $       1
                                                         ---------  ---------  ---------  ---------  ---------
                                                         ---------  ---------  ---------  ---------  ---------
Additional cash flow information:
Income taxes paid (refunds received)...................  $    (153) $     163  $     467  $     102  $     185
                                                         ---------  ---------  ---------  ---------  ---------
                                                         ---------  ---------  ---------  ---------  ---------
Interest paid..........................................  $     342  $     305  $     351  $     169  $     130
                                                         ---------  ---------  ---------  ---------  ---------
                                                         ---------  ---------  ---------  ---------  ---------
</TABLE>
    
 
                See notes to consolidated financial statements.
 
                                      F-62
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
 
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
CalOptical Holding Corporation ("CalOptical") was incorporated in Delaware on
July 27, 1992. CalOptical, which is owned 88% by MBR Investment Associates L.P.
(without giving effect to the exercise of outstanding warrants or options), had
no operations prior to its acquisition of California Optical Leather, Inc.
("COL") on October 30, 1992 (see Note 2, "Acquisition and Related Financing").
COL is a manufacturer and distributor of eyeglass cases, to customers
principally in the optical industry and also to customers in the retail
industry.
 
PRINCIPLES OF CONSOLIDATION
 
The consolidated financial statements include the accounts of CalOptical and its
wholly owned subsidiary, COL (together the "Company"). Intercompany balances and
transactions are eliminated in consolidation.
 
INVENTORIES are stated at the lower of cost (first-in, first-out basis) or
market. Costs include raw materials, direct labor and materials and indirect
factory overhead. In addition, portions of general and administrative costs are
included in the cost of inventories.
 
PLANT AND EQUIPMENT are stated at cost. Depreciation is calculated using the
straight-line method over the estimated useful lives of the assets which range
from 3 to 10 years.
 
REVENUE RECOGNITION
 
Sales are recorded at the date of shipment.
 
INCOME TAXES
 
The Company uses the liability method to account for income taxes as required by
Statement of Financial Accounting Standards No. 109. Deferred income taxes are
determined based upon enacted tax laws and rates applied to the differences
between the financial statement and tax bases of assets and liabilities.
 
AMORTIZATION OF INTANGIBLES
 
The Company amortizes goodwill on a straight-line basis over twenty years. The
Company amortizes the Non-Competition Agreement using the effective interest
method over the five-year life of the agreement.
 
LONG-LIVED ASSETS
 
   
In 1996, the Company adopted Statement of Financial Accounting Standards No.
121, ACCOUNTING FOR IMPAIRMENT OF LONG-LIVED ASSETS AND FOR LONG-LIVED ASSETS TO
BE DISPOSED OF. There was no impact on the consolidated financial statements as
a result of adopting this new accounting standard.
    
 
STOCK-BASED COMPENSATION
 
   
In 1996, the Company adopted Statement of Financial Accounting Standards No.
123, ACCOUNTING FOR STOCK-BASED COMPENSATION ("SFAS 123"). SFAS 123 encourages,
but does not require, companies to record compensation cost for stock-based
employee compensation plans at fair value. The Company has chosen to continue to
account for stock-based compensation using the intrinsic value method prescribed
in Accounting Principles Board Opinion No. 25, ACCOUNTING FOR STOCK ISSUED TO
EMPLOYEES, and related Interpretations. Accordingly, compensation cost for stock
options is measured as the excess, if any, of the estimated fair value of the
Company's stock at the measurement date over the amount an employee must pay to
acquire the stock. All of the Company's stock options were granted in 1992 and,
therefore, the Company is not subject to the pro forma disclosure provisions of
SFAS 123.
    
 
                                      F-63
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
1.  ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS
 
   
The carrying amounts of cash, accounts receivable, accounts payable, accrued
expenses and short-term debt are reflected in the financial statements at
approximate fair value due to the short-term nature of those instruments. The
carrying amount of the long-term debt approximates fair value at December 31,
1995 and 1996 based on interest rates available to the Company and debt
instruments with similar terms, except for the 14% note ($1,000,000) to previous
shareholders (the "Sellers"). The estimated fair value of the 14% note to the
Sellers at December 31, 1995 and 1996 is $929,000 and $947,000, respectively.
    
 
USE OF ESTIMATES
 
Management of the Company has made a number of estimates and assumptions
relating to the reporting of assets, liabilities, revenues, and expenses and the
disclosure of contingent assets and liabilities to prepare these financial
statements in conformity with generally accepted accounting principles. The
carrying value of warrants with put option and the stock option compensation
represent significant estimates. Actual results could differ from these
estimates.
 
INTERIM FINANCIAL STATEMENTS
 
   
The financial statements as of and for the six months ended June 30, 1996 and
1997 are unaudited. These financial statements, in the opinion of management of
the Company, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the results for those interim
periods. The results of operations for the six months ended June 30, 1996 and
1997 are not necessarily indicative of the results to be expected for the full
year.
    
 
   
NEW ACCOUNTING PRONOUNCEMENTS
    
 
   
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME, which
requires that an enterprise report, by major components and as a single total,
the change in its net assets during the period from nonowner sources; and
Statement of Financial Accounting Standards No. 131, DISCLOSURES ABOUT SEGMENTS
OF AN ENTERPRISE AND RELATED INFORMATION, which establishes annual and interim
reporting standards for an enterprise's operating segments and related
diclosures about its products, services, geographic areas, and major customers.
Adoption of these statements will not impact the Company's consolidated
financial position, results of operations or cash flows, and any effect will be
limited to the form and content of its disclosures. Both statements are
effective for fiscal years beginnning after December 15, 1997, with earlier
application permitted.
    
 
2.  ACQUISITION AND RELATED FINANCING
On October 30, 1992, the Company purchased all of the outstanding shares of COL
from the Sellers for $3,250,000 and incurred acquisition costs totaling
$307,000.
 
The acquisition was accounted for using the purchase method; accordingly, COL's
assets and liabilities were recorded at their estimated fair values at the date
of acquisition. The excess of purchase price over the fair value of net assets
acquired ("goodwill") is being amortized on a straight-line basis over twenty
years.
 
The Company obtained a total of $3,550,000 ($2,500,000 in subordinated notes,
$200,000 in notes payable and $850,000 in equity) to finance the acquisition. As
part of the acquisition of COL, the Company entered into a Non-Competition
Agreement with the Sellers that provides for an aggregate of $1,500,000 to be
paid to the Sellers in quarterly payments of $94,000 from January 31, 1994
through October 1997. This agreement is
 
                                      F-64
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
2.  ACQUISITION AND RELATED FINANCING (CONTINUED)
subordinate to all other notes payable. The present value of the payments
($1,174,000) was recorded as an intangible asset and long-term debt. The
discount is amortized to interest expense over five years using an 8% imputed
interest rate.
 
   
A dispute between CalOptical Holding Corporation and the Sellers of COL as to
the value of accounts receivable acquired was finalized during the year ended
December 31, 1995. The Sellers had indemnified the buyer for amounts owed by a
particular customer that were outstanding 30 days or more at October 30, 1992.
These amounts were converted to a promissory note from the customer which was
subsequently defaulted during the year ended December 31, 1994. The Company had
offset the amount of $161,000 against the liability established in connection
with the Non-Competition Agreement included in Long-Term Debt. The Sellers
disputed the provisions of the indemnification agreement. The matter went before
independent arbitrators. The arbitration was resolved in the Sellers' favor, and
they were awarded the $161,000, plus accrued interest, as well as recovery of
their attorney's fees. The award, legal fees and interest of $275,000 was
included in selling, general and administrative expenses during the year ended
December 31, 1995.
    
 
3.  CREDIT ARRANGEMENT
The Company has a $2,500,000 line of credit facility from a bank. Up to $600,000
of the credit facility may be used for letters of credit. At December 31, 1996,
$552,000 was outstanding and is included in short-term debt. The amount
available under the line is dependent upon levels of accounts receivable and
inventory. At December 31, 1996, $943,000 was available for additional
borrowings under the line. Interest on debt outstanding under this credit
facility is computed at 0.5% over the bank's base rate. At December 31, 1996,
the borrowing rate was 8.75%. The line is secured by accounts receivable,
inventory, plant and equipment. The credit agreement contains restrictive
covenants requiring maintenance of certain financial ratios and certain levels
of tangible net worth and profitability. At December 31, 1996, the Company was
in compliance with these covenants. The Company has outstanding letters of
credit of approximately $451,000 at December 31, 1996 for the purchase of
inventory.
 
4.  INVENTORY
Inventory consists of the following:
 
   
<TABLE>
<CAPTION>
                                      -------------------------------------
                                                                   JUNE 30,
                                            DECEMBER 31,               1997
IN THOUSANDS                                 1995         1996  -----------
                                      -----------  -----------
                                                                (UNAUDITED)
<S>                                   <C>          <C>          <C>
Raw materials.......................        $ 620        $ 742        $ 890
Work in process.....................           76           92           24
Finished goods......................        1,632        1,423        1,267
                                      -----------  -----------  -----------
Total...............................       $2,328       $2,257       $2,181
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
                                      F-65
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
5.  PROPERTY AND EQUIPMENT
Property and equipment consists of the following:
 
   
<TABLE>
<CAPTION>
                                      -------------------------------------
                                                                   JUNE 30,
                                            DECEMBER 31,               1997
IN THOUSANDS                                 1995         1996  -----------
                                      -----------  -----------
                                                                (UNAUDITED)
<S>                                   <C>          <C>          <C>
Machinery...........................        $ 717        $ 822        $ 860
Furniture fixtures and equipment....          317          459          484
Leasehold improvements..............          219          230          230
                                      -----------  -----------  -----------
Total...............................        1,253        1,511        1,574
Less accumulated depreciation and
 amortization.......................         (407)        (617)        (742)
                                      -----------  -----------  -----------
Property and equipment - net........        $ 846        $ 894        $ 832
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
6.  INTANGIBLES
Intangibles consist of the following:
 
   
<TABLE>
<CAPTION>
                                      -------------------------------------
                                            DECEMBER 31,           JUNE 30,
IN THOUSANDS                                 1995         1996         1997
                                      -----------  -----------  -----------
<S>                                   <C>          <C>          <C>
                                                                 (UNAUDITED)
Noncompetition agreement............      $ 1,174      $ 1,174      $ 1,174
Goodwill............................        1,162        1,162        1,162
Other...............................          178            3           83
                                      -----------  -----------  -----------
Total...............................        2,514        2,339        2,419
Accumulated amortization............       (1,189)      (1,415)      (1,613)
                                      -----------  -----------  -----------
Intangibles - net...................      $ 1,325       $  924       $  806
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
                                      F-66
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
7.  LONG-TERM DEBT
Long-term debt consists of the following:
 
   
<TABLE>
<CAPTION>
                                                      -------------------------------------
                                                            DECEMBER 31,           JUNE 30,
IN THOUSANDS                                                 1995         1996         1997
                                                      -----------  -----------  -----------
<S>                                                   <C>          <C>          <C>
                                                                                 (UNAUDITED)
Related parties:
  14% note to shareholder, subordinate to line of
   credit, quarterly principal payments of $40,000
   beginning January 1, 1994, quarterly payments of
   $75,000 beginning January 1, 1996, repaid in
   September 1996...................................        $ 955
  Less unamortized original issue discount..........         (111)
  14% note to Sellers, subordinate to line of credit
   and notes to shareholder, interest only payments
   at 10% due monthly, interest at 4% accrued and
   payable in 1999, principal due in two equal
   payments in 1998 and 1999........................        1,000       $1,000       $1,000
  Noninterest-bearing liability established in
   connection with Non-Competition Agreement
   quarterly payments of $94,000 from January 31,
   1994 to October 31, 1997.........................          750          375          187
  Less unamortized discount (based on imputed
   interest rate of 8%).............................          (54)         (13)          (3)
Other:
  9.75% equipment notes, due January 2000...........           86           94           86
  9.75% bank note, quarterly principal payments of
   $61 beginning January 1997 through October
   1999.............................................            -          730          534
                                                      -----------  -----------  -----------
Total long-term debt................................        2,626        2,186        1,804
Less current portion................................          586          640          515
                                                      -----------  -----------  -----------
Long-term portion...................................       $2,040       $1,546       $1,289
                                                      -----------  -----------  -----------
                                                      -----------  -----------  -----------
</TABLE>
    
 
   
The 14% subordinated note to a shareholder was carried net of a $300,000
original issue discount which was amortized by the interest method over the life
of the note. Under the terms of the note indenture, warrants to purchase common
stock were issued (see Note 13). Interest paid on the subordinated notes payable
to the shareholder was $195,000, $145,000 and $86,000 during the years ended
December 31, 1994, 1995 and 1996, and $61,000 and zero for the six months ended
June 30, 1996 and 1997.
    
 
   
In September 1996, the Company repaid the 14% subordinated note to the
shareholder that was originally due through October 1997. This resulted in the
write-off of the remaining original issue discount of $70,000 plus debt issuance
costs of $26,000. The total write-off of $96,000 less the income tax benefit of
$38,000 for a net of $58,000 is shown as an extraordinary item in the statement
of operations for the year ended December 31, 1996. The repayment was financed
with a 9.75% bank note due through October 1999.
    
 
                                      F-67
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
7.  LONG-TERM DEBT (CONTINUED)
The scheduled principal payments on long-term debt are as follows (in
thousands):
 
<TABLE>
<S>                                                                   <C>
Years ending December 31:
                                                                      ---------
  1997..............................................................  $     640
  1998..............................................................        777
  1999..............................................................        769
                                                                      ---------
Total...............................................................  $   2,186
                                                                      ---------
                                                                      ---------
</TABLE>
 
The bank note and the subordinated note to the Sellers contain certain
restrictive covenants including limitations on payment of dividends, borrowing
and investments, and require maintaining minimum tangible net worth and
financial ratios.
 
The subordinated note payable to the Sellers is secured by the shares of the
Company.
 
8.  EMPLOYEE BENEFIT PLAN
   
All employees are eligible to participate in the Company's 401(k) savings plan
after obtaining a certain age and level of service. The Company matches 50% of
employee contributions up to 6% (25% of employee contributions up to 6% prior to
July 1, 1996). Company contributions to the 401(k) savings plan were zero,
$26,000 and $41,000 for the years ended December 31, 1994, 1995 and 1996, and
$13,000 and $30,000 for the six months ended June 30, 1996 and 1997.
    
 
9.  INCOME TAXES
   
The provision for taxes on income before extraordinary item consists of the
following:
    
 
   
<TABLE>
<CAPTION>
                              -------------------------------------------------------------------------
                                        YEAR ENDED DECEMBER 31,             SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS)                         1994           1995           1996           1996           1997
                              -------------  -------------  -------------  -------------  -------------
                                                                                   (UNAUDITED)
<S>                           <C>            <C>            <C>            <C>            <C>
Current:
  Federal...................      $     131      $     181      $     247      $     141      $     305
  State.....................             31             32             40             25             54
                                     ------         ------         ------         ------         ------
    Total current...........            162            213            287            166            359
                                     ------         ------         ------         ------         ------
Deferred:
  Federal...................            (77)           (47)           (48)           (75)          (144)
  State.....................            (13)            (8)            (8)           (13)           (25)
                                     ------         ------         ------         ------         ------
    Total deferred..........            (90)           (55)           (56)           (88)          (169)
                                     ------         ------         ------         ------         ------
Total provision for income
 taxes......................      $      72      $     158      $     231      $      78      $     190
                                     ------         ------         ------         ------         ------
                                     ------         ------         ------         ------         ------
</TABLE>
    
 
                                      F-68
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
9.  INCOME TAXES (CONTINUED)
Components of the deferred income tax assets (liabilities) are as follows:
 
   
<TABLE>
<CAPTION>
                                                        -------------------------------------------------
                                                                  DECEMBER 31,                   JUNE 30,
(IN THOUSANDS)                                                     1995             1996             1997
                                                        ---------------  ---------------  ---------------
                                                                           (UNAUDITED)
<S>                                                     <C>              <C>              <C>
Difference between book and tax basis of inventory....        $      21        $      19        $      18
Accrued vacation......................................               33               34               37
Allowance for doubtful accounts.......................               26               18               25
Other assets..........................................              (60)             (43)             (48)
Difference between book and tax basis of property and
 equipment............................................              (99)             (87)             (80)
Difference between book and tax basis of
 intangibles..........................................               (1)              (1)              (1)
Stock option compensation.............................              199              325              490
Deferred lease credits................................               13               17               17
                                                                    ---              ---              ---
Total.................................................        $     131        $     282        $     458
                                                                    ---              ---              ---
                                                                    ---              ---              ---
</TABLE>
    
 
A reconciliation of the federal statutory income tax rate with the Company's
effective income tax rate is as follows:
 
   
<TABLE>
<CAPTION>
                                                ---------------------------------------------------------------
                                                                                           SIX MONTHS ENDED
                                                       YEAR ENDED DECEMBER 31,                 JUNE 30,
                                                       1994         1995         1996         1996         1997
                                                -----------  -----------  -----------  -----------  -----------
                                                                                             (UNAUDITED)
<S>                                             <C>          <C>          <C>          <C>          <C>
Federal statutory rate........................           34%          34%          34%          34%          34%
State income taxes, net of federal benefit....            6            6            6            6            6
Nondeductible expenses (primarily amortization
 of goodwill).................................           14            8            4           12            4
Utilization of net operating losses...........          (22)           -            -            -            -
                                                         --           --           --
                                                                                             -----  -----------
Effective tax rate............................           32%          48%          41%          52%          44%
                                                         --           --           --
                                                         --           --           --
                                                                                             -----  -----------
                                                                                             -----  -----------
</TABLE>
    
 
10. OTHER RELATED PARTY TRANSACTIONS
   
Included in general and administrative expenses are consulting fees of $120,000
for each of the years ended December 31, 1994, 1995 and 1996, $60,000 for each
of the six months ended June 30, 1996 and 1997 charged by an affiliate of one of
the shareholders.
    
 
11. SALES TO MAJOR CUSTOMERS
   
A major customer is defined as a customer that exceeds 10% of net sales. Sales
to one major customer were $3,765,000 for the year ended December 31, 1994.
Sales to two major customers were $4,249,000 and $2,367,000 for the year ended
December 31, 1995; $4,151,000 and $1,859,000 for the year ended December 31,
1996; $2,142,000 and $939,000 for the six months ended June 30, 1996; $1,753,000
and $1,083,000 for the six months ended June 30, 1997.
    
 
12. LEASE COMMITMENTS
   
The Company has a ten-year building lease, which includes escalation clauses,
with the Sellers, under which the Company paid rent of $151,000, $153,000 and
$157,000 for the years ended December 31, 1994, 1995 and 1996, and $78,000 and
$81,000 for the six months ended June 30, 1996 and 1997.
    
 
                                      F-69
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
12. LEASE COMMITMENTS (CONTINUED)
   
In addition to the lease described above, the Company leases administrative,
manufacturing and warehouse space used in operations under various operating
leases. The leases have initial five and ten year terms with no optional renewal
periods and certain escalation clauses. Rental expense for all leases was
$236,000, $250,000 and $270,000 for the years ended December 31, 1994, 1995 and
1996, $134,000 for the six months ended and $138,000 for the six months ended
June 30, 1996 and 1997.
    
 
Future minimum lease payments for all operating leases as of December 31, 1996
are as follows (in thousands):
 
<TABLE>
<S>                                                                   <C>
Years ending December 31:
                                                                      ---------
  1997..............................................................  $     278
  1998..............................................................        282
  1999..............................................................        263
  2000..............................................................        265
  2001..............................................................        269
  Thereafter........................................................        285
                                                                      ---------
Total...............................................................  $   1,642
                                                                      ---------
                                                                      ---------
</TABLE>
 
13. SHAREHOLDERS' EQUITY
 
DETACHABLE STOCK WARRANTS WITH PUT OPTION
 
   
The Company's 14% note payable to a shareholder (the "shareholder note") also
provides for Class A and Class B detachable warrants exercisable at $20 per
share and $0.01 per share, respectively, to purchase shares of the Company which
would represent 13% and 10%, respectively, of the total outstanding shares of
the Company after such warrants are exercised (collectively referred to as the
"warrants"). The warrants are exercisable immediately and contain anti-dilution
provisions. The warrant holder has the right to require the Company to purchase
all or any portion of such warrants and any common stock of the Company acquired
upon exercise of such warrants and owned by the holder ("put option"). The
purchase price to be paid upon exercise of the put option is based upon the
value of the tendered securities, determined as the pro rata portion of the
greater of the fair market value of the Company or 4.6 multiplied by the
Company's average annual earnings before depreciation, income taxes and
amortization for the two most recent fiscal years (the "Formula"). The carrying
value of the warrants has been determined using the Formula. The actual purchase
price paid upon exercise of the put option could be based on the fair market
value of the Company at the time, which may be higher than the amount derived by
the Formula. The put option is exercisable for five years following repayment of
the shareholder note or a Liquidation Event (as defined). Such warrants owned by
the holder may be purchased by the Company at the Company's option ("call
option"). The call option is exercisable for four years following one year after
the repayment of the shareholder note. The consideration payable upon the
exercise of the call option is based upon the greater of $250,000 or the
consideration payable upon exercise of the put option multiplied by 105%, 110%
or 115%, depending upon the date on which the call option is exercised.
    
 
   
A portion of the proceeds from the shareholder note representing the $300,000
estimated fair value of the warrants was recognized as temporary equity with a
corresponding decrease (original issue discount) in the recorded value of the
note. Such original issue discount was amortized over the life of the debt
agreement. The Company is accreting the warrant value to the estimated
contingent liability under the put option with a corresponding charge to
permanent equity. Total warrant value accretion was $217,000, $485,000 and
$586,000 for the years ended December 31, 1994, 1995 and 1996, $379,000 and
$355,000 for the six months ended June 30, 1996 and 1997.
    
 
                                      F-70
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
   
                (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED
                          JUNE 30, 1997 IS UNAUDITED)
    
 
13. SHAREHOLDERS' EQUITY (CONTINUED)
STOCK OPTIONS
 
   
The President of the Company was granted options, in 1992, to purchase 14,167
shares of common stock at a price of $1 per share and 5,667 shares of common
stock at a price of $20 per share contingent upon the Company obtaining
specified profitability levels in the future. There were 2,125 stock options
exercisable at December 31, 1994, 7,084 stock options exercisable at December
31, 1995, 10,626 stock options exercisable at December 31, 1996, and 14,167
stock options exercisable at June 30, 1997 at a price of $1 per share. There
were no stock options exercisable at December 31, 1996 and 2,240 stock options
exercisable at a price of $20 per share at June 30, 1997. As of June 30, 1997,
no options have been exercised.
    
 
14. SUBSEQUENT EVENTS
 
   
On July 17, 1997, the Company executed a merger agreement to be acquired by
FirstPak, Inc. ("FirstPak"). If the merger is consummated, it will close
concurrently with the proposed offering of FirstPak Common Stock. Certain
FirstPak stockholders are affiliated with Company shareholders and certain
FirstPak stockholders are members of the Company's Board of Directors.
    
 
                                      F-71
<PAGE>
                          INDEPENDENT AUDITORS' REPORT
 
To the Board of Directors and Stockholders of
Blake Printing and Publishing, Inc.:
 
We have audited the accompanying balance sheets of Blake Printing and
Publishing, Inc. (the "Company") as of December 31, 1995 and December 29, 1996,
and the related consolidated statements of income, changes in stockholders'
equity and cash flows for each of the three years in the period ended December
29, 1996. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
 
In our opinion the financial statements referred to above present fairly, in all
material respects, the financial position of Blake Printing and Publishing, Inc.
at December 31, 1995 and December 29, 1996, and the results of its operations
and its cash flows for each of the three years in the period ended December 29,
1996, in conformity with generally accepted accounting principles.
 
DELOITTE & TOUCHE LLP
San Jose, California
March 31, 1997 (July 17, 1997 as to Note 16)
 
                                      F-72
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
                                 BALANCE SHEETS
 
   
<TABLE>
<CAPTION>
                                                        -------------------------------------------
                                                                                        (UNAUDITED)
                                                         DECEMBER 31,   DECEMBER 29,       JUNE 29,
                                                                 1995           1996           1997
                                                        -------------  -------------  -------------
<S>                                                     <C>            <C>            <C>
(In thousands, except share data)
ASSETS
Current assets:
  Cash................................................      $       9      $      44      $     109
  Trade accounts receivable, net of allowance for
   doubtful accounts of $20...........................          1,503          1,017          1,794
  Inventories.........................................            553            601            677
  Prepaid expenses, deposits and other................            167            134            435
  Deferred tax asset..................................             41
                                                               ------         ------         ------
Total current assets..................................          2,273          1,796          3,015
                                                               ------         ------         ------
Property and equipment - net..........................          3,064          4,565          4,121
                                                               ------         ------         ------
Other assets:
  Prepublication costs - net..........................             50             31             23
  Other assets........................................             59             66             63
                                                               ------         ------         ------
Total other assets....................................            109             97             86
                                                               ------         ------         ------
Total assets..........................................      $   5,446      $   6,458      $   7,222
                                                               ------         ------         ------
                                                               ------         ------         ------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Accounts payable....................................      $     495      $     322      $     653
  Accrued and other liabilities.......................            306            295            346
  Income taxes payable................................              1            107             73
  Bank line of credit.................................            806            621
  Deferred income taxes...............................                            12             42
  Current portion of long term liabilities............            807            824            850
                                                               ------         ------         ------
Total current liabilities.............................          2,415          2,181          1,964
Long-term liabilities:
  Bank line of credit.................................              -              -          1,083
  Notes payable.......................................          1,232          2,205          1,798
  Capital leases obligations..........................            134             68             54
  Deferred income taxes...............................            160            140            140
                                                               ------         ------         ------
Total liabilities.....................................          3,941          4,594          5,039
                                                               ------         ------         ------
Commitments and contingencies (Notes 8, 9, and 15)
Stockholders' equity:
  Common stock, $100 par value, 250 shares authorized,
   160 shares issued and outstanding..................             20             16             16
  Additional paid-in capital..........................            311            411            411
  Retained earnings...................................          1,174          1,437          1,756
                                                               ------         ------         ------
Total stockholders' equity............................          1,505          1,864          2,183
                                                               ------         ------         ------
Total liabilities and stockholders' equity............      $   5,446      $   6,458      $   7,222
                                                               ------         ------         ------
                                                               ------         ------         ------
</TABLE>
    
 
                       See notes to financial statements.
 
                                      F-73
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
                              STATEMENTS OF INCOME
 
   
<TABLE>
<CAPTION>
                                        ---------------------------------------------------------------
                                                      YEARS ENDED                   SIX MONTHS ENDED
                                         JANUARY 1,  DECEMBER 31,  DECEMBER 29,    JUNE 30,    JUNE 29,
                                               1995          1995          1996        1996        1997
                                        -----------  ------------  ------------  ----------  ----------
(IN THOUSANDS)
<S>                                     <C>          <C>           <C>           <C>         <C>
Sales.................................    $  10,663     $  11,139     $  12,362       6,586       6,894
Cost of sales.........................        7,063         6,919         7,523       3,659       4,202
                                        -----------  ------------  ------------  ----------  ----------
Gross profit..........................        3,600         4,220         4,839       2,927       2,692
Operating expenses:
  Selling, general, and administrative
   expenses...........................        3,310         3,660         3,801       1,955       2,010
  Amortization of goodwill............            1             1             1           -           2
  Stock based compensation............            -             -           100           -           -
                                        -----------  ------------  ------------  ----------  ----------
Total operating expenses..............        3,311         3,661         3,902       1,955       2,012
                                        -----------  ------------  ------------  ----------  ----------
Operating income......................          289           559           937         972         680
                                        -----------  ------------  ------------  ----------  ----------
Other income (expenses):
  Interest expense - net..............         (245)         (287)         (293)       (127)       (178)
  Other...............................           23           (15)           43          22          30
                                        -----------  ------------  ------------  ----------  ----------
Total other income (expenses).........         (222)         (302)         (250)       (105)       (148)
                                        -----------  ------------  ------------  ----------  ----------
Income before taxes on income.........           67           257           687         867         532
Provision for taxes on income.........            8            74           228         353         213
                                        -----------  ------------  ------------  ----------  ----------
Net income............................    $      59     $     183     $     459         514         319
                                        -----------  ------------  ------------  ----------  ----------
                                        -----------  ------------  ------------  ----------  ----------
</TABLE>
    
 
                       See notes to financial statements.
 
                                      F-74
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
                 STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
 
   
<TABLE>
<CAPTION>
                                              ----------------------------------------------------------
                                                                      ADDITIONAL    RETAINED
                                                              COMMON     PAID IN    EARNINGS
                                                  SHARES       STOCK     CAPITAL   (DEFICIT)       TOTAL
                                              ----------  ----------  ----------  ----------  ----------
(IN THOUSANDS, EXCEPT SHARE DATA)
<S>                                           <C>         <C>         <C>         <C>         <C>
Balance, January 3, 1994....................         200   $      20   $     311   $     932   $   1,263
Net income..................................           -           -           -          59          59
                                              ----------  ----------  ----------  ----------  ----------
Balance, January 1, 1995....................         200          20         311         991       1,322
Net income..................................           -           -           -         183         183
                                              ----------  ----------  ----------  ----------  ----------
Balance, December 31, 1995..................         200          20         311       1,174       1,505
Net income..................................           -           -           -         459         459
Stock repurchase............................         (40)         (4)          -        (196)       (200)
Compensation - stock option agreement.......           -           -         100           -         100
                                              ----------  ----------  ----------  ----------  ----------
Balance, December 29, 1996..................         160          16         411       1,437       1,864
Net income (unaudited)......................           -           -           -         319         319
                                              ----------  ----------  ----------  ----------  ----------
Balance, June 29, 1997 (unaudited)..........         160   $      16   $     411       1,756       2,183
                                              ----------  ----------  ----------  ----------  ----------
                                              ----------  ----------  ----------  ----------  ----------
</TABLE>
    
 
                See notes to consolidated financial statements.
 
                                      F-75
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
                            STATEMENTS OF CASH FLOWS
 
   
<TABLE>
<CAPTION>
                                        ---------------------------------------------------------------
                                                      YEARS ENDED                   SIX MONTHS ENDED
                                         JANUARY 1,  DECEMBER 31,  DECEMBER 29,    JUNE 30,     JUNE 29
                                               1995          1995          1996        1996        1997
                                        -----------  ------------  ------------  ----------  ----------
                                                                                      (UNAUDITED)
(IN THOUSANDS)
<S>                                     <C>          <C>           <C>           <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................    $      59     $     183     $     459   $     514   $     319
Adjustments to reconcile net income to
 net cash provided by operating
 activities:
  Depreciation and amortization.......          677           865         1,022         442         617
  Stock based compensation............            -             -           100           -           -
  Write off of prepublication costs...                        157
  (Gain) loss on disposal of assets...           13            76            (4)         (6)         36
  Effect of changes in:
    Accounts receivable...............           59          (557)          486          (4)       (778)
    Inventories.......................          181          (158)          (48)       (115)        (76)
    Prepaid expenses and other........         (135)          (80)           50          61         (22)
    Accounts payable..................           28           153          (147)        (92)        245
    Accrued and other liabilities.....           (1)           38           (36)        104         129
    Income taxes payable..............         (119)            1           106         307         (34)
    Deferred income taxes.............          (33)          (13)           34           -          30
                                        -----------  ------------  ------------  ----------  ----------
Net cash provided by operating
 activities...........................          729           665         2,022       1,211         466
                                        -----------  ------------  ------------  ----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and
 equipment............................         (196)         (425)         (468)       (830)       (146)
Proceeds from sale of equipment.......                         10            11           9           3
Other.................................           85             5             2         (18)        (35)
                                        -----------  ------------  ------------  ----------  ----------
Net cash used by investing
 activities...........................         (111)         (410)         (455)       (839)       (178)
                                        -----------  ------------  ------------  ----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of long-term debt...........         (467)         (471)       (1,021)         58        (376)
Repayment of capital lease
 obligations..........................          (95)         (155)         (116)        (60)        (18)
Bank line of credit borrowings
 (repayments), net....................         (187)          369          (195)       (357)        462
Deferred public offering and merger
 costs................................            -             -             -           -        (291)
Retirement of common stock............            -             -          (200)          -           -
                                        -----------  ------------  ------------  ----------  ----------
Net cash provided (used) by financing
 activities...........................         (749)         (257)       (1,532)       (359)       (223)
                                        -----------  ------------  ------------  ----------  ----------
Net increase (decrease) in cash.......         (131)           (2)           35          13          65
Cash at beginning of period...........          142            11             9           9          44
                                        -----------  ------------  ------------  ----------  ----------
Cash at end of period.................    $      11     $       9     $      44          22         109
                                        -----------  ------------  ------------  ----------  ----------
                                        -----------  ------------  ------------  ----------  ----------
Supplemental disclosures:
Cash payments of interest.............    $     244     $     287     $     293   $     127   $     178
Cash payments for income taxes........          170            66           124          44         217
Supplemental schedule of noncash
 investing and financing activities:
Acquisition cost of equipment financed
 through notes payable................          635         1,110         2,061           -           -
</TABLE>
    
 
                       See notes to financial statements
 
                                      F-76
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
 
                         NOTES TO FINANCIAL STATEMENTS
   
         (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
                        AND JUNE 29, 1997 IS UNAUDITED)
    
 
1.  ORGANIZATION AND OPERATIONS
   
Blake Printing and Publishing, Inc. operates in the printing and publishing
industry under two divisions, one offering high grade printing services to
wineries and to commercial entities principally in California and the other
operating print and copy stores throughout central California. The Company is
the legal reporting entity for both divisions. All interdivision balances and
transactions, including profits and inventories, have been eliminated. The
financial statements of the Company are prepared on a 52/53 week convention with
the fiscal year ending on the Sunday closest to December 31. The operations for
years ended January 1, 1995, December 31, 1995 and December 29, 1996 each
include 52 weeks and for the six months ended June 30, 1996 and June 29, 1997
each include 26 weeks.
    
 
2.  SIGNIFICANT ACCOUNTING POLICIES
INVENTORIES have been valued at the lower of cost (determined on a first-in,
first-out basis) or market.
 
PROPERTY AND EQUIPMENT are recorded at cost. Property and equipment capitalized
under capital leases are recorded at the present value of the minimum lease
payments due over the term of the lease. Depreciation and amortization are
provided using the straight-line method over the estimated lives or the lease
term, whichever is shorter (see Note 6).
 
Expenditures for maintenance, repairs and betterments which do not prolong the
useful life of an asset have been charged to operations as incurred. Additions
and betterments which substantially extend the useful life of the asset are
capitalized. Upon the sale or other disposition of assets, the cost and related
accumulated depreciation and amortization are removed from the respective
accounts, and the resulting gain or loss, if any, is included in income.
 
PREPUBLICATION costs are amortized over a three to five year period. In 1995, in
conjunction with the licensing of rights to the Company's publications,
management determined that the amounts recorded for such assets exceed their
estimated recoverable value. The 1995 statement of income reflects a write-off
of $157,000 to appropriately reflect prepublication cost at net realizable
value.
 
LONG-LIVED ASSETS
 
In March 1995, Statement of Financial Accounting Standards No. 121, ACCOUNTING
FOR THE IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF
("SFAS 121"), was issued. SFAS 121 requires that long-lived assets and certain
identifiable intangibles to be held and used or disposed of by an entity be
reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount of an asset may not be recoverable. There was no
significant effect upon adoption in 1996.
 
REVENUE RECOGNITION
 
Sales are recognized upon job completion and delivery to the customer.
 
INCOME TAXES
 
The Company follows the liability method of accounting for deferred income
taxes, whereby enacted statutory tax rates are applied to the differences
between the financial reporting and tax bases of assets and liabilities.
 
CONCENTRATION OF CREDIT RISK
 
The Company provides printing and publishing services to a diversified group of
customers located primarily in the state of California. Consequently, the
Company's ability to collect the amounts due from customers may be affected by
economic fluctuations within the state of California economy.
 
                                      F-77
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
         (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
                        AND JUNE 29, 1997 IS UNAUDITED)
    
 
2.  SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
FAIR VALUE OF FINANCIAL INSTRUMENTS
 
The carrying amounts of cash, accounts receivable, accounts payable and accrued
liabilities are reflected in the financial statements at approximate fair value
due to the short nature of those instruments. The carrying amount of the notes
payable and capital lease obligations approximates fair value at December 31,
1995 and December 29, 1996 based on interest rates available to the Company and
debt instruments with similar terms.
 
PERVASIVENESS OF ESTIMATES
 
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
 
INTERIM FINANCIAL INFORMATION
 
   
Unaudited interim financial information as of and for the six months ended June
30, 1996 and June 29, 1997 has been prepared on the same basis as the annual
financial statements. In the opinion of management, such unaudited interim
information includes all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the interim financial
information. The results of operations and cash flows for the interim periods
presented are not necessarily indicative of the expected results for the full
year.
    
 
   
NEW ACCOUNTING PRONOUNCEMENTS
    
 
   
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 130, REPORTING COMPREHENSIVE INCOME, which
requires that an enterprise report, by major components and as a single total,
the change in its net assets during the period from nonowner sources; and
Statement of Financial Accounting Standards No. 131, DISCLOSURES ABOUT SEGMENTS
OF AN ENTERPRISE AND RELATED INFORMATION, which establishes annual and interim
reporting standards for an enterprise's operating segments and related
disclosures about its products, services, geographic areas, and major customers.
Adoption of these statements will not impact the Company's financial position,
results of operations or cash flows, and any effect will be limited to the form
and content of its disclosures. Both statements are effective for fiscal years
beginning after December 15, 1997, with earlier application permitted.
    
 
3.  INVENTORIES
Inventories consisted of the following:
 
   
<TABLE>
<CAPTION>
                                      -------------------------------------
                                         DECEMBER     DECEMBER     JUNE 29,
IN THOUSANDS                             31, 1995     29, 1996         1997
                                      -----------  -----------  -----------
                                                                (UNAUDITED)
<S>                                   <C>          <C>          <C>
Raw materials.......................         $316         $272         $433
Work in process.....................          211          299          192
Finished products...................           26           30           52
                                      -----------  -----------  -----------
Total...............................         $553         $601         $677
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
                                      F-78
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
         (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
                        AND JUNE 29, 1997 IS UNAUDITED)
    
 
4.  PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
 
   
<TABLE>
<CAPTION>
                         --------------------------------------------------
                              USEFUL     DECEMBER     DECEMBER     JUNE 29,
IN THOUSANDS                   LIVES     31, 1995     31, 1996         1997
                         -----------  -----------  -----------  -----------
                                                                (UNAUDITED)
<S>                      <C>          <C>          <C>          <C>
Machinery and
 equipment.............         5-10       $6,623       $8,151       $7,994
Computer equipment.....          3-5          751        1,066        1,094
Transportation
 equipment.............            5           17           85           26
Leasehold
 improvement...........         5-40          201          227          330
                                      -----------  -----------  -----------
Total..................                     7,592        9,529        9,444
Less accumulated
 depreciation and
 amortization..........                     4,528        4,964        5,323
                                      -----------  -----------  -----------
Total..................                    $3,064       $4,565       $4,121
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
5.  ACCRUED AND OTHER LIABILITIES
Accrued and other liabilities consist of the following:
 
   
<TABLE>
<CAPTION>
                                      -------------------------------------
                                         DECEMBER     DECEMBER     JUNE 29,
IN THOUSANDS                             31, 1995     29, 1996         1997
                                      -----------  -----------  -----------
                                                                (UNAUDITED)
<S>                                   <C>          <C>          <C>
Accrued compensation................         $133         $108         $172
Accrued vacation....................           90           77          122
Sales tax payable...................           31           33           26
Other...............................           52           77           26
                                      -----------  -----------  -----------
Total...............................         $306         $295         $346
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
   
6.  BANK LINE OF CREDIT
    
   
The Company has a $1,250,000 revolving line of credit agreement with Wells Fargo
Bank with interest rate at .75% above the Bank's prime rate (9% at December 29,
1996 and 8.5% at June 29, 1997) expiring in May 1999. The line of credit is
secured by accounts receivable and inventory and has been personally guaranteed
by a shareholder of the Company and a related partnership (see Notes 9 and 16).
    
 
   
The credit agreement has several covenants that require the Company to maintain
certain financial ratios. At December 29, 1996 and June 29, 1997 the Company was
in compliance with or had obtained waivers for all such covenants.
    
 
                                      F-79
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
         (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
                        AND JUNE 29, 1997 IS UNAUDITED)
    
 
7.  LONG-TERM DEBT
Long-term debt consisted of the following:
 
   
<TABLE>
<CAPTION>
                                                      -------------------------------------
                                                         DECEMBER     DECEMBER     JUNE 29,
IN THOUSANDS                                             31, 1995     29, 1996         1997
                                                      -----------  -----------  -----------
                                                                                (UNAUDITED)
<S>                                                   <C>          <C>          <C>
Installment note payable, due in monthly
 installments of $33,000 including interest at 9.25%
 through August 2001, secured by fixed assets.......                    $1,506       $1,374
Installment note payable, due in monthly
 installments of $8,000 including interest at 9%
 through to June 2001, secured by fixed assets......                       362          328
Installment note payable, due in monthly
 installments of $7,000 plus interest of prime plus
 1.625% through September 2001, secured by fixed
 assets and personal assets of the stockholders.....        $ 422          333          289
Installment note payable, due in monthly
 installments of $14,000 including interest at 9.28%
 through November 1998, secured by fixed assets and
 personal assets of the stockholders................          441          303          229
Installment note payable, due in monthly
 installments of $8,000 plus interest of prime plus
 1.75% on the unpaid balance to March 1999, secured
 by fixed assets and personal assets of the
 stockholders.......................................          294          204          158
Installment note payable, due in monthly
 installments of $5,000 plus interest of prime plus
 1.625% on the unpaid balance to August 1999,
 secured by fixed assets and personal assets of the
 stockholders.......................................          242          176          143
Installment note payable, due in monthly
 installments of $2,000 including interest at 9%
 through December 1999, secured by fixed assets.....                        57           48
Installment note payable, due in monthly
 installments of $2,000 plus interest of prime plus
 1.75% through March 1999, secured by fixed assets
 and personal assets of stockholders................           32           22           17
Installment note payable, due in monthly
 installments of $24,000 plus interest at prime plus
 2%.................................................          485            -            -
Note to related party, due in monthly installments
 of $3,000 including interest at 10% unsecured......            6            -            -
                                                      -----------  -----------  -----------
Total...............................................        1,922        2,963        2,586
Less current portion of long-term debt..............          690          758          788
                                                      -----------  -----------  -----------
Total...............................................       $1,232       $2,205       $1,798
                                                      -----------  -----------  -----------
                                                      -----------  -----------  -----------
</TABLE>
    
 
                                      F-80
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
         (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
                        AND JUNE 29, 1997 IS UNAUDITED)
    
 
7.  LONG-TERM DEBT (CONTINUED)
Future minimum principal payments of long-term debt are as follows (in
thousands):
 
<TABLE>
<S>                                                                <C>
Fiscal years:
                                                                   ---------
  1997...........................................................  $     758
  1998...........................................................        798
  1999...........................................................        587
  2000...........................................................        515
  2001...........................................................        305
                                                                   ---------
Total............................................................  $   2,963
                                                                   ---------
                                                                   ---------
</TABLE>
 
8.  LONG-TERM LEASES
OPERATING LEASES
 
   
The Company leases manufacturing facilities, telephone equipment, office space
and division sales offices under long-term lease agreements. These leases, with
terms (including renewal options) ranging from five to twenty years, have been
classified as operating leases. Total rental expense under operating leases was
$455,000, $447,000 and $447,000 for the years ended January 1, 1995, December
31, 1995, and December 29, 1996, respectively, and $160,000 for the six months
ended June 30, 1996 and June 29, 1997, respectively (see Notes 9 and 16).
    
 
Future minimum lease payments for these leases are as follows (in thousands):
 
<TABLE>
<S>                                                                  <C>
Fiscal years:
                                                                     ---------
  1997.............................................................  $      97
  1998.............................................................         61
                                                                     ---------
Total..............................................................  $     158
                                                                     ---------
                                                                     ---------
</TABLE>
 
CAPITAL LEASES
 
The Company also leases copiers under long-term lease agreements which are
classified as capital leases. Property and equipment purchased under capital
leases include the following:
 
   
<TABLE>
<CAPTION>
                                      -------------------------------------
                                         DECEMBER     DECEMBER     JUNE 29,
IN THOUSANDS                             31, 1995     29, 1996         1997
                                      -----------  -----------  -----------
                                                                (UNAUDITED)
<S>                                   <C>          <C>          <C>
Equipment...........................         $572         $572         $572
Less accumulated amortization.......          328          420          456
                                      -----------  -----------  -----------
Total...............................         $244         $152         $116
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
                                      F-81
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
         (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
                        AND JUNE 29, 1997 IS UNAUDITED)
    
 
8.  LONG-TERM LEASES (CONTINUED)
The following is a schedule of future minimum lease payments for the lease (in
thousands):
 
<TABLE>
<S>                                                                  <C>
Fiscal years:
                                                                     ---------
  1997.............................................................  $      81
  1998.............................................................         48
  1999.............................................................         23
                                                                     ---------
Total minimum lease payments.......................................        152
Less amount representing interest..................................         18
                                                                     ---------
Present value of net minimum lease payments........................        134
Less current portion of capital lease obligation...................         66
                                                                     ---------
Total..............................................................  $      68
                                                                     ---------
                                                                     ---------
</TABLE>
 
9.  RELATED PARTY TRANSACTIONS
The Company has a line of credit which is guaranteed by one of the stockholders
of the Company and a related partnership (see Note 6, "Note Payable - Line of
Credit"). This stockholder is also the sole partner in this partnership.
 
   
This partnership also has two installment notes on which the Company and the
stockholder is a guarantor. These notes are also secured by real property of the
partnership. At December 31, 1995, December 29, 1996 and June 29, 1997 the
aggregate outstanding principal balance of these notes was $1,457,000,
$1,428,000, and $1,417,000, respectively.
    
 
   
The Company rents production facilities and office space from this partnership
under operating lease agreements. Total rent expense paid to the partnership was
$273,000, $290,000, and $290,000 for the years ended January 1, 1995, December
31, 1995 and December 29, 1996, respectively and $145,000 for the six months
ended June 30, 1996 and June 29, 1997.
    
 
In March 1997, the Company sold equipment with net book value of $37,000 to a
shareholder for a nominal amount.
 
10. PROFIT SHARING PLAN
   
The Company has a qualified profit sharing plan. Annual contributions to the
plan are made at the discretion of the Board of Directors. The company elected
not to make a contribution for the fiscal years ended January 1, 1995, December
31, 1995 and December 29, 1996. As part of this plan, employees are allowed to
make salary deferrals. The Company has elected to match employee contributions
commensurate with the profitability of the Company. The contributions to the
plan are made on a quarterly basis. The Company elected to make contributions of
$14,000, $24,000 and $146,000 for the years ended January 1, 1995, December 31,
1995 and December 29, 1996, respectively, and $71,000 and $31,000 for the six
months ended June 30, 1996 and June 29, 1997, respectively.
    
 
                                      F-82
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
         (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
                        AND JUNE 29, 1997 IS UNAUDITED)
    
 
11. PROVISION FOR INCOME TAXES
 
The provision for income taxes includes the following:
 
   
<TABLE>
<CAPTION>
                       ------------------------------------------------------------
                                   YEARS ENDED
                                      DECEMBER     DECEMBER     SIX MONTHS ENDED
                       JANUARY 1,          31,          29,    JUNE 30,    JUNE 29,
(IN THOUSANDS)               1995         1995         1996        1996        1997
                       ----------  -----------  -----------  ----------  ----------
                                                                  (UNAUDITED)
<S>                    <C>         <C>          <C>          <C>         <C>
Income tax provision:
  Current:
    Federal
     provision.......        $ 30         $ 74         $186        $340       $ 168
    State
     provision.......          11           13            8          13          15
                       ----------  -----------  -----------  ----------  ----------
      Total current
       provision.....          41           87          194         353         183
                       ----------  -----------  -----------  ----------  ----------
  Deferred:
    Federal
     provision.......           5           26           52           -          30
    State provision
     (benefit).......         (38)         (39)         (18)          -           -
                       ----------  -----------  -----------  ----------  ----------
      Total deferred
       tax provision
       (benefit).....         (33)         (13)          34           -          30
                       ----------  -----------  -----------  ----------  ----------
Total income tax
 provision...........        $  8         $ 74         $228        $355       $ 213
                       ----------  -----------  -----------  ----------  ----------
                       ----------  -----------  -----------  ----------  ----------
</TABLE>
    
 
The amounts of income tax expense differ from the amounts obtained by
application of the statutory U.S. rates to income before income taxes for the
reasons shown in the following table:
 
   
<TABLE>
<CAPTION>
                       ------------------------------------------------------------
                                   YEARS ENDED
                                      DECEMBER     DECEMBER     SIX MONTHS ENDED
                       JANUARY 1,          31,          29,    JUNE 30,    JUNE 29,
(IN THOUSANDS)               1995         1995         1996        1996        1997
                       ----------  -----------  -----------  ----------  ----------
                                                                  (UNAUDITED)
<S>                    <C>         <C>          <C>          <C>         <C>
RATE RECONCILIATION
Book income before
 taxes...............        $ 67         $257         $687        $867        $532
                       ----------  -----------  -----------  ----------  ----------
                       ----------  -----------  -----------  ----------  ----------
Computed at U.S.
 statutory tax rate
 of 34%..............        $ 23         $ 87         $234       $ 295       $ 181
State tax, net of
 federal tax
 benefit.............         (18)         (17)          (7)         16          20
Other................           3            4            1          42          12
                       ----------  -----------  -----------  ----------  ----------
Total income tax
 provision...........        $  8         $ 74         $228        $353       $ 213
                       ----------  -----------  -----------  ----------  ----------
                       ----------  -----------  -----------  ----------  ----------
</TABLE>
    
 
                                      F-83
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
         (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
                        AND JUNE 29, 1997 IS UNAUDITED)
    
 
11. PROVISION FOR INCOME TAXES (CONTINUED)
The net current and noncurrent components of deferred income taxes included in
the balance sheets are as follows:
 
   
<TABLE>
<CAPTION>
                                      -------------------------------------
                                         DECEMBER     DECEMBER     JUNE 29,
                                              31,          29,         1997
(IN THOUSANDS)                               1995         1996  -----------
                                      -----------  -----------
                                                                (UNAUDITED)
Deferred:
<S>                                   <C>          <C>          <C>
  Current (liability) asset:
    Federal.........................         $  6        $ (42)       $ (72)
    State...........................           35           30           30
                                      -----------  -----------  -----------
      Total current.................           41          (12)         (42)
                                      -----------  -----------  -----------
  Long-term (liability) asset:
    Federal.........................         (200)        (198)        (198)
    State...........................           40           58           58
                                      -----------  -----------  -----------
      Total long-term...............         (160)        (140)        (140)
                                      -----------  -----------  -----------
Total deferred tax liability........        $(119)       $(152)       $(182)
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
The tax effects of the significant temporary differences which comprise the
deferred tax assets and liabilities in the balance sheets are as follows:
 
   
<TABLE>
<CAPTION>
                                      -------------------------------------
                                         DECEMBER     DECEMBER     JUNE 29,
                                              31,          29,         1997
(IN THOUSANDS)                               1995         1996  -----------
                                      -----------  -----------
                                                                (UNAUDITED)
Significant temporary differences:
<S>                                   <C>          <C>          <C>
  Depreciation......................        $(238)       $(252)       $(252)
  Compensation - stock option.......                        34           34
  Deferred income...................          (21)         (10)         (10)
  Allowance for bad debts...........            9            9            9
  Accrued vacation..................           24           23           23
  Charitable contribution...........           14            -            -
  Deferred state tax................          (25)         (30)         (30)
  State manufacturing credits.......           86          151          151
  Other.............................           21          (77)        (107)
                                      -----------  -----------  -----------
Total...............................        $(119)       $(152)       $(182)
                                      -----------  -----------  -----------
                                      -----------  -----------  -----------
</TABLE>
    
 
At December 29, 1996, the Company had California state manufacturing credit
carry forwards of $151,000 which expire in 2005.
 
12. COMMON STOCK
 
During July 1996, the Company redeemed and retired all 40 shares of common stock
held by a minority stockholder for $200,000.
 
                                      F-84
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
 
                   NOTES TO FINANCIAL STATEMENTS (CONTINUED)
   
         (INFORMATION AS OF AND FOR THE SIX MONTHS ENDED JUNE 30, 1996
                        AND JUNE 29, 1997 IS UNAUDITED)
    
 
13. STOCK OPTION PLAN
 
Effective January 1996, the Company adopted an Employee Stock Option Plan. The
Plan allows for certain high level full-time employees, employed on a permanent
basis to be awarded Employee Incentive Stock Options. Participants in the plan,
vesting dates, and other criteria are at the sole discretion of the Board of
Directors.
 
In November 1996, the Company entered into a stock option agreement with a
member of management. Under the agreement, the employee has the option to
purchase up to 40 shares of the Company's common stock for $5,000 per share at
any time prior to November 22, 2001, at which point the unexercised options
expire. Management determined that the fair market value of the Company's stock
on November 22, 1996 was approximately $7,500 per share; accordingly, the 1996
selling, general and administrative expenses include compensation expense of
$100,000 relating to this agreement.
 
   
Statement of Financial Accounting Standards No. 123, ACCOUNTING FOR STOCK-BASED
COMPENSATION ("SFAS 123"), requires the disclosure of pro forma net income had
the Company adopted the fair value method as of the beginning of 1995. Under
SFAS 123, the fair value of stock-based awards to employees is calculated
through the use of option pricing models. These models require subjective
assumptions, including future stock price volatility and expected time to
exercise, which greatly affect the calculated values. The Company's 1996
calculation for its one existing stock option agreement was made using the
Black-Scholes option pricing model with the following average assumptions;
expected life; 60 months; stock volatility, .001%; risk free interest rates,
5.53%; and no dividends during the expected term. If the computed fair values of
the 1996 agreement was included in expense, pro forma net income for the year
ended December 29, 1996 or the six months ended June 30, 1996 or June 29, 1997
would not change materially from the amounts reported in the accompanying
statements of income.
    
 
14. SIGNIFICANT CUSTOMERS
 
   
One of the Company's customers constituted 11.5%, 11.5% and 11.0% of total sales
for the year ended December 29, 1996, and for the six months ended June 30, 1996
and June 29, 1997, respectively. In 1994, 1995, no single customer accounted for
more than 10% of sales.
    
 
15. CONTINGENCIES
 
The Company may be subject to various claims and litigation arising from its
business. While the outcome of such matters cannot be predicted with certainty,
management believes the ultimate resolution of such matters will not have a
materially adverse effect on its financial position or results of operations.
 
See also Notes 8 ("Long-Term Leases") and 9 ("Related Party Transactions") for
commitments.
 
16. SUBSEQUENT EVENTS
 
On May 15, 1997, the Company entered into two five year operating leases with a
stockholder of the Company. Minimum annual rent under these agreements is
$290,000 per year subject to annual adjustments based on the consumer price
index. These leases have a five year renewal option.
 
On May 30, 1997, the Company renegotiated its current $1.3 million line of
Credit with Wells Fargo Bank. Terms and conditions of the new agreement are
similar to the existing agreement (see Note 6 "Note Payable - Line of Credit").
The new agreement expires on May 30, 1999.
 
   
On July 17, 1997, the Company executed a merger agreement to be acquired by
FirstPak, Inc. ("FirstPak"). If the merger is consummated, it will close
concurrently with the proposed offering of FirstPak common stock.
    
 
                                      F-85
<PAGE>
                                [LOGO]
<PAGE>
                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13.  OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
The following table sets forth fees payable to the Securities and Exchange
Commission and the National Association of Securities Dealers, Inc., and other
estimated expenses other than underwriting discounts and commissions expected to
be incurred in connection with issuance and distribution of securities being
registered. All such fees and expenses shall be paid by the Registrant.
 
<TABLE>
<CAPTION>
                                                                  ---------
<S>                                                               <C>
Securities and Exchange Commission Registration Fee.............  $
NASD Fee........................................................
Nasdaq National Market Listing Fee..............................
Printing and Engraving Expenses.................................
Accounting Fees and Expenses....................................
Legal Fees and Expenses.........................................
Blue Sky Qualification Fees and Expenses........................
Transfer Agent Fees and Expenses................................
Miscellaneous...................................................
                                                                  ---------
    Total.......................................................  $
                                                                  ---------
                                                                  ---------
</TABLE>
 
ITEM 14.  INDEMNIFICATION OF DIRECTORS AND OFFICERS
 
Section 102(b)(7) of the Delaware General Corporation Law (the "DGCL") permits a
corporation, in its certificate of incorporation, to limit or eliminate, subject
to certain statutory limitations, the personal liability of directors to the
corporation or its stockholders for monetary damages for breaches of fiduciary
duty, except for liability (a) for any breach of the director's duty of loyalty
to the corporation or its stockholders, (b) for acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law, (c)
under Section 174 of the DGCL, or (d) for any transaction from which the
director derived an improper personal benefit. Article IX of the registrant's
Restated Certificate of Incorporation provides that the personal liability of
directors of the registrant is eliminated to the fullest extent permitted by
Section 102(b)(7) of the DGCL.
 
Under Section 145 of the DGCL, a corporation has the power to indemnify
directors and officers under certain prescribed circumstances and subject to
certain limitations against certain costs and expenses, including attorneys'
fees actually and reasonably incurred in connection with any action, suit or
proceeding, whether civil, criminal, administrative or investigative, to which
any of them is a party by reason of being a director or officer of the
corporation if it is determined that the director of officer acted in accordance
with the applicable standard of conduct set forth in such statutory provision.
Article 6 of the Registrant's Bylaws provides that the registrant will indemnify
any person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding by reason of the
fact that he is or was a director, officer, employee or agent of the Registrant,
or is or was serving at the request of the registrant as a director, officer,
employee or agent of another entity, against certain liabilities, costs and
expenses. Article 6 further permits the registrant to maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
registrant, or is or was serving at the request of the Registrant as a director,
officer, employee or agent of another entity, against any liability asserted
against such person and incurred by such person in any such capacity or arising
out of his status as such, whether or not the Registrant would have the power to
indemnify such person against such liability under the DGCL. The Registrant
maintains directors' and officers' liability insurance.
 
Under Section   of the Underwriting Agreement, the Underwriters are obligated,
under certain circumstances, to indemnify directors and officers of the
registrant against certain liabilities, including liabilities under the
Securities Act. Reference is made to the form of Underwriting Agreement filed as
Exhibit 1.01 hereto.
 
                                      II-1
<PAGE>
ITEM 15.  RECENT SALES OF UNREGISTERED SECURITIES
 
   
    (i) In connection with its formation in February 1996, FirstPak, Inc. issued
25 shares of common stock in exchange for certain property (including the
business plan for FirstPak, Inc.) contributed by the founding stockholders as
follows: Vincent F. Titolo, ten shares; John D. Menke, ten shares; and Eric R.
Menke, five shares. Such shares were issued in a private placement in reliance
on Section 4(2) of the Securities Act.
    
 
   
    (ii) In February 1997, FirstPak, Inc. issued options to purchase 50,000
shares of common stock to an officer of the Company at an exercise price of
$5.35 per share for services rendered to the Company. The options were issued in
a private placement in reliance on Section 4(2) of the Securities Act.
    
 
ITEM 16.  EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
 
(a) The following exhibits are filed as part of this registration statement:
 
   
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
  EXHIBIT
  NUMBER     DESCRIPTION
- -----------  --------------------------------------------------------------------------------
<S>          <C>
      1.01   Form of Underwriting Agreement*
      3.01   Restated Certificate of Incorporation of FirstPak, Inc.*
      3.02   Form of Bylaws of FirstPak, Inc.
      4.01   Form of Stock Certificate*
      5.01   Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel
              for the Registrant*
     10.01   Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
              Registrant, WL Acquisition Corp. and Wisconsin Label Corporation.*
     10.02   Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
              Registrant, SLL Acquisition Corp. and St. Louis Lithographing Company.*
     10.03   Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
              Registrant, CAO Acquisition Corp. and CalOptical Holding Corporation.*
     10.04   Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
              Registrant, Premier Label Acquisition Corp. and Blake Printing and Publishing,
              Inc.*
     10.05   Form of Employment Agreement to be entered into between the Registrant and
              Vincent F. Titolo.*
     10.06   Form of Employment Agreement to be entered into between the Registrant and
              William T. Leith.*
     10.07   Form of Employment Agreement to be entered into between the Registrant and Eric
              R. Roberts.*
     10.08   Form of Employment Agreement to be entered into between the Registrant and Gary
              S. Yellin.
     10.09   Form of Employment Agreement to be entered into between the Registrant and Eric
              R. Menke.
     10.10   Form of Employment Agreement to be entered into between the Registrant and
              Terrence R. Fulwiler.
     10.11   Form of Employment Agreement to be entered into between the Registrant and Ben
              Kraft.
     10.12   Form of Employment Agreement to be entered into between the Registrant and
              Richard C. Blake.
     10.13   Form of Employment Agreement to be entered into between the Registrant and Larry
              Nathanson.
     10.14   Form of Employment Agreement to be entered into between the Registrant and
              Daniel R. Fulwiler.
     10.15   Form of Employment Agreement to be entered into between the Registrant and Jay
              K. Tomcheck.
     10.16   FirstPak, Inc. 1997 Stock Plan*
     11.01   Statement re: Computation of Earnings per Share*
     21.01   List of Subsidiaries
     23.01   Consent of Deloitte & Touche LLP, independent auditors for FirstPak, Inc.,
              Wisconsin Label Corporation and subsidiaries, St. Louis Lithographing Company,
              CalOptical Holding Corporation and subsidiary and Blake Printing and
              Publishing, Inc.
</TABLE>
    
 
                                      II-2
<PAGE>
   
<TABLE>
<S>          <C>
     23.02   Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel
              for the Company (included in opinion filed as Exhibit 5.01)*
     27.01   Financial Data Schedule*
     99.01   Consent of William T. Leith to be named in the Registration Statement as a
              person to become a director of the Company upon consummation of the initial
              public offering.
     99.02   Consent of R. Michael Mondavi to be named in the Registration Statement as a
              person to become a director of the Company upon consummation of the initial
              public offering.
     99.03   Consent of Terrence R. Fulwiler to be named in the Registration Statement as a
              person to become a director of the Company upon consummation of the initial
              public offering.
     99.04   Consent of Richard C. Blake to be named in the Registration Statement as a
              person to become a director of the Company upon consummation of the initial
              public offering.
     99.05   Consent of Daniel R. Fulwiler to be named in the Registration Statement as a
              person to become a director of the Company upon consummation of the initial
              public offering.
     99.06   Consent of Jay K. Tomcheck to be named in the Registration Statement as a person
              to become a director of the Company upon consummation of the initial public
              offering.
</TABLE>
    
 
- ------------------------
*   To be filed by amendment.
 
(b) Financial Statement Schedules.
 
ITEM 17.  UNDERTAKINGS.
 
The undersigned Registrant hereby undertakes to provide to the underwriter at
the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each Purchaser.
 
Insofar as indemnification for liabilities arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
 
The undersigned registrant hereby undertakes that:
 
        (1) For purposes of determining any liability under the Securities Act
    of 1933, the information omitted from the form of prospectus filed as part
    of this registration statement in reliance upon Rule 430A and contained in a
    form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4)
    or 497(h) under the Securities Act shall be deemed to be part of this
    registrations statement as of the time it was declared effective.
 
        (2) For the purpose of determining any liability under the Securities
    Act of 1933, each post-effective amendment that contains a form of
    prospectus shall be deemed to be a new registration statement relating to
    the securities offered therein, and the offering of such securities at that
    time shall be deemed to be the initial BONA FIDE offering thereof.
 
                                      II-3
<PAGE>
                                   SIGNATURES
 
   
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to the Registration Statement on
Form S-1 to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Francisco, California, on September 9, 1997.
    
 
   
                                FirstPak, Inc.
 
                                By:            /S/ VINCENT F. TITOLO
                                     -----------------------------------------
                                              Name: Vincent F. Titolo
                                     Title: Chairman of the Board of Directors
                                            and Chief Executive Officer
 
    
 
   
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 1 to the Registration Statement on Form S-1 has been signed by the
following persons in the capacities and on the dates indicated.
    
 
   
<TABLE>
<CAPTION>
          SIGNATURE                        CAPACITY                    DATE
- ------------------------------  ------------------------------  -------------------
 
<C>                             <S>                             <C>
                                Chairman of the Board of
                                  Directors and Chief
               *                  Executive Officer (Principal
- ------------------------------    Financial and Accounting       September 9, 1997
     (Vincent F. Titolo)          Officer and Principal
                                  Executive Officer)
 
               *
- ------------------------------  Director                         September 9, 1997
       (John D. Menke)
 
  *By: /S/ VINCENT F. TITOLO
- ------------------------------
      Vincent F. Titolo,
       Attorney-in-fact
</TABLE>
    
 
                                      II-4
<PAGE>
                          INDEPENDENT AUDITORS REPORT
 
To the Board of Directors and Stockholders
of Wisconsin Label Corporation:
 
We have audited the consolidated financial statements of Wisconsin Label
Corporation and subsidiaries (the "Company") as of December 31, 1995 and 1996
and for each of the three years in the period ended December 31, 1996 and have
issued our report thereon dated March 31, 1997 (July 17, 1997 as to Note 13)
(included elsewhere in this Registration Statement). Our audits also included
the financial statement schedule ("Schedule II - Valuation and Qualifying
Accounts") included in Part II of such Registration Statement. This financial
statement schedule is the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits. In our opinion,
such financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
 
DELOITTE & TOUCHE LLP
Milwaukee, Wisconsin
March 31, 1997
 
                                      S-1
<PAGE>
                  WISCONSIN LABEL CORPORATION AND SUBSIDIARIES
                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                    B              C
                                                              -------------  -------------        D              E
                             A                                 BALANCE AT     CHARGES TO    -------------  -------------
- ------------------------------------------------------------    BEGINNING      COSTS AND       ACCOUNTS     BALANCE AT
DESCRIPTION                                                       OF YEAR       EXPENSES    WRITTEN OFF    END OF YEAR
- ------------------------------------------------------------  -------------  -------------  -------------  -------------
<S>                                                           <C>            <C>            <C>            <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
  1994                                                          $     126      $     304      $     183      $     247
  1995                                                                247            262            209            300
  1996                                                                300            768            230            838
</TABLE>
 
                                      S-2
<PAGE>
                          INDEPENDENT AUDITORS REPORT
 
To the Board of Directors and Stockholders
of St. Louis Lithographing Company:
 
We have audited the financial statements of St. Louis Lithographing Company as
of December 31, 1996 and for the period from June 1, 1996 (date of acquisition)
through December 31, 1996 (the "Successor Company") and have issued our report
thereon dated March 28, 1997 (July 17, 1997 as to Note 12) (included elsewhere
in this Registration Statement). We have also audited the financial statements
of St. Louis Lithographing Company as of December 31, 1995 and for the period
from January 1, 1996 through May 31, 1996 and for each of the two years in the
period ended December 31, 1995 (the "Predecessor Company") and have also issued
our report thereon dated March 28, 1997 (also included elsewhere in this
Registration Statement). Our audits also included the financial statement
schedule ("Schedule II - Valuation and Qualifying Accounts") included in Part II
of such Registration Statement. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.
 
DELOITTE & TOUCHE LLP
St. Louis, Missouri
March 28, 1997
 
                                      S-3
<PAGE>
                        ST. LOUIS LITHOGRAPHING COMPANY
                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                              B                C
                                                       ---------------  ---------------         D                E
                          A                              BALANCE AT       CHARGES TO     ---------------  ---------------
- -----------------------------------------------------     BEGINNING        COSTS AND         ACCOUNTS       BALANCE AT
DESCRIPTION                                               OF PERIOD         EXPENSES      WRITTEN OFF     END OF PERIOD
- -----------------------------------------------------  ---------------  ---------------  ---------------  ---------------
<S>                                                    <C>              <C>              <C>              <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
  Predecessor (through May 31, 1996):
    1994.............................................     $      50        $       -        $      --        $      50
    1995.............................................            50                -                -               50
    1996.............................................            50                -               --               50
  Successor (commencing June 1, 1996):
    1996.............................................            40              258              258               40
</TABLE>
 
                                      S-4
<PAGE>
                          INDEPENDENT AUDITORS REPORT
 
To the Board of Directors and Stockholders
of CalOptical Holding Corporation and Subsidiary:
 
   
We have audited the consolidated financial statements of CalOptical Holding
Corporation and subsidiary (the "Company") as of December 31, 1995 and 1996 and
for each of the three years in the period ended December 31, 1996 and have
issued our report thereon dated August 1, 1997 (included elsewhere in this
Registration Statement). Our audits also included the financial statement
schedule ("Schedule II - Valuation and Qualifying Accounts") included in Part II
of such Registration Statement. This financial statement schedule is the
responsibility of the Company's management. Our responsibility is to express an
opinion based on our audits. In our opinion, such financial statement schedule,
when considered in relation to the basic consolidated financial statements taken
as a whole, presents fairly in all material respects the information set forth
therein.
    
 
   
DELOITTE & TOUCHE LLP
Oakland, California
August 1, 1997
    
 
                                      S-5
<PAGE>
                 CALOPTICAL HOLDING CORPORATION AND SUBSIDIARY
                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)
 
   
<TABLE>
<CAPTION>
                                                               B                  C
                                                       -----------------  -----------------          D                  E
                          A                               BALANCE AT         CHARGES TO      -----------------  -----------------
- -----------------------------------------------------      BEGINNING          COSTS AND           ACCOUNTS         BALANCE AT
DESCRIPTION                                                OF PERIOD           EXPENSES        WRITTEN OFF      END OF PERIOD
- -----------------------------------------------------  -----------------  -----------------  -----------------  -----------------
<S>                                                    <C>                <C>                <C>                <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
  Year ended December 31, 1994                             $      19          $      27          $       9          $      37
  Year ended December 31, 1995                                    37                 32                  4                 65
  Year ended December 31, 1996                                    65                 65                 88                 44
</TABLE>
    
 
                                      S-6
<PAGE>
                          INDEPENDENT AUDITORS REPORT
 
To the Board of Directors and Stockholders
of Blake Printing and Publishing, Inc.:
 
We have audited the financial statements of Blake Printing and Publishing, Inc.
(the "Company") as of December 31, 1995 and December 29, 1996 and for each of
the three years in the period ended December 29, 1996 and have issued our report
thereon dated March 31, 1997 (July 17, 1997 as to Note 16) (included elsewhere
in this Registration Statement). Our audits also included the financial
statement schedule ("Schedule II - Valuation and Qualifying Accounts") included
in Part II of such Registration Statement. This financial statement schedule is
the responsibility of the Company's management. Our responsibility is to express
an opinion based on our audits. In our opinion, such financial statement
schedule, when considered in relation to the consolidated financial statements
taken as a whole, presents fairly in all material respects the information set
forth therein.
 
DELOITTE & TOUCHE LLP
San Jose, California
March 31, 1997
 
                                      S-7
<PAGE>
                      BLAKE PRINTING AND PUBLISHING, INC.
                SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                    B              C
                                                              -------------  -------------        D              E
                             A                                 BALANCE AT     CHARGES TO    -------------  -------------
- ------------------------------------------------------------    BEGINNING      COSTS AND       ACCOUNTS     BALANCE AT
DESCRIPTION                                                       OF YEAR       EXPENSES    WRITTEN OFF    END OF YEAR
- ------------------------------------------------------------  -------------  -------------  -------------  -------------
<S>                                                           <C>            <C>            <C>            <C>
ALLOWANCE FOR DOUBTFUL ACCOUNTS:
  1994                                                          $      20      $      12      $      12      $      20
  1995                                                                 20             26             26             20
  1996                                                                 20             11             11             20
</TABLE>
 
                                      S-8
<PAGE>
                                 EXHIBIT INDEX
 
   
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
  EXHIBIT
  NUMBER     DESCRIPTION
- -----------  --------------------------------------------------------------------------------
<S>          <C>
      1.01   Form of Underwriting Agreement*
      3.01   Restated Certificate of Incorporation of FirstPak, Inc.*
      3.02   Form of Bylaws of FirstPak, Inc.
      4.01   Form of Stock Certificate*
      5.01   Opinion of Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel
              for the Registrant*
     10.01   Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
              Registrant, WL Acquisition Corp. and Wisconsin Label Corporation.*
     10.02   Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
              Registrant, SLL Acquisition Corp. and St. Louis Lithographing Company.*
     10.03   Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
              Registrant, CAO Acquisition Corp. and CalOptical Holding Corporation.*
     10.04   Agreement and Plan of Reorganization, dated as of July 17, 1997, among the
              Registrant, Premier Label Acquisition Corp. and Blake Printing and Publishing,
              Inc.*
     10.05   Form of Employment Agreement to be entered into between the Registrant and
              Vincent F. Titolo.*
     10.06   Form of Employment Agreement to be entered into between the Registrant and
              William T. Leith.*
     10.07   Form of Employment Agreement to be entered into between the Registrant and Eric
              R. Roberts.*
     10.08   Form of Employment Agreement to be entered into between the Registrant and Gary
              S. Yellin.
     10.09   Form of Employment Agreement to be entered into between the Registrant and Eric
              R. Menke.
     10.10   Form of Employment Agreement to be entered into between the Registrant and
              Terrence R. Fulwiler.
     10.11   Form of Employment Agreement to be entered into between the Registrant and Ben
              Kraft.
     10.12   Form of Employment Agreement to be entered into between the Registrant and
              Richard C. Blake.
     10.13   Form of Employment Agreement to be entered into between the Registrant and Larry
              Nathanson.
     10.14   Form of Employment Agreement to be entered into between the Registrant and
              Daniel R. Fulwiler.
     10.15   Form of Employment Agreement to be entered into between the Registrant and Jay
              K. Tomcheck.
     10.16   FirstPak, Inc. 1997 Stock Plan*
     11.01   Statement re: Computation of Earnings per Share*
     21.01   List of Subsidiaries
     23.01   Consent of Deloitte & Touche LLP, independent auditors for FirstPak, Inc.,
              Wisconsin Label Corporation and subsidiaries, St. Louis Lithographing Company,
              CalOptical Holding Corporation and subsidiary and Blake Printing and
              Publishing, Inc.
     23.02   Consent of Wilson Sonsini Goodrich & Rosati, Professional Corporation, counsel
              for the Company (included in opinion filed as Exhibit 5.01)*
     27.01   Financial Data Schedule*
     99.01   Consent of William T. Leith to be named in the Registration Statement as a
              person to become a director of the Company upon consummation of the initial
              public offering.
     99.02   Consent of R. Michael Mondavi to be named in the Registration Statement as a
              person to become a director of the Company upon consummation of the initial
              public offering.
     99.03   Consent of Terrence R. Fulwiler to be named in the Registration Statement as a
              person to become a director of the Company upon consummation of the initial
              public offering.
     99.04   Consent of Richard C. Blake to be named in the Registration Statement as a
              person to become a director of the Company upon consummation of the initial
              public offering.
     99.05   Consent of Daniel R. Fulwiler to be named in the Registration Statement as a
              person to become a director of the Company upon consummation of the initial
              public offering.
     99.06   Consent of Jay K. Tomcheck to be named in the Registration Statement as a person
              to become a director of the Company upon consummation of the initial public
              offering.
</TABLE>
    
 
- ------------------------
*   To be filed by amendment.

<PAGE>

                               BYLAWS

                                 OF

                           FIRSTPAK, INC.
                      (A DELAWARE CORPORATION)

<PAGE>
                          TABLE OF CONTENTS

                                                                PAGE
                                                                ----
ARTICLE I  CORPORATE OFFICES . . . . . . . . . . . . . . . . . . -1-
  1.1  REGISTERED OFFICE . . . . . . . . . . . . . . . . . . . . -1-
  1.2  OTHER OFFICES . . . . . . . . . . . . . . . . . . . . . . -1-

ARTICLE II  MEETINGS OF STOCKHOLDERS . . . . . . . . . . . . . . -1-
  2.1  PLACE OF MEETINGS . . . . . . . . . . . . . . . . . . . . -1-
  2.2  ANNUAL MEETING. . . . . . . . . . . . . . . . . . . . . . -1-
  2.3  SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . -3-
  2.4  ORGANIZATION. . . . . . . . . . . . . . . . . . . . . . . -3-
  2.5  NOTICE OF STOCKHOLDERS' MEETINGS. . . . . . . . . . . . . -4-
  2.6  MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE. . . . . . . -4-
  2.7  QUORUM. . . . . . . . . . . . . . . . . . . . . . . . . . -4-
  2.8  ADJOURNED MEETING; NOTICE . . . . . . . . . . . . . . . . -5-
  2.9  VOTING. . . . . . . . . . . . . . . . . . . . . . . . . . -5-
  2.10 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT . . . . -6-
  2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING 
         CONSENTS  . . . . . . . . . . . . . . . . . . . . . . . -6-
  2.12 PROXIES . . . . . . . . . . . . . . . . . . . . . . . . . -6-
  2.13 INSPECTORS OF ELECTION. . . . . . . . . . . . . . . . . . -7-

ARTICLE III  DIRECTORS . . . . . . . . . . . . . . . . . . . . . -8-
  3.1  POWERS. . . . . . . . . . . . . . . . . . . . . . . . . . -8-
  3.2  NUMBER AND TERM OF OFFICE . . . . . . . . . . . . . . . . -8-
  3.3  RESIGNATION AND VACANCIES . . . . . . . . . . . . . . . . -8-
  3.4  REMOVAL . . . . . . . . . . . . . . . . . . . . . . . . . -9-
  3.5  PLACE OF MEETINGS; MEETINGS BY TELEPHONE. . . . . . . . . -9-
  3.6  FIRST MEETINGS. . . . . . . . . . . . . . . . . . . . . .-10-
  3.7  REGULAR MEETINGS. . . . . . . . . . . . . . . . . . . . .-10-
  3.8  SPECIAL MEETINGS; NOTICE. . . . . . . . . . . . . . . . .-10-
  3.9  QUORUM. . . . . . . . . . . . . . . . . . . . . . . . . .-11-
  3.10 WAIVER OF NOTICE. . . . . . . . . . . . . . . . . . . . .-11-
  3.11 ADJOURNMENT . . . . . . . . . . . . . . . . . . . . . . .-11-
  3.12 NOTICE OF ADJOURNMENT . . . . . . . . . . . . . . . . . .-11-
  3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING . . . .-11-
  3.14 ORGANIZATION. . . . . . . . . . . . . . . . . . . . . . .-12-
  3.15 FEES AND COMPENSATION OF DIRECTORS. . . . . . . . . . . .-12-
  3.16 APPROVAL OF LOANS TO OFFICERS . . . . . . . . . . . . . .-12-


                                     -i-
<PAGE>
                          TABLE OF CONTENTS
                             (CONTINUED)

                                                                PAGE
                                                                ----
ARTICLE IV  COMMITTEES . . . . . . . . . . . . . . . . . . . . .-12-
  4.1  COMMITTEES OF DIRECTORS . . . . . . . . . . . . . . . . .-12-
  4.2  MEETINGS AND ACTION OF COMMITTEES . . . . . . . . . . . .-13-

ARTICLE V  OFFICERS. . . . . . . . . . . . . . . . . . . . . . .-13-
  5.1  OFFICERS. . . . . . . . . . . . . . . . . . . . . . . . .-13-
  5.2  ELECTION OF OFFICERS. . . . . . . . . . . . . . . . . . .-14-
  5.3  SUBORDINATE OFFICERS. . . . . . . . . . . . . . . . . . .-14-
  5.4  REMOVAL AND RESIGNATION OF OFFICERS . . . . . . . . . . .-14-
  5.5  VACANCIES IN OFFICES. . . . . . . . . . . . . . . . . . .-14-
  5.6  CHAIRMAN OF THE BOARD . . . . . . . . . . . . . . . . . .-14-
  5.7  CHIEF EXECUTIVE OFFICER . . . . . . . . . . . . . . . . .-15-
  5.8  PRESIDENT . . . . . . . . . . . . . . . . . . . . . . . .-15-
  5.9  VICE PRESIDENTS . . . . . . . . . . . . . . . . . . . . .-15-
  5.10 SECRETARY . . . . . . . . . . . . . . . . . . . . . . . .-15-
  5.11 CHIEF FINANCIAL OFFICER . . . . . . . . . . . . . . . . .-16-

ARTICLE VI  INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES 
  AND OTHER AGENTS . . . . . . . . . . . . . . . . . . . . . . .-16-
  6.1  INDEMNIFICATION OF DIRECTORS AND OFFICERS . . . . . . . .-16-
  6.2  INDEMNIFICATION OF OTHERS . . . . . . . . . . . . . . . .-17-
  6.3  INSURANCE . . . . . . . . . . . . . . . . . . . . . . . .-17-
  6.4  EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . .-18-
  6.5  NON-EXCLUSIVITY OF RIGHTS . . . . . . . . . . . . . . . .-18-
  6.6  SURVIVAL OF RIGHTS. . . . . . . . . . . . . . . . . . . .-18-
  6.7  AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . .-19-

ARTICLE VII  RECORDS AND REPORTS . . . . . . . . . . . . . . . .-19-
  7.1  MAINTENANCE AND INSPECTION OF RECORDS . . . . . . . . . .-19-
  7.2  INSPECTION BY DIRECTORS . . . . . . . . . . . . . . . . .-19-
  7.3  ANNUAL STATEMENT TO STOCKHOLDERS. . . . . . . . . . . . .-20-
  7.4  REPRESENTATION OF SHARES OF OTHER CORPORATIONS. . . . . .-20-

ARTICLE VIII  GENERAL MATTERS. . . . . . . . . . . . . . . . . .-20-
  8.1  RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING . .-20-
  8.2  CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS . . . . . . . .-21-
  8.3  CORPORATE CONTRACTS AND INSTRUMENTS:  HOW EXECUTED. . . .-21-
  8.4  STOCK CERTIFICATES; PARTLY PAID SHARES. . . . . . . . . .-21-
  8.5  SPECIAL DESIGNATION ON CERTIFICATES . . . . . . . . . . .-22-


                                  -ii-
<PAGE>
                           TABLE OF CONTENTS
                              (CONTINUED)

                                                                PAGE
                                                                ----
  8.6  LOST CERTIFICATES . . . . . . . . . . . . . . . . . . . .-22-
  8.7  CONSTRUCTION; DEFINITIONS . . . . . . . . . . . . . . . .-22-

ARTICLE IX  AMENDMENTS . . . . . . . . . . . . . . . . . . . . .-22-

ARTICLE X  DISSOLUTION . . . . . . . . . . . . . . . . . . . . .-23-

ARTICLE XI  CUSTODIAN. . . . . . . . . . . . . . . . . . . . . .-23-
  11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES . . . . . . .-23-
  11.2 DUTIES OF CUSTODIAN . . . . . . . . . . . . . . . . . . .-24-


                              -iii-
<PAGE>

                               BYLAWS

                                 OF

                           FIRSTPAK, INC.
                      (A DELAWARE CORPORATION)


                              ARTICLE I

                          CORPORATE OFFICES

     1.1  REGISTERED OFFICE

     The registered office of the corporation shall be fixed in the 
Certificate of Incorporation of the corporation.

     1.2  OTHER OFFICES

     The board of directors may at any time establish branch or subordinate 
offices at any place or places where the corporation is qualified to do 
business.

                             ARTICLE II

                      MEETINGS OF STOCKHOLDERS

     2.1  PLACE OF MEETINGS

     Meetings of stockholders shall be held at any place within or outside 
the State of Delaware designated by the board of directors.  In the absence 
of any such designation, stockholders' meetings shall be held at the 
registered office of the corporation.

     2.2  ANNUAL MEETING

          (a)  The annual meeting of stockholders shall be held each year on 
a date and at a time designated by the board of directors.  In the absence of 
such designation, the annual meeting of stockholders shall be held on the 
third Thursday in May of each year at 10:00 a.m.  However, if such day falls 
on a legal holiday, then the meeting shall be held at the same time and place 
on the next succeeding full business day.  At the meeting, directors shall be 
elected, and any other proper business may be transacted.


<PAGE>

          (b)  At an annual meeting of the stockholders, only such business 
shall be conducted as shall have been properly brought before the meeting.  
To be properly brought before an annual meeting, business must be:  (A) 
specified in the notice of meeting (or any supplement thereto) given by or at 
the direction of the board of directors, (B) otherwise properly brought 
before the meeting by or at the direction of the board of directors, or (C) 
otherwise properly brought before the meeting by a stockholder.  For business 
to be properly brought before an annual meeting by a stockholder, the 
stockholder must have given timely notice thereof in writing to the secretary 
of the corporation. To be timely, a stockholder's notice must be delivered to 
or mailed and received at the principal executive offices of the corporation 
not less than one hundred twenty (120) calendar days in advance of the date 
specified in the corporation's proxy statement released to stockholders in 
connection with the previous year's annual meeting of stockholders; provided, 
however, that in the event that no annual meeting was held in the previous 
year or the date of the annual meeting has been changed by more than thirty 
(30) days from the date contemplated at the time of the previous year's proxy 
statement, notice by the stockholder to be timely must be so received a 
reasonable time before the solicitation is made.  A stockholder's notice to 
the secretary shall set forth as to each matter the stockholder proposes to 
bring before the annual meeting:  (i) a brief description of the business 
desired to be brought before the annual meeting and the reasons for 
conducting such business at the annual meeting, (ii) the name and address, as 
they appear on the corporation's books, of the stockholder proposing such 
business, (iii) the class and number of shares of the corporation which are 
beneficially owned by the stockholder, (iv) any material interest of the 
stockholder in such business and (v) any other information that is required 
to be provided by the stockholder pursuant to Regulation 14A under the 
Securities Exchange Act of 1934, as amended (the "1934 Act"), in his capacity 
as a proponent to a stockholder proposal.  Notwithstanding the foregoing, in 
order to include information with respect to a stockholder proposal in the 
proxy statement and form of proxy for a stockholder's meeting, stockholders 
must provide notice as required by the regulations promulgated under the 1934 
Act. Notwithstanding anything in these Bylaws to the contrary, no business 
shall be conducted at any annual meeting except in accordance with the 
procedures set forth in this paragraph (b).  The chairman of the annual 
meeting shall, if the facts warrant, determine and declare at the meeting 
that business was not properly brought before the meeting and in accordance 
with the provisions of this paragraph (b), and, if he should so determine, he 
shall so declare at the meeting that any such business not properly brought 
before the meeting shall not be transacted.

          (c)  Only persons who are nominated in accordance with the 
procedures set forth in this paragraph (c) shall be eligible for election as 
directors. Nominations of persons for election to the board of directors of 
the corporation may be made at a meeting of stockholders by or at the 
direction of the board of directors or by any stockholder of the corporation 
entitled to vote in the election of directors at the meeting who complies 
with the notice procedures set forth in this paragraph (c).  Such 
nominations, other than those made by or at the direction of the board of 
directors, shall be made pursuant to timely notice in writing to the 
secretary of the corporation in accordance with the provisions of paragraph 
(b) of this Section 2.2.  Such stockholder's notice shall set forth (i) as to 
each person, if any, whom the stockholder proposes to nominate for election 
or re-election as a director:  (A) the name, age, business address and 
residence address of such person, (B) the principal occupation or employment 
of such person, (C) the class and number of shares of the 


                                     -2-
<PAGE>

corporation which are beneficially owned by such person, (D) a description of 
all arrangements or understandings between the stockholder and each nominee 
and any other person or persons (naming such person or persons) pursuant to 
which the nominations are to be made by the stockholder, and (E) any other 
information relating to such person that is required to be disclosed in 
solicitations of proxies for elections of directors, or is otherwise 
required, in each case pursuant to Regulation 14A under the 1934 Act 
(including without limitation such person's written consent to being named in 
the proxy statement, if any, as a nominee and to serving as a director if 
elected); and (ii) as to such stockholder giving notice, the information 
required to be provided pursuant to paragraph (b) of this Section 2.2.  At 
the request of the board of directors, any person nominated by a stockholder 
for election as a director shall furnish to the secretary of the corporation 
that information required to be set forth in the stockholder's notice of 
nomination which pertains to the nominee.  No person shall be eligible for 
election as a director of the corporation unless nominated in accordance with 
the procedures set forth in this paragraph (c).  The chairman of the meeting 
shall, if the facts warrants, determine and declare at the meeting that a 
nomination was not made in accordance with the procedures prescribed by these 
Bylaws, and if he should so determine, he shall so declare at the meeting, 
and the defective nomination shall be disregarded.

     2.3  SPECIAL MEETING

     A special meeting of the stockholders may be called at any time by the 
board of directors, or by the chairman of the board, or in the absence of the 
chairman of the board by the vice chairman or chief executive officer, but 
such special meetings may not be called by any other person or persons.

     If a special meeting is called by any person or persons other than the 
board of directors, the request shall be in writing, specifying the time of 
such meeting and the general nature of the business proposed to be 
transacted, and shall be delivered personally or sent by registered mail or 
by telegraphic or other facsimile transmission to the chairman of the board, 
vice chairman, chief executive officer, president, or the secretary of the 
corporation.  No business may be transacted at such special meeting otherwise 
than specified in such notice.  The officer receiving the request shall cause 
notice to be promptly given to the stockholders entitled to vote, in 
accordance with the provisions of Sections 2.5 and 2.6, that a meeting will 
be held at the time requested by the person or persons who called the 
meeting, not less than ten (10) nor more than sixty (60) days after the 
receipt of the request.  If the notice is not given within twenty (20) days 
after the receipt of the request, the person or persons requesting the 
meeting may give the notice.  Nothing contained in this paragraph of this 
Section 2.3 shall be construed as limiting, fixing, or affecting the time 
when a meeting of stockholders called by action of the board of directors may 
be held.

     2.4  ORGANIZATION

     Meetings of stockholders shall be presided over by the chairman of the 
board, if any, or in his absence by the vice chairman of the board, if any, 
or in his absence by the chief executive officer, if any, or in his absence 
by the president, if any, or in his absence a vice president, or in the 
absence of the foregoing persons by a chairman designated by the board of 
directors, or in the absence of such 


                                     -3-
<PAGE>

designation by a chairman chosen at the meeting.  The secretary shall act as 
secretary of the meeting, but in his absence the chairman of the meeting may 
appoint any person to act as secretary of the meeting.

     2.5  NOTICE OF STOCKHOLDERS' MEETINGS

     Except as set forth in Section 2.3, all notices of meetings of 
stockholders shall be sent or otherwise given in accordance with Section 2.6 
of these Bylaws not less than ten (10) nor more than sixty (60) days before 
the date of the meeting.  The notice shall specify the place, date, and hour 
of the meeting and (i) in the case of a special meeting, the general nature 
of the business to be transacted (no business other than that specified in 
the notice may be transacted) or (ii) in the case of the annual meeting, 
those matters which the board of directors, at the time of giving the notice, 
intends to present for action by the stockholders (but any proper matter may 
be presented at the meeting for such action).  The notice of any meeting at 
which directors are to be elected shall include the name of any nominee or 
nominees who, at the time of the notice, the board intends to present for 
election.

     2.6  MANNER OF GIVING NOTICE; AFFIDAVIT OF NOTICE

     Written notice of any meeting of stockholders shall be given either 
personally or by first-class mail or by telegraphic or other written 
communication.  Notices not personally delivered shall be sent charges 
prepaid and shall be addressed to the stockholder at the address of that 
stockholder appearing on the books of the corporation or given by the 
stockholder to the corporation for the purpose of notice.  If no such address 
appears on the corporation's books or is given, notice shall be deemed to 
have been given if sent to that stockholder by mail or telegraphic or other 
written communication to the corporation's principal executive office, or if 
published at least once in a newspaper of general circulation in the county 
where that office is located.  Notice shall be deemed to have been given at 
the time when delivered personally or deposited in the mail or sent by 
telegram or other means of written communication.

     An affidavit of the mailing or other means of giving any notice of any 
stockholders' meeting, executed by the secretary, assistant secretary or any 
transfer agent of the corporation giving the notice, shall be prima facie 
evidence of the giving of such notice.

     2.7  QUORUM

     The presence in person or by proxy of the holders of a majority the 
voting power of the shares entitled to vote thereat constitutes a quorum for 
the transaction of business at all meetings of stockholders; provided, 
however, that in the case of any vote to be taken by classes, the holders of 
a majority of the votes entitled to be cast by the stockholders of a 
particular class shall constitute a quorum for the transaction of business by 
such class.  The stockholders present at a duly called or held meeting at 
which a quorum is present may continue to do business until adjournment, 
notwithstanding the withdrawal of enough stockholders to leave less than a 
quorum, if any action 


                                     -4-
<PAGE>

taken (other than adjournment) is approved by at least a majority of the 
voting power of the shares required to constitute a quorum.

     2.8  ADJOURNED MEETING; NOTICE

     Any stockholders' meeting, annual or special, whether or not a quorum is 
present, may be adjourned from time to time by the vote of the majority of 
the voting power of the shares represented at that meeting, either in person 
or by proxy.  In the absence of a quorum, no other business may be transacted 
at that meeting except as provided in Section 2.7 of these Bylaws.

     When any meeting of stockholders, either annual or special, is adjourned 
to another time or place, notice need not be given of the adjourned meeting 
if the time and place are announced at the meeting at which the adjournment 
is taken. However, if a new record date for the adjourned meeting is fixed or 
if the adjournment is for more than thirty (30) days from the date set for 
the original meeting, then notice of the adjourned meeting shall be given.  
Notice of any such adjourned meeting shall be given to each stockholder of 
record entitled to vote at the adjourned meeting in accordance with the 
provisions of Sections 2.5 and 2.6 of these Bylaws.  At any adjourned meeting 
the corporation may transact any business which might have been transacted at 
the original meeting.

     2.9  VOTING

     Voting at any meeting of stockholders need not be by ballot; provided, 
however, that elections for directors shall be by written ballot, unless 
otherwise provided for in the Certificate of Incorporation.

     The stockholders entitled to vote at any meeting of stockholders shall 
be determined in accordance with the provisions of Section 2.11 of these 
Bylaws, subject to the provisions of Sections 217 and 218 of the General 
Corporation Law of Delaware (relating to voting rights of fiduciaries, 
pledgors and joint owners, and to voting trusts and other voting agreements).

     Except as may be otherwise provided in the Certificate of Incorporation, 
each stockholder shall be entitled to one vote for each share of capital 
stock held by such stockholder.

     Any stockholder entitled to vote on any matter may vote part of the 
shares in favor of the proposal and refrain from voting the remaining shares 
or, except when the matter is the election of directors, may vote them 
against the proposal; but if  the stockholder fails to specify the number of 
shares which the stockholder is voting affirmatively, it will be conclusively 
presumed that the stockholder's approving vote is with respect to all shares 
which the stockholder is entitled to vote.

     If a quorum is present, the affirmative vote of the voting power of the 
shares represented, in person or by proxy, and voting at a duly held meeting 
(which shares voting affirmatively also constitute at least a majority of the 
voting power of the required quorum) shall be the act of the 


                                     -5-
<PAGE>

stockholders, unless the vote of a greater number or a vote by classes is 
required by law or by the Certificate of Incorporation.

     2.10 VALIDATION OF MEETINGS; WAIVER OF NOTICE; CONSENT

     The transactions of any meeting of stockholders, either annual or 
special, however called and noticed, and wherever held, shall be as valid as 
though they had been taken at a meeting duly held after regular call and 
notice, if a quorum be present either in person or by proxy, and if, either 
before or after the meeting, each person entitled to vote, who was not 
present in person or by proxy, signs a written waiver of notice or a consent 
to the holding of the meeting or an approval of the minutes thereof.  The 
waiver of notice or consent or approval need not specify either the business 
to be transacted or the purpose of any annual or special meeting of 
stockholders.  All such waivers, consents, and approvals shall be filed with 
the corporate records or made a part of the minutes of the meeting.

     Attendance by a person at a meeting shall also constitute a waiver of 
notice of and presence at that meeting, except when the person objects at the 
beginning of the meeting to the transaction of any business because the 
meeting is not lawfully called or convened.  Attendance at a meeting is not a 
waiver of any right to object to the consideration of matters required by law 
to be included in the notice of the meeting but not so included, if that 
objection is expressly made at the meeting.

     2.11 RECORD DATE FOR STOCKHOLDER NOTICE; VOTING; GIVING CONSENTS

     For purposes of determining the stockholders entitled to notice of any 
meeting or to vote thereat or entitled to give consent to corporate action 
without a meeting, the board of directors may fix, in advance, a record date, 
which shall not be more than sixty (60) days nor less than ten (10) days 
before the date of any such meeting, and in such event only stockholders of 
record on the date so fixed are entitled to notice and to vote, 
notwithstanding any transfer of any shares on the books of the corporation 
after the record date.

     If the board of directors does not so fix a record date, the record date 
for determining stockholders entitled to notice of or to vote at a meeting of 
stockholders shall be at the close of business on the business day next 
preceding the day on which notice is given, or, if notice is waived, at the 
close of business on the business day next preceding the day on which the 
meeting is held.

     The record date for any other purpose shall be as provided in Article 
VIII of these Bylaws.

     2.12 PROXIES

     Every person entitled to vote for Directors, or on any other matter, 
shall have the right to do so either in person or by one or more agents 
authorized by a written proxy signed by the person and filed with the 
Secretary of the corporation, but no such proxy shall be voted or acted upon 
after three 


                                     -6-
<PAGE>

(3) years from its date, unless the proxy provides for a longer period.  A 
proxy shall be deemed signed if the stockholder's name is placed on the proxy 
(whether by manual signature, typewriting, telegraphic transmission or 
otherwise) by the stockholder or the stockholder's attorney-in-fact.  A duly 
executed proxy shall be irrevocable if it states that it is irrevocable and 
if, and only as long as, it is coupled with an interest sufficient in law to 
support an irrevocable power.  A stockholder may revoke any proxy which is 
not irrevocable by attending the meeting and voting in person or by filing an 
instrument in writing revoking the proxy or another duly executed proxy 
bearing a later date with the secretary of the corporation.  

     2.13 INSPECTORS OF ELECTION

     Before any meeting of stockholders, the board of directors may appoint 
an inspector or inspectors of election to act at the meeting or its 
adjournment. If no inspector of election is so appointed, then the chairman 
of the meeting may, and on the request of any stockholder or a stockholder's 
proxy shall, appoint an inspector or inspectors of election to act at the 
meeting.  The number of inspectors shall be either one (1) or three (3).  If 
inspectors are appointed at a meeting pursuant to the request of one (1) or 
more stockholders or proxies, then the holders of a majority of the voting 
power of shares or their proxies present at the meeting shall determine 
whether one (1) or three (3) inspectors are to be appointed.  If any person 
appointed as inspector fails to appear or fails or refuses to act, then the 
chairman of the meeting may, and upon the request of any stockholder or a 
stockholder's proxy shall, appoint a person to fill that vacancy.

     Such inspectors shall:

          (a)  determine the number of shares outstanding and the voting 
power of each, the number of shares represented at the meeting, the existence 
of a quorum, and the authenticity, validity, and effect of proxies;

          (b)  receive votes, ballots or consents;

          (c)  hear and determine all challenges and questions in any way 
arising in connection with the right to vote;

          (d)  count and tabulate all votes or consents;

          (e)  determine when the polls shall close;

          (f)  determine the result; and

          (g)  do any other acts that may be proper to conduct the election 
or vote with fairness to all stockholders.


                                   -7-
<PAGE>

                             ARTICLE III

                              DIRECTORS

     3.1  POWERS

     Subject to the provisions of the General Corporation Law of Delaware and 
to any limitations in the Certificate of Incorporation or these Bylaws 
relating to action required to be approved by the stockholders or by the 
outstanding shares, the business and affairs of the corporation shall be 
managed and all corporate powers shall be exercised by or under the direction 
of the board of directors.

     3.2  NUMBER AND TERM OF OFFICE

     The number of directors shall be not less than five (5) nor more than 
eleven (11).  The definite number of directors shall be eight (8) until 
changed in accordance with the terms of this Section 3.2.  An indefinite 
number of directors may be fixed, or the definite number of directors may be 
changed, by a duly adopted amendment to the Certificate of Incorporation or 
by an amendment to this bylaw adopted by the vote of holders of a majority of 
the voting power of the outstanding shares entitled to vote or by resolution 
of a majority of the board of directors.

     No reduction of the authorized number of directors shall have the effect 
of removing any director before that director's term of office expires.  If 
for any cause, the directors shall not have been elected at an annual 
meeting, they may be elected as soon thereafter as convenient at a special 
meeting of the stockholders called for that purpose in the manner provided in 
these Bylaws.

     3.3  RESIGNATION AND VACANCIES

     Any director may resign effective on giving written notice to the 
chairman of the board, the vice chairman of the board, the chief executive 
officer, the secretary or the board of directors, unless the notice specifies 
a later time for that resignation to become effective.  If the resignation of 
a director is effective at a future time, the board of directors may elect a 
successor to take office when the resignation becomes effective.

          Unless otherwise provided in the Certificate of Incorporation or 
these Bylaws, vacancies in the board of directors may be filled by a majority 
of the remaining directors, even if less than a quorum, or by a sole 
remaining director; however, a vacancy created by the removal of a director 
by the vote or written consent of the stockholders or by court order may be 
filled only by the affirmative vote of a majority of the voting power of 
shares represented and voting at a duly held meeting at which a quorum is 
present (which shares voting affirmatively also constitute a majority of the 
required quorum).  Each director so elected shall hold office until the next 
annual meeting of the stockholders and until a successor has been elected and 
qualified.


                                     -8-
<PAGE>

     Unless otherwise provided in the Certificate of Incorporation or these 
Bylaws:

               (i)  Vacancies and newly created directorships resulting from 
any increase in the authorized number of directors elected by all of the 
stockholders having the right to vote as a single class may be filled by a 
majority of the directors then in office, although less than a quorum, or by 
a sole remaining director.

               (ii) Whenever the holders of any class or classes of stock or 
series thereof are entitled to elect one or more directors by the provisions 
of the Certificate of Incorporation, vacancies and newly created 
directorships of such class or classes or series may be filled by a majority 
of the directors elected by such class or classes or series thereof then in 
office, or by a sole remaining director so elected.

     If at any time, by reason of death or resignation or other cause, the 
corporation should have no directors in office, then any officer or any 
stockholder or an executor, administrator, trustee or guardian of a 
stockholder, or other fiduciary entrusted with like responsibility for the 
person or estate of a stockholder, may call a special meeting of stockholders 
in accordance with the provisions of the Certificate of Incorporation or 
these Bylaws, or may apply to the Court of Chancery for a decree summarily 
ordering an election as provided in Section 211 of the General Corporation 
Law of Delaware.

     If, at the time of filling any vacancy or any newly created 
directorship, the directors then in office constitute less than a majority of 
the whole board (as constituted immediately prior to any such increase), then 
the Court of Chancery may, upon application of any stockholder or 
stockholders holding at least ten percent (10%) of the total number of the 
then outstanding shares having the right to vote for such directors, 
summarily order an election to be held to fill any such vacancies or newly 
created directorships, or to replace the directors chosen by the directors 
then in office as aforesaid, which election shall be governed by the 
provisions of Section 211 of the General Corporation Law of Delaware as far 
as applicable.

     3.4  REMOVAL

     Subject to Section 3.3 and any limitations imposed by law, and unless 
otherwise provided in the Certificate of Incorporation, the board of 
directors, or any individual director, may be removed from office at any time 
by the affirmative vote of the holders of at least a majority of the voting 
power of the then outstanding shares of the capital stock of the corporation 
entitled to vote at an election of directors.

     3.5  PLACE OF MEETINGS; MEETINGS BY TELEPHONE

     Regular meetings of the board of directors may be held at any place 
within or outside the State of Delaware that has been designated from time to 
time by resolution of the board of directors.  In the absence of such a 
designation, regular meetings shall be held at the principal executive office 


                                     -9-
<PAGE>

of the corporation.  Special meetings of the board of directors may be held 
at any place within or outside the State of Delaware that has been designated 
in the notice of the meeting or, if not stated in the notice or if there is 
no notice, at the principal executive office of the corporation.

     Any meeting, regular or special, may be held by conference telephone or 
similar communication equipment, so long as all directors participating in 
the meeting can hear one another; and all such directors shall be deemed to 
be present in person at the meeting.

     3.6  FIRST MEETINGS

     The first meeting of each newly elected board of directors shall be held 
at such time and place as shall be fixed by the vote of the stockholders at 
the annual meeting and no notice of such meeting shall be necessary to the 
newly elected directors in order legally to constitute the meeting, provided 
a quorum shall be present. In the event of the failure of the stockholders to 
fix the time or place of such first meeting of the newly elected board of 
directors, or in the event such meeting is not held at the time and place so 
fixed by the stockholders, the meeting may be held at such time and place as 
shall be specified in a notice given as hereinafter provided for special 
meetings of the board of directors, or as shall be specified in a written 
waiver signed by all of the directors.

     3.7  REGULAR MEETINGS

     Regular meetings of the board of directors may be held without notice if 
the times of such meetings are fixed by the board of directors.

     3.8  SPECIAL MEETINGS; NOTICE

     Special meetings of the board of directors for any purpose or purposes 
may be called at any time by the chairman of the board, or in the absence of 
the chairman of the board by the vice chairman or chief executive officer or 
any four directors.

     Notice of the time and place of special meetings shall be delivered 
personally or by telephone to each director or sent by first-class mail or 
telegram, charges prepaid, addressed to each director at that director's 
address as it is shown on the records of the corporation.  If the notice is 
mailed, it shall be deposited in the United States mail at least seven (7) 
days before the time of the holding of the meeting.  If the notice is 
delivered personally or by telephone or telegram, it shall be delivered 
personally or by telephone or to the telegraph company at least seventy-two 
(48) hours before the time of the holding of the meeting.  Any oral notice 
given personally or by telephone may be communicated either to the director 
or to a person at the office of the director who the person giving the notice 
has reason to believe will promptly communicate it to the director.  The 
notice need not specify the purpose or the place of the meeting, if the 
meeting is to be held at the principal executive office of the corporation.


                                     -10-
<PAGE>

     3.9  QUORUM

     A majority of the authorized number of directors shall constitute a 
quorum for the transaction of business, except to adjourn as provided in 
Section 3.12 of these Bylaws.  Every act or decision done or made by a 
majority of the directors present at a duly held meeting at which a quorum is 
present shall be regarded as the act of the board of directors, subject to 
the provisions of the Certificate of Incorporation and applicable law.

     A meeting at which a quorum is initially present may continue to 
transact business notwithstanding the withdrawal of directors, if any action 
taken is approved by at least a majority of the required quorum for that 
meeting.

     3.10 WAIVER OF NOTICE

     Notice of a meeting need not be given to any director (i) who signs a 
waiver of notice or a consent to holding the meeting or an approval of the 
minutes thereof, whether before or after the meeting, or (ii) who attends the 
meeting without protesting, prior thereto or at its commencement, the lack of 
notice to such directors.  All such waivers, consents, and approvals shall be 
filed with the corporate records or made part of the minutes of the meeting.  
A waiver of notice need not specify the purpose of any regular or special 
meeting of the board of directors.

     3.11 ADJOURNMENT

     A majority of the directors present, whether or not constituting a 
quorum, may adjourn any meeting to another time and place.

     3.12 NOTICE OF ADJOURNMENT

     Notice of the time and place of holding an adjourned meeting need not be 
given if announced unless the meeting is adjourned for more than twenty-four 
(24) hours.  If the meeting is adjourned for more than twenty-four (24) 
hours, then notice of the time and place of the adjourned meeting shall be 
given before the adjourned meeting takes place, in the manner specified in 
Section 3.9 of these Bylaws, to the directors who were not present at the 
time of the adjournment.

     3.13 BOARD ACTION BY WRITTEN CONSENT WITHOUT A MEETING

     Any action required or permitted to be taken by the board of directors 
may be taken without a meeting, provided that all members of the board of 
directors individually or collectively consent in writing to that action.  
Such action by written consent shall have the same force and effect as a 
unanimous vote of the board of directors. Such written consent and any 
counterparts thereof shall be filed with the minutes of the proceedings of 
the board.


                                     -11-
<PAGE>

     3.14 ORGANIZATION

     Meetings of the board of directors shall be presided over by the 
chairman of the board, if any, or in his absence by the vice chairman of the 
board, if any, or in his absence by the chief executive officer, or in their 
absence by a chairman chosen at the meeting.  The secretary shall act as 
secretary of the meeting, but in his absence the chairman of the meeting may 
appoint any person to act as secretary of the meeting.

     3.15 FEES AND COMPENSATION OF DIRECTORS

     Directors and members of committees may receive such compensation, if 
any, for their services and such reimbursement of expenses as may be fixed or 
determined by resolution of the board of directors.  This Section 3.16 shall 
not be construed to preclude any director from serving the corporation in any 
other capacity as an officer, agent, employee or otherwise and receiving 
compensation for those services.

     3.16 APPROVAL OF LOANS TO OFFICERS

     The corporation may lend money to, or guarantee any obligation of, or 
otherwise assist any officer or other employee of the corporation or of its 
subsidiary, including any officer or employee who is a director of the 
corporation or its subsidiary, whenever, in the judgment of the directors, 
such loan, guaranty or assistance may reasonably be expected to benefit the 
corporation.  The loan, guaranty or other assistance may be with or without 
interest and may be unsecured, or secured in such manner as the board of 
directors shall approve, including, without limitation, a pledge of shares of 
stock of the corporation.  Nothing contained in this section shall be deemed 
to deny, limit or restrict the powers of guaranty or warranty of the 
corporation at common law or under any statute.

                             ARTICLE IV

                             COMMITTEES

     4.1  COMMITTEES OF DIRECTORS

     The board of directors may, by resolution adopted by a majority of the 
authorized number of directors, designate one (1) or more committees, each 
consisting of two or more directors, to serve at the pleasure of the board of 
directors.  The board of directors may designate one (1) or more directors as 
alternate members of any committee, who may replace any absent member at any 
meeting of the committee.  The appointment of members or alternate members of 
a committee requires the vote of a majority of the authorized number of 
directors. Any committee, to the extent provided in the resolution of the 
board, shall have all the authority of the board, but no such committee shall 
have the power or authority to (i) amend the Certificate of Incorporation 
(except that a committee may, to the extent authorized in the resolution or 
resolutions providing for the issuance of shares of stock 


                                     -12-
<PAGE>

adopted by the board of directors as provided in Section 151(a) of the 
General Corporation Law of Delaware, fix any of the preferences or rights of 
such shares relating to dividends, redemption, dissolution, any distribution 
of assets of the corporation or the conversion into, or the exchange of such 
shares for, shares of any other class or classes or any other series of the 
same or any other class or classes of stock of the corporation), (ii) adopt 
an agreement of merger or consolidation under Sections 251, 252, 255, 256, 
257, 258, 263 or 264 of the General Corporation Law of Delaware, (iii) 
recommend to the stockholders the sale, lease or exchange of all or 
substantially all of the corporation's property and assets, (iv) recommend to 
the stockholders a dissolution of the corporation or a revocation of a 
dissolution, or (v) amend the Bylaws of the corporation; and, unless the 
board resolution establishing the committee, the Bylaws or the Certificate of 
Incorporation expressly so provide, no such committee shall have the power or 
authority to declare a dividend, to authorize the issuance of stock, or to 
adopt a certificate of ownership and merger pursuant to Section 253 of the 
General Corporation Law of Delaware.

     4.2  MEETINGS AND ACTION OF COMMITTEES

     Meetings and actions of committees shall be governed by, and held and 
taken in accordance with, the provisions of Article III of these Bylaws, 
Section 3.6 (place of meetings), Section 3.8 (regular meetings), Section 3.9 
(special meetings and notice), Section 3.10 (quorum), Section 3.11 (waiver of 
notice), Section 3.12 (adjournment), Section 3.13 (notice of adjournment), 
and Section 3.14 (action without meeting), with such changes in the context 
of those Bylaws as are necessary to substitute the committee and its members 
for the board of directors and its members; provided, however, that the time 
of regular meetings of committees may be determined either by resolution of 
the board of directors or by resolution of the committee, that special 
meetings of committees may also be called by resolution of the board of 
directors, and that notice of special meetings of committees shall also be 
given to all alternate members, who shall have the right to attend all 
meetings of the committee.  The board of directors may adopt rules for the 
government of any committee not inconsistent with the provisions of these 
Bylaws.

                              ARTICLE V

                              OFFICERS

     5.1  OFFICERS

     The officers of the corporation shall be a chairman of the board, a vice 
chairman of the board, a chief executive officer, a president, a secretary 
and a chief financial officer.  The corporation may also have, at the 
discretion of the board of directors, one or more vice presidents, one or 
more assistant secretaries, one or more assistant treasurers, and such other 
officers as may be appointed in accordance with the provisions of Section 5.3 
of these Bylaws.  Any number of offices may be held by the same person.


                                     -13-
<PAGE>

     5.2  ELECTION OF OFFICERS

     The officers of the corporation, except such officers as may be 
appointed in accordance with the provisions of Section 5.3 or Section 5.5 of 
these Bylaws, shall be chosen by the board of directors, subject to the 
rights, if any, of an officer under any contract of employment.

     5.3  SUBORDINATE OFFICERS

     The board of directors may appoint, or may empower the chief executive 
officer to appoint, such other officers as the business of the corporation 
may require, each of whom shall hold office for such period, have such 
authority, and perform such duties as are provided in these Bylaws or as the 
board of directors may from time to time determine.

     5.4  REMOVAL AND RESIGNATION OF OFFICERS

     Subject to the rights, if any, of an officer under any contract of 
employment, any officer may be removed, either with or without cause, by the 
board of directors at any regular or special meeting of the board or, except 
in case of an officer chosen by the board of directors, by any officer upon 
whom such power of removal may be conferred by the board of directors.

     Any officer may resign at any time by giving written notice to the 
corporation.  Any resignation shall take effect at the date of the receipt of 
that notice or at any later time specified in that notice; and, unless 
otherwise specified in that notice, the acceptance of the resignation shall 
not be necessary to make it effective.  Any resignation is without prejudice 
to the rights, if any, of the corporation under any contract to which the 
officer is a party.

     5.5  VACANCIES IN OFFICES

     A vacancy in any office because of death, resignation, removal, 
disqualification or any other cause shall be filled in the manner prescribed 
in these Bylaws for regular appointments to that office.

     5.6  CHAIRMAN OF THE BOARD

     The chairman of the board, if such an officer be elected, shall serve as 
the corporation's general manager, and shall have general supervision, 
direction and control of the corporation's business and its officers, and, if 
present, preside at meetings of the stockholders and the board of directors 
and exercise and perform such other powers and duties as may from time to 
time be assigned to him by the board of directors or as may be prescribed by 
these Bylaws.  If there is no chief executive officer, then the chairman of 
the board shall also be the chief executive officer of the corporation and 
shall have the powers and duties prescribed in Section 5.7 of these Bylaws.  
The chairman of the board shall report to the board of directors.


                                     -14-
<PAGE>

     5.7  CHIEF EXECUTIVE OFFICER

     Subject to such supervisory powers, if any, as may be given by the board 
of directors to the chairman of the board, if there be such an officer, the 
chief executive officer of the corporation shall, subject to the control of 
the board of directors, have general supervision, direction, and control of 
the business and the officers of the corporation.  He shall preside at all 
meetings of the stockholders and, in the absence or nonexistence of a 
chairman of the board, at all meetings of the board of directors.  He shall 
have the general powers and duties of management usually vested in the chief 
executive officer of a corporation, and shall have such other powers and 
duties as may be prescribed by the board of directors or these Bylaws.

     5.8  PRESIDENT

     The president may assume and perform the duties of the chief executive 
officer in the absence or disability of the chief executive officer or 
whenever the office of the chief executive officer is vacant.  The president 
of the corporation shall exercise and perform such powers and duties as may 
from time to time be assigned to him by the board of directors or as may be 
prescribed by these Bylaws.  The president shall have authority to execute in 
the name of the corporation bonds, contracts, deeds, leases and other written 
instruments to be executed by the corporation. In the absence or nonexistence 
of the chairman of the board and chief executive officer, he shall preside at 
all meetings of the stockholders and, in the absence or nonexistence of a 
chairman of the board and the chief executive officer, at all meetings of the 
board of directors and shall perform such other duties as the board of 
directors may from time to time determine.

     5.9  VICE PRESIDENTS

     In the absence or disability of the president, the vice presidents, if 
any, in order of their rank as fixed by the board of directors or, if not 
ranked, a vice president designated by the board of directors, shall perform 
all the duties of the president and when so acting shall have all the powers 
of, and be subject to all the restrictions upon, the president.  The vice 
presidents shall have such other powers and perform such other duties as from 
time to time may be prescribed for them respectively by the board of 
directors, these Bylaws, the chairman of the board or the chief executive 
officer.

     5.10 SECRETARY

     The secretary shall keep or cause to be kept, at the principal executive 
office of the corporation or such other place as the board of directors may 
direct, a book of minutes of all meetings and actions of directors, 
committees of directors and stockholders.  The minutes shall show the time 
and place of each meeting, whether regular or special (and, if special, how 
authorized and the notice given), the names of those present at directors' 
meetings or committee meetings, the number of shares present or represented 
at stockholders' meetings, and the proceedings thereof.


                                     -15-
<PAGE>

     The secretary shall keep, or cause to be kept, at the principal 
executive office of the corporation or at the office of the corporation's 
transfer agent or registrar, as determined by resolution of the board of 
directors, a share register, or a duplicate share register, showing the names 
of all stockholders and their addresses, the number and classes of shares 
held by each, the number and date of certificates evidencing such shares, and 
the number and date of cancellation of every certificate surrendered for 
cancellation.

     The secretary shall give, or cause to be given, notice of all meetings 
of the stockholders and of the board of directors required to be given by law 
or by these Bylaws.  He or she shall keep the seal of the corporation, if one 
be adopted, in safe custody and shall have such other powers and perform such 
other duties as may be prescribed by the board of directors or by these 
Bylaws.

     5.11 CHIEF FINANCIAL OFFICER

     The chief financial officer shall keep and maintain, or cause to be kept 
and maintained, adequate and correct books and records of accounts of the 
properties and business transactions of the corporation, including accounts 
of its assets, liabilities, receipts, disbursements, gains, losses, capital, 
retained earnings and shares.  The books of account shall at all reasonable 
times be open to inspection by any director.

     The chief financial officer shall deposit all money and other valuables 
in the name and to the credit of the corporation with such depositaries as 
may be designated by the board of directors. He or she shall disburse the 
funds of the corporation as may be ordered by the board of directors, shall 
render to the chief executive officer and directors, whenever they request 
it, an account of all of his or her transactions as chief financial officer 
and of the financial condition of the corporation, and shall have such other 
powers and perform such other duties as may be prescribed by the board of 
directors or these Bylaws.

                               ARTICLE VI

    INDEMNIFICATION OF DIRECTORS, OFFICERS, EMPLOYEES AND OTHER AGENTS

     6.1  INDEMNIFICATION OF DIRECTORS AND OFFICERS

     The corporation shall, to the maximum extent and in the manner permitted 
by the General Corporation Law of Delaware, indemnify each of its directors 
and officers against expenses (including attorneys' fees), judgments, fines, 
settlements and other amounts actually and reasonably incurred in connection 
with any proceeding, arising by reason of the fact that such person is or was 
an agent of the corporation; provided,  however, that the corporation may 
modify the extent of such indemnification by individual contracts with its 
directors and executive officers and, provided, further, that the corporation 
shall not be required to indemnify any director or officer in connection with 
any proceeding (or part thereof) initiated by such person unless (i) such 
indemnification is 


                                     -16-
<PAGE>

expressly required to be made by law, (ii) the proceeding was authorized by 
the board of directors of the corporation, (iii) such indemnification is 
provided by the corporation, in its sole discretion, pursuant to the powers 
vested in the corporation under the General Corporation Law of Delaware or 
(iv) such indemnification is required to be made pursuant to an individual 
contract.  For purposes of this Section 6.1, a "director" or "officer" of the 
corporation includes any person (i) who is or was a director or officer of 
the corporation, (ii) who is or was serving at the request of the corporation 
as a director or officer of another corporation, partnership, joint venture, 
trust or other enterprise, or (iii) who was a director or officer of a 
corporation which was a predecessor corporation of the corporation or of 
another enterprise at the request of such predecessor corporation.

     6.2  INDEMNIFICATION OF OTHERS

     The corporation shall have the power, to the maximum extent and in the 
manner permitted by the General Corporation Law of Delaware, to indemnify 
each of its employees and agents (other than directors and officers) against 
expenses (including attorneys' fees), judgments, fines, settlements and other 
amounts actually and reasonably incurred in connection with any proceeding, 
arising by reason of the fact that such person is or was an agent of the 
corporation.  For purposes of this Section 6.2, an "employee" or "agent" of 
the corporation (other than a director or officer) includes any person (i) 
who is or was an employee or agent of the corporation, (ii) who is or was 
serving at the request of the corporation as an employee or agent of another 
corporation, partnership, joint venture, trust or other enterprise, or (iii) 
who was an employee or agent of a corporation which was a predecessor 
corporation of the corporation or of another enterprise at the request of 
such predecessor corporation.

     6.3  INSURANCE

     The corporation may purchase and maintain insurance on behalf of any 
person who is or was a director, officer, employee or agent of the 
corporation, or is or was serving at the request of the corporation as a 
director, officer, employee or agent of another corporation, partnership, 
joint venture, trust or other enterprise against any liability asserted 
against him or her and incurred by him or her in any such capacity, or 
arising out of his or her status as such, whether or not the corporation 
would have the power to indemnify him or her against such liability under the 
provisions of the General Corporation Law of Delaware.

     6.4  EXPENSES

     The corporation shall advance to any person who was or is a party or is 
threatened to be made a party to any threatened, pending or completed action, 
suit or proceeding, whether civil, criminal, administrative or investigative, 
by reason of the fact that he or she is or was a director or officer, of the 
corporation, or is or was serving at the request of the corporation as a 
director or officer of another corporation, partnership, joint venture, trust 
or other enterprise, prior to the final disposition of the proceeding, 
promptly following request therefor, all expenses incurred by any director or 
officer in connection with such proceeding upon receipt of an undertaking by 
or on behalf of such 



                                     -17-
<PAGE>

person to repay said amounts if it should be determined ultimately that such 
person is not entitled to be indemnified under this Bylaw or otherwise.

     Notwithstanding the foregoing, unless otherwise determined pursuant to 
Section 6.5, no advance shall be made by the corporation to an officer of the 
corporation (except by reason of the fact that such officer is or was a 
director of the corporation in which event this paragraph shall not apply) in 
any action, suit or proceeding, whether civil, criminal, administrative or 
investigative, if a determination is reasonably and promptly made (i) by the 
board of directors by a majority vote of a quorum consisting of directors who 
were not parties to the proceeding, or (ii) if such quorum is not obtainable, 
or, even if obtainable, a quorum of disinterested directors so directs, by 
independent legal counsel in a written opinion, that the facts known to the 
decision-making party at the time such determination is made demonstrate 
clearly and convincingly that such person acted in bad faith or in a manner 
that such person did not believe to be in or not opposed to the best 
interests of the corporation.

     6.5  NON-EXCLUSIVITY OF RIGHTS

     The rights conferred on any person by this Article VI shall not be 
exclusive of any other right which such person may have or hereafter acquire 
under any statute, provision of the Certificate of Incorporation, Bylaw, 
agreement, vote of stockholders or disinterested directors or otherwise, both 
as to action in such person's official capacity and as to action in another 
capacity while holding office.  The corporation is specifically authorized to 
enter into individual contracts with any or all of its directors, officers, 
employees or agents respecting indemnification and advances, to the fullest 
extent not prohibited by the General Corporation Law of Delaware.

     6.6  SURVIVAL OF RIGHTS

     The rights conferred on any person by this Bylaw shall continue as to a 
person who has ceased to be a director, officer, employee or other agent and 
shall inure to the benefit of the heirs, executors and administrators of such 
person.

     6.7  AMENDMENTS

     Any repeal or modification of this Bylaw shall be prospective only and 
shall not affect the rights under this Bylaw as in effect at the time of the 
alleged occurrence of any action or omission to act that is the cause of any 
proceeding against any agent of the corporation.


                                     -18-
<PAGE>

                             ARTICLE VII

                         RECORDS AND REPORTS

     7.1  MAINTENANCE AND INSPECTION OF RECORDS

     The corporation shall, either at its principal executive office or at 
such place or places as designated by the board of directors, keep a record 
of its stockholders listing their names and addresses and the number and 
class of shares held by each stockholder, a copy of these Bylaws as amended 
to date, accounting books and other records.

     Any stockholder of record, in person or by attorney or other agent, 
shall, upon written demand under oath stating the purpose thereof, have the 
right during the usual hours for business to inspect for any proper purpose 
the corporation's stock ledger, a list of its stockholders, and its other 
books and records and to make copies or extracts therefrom.  A proper purpose 
shall mean a purpose reasonably related to such person's interest as a 
stockholder.  In every instance where an attorney or other agent is the 
person who seeks the right to inspection, the demand under oath shall be 
accompanied by a power of attorney or such other writing that authorizes the 
attorney or other agent to so act on behalf of the stockholder. The demand 
under oath shall be directed to the corporation at its registered office in 
Delaware or at its principal place of business.

     The officer who has charge of the stock ledger of a corporation shall 
prepare and make, at least ten (10) days before every meeting of 
stockholders, a complete list of the stockholders entitled to vote at the 
meeting, arranged in alphabetical order, and showing the address of each 
stockholder and the number of shares registered in the name of each 
stockholder.  Such list shall be open to the examination of any stockholder, 
for any purpose germane to the meeting, during ordinary business hours, for a 
period of at least ten (10) days prior to the meeting, either at a place 
within the city where the meeting is to be held, which place shall be 
specified in the notice of the meeting, or, if not so specified, at the place 
where the meeting is to be held.  The list shall also be produced and kept at 
the time and place of the meeting during the whole time thereof, and may be 
inspected by any stockholder who is present.

     7.2  INSPECTION BY DIRECTORS

     Any director shall have the right to examine the corporation's stock 
ledger, a list of its stockholders and its other books and records for a 
purpose reasonably related to his or her position as a director. The Court of 
Chancery is hereby vested with the exclusive jurisdiction to determine 
whether a director is entitled to the inspection sought. The Court may 
summarily order the corporation to permit the director to inspect any and all 
books and records, the stock ledger, and the stock list and to make copies or 
extracts therefrom.  The Court may, in its discretion, prescribe any 
limitations or conditions with reference to the inspection, or award such 
other and further relief as the Court may deem just and proper.


                                     -19-
<PAGE>

     7.3  ANNUAL STATEMENT TO STOCKHOLDERS

     The board of directors shall present at each annual meeting, and at any 
special meeting of the stockholders when called for by vote of the 
stockholders, a full and clear statement of the business and condition of the 
corporation.

     7.4  REPRESENTATION OF SHARES OF OTHER CORPORATIONS

     The chairman of the board, the vice chairman, the chief executive 
officer, the president, any vice president, the chief financial officer, the 
secretary or assistant secretary of this corporation, or any other person 
authorized by the board of directors or the chief executive officer or the 
president or a vice president, is authorized to vote, represent, and exercise 
on behalf of this corporation all rights incident to any and all shares of 
any other corporation or corporations standing in the name of this 
corporation.  The authority herein granted may be exercised either by such 
person directly or by any other person authorized to do so by proxy or power 
of attorney duly executed by such person having the authority.

                            ARTICLE VIII

                           GENERAL MATTERS

     8.1  RECORD DATE FOR PURPOSES OTHER THAN NOTICE AND VOTING

     For purposes of determining the stockholders entitled to receive payment 
of any dividend or other distribution or allotment of any rights or the 
stockholders entitled to exercise any rights in respect of any other lawful 
action, the board of directors may fix, in advance, a record date, which 
shall not be more than sixty (60) days before any such action.  In that case, 
only stockholders of record at the close of business on the date so fixed are 
entitled to receive the dividend, distribution or allotment of rights, or to 
exercise such rights, as the case may be, notwithstanding any transfer of any 
shares on the books of the corporation after the record date so fixed, except 
as otherwise provided by law.

     If the board of directors does not so fix a record date, then the record 
date for determining stockholders for any such purpose shall be at the close 
of business on the day on which the board adopts the applicable resolution or 
the sixtieth (60th) day before the date of that action, whichever is later.

     8.2  CHECKS; DRAFTS; EVIDENCES OF INDEBTEDNESS

     From time to time, the board of directors shall determine by resolution 
which person or persons may sign or endorse all checks, drafts, other orders 
for payment of money, notes or other evidences of indebtedness that are 
issued in the name of or payable to the corporation, and only the persons so 
authorized shall sign or endorse those instruments.


                                     -20-
<PAGE>

     8.3  CORPORATE CONTRACTS AND INSTRUMENTS:  HOW EXECUTED

     The board of directors, except as otherwise provided in these Bylaws, 
may authorize any officer or officers, or agent or agents, to enter into any 
contract or execute any instrument in the name of and on behalf of the 
corporation; such authority may be general or confined to specific instances. 
Unless so authorized or ratified by the board of directors or within the 
agency power of an officer, no officer, agent or employee shall have any 
power or authority to bind the corporation by any contract or engagement or 
to pledge its credit or to render it liable for any purpose or for any amount.

     8.4  STOCK CERTIFICATES; PARTLY PAID SHARES

     The shares of a corporation shall be represented by certificates, 
provided that the board of directors of the corporation may provide by 
resolution or resolutions that some or all of any or all classes or series of 
its stock shall be uncertificated shares.  Any such resolution shall not 
apply to shares represented by a certificate until such certificate is 
surrendered to the corporation.  Notwithstanding the adoption of such a 
resolution by the board of directors, every holder of stock represented by 
certificates and upon request every holder of uncertificated shares shall be 
entitled to have a certificate signed by, or in the name of the corporation 
by, the chairman or vice-chairman of the board of directors, or the chief 
executive officer or the president or vice-president, and by the chief 
financial officer, the secretary or an assistant secretary of such 
corporation representing the number of shares registered in certificate form. 
Any or all of the signatures on the certificate may be a facsimile.  In case 
any officer, transfer agent or registrar who has signed or whose facsimile 
signature has been placed upon a certificate has ceased to be such officer, 
transfer agent or registrar before such certificate is issued, it may be 
issued by the corporation with the same effect as if he or she were such 
officer, transfer agent or registrar at the date of issue.

     The corporation may issue the whole or any part of its shares as partly 
paid and subject to call for the remainder of the consideration to be paid 
therefor.  Upon the face or back of each stock certificate issued to 
represent any such partly paid shares, upon the books and records of the 
corporation in the case of uncertificated partly paid shares, the total 
amount of the consideration to be paid therefor and the amount paid thereon 
shall be stated. Upon the declaration of any dividend on fully paid shares, 
the corporation shall declare a dividend upon partly paid shares of the same 
class, but only upon the basis of the percentage of the consideration 
actually paid thereon.

     8.5  SPECIAL DESIGNATION ON CERTIFICATES

     If the corporation is authorized to issue more than one class of stock 
or more than one series of any class, then the powers, the designations, the 
preferences, and the relative, participating, optional or other special 
rights of each class of stock or series thereof and the qualifications, 
limitations or restrictions of such preferences and/or rights shall be set 
forth in full or summarized on the face or back of the certificate that the 
corporation shall issue to represent such class or series of stock; provided, 
however, that, except as otherwise provided in Section 202 of the General 


                                     -21-
<PAGE>

Corporation Law of Delaware, in lieu of the foregoing requirements there may 
be set forth on the face or back of the certificate that the corporation 
shall issue to represent such class or series of stock a statement that the 
corporation will furnish without charge to each stockholder who so requests 
the powers, the designations, the preferences, and the relative, 
participating, optional or other special rights of each class of stock or 
series thereof and the qualifications, limitations or restrictions of such 
preferences and/or rights.

     8.6  LOST CERTIFICATES

     Except as provided in this Section 8.6, no new certificates for shares 
shall be issued to replace a previously issued certificate unless the latter 
is surrendered to the corporation and canceled at the same time.  The board 
of directors may, in case any share certificate or certificate for any other 
security is lost, stolen or destroyed, authorize the issuance of replacement 
certificates on such terms and conditions as the board of directors may 
require; in such case the board of directors may require indemnification of 
the corporation secured by a bond or other adequate security sufficient to 
protect the corporation against any claim that may be made against it, 
including any expense or liability, on account of the alleged loss, theft or 
destruction of the certificate or the issuance of the replacement certificate.

     8.7  CONSTRUCTION; DEFINITIONS

     Unless the context requires otherwise, the general provisions, rules of 
construction, and definitions in the General Corporation Law of Delaware 
shall govern the construction of these Bylaws.  Without limiting the 
generality of this provision, the singular number includes the plural, the 
plural number includes the singular, and the term "person" includes both a 
corporation and a natural person.

                             ARTICLE IX

                             AMENDMENTS

     Subject to Section 6.7 hereof the Bylaws of the corporation may be 
adopted, amended or repealed and new Bylaws adopted by the affirmative vote 
of stockholders holding a majority of the voting power of stock entitled to 
vote or by the board of directors.

                              ARTICLE X
                                  
                             DISSOLUTION
                                  
     If it should be deemed advisable in the judgment of the board of 
directors of the corporation that the corporation should be dissolved, the 
board, after the adoption of a resolution to that effect by a majority of the 
whole board at any meeting called for that purpose, shall cause notice to be 
mailed 


                                     -22-
<PAGE>

to each stockholder entitled to vote thereon of the adoption of the 
resolution and of a meeting of stockholders to take action upon the 
resolution.

     At the meeting a vote shall be taken for and against the proposed 
dissolution.  If a majority of the voting power of the outstanding stock of 
the corporation entitled to vote thereon votes for the proposed dissolution, 
then a certificate stating that the dissolution has been authorized in 
accordance with the provisions of Section 275 of the General Corporation Law 
of Delaware and setting forth the names and residences of the directors and 
officers shall be executed, acknowledged and filed, and shall become 
effective in accordance with Section 103 of the General Corporation Law of 
Delaware.  Upon such certificate's becoming effective in accordance with 
Section 103 of the General Corporation Law of Delaware, the corporation shall 
be dissolved.

     Whenever stockholders holding a majority of the voting power of stock 
entitled to vote on a dissolution consent in writing, either in person or by 
duly authorized attorney, to a dissolution, no meeting of directors or 
stockholders shall be necessary.  The consent shall be filed and shall become 
effective in accordance with Section 103 of the General Corporation Law of 
Delaware.  Upon such consent's becoming effective in accordance with Section 
103 of the General Corporation Law of Delaware, the corporation shall be 
dissolved. If the consent is signed by an attorney, then the original power 
of attorney or a photocopy thereof shall be attached to and filed with the 
consent.  The consent filed with the Secretary of State shall have attached 
to it the affidavit of the secretary or some other officer of the corporation 
stating that the consent has been signed by or on behalf of all the 
stockholders entitled to vote on a dissolution; in addition, there shall be 
attached to the consent a certification by the secretary or some other 
officer of the corporation setting forth the names and residences of the 
directors and officers of the corporation.

                             ARTICLE XI

                              CUSTODIAN

     11.1 APPOINTMENT OF A CUSTODIAN IN CERTAIN CASES

     The Court of Chancery, upon application of any stockholder, may appoint 
one or more persons to be custodians and, if the corporation is insolvent, to 
be receivers, of and for the corporation when:

               (i) at any meeting held for the election of directors the 
stockholders are so divided that they have failed to elect successors to 
directors whose terms have expired or would have expired upon qualification 
of their successors; or

               (ii) the business of the corporation is suffering or is 
threatened with irreparable injury because the directors are so divided 
respecting the management of the affairs of the corporation that the required 
vote for action by the board of directors cannot be obtained and the 
stockholders are unable to terminate this division; or


                                     -23-
<PAGE>

               (iii) the corporation has abandoned its business and has
failed within a reasonable time to take steps to dissolve, liquidate or
distribute its assets.

     11.2 DUTIES OF CUSTODIAN

     The custodian shall have all the powers and title of a receiver 
appointed under Section 291 of the General Corporation Law of Delaware, but 
the authority of the custodian shall be to continue the business of the 
corporation and not to liquidate its affairs and distribute its assets, 
except when the Court of Chancery otherwise orders and except in cases 
arising under Sections 226(a)(3) or 352(a)(2) of the General Corporation Law 
of Delaware.



                                     -24-

<PAGE>


                             EMPLOYMENT AGREEMENT


    THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and 
between FirstPak, Inc. (the "Company") and Gary S. Yellin ("Executive"), as 
of the "Effective Time," as defined below.

                                   RECITALS
                                       
    A.   The Company and each of Wisconsin Label Corporation, St. Louis 
Lithographing Company, CalOptical Holding Corporation and Blake Printing & 
Publishing ("Subsidiaries") have entered into Agreements and Plans of 
Reorganization, dated as of July 17, 1997 (the "Merger Agreements"), pursuant 
to which a wholly-owned subsidiary of the Company will merge with each 
Subsidiary (the "Mergers") and each Subsidiary will thereby become a 
wholly-owned subsidiary of the Company.

    B.   The business conducted by Subsidiaries prior to the date of the Merger 
Agreement and the business to be conducted by the Company after the Effective 
Time of the Merger consists of production and distribution of label and 
packaging products.

    NOW, THEREFORE, in consideration of the covenants and agreements 
hereinafter set forth, the parties hereto agree as follows:

    1.   EFFECTIVENESS OF AGREEMENT.  This Agreement shall become effective 
only upon the "Effective Time" as such term is defined in the Merger 
Agreements (the "Effective Time").  In the event that each Merger Agreement 
terminates prior to the Effective Time, this Agreement will be of no force or 
effect.  The Company and Executive agree that this Agreement shall govern the 
terms and conditions of Executive's provision of services to the Company 
(and/or its parent and/or subsidiaries) from and after the Effective Time.

    2.   TERM OF AGREEMENT.  Unless terminated earlier in accordance with the 
provisions of Section 7, this Agreement shall commence on the Effective Time 
and shall end on the three-year anniversary of the Effective Time (the 
"Employment Period").

    3.   DUTIES AND SCOPE OF EMPLOYMENT.

         (a)  POSITION; EMPLOYMENT COMMENCEMENT DATE; DUTIES.  The Company 
shall employ Executive as the Vice President, Business Development of the 
Company.

         (b)  OBLIGATIONS.  During the Employment Period, Executive shall 
devote substantially all of his business efforts and time to the Company. 
Executive agrees, during the Employment Period, not to actively engage in any 
other employment, occupation or consulting activity for any direct or 
indirect remuneration, other than to the extent that such activities do not 
materially interfere with Executive's performance of his or her duties under 
this Agreement, without the prior approval of the Board of Directors of the 
Company (the "Board").



<PAGE>

    4.   EMPLOYEE BENEFITS.  During the Employment Period, Executive shall be 
eligible to participate in (i) all employee benefit plans currently and 
hereafter maintained by the Company for senior management according to their 
terms, and (ii) such other employee benefits as are set forth in this 
Agreement. 

    5.   COMPENSATION.

         (a)  BASE SALARY.  During the Employment Period, the Company shall 
pay the Executive as compensation for his services a base salary at the 
annualized rate of $135,000 (the "Base Salary").  The Base Salary shall be 
paid periodically in accordance with normal Company payroll practices and 
subject to the usual, required withholding.  Executive's Base Salary shall be 
reviewed annually by the Board of Directors of the Company to determine 
appropriate increases, if any, to the Base Salary.  Executive understands and 
agrees that neither his job performance nor promotions, commendations, 
bonuses or the like from the Company give rise to or in any way serve as the 
basis for modification, amendment, or extension, by implication or otherwise, 
of this Agreement.

         (b)  BONUS.  During the Employment Period Executive shall be 
eligible to receive bonuses as determined by the Board or its Compensation 
Committee, provided, however, that the determination and payment of any and 
all bonuses shall be at the sole discretion of the Board.  The Company shall 
pay any and all bonuses referred to in this Agreement only at the same time 
as bonuses are normally paid to senior management of the Company.

         (c)  EQUITY COMPENSATION.  The board is granting Executive a stock 
option to purchase 50,000 shares of the Company's common stock. The stock 
option shall be subject to the terms and conditions of the 1997 Stock Plan 
(the "Stock Plan") and standard form of the option agreement (the "Option 
Agreement").

    6.   EXPENSES.  The Company will pay or reimburse Executive for 
reasonable travel, entertainment or other expenses incurred by Executive in 
the furtherance of or in connection with the performance of Executive's 
duties hereunder in accordance with the Company's established policies.

    7.   TERMINATION OF EMPLOYMENT.

         (a)  EARLY TERMINATION GENERALLY.  The Company may terminate the 
Executive's employment at any time prior to the expiration of the Employment 
Period.  If the Company terminates the Executive's employment prior to the 
end the Employment Period without Cause (as defined below), if Executive 
resigns prior to the end of the Employment Period for Good Reason (as defined 
below) or if the Executive's employment is terminated prior to the end of the 
Employment Period due to Executive's death or total and permanent disability, 
the Executive shall be entitled to receive the payments and benefits referred 
to in Paragraph 7(c) below (subject to the terms and conditions of said 
Paragraph).


                                     2
<PAGE>

         (b)  TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION.  In the event 
the Company terminates Executive's employment with the Company for Cause (as 
defined below) or the Executive voluntarily terminates employment with the 
Company without Good Reason, then this Agreement shall terminate immediately 
and Executive shall not be entitled to any benefits or compensation hereunder 
arising after the date of such termination, and Executive shall only be 
eligible for severance benefits in accordance with the Company's established 
policies as then in effect.

              For this purpose, "Cause" shall mean (i) a material breach by 
Executive of any of his obligations under this Agreement and such breach 
shall remain uncured for 10 business days after written notice is delivered 
to Executive by the Company, (ii) any act by the Executive which constitutes 
gross misconduct of a type and kind which is materially adverse to the 
Company, (iii) a violation caused directly and intentionally by Executive of 
a federal or state law, rule or regulation applicable to the business of the 
Company of a type and kind that is materially adverse to the Company, or (iv) 
the conviction of the Executive of, or entry by the Executive of a guilty or 
no contest plea to, the commission of a crime involving moral turpitude or 
any felony or the rendering of any civil judgement against Executive that 
materially and adversely affects the Company's reputation.

         (c)  TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON; DEATH; 
DISABILITY.  In the event (i) the Company terminates Executive's employment 
with the Company other than for Cause, (ii) Executive terminates employment 
for Good Reason, (iii) Executive's employment is terminated as a result of 
Executive's death, or (iv) Executive's employment is terminated as a result 
of Executive's permanent and total disability, the Company shall provide 
Executive with the following benefits:  

              (i)  SEVERANCE PAYMENTS.  Subject to Executive entering into a 
Release of Claims arising out of Executive's employment (in a form provided 
by the Company and reasonably satisfactory to Executive), Executive shall be 
entitled to Base Salary continuation payments, at the Base Salary rate in 
effect at the date of termination, for thirty (30) months from the 
Termination Date, to be paid periodically in accordance with the Company's 
normal payroll policies.

              (ii) CONTINUED EMPLOYEE BENEFITS.  The Company shall provide to 
Executive, subject to Executive and his dependents electing continuation 
coverage under COBRA, one hundred percent (100%) Company-paid health, dental 
and vision coverage at the same level of coverage as was provided to 
Executive immediately prior to the date of termination until the earlier of 
(x) thirty (30) months from the Termination Date, or (y) the date that the 
Executive and his dependents become covered under another employer's group 
health, dental and vision plans that provide Executive and his dependents 
with comparable benefits and levels of coverage; and

              (iii) OPTION VESTING.  The Company agrees to accelerate One 
Hundred percent (100%) of the unvested portion of any stock option or 
restricted stock held by the Executive so as to become completely vested; 
provided, however, that if and to the extent that such potential vesting 
acceleration would cause a contemplated transaction that was intended to be 
accounted for as 


                                       3

<PAGE>

a "pooling-of-interests" transaction to become ineligible for such accounting 
treatment under generally accepted accounting principles, as determined by 
the Company's independent public accountants prior to such transaction, 
Executive's stock options shall not have their vesting so accelerated.

              For this purpose, "Good Reason" shall mean (i) without the 
express written consent of the Executive, a material reduction of the 
Executive's duties, authority or responsibilities, relative to the 
Executive's duties, authority or responsibilities as in effect immediately 
prior to such reduction, or the assignment to Executive of such reduced 
duties, authority or responsibilities; (ii) a material breach of this 
Agreement; (iii) a material reduction in benefits for which Executive is 
eligible and in effect immediately prior to such reduction, other than a 
reduction in the benefits of substantially all other similarly situated 
employees of the Company; (iv) without the express written consent of the 
Executive, the relocation of the Executive to a facility or a location more 
than fifty (50) miles from the executive's then present location; and (v) 
failure on the part of any successor of the Company to assume the Company's 
obligations under this Agreement.

    8.   NONCOMPETE AGREEMENT.  Concurrent with the execution of this 
Agreement, Executive will execute the Noncompete Agreement in the form 
attached hereto as Exhibit B (the "Noncompete Agreement").

    9.   EXCISE TAX PAYMENTS. 

         (a)  In the event that the severance and other benefits provided for 
in this Agreement or otherwise payable to the Executive (i) constitute 
"parachute payments" within the meaning of Section 280G of the Internal 
Revenue Code of 1986, as amended (the "Code") and (ii) but for this Section 
9, would be subject to the excise tax imposed by Section 4999 of the Code, 
then the Executive's severance benefits under Section 7(c) shall be either

              (1)  delivered in full, or

              (2)  delivered as to such lesser extent which would result in no
                   portion of such severance benefits being subject to excise
                   tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable 
federal, state and local income taxes and the excise tax imposed by Section 
4999, results in the receipt by the Executive on an after-tax basis, of the 
greatest amount of severance benefits, notwithstanding that all or some 
portion of such severance benefits may be taxable under Section 4999 of the 
Code.  Unless the Company and the Executive otherwise agree in writing, any 
determination required under this Section 9 shall be made in writing by the 
Company's Accountants immediately prior to Change of Control, whose 
determination shall be conclusive and binding upon the Executive and the 
Company for all purposes.  For purposes of making the calculations required 
by this Section 9, the Accountants may make reasonable assumptions and 
approximations concerning applicable taxes and may rely on 


                                      4

<PAGE>

reasonable, good faith interpretations concerning the application of Sections 
280G and 4999 of the Code.  The Company and the Executive shall furnish to 
the Accountants such information and documents as the Accountants may 
reasonably request in order to make a determination under this Section.  The 
Company shall bear all costs the Accountants may reasonably incur in 
connection with any calculations contemplated by this Section 9.

    10.  ASSIGNMENT.  Executive's rights and obligations under this Agreement 
shall not be assignable by Executive.  The Company's rights and obligations 
under this Agreement shall not be assignable by the Company except as 
incident to the transfer, by merger, liquidation, or otherwise, of all or 
substantially all of the business of the Company provided, however, that any 
such transfer shall not affect the Company's obligations under the 1997 Stock 
Plan.

    11.  NOTICES.  Any notice required or permitted under this Agreement 
shall be given in writing and shall be deemed to have been effectively made 
or given if personally delivered, or if sent by facsimile, or mailed or sent 
via Federal Express to the other party at its address set forth below in this 
Section 11, or at such other address as such party may designate by written 
notice to the other party hereto.  Any effective notice hereunder shall be 
deemed given on the date personally delivered or on the date sent by 
facsimile or deposited in the United States mail (sent by certified mail, 
return receipt requested), as the case may be, at the following addresses:

         (i)  If to the Company:

              FirstPak, Inc.
              114 Sansome Street, Suite 1000
              San Francisco, CA  94104
              ATTN: Chairman of the Board of Directors
              Telephone No.:  (415) 362-9800
              Facsimile No.:  (415) 362-5927

         (ii) If to Executive:

              Gary S. Yellin
              FirstPak, Inc.
              114 Sansome Street, Suite 1000
              San Francisco, CA  94104
              Telephone No.:  (415) 362-9800
              Facsimile No.:  (415) 362-5927

    12.  ARBITRATION.  The parties hereto agree that any dispute or 
controversy arising out of, relating to, or in connection with this 
Agreement, or the interpretation, validity, construction, performance, 
breach, or termination thereof, shall be finally settled by binding 
arbitration to be held in Santa Clara County, California under the Employment 
Dispute Resolution Rules of the American Arbitration Association as then in 
effect (the "Rules").  The arbitrator(s) may grant injunctions or 


                                     5

<PAGE>

other relief in such dispute or controversy.  The decision of the 
arbitrator(s) shall be final, conclusive and binding on the parties to the 
arbitration, and judgment may be entered on the decision of the arbitrator(s) 
in any court having jurisdiction.

    The arbitrator(s) shall apply the laws of the State of California to the 
merits of any dispute or claim, without reference to rules of conflicts of 
law, and the arbitration proceedings shall be governed by federal arbitration 
law and by the Rules, without reference to state arbitration law.

    The parties shall each pay one-half of the costs and expenses of such 
arbitration, and each party shall pay its own counsel fees and expenses.

         EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 12, WHICH DISCUSSES 
ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE 
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION 
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, 
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT 
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY 
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EXECUTIVE'S 
RELATIONSHIP WITH THE COMPANY.

    13.  WITHHOLDING.  The Company shall be entitled to withhold, or cause to 
be withheld, from payment any amount of withholding taxes required by law 
with respect to payments made to Executive in connection with his employment 
hereunder.

    14.  SEVERABILITY.  If any term or provision of this Agreement shall to any
extent be declared illegal or unenforceable by arbitrator(s) or by a duly
authorized court of competent jurisdiction, then the remainder of this Agreement
or the application of such term or provision in circumstances other than those
as to which it is so declared illegal or unenforceable, shall not be 
affected thereby, each term and provision of this Agreement shall be valid 
and enforceable to the fullest extent permitted by law and the illegal or 
unenforceable term or provision shall be deemed replaced by a term or 
provision that is valid and enforceable and that comes closest to expressing 
the intention of the invalid or unenforceable term of provision.

    15.  ENTIRE AGREEMENT.  This Agreement and the agreements referenced 
herein represent the entire agreement of the parties with respect to the 
matters set forth herein, and to the extent inconsistent with other prior 
contracts, arrangements or understandings between the parties, supersedes all 
such previous contracts, arrangements or understandings between the Company 
and Executive. The Agreement may be amended at any time only by mutual 
written agreement signed by the parties hereto.


                                      6

<PAGE>

    16.  GOVERNING LAW.  This Agreement shall be construed, interpreted, and 
governed in accordance with the laws of the State of California without 
reference to rules relating to conflict of law (other than any such rules 
directing application of California law).

    17.  HEADINGS.  The headings of sections herein are included solely for 
convenience of reference and shall not control the meaning or interpretation 
of any of the provisions of this Agreement.

    18.  COUNTERPARTS.  This Agreement may be executed by either of the 
parties hereto in counterparts, each of which shall be deemed to be an 
original, but all such counterparts shall together constitute one and the 
same instrument.

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the day and year first above written.

EXECUTIVE                                                       
                                  -----------------------------------------
                                  GARY S. YELLIN
                                  



FIRSTPAK, INC.                                                       
                                  -----------------------------------------
                                  [NAME & TITLE]






                                      7


<PAGE>


                             EMPLOYMENT AGREEMENT


    THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and 
between FirstPak, Inc. (the "Company") and Eric R. Menke ("Executive"), as of 
the "Effective Time," as defined below.

                                   RECITALS
                                       
    A.   The Company and each of Wisconsin Label Corporation, St. Louis 
Lithographing Company, CalOptical Holding Corporation and Blake Printing & 
Publishing ("Subsidiaries") have entered into Agreements and Plans of 
Reorganization, dated as of July 17, 1997 (the "Merger Agreements"), pursuant 
to which a wholly-owned subsidiary of the Company will merge with each 
Subsidiary (the "Mergers") and each Subsidiary will thereby become a 
wholly-owned subsidiary of the Company.

    B.   The business conducted by Subsidiaries prior to the date of the Merger 
Agreement and the business to be conducted by the Company after the Effective 
Time of the Merger consists of production and distribution of label and 
packaging products.

    NOW, THEREFORE, in consideration of the covenants and agreements 
hereinafter set forth, the parties hereto agree as follows:

    1.   EFFECTIVENESS OF AGREEMENT.  This Agreement shall become effective 
only upon the "Effective Time" as such term is defined in the Merger 
Agreements (the "Effective Time").  In the event that each Merger Agreement 
terminates prior to the Effective Time, this Agreement will be of no force or 
effect.  The Company and Executive agree that this Agreement shall govern the 
terms and conditions of Executive's provision of services to the Company 
(and/or its parent and/or subsidiaries) from and after the Effective Time.

    2.   TERM OF AGREEMENT.  Unless terminated earlier in accordance with the 
provisions of Section 7, this Agreement shall commence on the Effective Time 
and shall end on the three-year anniversary of the Effective Time (the 
"Employment Period").

    3.   DUTIES AND SCOPE OF EMPLOYMENT.

         (a)  POSITION; EMPLOYMENT COMMENCEMENT DATE; DUTIES.  The Company 
shall employ Executive as the Vice President, Business Development of the 
Company.

         (b)  OBLIGATIONS.  During the Employment Period, Executive shall 
devote substantially all of his business efforts and time to the Company. 
Executive agrees, during the Employment Period, not to actively engage in any 
other employment, occupation or consulting activity for any direct or 
indirect remuneration, other than to the extent that such activities do not 
materially interfere with Executive's performance of his or her duties under 
this Agreement, without the prior approval of the Board of Directors of the 
Company (the "Board").



<PAGE>

    4.   EMPLOYEE BENEFITS.  During the Employment Period, Executive shall be 
eligible to participate in (i) all employee benefit plans currently and 
hereafter maintained by the Company for senior management according to their 
terms, and (ii) such other employee benefits as are set forth in this 
Agreement. 

    5.   COMPENSATION.

         (a)  BASE SALARY.  During the Employment Period, the Company shall 
pay the Executive as compensation for his services a base salary at the 
annualized rate of $135,000 (the "Base Salary").  The Base Salary shall be 
paid periodically in accordance with normal Company payroll practices and 
subject to the usual, required withholding.  Executive's Base Salary shall be 
reviewed annually by the Board of Directors of the Company to determine 
appropriate increases, if any, to the Base Salary.  Executive understands and 
agrees that neither his job performance nor promotions, commendations, 
bonuses or the like from the Company give rise to or in any way serve as the 
basis for modification, amendment, or extension, by implication or otherwise, 
of this Agreement.

         (b)  BONUS.  During the Employment Period Executive shall be 
eligible to receive bonuses as determined by the Board or its Compensation 
Committee, provided, however, that the determination and payment of any and 
all bonuses shall be at the sole discretion of the Board.  The Company shall 
pay any and all bonuses referred to in this Agreement only at the same time 
as bonuses are normally paid to senior management of the Company.

    6.   EXPENSES.  The Company will pay or reimburse Executive for 
reasonable travel, entertainment or other expenses incurred by Executive in 
the furtherance of or in connection with the performance of Executive's 
duties hereunder in accordance with the Company's established policies.

    7.   TERMINATION OF EMPLOYMENT.

         (a)  EARLY TERMINATION GENERALLY.  The Company may terminate the 
Executive's employment at any time prior to the expiration of the Employment 
Period.  If the Company terminates the Executive's employment prior to the 
end the Employment Period without Cause (as defined below), if Executive 
resigns prior to the end of the Employment Period for Good Reason (as defined 
below) or if the Executive's employment is terminated prior to the end of the 
Employment Period due to Executive's death or total and permanent disability, 
the Executive shall be entitled to receive the payments and benefits referred 
to in Paragraph 7(c) below (subject to the terms and conditions of said 
Paragraph).

         (b)  TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION.  In the event 
the Company terminates Executive's employment with the Company for Cause (as 
defined below) or the Executive voluntarily terminates employment with the 
Company without Good Reason, then this Agreement shall terminate immediately 
and Executive shall not be entitled to any benefits or compensation 


                                     2

<PAGE>

hereunder arising after the date of such termination, and Executive shall 
only be eligible for severance benefits in accordance with the Company's 
established policies as then in effect.

              For this purpose, "Cause" shall mean (i) a material breach by 
Executive of any of his obligations under this Agreement and such breach 
shall remain uncured for 10 business days after written notice is delivered 
to Executive by the Company, (ii) any act by the Executive which constitutes 
gross misconduct of a type and kind which is materially adverse to the 
Company, (iii) a violation caused directly and intentionally by Executive of 
a federal or state law, rule or regulation applicable to the business of the 
Company of a type and kind that is materially adverse to the Company, or (iv) 
the conviction of the Executive of, or entry by the Executive of a guilty or 
no contest plea to, the commission of a crime involving moral turpitude or 
any felony or the rendering of any civil judgement against Executive that 
materially and adversely affects the Company's reputation.

         (c)  TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON; DEATH; 
DISABILITY.  In the event (i) the Company terminates Executive's employment 
with the Company other than for Cause, (ii) Executive terminates employment 
for Good Reason, (iii) Executive's employment is terminated as a result of 
Executive's death, or (iv) Executive's employment is terminated as a result 
of Executive's permanent and total disability, the Company shall provide 
Executive with the following benefits:  

              (i)  SEVERANCE PAYMENTS.  Subject to Executive entering into a 
Release of Claims arising out of Executive's employment (in a form provided 
by the Company and reasonably satisfactory to Executive), Executive shall be 
entitled to Base Salary continuation payments, at the Base Salary rate in 
effect at the date of termination, for eighteen (18) months from the 
Termination Date, to be paid periodically in accordance with the Company's 
normal payroll policies.

              (ii) CONTINUED EMPLOYEE BENEFITS.  The Company shall provide to 
Executive, subject to Executive and his dependents electing continuation 
coverage under COBRA, one hundred percent (100%) Company-paid health, dental 
and vision coverage at the same level of coverage as was provided to 
Executive immediately prior to the date of termination until the earlier of 
(x) eighteen (18) months from the Termination Date, or (y) the date that the 
Executive and his dependents become covered under another employer's group 
health, dental and vision plans that provide Executive and his dependents 
with comparable benefits and levels of coverage; and

              (iii) OPTION VESTING.  The Company agrees to accelerate One 
Hundred percent (100%) of the unvested portion of any stock option or 
restricted stock held by the Executive so as to become completely vested; 
provided, however, that if and to the extent that such potential vesting 
acceleration would cause a contemplated transaction that was intended to be 
accounted for as a "pooling-of-interests" transaction to become ineligible 
for such accounting treatment under generally accepted accounting principles, 
as determined by the Company's independent public accountants prior to such 
transaction, Executive's stock options shall not have their vesting so 
accelerated.


                                       3

<PAGE>

              For this purpose, "Good Reason" shall mean (i) without the 
express written consent of the Executive, a material reduction of the 
Executive's duties, authority or responsibilities, relative to the 
Executive's duties, authority or responsibilities as in effect immediately 
prior to such reduction, or the assignment to Executive of such reduced 
duties, authority or responsibilities; (ii) a material breach of this 
Agreement; (iii) a material reduction in benefits for which Executive is 
eligible and in effect immediately prior to such reduction, other than a 
reduction in the benefits of substantially all other similarly situated 
employees of the Company; (iv) without the express written consent of the 
Executive, the relocation of the Executive to a facility or a location more 
than fifty (50) miles from the executive's then present location; and (v) 
failure on the part of any successor of the Company to assume the Company's 
obligations under this Agreement.

    8.   NONCOMPETE AGREEMENT.  Concurrent with the execution of this 
Agreement, Executive will execute the Noncompete Agreement in the form 
attached hereto as Exhibit B (the "Noncompete Agreement").

    9.   EXCISE TAX PAYMENTS. 

         (a)  In the event that the severance and other benefits provided for 
in this Agreement or otherwise payable to the Executive (i) constitute 
"parachute payments" within the meaning of Section 280G of the Internal 
Revenue Code of 1986, as amended (the "Code") and (ii) but for this Section 
9, would be subject to the excise tax imposed by Section 4999 of the Code, 
then the Executive's severance benefits under Section 7(c) shall be either

              (1)  delivered in full, or

              (2)  delivered as to such lesser extent which would result in no
                   portion of such severance benefits being subject to excise
                   tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable 
federal, state and local income taxes and the excise tax imposed by Section 
4999, results in the receipt by the Executive on an after-tax basis, of the 
greatest amount of severance benefits, notwithstanding that all or some 
portion of such severance benefits may be taxable under Section 4999 of the 
Code.  Unless the Company and the Executive otherwise agree in writing, any 
determination required under this Section 9 shall be made in writing by the 
Company's Accountants immediately prior to Change of Control, whose 
determination shall be conclusive and binding upon the Executive and the 
Company for all purposes.  For purposes of making the calculations required 
by this Section 9, the Accountants may make reasonable assumptions and 
approximations concerning applicable taxes and may rely on reasonable, good 
faith interpretations concerning the application of Sections 280G and 4999 of 
the Code.  The Company and the Executive shall furnish to the Accountants 
such information and documents as the Accountants may reasonably request in 
order to make a determination under this Section.  The Company shall bear all 
costs the Accountants may reasonably incur in connection with any 
calculations contemplated by this Section 9.


                                      4

<PAGE>

    10.  ASSIGNMENT.  Executive's rights and obligations under this Agreement 
shall not be assignable by Executive.  The Company's rights and obligations 
under this Agreement shall not be assignable by the Company except as 
incident to the transfer, by merger, liquidation, or otherwise, of all or 
substantially all of the business of the Company provided, however, that any 
such transfer shall not affect the Company's obligations under the 1997 Stock 
Plan.

    11.  NOTICES.  Any notice required or permitted under this Agreement 
shall be given in writing and shall be deemed to have been effectively made 
or given if personally delivered, or if sent by facsimile, or mailed or sent 
via Federal Express to the other party at its address set forth below in this 
Section 11, or at such other address as such party may designate by written 
notice to the other party hereto.  Any effective notice hereunder shall be 
deemed given on the date personally delivered or on the date sent by 
facsimile or deposited in the United States mail (sent by certified mail, 
return receipt requested), as the case may be, at the following addresses:

         (i)  If to the Company:

              FirstPak, Inc.
              114 Sansome Street, Suite 1000
              San Francisco, CA  94104
              ATTN: Chairman of the Board of Directors
              Telephone No.:  (415) 362-9800
              Facsimile No.:  (415) 362-5927

         (ii) If to Executive:

              Eric R. Menke
              FirstPak, Inc.
              114 Sansome Street, Suite 1000
              San Francisco, CA  94104
              Telephone No.:  (415) 362-9800
              Facsimile No.:  (415) 362-5927

    12.  ARBITRATION.  The parties hereto agree that any dispute or 
controversy arising out of, relating to, or in connection with this 
Agreement, or the interpretation, validity, construction, performance, 
breach, or termination thereof, shall be finally settled by binding 
arbitration to be held in Santa Clara County, California under the Employment 
Dispute Resolution Rules of the American Arbitration Association as then in 
effect (the "Rules").  The arbitrator(s) may grant injunctions or other 
relief in such dispute or controversy.  The decision of the arbitrator(s) 
shall be final, conclusive and binding on the parties to the arbitration, and 
judgment may be entered on the decision of the arbitrator(s) in any court 
having jurisdiction.

                                     5

<PAGE>

    The arbitrator(s) shall apply the laws of the State of California to the 
merits of any dispute or claim, without reference to rules of conflicts of 
law, and the arbitration proceedings shall be governed by federal arbitration 
law and by the Rules, without reference to state arbitration law.

    The parties shall each pay one-half of the costs and expenses of such 
arbitration, and each party shall pay its own counsel fees and expenses.

         EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 12, WHICH DISCUSSES 
ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE 
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION 
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, 
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT 
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY 
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EXECUTIVE'S 
RELATIONSHIP WITH THE COMPANY.

    13.  WITHHOLDING.  The Company shall be entitled to withhold, or cause to 
be withheld, from payment any amount of withholding taxes required by law 
with respect to payments made to Executive in connection with his employment 
hereunder.

    14.  SEVERABILITY.  If any term or provision of this Agreement shall to any
extent be declared illegal or unenforceable by arbitrator(s) or by a duly
authorized court of competent jurisdiction, then the remainder of this Agreement
or the application of such term or provision in circumstances other than those
as to which it is so declared illegal or unenforceable, shall not be 
affected thereby, each term and provision of this Agreement shall be valid 
and enforceable to the fullest extent permitted by law and the illegal or 
unenforceable term or provision shall be deemed replaced by a term or 
provision that is valid and enforceable and that comes closest to expressing 
the intention of the invalid or unenforceable term of provision.

    15.  ENTIRE AGREEMENT.  This Agreement and the agreements referenced 
herein represent the entire agreement of the parties with respect to the 
matters set forth herein, and to the extent inconsistent with other prior 
contracts, arrangements or understandings between the parties, supersedes all 
such previous contracts, arrangements or understandings between the Company 
and Executive. The Agreement may be amended at any time only by mutual 
written agreement signed by the parties hereto.

    16.  GOVERNING LAW.  This Agreement shall be construed, interpreted, and 
governed in accordance with the laws of the State of California without 
reference to rules relating to conflict of law (other than any such rules 
directing application of California law).


                                      6

<PAGE>

    17.  HEADINGS.  The headings of sections herein are included solely for 
convenience of reference and shall not control the meaning or interpretation 
of any of the provisions of this Agreement.

    18.  COUNTERPARTS.  This Agreement may be executed by either of the 
parties hereto in counterparts, each of which shall be deemed to be an 
original, but all such counterparts shall together constitute one and the 
same instrument.

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the day and year first above written.

EXECUTIVE                                                       
                                  -----------------------------------------
                                  ERIC R. MENKE
                                  



FIRSTPAK, INC.                                                       
                                  -----------------------------------------
                                  [NAME & TITLE]






                                      7


<PAGE>


                             EMPLOYMENT AGREEMENT


    THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and 
between FirstPak, Inc. (the "Company"), Wisconsin Label Corporation 
("Subsidiary"), and Terrence R. Fulwiler ("Executive"), as of the "Effective 
Time," as defined below.

                                   RECITALS
                                       
    A.   The Company and Subsidiary have entered into an Agreement and Plan 
of Reorganization, dated as of July 17, 1997 (the "Merger Agreement"), 
pursuant to which a wholly-owned subsidiary of the Company will merge with 
Subsidiary (the "Merger") and Subsidiary will thereby become a wholly-owned 
subsidiary of the Company.

    B.   The business conducted by Subsidiary prior to the date of the Merger 
Agreement and the business to be conducted by Subsidiary after the Effective 
Time of the Merger consists of production and distribution of label and 
packaging products.

    C.   The undersigned is willing to enter into this Agreement to assure 
the Company that it will receive the full benefit of the business that it is 
acquiring pursuant to the Merger.

    D.   As a material inducement to the Company to enter in to the Merger, 
Executive agrees to enter into this Agreement.

    NOW, THEREFORE, in consideration of the covenants and agreements 
hereinafter set forth, the parties hereto agree as follows:

    1.   EFFECTIVENESS OF AGREEMENT.  This Agreement shall become effective 
only upon the "Effective Time" as such term is defined in the Merger 
Agreement (the "Effective Time").  In the event that the Merger Agreement 
terminates prior to the Effective Time, this Agreement will be of no force or 
effect.  The Company and Executive agree that this Agreement shall govern the 
terms and conditions of Executive's provision of services to the Company 
(and/or its parent and/or subsidiaries) from and after the Effective Time.

    2.   TERM OF AGREEMENT.  Unless terminated earlier in accordance with the 
provisions of Section 7, this Agreement shall commence on the Effective Time 
and shall end on the five-year anniversary of the Effective Time (the 
"Employment Period").

    3.   DUTIES AND SCOPE OF EMPLOYMENT.

         (a)  POSITION; EMPLOYMENT COMMENCEMENT DATE; DUTIES.  The Company 
shall employ Executive as the Chief Executive Officer of Subsidiary. 
Executive's duties in such position shall be substantially similar to his or 
her duties as an employee of Subsidiary immediately prior to the Effective 
Time. 



<PAGE>

         (b)  OBLIGATIONS.  During the Employment Period, Executive shall 
devote substantially all of his business efforts and time to the Company. 
Executive agrees, during the Employment Period, not to actively engage in any 
other employment, occupation or consulting activity for any direct or 
indirect remuneration, other than to the extent that such activities do not 
materially interfere with Executive's performance of his or her duties under 
this Agreement, without the prior approval of the Board of Directors of the 
Company (the "Board").

    4.   EMPLOYEE BENEFITS.  During the Employment Period, Executive shall be 
eligible to participate in (i) all employee benefit plans currently and 
hereafter maintained by the Company for senior management according to their 
terms, and (ii) such other employee benefits as are set forth in this 
Agreement. 

    5.   COMPENSATION.

         (a)  BASE SALARY.  During the Employment Period, the Company shall 
pay the Executive as compensation for his services a base salary at the 
annualized rate of $300,000 (the "Base Salary").  The Base Salary shall be 
paid periodically in accordance with normal Company payroll practices and 
subject to the usual, required withholding.  Executive's Base Salary shall be 
reviewed annually by the Board of Directors of the Company to determine 
appropriate increases, if any, to the Base Salary.  Executive understands and 
agrees that neither his job performance nor promotions, commendations, 
bonuses or the like from the Company give rise to or in any way serve as the 
basis for modification, amendment, or extension, by implication or otherwise, 
of this Agreement.

         (b)  BONUS.  During the Employment Period Executive shall be 
eligible to receive bonuses as determined by the Board or its Compensation 
Committee, provided, however, that the determination and payment of any and 
all bonuses shall be at the sole discretion of the Board.  The Company shall 
pay any and all bonuses referred to in this Agreement only at the same time 
as bonuses are normally paid to senior management of the Company.

         (c)  EQUITY COMPENSATION.  The Board is granting Executive a stock 
option to purchase _____ shares of the Company's common stock.  The stock 
option shall be subject to the terms and conditions of the 1997 Stock Plan 
(the "Stock Plan") and standard form of option agreement (the "Option 
Agreement").

    6.   EXPENSES.  The Company will pay or reimburse Executive for 
reasonable travel, entertainment or other expenses incurred by Executive in 
the furtherance of or in connection with the performance of Executive's 
duties hereunder in accordance with the Company's established policies.

    7.   TERMINATION OF EMPLOYMENT.

         (a)  EARLY TERMINATION GENERALLY.  The Company may terminate the 
Executive's employment at any time prior to the expiration of the Employment 
Period.  If the Company 

                                     2

<PAGE>

terminates the Executive's employment prior to the end the Employment Period 
without Cause (as defined below), if Executive resigns prior to the end of 
the Employment Period for Good Reason (as defined below) or if the 
Executive's employment is terminated prior to the end of the Employment 
Period due to Executive's death or total and permanent disability, the 
Executive shall be entitled to receive the payments and benefits referred to 
in Paragraph 7(c) below (subject to the terms and conditions of said 
Paragraph).

         (b)  TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION.  In the event 
the Company terminates Executive's employment with the Company for Cause (as 
defined below) or the Executive voluntarily terminates employment with the 
Company without Good Reason, then this Agreement shall terminate immediately 
and Executive shall not be entitled to any benefits or compensation hereunder 
arising after the date of such termination, and Executive shall only be 
eligible for severance benefits in accordance with the Company's established 
policies as then in effect.

              For this purpose, "Cause" shall mean (i) a material breach by 
Executive of any of his obligations under this Agreement and such breach 
shall remain uncured for 10 business days after written notice is delivered 
to Executive by the Company, (ii) any act by the Executive which constitutes 
gross misconduct of a type and kind which is materially adverse to the 
Company or Subsidiary, (iii) a violation caused directly and intentionally by 
Executive of a federal or state law, rule or regulation applicable to the 
business of the Company or Subsidiary of a type and kind that is materially 
adverse to the Company or Subsidiary, or (iv) the conviction of the Executive 
of, or entry by the Executive of a guilty or no contest plea to, the 
commission of a crime involving moral turpitude or any felony or the 
rendering of any civil judgement against Executive that materially and 
adversely affects the Company's or Subsidiary's reputation.

         (c)  TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON; DEATH; 
DISABILITY.  In the event (i) the Company terminates Executive's employment 
with the Company other than for Cause, (ii) Executive terminates employment 
for Good Reason, (iii) Executive's employment is terminated as a result of 
Executive's death, or (iv) Executive's employment is terminated as a result 
of Executive's permanent and total disability, the Company shall provide 
Executive with the following benefits:  

              (i)  SEVERANCE PAYMENTS.  Subject to Executive entering into a 
Release of Claims arising out of Executive's employment (in a form provided 
by the Company and reasonably satisfactory to Executive), Executive shall be 
entitled to Base Salary continuation payments, at the Base Salary rate in 
effect at the date of termination, for thirty (30) months from the 
Termination Date, to be paid periodically in accordance with the Company's 
normal payroll policies.

              (ii) CONTINUED EMPLOYEE BENEFITS.  The Company shall provide to
Executive, subject to Executive and his dependents electing continuation
coverage under COBRA, one hundred percent (100%) Company-paid health, dental and
vision coverage at the same level of coverage as was provided to Executive
immediately prior to the date of termination until the earlier of (x) thirty
(30) months from the Termination Date, or (y) the date that the Executive and
his dependents become covered under another employer's group health, dental and
vision plans that provide Executive and his 


                                     3

<PAGE>

dependents with comparable benefits and levels of coverage; and

              (iii) OPTION VESTING.  The Company agrees to accelerate One 
Hundred percent (100%) of the unvested portion of any stock option or 
restricted stock held by the Executive so as to become completely vested; 
provided, however, that if and to the extent that such potential vesting 
acceleration would cause a contemplated transaction that was intended to be 
accounted for as a "pooling-of-interests" transaction to become ineligible 
for such accounting treatment under generally accepted accounting principles, 
as determined by the Company's independent public accountants prior to such 
transaction, Executive's stock options shall not have their vesting so 
accelerated.

              For this purpose, "Good Reason" shall mean (i) without the 
express written consent of the Executive, a material reduction of the 
Executive's duties, authority or responsibilities, relative to the 
Executive's duties, authority or responsibilities as in effect immediately 
prior to such reduction, or the assignment to Executive of such reduced 
duties, authority or responsibilities; provided, however, that any change in 
the Executive's duties, authority or responsibilities directly resulting from 
Subsidiary becoming a subsidiary of the Company pursuant to the Merger shall 
not constitute Good Reason; (ii) a material breach of this Agreement; (iii) a 
material reduction in benefits for which Executive is eligible and in effect 
immediately prior to such reduction, other than a reduction in the benefits 
of substantially all other similarly situated employees of the Company; (iv) 
without the express written consent of the Executive, the relocation of the 
Executive to a facility or a location more than fifty (50) miles from the 
executive's then present location; and (v)  failure on the part of any 
successor of the Company to assume the Company's obligations under this 
Agreement.

    8.   NONCOMPETE AGREEMENT.  Concurrent with the execution of this 
Agreement, Executive will execute the Noncompete Agreement in the form 
attached hereto as Exhibit B (the "Noncompete Agreement").

    9.   EXCISE TAX PAYMENTS. 

         (a)  In the event that the severance and other benefits provided for 
in this Agreement or otherwise payable to the Executive (i) constitute 
"parachute payments" within the meaning of Section 280G of the Internal 
Revenue Code of 1986, as amended (the "Code") and (ii) but for this Section 
9, would be subject to the excise tax imposed by Section 4999 of the Code, 
then the Executive's severance benefits under Section 7(c) shall be either

              (1)  delivered in full, or

              (2)  delivered as to such lesser extent which would result in no
                   portion of such severance benefits being subject to excise
                   tax under Section 4999 of the Code,


                                     4

<PAGE>

whichever of the foregoing amounts, taking into account the applicable 
federal, state and local income taxes and the excise tax imposed by Section 
4999, results in the receipt by the Executive on an after-tax basis, of the 
greatest amount of severance benefits, notwithstanding that all or some 
portion of such severance benefits may be taxable under Section 4999 of the 
Code.  Unless the Company and the Executive otherwise agree in writing, any 
determination required under this Section 9 shall be made in writing by the 
Company's Accountants immediately prior to Change of Control, whose 
determination shall be conclusive and binding upon the Executive and the 
Company for all purposes.  For purposes of making the calculations required 
by this Section 9, the Accountants may make reasonable assumptions and 
approximations concerning applicable taxes and may rely on reasonable, good 
faith interpretations concerning the application of Sections 280G and 4999 of 
the Code.  The Company and the Executive shall furnish to the Accountants 
such information and documents as the Accountants may reasonably request in 
order to make a determination under this Section.  The Company shall bear all 
costs the Accountants may reasonably incur in connection with any 
calculations contemplated by this Section 9.

    10.  ASSIGNMENT.  Executive's rights and obligations under this Agreement 
shall not be assignable by Executive.  The Company's rights and obligations 
under this Agreement shall not be assignable by the Company except as 
incident to the transfer, by merger, liquidation, or otherwise, of all or 
substantially all of the business of the Company or Subsidiary provided, 
however, that any such transfer shall not affect the Company's obligations 
under the 1997 Stock Plan.

    11.  NOTICES.  Any notice required or permitted under this Agreement 
shall be given in writing and shall be deemed to have been effectively made 
or given if personally delivered, or if sent by facsimile, or mailed or sent 
via Federal Express to the other party at its address set forth below in this 
Section 11, or at such other address as such party may designate by written 
notice to the other party hereto.  Any effective notice hereunder shall be 
deemed given on the date personally delivered or on the date sent by 
facsimile or deposited in the United States mail (sent by certified mail, 
return receipt requested), as the case may be, at the following addresses:

         (i)  If to the Company:

              FirstPak, Inc.
              114 Sansome Street, Suite 1000
              San Francisco, CA  94104
              ATTN: Chairman of the Board of Directors
              Telephone No.:  (415) 362-9800
              Facsimile No.:  (415) 362-5927


                                     5

<PAGE>

         (ii) If to Executive:

              Terrence R. Fulwiler
              Wisconsin Label Corporation
              1102 Jefferson Street
              Algoma, Wisconsin  54201
              Telephone No.:  (414) 487-3424 Ext. 109
              Facsimile No.:  (414) 487-7092

    12.  ARBITRATION.  The parties hereto agree that any dispute or 
controversy arising out of, relating to, or in connection with this 
Agreement, or the interpretation, validity, construction, performance, 
breach, or termination thereof, shall be finally settled by binding 
arbitration to be held in Santa Clara County, California under the Employment 
Dispute Resolution Rules of the American Arbitration Association as then in 
effect (the "Rules").  The arbitrator(s) may grant injunctions or other 
relief in such dispute or controversy.  The decision of the arbitrator(s) 
shall be final, conclusive and binding on the parties to the arbitration, and 
judgment may be entered on the decision of the arbitrator(s) in any court 
having jurisdiction.

    The arbitrator(s) shall apply the laws of the State of Wisconsin to the 
merits of any dispute or claim, without reference to rules of conflicts of 
law, and the arbitration proceedings shall be governed by federal arbitration 
law and by the Rules, without reference to state arbitration law.

    The parties shall each pay one-half of the costs and expenses of such 
arbitration, and each party shall pay its own counsel fees and expenses.

         EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 12, WHICH DISCUSSES 
ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE 
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION 
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, 
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT 
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY 
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EXECUTIVE'S 
RELATIONSHIP WITH THE COMPANY.

    13.  WITHHOLDING.  The Company shall be entitled to withhold, or cause to 
be withheld, from payment any amount of withholding taxes required by law 
with respect to payments made to Executive in connection with his employment 
hereunder.

    14.  SEVERABILITY.  If any term or provision of this Agreement shall to any
extent be declared illegal or unenforceable by arbitrator(s) or by a duly
authorized court of competent jurisdiction, then the remainder of this Agreement
or the application of such term or provision in circumstances other than those
as to which it is so declared illegal or unenforceable, shall not be 


                                     6

<PAGE>

affected thereby, each term and provision of this Agreement shall be valid 
and enforceable to the fullest extent permitted by law and the illegal or 
unenforceable term or provision shall be deemed replaced by a term or 
provision that is valid and enforceable and that comes closest to expressing 
the intention of the invalid or unenforceable term of provision.

    15.  ENTIRE AGREEMENT.  This Agreement and the agreements referenced 
herein represent the entire agreement of the parties with respect to the 
matters set forth herein, and to the extent inconsistent with other prior 
contracts, arrangements or understandings between the parties, supersedes all 
such previous contracts, arrangements or understandings between the Company 
and Executive. The Agreement may be amended at any time only by mutual 
written agreement signed by the parties hereto.

    16.  GOVERNING LAW.  This Agreement shall be construed, interpreted, and 
governed in accordance with the laws of the State of Wisconsin without 
reference to rules relating to conflict of law (other than any such rules 
directing application of Wisconsin law).

    17.  HEADINGS.  The headings of sections herein are included solely for 
convenience of reference and shall not control the meaning or interpretation 
of any of the provisions of this Agreement.

    18.  COUNTERPARTS.  This Agreement may be executed by either of the 
parties hereto in counterparts, each of which shall be deemed to be an 
original, but all such counterparts shall together constitute one and the 
same instrument.

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the day and year first above written.

EXECUTIVE                                                       
                                  -----------------------------------------
                                  Terrence R. Fulwiler
                                  



FIRSTPAK, INC.                                                       
                                  -----------------------------------------
                                  [NAME & TITLE]



WISCONSIN LABEL CORPORATION                                     
                                  -----------------------------------------
                                  [NAME & TITLE]




                                      7


<PAGE>


                             EMPLOYMENT AGREEMENT


    THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and 
between FirstPak, Inc. (the "Company"), St. Louis Lithographing Company 
("Subsidiary"), and L. Ben Kraft ("Executive"), as of the "Effective Time," 
as defined below.

                                   RECITALS
                                       
    A.   The Company and Subsidiary have entered into an Agreement and Plan 
of Reorganization, dated as of July 17, 1997 (the "Merger Agreement"), 
pursuant to which a wholly-owned subsidiary of the Company will merge with 
Subsidiary (the "Merger") and Subsidiary will thereby become a wholly-owned 
subsidiary of the Company.

    B.   The business conducted by Subsidiary prior to the date of the Merger 
Agreement and the business to be conducted by Subsidiary after the Effective 
Time of the Merger consists of production and distribution of label and 
packaging products.

    C.   The undersigned is willing to enter into this Agreement to assure 
the Company that it will receive the full benefit of the business that it is 
acquiring pursuant to the Merger.

    D.   As a material inducement to the Company to enter in to the Merger, 
Executive agrees to enter into this Agreement.

    NOW, THEREFORE, in consideration of the covenants and agreements 
hereinafter set forth, the parties hereto agree as follows:

    1.   EFFECTIVENESS OF AGREEMENT.  This Agreement shall become effective 
only upon the "Effective Time" as such term is defined in the Merger 
Agreement (the "Effective Time").  In the event that the Merger Agreement 
terminates prior to the Effective Time, this Agreement will be of no force or 
effect.  The Company and Executive agree that this Agreement shall govern the 
terms and conditions of Executive's provision of services to the Company 
(and/or its parent and/or subsidiaries) from and after the Effective Time.

    2.   TERM OF AGREEMENT.  Unless terminated earlier in accordance with the 
provisions of Section 7, this Agreement shall commence on the Effective Time 
and shall end on the five-year anniversary of the Effective Time (the 
"Employment Period").

    3.   DUTIES AND SCOPE OF EMPLOYMENT.

         (a)  POSITION; EMPLOYMENT COMMENCEMENT DATE; DUTIES.  The Company 
shall employ Executive as the President and Chief Executive Officer of 
Subsidiary.  Executive's duties in such position shall be substantially 
similar to his or her duties as an employee of Subsidiary immediately prior 
to the Effective Time. 



<PAGE>

         (b)  OBLIGATIONS.  During the Employment Period, Executive shall 
devote substantially all of his business efforts and time to the Company. 
Executive agrees, during the Employment Period, not to actively engage in any 
other employment, occupation or consulting activity for any direct or 
indirect remuneration, other than to the extent that such activities do not 
materially interfere with Executive's performance of his or her duties under 
this Agreement, without the prior approval of the Board of Directors of the 
Company (the "Board").

         (c)  BOARD MEMBERSHIP.  If Executive is serving as a member of the 
Board on the date of termination of the Employment Period, he shall tender to 
the Board his resignation from the Board effective as of such date.  The 
Board shall not be obligated to accept such resignation.

    4.   EMPLOYEE BENEFITS.  During the Employment Period, Executive shall be 
eligible to participate in (i) all employee benefit plans currently and 
hereafter maintained by the Company for senior management according to their 
terms, and (ii) such other employee benefits as are set forth in this 
Agreement. 

    5.   COMPENSATION.

         (a)  BASE SALARY.  During the Employment Period, the Company shall 
pay the Executive as compensation for his services a base salary at the 
annualized rate of $150,000 (the "Base Salary").  The Base Salary shall be 
paid periodically in accordance with normal Company payroll practices and 
subject to the usual, required withholding.  Executive's Base Salary shall be 
reviewed annually by the Board of Directors of the Company to determine 
appropriate increases, if any, to the Base Salary.  Executive understands and 
agrees that neither his job performance nor promotions, commendations, 
bonuses or the like from the Company give rise to or in any way serve as the 
basis for modification, amendment, or extension, by implication or otherwise, 
of this Agreement.

         (b)  BONUS.  During the Employment Period Executive shall be 
eligible to receive bonuses as determined by the Board or its Compensation 
Committee, provided, however, that the determination and payment of any and 
all bonuses shall be at the sole discretion of the Board.  The Company shall 
pay any and all bonuses referred to in this Agreement only at the same time 
as bonuses are normally paid to senior management of the Company.

         (c)  EQUITY COMPENSATION.  The Board is granting Executive a stock 
option to purchase _____ shares of the Company's common stock.  The stock 
option shall be subject to the terms and conditions of the 1997 Stock Plan 
(the "Stock Plan") and standard form of option agreement (the "Option 
Agreement").

    6.   EXPENSES.  The Company will pay or reimburse Executive for 
reasonable travel, entertainment or other expenses incurred by Executive in 
the furtherance of or in connection with the performance of Executive's 
duties hereunder in accordance with the Company's established policies.


                                       2

<PAGE>

    7.   TERMINATION OF EMPLOYMENT.

         (a)  EARLY TERMINATION GENERALLY.  The Company may terminate the 
Executive's employment at any time prior to the expiration of the Employment 
Period.  If the Company terminates the Executive's employment prior to the 
end the Employment Period without Cause (as defined below), if Executive 
resigns prior to the end of the Employment Period for Good Reason (as defined 
below) or if the Executive's employment is terminated prior to the end of the 
Employment Period due to Executive's death or total and permanent disability, 
the Executive shall be entitled to receive the payments and benefits referred 
to in Paragraph 7(c) below (subject to the terms and conditions of said 
Paragraph).

         (b)  TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION.  In the event 
the Company terminates Executive's employment with the Company for Cause (as 
defined below) or the Executive voluntarily terminates employment with the 
Company without Good Reason, then this Agreement shall terminate immediately 
and Executive shall not be entitled to any benefits or compensation hereunder 
arising after the date of such termination, and Executive shall only be 
eligible for severance benefits in accordance with the Company's established 
policies as then in effect.

              For this purpose, "Cause" shall mean (i) a material breach by 
Executive of any of his obligations under this Agreement and such breach 
shall remain uncured for 10 business days after written notice is delivered 
to Executive by the Company, (ii) any act by the Executive which constitutes 
gross misconduct of a type and kind which is materially adverse to the 
Company or Subsidiary, (iii) a violation caused directly and intentionally by 
Executive of a federal or state law, rule or regulation applicable to the 
business of the Company or Subsidiary of a type and kind that is materially 
adverse to the Company or Subsidiary, or (iv) the conviction of the Executive 
of, or entry by the Executive of a guilty or no contest plea to, the 
commission of a crime involving moral turpitude or any felony or the 
rendering of any civil judgement against Executive that materially and 
adversely affects the Company's or Subsidiary's reputation.

         (c)  TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON; DEATH; 
DISABILITY.  In the event (i) the Company terminates Executive's employment 
with the Company other than for Cause, (ii) Executive terminates employment 
for Good Reason, (iii) Executive's employment is terminated as a result of 
Executive's death, or (iv) Executive's employment is terminated as a result 
of Executive's permanent and total disability, the Company shall provide 
Executive with the following benefits:  

              (i)  SEVERANCE PAYMENTS.  Subject to Executive entering into a 
Release of Claims arising out of Executive's employment (in a form provided 
by the Company and reasonably satisfactory to Executive), Executive shall be 
entitled to Base Salary continuation payments, at the Base Salary rate in 
effect at the date of termination, for thirty (30) months from the 
Termination Date, to be paid periodically in accordance with the Company's 
normal payroll policies.


                                       3

<PAGE>

              (ii)  CONTINUED EMPLOYEE BENEFITS.  The Company shall provide 
to Executive, subject to Executive and his dependents electing continuation 
coverage under COBRA, one hundred percent (100%) Company-paid health, dental 
and vision coverage at the same level of coverage as was provided to 
Executive immediately prior to the date of termination until the earlier of 
(x) thirty (30) months from the Termination Date, or (y) the date that the 
Executive and his dependents become covered under another employer's group 
health, dental and vision plans that provide Executive and his dependents 
with comparable benefits and levels of coverage; and 

              (iii) OPTION VESTING.  The Company agrees to accelerate One 
Hundred percent (100%) of the unvested portion of any stock option or 
restricted stock held by the Executive so as to become completely vested; 
provided, however, that if and to the extent that such potential vesting 
acceleration would cause a contemplated transaction that was intended to be 
accounted for as a "pooling-of-interests" transaction to become ineligible 
for such accounting treatment under generally accepted accounting principles, 
as determined by the Company's independent public accountants prior to such 
transaction, Executive's stock options shall not have their vesting so 
accelerated.

              For this purpose, "Good Reason" shall mean (i) without the 
express written consent of the Executive, a material reduction of the 
Executive's duties, authority or responsibilities, relative to the 
Executive's duties, authority or responsibilities as in effect immediately 
prior to such reduction, or the assignment to Executive of such reduced 
duties, authority or responsibilities; provided, however, that any change in 
the Executive's duties, authority or responsibilities directly resulting from 
Subsidiary becoming a subsidiary of the Company pursuant to the Merger shall 
not constitute Good Reason; (ii) a material breach of this Agreement; (iii) a 
material reduction in benefits for which Executive is eligible and in effect 
immediately prior to such reduction, other than a reduction in the benefits 
of substantially all other similarly situated employees of the Company; (iv) 
without the express written consent of the Executive, the relocation of the 
Executive to a facility or a location more than fifty (50) miles from the 
executive's then present location; and (v) failure on the part of any 
successor of the Company to assume the Company's obligations under this 
Agreement.

    8.   NONCOMPETE AGREEMENT.  Concurrent with the execution of this 
Agreement, Executive will execute the Noncompete Agreement in the form 
attached hereto as Exhibit B (the "Noncompete Agreement").

    9.   EXCISE TAX PAYMENTS. 

         (a)  In the event that the severance and other benefits provided for 
in this Agreement or otherwise payable to the Executive (i) constitute 
"parachute payments" within the meaning of Section 280G of the Internal 
Revenue Code of 1986, as amended (the "Code") and (ii) but for this Section 
9, would be subject to the excise tax imposed by Section 4999 of the Code, 
then the Executive's severance benefits under Section 7(c) shall be either


                                       4

<PAGE>

              (1)  delivered in full, or

              (2)  delivered as to such lesser extent which would result in no
                   portion of such severance benefits being subject to excise
                   tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable 
federal, state and local income taxes and the excise tax imposed by Section 
4999, results in the receipt by the Executive on an after-tax basis, of the 
greatest amount of severance benefits, notwithstanding that all or some 
portion of such severance benefits may be taxable under Section 4999 of the 
Code.  Unless the Company and the Executive otherwise agree in writing, any 
determination required under this Section 9 shall be made in writing by the 
Company's Accountants immediately prior to Change of Control, whose 
determination shall be conclusive and binding upon the Executive and the 
Company for all purposes.  For purposes of making the calculations required 
by this Section 9, the Accountants may make reasonable assumptions and 
approximations concerning applicable taxes and may rely on reasonable, good 
faith interpretations concerning the application of Sections 280G and 4999 of 
the Code.  The Company and the Executive shall furnish to the Accountants 
such information and documents as the Accountants may reasonably request in 
order to make a determination under this Section.  The Company shall bear all 
costs the Accountants may reasonably incur in connection with any 
calculations contemplated by this Section 9.

    10.  ASSIGNMENT.  Executive's rights and obligations under this Agreement 
shall not be assignable by Executive.  The Company's rights and obligations 
under this Agreement shall not be assignable by the Company except as 
incident to the transfer, by merger, liquidation, or otherwise, of all or 
substantially all of the business of the Company or Subsidiary provided, 
however, that any such transfer shall not affect the Company's obligations 
under the 1997 Stock Plan.

    11.  NOTICES.  Any notice required or permitted under this Agreement 
shall be given in writing and shall be deemed to have been effectively made 
or given if personally delivered, or if sent by facsimile, or mailed or sent 
via Federal Express to the other party at its address set forth below in this 
Section 11, or at such other address as such party may designate by written 
notice to the other party hereto.  Any effective notice hereunder shall be 
deemed given on the date personally delivered or on the date sent by 
facsimile or deposited in the United States mail (sent by certified mail, 
return receipt requested), as the case may be, at the following addresses:

         (i)  If to the Company:

              FirstPak, Inc.
              114 Sansome Street, Suite 1000
              San Francisco, CA  94104
              ATTN: Chairman of the Board of Directors
              Telephone No.:  (415) 362-9800
              Facsimile No.:  (415) 362-5927


                                       5

<PAGE>

         (ii) If to Executive:

              L. Ben Kraft
              St. Louis Lithographing Company
              6880 Heege Road
              St. Louis, MO  63123
              Telephone No.:  (314) 352-1300 Ext. 103
              Facsimile No.:  (314) 352-4941

    12.  ARBITRATION.  The parties hereto agree that any dispute or 
controversy arising out of, relating to, or in connection with this 
Agreement, or the interpretation, validity, construction, performance, 
breach, or termination thereof, shall be finally settled by binding 
arbitration to be held in Santa Clara County, California under the Employment 
Dispute Resolution Rules of the American Arbitration Association as then in 
effect (the "Rules").  The arbitrator(s) may grant injunctions or other 
relief in such dispute or controversy.  The decision of the arbitrator(s) 
shall be final, conclusive and binding on the parties to the arbitration, and 
judgment may be entered on the decision of the arbitrator(s) in any court 
having jurisdiction.

    The arbitrator(s) shall apply the laws of the State of Missouri to the 
merits of any dispute or claim, without reference to rules of conflicts of 
law, and the arbitration proceedings shall be governed by federal arbitration 
law and by the Rules, without reference to state arbitration law.

    The parties shall each pay one-half of the costs and expenses of such 
arbitration, and each party shall pay its own counsel fees and expenses.

         EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 12, WHICH DISCUSSES 
ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE 
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION 
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, 
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT 
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY 
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EXECUTIVE'S 
RELATIONSHIP WITH THE COMPANY.

    13.  WITHHOLDING.  The Company shall be entitled to withhold, or cause to 
be withheld, from payment any amount of withholding taxes required by law 
with respect to payments made to Executive in connection with his employment 
hereunder.

    14.  SEVERABILITY.  If any term or provision of this Agreement shall to 
any extent be declared illegal or unenforceable by arbitrator(s) or by a duly 
authorized court of competent jurisdiction, then the remainder of this 
Agreement or the application of such term or provision in circumstances other 
than those as to which it is so declared illegal or unenforceable, shall not 
be 

                                       6

<PAGE>

affected thereby, each term and provision of this Agreement shall be valid 
and enforceable to the fullest extent permitted by law and the illegal or 
unenforceable term or provision shall be deemed replaced by a term or 
provision that is valid and enforceable and that comes closest to expressing 
the intention of the invalid or unenforceable term of provision.

    15.  ENTIRE AGREEMENT.  This Agreement and the agreements referenced 
herein represent the entire agreement of the parties with respect to the 
matters set forth herein, and to the extent inconsistent with other prior 
contracts, arrangements or understandings between the parties, supersedes all 
such previous contracts, arrangements or understandings between the Company 
and Executive. The Agreement may be amended at any time only by mutual 
written agreement signed by the parties hereto.

    16.  GOVERNING LAW.  This Agreement shall be construed, interpreted, and 
governed in accordance with the laws of the State of Missouri without 
reference to rules relating to conflict of law (other than any such rules 
directing application of Missouri law).

    17.  HEADINGS.  The headings of sections herein are included solely for 
convenience of reference and shall not control the meaning or interpretation 
of any of the provisions of this Agreement.

    18.  COUNTERPARTS.  This Agreement may be executed by either of the 
parties hereto in counterparts, each of which shall be deemed to be an 
original, but all such counterparts shall together constitute one and the 
same instrument.

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the day and year first above written.

EXECUTIVE                                                       
                                  -----------------------------------------
                                  L. Ben Kraft
                                  


FIRSTPAK, INC.                                                       
                                  -----------------------------------------
                                  [NAME & TITLE]



ST. LOUIS LITHOGRAPHING COMPANY                                 
                                  -----------------------------------------
                                  [NAME & TITLE]



                                   7

<PAGE>


                             EMPLOYMENT AGREEMENT


    THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and 
between FirstPak, Inc. (the "Company"), Blake Printing & Publishing 
("Subsidiary"), and Richard C. Blake ("Executive"), as of the "Effective 
Time," as defined below.

                                   RECITALS
                                       
    A.   The Company and Subsidiary have entered into an Agreement and Plan 
of Reorganization, dated as of July 17, 1997 (the "Merger Agreement"), 
pursuant to which a wholly-owned subsidiary of the Company will merge with 
Subsidiary (the "Merger") and Subsidiary will thereby become a wholly-owned 
subsidiary of the Company.

    B.   The business conducted by Subsidiary prior to the date of the Merger 
Agreement and the business to be conducted by Subsidiary after the Effective 
Time of the Merger consists of production and distribution of label and 
packaging products.

    C.   The undersigned is willing to enter into this Agreement to assure 
the Company that it will receive the full benefit of the business that it is 
acquiring pursuant to the Merger.

    D.   As a material inducement to the Company to enter in to the Merger, 
Executive agrees to enter into this Agreement.

    NOW, THEREFORE, in consideration of the covenants and agreements 
hereinafter set forth, the parties hereto agree as follows:

    1.   EFFECTIVENESS OF AGREEMENT.  This Agreement shall become effective 
only upon the "Effective Time" as such term is defined in the Merger 
Agreement (the "Effective Time").  In the event that the Merger Agreement 
terminates prior to the Effective Time, this Agreement will be of no force or 
effect.  The Company and Executive agree that this Agreement shall govern the 
terms and conditions of Executive's provision of services to the Company 
(and/or its parent and/or subsidiaries) from and after the Effective Time.

    2.   TERM OF AGREEMENT.  Unless terminated earlier in accordance with the 
provisions of Section 7, this Agreement shall commence on the Effective Time 
and shall end on the five-year anniversary of the Effective Time (the 
"Employment Period").

    3.   DUTIES AND SCOPE OF EMPLOYMENT.

         (a)  POSITION; EMPLOYMENT COMMENCEMENT DATE; DUTIES.  The Company 
shall employ Executive as the President of Subsidiary.  Executive's duties in 
such position shall be substantially similar to his or her duties as an 
employee of Subsidiary immediately prior to the Effective Time. 


<PAGE>

         (b)  OBLIGATIONS.  During the Employment Period, Executive shall 
devote substantially all of his business efforts and time to the Company. 
Executive agrees, during the Employment Period, not to actively engage in any 
other employment, occupation or consulting activity for any direct or 
indirect remuneration, other than to the extent that such activities do not 
materially interfere with Executive's performance of his or her duties under 
this Agreement, without the prior approval of the Board of Directors of the 
Company (the "Board").

         (c)  BOARD MEMBERSHIP.  If Executive is serving as a member of the 
Board on the date of termination of the Employment Period, he shall tender to 
the Board his resignation from the Board effective as of such date.  The 
Board shall not be obligated to accept such resignation.

    4.   EMPLOYEE BENEFITS.  During the Employment Period, Executive shall be 
eligible to participate in (i) all employee benefit plans currently and 
hereafter maintained by the Company for senior management according to their 
terms, and (ii) such other employee benefits as are set forth in this 
Agreement. 

    5.   COMPENSATION.

         (a)  BASE SALARY.  During the Employment Period, the Company shall 
pay the Executive as compensation for his services a base salary at the 
annualized rate of $200,000 (the "Base Salary").  The Base Salary shall be 
paid periodically in accordance with normal Company payroll practices and 
subject to the usual, required withholding.  Executive's Base Salary shall be 
reviewed annually by the Board of Directors of the Company to determine 
appropriate increases, if any, to the Base Salary.  Executive understands and 
agrees that neither his job performance nor promotions, commendations, 
bonuses or the like from the Company give rise to or in any way serve as the 
basis for modification, amendment, or extension, by implication or otherwise, 
of this Agreement.

         (b)  BONUS.  During the Employment Period Executive shall be 
eligible to receive bonuses as determined by the Board or its Compensation 
Committee, provided, however, that the determination and payment of any and 
all bonuses shall be at the sole discretion of the Board.  The Company shall 
pay any and all bonuses referred to in this Agreement only at the same time 
as bonuses are normally paid to senior management of the Company.

         (c)  EQUITY COMPENSATION.  The Board is granting Executive a stock 
option to purchase _____ shares of the Company's common stock.  The stock 
option shall be subject to the terms and conditions of the 1997 Stock Plan 
(the "Stock Plan") and standard form of option agreement (the "Option 
Agreement").

    6.   EXPENSES.  The Company will pay or reimburse Executive for 
reasonable travel, entertainment or other expenses incurred by Executive in 
the furtherance of or in connection with the performance of Executive's 
duties hereunder in accordance with the Company's established policies.


                                     2

<PAGE>

    7.   TERMINATION OF EMPLOYMENT.

         (a)  EARLY TERMINATION GENERALLY.  The Company may terminate the 
Executive's employment at any time prior to the expiration of the Employment 
Period.  If the Company terminates the Executive's employment prior to the 
end the Employment Period without Cause (as defined below), if Executive 
resigns prior to the end of the Employment Period for Good Reason (as defined 
below) or if the Executive's employment is terminated prior to the end of the 
Employment Period due to Executive's death or total and permanent disability, 
the Executive shall be entitled to receive the payments and benefits referred 
to in Paragraph 7(c) below (subject to the terms and conditions of said 
Paragraph).

         (b)  TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION.  In the event 
the Company terminates Executive's employment with the Company for Cause (as 
defined below) or the Executive voluntarily terminates employment with the 
Company without Good Reason, then this Agreement shall terminate immediately 
and Executive shall not be entitled to any benefits or compensation hereunder 
arising after the date of such termination, and Executive shall only be 
eligible for severance benefits in accordance with the Company's established 
policies as then in effect.

              For this purpose, "Cause" shall mean (i) a material breach by 
Executive of any of his obligations under this Agreement and such breach 
shall remain uncured for 10 business days after written notice is delivered 
to Executive by the Company, (ii) any act by the Executive which constitutes 
gross misconduct of a type and kind which is materially adverse to the 
Company or Subsidiary, (iii) a violation caused directly and intentionally by 
Executive of a federal or state law, rule or regulation applicable to the 
business of the Company or Subsidiary of a type and kind that is materially 
adverse to the Company or Subsidiary, or (iv) the conviction of the Executive 
of, or entry by the Executive of a guilty or no contest plea to, the 
commission of a crime involving moral turpitude or any felony or the 
rendering of any civil judgement against Executive that materially and 
adversely affects the Company's or Subsidiary's reputation.

         (c)  TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON; DEATH; 
DISABILITY.  In the event (i) the Company terminates Executive's employment 
with the Company other than for Cause, (ii) Executive terminates employment 
for Good Reason, (iii) Executive's employment is terminated as a result of 
Executive's death, or (iv) Executive's employment is terminated as a result 
of Executive's permanent and total disability, the Company shall provide 
Executive with the following benefits:  

              (i)  SEVERANCE PAYMENTS.  Subject to Executive entering into a 
Release of Claims arising out of Executive's employment (in a form provided 
by the Company and reasonably satisfactory to Executive), Executive shall be 
entitled to Base Salary continuation payments, at the Base Salary rate in 
effect at the date of termination, for thirty (30) months from the 
Termination Date, to be paid periodically in accordance with the Company's 
normal payroll policies.


                                     3

<PAGE>

              (ii)   CONTINUED EMPLOYEE BENEFITS.  The Company shall provide 
to Executive, subject to Executive and his dependents electing continuation 
coverage under COBRA, one hundred percent (100%) Company-paid health, dental 
and vision coverage at the same level of coverage as was provided to 
Executive immediately prior to the date of termination until the earlier of 
(x) thirty (30) months from the Termination Date, or (y) the date that the 
Executive and his dependents become covered under another employer's group 
health, dental and vision plans that provide Executive and his dependents 
with comparable benefits and levels of coverage; and 

              (iii)  OPTION VESTING.  The Company agrees to accelerate One 
Hundred percent (100%) of the unvested portion of any stock option or 
restricted stock held by the Executive so as to become completely vested; 
provided, however, that if and to the extent that such potential vesting 
acceleration would cause a contemplated transaction that was intended to be 
accounted for as a "pooling-of-interests" transaction to become ineligible 
for such accounting treatment under generally accepted accounting principles, 
as determined by the Company's independent public accountants prior to such 
transaction, Executive's stock options shall not have their vesting so 
accelerated.

              For this purpose, "Good Reason" shall mean (i) without the 
express written consent of the Executive, a material reduction of the 
Executive's duties, authority or responsibilities, relative to the 
Executive's duties, authority or responsibilities as in effect immediately 
prior to such reduction, or the assignment to Executive of such reduced 
duties, authority or responsibilities; provided, however, that any change in 
the Executive's duties, authority or responsibilities directly resulting from 
Subsidiary becoming a subsidiary of the Company pursuant to the Merger shall 
not constitute Good Reason; (ii) a material breach of this Agreement; (iii) a 
material reduction in benefits for which Executive is eligible and in effect 
immediately prior to such reduction, other than a reduction in the benefits 
of substantially all other similarly situated employees of the Company; (iv) 
without the express written consent of the Executive, the relocation of the 
Executive to a facility or a location more than fifty (50) miles from the 
executive's then present location; and (v) failure on the part of any 
successor of the Company to assume the Company's obligations under this 
Agreement.

    8.   NONCOMPETE AGREEMENT.  Concurrent with the execution of this 
Agreement, Executive will execute the Noncompete Agreement in the form 
attached hereto as Exhibit B (the "Noncompete Agreement").

    9.   EXCISE TAX PAYMENTS. 

         (a)  In the event that the severance and other benefits provided for 
in this Agreement or otherwise payable to the Executive (i) constitute 
"parachute payments" within the meaning of Section 280G of the Internal 
Revenue Code of 1986, as amended (the "Code") and (ii) but for this Section 
9, would be subject to the excise tax imposed by Section 4999 of the Code, 
then the Executive's severance benefits under Section 7(c) shall be either


                                     4

<PAGE>

              (1)  delivered in full, or

              (2)  delivered as to such lesser extent which would result in no
                   portion of such severance benefits being subject to excise
                   tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable 
federal, state and local income taxes and the excise tax imposed by Section 
4999, results in the receipt by the Executive on an after-tax basis, of the 
greatest amount of severance benefits, notwithstanding that all or some 
portion of such severance benefits may be taxable under Section 4999 of the 
Code.  Unless the Company and the Executive otherwise agree in writing, any 
determination required under this Section 9 shall be made in writing by the 
Company's Accountants immediately prior to Change of Control, whose 
determination shall be conclusive and binding upon the Executive and the 
Company for all purposes.  For purposes of making the calculations required 
by this Section 9, the Accountants may make reasonable assumptions and 
approximations concerning applicable taxes and may rely on reasonable, good 
faith interpretations concerning the application of Sections 280G and 4999 of 
the Code.  The Company and the Executive shall furnish to the Accountants 
such information and documents as the Accountants may reasonably request in 
order to make a determination under this Section.  The Company shall bear all 
costs the Accountants may reasonably incur in connection with any 
calculations contemplated by this Section 9.

    10.  ASSIGNMENT.  Executive's rights and obligations under this Agreement 
shall not be assignable by Executive.  The Company's rights and obligations 
under this Agreement shall not be assignable by the Company except as 
incident to the transfer, by merger, liquidation, or otherwise, of all or 
substantially all of the business of the Company or Subsidiary provided, 
however, that any such transfer shall not affect the Company's obligations 
under the 1997 Stock Plan.

    11.  NOTICES.  Any notice required or permitted under this Agreement 
shall be given in writing and shall be deemed to have been effectively made 
or given if personally delivered, or if sent by facsimile, or mailed or sent 
via Federal Express to the other party at its address set forth below in this 
Section 11, or at such other address as such party may designate by written 
notice to the other party hereto.  Any effective notice hereunder shall be 
deemed given on the date personally delivered or on the date sent by 
facsimile or deposited in the United States mail (sent by certified mail, 
return receipt requested), as the case may be, at the following addresses:

         (i)  If to the Company:

              FirstPak, Inc.
              114 Sansome Street, Suite 1000
              San Francisco, CA  94104
              ATTN: Chairman of the Board of Directors
              Telephone No.:  (415) 362-9800
              Facsimile No.:  (415) 362-5927


                                     5

<PAGE>

         (ii) If to Executive:

              Richard C. Blake
              Blake Printing & Publishing
              222 Beebee Street
              San Luis Obispo, CA  93401
              Telephone No.:  (805) 543-6903 Ext. 1700
              Facsimile No.:  (805)  543-2982

    12.  ARBITRATION.  The parties hereto agree that any dispute or 
controversy arising out of, relating to, or in connection with this 
Agreement, or the interpretation, validity, construction, performance, 
breach, or termination thereof, shall be finally settled by binding 
arbitration to be held in Santa Clara County, California under the Employment 
Dispute Resolution Rules of the American Arbitration Association as then in 
effect (the "Rules").  The arbitrator(s) may grant injunctions or other 
relief in such dispute or controversy.  The decision of the arbitrator(s) 
shall be final, conclusive and binding on the parties to the arbitration, and 
judgment may be entered on the decision of the arbitrator(s) in any court 
having jurisdiction.

    The arbitrator(s) shall apply the laws of the State of California to the 
merits of any dispute or claim, without reference to rules of conflicts of 
law, and the arbitration proceedings shall be governed by federal arbitration 
law and by the Rules, without reference to state arbitration law.

    The parties shall each pay one-half of the costs and expenses of such 
arbitration, and each party shall pay its own counsel fees and expenses.

         EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 12, WHICH DISCUSSES 
ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE 
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION 
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, 
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT 
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY 
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EXECUTIVE'S 
RELATIONSHIP WITH THE COMPANY.

    13.  WITHHOLDING.  The Company shall be entitled to withhold, or cause to 
be withheld, from payment any amount of withholding taxes required by law 
with respect to payments made to Executive in connection with his employment 
hereunder.

    14.  SEVERABILITY.  If any term or provision of this Agreement shall to any
extent be declared illegal or unenforceable by arbitrator(s) or by a duly
authorized court of competent jurisdiction, then the remainder of this Agreement
or the application of such term or provision in circumstances other than those
as to which it is so declared illegal or unenforceable, shall not be 


                                     6

<PAGE>

affected thereby, each term and provision of this Agreement shall be valid 
and enforceable to the fullest extent permitted by law and the illegal or 
unenforceable term or provision shall be deemed replaced by a term or 
provision that is valid and enforceable and that comes closest to expressing 
the intention of the invalid or unenforceable term of provision.

    15.  ENTIRE AGREEMENT.  This Agreement and the agreements referenced 
herein represent the entire agreement of the parties with respect to the 
matters set forth herein, and to the extent inconsistent with other prior 
contracts, arrangements or understandings between the parties, supersedes all 
such previous contracts, arrangements or understandings between the Company 
and Executive. The Agreement may be amended at any time only by mutual 
written agreement signed by the parties hereto.

    16.  GOVERNING LAW.  This Agreement shall be construed, interpreted, and 
governed in accordance with the laws of the State of California without 
reference to rules relating to conflict of law (other than any such rules 
directing application of California law).

    17.  HEADINGS.  The headings of sections herein are included solely for 
convenience of reference and shall not control the meaning or interpretation 
of any of the provisions of this Agreement.

    18.  COUNTERPARTS.  This Agreement may be executed by either of the 
parties hereto in counterparts, each of which shall be deemed to be an 
original, but all such counterparts shall together constitute one and the 
same instrument.

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the day and year first above written.

EXECUTIVE                                                       
                                  -------------------------------------------
                                  Richard C. Blake
                                  



FIRSTPAK, INC.                                                       
                                  -------------------------------------------
                                  [NAME & TITLE]



BLAKE PRINTING & PUBLISHING                                     
                                  -------------------------------------------
                                  [NAME & TITLE]



                                       7

<PAGE>


                             EMPLOYMENT AGREEMENT


    THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and 
between FirstPak, Inc. (the "Company"), CalOptical Holding Corporation 
("Subsidiary"), and Larry Nathanson ("Executive"), as of the "Effective 
Time," as defined below.

                                   RECITALS
                                       
    A.   The Company and Subsidiary have entered into an Agreement and Plan 
of Reorganization, dated as of July 17, 1997 (the "Merger Agreement"), 
pursuant to which a wholly-owned subsidiary of the Company will merge with 
Subsidiary (the "Merger") and Subsidiary will thereby become a wholly-owned 
subsidiary of the Company.

    B.   The business conducted by Subsidiary prior to the date of the Merger 
Agreement and the business to be conducted by Subsidiary after the Effective 
Time of the Merger consists of production and distribution of label and 
packaging products.

    C.   The undersigned is willing to enter into this Agreement to assure 
the Company that it will receive the full benefit of the business that it is 
acquiring pursuant to the Merger.

    D.   As a material inducement to the Company to enter in to the Merger, 
Executive agrees to enter into this Agreement.

    NOW, THEREFORE, in consideration of the covenants and agreements 
hereinafter set forth, the parties hereto agree as follows:

    1.   EFFECTIVENESS OF AGREEMENT.  This Agreement shall become effective 
only upon the "Effective Time" as such term is defined in the Merger 
Agreement (the "Effective Time").  In the event that the Merger Agreement 
terminates prior to the Effective Time, this Agreement will be of no force or 
effect.  The Company and Executive agree that this Agreement shall govern the 
terms and conditions of Executive's provision of services to the Company 
(and/or its parent and/or subsidiaries) from and after the Effective Time.

    2.   TERM OF AGREEMENT.  Unless terminated earlier in accordance with the 
provisions of Section 7, this Agreement shall commence on the Effective Time 
and shall end on the five-year anniversary of the Effective Time (the 
"Employment Period").

    3.   DUTIES AND SCOPE OF EMPLOYMENT.

         (a)  POSITION; EMPLOYMENT COMMENCEMENT DATE; DUTIES.  The Company 
shall employ Executive as the President of Subsidiary.  Executive's duties in 
such position shall be substantially similar to his or her duties as an 
employee of Subsidiary immediately prior to the Effective Time. 



<PAGE>

         (b)  OBLIGATIONS.  During the Employment Period, Executive shall 
devote substantially all of his business efforts and time to the Company. 
Executive agrees, during the Employment Period, not to actively engage in any 
other employment, occupation or consulting activity for any direct or 
indirect remuneration, other than to the extent that such activities do not 
materially interfere with Executive's performance of his or her duties under 
this Agreement, without the prior approval of the Board of Directors of the 
Company (the "Board").

         (c)  BOARD MEMBERSHIP.  If Executive is serving as a member of the 
Board on the date of termination of the Employment Period, he shall tender to 
the Board his resignation from the Board effective as of such date.  The 
Board shall not be obligated to accept such resignation.

    4.   EMPLOYEE BENEFITS.  During the Employment Period, Executive shall be 
eligible to participate in (i) all employee benefit plans currently and 
hereafter maintained by the Company for senior management according to their 
terms, and (ii) such other employee benefits as are set forth in this 
Agreement. 

    5.   COMPENSATION.

         (a)  BASE SALARY.  During the Employment Period, the Company shall 
pay the Executive as compensation for his services a base salary at the 
annualized rate of $238,139 (the "Base Salary").  The Base Salary shall be 
paid periodically in accordance with normal Company payroll practices and 
subject to the usual, required withholding.  Executive's Base Salary shall be 
reviewed annually by the Board of Directors of the Company to determine 
appropriate increases, if any, to the Base Salary.  Executive understands and 
agrees that neither his job performance nor promotions, commendations, 
bonuses or the like from the Company give rise to or in any way serve as the 
basis for modification, amendment, or extension, by implication or otherwise, 
of this Agreement.

         (b)  BONUS.  During the Employment Period Executive shall be 
eligible to receive bonuses as determined by the Board or its Compensation 
Committee, provided, however, that the determination and payment of any and 
all bonuses shall be at the sole discretion of the Board.  The Company shall 
pay any and all bonuses referred to in this Agreement only at the same time 
as bonuses are normally paid to senior management of the Company.

         (c)  EQUITY COMPENSATION.  The Board is granting Executive a stock 
option to purchase _____ shares of the Company's common stock.  The stock 
option shall be subject to the terms and conditions of the 1997 Stock Plan 
(the "Stock Plan") and standard form of option agreement (the "Option 
Agreement").

    6.   EXPENSES.  The Company will pay or reimburse Executive for 
reasonable travel, entertainment or other expenses incurred by Executive in 
the furtherance of or in connection with the performance of Executive's 
duties hereunder in accordance with the Company's established policies.


                                       2

<PAGE>

    7.   TERMINATION OF EMPLOYMENT.

         (a)  EARLY TERMINATION GENERALLY.  The Company may terminate the 
Executive's employment at any time prior to the expiration of the Employment 
Period.  If the Company terminates the Executive's employment prior to the 
end the Employment Period without Cause (as defined below), if Executive 
resigns prior to the end of the Employment Period for Good Reason (as defined 
below) or if the Executive's employment is terminated prior to the end of the 
Employment Period due to Executive's death or total and permanent disability, 
the Executive shall be entitled to receive the payments and benefits referred 
to in Paragraph 7(c) below (subject to the terms and conditions of said 
Paragraph).

         (b)  TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION.  In the event 
the Company terminates Executive's employment with the Company for Cause (as 
defined below) or the Executive voluntarily terminates employment with the 
Company without Good Reason, then this Agreement shall terminate immediately 
and Executive shall not be entitled to any benefits or compensation hereunder 
arising after the date of such termination, and Executive shall only be 
eligible for severance benefits in accordance with the Company's established 
policies as then in effect.

              For this purpose, "Cause" shall mean (i) a material breach by 
Executive of any of his obligations under this Agreement and such breach 
shall remain uncured for 10 business days after written notice is delivered 
to Executive by the Company, (ii) any act by the Executive which constitutes 
gross misconduct of a type and kind which is materially adverse to the 
Company or Subsidiary, (iii) a violation caused directly and intentionally by 
Executive of a federal or state law, rule or regulation applicable to the 
business of the Company or Subsidiary of a type and kind that is materially 
adverse to the Company or Subsidiary, or (iv) the conviction of the Executive 
of, or entry by the Executive of a guilty or no contest plea to, the 
commission of a crime involving moral turpitude or any felony or the 
rendering of any civil judgement against Executive that materially and 
adversely affects the Company's or Subsidiary's reputation.

         (c)  TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON; DEATH; 
DISABILITY.  In the event (i) the Company terminates Executive's employment 
with the Company other than for Cause, (ii) Executive terminates employment 
for Good Reason, (iii) Executive's employment is terminated as a result of 
Executive's death, or (iv) Executive's employment is terminated as a result 
of Executive's permanent and total disability, the Company shall provide 
Executive with the following benefits:  

              (i)  SEVERANCE PAYMENTS.  Subject to Executive entering into a 
Release of Claims arising out of Executive's employment (in a form provided 
by the Company and reasonably satisfactory to Executive), Executive shall be 
entitled to Base Salary continuation payments, at the Base Salary rate in 
effect at the date of termination, for thirty (30) months from the 
Termination Date, to be paid periodically in accordance with the Company's 
normal payroll policies.


                                       3

<PAGE>

              (ii)   CONTINUED EMPLOYEE BENEFITS.  The Company shall provide 
to Executive, subject to Executive and his dependents electing continuation 
coverage under COBRA, one hundred percent (100%) Company-paid health, dental 
and vision coverage at the same level of coverage as was provided to 
Executive immediately prior to the date of termination until the earlier of 
(x) thirty (30) months from the Termination Date, or (y) the date that the 
Executive and his dependents become covered under another employer's group 
health, dental and vision plans that provide Executive and his dependents 
with comparable benefits and levels of coverage; and 

              (iii)  OPTION VESTING.  The Company agrees to accelerate One 
Hundred percent (100%) of the unvested portion of any stock option or 
restricted stock held by the Executive so as to become completely vested; 
provided, however, that if and to the extent that such potential vesting 
acceleration would cause a contemplated transaction that was intended to be 
accounted for as a "pooling-of-interests" transaction to become ineligible 
for such accounting treatment under generally accepted accounting principles, 
as determined by the Company's independent public accountants prior to such 
transaction, Executive's stock options shall not have their vesting so 
accelerated.

              For this purpose, "Good Reason" shall mean (i) without the 
express written consent of the Executive, a material reduction of the 
Executive's duties, authority or responsibilities, relative to the 
Executive's duties, authority or responsibilities as in effect immediately 
prior to such reduction, or the assignment to Executive of such reduced 
duties, authority or responsibilities; provided, however, that any change in 
the Executive's duties, authority or responsibilities directly resulting from 
Subsidiary becoming a subsidiary of the Company pursuant to the Merger shall 
not constitute Good Reason; (ii) a material breach of this Agreement; (iii) a 
material reduction in benefits for which Executive is eligible and in effect 
immediately prior to such reduction, other than a reduction in the benefits 
of substantially all other similarly situated employees of the Company; (iv) 
without the express written consent of the Executive, the relocation of the 
Executive to a facility or a location more than fifty (50) miles from the 
executive's then present location; and (v) failure on the part of any 
successor of the Company to assume the Company's obligations under this 
Agreement.

    8.   NONCOMPETE AGREEMENT.  Concurrent with the execution of this 
Agreement, Executive will execute the Noncompete Agreement in the form 
attached hereto as Exhibit B (the "Noncompete Agreement").

    9.   EXCISE TAX PAYMENTS. 

         (a)  In the event that the severance and other benefits provided for 
in this Agreement or otherwise payable to the Executive (i) constitute 
"parachute payments" within the meaning of Section 280G of the Internal 
Revenue Code of 1986, as amended (the "Code") and (ii) but for this Section 
9, would be subject to the excise tax imposed by Section 4999 of the Code, 
then the Executive's severance benefits under Section 7(c) shall be either


                                       4

<PAGE>

              (1)  delivered in full, or

              (2)  delivered as to such lesser extent which would result in no
                   portion of such severance benefits being subject to excise
                   tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable 
federal, state and local income taxes and the excise tax imposed by Section 
4999, results in the receipt by the Executive on an after-tax basis, of the 
greatest amount of severance benefits, notwithstanding that all or some 
portion of such severance benefits may be taxable under Section 4999 of the 
Code.  Unless the Company and the Executive otherwise agree in writing, any 
determination required under this Section 9 shall be made in writing by the 
Company's Accountants immediately prior to Change of Control, whose 
determination shall be conclusive and binding upon the Executive and the 
Company for all purposes.  For purposes of making the calculations required 
by this Section 9, the Accountants may make reasonable assumptions and 
approximations concerning applicable taxes and may rely on reasonable, good 
faith interpretations concerning the application of Sections 280G and 4999 of 
the Code.  The Company and the Executive shall furnish to the Accountants 
such information and documents as the Accountants may reasonably request in 
order to make a determination under this Section.  The Company shall bear all 
costs the Accountants may reasonably incur in connection with any 
calculations contemplated by this Section 9.

    10.  ASSIGNMENT.  Executive's rights and obligations under this Agreement 
shall not be assignable by Executive.  The Company's rights and obligations 
under this Agreement shall not be assignable by the Company except as 
incident to the transfer, by merger, liquidation, or otherwise, of all or 
substantially all of the business of the Company or Subsidiary provided, 
however, that any such transfer shall not affect the Company's obligations 
under the 1997 Stock Plan.

    11.  NOTICES.  Any notice required or permitted under this Agreement 
shall be given in writing and shall be deemed to have been effectively made 
or given if personally delivered, or if sent by facsimile, or mailed or sent 
via Federal Express to the other party at its address set forth below in this 
Section 11, or at such other address as such party may designate by written 
notice to the other party hereto.  Any effective notice hereunder shall be 
deemed given on the date personally delivered or on the date sent by 
facsimile or deposited in the United States mail (sent by certified mail, 
return receipt requested), as the case may be, at the following addresses:

         (i)  If to the Company:

              FirstPak, Inc.
              114 Sansome Street, Suite 1000
              San Francisco, CA  94104
              ATTN: Chairman of the Board of Directors
              Telephone No.:  (415) 362-9800
              Facsimile No.:  (415) 362-5927


                                       5

<PAGE>

         (ii) If to Executive:

              Larry Nathanson
              CalOptical Holding Corporation
              2099 Burroughs Avenue
              San Leandro, CA  94577
              Telephone No.:  (510) 352-4774
              Facsimile No.:  (510) 352-3714

    12.  ARBITRATION.  The parties hereto agree that any dispute or 
controversy arising out of, relating to, or in connection with this 
Agreement, or the interpretation, validity, construction, performance, 
breach, or termination thereof, shall be finally settled by binding 
arbitration to be held in Santa Clara County, California under the Employment 
Dispute Resolution Rules of the American Arbitration Association as then in 
effect (the "Rules").  The arbitrator(s) may grant injunctions or other 
relief in such dispute or controversy.  The decision of the arbitrator(s) 
shall be final, conclusive and binding on the parties to the arbitration, and 
judgment may be entered on the decision of the arbitrator(s) in any court 
having jurisdiction.

    The arbitrator(s) shall apply the laws of the State of California to the 
merits of any dispute or claim, without reference to rules of conflicts of 
law, and the arbitration proceedings shall be governed by federal arbitration 
law and by the Rules, without reference to state arbitration law.

    The parties shall each pay one-half of the costs and expenses of such 
arbitration, and each party shall pay its own counsel fees and expenses.

         EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 12, WHICH DISCUSSES 
ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE 
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION 
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, 
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT 
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY 
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EXECUTIVE'S 
RELATIONSHIP WITH THE COMPANY.

    13.  WITHHOLDING.  The Company shall be entitled to withhold, or cause to 
be withheld, from payment any amount of withholding taxes required by law 
with respect to payments made to Executive in connection with his employment 
hereunder.

    14.  SEVERABILITY.  If any term or provision of this Agreement shall to 
any extent be declared illegal or unenforceable by arbitrator(s) or by a duly 
authorized court of competent jurisdiction, then the remainder of this 
Agreement or the application of such term or provision in circumstances other 
than those as to which it is so declared illegal or unenforceable, shall not 
be 

                                       6

<PAGE>

affected thereby, each term and provision of this Agreement shall be valid 
and enforceable to the fullest extent permitted by law and the illegal or 
unenforceable term or provision shall be deemed replaced by a term or 
provision that is valid and enforceable and that comes closest to expressing 
the intention of the invalid or unenforceable term of provision.

    15.  ENTIRE AGREEMENT.  This Agreement and the agreements referenced 
herein represent the entire agreement of the parties with respect to the 
matters set forth herein, and to the extent inconsistent with other prior 
contracts, arrangements or understandings between the parties, supersedes all 
such previous contracts, arrangements or understandings between the Company 
and Executive. The Agreement may be amended at any time only by mutual 
written agreement signed by the parties hereto.

    16.  GOVERNING LAW.  This Agreement shall be construed, interpreted, and 
governed in accordance with the laws of the State of California without 
reference to rules relating to conflict of law (other than any such rules 
directing application of California law).

    17.  HEADINGS.  The headings of sections herein are included solely for 
convenience of reference and shall not control the meaning or interpretation 
of any of the provisions of this Agreement.

    18.  COUNTERPARTS.  This Agreement may be executed by either of the 
parties hereto in counterparts, each of which shall be deemed to be an 
original, but all such counterparts shall together constitute one and the 
same instrument.

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the day and year first above written.

EXECUTIVE                                                       
                                  -----------------------------------------
                                  Larry Nathanson



FIRSTPAK, INC.                                                       
                                  -----------------------------------------
                                  [NAME & TITLE]



CALOPTICAL HOLDING CORPORATION                                  
                                  -----------------------------------------
                                  [NAME & TITLE]



                                     7

<PAGE>


                             EMPLOYMENT AGREEMENT


    THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and 
between FirstPak, Inc. (the "Company"), Wisconsin Label Corporation 
("Subsidiary"), and Daniel R. Fulwiler ("Executive"), as of the "Effective 
Time," as defined below.

                                   RECITALS
                                       
    A.   The Company and Subsidiary have entered into an Agreement and Plan 
of Reorganization, dated as of July 17, 1997 (the "Merger Agreement"), 
pursuant to which a wholly-owned subsidiary of the Company will merge with 
Subsidiary (the "Merger") and Subsidiary will thereby become a wholly-owned 
subsidiary of the Company.

    B.   The business conducted by Subsidiary prior to the date of the Merger 
Agreement and the business to be conducted by Subsidiary after the Effective 
Time of the Merger consists of production and distribution of label and 
packaging products.

    C.   The undersigned is willing to enter into this Agreement to assure 
the Company that it will receive the full benefit of the business that it is 
acquiring pursuant to the Merger.

    D.   As a material inducement to the Company to enter in to the Merger, 
Executive agrees to enter into this Agreement.

    NOW, THEREFORE, in consideration of the covenants and agreements 
hereinafter set forth, the parties hereto agree as follows:

    1.   EFFECTIVENESS OF AGREEMENT.  This Agreement shall become effective 
only upon the "Effective Time" as such term is defined in the Merger 
Agreement (the "Effective Time").  In the event that the Merger Agreement 
terminates prior to the Effective Time, this Agreement will be of no force or 
effect.  The Company and Executive agree that this Agreement shall govern the 
terms and conditions of Executive's provision of services to the Company 
(and/or its parent and/or subsidiaries) from and after the Effective Time.

    2.   TERM OF AGREEMENT.  Unless terminated earlier in accordance with the 
provisions of Section 7, this Agreement shall commence on the Effective Time 
and shall end on the five-year anniversary of the Effective Time (the 
"Employment Period").

    3.   DUTIES AND SCOPE OF EMPLOYMENT.

         (a)  POSITION; EMPLOYMENT COMMENCEMENT DATE; DUTIES.  The Company 
shall employ Executive as the Chief Operating Officer of Subsidiary, 
reporting to the Chief Executive Officer of Subsidiary.  Executive's duties 
in such position shall be substantially similar to his or her duties as an 
employee of Subsidiary immediately prior to the Effective Time. 



<PAGE>

         (b)  OBLIGATIONS.  During the Employment Period, Executive shall 
devote substantially all of his business efforts and time to the Company. 
Executive agrees, during the Employment Period, not to actively engage in any 
other employment, occupation or consulting activity for any direct or 
indirect remuneration, other than to the extent that such activities do not 
materially interfere with Executive's performance of his or her duties under 
this Agreement, without the prior approval of the Board of Directors of the 
Company (the "Board").

         (c)  BOARD MEMBERSHIP.  If Executive is serving as a member of the 
Board on the date of termination of the Employment Period, he shall tender to 
the Board his resignation from the Board effective as of such date.  The 
Board shall not be obligated to accept such resignation.

    4.   EMPLOYEE BENEFITS.  During the Employment Period, Executive shall be 
eligible to participate in (i) all employee benefit plans currently and 
hereafter maintained by the Company for senior management according to their 
terms, and (ii) such other employee benefits as are set forth in this 
Agreement. 

    5.   COMPENSATION.

         (a)  BASE SALARY.  During the Employment Period, the Company shall 
pay the Executive as compensation for his services a base salary at the 
annualized rate of $155,000 (the "Base Salary").  The Base Salary shall be 
paid periodically in accordance with normal Company payroll practices and 
subject to the usual, required withholding.  Executive's Base Salary shall be 
reviewed annually by the Board of Directors of the Company to determine 
appropriate increases, if any, to the Base Salary.  Executive understands and 
agrees that neither his job performance nor promotions, commendations, 
bonuses or the like from the Company give rise to or in any way serve as the 
basis for modification, amendment, or extension, by implication or otherwise, 
of this Agreement.

         (b)  BONUS.  During the Employment Period Executive shall be 
eligible to receive bonuses as determined by the Board or its Compensation 
Committee, provided, however, that the determination and payment of any and 
all bonuses shall be at the sole discretion of the Board.  The Company shall 
pay any and all bonuses referred to in this Agreement only at the same time 
as bonuses are normally paid to senior management of the Company.

         (c)  EQUITY COMPENSATION.  The Board is granting Executive a stock 
option to purchase _____ shares of the Company's common stock.  The stock 
option shall be subject to the terms and conditions of the 1997 Stock Plan 
(the "Stock Plan") and standard form of option agreement (the "Option 
Agreement").

    6.   EXPENSES.  The Company will pay or reimburse Executive for 
reasonable travel, entertainment or other expenses incurred by Executive in 
the furtherance of or in connection with the performance of Executive's 
duties hereunder in accordance with the Company's established policies.


                                       2

<PAGE>

    7.   TERMINATION OF EMPLOYMENT.

         (a)  EARLY TERMINATION GENERALLY.  The Company may terminate the 
Executive's employment at any time prior to the expiration of the Employment 
Period.  If the Company terminates the Executive's employment prior to the 
end the Employment Period without Cause (as defined below), if Executive 
resigns prior to the end of the Employment Period for Good Reason (as defined 
below) or if the Executive's employment is terminated prior to the end of the 
Employment Period due to Executive's death or total and permanent disability, 
the Executive shall be entitled to receive the payments and benefits referred 
to in Paragraph 7(c) below (subject to the terms and conditions of said 
Paragraph).

         (b)  TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION.  In the event 
the Company terminates Executive's employment with the Company for Cause (as 
defined below) or the Executive voluntarily terminates employment with the 
Company without Good Reason, then this Agreement shall terminate immediately 
and Executive shall not be entitled to any benefits or compensation hereunder 
arising after the date of such termination, and Executive shall only be 
eligible for severance benefits in accordance with the Company's established 
policies as then in effect.

              For this purpose, "Cause" shall mean (i) a material breach by 
Executive of any of his obligations under this Agreement and such breach 
shall remain uncured for 10 business days after written notice is delivered 
to Executive by the Company, (ii) any act by the Executive which constitutes 
gross misconduct of a type and kind which is materially adverse to the 
Company or Subsidiary, (iii) a violation caused directly and intentionally by 
Executive of a federal or state law, rule or regulation applicable to the 
business of the Company or Subsidiary of a type and kind that is materially 
adverse to the Company or Subsidiary, or (iv) the conviction of the Executive 
of, or entry by the Executive of a guilty or no contest plea to, the 
commission of a crime involving moral turpitude or any felony or the 
rendering of any civil judgement against Executive that materially and 
adversely affects the Company's or Subsidiary's reputation.

         (c)  TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON; DEATH; 
DISABILITY.  In the event (i) the Company terminates Executive's employment 
with the Company other than for Cause, (ii) Executive terminates employment 
for Good Reason, (iii) Executive's employment is terminated as a result of 
Executive's death, or (iv) Executive's employment is terminated as a result 
of Executive's permanent and total disability, the Company shall provide 
Executive with the following benefits:  

              (i)  SEVERANCE PAYMENTS.  Subject to Executive entering into a 
Release of Claims arising out of Executive's employment (in a form provided 
by the Company and reasonably satisfactory to Executive), Executive shall be 
entitled to Base Salary continuation payments, at the Base Salary rate in 
effect at the date of termination, for thirty (30) months from the 
Termination Date, to be paid periodically in accordance with the Company's 
normal payroll policies.


                                       3

<PAGE>

              (ii) CONTINUED EMPLOYEE BENEFITS.  The Company shall provide to 
Executive, subject to Executive and his dependents electing continuation 
coverage under COBRA, one hundred percent (100%) Company-paid health, dental 
and vision coverage at the same level of coverage as was provided to 
Executive immediately prior to the date of termination until the earlier of 
(x) thirty (30) months from the Termination Date, or (y) the date that the 
Executive and his dependents become covered under another employer's group 
health, dental and vision plans that provide Executive and his dependents 
with comparable benefits and levels of coverage; and 

              (iii) OPTION VESTING.  The Company agrees to accelerate One 
Hundred percent (100%) of the unvested portion of any stock option or 
restricted stock held by the Executive so as to become completely vested; 
provided, however, that if and to the extent that such potential vesting 
acceleration would cause a contemplated transaction that was intended to be 
accounted for as a "pooling-of-interests" transaction to become ineligible 
for such accounting treatment under generally accepted accounting principles, 
as determined by the Company's independent public accountants prior to such 
transaction, Executive's stock options shall not have their vesting so 
accelerated.

              For this purpose, "Good Reason" shall mean (i) without the 
express written consent of the Executive, a material reduction of the 
Executive's duties, authority or responsibilities, relative to the 
Executive's duties, authority or responsibilities as in effect immediately 
prior to such reduction, or the assignment to Executive of such reduced 
duties, authority or responsibilities; provided, however, that any change in 
the Executive's duties, authority or responsibilities directly resulting from 
Subsidiary becoming a subsidiary of the Company pursuant to the Merger shall 
not constitute Good Reason; (ii) a material breach of this Agreement; (iii) a 
material reduction in benefits for which Executive is eligible and in effect 
immediately prior to such reduction, other than a reduction in the benefits 
of substantially all other similarly situated employees of the Company; (iv) 
without the express written consent of the Executive, the relocation of the 
Executive to a facility or a location more than fifty (50) miles from the 
executive's then present location; and (v) failure on the part of any 
successor of the Company to assume the Company's obligations under this 
Agreement.

    8.   NONCOMPETE AGREEMENT.  Concurrent with the execution of this 
Agreement, Executive will execute the Noncompete Agreement in the form 
attached hereto as Exhibit B (the "Noncompete Agreement").

    9.   EXCISE TAX PAYMENTS.

         (a)  In the event that the severance and other benefits provided for 
in this Agreement or otherwise payable to the Executive (i) constitute 
"parachute payments" within the meaning of Section 280G of the Internal 
Revenue Code of 1986, as amended (the "Code") and (ii) but for this Section 
9, would be subject to the excise tax imposed by Section 4999 of the Code, 
then the Executive's severance benefits under Section 7(c) shall be either


                                       4

<PAGE>

              (1)  delivered in full, or

              (2)  delivered as to such lesser extent which would result in no
                   portion of such severance benefits being subject to excise
                   tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable 
federal, state and local income taxes and the excise tax imposed by Section 
4999, results in the receipt by the Executive on an after-tax basis, of the 
greatest amount of severance benefits, notwithstanding that all or some 
portion of such severance benefits may be taxable under Section 4999 of the 
Code.  Unless the Company and the Executive otherwise agree in writing, any 
determination required under this Section 9 shall be made in writing by the 
Company's Accountants immediately prior to Change of Control, whose 
determination shall be conclusive and binding upon the Executive and the 
Company for all purposes.  For purposes of making the calculations required 
by this Section 9, the Accountants may make reasonable assumptions and 
approximations concerning applicable taxes and may rely on reasonable, good 
faith interpretations concerning the application of Sections 280G and 4999 of 
the Code.  The Company and the Executive shall furnish to the Accountants 
such information and documents as the Accountants may reasonably request in 
order to make a determination under this Section.  The Company shall bear all 
costs the Accountants may reasonably incur in connection with any 
calculations contemplated by this Section 9.

    10.  ASSIGNMENT.  Executive's rights and obligations under this Agreement 
shall not be assignable by Executive.  The Company's rights and obligations 
under this Agreement shall not be assignable by the Company except as 
incident to the transfer, by merger, liquidation, or otherwise, of all or 
substantially all of the business of the Company or Subsidiary provided, 
however, that any such transfer shall not affect the Company's obligations 
under the 1997 Stock Plan.

    11.  NOTICES.  Any notice required or permitted under this Agreement 
shall be given in writing and shall be deemed to have been effectively made 
or given if personally delivered, or if sent by facsimile, or mailed or sent 
via Federal Express to the other party at its address set forth below in this 
Section 11, or at such other address as such party may designate by written 
notice to the other party hereto.  Any effective notice hereunder shall be 
deemed given on the date personally delivered or on the date sent by 
facsimile or deposited in the United States mail (sent by certified mail, 
return receipt requested), as the case may be, at the following addresses:

         (i)  If to the Company:

              FirstPak, Inc.
              114 Sansome Street, Suite 1000
              San Francisco, CA  94104
              ATTN: Chairman of the Board of Directors
              Telephone No.:  (415) 362-9800
              Facsimile No.:  (415) 362-5927



                                       5

<PAGE>

         (ii) If to Executive:

              Daniel R. Fulwiler
              Wisconsin Label Corporation
              1102 Jefferson Street
              Algoma, Wisconsin  54201
              Telephone No.:  (414) 487-3424 Ext. 109
              Facsimile No.:  (414) 487-7092

    12.  ARBITRATION.  The parties hereto agree that any dispute or 
controversy arising out of, relating to, or in connection with this 
Agreement, or the interpretation, validity, construction, performance, 
breach, or termination thereof, shall be finally settled by binding 
arbitration to be held in Santa Clara County, California under the Employment 
Dispute Resolution Rules of the American Arbitration Association as then in 
effect (the "Rules").  The arbitrator(s) may grant injunctions or other 
relief in such dispute or controversy.  The decision of the arbitrator(s) 
shall be final, conclusive and binding on the parties to the arbitration, and 
judgment may be entered on the decision of the arbitrator(s) in any court 
having jurisdiction.

    The arbitrator(s) shall apply the laws of the State of Wisconsin to the 
merits of any dispute or claim, without reference to rules of conflicts of 
law, and the arbitration proceedings shall be governed by federal arbitration 
law and by the Rules, without reference to state arbitration law.

    The parties shall each pay one-half of the costs and expenses of such 
arbitration, and each party shall pay its own counsel fees and expenses.

         EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 12, WHICH DISCUSSES 
ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE 
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION 
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, 
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT 
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY 
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EXECUTIVE'S 
RELATIONSHIP WITH THE COMPANY.

    13.  WITHHOLDING.  The Company shall be entitled to withhold, or cause to 
be withheld, from payment any amount of withholding taxes required by law 
with respect to payments made to Executive in connection with his employment 
hereunder.

    14.  SEVERABILITY.  If any term or provision of this Agreement shall to 
any extent be declared illegal or unenforceable by arbitrator(s) or by a duly 
authorized court of competent jurisdiction, then the remainder of this 
Agreement or the application of such term or provision in circumstances other 
than those as to which it is so declared illegal or unenforceable, shall not 
be 

                                       6

<PAGE>

affected thereby, each term and provision of this Agreement shall be valid 
and enforceable to the fullest extent permitted by law and the illegal or 
unenforceable term or provision shall be deemed replaced by a term or 
provision that is valid and enforceable and that comes closest to expressing 
the intention of the invalid or unenforceable term of provision.

    15.  ENTIRE AGREEMENT.  This Agreement and the agreements referenced 
herein represent the entire agreement of the parties with respect to the 
matters set forth herein, and to the extent inconsistent with other prior 
contracts, arrangements or understandings between the parties, supersedes all 
such previous contracts, arrangements or understandings between the Company 
and Executive. The Agreement may be amended at any time only by mutual 
written agreement signed by the parties hereto.

    16.  GOVERNING LAW.  This Agreement shall be construed, interpreted, and 
governed in accordance with the laws of the State of Wisconsin without 
reference to rules relating to conflict of law (other than any such rules 
directing application of Wisconsin law).

    17.  HEADINGS.  The headings of sections herein are included solely for 
convenience of reference and shall not control the meaning or interpretation 
of any of the provisions of this Agreement.

    18.  COUNTERPARTS.  This Agreement may be executed by either of the 
parties hereto in counterparts, each of which shall be deemed to be an 
original, but all such counterparts shall together constitute one and the 
same instrument.

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the day and year first above written.

EXECUTIVE                                                       
                                  -----------------------------------------
                                  Daniel R. Fulwiler
                                  


FIRSTPAK, INC.                                                       
                                  -----------------------------------------
                                  [NAME & TITLE]



WISCONSIN LABEL CORPORATION                                     
                                  -----------------------------------------
                                  [NAME & TITLE]




                                       7



<PAGE>


                             EMPLOYMENT AGREEMENT


    THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into by and between
FirstPak, Inc. (the "Company"), Wisconsin Label Corporation ("Subsidiary"), and
Jay K. Tomcheck ("Executive"), as of the "Effective Time," as defined below.

                                   RECITALS
                                       
    A.   The Company and Subsidiary have entered into an Agreement and Plan 
of Reorganization, dated as of July 17, 1997 (the "Merger Agreement"), 
pursuant to which a wholly-owned subsidiary of the Company will merge with 
Subsidiary (the "Merger") and Subsidiary will thereby become a wholly-owned 
subsidiary of the Company.

    B.   The business conducted by Subsidiary prior to the date of the Merger 
Agreement and the business to be conducted by Subsidiary after the Effective 
Time of the Merger consists of production and distribution of label and 
packaging products.

    C.   The undersigned is willing to enter into this Agreement to assure 
the Company that it will receive the full benefit of the business that it is 
acquiring pursuant to the Merger.

    D.   As a material inducement to the Company to enter in to the Merger, 
Executive agrees to enter into this Agreement.

    NOW, THEREFORE, in consideration of the covenants and agreements 
hereinafter set forth, the parties hereto agree as follows:

    1.   EFFECTIVENESS OF AGREEMENT.  This Agreement shall become effective 
only upon the "Effective Time" as such term is defined in the Merger 
Agreement (the "Effective Time").  In the event that the Merger Agreement 
terminates prior to the Effective Time, this Agreement will be of no force or 
effect.  The Company and Executive agree that this Agreement shall govern the 
terms and conditions of Executive's provision of services to the Company 
(and/or its parent and/or subsidiaries) from and after the Effective Time.

    2.   TERM OF AGREEMENT.  Unless terminated earlier in accordance with the 
provisions of Section 7, this Agreement shall commence on the Effective Time 
and shall end on the five-year anniversary of the Effective Time (the 
"Employment Period").

    3.   DUTIES AND SCOPE OF EMPLOYMENT.

         (a)  POSITION; EMPLOYMENT COMMENCEMENT DATE; DUTIES.  The Company 
shall employ Executive as the Vice President, Finance of Subsidiary, 
reporting to the Chief Executive Officer of Subsidiary.  Executive's duties 
in such position shall be substantially similar to his or her duties as an 
employee of Subsidiary immediately prior to the Effective Time. 


<PAGE>

         (b)  OBLIGATIONS.  During the Employment Period, Executive shall 
devote substantially all of his business efforts and time to the Company. 
Executive agrees, during the Employment Period, not to actively engage in any 
other employment, occupation or consulting activity for any direct or 
indirect remuneration, other than to the extent that such activities do not 
materially interfere with Executive's performance of his or her duties under 
this Agreement, without the prior approval of the Board of Directors of the 
Company (the "Board").

         (c)  BOARD MEMBERSHIP.  If Executive is serving as a member of the 
Board on the date of termination of the Employment Period, he shall tender to 
the Board his resignation from the Board effective as of such date.  The 
Board shall not be obligated to accept such resignation.

    4.   EMPLOYEE BENEFITS.  During the Employment Period, Executive shall be 
eligible to participate in (i) all employee benefit plans currently and 
hereafter maintained by the Company for senior management according to their 
terms, and (ii) such other employee benefits as are set forth in this 
Agreement. 

    5.   COMPENSATION.

         (a)  BASE SALARY.  During the Employment Period, the Company shall 
pay the Executive as compensation for his services a base salary at the 
annualized rate of $135,000 (the "Base Salary").  The Base Salary shall be 
paid periodically in accordance with normal Company payroll practices and 
subject to the usual, required withholding.  Executive's Base Salary shall be 
reviewed annually by the Board of Directors of the Company to determine 
appropriate increases, if any, to the Base Salary.  Executive understands and 
agrees that neither his job performance nor promotions, commendations, 
bonuses or the like from the Company give rise to or in any way serve as the 
basis for modification, amendment, or extension, by implication or otherwise, 
of this Agreement.

         (b)  BONUS.  During the Employment Period Executive shall be 
eligible to receive bonuses as determined by the Board or its Compensation 
Committee, provided, however, that the determination and payment of any and 
all bonuses shall be at the sole discretion of the Board.  The Company shall 
pay any and all bonuses referred to in this Agreement only at the same time 
as bonuses are normally paid to senior management of the Company.

         (c)  EQUITY COMPENSATION.  The Board is granting Executive a stock 
option to purchase _____ shares of the Company's common stock.  The stock 
option shall be subject to the terms and conditions of the 1997 Stock Plan 
(the "Stock Plan") and standard form of option agreement (the "Option 
Agreement").

    6.   EXPENSES.  The Company will pay or reimburse Executive for 
reasonable travel, entertainment or other expenses incurred by Executive in 
the furtherance of or in connection with the performance of Executive's 
duties hereunder in accordance with the Company's established policies.


                                     2

<PAGE>

    7.   TERMINATION OF EMPLOYMENT.

         (a)  EARLY TERMINATION GENERALLY.  The Company may terminate the 
Executive's employment at any time prior to the expiration of the Employment 
Period.  If the Company terminates the Executive's employment prior to the 
end the Employment Period without Cause (as defined below), if Executive 
resigns prior to the end of the Employment Period for Good Reason (as defined 
below) or if the Executive's employment is terminated prior to the end of the 
Employment Period due to Executive's death or total and permanent disability, 
the Executive shall be entitled to receive the payments and benefits referred 
to in Paragraph 7(c) below (subject to the terms and conditions of said 
Paragraph).

         (b)  TERMINATION FOR CAUSE OR VOLUNTARY RESIGNATION.  In the event 
the Company terminates Executive's employment with the Company for Cause (as 
defined below) or the Executive voluntarily terminates employment with the 
Company without Good Reason, then this Agreement shall terminate immediately 
and Executive shall not be entitled to any benefits or compensation hereunder 
arising after the date of such termination, and Executive shall only be 
eligible for severance benefits in accordance with the Company's established 
policies as then in effect.

              For this purpose, "Cause" shall mean (i) a material breach by 
Executive of any of his obligations under this Agreement and such breach 
shall remain uncured for 10 business days after written notice is delivered 
to Executive by the Company, (ii) any act by the Executive which constitutes 
gross misconduct of a type and kind which is materially adverse to the 
Company or Subsidiary, (iii) a violation caused directly and intentionally by 
Executive of a federal or state law, rule or regulation applicable to the 
business of the Company or Subsidiary of a type and kind that is materially 
adverse to the Company or Subsidiary, or (iv) the conviction of the Executive 
of, or entry by the Executive of a guilty or no contest plea to, the 
commission of a crime involving moral turpitude or any felony or the 
rendering of any civil judgement against Executive that materially and 
adversely affects the Company's or Subsidiary's reputation.

         (c)  TERMINATION WITHOUT CAUSE; TERMINATION FOR GOOD REASON; DEATH; 
DISABILITY.  In the event (i) the Company terminates Executive's employment 
with the Company other than for Cause, (ii) Executive terminates employment 
for Good Reason, (iii) Executive's employment is terminated as a result of 
Executive's death, or (iv) Executive's employment is terminated as a result 
of Executive's permanent and total disability, the Company shall provide 
Executive with the following benefits:  

              (i)  SEVERANCE PAYMENTS.  Subject to Executive entering into a 
Release of Claims arising out of Executive's employment (in a form provided 
by the Company and reasonably satisfactory to Executive), Executive shall be 
entitled to Base Salary continuation payments, at the Base Salary rate in 
effect at the date of termination, for thirty (30) months from the 
Termination Date, to be paid periodically in accordance with the Company's 
normal payroll policies.


                                     3

<PAGE>

              (ii)   CONTINUED EMPLOYEE BENEFITS.  The Company shall provide 
to Executive, subject to Executive and his dependents electing continuation 
coverage under COBRA, one hundred percent (100%) Company-paid health, dental 
and vision coverage at the same level of coverage as was provided to 
Executive immediately prior to the date of termination until the earlier of 
(x) thirty (30) months from the Termination Date, or (y) the date that the 
Executive and his dependents become covered under another employer's group 
health, dental and vision plans that provide Executive and his dependents 
with comparable benefits and levels of coverage; and 

              (iii)  OPTION VESTING.  The Company agrees to accelerate One 
Hundred percent (100%) of the unvested portion of any stock option or 
restricted stock held by the Executive so as to become completely vested; 
provided, however, that if and to the extent that such potential vesting 
acceleration would cause a contemplated transaction that was intended to be 
accounted for as a "pooling-of-interests" transaction to become ineligible 
for such accounting treatment under generally accepted accounting principles, 
as determined by the Company's independent public accountants prior to such 
transaction, Executive's stock options shall not have their vesting so 
accelerated.

              For this purpose, "Good Reason" shall mean (i) without the 
express written consent of the Executive, a material reduction of the 
Executive's duties, authority or responsibilities, relative to the 
Executive's duties, authority or responsibilities as in effect immediately 
prior to such reduction, or the assignment to Executive of such reduced 
duties, authority or responsibilities; provided, however, that any change in 
the Executive's duties, authority or responsibilities directly resulting from 
Subsidiary becoming a subsidiary of the Company pursuant to the Merger shall 
not constitute Good Reason; (ii) a material breach of this Agreement; (iii) a 
material reduction in benefits for which Executive is eligible and in effect 
immediately prior to such reduction, other than a reduction in the benefits 
of substantially all other similarly situated employees of the Company; (iv) 
without the express written consent of the Executive, the relocation of the 
Executive to a facility or a location more than fifty (50) miles from the 
executive's then present location; and (v) failure on the part of any 
successor of the Company to assume the Company's obligations under this 
Agreement.

    8.   NONCOMPETE AGREEMENT.  Concurrent with the execution of this 
Agreement, Executive will execute the Noncompete Agreement in the form 
attached hereto as Exhibit B (the "Noncompete Agreement").

    9.   EXCISE TAX PAYMENTS. 

         (a)  In the event that the severance and other benefits provided for 
in this Agreement or otherwise payable to the Executive (i) constitute 
"parachute payments" within the meaning of Section 280G of the Internal 
Revenue Code of 1986, as amended (the "Code") and (ii) but for this Section 
9, would be subject to the excise tax imposed by Section 4999 of the Code, 
then the Executive's severance benefits under Section 7(c) shall be either


                                     4

<PAGE>

              (1)  delivered in full, or

              (2)  delivered as to such lesser extent which would result in no
                   portion of such severance benefits being subject to excise
                   tax under Section 4999 of the Code,

whichever of the foregoing amounts, taking into account the applicable 
federal, state and local income taxes and the excise tax imposed by Section 
4999, results in the receipt by the Executive on an after-tax basis, of the 
greatest amount of severance benefits, notwithstanding that all or some 
portion of such severance benefits may be taxable under Section 4999 of the 
Code.  Unless the Company and the Executive otherwise agree in writing, any 
determination required under this Section 9 shall be made in writing by the 
Company's Accountants immediately prior to Change of Control, whose 
determination shall be conclusive and binding upon the Executive and the 
Company for all purposes.  For purposes of making the calculations required 
by this Section 9, the Accountants may make reasonable assumptions and 
approximations concerning applicable taxes and may rely on reasonable, good 
faith interpretations concerning the application of Sections 280G and 4999 of 
the Code.  The Company and the Executive shall furnish to the Accountants 
such information and documents as the Accountants may reasonably request in 
order to make a determination under this Section.  The Company shall bear all 
costs the Accountants may reasonably incur in connection with any 
calculations contemplated by this Section 9.

    10.  ASSIGNMENT.  Executive's rights and obligations under this Agreement 
shall not be assignable by Executive.  The Company's rights and obligations 
under this Agreement shall not be assignable by the Company except as 
incident to the transfer, by merger, liquidation, or otherwise, of all or 
substantially all of the business of the Company or Subsidiary provided, 
however, that any such transfer shall not affect the Company's obligations 
under the 1997 Stock Plan.

    11.  NOTICES.  Any notice required or permitted under this Agreement 
shall be given in writing and shall be deemed to have been effectively made 
or given if personally delivered, or if sent by facsimile, or mailed or sent 
via Federal Express to the other party at its address set forth below in this 
Section 11, or at such other address as such party may designate by written 
notice to the other party hereto.  Any effective notice hereunder shall be 
deemed given on the date personally delivered or on the date sent by 
facsimile or deposited in the United States mail (sent by certified mail, 
return receipt requested), as the case may be, at the following addresses:

         (i)  If to the Company:

              FirstPak, Inc.
              114 Sansome Street, Suite 1000
              San Francisco, CA  94104
              ATTN: Chairman of the Board of Directors
              Telephone No.:  (415) 362-9800
              Facsimile No.:   (415) 362-5927


                                     5

<PAGE>

         (ii) If to Executive:

              Jay K. Tomcheck
              Wisconsin Label Corporation
              1102 Jefferson Street
              Algoma, Wisconsin  54201
              Telephone No.:  (414) 487-3424 Ext. 109
              Facsimile No.:   (414) 487-7092

    12.  ARBITRATION.  The parties hereto agree that any dispute or 
controversy arising out of, relating to, or in connection with this 
Agreement, or the interpretation, validity, construction, performance, 
breach, or termination thereof, shall be finally settled by binding 
arbitration to be held in Santa Clara County, California under the Employment 
Dispute Resolution Rules of the American Arbitration Association as then in 
effect (the "Rules").  The arbitrator(s) may grant injunctions or other 
relief in such dispute or controversy.  The decision of the arbitrator(s) 
shall be final, conclusive and binding on the parties to the arbitration, and 
judgment may be entered on the decision of the arbitrator(s) in any court 
having jurisdiction.

    The arbitrator(s) shall apply the laws of the State of Wisconsin to the 
merits of any dispute or claim, without reference to rules of conflicts of 
law, and the arbitration proceedings shall be governed by federal arbitration 
law and by the Rules, without reference to state arbitration law.

    The parties shall each pay one-half of the costs and expenses of such 
arbitration, and each party shall pay its own counsel fees and expenses.

         EXECUTIVE HAS READ AND UNDERSTANDS THIS SECTION 12, WHICH DISCUSSES 
ARBITRATION.  EXECUTIVE UNDERSTANDS THAT BY SIGNING THIS AGREEMENT, EXECUTIVE 
AGREES TO SUBMIT ANY CLAIMS ARISING OUT OF, RELATING TO, OR IN CONNECTION 
WITH THIS AGREEMENT, OR THE INTERPRETATION, VALIDITY, CONSTRUCTION, 
PERFORMANCE, BREACH OR TERMINATION THEREOF TO BINDING ARBITRATION, AND THAT 
THIS ARBITRATION CLAUSE CONSTITUTES A WAIVER OF EXECUTIVE'S RIGHT TO A JURY 
TRIAL AND RELATES TO THE RESOLUTION OF ALL DISPUTES RELATING TO EXECUTIVE'S 
RELATIONSHIP WITH THE COMPANY.

    13.  WITHHOLDING.  The Company shall be entitled to withhold, or cause to 
be withheld, from payment any amount of withholding taxes required by law 
with respect to payments made to Executive in connection with his employment 
hereunder.

    14.  SEVERABILITY.  If any term or provision of this Agreement shall to 
any extent be declared illegal or unenforceable by arbitrator(s) or by a duly 
authorized court of competent jurisdiction, then the remainder of this 
Agreement or the application of such term or provision in circumstances other 
than those as to which it is so declared illegal or unenforceable, shall not 
be 

                                     6

<PAGE>

affected thereby, each term and provision of this Agreement shall be valid 
and enforceable to the fullest extent permitted by law and the illegal or 
unenforceable term or provision shall be deemed replaced by a term or 
provision that is valid and enforceable and that comes closest to expressing 
the intention of the invalid or unenforceable term of provision.

    15.  ENTIRE AGREEMENT.  This Agreement and the agreements referenced 
herein represent the entire agreement of the parties with respect to the 
matters set forth herein, and to the extent inconsistent with other prior 
contracts, arrangements or understandings between the parties, supersedes all 
such previous contracts, arrangements or understandings between the Company 
and Executive. The Agreement may be amended at any time only by mutual 
written agreement signed by the parties hereto.

    16.  GOVERNING LAW.  This Agreement shall be construed, interpreted, and 
governed in accordance with the laws of the State of Wisconsin without 
reference to rules relating to conflict of law (other than any such rules 
directing application of Wisconsin law).

    17.  HEADINGS.  The headings of sections herein are included solely for 
convenience of reference and shall not control the meaning or interpretation 
of any of the provisions of this Agreement.

    18.  COUNTERPARTS.  This Agreement may be executed by either of the 
parties hereto in counterparts, each of which shall be deemed to be an 
original, but all such counterparts shall together constitute one and the 
same instrument.

    IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of 
the day and year first above written.

EXECUTIVE                         
                                  ---------------------------------------
                                  Jay K. Tomcheck
                                  


FIRSTPAK, INC.                                                       
                                  ---------------------------------------
                                  [NAME & TITLE]


WISCONSIN LABEL CORPORATION                                     
                                  ---------------------------------------
                                  [NAME & TITLE]


                                    7

<PAGE>

EXHIBIT 21.01


                                 List of Subsidiaries


Wisconsin Label Corporation, a Wisconsin corporation

St. Louis Lithographing Company, a Delaware corporation

CalOptical Holding Corporation, a Delaware corporation

Blake Printing and Publishing, a California corporation


<PAGE>
                                                                   EXHIBIT 23.01
 
                         INDEPENDENT AUDITORS' CONSENT
 
   
We consent to the use in this Amendment No. 1 to Registration Statement No.
333-31653 of FirstPak, Inc. on Form S-1 of our reports, listed below, appearing
in the Prospectus, which is part of this Registration Statement, and of our
reports, also listed below, relating to the financial statement schedules
appearing elsewhere in this Registration Statement.
    
 
   
<TABLE>
<CAPTION>
                                                      --------------------------------------------------
                                                                                              REPORTS ON
                                                      REPORTS ON FINANCIAL STATEMENTS          SCHEDULES
                                                      -------------------------------  -----------------
<S>                                                   <C>                              <C>
FirstPak, Inc.                                                August 27, 1997                None
Wisconsin Label Corporation and subsidiaries                  March 31, 1997            March 31, 1997
                                                       (July 17, 1997 as to Note 13)
St. Louis Lithographing Company and Predecessor               March 28, 1997            March 28, 1997
                                                       (July 17, 1997 as to Note 12)
CalOptical Holding Corporation and subsidiary                 August 1, 1997            August 1, 1997
Blake Printing and Publishing, Inc.                           March 31, 1997            March 31, 1997
                                                       (July 17, 1997 as to Note 16)
</TABLE>
    
 
   
We also consent to the reference to us under the heading "Experts" in such
Prospectus.
    
 
   
DELOITTE & TOUCHE LLP
San Francisco, California
September 8, 1997
    

<TABLE> <S> <C>

<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF WISCONSIN LABEL CORPORATION AND
SUBSIDIARIES (THE ACCOUNTING ACQUIRER OF FIRSTPAK, INC.) AND IS QUALIFIED IN 
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>                     <C>
<PERIOD-TYPE>                   YEAR                   6-MOS
<FISCAL-YEAR-END>                          DEC-31-1996             DEC-31-1997
<PERIOD-END>                               DEC-31-1996             JUN-30-1997
<CASH>                                             703                    1158
<SECURITIES>                                         0                       0
<RECEIVABLES>                                    15391                   14939
<ALLOWANCES>                                       838                     310
<INVENTORY>                                       8812                    8665
<CURRENT-ASSETS>                                 25233                   25165
<PP&E>                                           26512                   29141
<DEPRECIATION>                                   11576                   12691
<TOTAL-ASSETS>                                   46187                   48628
<CURRENT-LIABILITIES>                            20394                   16110
<BONDS>                                           9216                   14421
                                0                       0
                                          0                       0
<COMMON>                                           294                     294
<OTHER-SE>                                       13726                   15382
<TOTAL-LIABILITY-AND-EQUITY>                     46187                   48628
<SALES>                                          93914                   46919
<TOTAL-REVENUES>                                 93914                   46919
<CGS>                                            71744                   35951
<TOTAL-COSTS>                                    71744                   35951
<OTHER-EXPENSES>                                     0                       0
<LOSS-PROVISION>                                   768                      95
<INTEREST-EXPENSE>                                1451                     724
<INCOME-PRETAX>                                   5533                    2551
<INCOME-TAX>                                      2400                     852
<INCOME-CONTINUING>                               3055                    1656
<DISCONTINUED>                                       0                       0
<EXTRAORDINARY>                                      0                       0
<CHANGES>                                            0                       0
<NET-INCOME>                                      3055                    1656
<EPS-PRIMARY>                                        0                       0<F1>
<EPS-DILUTED>                                        0                       0<F2>
<FN>
<F1>NOT DETERMINED AT THIS TIME
<F2>NOT DETERMINED AT THIS TIME
</FN>
        

</TABLE>

<PAGE>
   
                                                                   EXHIBIT 99.01
    
 
   
I do hereby consent to be named in the Registration Statement on Form S-1 as a
person to become a director of the Company upon consummation of the initial
public offering.
    
 
   
                                                   /s/ WILLIAM T. LEITH
    
   
 
                                          --------------------------------------
                                                     William T. Leith
                                                    September 9, 1997
    

<PAGE>
   
                                                                   EXHIBIT 99.02
    
 
   
I hereby consent to be named in the Registration Statement on Form S-1 as a
person to become a director of the Company upon consummation of the initial
public offering.
    
 
   
                                                  /s/ R. MICHAEL MONDAVI
    
   
 
                                          --------------------------------------
                                                    R. Michael Mondavi
                                                    September 9, 1997
    

<PAGE>
   
                                                                   EXHIBIT 99.03
    
 
   
I do hereby consent to be named in the Registration Statement on Form S-1 as a
person to become a director of the Company upon consummation of the initial
public offering.
    
 
   
                                                 /s/ TERRENCE R. FULWILER
    
   
 
                                          --------------------------------------
                                                   Terrence R. Fulwiler
                                                    September 9, 1997
    

<PAGE>
   
                                                                   EXHIBIT 99.04
    
 
   
I hereby consent to be named in the Registration Statement on Form S-1 as a
person to become a director of the Company upon consummation of the initial
public offering.
    
 
   
                                                   /s/ RICHARD C. BLAKE
    
   
 
                                          --------------------------------------
                                                     Richard C. Blake
                                                    September 9, 1997
    

<PAGE>
   
                                                                   EXHIBIT 99.05
    
 
   
I hereby consent to be named in the Registration Statement on Form S-1 as a
person to become a director of the Company upon consummation of the initial
public offering.
    
 
   
                                                  /s/ DANIEL R. FULWILER
    
   
 
                                          --------------------------------------
                                                    Daniel R. Fulwiler
                                                    September 9, 1997
    

<PAGE>
   
                                                                   EXHIBIT 99.06
    
 
   
I hereby consent to be named in the Registration Statement on Form S-1 as a
person to become a director of the Company upon consummation of the initial
public offering.
    
 
   
                                                   /s/ JAY K. TOMCHECK
    
   
 
                                          --------------------------------------
                                                     Jay K. Tomcheck
                                                    September 9, 1997
    


© 2022 IncJournal is not affiliated with or endorsed by the U.S. Securities and Exchange Commission