SCHAWK INC, S-2, 1997-10-30

SCHAWK INC
S-2, 1997-10-30
SERVICE INDUSTRIES FOR THE PRINTING TRADE

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1997

REGISTRATION NO. 333-
================================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------
FORM S-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------------

SCHAWK, INC.
(Exact name of registrant as specified in its charter)
---------------------

<TABLE>
<C> <C> <C>
DELAWARE 1695 RIVER ROAD 36-2545354
(State or other jurisdiction DES PLAINES, ILLINOIS 60018 (IRS Employer
of incorporation or (847) 827-9494 Identification No.)
organization) (Address, including zip code,
and
and telephone number, including
area code, of registrant's
principal executive offices)
</TABLE>

---------------------
CLARENCE W. SCHAWK
CHAIRMAN OF THE BOARD OF DIRECTORS
DAVID A. SCHAWK
PRESIDENT, CHIEF EXECUTIVE OFFICER AND DIRECTOR
SCHAWK, INC.
1695 RIVER ROAD
DES PLAINES, ILLINOIS 60018
(847) 827-9494

(Name, address, including zip code, and telephone number, including area code,
of agents for service)
---------------------
Copies to:

<TABLE>
<C> <C>
JOHN T. MCENROE, ESQ. MARK M. HEATWOLE, ESQ.
STEVEN J. GRAY, ESQ. TERRENCE R. BRADY, ESQ.
VEDDER, PRICE, KAUFMAN & KAMMHOLZ WINSTON & STRAWN
222 NORTH LASALLE STREET 35 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60601 CHICAGO, ILLINOIS 60601
</TABLE>

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

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the 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 the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, 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 this Form is a post-effective amendment filed pursuant to Rule 462(d)
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 MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED SHARE(1) PRICE(1) FEE(1)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A Common Stock, $0.008
par value.................... 3,450,000 $11.5625 $39,890,625 $12,090
===================================================================================================================
</TABLE>

(1) Calculated pursuant to Rule 457.

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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
================================================================================
<PAGE> 2

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.

Subject to Completion, dated October 30, 1997

PROSPECTUS

[LOGO] 3,000,000 SHARES

SCHAWK, INC.
CLASS A COMMON STOCK
---------------------

Of the 3,000,000 shares of Class A Common Stock (the "Class A Common
Stock") of Schawk, Inc. ("Schawk" or the "Company") offered hereby (the
"Offering"), 1,500,000 shares are being sold by the Company and 1,500,000 shares
are being sold by certain stockholders of the Company (the "Selling
Stockholders"). The Company will not receive any proceeds from the sale of
shares of the Class A Common Stock by the Selling Stockholders. See "Use of
Proceeds" and "Principal and Selling Stockholders."

The Class A Common Stock is listed on the New York Stock Exchange under the
symbol "SGK." On October 29, 1997, the last sale price of the Class A Common
Stock as reported on the New York Stock Exchange was $12.1875 per share. See
"Price Range of Class A Common Stock."

THE SHARES OF CLASS A COMMON STOCK OFFERED HEREBY INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 9.
---------------------

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>
==============================================================================================================
UNDERWRITING PROCEEDS TO
PRICE TO DISCOUNTS AND PROCEEDS TO SELLING
PUBLIC COMMISSIONS(1) COMPANY(2) 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 (the "Securities Act"). See
"Underwriting."

(2) Before deducting estimated expenses of $325,000 payable by the Company.

(3) The Company and certain Selling Stockholders have granted the Underwriters a
30-day option to purchase up to 450,000 additional shares of Class A Common
Stock on the same terms and conditions as set forth above solely to cover
over-allotments, if any. If such option is exercised in full, the Price to
Public, Underwriting Discounts and Commissions, Proceeds to Company and
Proceeds to the Selling Stockholders will be $ , $ ,
$ and $ , respectively. See "Underwriting."

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

The shares of Class A Common Stock offered by this Prospectus are offered
by the Underwriters subject to prior sale, to withdrawal, cancellation or
modification of the offer without notice, to delivery to and acceptance by the
Underwriters and to certain further conditions. It is expected that the delivery
of certificates for the shares will be made at the offices of Lehman Brothers
Inc., New York, New York, on or about , 1997.

---------------------
LEHMAN BROTHERS MCDONALD & COMPANY
SECURITIES, INC.
, 1997
<PAGE> 3

[LOGO] SCHAWK

[The following appears as a series of four statements surrounding in a
clockwise fashion a pictorial displayed in color.].

DIGITAL IMAGING PREPRESS SERVICES

Schawk supplies high quality prepress services, including digitized and
conventional color separations, film production, platemaking and press proofs,
as well as digital photography and art production, for the consumer products
industry.

GLOBAL PRODUCTION SERVICES

Through its North American operations and alliances with prepress service
providers in the Far East, Europe and Australia, Schawk is positioned to meet
its clients' growing demand for global brand consistency.

IMAGING ASSET MANAGEMENT

Using its PaRTs(SM) System, Schawk is able to maintain and manage
customized databases for its clients' image and package designs. Databases can
include brand packaging, images, text, production specifications, audio and
video commercial and advertising page information.

OUTSOURCING SERVICES

Initiated in 1993, Schawk's on-site program presently places skilled Schawk
employees at or near 19 client locations enabling its clients to achieve greater
speed to market for their products.

[Image -- a globe surrounded by consumer products packaging, cans, labeling
information and computer technology components.]

Schawk, the Schawk logo, PaRTs(SM), CLICk(TM) and the names of certain
other services offered by Schawk are service marks, trademarks or registered
service marks or trademarks of Schawk. All other trademarks or service marks
appearing in this Prospectus are trademarks, service marks or registered
trademarks or service marks of the respective companies that utilize them.

CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE CLASS A COMMON
STOCK. SUCH TRANSACTIONS MAY INCLUDE THE PURCHASE OF SHARES OF CLASS A COMMON
STOCK PRIOR TO THE PRICING OF THE OFFERING FOR THE PURPOSE OF MAINTAINING THE
PRICE OF THE CLASS A COMMON STOCK, THE PURCHASE OF SHARES OF CLASS A COMMON
STOCK FOLLOWING THE PRICING OF THE OFFERING TO COVER A SYNDICATE SHORT POSITION
IN THE CLASS A COMMON STOCK OR THE IMPOSITION OF PENALTY BIDS. FOR A DESCRIPTION
OF THESE ACTIVITIES SEE "UNDERWRITING."

2
<PAGE> 4

AVAILABLE INFORMATION

The Company is subject to the periodic reporting and other informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). As long as the Company is subject to such periodic reporting and
information requirements, it will file with the Securities and Exchange
Commission (the "Commission") all Commission reports, proxy statements and other
information required thereby, which may be inspected at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and 7 World Trade Center, Suite 1300, New York, New York 10048.
Copies of such material may be obtained by mail from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549 at
prescribed rates. In addition, electronically filed documents, including
reports, proxy statements and other information filed by the Company, can be
obtained from the Commission's Web site at http://www.sec.gov. The Class A
Common Stock is quoted on the New York Stock Exchange, and reports and other
information concerning the Company may also be inspected and copied at the
office of the New York Stock Exchange, 2 Broad Street, New York, New York 10005.

The Company has filed a Registration Statement on Form S-2 under the
Securities Act of 1933, as amended (the "Securities Act"), with the Commission
in Washington, D.C., with respect to the Class A Common Stock offered by this
Prospectus. This Prospectus, filed as part of the Registration Statement, does
not contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. For further information regarding the Company and
the shares offered hereby, reference is made to the Registration Statement and
any amendments, exhibits and schedules thereto, which may be inspected without
charge and copied at prescribed rates at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549. Such information may also be available on the Web site maintained by
the Commission at http://www.sec.gov. Statements contained in this Prospectus as
to the contents of any contract or other document referred to herein are not
necessarily complete and in each instance reference is made to the copy of such
contract or document filed as an exhibit to the Registration Statement, each
such statement being qualified in its entirety by such reference.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents filed by the Company with the Commission pursuant
to the Exchange Act (File No. 0-26094) are incorporated herein by reference as
of their respective dates:

(a) Annual Report on Form 10-K for the fiscal year ended December 31, 1996.

(b) Current Report on Form 8-K dated February 7, 1997.

(d) Current Report on Form 8-K dated May 5, 1997.

(e) Quarterly Report on Form 10-Q for the quarter ended June 30, 1997.

(f) Current Report on Form 8-K dated July 8, 1997.

(g) Quarterly Report on Form 10-Q for the quarter ended September 30, 1997.

All reports and other documents filed by the Company pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the Offering of the Class A Common
Stock shall be deemed to be incorporated by reference herein. Any statement
contained in a document incorporated or deemed to be incorporated by reference
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein or in any other subsequently filed
document which is also incorporated or deemed to be incorporated by reference
herein modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.

3
<PAGE> 5

The Company shall provide without charge to each person to whom a
Prospectus is delivered, upon the written or oral request of such person, a copy
of any or all of the information incorporated by reference in this Prospectus,
other than exhibits to such information (unless such exhibits are specifically
incorporated by reference into the information that this Prospectus
incorporates). Requests for such copies should be directed to A. Alex Sarkisian,
Schawk, Inc., 1695 River Road, Des Plaines, Illinois 60018.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

STATEMENTS CONTAINED IN THIS PROSPECTUS OR IN ANY DOCUMENT INCORPORATED OR
DEEMED TO BE INCORPORATED BY REFERENCE HEREIN THAT RELATE TO THE COMPANY'S
BELIEFS OR EXPECTATIONS AS TO FUTURE EVENTS RELATING TO, AMONG OTHER THINGS, THE
SUCCESS OF THE COMPANY'S GROWTH STRATEGY, THE ABILITY OF THE COMPANY TO EXPLOIT
INDUSTRY TRENDS, SUCH AS OUTSOURCING, AND THE COMPANY'S EXPLOITATION OF
TECHNOLOGICAL ADVANCEMENTS IN THE IMAGING INDUSTRY, ARE NOT STATEMENTS OF
HISTORICAL FACT AND ARE FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION
27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT AND ARE SUBJECT TO
THE "SAFE HARBOR" CREATED THEREBY. ALTHOUGH THE COMPANY BELIEVES THAT THE
ASSUMPTIONS UPON WHICH SUCH FORWARD-LOOKING STATEMENTS ARE BASED ARE REASONABLE
WITHIN THE BOUNDS OF ITS KNOWLEDGE OF ITS BUSINESS AND OPERATIONS, IT CAN GIVE
NO ASSURANCE THAT THE ASSUMPTIONS WILL PROVE TO HAVE BEEN CORRECT. REFERENCE TO
SECTIONS IN THIS PROSPECTUS WHICH CONTAIN FORWARD-LOOKING STATEMENTS AND
IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY AND
ADVERSELY FROM THE COMPANY'S EXPECTATIONS AND BELIEFS ARE SET OUT UNDER "RISK
FACTORS" AND "MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS." THESE FACTORS SHOULD BE CAREFULLY CONSIDERED BY
POTENTIAL INVESTORS.

4
<PAGE> 6

PROSPECTUS SUMMARY

The following summary should be read in conjunction with, and is qualified
in its entirety by, the more detailed information, including "Risk Factors,"
appearing elsewhere in this Prospectus, and the consolidated financial
statements and notes thereto. Unless otherwise indicated, the information set
forth in this Prospectus does not give effect to the exercise of the
Underwriters' over-allotment option.

THE COMPANY

Schawk, Inc. ("Schawk" or the "Company") is a leading provider of digital
imaging prepress services for the consumer products industry in the United
States and Canada. The Company offers its clients a complete line of high
quality prepress services, including conventional, electronic and desktop color
separations, film preparation, platemaking and press proofs for the three main
printing processes used in the graphic arts industry: lithography, flexography
and gravure. The Company also provides its clients such value-added services as
digital image management, digital photography and art production. The
preparation of film, digital tape and press proofs for lithography, flexography
and other printing processes related to packaging accounted for approximately
75% of net sales in 1996 and 77% of net sales for the nine months ended
September 30, 1997. The balance of the Company's business consists of the
production of similar services for point-of-sale, advertising and direct mail.

"Prepress services" are the tasks involved in preparing images and text for
reproduction to exact specifications for a variety of media, including packaging
for consumer products, point-of-sale displays and other promotional materials.
Packaging for consumer products encompasses folding cartons, boxes, trays, cans,
containers, packaging labels and wrap. While prepress work represents a
relatively small percentage of a product's final packaging and promotion costs,
the visual impact and effectiveness of product packaging and promotions are
largely dependent upon the quality of prepress work.

The Company's clients typically outsource their prepress requirements and
assign the Company the responsibility of interfacing with the clients'
designated graphic designers who design the packaging and the converters or
printers who print and produce the packaging and related materials. The Company
competes on the basis of offering its multi-national client base: (i) high
quality customized imaging; (ii) rapid turnaround and delivery times; (iii)
up-to-date knowledge of the printing press specifications of converters and
printers located throughout the United States and Canada; (iv) digital imaging
asset management; (v) art production; and (vi) the capability to service its
clients' global prepress requirements through the Company's North American
facilities and international alliance partners. The Company's clients include:
Bayer, Campbell Soup, ConAgra, General Mills, Hershey, Keebler, Leo Burnett,
Nestle, Pepsico, Pillsbury, Publisher's Clearing House, Quaker Oats and a
significant number of other Fortune 1000 accounts.

The prepress industry in North America has over 1,300 market participants,
principally independent color separators, such as the Company, converters,
printers and consumer products companies that perform these services in-house.
The majority of prepress providers specialize in high volume, commodity-oriented
publication work that includes textbooks, advertising, catalogs, newspapers and
magazines. The Company's target market, however, is the consumer products
industry. The North American market for prepress services to the consumer
products industry is estimated by the Company to range from $1.0 billion to $1.3
billion, while the worldwide market is estimated by the Company to be as high as
$6.0 billion. The consumer products prepress industry is highly fragmented with
hundreds of market participants, only a small number of which have annual
revenues exceeding $50.0 million. The Company believes that the number of
participants in the North American prepress market for the consumer products
industry will diminish due to consolidation and attrition caused by competitive
forces such as accelerating technological requirements for advanced systems,
equipment and highly skilled personnel and the growing demands of clients for
full-service global capabilities.

the consumer products industry and in particular for the food and beverage
segment. Additional industry trends include: (i) the shorter turnaround and
delivery time requirements from the creative design phase to final distribution
of the packaged product; (ii) an increasing number of stock keeping units
("SKUs") competing for shelf space and market share; (iii) the increasing
importance of package appearance and promotions due to demonstrated
point-of-sale consumer purchasing behavior; and (iv) the increasing requirements
for worldwide quality and consistency in packaging as companies attempt to build
global brand name recognition.

The Company believes that its clients have increasingly selected Schawk as
the primary supplier of prepress services because of the Company's ability to
provide quick turnaround and delivery times and high quality, customized
imaging. The Company is able to compete on this basis due to the following core
competencies:

- Technical Expertise. The Company places an emphasis on state-of-the-art
systems and equipment and continual training and development of its
employees.

- On-Site Personnel. The Company has placed over 60 employees on-site at or
near 19 client locations in an effort to further integrate its prepress
services directly with client operations. This facilitates faster
turnaround and delivery times and fosters stronger client relationships.

- Strong Relationships with Converters and Printers. Over the course of its
44-year business history, the Company has developed strong relationships
with virtually all of the major converters and printers in the United
States and Canada and, as a result, has extensive knowledge of their
equipment, thereby enabling the Company to increase the overall
efficiency of the printing process.

- Imaging Asset Management. The Company maintains and manages a database of
its clients' images and package designs. Once an image is in the
Company's database, the client can make regional, seasonal or event
related adjustments to the file image prior to printing. The Company's
ability to quickly manipulate digital images enables its clients to
deliver their products to the market faster.

The Company's primary goal is to enhance its leadership position in the
prepress imaging market for the consumer products industry. Key aspects of the
Company's business strategy to achieve this goal include the following:

- Growth through Acquisitions and Start-ups. In its 44-year business
history, the Company has integrated more than 25 prepress and imaging
businesses into its operations while streamlining overhead and improving
margins. These acquisitions are part of the Company's growth strategy to
acquire companies with Fortune 1000 client lists, excellent client
service or proprietary products and solid management who will continue to
operate the business after the acquisition. The Company believes that an
emphasis on complementary acquisitions of companies serving targeted
markets will allow it to broaden its service offerings and provide single
source prepress and imaging services. Schawk has also established
start-up operations in response to client or market requirements. The
Company expects to continue this strategy as opportunities warrant.

- Exploitation of Industry Trends; Outsourcing. The Company has
historically attempted to strengthen its market position by identifying
and exploiting industry trends. As a consequence, the Company has been
uniquely positioned to benefit as consumer products companies continue to
reduce both their prepress staffs and total number of suppliers. The
Company's on-site strategy developed as clients outsourced imaging
functions in an attempt to cut costs and improve turnaround and delivery
times. The Company intends to expand this effort as clients increasingly
require on-site service. Further, the Company believes that its
commitment to client service and its broad array of premium service
offerings position the Company as a cost effective, value-added supplier
of prepress services.

Company continually invests in new technology designed to support its high
quality prepress services. The Company concentrates its efforts on understanding
the systems and equipment available in the marketplace and creating solutions
using off-the-shelf products, customized to meet a variety of specific
client and internal requirements.

In addition to its operations in the United States and Canada, the Company
has established a full-service prepress and digital imaging operation in Mexico.
The Company also has alliances with selected prepress companies in Europe, the
Far East and Australia to provide international prepress services to its
multi-national client base.

The Company is incorporated under the laws of the State of Delaware. The
Company's principal executive offices are located at 1695 River Road, Des
Plaines, Illinois 60018, and its telephone number is (847) 827-9494.

THE OFFERING

Class A Common Stock offered

By the Company................................ 1,500,000 shares

By the Selling Stockholders................... 1,500,000 shares

Total Class A Common Stock offered............ 3,000,000 shares

Class A Common Stock to be outstanding after the
Offering........................................ 21,303,739 shares (21,453,739
shares if the Underwriters'
over-allotment option is
exercised)(1)

Use of Proceeds................................. Together with other available
funds, to repurchase all of
the outstanding Series A
Preferred Stock and Series B
Preferred Stock of the
Company. See "Use of
Proceeds."

New York Stock Exchange Symbol.................. "SGK"
- ---------------
(1) Excludes 2,252,000 shares of Class A Common Stock reserved for issuance
pursuant to the exercise of options under the Company's 1988 Equity Option
Plan and 1991 Outside Directors' Formula Stock Option Plan, under which
options for 820,000 shares have been granted and options for 486,465 shares
were vested as of September 30, 1997.
7
<PAGE> 9

SUMMARY CONSOLIDATED FINANCIAL DATA

On February 7, 1997, the Company sold its plastics business segment for
$93.485 million plus or minus working capital adjustments. The consolidated
statement of income data for the Company set forth below has been restated to
exclude discontinued operations and is presented for continuing operations only.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- General."

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
----------------------------------------------------- -------------------
1992 1993 1994 1995 1996 1996 1997
-------- -------- -------- -------- -------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME
DATA
Net Sales........................... $ 82,860 $ 95,809 $103,889 $ 87,204 $ 90,763 $ 63,881 $ 85,157
Operating Income.................... 14,065 16,276 20,309 11,022 13,373 9,530 13,777
Income from Continuing Operations
Before Income Taxes............... 12,653 12,680 15,991 7,243 9,056 6,642 13,698
Income Taxes........................ 425(a) 601(a) 3,722(a)(b) 945(c) 3,530 2,487 5,479
Income from Continuing Operations... 12,228 12,079 12,269 6,298 5,526 4,155 8,219
Income from Continuing Operations
Per Common Share.................. --(d) --(d) --(d) $ 0.26 $ 0.22 $ 0.17 $ 0.37
PRO FORMA INFORMATION (CONTINUING
OPERATIONS)(E)
Pro Forma Income Taxes.............. $ 5,061 $ 5,072 $ 6,396 -- -- -- --
Pro Forma Income from Continuing
Operations Adjusted Only for
Income Taxes...................... 7,592 7,608 9,595 -- -- -- --
OTHER DATA
Cash Dividends per Common Share..... --(d) --(d) --(d) $ 0.260 $ 0.260 $ 0.195 $ 0.195
</TABLE>

<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
----------------------
AS
ACTUAL ADJUSTED(f)
-------- -----------
(UNAUDITED)
<S> <C> <C>
CONSOLIDATED BALANCE SHEET DATA
Working Capital................................... $ 25,379 $ 19,431
Total Assets...................................... 129,551 123,603
Long-Term Debt and Capital Lease Obligations...... 44,963 44,963
Stockholders' Equity.............................. 53,403 47,455
</TABLE>

- ---------------
(a) The Company was taxed as an S corporation and therefore was subject only to
certain state income taxes for the years ended December 31, 1992, 1993 and
1994.

(b) Income taxes for the year ended December 31, 1994 include a one-time
deferred tax charge of $3,000 for the termination of the S corporation tax
election.

(c) Income taxes for the year ended December 31, 1995 include a benefit of
$1,632 for utilization of net operating loss carryforwards for which no tax
benefit was previously recorded.

(d) Because of the limited number of stockholders of the Company during the
periods it was taxed as an S corporation, income and cash dividends per
common share data is not meaningful and has not been presented for the years
ended December 31, 1992, 1993 or 1994.

(e) Pro forma information is presented to reflect income tax expense at a normal
corporate rate for the years ended December 31, 1992, 1993 and 1994.

(f) Adjusted to reflect the sale by the Company of 1,500,000 shares of Class A
Common Stock offered hereby at an estimated offering price of $12.1875 per
share and the application of the estimated net proceeds therefrom, together
with other funds available to the Company, to repurchase Series A Preferred
Stock and Series B Preferred Stock of the Company. See "Use of Proceeds."
8
<PAGE> 10

RISK FACTORS

The Class A Common Stock being offered hereby involves a high degree of
risk. Prospective purchasers of the Class A Common Stock offered hereby should
carefully consider the following risk factors, as well as the other information
contained in this Prospectus or incorporated by reference herein.

RISKS OF TECHNOLOGICAL CHANGE

The success of the Company has in part depended on its ability to develop
and exploit emerging technologies in the prepress services industry. By
leveraging its technological expertise, the Company has been able to maintain an
advantage over its competitors and has demonstrated to its clients the value of
using the Company for prepress services rather than attempting to perform these
functions in-house, through lower-cost competitors or through converters who
provide certain prepress services. While the Company continually invests in
training, education and research, there can be no assurance that the Company
will be successful in continuing to develop and exploit emerging technologies.
New technologies may also have the effect of lessening the Company's current
technological advantages, leading to increased in-house production of prepress
work by the Company's clients, or lowering barriers to entry so as to permit
other firms to provide competitive services. Use of the latest computer
equipment and software, while providing the opportunity for quicker turnaround
and delivery times, has placed greater reliance upon the accuracy of formatting
and information input methodologies. In order to ensure this accuracy as early
in the process as possible, well trained, highly efficient client service
personnel are vital. There can be no assurance that the Company will be
successful in continuing to attract, train or retain the highly skilled
personnel which are necessary for its operations.

The Company's services and the equipment that it employs in delivering its
services are subject to rapid technological change and rapid obsolescence.
Accordingly, the Company's ability to grow will depend upon its ability to keep
pace with technological advances on a continuing basis and to integrate
available technologies with client needs in a commercially appropriate manner.
The Company's business may be adversely affected if it is unable to keep pace
with relevant changes or if the technologies that it adopts do not receive
widespread market acceptance.

RISKS ASSOCIATED WITH ACQUISITIONS; MANAGEMENT OF GROWTH

The Company plans to further expand its business through acquisitions and
evaluates acquisition opportunities on an ongoing basis. There can be no
assurance that the Company will successfully identify, complete or integrate
additional acquisitions or that any acquisitions will perform as expected or
will contribute significant revenues or profits to the Company. In addition, the
Company may pursue and consummate acquisitions that are dilutive to stockholders
if it believes that such acquisitions are in the best interests of the Company.
Additionally, in the future, the Company may face increased competition for
acquisition opportunities, which may inhibit the Company's ability to consummate
acquisitions on terms favorable to the Company.

Any acquired business may provide services that, although complementary,
differ from the existing services offered by the Company. There can be no
assurance that the anticipated benefits of these acquisitions will be achieved.
There can be no assurance that the Company will be able to manage successfully
new service areas of the Company, the employees of such service areas or the
client base supported by such service areas.

The ability of the Company to manage growth through acquisitions and its
own internal growth depends on its ability to maintain the high quality of
services that it provides to clients; to successfully integrate the different
services that it provides; to recruit, motivate and retain qualified personnel;
and to train existing sales representatives or recruit new sales representatives
to cross-sell different services or products. There can be no assurance that the
Company will be able to manage its expanding operations effectively or that it
will be able to maintain its growth. Failure to successfully manage its
expanding operations or to maintain its growth would have a material adverse
effect on the Company's business, financial condition and results of operations.

9
<PAGE> 11

INABILITY TO PREDICT ORDER FLOW

The prepress services business is generally characterized by individual
orders from clients on a project-by-project basis rather than long-term supply
contracts. Continued engagements for successive jobs are primarily dependent
upon the client's satisfaction with services previously provided. As
technological developments have significantly reduced the time-to-market for the
production of product packaging materials, seasonal fluctuations in the
Company's sales volume that previously occurred due to holiday promotions and
special marketing tie-ins have become less pronounced. Currently, on average,
the Company's projects and orders are processed in its production facility
within four days. Although the Company has established long-standing
relationships with its clients and believes its reputation for quality service
is excellent, the Company is not able to predict with certainty the volume of
its business even in the near future.

DEPENDENCE ON KEY MANAGEMENT

The Company's success has been and will be dependent to a large degree upon
its ability to retain the services of its existing senior management and to
attract and retain qualified additional senior and middle management in the
future. To provide for continuity of leadership, the Company has entered into
employment agreements with two of its executive officers. The loss of the
services of any of the key management personnel or the inability to recruit and
retain qualified personnel in the future could have a material adverse effect on
the Company's business and results of operations. See "Management."

CONCENTRATION OF OWNERSHIP

Clarence W. Schawk, David A. Schawk, other members of their immediate
families and A. Alex Sarkisian as trustee of various family trusts for the
benefit of Clarence W. Schawk's grandchildren (the "Schawk Family") presently
beneficially own, in the aggregate, approximately 85.1% of the Class A Common
Stock of the Company and will beneficially own approximately 73.6% of the Class
A Common Stock after completion of the Offering. As a result, the Schawk Family
will, acting together, be able to control most matters requiring approval by the
stockholders of the Company, including the election of directors. The voting
control of the Schawk Family could have the effect of delaying or preventing a
change in control of the Company. See "Principal and Selling Stockholders" and
"Description of Capital Stock."

COMPETITION

The Company competes with other providers of prepress and digital imaging
services. The market for prepress services is highly fragmented, with several
national and many regional participants. The Company faces, and will continue to
face, competition in its prepress business from many sources, including national
and regional companies, some of which have greater financial, marketing and
other resources than the Company. In addition, local and regional firms
specializing in particular industry segments compete on the basis of established
long-term relationships or specialized knowledge of such segments. The
introduction of new technologies may also lead to increased in-house production
of prepress work by the Company's clients, or create lower barriers to entry so
as to permit other firms to provide competing services.

There can be no assurance that competitors will not introduce services or
products that achieve greater market acceptance than, or are technologically
superior to, the Company's prepress and digital imaging service offerings.
Competitors and future competitors have or may have more extensive digital
imaging service capabilities, more extensive experience and greater financial,
marketing and other resources than the Company.

No assurance can be given that the Company will be able to continue to
compete successfully or that competitive pressures will not adversely affect the
Company's business, financial condition and results of operations. See
"Business -- Competition."

10
<PAGE> 12

DEPENDENCE ON KEY CLIENTS

The Company's ten largest clients accounted for approximately 37% of the
Company's revenues in 1996 and 34% of revenues for the nine months ended
September 30, 1997. In 1996 and for the nine months ended September 30, 1997,
approximately 8% and 7%, respectively, of the Company's total revenues came from
the Company's largest single client. While the Company seeks to build long-term
client relationships, revenues from any particular client can fluctuate from
period to period due to such client's purchasing patterns. Any termination or
significant disruption of the Company's relationships with any of its principal
clients could have a material adverse effect on the Company's business,
financial condition and results of operations. See "Business -- Clients."

FLUCTUATIONS IN VALUE OF MARKETABLE SECURITIES

As of September 30, 1997, the Company held $52.3 million of marketable
securities and short-term investments which consisted of $10.5 million in equity
securities and equity mutual funds, $6.3 million in U.S. Treasury and U.S.
Government notes, $3.3 million in corporate bonds and $32.2 million in bond
mutual funds. The Company carries the marketable securities at fair value, with
unrealized gains and losses, net of income taxes, reported as a separate
component of stockholders' equity. Realized gains and losses upon disposition of
marketable securities and declines in value of marketable securities judged to
be other than temporary are included in investment income. As of September 30,
1997, the fair value of the marketable securities exceeded the Company's cost by
$2.6 million ($1.6 million net of tax effects) which was recorded in
stockholders' equity. See Note 7 to notes to condensed consolidated interim
financial statements.

The fair value of the Company's marketable securities are subject to stock
market and interest rate risk and it is expected that the fair value of the
Company's marketable securities will fluctuate from period to period. Any
decrease in the market value of the marketable securities held by the Company
will have a negative impact on the Company's stockholders' equity and would have
an adverse effect on the Company's income from operations if the Company sold
its marketable securities below the cost thereof. Substantial decreases in the
fair value of such marketable securities may adversely affect the Company's
financial condition, results of operations and growth strategy, particularly its
ability to pursue its acquisition strategy.

LIMITED PROPRIETARY RIGHTS

The Company seeks to protect its know-how and proprietary software through
copyright and trade secret laws and, in certain cases, contractual restrictions
on disclosure. Despite such measures, it may be possible for unauthorized third
parties to copy aspects of the Company's software and processes or to obtain and
use information that the Company regards as proprietary. In addition, no
assurance can be given that protective measures taken by the Company will be
sufficient to preclude competitors from developing competing or similar software
or processes.

FLUCTUATIONS IN QUARTERLY OPERATING RESULTS

The Company's quarterly operating results have fluctuated in the past and
may fluctuate in the future as a result of a variety of factors, including
timing of the completion of particular projects or orders, material reduction or
cancellation of major projects or the loss of a major client, timing of new
business, timing of the hiring or loss of personnel, differences in order flows
between traditional prepress and digital imaging services, sensitivity to
general economic conditions, the health of the consumer products industry, the
relative mix of different types of work with differing margins, clients' order
patterns, changes in the pricing strategies of the Company and other costs
relating to the expansion of operations. Many of these factors are outside of
the Company's control. Because of the high fixed-cost nature of the Company's
business, the Company may not be able to adjust spending in a timely manner to
compensate for any unexpected revenue shortfall, which would adversely affect
operating results. For the foregoing reasons, the Company believes that
period-to-period comparisons of its financial results should not be relied upon
as an indication of future performance. In addition, the results of any
quarterly period are not indicative of results to be expected for a full fiscal
year. It is possible that, in certain future quarters, the Company's operating
results may be below the expectations of

11
<PAGE> 13

public market analysts and investors. In such an event, the price of the Class A
Common Stock would likely be materially adversely affected. See "Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Quarterly Results of Operations."

SUSCEPTIBILITY TO CHANGE IN ECONOMIC CONDITIONS

The Company's revenues and results of operations are subject to
fluctuations based upon the economic conditions of the United States and Canada
in general, and the economic conditions of the consumer products industry and
food and beverage companies in particular. If there were to be a general
economic downturn or a recession in the United States or one specifically
affecting the consumer products industry and food and beverage companies, the
Company would expect that business enterprises, including its clients and
potential clients, will substantially and immediately reduce both their prepress
budgets and their expenditures on other services of the types offered by the
Company. In the event of such an economic downturn, there can be no assurance
that the Company's business, operating results and financial condition would not
be materially and adversely affected.

LABOR RELATIONS

Approximately 30% of the Company's employees are represented by local units
of international labor unions. The Company considers its union employees to be
vital to its operations. Although the Company considers its relationship with
its union employees to be good, there can be no assurance that the Company will
be successful in renegotiating collective bargaining agreements with its union
employees in the future or that the failure to renegotiate such contracts will
not result in work stoppages or disruption to the operations of the Company. Any
such work stoppages or disruption could have a material adverse effect on the
Company's financial condition, results of operations or growth opportunities.
See "Business -- Employees."

RESTRICTIVE DEBT COVENANTS

The Company may in the future incur indebtedness in connection with its
acquisition strategy or to fund its operations. Existing or future credit
agreements entered into by the Company with its lenders with respect to existing
or future indebtedness may contain covenants that could restrict certain actions
by the Company and may impede its ability to implement its growth strategy. No
assurances can be given that existing credit agreements will not restrict the
Company's growth strategy or that the Company will not in the future enter into
agreements with its lenders that contain restrictive covenants that would have a
similar effect.

POTENTIAL STOCK PRICE VOLATILITY

The trading price of the Class A Common Stock could be subject to
significant fluctuations in response to variations in quarterly operating
results or other factors. Announcements concerning developments in the prepress,
digital imaging or related industries, results of the Company's operations and
stock market conditions generally could have a significant impact on the market
price of the Class A Common Stock. In addition, stock prices for many companies
fluctuate widely for reasons that may be unrelated to those companies' results
of operations. These fluctuations, as well as general economic, political and
market conditions, may have a material adverse effect on the market price of the
Class A Common Stock.

SHARES ELIGIBLE FOR FUTURE SALE

Sales of a significant number of shares of Class A Common Stock in the
public market following the Offering, or the perception that such sales could
occur, could adversely affect the market price of the Class A Common Stock and
such sales could materially impair the Company's ability to raise capital
through the future offering of equity securities. All of the 3,000,000 shares
offered hereby (3,450,000 shares if the Underwriters' over-allotment option is
exercised in full) will be freely transferable without restriction or
registration under the Securities Act. Upon completion of the Offering, the
Company will have 21,303,739 shares of Class A Common Stock outstanding and will
have increased the number of shares that will be freely transferable without
restriction (the "public float") from 4,705,971 shares to 7,705,971 shares
(8,155,971

12
<PAGE> 14

shares if the Underwriters' over-allotment option is exercised in full). Of the
remaining shares outstanding, 159,521 shares will be held by independent parties
and constitute "restricted securities," as defined under Rule 144 of the
Securities Act, and subject to the resale limitations thereunder, and 12,818,399
shares will be beneficially owned by "affiliates" of the Company, as defined
under Rule 144, and eligible for resale subject to the limitations under Rule
144. Of the shares held by or on behalf of the Schawk Family, 2,212,914 shares
are freely transferable under Rule 144, 13,420,476 shares are eligible for
resale subject to the limitations of Rule 144 and approximately 12.9 million
shares are subject to demand or piggyback registration rights. See "Shares
Eligible for Future Sale."

Up to 820,000 additional shares of Class A Common Stock may be purchased by
certain employees and directors of the Company pursuant to the exercise of
options (the "Options") granted under the Company's 1988 Equity Option Plan and
the 1991 Outside Directors' Formula Stock Option Plan, of which Options for
468,465 shares were vested as of September 30, 1997. The shares of Class A
Common Stock issuable upon exercise of the Options are freely tradable under a
registration statement on Form S-8, except that such shares held by affiliates
of the Company will be subject to the volume limitations of Rule 144.

The Company may issue shares of Class A Common Stock in connection with
acquisitions of other companies. Such shares, if registered, could be freely
tradeable.

ANTI-TAKEOVER CONSIDERATIONS

The Company is subject to the restrictions imposed by Section 203 of the
Delaware General Corporation Law, as amended ("Section 203"). Section 203
provides that, subject to certain exceptions specified therein, an "interested
stockholder" of a Delaware corporation shall not engage in any business
combination, including mergers, consolidations or acquisitions of additional
shares of the corporation, with the corporation for a three-year period
following the date that such stockholder becomes an "interested stockholder"
unless: (i) prior to such date, the board of directors of the corporation
approved either the business combination or the transaction which resulted in
the stockholder becoming an "interested stockholder"; (ii) upon consummation of
the transaction which resulted in the stockholder becoming an "interested
stockholder," the interested stockholder owned at least 85% of the voting stock
of the corporation outstanding at the time the transaction commenced (excluding
certain shares); or (iii) on or subsequent to such date, the business
combination is approved by the board of directors of the corporation and
authorized at an annual or special meeting of stockholders by the affirmative
vote of at least 66 2/3% of the outstanding voting stock which is not owned by
the "interested stockholder." Except as otherwise specified in Section 203, an
"interested stockholder" is defined to include (x) any person that is the owner
of 15% or more of the outstanding voting stock of the corporation, or is an
affiliate or associate of the corporation and was the owner of 15% or more of
the outstanding voting stock of the corporation at any time within three years
immediately prior to the relevant date and (y) the affiliates and associates of
any such person. The Schawk Family became "interested stockholders" in September
1992.

These provisions could have the effect of delaying, deferring or preventing
a change of control of the Company. The Company's stockholders, by adopting an
amendment to its Amended Certificate of Incorporation or By-laws, may elect not
to be governed by Section 203, effective 12 months after adoption.

13
<PAGE> 15

THE COMPANY

Schawk is a leading provider of digital imaging prepress services for the
consumer products industry in the United States and Canada. The Company offers
its clients a complete line of high quality prepress services, including
conventional, electronic and desktop color separations, film preparation,
platemaking and press proofs for the three main printing processes used in the
graphic arts industry: lithography, flexography and gravure. The Company also
provides its clients such value-added services as digital photography, digital
image management and art production. See "Business."

The Company's prepress business was begun in 1953, operating from one
location in Chicago, Illinois. Under the direction of Clarence W. Schawk and his
son, David A. Schawk, the Company has grown into an international business with
operations in the United States and Canada and has recently established a full-
service prepress operation in Mexico. The Company also maintains international
affiliations with selected prepress providers in Europe, the Far East and
Australia. Over the Company's 44-year business history, Schawk has integrated
more than 25 prepress and imaging businesses into its operations while
streamlining overhead and improving margins. Schawk intends to continue to
expand through acquisitions of well-managed companies in prepress and
imaging-related businesses with solid market positions, established client
relationships and new technologies. Schawk has also established start-up
operations in response to client or market requirements and expects to continue
this strategy as opportunities warrant.

The Company functions as a network of autonomous operating businesses with
purchasing, technology development and finance centralized at the Company's
corporate headquarters in Des Plaines, Illinois. The following is a listing of
the various Schawk operations and international alliances:

<TABLE>
<CAPTION>
SCHAWK OPERATIONS LOCATION
----------------- --------
<S> <C>
United States
Amber Design Associates............. Hackettstown, New Jersey
Color Data East..................... Armonk, New York
Converterscan....................... Smyrna, Georgia
Dimension Imaging................... Roseville, Minnesota
Lincoln Graphics.................... Cherry Hill, New Jersey
Litho Colorplate Company............ Minneapolis, Minnesota
LSI/Atlanta......................... Smyrna, Georgia
LSI/Kala............................ Kalamazoo, Michigan
Process Color Plate Co.............. Chicago, Illinois
Schawkgraphics/Total Reproduction... Des Plaines, Illinois
Stebbins Photography................ Minneapolis, Minnesota
Weston Engraving Company............ Minneapolis, Minnesota
929 Design.......................... Costa Mesa, California
Canada
Batten Graphics..................... Toronto, Ontario
CyberImages......................... Toronto, Ontario
PrinterNet.......................... Toronto, Ontario
Fishbowl Productions................ Toronto, Ontario
StanMont, Inc. ..................... Montreal, Quebec
XZact............................... Montreal, Quebec
Mexico
Schawk de Mexico, S.A. de C.V. ..... Queretaro, Mexico
</TABLE>

14
<PAGE> 16

<TABLE>
<CAPTION>
INTERNATIONAL ALLIANCES LOCATION
----------------------- --------
<S> <C>
Europe
Brent International PLC............. Buckinghamshire, United Kingdom
Pre-press Group De Schutter......... Antwerpen, Belgium
Saueressig & Company................ Vreden, Germany
Singapore
Colourscan Co. Pte. Ltd. ........... Singapore
Laserscan SDN.BHD................... Simpang Ampai, S.P.T., Penang
Australia
Network Graphics.................... Marrickville, Australia
</TABLE>

The Company has taken advantage of its clients' needs to rationalize their
workforce and outsource their prepress services by establishing satellite
operations either on-site or in close proximity to the Company's clients. The
Company presently has over 60 employees on-site at or near 19 client facilities.
Maintaining personnel and digital imaging systems on-site provides for increased
client communication, improved turnaround and delivery time and enhanced
long-term client relationships. It also enables the Company to modify and
customize its operations to fit the particular requirements of each client.

The Company is primarily engaged in one line of business, prepress and
digital imaging. Prior to February 7, 1997, the Company also operated a second
business segment, the operations of which were sold in transactions accounted
for in 1996. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations -- General."

USE OF PROCEEDS

The proceeds to the Company from the sale of the 1,500,000 shares of Class
A Common Stock offered by the Company hereby are estimated to be $16,859,000,
net of underwriting discounts, commissions and estimated expenses. If the
Underwriters' over-allotment option is exercised in full, the proceeds to the
Company from the sale of 1,650,000 shares, net of underwriting discounts,
commissions and estimated expenses, are estimated to be $18,578,000. The Company
will not receive any proceeds from the sale of shares of Class A Common Stock by
the Selling Stockholders.

Simultaneously with the closing of the Offering, the Company intends to use
the net proceeds from the Offering, together with other available funds, to
repurchase 17,600 shares of Series A Preferred Stock of the Company and 5,207
shares of Series B Preferred Stock of the Company at a price of $1,000 per share
plus accrued dividends thereon to the date of repurchase. All of the outstanding
shares of Series A Preferred Stock and Series B Preferred Stock of the Company
are beneficially owned by members of the Schawk Family. Each holder of Series A
Preferred Stock and Series B Preferred Stock has agreed to sell such shares to
the Company. See "Certain Transactions."

15
<PAGE> 17

PRICE RANGE OF CLASS A COMMON STOCK

The Class A Common Stock is traded on the New York Stock Exchange under the
symbol "SGK." The following table sets forth, for the periods indicated, the
high and low sales prices for the Class A Common Stock, as reported on the New
York Stock Exchange.

<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1995:
Quarter ended March 31.................................... $11 $ 8 1/4
Quarter ended June 30..................................... 9 1/8 7 3/8
Quarter ended September 30................................ 8 3/4 7 1/8
Quarter ended December 31................................. 7 3/4 5 1/8
YEAR ENDED DECEMBER 31, 1996:
Quarter ended March 31.................................... 9 1/4 7
Quarter ended June 30..................................... 9 1/8 7 5/8
Quarter ended September 30................................ 8 3/4 7 1/4
Quarter ended December 31................................. 8 3/4 6 3/4
YEAR ENDED DECEMBER 31, 1997:
Quarter ended March 31.................................... 9 9 5/8
Quarter ended June 30..................................... 9 7 7/8
Quarter ended September 30................................ 11 7/16 8 1/8
Quarter ending December 31 (through November , 1997)....
</TABLE>

The last sale price of the Class A Common Stock, as reported on the New
York Stock Exchange on October 29, 1997, was $12.1875 per share. As of September
30, 1997, the Company had 19,803,739 outstanding shares of Class A Common Stock
and approximately 2,140 stockholders of record, which does not include shares
held in securities position listings.

16
<PAGE> 18

DIVIDEND POLICY

The Company's Board of Directors has declared and the Company has paid a
regular quarterly dividend on the Class A Common Stock of $0.065 per share, or
$0.260 per share annually. The table below sets forth information with respect
to dividends paid on the Class A Common Stock during the periods indicated.

<TABLE>
<CAPTION>
PER SHARE OF CLASS A
COMMON STOCK
--------------------
<S> <C>
YEAR ENDED DECEMBER 31, 1995:
Quarter ended March 31.................................... $0.065
Quarter ended June 30..................................... 0.065
Quarter ended September 30................................ 0.065
Quarter ended December 31................................. 0.065
-------
$0.260
=======
YEAR ENDED DECEMBER 31, 1996:
Quarter ended March 31.................................... $0.065
Quarter ended June 30..................................... 0.065
Quarter ended September 30................................ 0.065
Quarter ended December 31................................. 0.065
-------
$0.260
=======
YEAR ENDED DECEMBER 31, 1997 (THROUGH SEPTEMBER 30):
Quarter ended March 31.................................... $0.065
Quarter ended June 30..................................... 0.065
Quarter ended September 30................................ 0.065
-------
$0.195
=======
</TABLE>

The Company's Board of Directors may determine to discontinue declaring and
paying any dividends with respect to the Class A Common Stock in the future.
There can be no assurance that dividends will be paid in the future by the
Company. Any future determination as to payment of dividends will depend upon
the Company's financial condition, results of operations, growth opportunities
and such other factors as the Board of Directors deems relevant.

17
<PAGE> 19

CAPITALIZATION

The following table sets forth, as of September 30, 1997, the
capitalization of the Company and the capitalization of the Company as adjusted
to give effect to the receipt and application by the Company of the estimated
net proceeds from the sale of 1,500,000 shares of Class A Common Stock offered
hereby as described in "Use of Proceeds" (at an assumed price of $12.1875 per
share and after the deduction of estimated underwriting discounts and
commissions and estimated offering expenses payable by the Company). The table
also gives effect to additional funds to be paid by the Company to repurchase
the remaining Series A Preferred Stock and Series B Preferred Stock not
repurchased with the proceeds of the Offering. The table should be read in
conjunction with the historical consolidated financial statements of the Company
and the notes thereto, and the other financial information appearing elsewhere
in this Prospectus or incorporated by reference herein. See "Index to
Consolidated Financial Statements."

<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
--------------------
(IN THOUSANDS)
AS
ACTUAL ADJUSTED
-------- --------
<S> <C> <C>
Cash and cash equivalents................................... $ 1,878 $ 1,878
Short-term investments...................................... 18,967 13,019
-------- --------
Total cash and short-term investments............. $ 20,845 $ 14,897
Marketable securities....................................... $ 33,354 $ 33,354
Short-term debt:
Notes payable to banks.................................... $ 4,200 $ 4,200
Current portion of long-term debt and capital lease
obligations............................................ 391 391
-------- --------
Total short-term debt............................. $ 4,591 $ 4,591
Long-term debt.............................................. $ 40,000 $ 40,000
Capital lease obligations................................... 4,963 4,963
Stockholders' equity:
Series A Preferred Stock, $0.01 par value; $1,000
liquidation value; 17,600 shares issued and outstanding
(Actual); no shares issued and outstanding (As
Adjusted).............................................. -- --
Series B Preferred Stock, $0.01 par value; $1,000
liquidation value; 5,207 shares issued and outstanding
(Actual); no shares issued and outstanding (As
Adjusted).............................................. -- --
Class A Common Stock, $0.008 par value; 19,803,739 shares
issued and outstanding (Actual); 21,303,739 shares
issued and outstanding (As Adjusted) (1)............... 159 171
Class B Common Stock, $0.05 par value; 172,281 shares
issued but not outstanding (Actual and As Adjusted)....
Additional paid-in capital................................ 78,318 72,358
Retained earnings (deficit)............................... (23,491) (23,491)
Other equity.............................................. (1,583) (1,583)
-------- --------
Total stockholders' equity........................ 53,403 47,455
-------- --------
Total capitalization.............................. $ 98,366 $ 92,418
======== ========
</TABLE>

- ---------------
(1) Excludes 2,252,000 shares of Class A Common Stock reserved for issuance
pursuant to the exercise of options under the Company's 1988 Equity Option
Plan and 1991 Outside Directors' Formula Stock Option Plan, under which
options for 820,000 shares have been granted and options for 486,465 shares
were vested as of September 30, 1997.

18
<PAGE> 20

SELECTED CONSOLIDATED FINANCIAL DATA

The following table sets forth selected consolidated financial data of the
Company. On February 7, 1997, the Company sold its plastics business segment for
$93.485 million plus or minus working capital adjustments. The consolidated
statement of income data for the Company set forth below has been restated to
exclude discontinued operations and is presented for continuing operations only.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations -- General." The selected consolidated financial data as of and for
the fiscal years ended 1992, 1993, 1994, 1995 and 1996 is derived from the
consolidated financial statements of the Company which have been audited by
Ernst & Young LLP, independent auditors. Ernst & Young LLP has relied upon an
audit report of Arthur Andersen LLP with respect to the presentation of certain
financial information in the Company's 1994 financial statements. The selected
consolidated financial data as of September 30, 1997 and for the nine months
ended September 30, 1996 and September 30, 1997 is derived from the unaudited
condensed consolidated financial statements of the Company which, in the opinion
of management, contain all adjustments (consisting of normal recurring
adjustments) necessary for a fair presentation of the Company's financial
position and results of operations. The data should be read in conjunction with
the consolidated financial statements and related notes included elsewhere in
this Prospectus or incorporated by reference herein.

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
-------------------------------------------------------- --------------------
1992 1993 1994 1995 1996 1996 1997
------- ------- -------- ------- ------- ------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED STATEMENT OF INCOME DATA
Net Sales....................................... $82,860 $95,809 $103,889 $87,204 $90,763 $63,881 $85,157
Operating Income................................ 14,065 16,276 20,309 11,022 13,373 9,530 13,777
Income from Continuing Operations Before Income
Taxes......................................... 12,653 12,680 15,991 7,243 9,056 6,642 13,698
Income Taxes.................................... 425(a) 601(a) 3,722(a)(b) 945(c) 3,530 2,487 5,479
Income from Continuing Operations............... 12,228 12,079 12,269 6,298 5,526 4,155 8,219
Income from Continuing Operations Per Common
Share......................................... --(d) --(d) --(d) $ 0.26 $ 0.22 $ 0.17 $ 0.37
PRO FORMA INFORMATION (CONTINUING OPERATIONS)(E)
Pro Forma Income Taxes.......................... $ 5,061 $ 5,072 $ 6,396 -- -- -- --
Pro Forma Income from Continuing Operations
Adjusted Only for Income Taxes................ 7,592 7,608 9,595 -- -- -- --
OTHER DATA
Cash Dividends per Common Share................. --(d) --(d) --(d) $ 0.260 $ 0.260 $ 0.195 $ 0.195
</TABLE>

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30, 1997
---------------------------------------------------- ----------------------
AS
1992 1993 1994 1995 1996 ACTUAL ADJUSTED(F)
-------- -------- -------- -------- -------- -------- -----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
CONSOLIDATED BALANCE SHEET DATA(G)
Working Capital................................... $ 26,186 $ 30,049 $ 25,753 $ 26,875 $ 21,881 $ 25,379 $ 19,431
Total Assets...................................... 155,756 180,193 193,925 184,463 160,840 129,551 123,603
Long-Term Debt and Capital Lease Obligations...... 70,803 83,271 81,090 75,582 67,785 44,963 44,963
Stockholders' Equity.............................. 44,183 51,119 75,590 76,429 48,926 53,403 47,455
</TABLE>

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

(a) The Company was taxed as an S corporation and therefore was subject only to
certain state income taxes for the years ended December 31, 1992, 1993 and
1994.

(b) Income taxes for the year ended December 31, 1994 include a one-time
deferred tax charge of $3,000 for the termination of S corporation tax
election.

(c) Income taxes for the year ended December 31, 1995 include a benefit of
$1,632 for utilization of net operating loss carryforwards for which no tax
benefit was previously recorded.

(d) Because of the limited number of stockholders of the Company during the
periods it was taxed as an S corporation, income and cash dividends per
common share is not meaningful and has not been presented for the years
ended December 31, 1992, 1993 and 1994.

(e) Pro forma information is presented to reflect income tax expense at a normal
corporate rate for the years ended December 31, 1992, 1993 and 1994.

(f) Adjusted to reflect the sale by the Company of 1,500,000 shares of Class A
Common Stock offered hereby at an offering price of $12.1875 per share and
the application of the estimated net proceeds therefrom, together with other
funds available to the Company, to repurchase Series A Preferred Stock and
Series B Preferred Stock of the Company. See "Use of Proceeds."

(g) Consolidated balance sheet data for the years ended December 31, 1992, 1993,
1994, 1995 and 1996 includes the plastics business segment of the Company.

19
<PAGE> 21

MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the
consolidated financial statements and notes thereto appearing elsewhere in this
Prospectus or incorporated by reference herein. Except for the historical
information contained herein, the following discussion contains forward-looking
statements that involve risks and uncertainties. The Company's actual results
could differ materially from those projected in the forward-looking statements
discussed herein. Factors that could cause or constitute such differences
include, but are not limited to, those discussed in this section, as well as in
the sections entitled "Risk Factors" and "Business."

GENERAL

In 1992, the company previously known as Schawk, Inc. ("Old Schawk") and
affiliated companies controlled by the Schawk Family (such companies
collectively referred to with Old Schawk as the "Old Schawk Companies") acquired
a controlling interest in Filtertek, Inc., a New York Stock Exchange listed
company ("Filtertek"). Effective December 30, 1994, the Old Schawk Companies
were merged into Filtertek (the "Merger") in a transaction accounted for as a
purchase transaction. The surviving corporation in the Merger was Filtertek,
which then changed its name to Schawk, Inc.; however, under applicable
accounting rules the historical financial statements of the Old Schawk
Companies, rather than the Filtertek statements, are treated as the financial
statements of the Company. The Filtertek business and certain related plastics
businesses constituted what had been the plastics group of the Company (the
"Plastics Group") prior to the Merger.

During 1996, the Company adopted a plan to discontinue the operation of its
Plastics Group. The Company concluded that its managerial and financial
resources could be more productively invested in the Company's primary
competency, prepress and digital imaging services. Plastic Molded Concepts, a
division of the Plastics Group located in Eagle, Wisconsin, was sold on May 1,
1996, to a management buyout group. On December 19, 1996, the Company announced
the sale of the remaining Plastics Group to ESCO Electronics Corporation. This
sale transaction closed on February 7, 1997. As a result of the February 7, 1997
sale, the Company recorded a 1996 fourth quarter charge of $33.0 million ($1.67
loss per share) to write-down assets of the Plastics Group to estimated net
realizable value and provide for income taxes and other costs of disposing of
this business. The financial information with respect to discontinued operations
is presented in Note 14 to the Consolidated Financial Statements.

As a result of the sale of the entire Plastics Group in 1996, the Company,
comprised primarily of what had been the business of the Old Schawk Companies,
is now strategically focused on its prepress and digital imaging business.
Accordingly, the Company has restated its financial statements to reflect
discontinued operations accounting treatment with respect to the Plastics Group.
Sales, cost of sales and operating income for all years presented reflect the
actual financial information for the continuing operations only of the Company's
prepress and digital imaging business and may be used as a basis of comparison
with the 1996 consolidated financial statements.

20
<PAGE> 22

RESULTS OF OPERATIONS

The following table sets forth, for the periods indicated, the percentage
relationship to net sales of selected items in the Company's consolidated income
statement for continuing operations:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
----------------------- ------------------
1994 1995 1996 1996 1997
----- ----- ----- ------ ------
<S> <C> <C> <C> <C> <C>
Net sales................................ 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales............................ 50.5 58.6 56.4 57.0 56.2
----- ----- ----- ----- -----
Gross profit............................. 49.5 41.4 43.6 43.0 43.8
Selling, general and administrative...... 29.9 28.8 27.8 28.1 27.6
Write-off of equipment................... -- -- 1.1 -- --
----- ----- ----- ----- -----
Operating income......................... 19.6% 12.6% 14.7% 14.9% 16.2%
Income from continuing operations before
income taxes........................... 15.4% 8.3% 10.0% 10.4% 16.1%
Income from continuing operations........ 11.8% 7.2% 6.1% 6.5% 9.7%
Net income (loss)........................ 13.0% 8.0% (27.5)% 9.4% 9.7%
</TABLE>

NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
1996

Net Sales. Net sales from continuing operations for the first nine months
of 1997 increased 33.3% to $85.2 million from $63.9 million for the first nine
months of 1996. The increase in net sales is attributable to revenue growth from
existing clients of approximately 12.4% and revenue growth from acquisitions of
approximately 20.9%. The Company acquired several new major clients during 1997
and experienced additional revenues from the expansion of its pre-existing
client base.

Operating Income. For the first nine months of 1997 operating income
increased 44.6% to $13.8 million from $9.5 million due to increased sales volume
and increased operating efficiency. Cost of sales for the nine months ended
September 30, 1997 decreased as a percent of net sales to 56.2% from 57.0% of
net sales for the comparable period in 1996 due to increased sales volume and
improved operating efficiency. Selling, general and administrative expenses
increased $5.6 million or 31.0% but decreased as a percent of net sales from
28.1% to 27.6% for the first nine months of 1997 versus the comparable period in
1996.

Income From Continuing Operations Before Income Taxes. Income from
continuing operations before income taxes for the nine months ended September
30, 1997 was $13.7 million, a gain of 106.2% over $6.6 million in the comparable
period of 1996. The pretax income margin for the first nine months of 1997 was
16.1% versus 10.4% for the first nine months of 1996. The improvement in pretax
income in the first nine months of 1997 versus the comparable period in 1996 is
primarily due to increased sales volume and increased operating efficiency.

Income From Continuing Operations. Income from continuing operations
increased 97.8% to $8.2 million for the first nine months of 1997 versus $4.2
for the first nine months of 1996 due to the increased sales volume, greater
operating efficiencies and the application of the proceeds of the sale of the
Plastics Group. For the nine-month period ended September 30, 1997, the Company
experienced growth in interest income to $2.1 million from $0.3 million for the
same period in 1996 due to an increase in invested balances relating to the
receipt of proceeds from the sale of the Plastics Group. Additionally, interest
expense decreased for the first nine months of 1997 to $2.8 million from $3.3
million in 1996 as a result of lower overall borrowings due to the retirement or
cancellation of certain of the Company's indebtedness with proceeds from the
sale of the Plastics Group. Other income of $0.6 million for the nine months
ended September 30, 1997 is primarily due to gain on the sale of investments as
the Company liquidated a portion of the equity portfolio acquired with proceeds
of the sale of the Plastics Group which was reinvested in bond funds.

Net Income. Net income increased to $8.2 million for the first nine months
of 1997 from $6.0 million for the first nine months of 1996, which included $1.9
million of income from the Plastics Group.

21
<PAGE> 23

1996 COMPARED TO 1995

Net Sales. Sales for 1996 were $90.8 million, up 4.1% over 1995 sales of
$87.2 million. Sales increased primarily as a result of the acquisition of
Converterscan of Stamford, Connecticut and Atlanta, Georgia (August 1996) and
StanMont Inc. of Montreal, Quebec and Toronto, Ontario (September 1996). These
acquisitions were included in the Company's results during the third quarter and
increased sales in the fourth quarter of 1996 by 32% from $20.3 million in sales
during the fourth quarter of 1995 to $26.9 million for the comparable quarter of
1996.

Internal growth, which was negative during the first six months of 1996,
increased in the last half of 1996 as new projects and promotions came on stream
with the Company's pre-existing consumer products clients.

Operating Income. Operating income for 1996 was $13.4 million, a gain of
21.3% as compared to 1995 operating income of $11.0 million. The operating
margin in 1996 of 14.7% increased over 1995 operating margin of 12.6%. The
operating gain was due to improved operating efficiencies in the Company's
plants as capacity utilization on new and existing electronic equipment improved
and the Company was able to hold selling, general and administrative costs flat
when compared with 1995.

Additionally, the Company made a decision to write off approximately $1.1
million of obsolete electronic equipment that was taken out of service in
several plants due to newer, more efficient equipment going on-line. Without the
write-off, operating income would have been $14.4 million in 1996, a gain of
30.9% over 1995 operating income of $11.0 million. The operating margin
comparison without the write-off for obsolete equipment for 1996 would have been
15.9% versus 1995 operating margin of 12.6%.

Income from Continuing Operations Before Income Taxes. Income from
continuing operations before income taxes for 1996 was $9.1 million, a gain of
25.0% over 1995 income of $7.2 million. This is a pretax income margin for 1996
of 10% versus the 1995 pretax income margin of 8.3%. Interest expense in 1996
was 8.2% higher than 1995, increasing from $4.3 million in 1995 to $4.7 million
in 1996 due to increased borrowings from acquisition-related debt. Without the
write-off of obsolete equipment of approximately $1.1 million, pretax income for
1996 would have been $10.1 million, a gain of 39.5% over 1995 pretax income of
$7.2 million. The pretax margin without the write-off for obsolete equipment for
1996 would have been 11.1% as compared to 1995 margin of 8.3%.

Income from Continuing Operations. Income from continuing operations for
1996 was $5.5 million as compared to $6.3 million in 1995. Excluding the
write-off of obsolete equipment in 1996, income from continuing operations would
have been $6.6 million, an increase of 4.4% compared to 1995 income of $6.3
million. Excluding the write-off of equipment in 1996 and the benefit of net
operating loss carryforwards in 1995, income from continuing operations in 1996
would have been $6.6 million, an increase of 40.9%, compared to 1995 income of
$4.7 million.

Net Income (Loss). Net loss for 1996 of $25.0 million contains a $33.0
million loss ($1.67 loss per share) on the disposal of the Plastics Group and
the related stockholder litigation settlement. The 1996 loss on the disposal of
discontinued operations contains a write-down of assets to estimated net
realizable value and provides for income taxes and other costs of disposing of
this business.

1995 COMPARED TO 1994

Net Sales. Sales for 1995 were $87.2 million compared to 1994 sales of
$103.9 million. Sales for 1994 were at a record level due in part to labeling
law changes required by the NLEA (National Labeling and Education Act). Every
food and beverage package sold in the U.S. was required to conform to a standard
contents label on each SKU by May 1994. Sales declined 16.1% in 1995 from 1994
as clients adjusted their typical package redesign cycles as a result of the
1994 NLEA deadline. This, combined with large increases in paper prices, lowered
the annual volume of projects or orders at the Company. The resulting effect was
that many of the Company's clients in 1995 elected to postpone package changes
or use up existing packaging inventories. The rebound in sales volume was much
slower than had been anticipated.

22
<PAGE> 24

Operating Income. Operating income for 1995 was $11.0 million as compared
to operating income for 1994 of $20.3 million. The operating margin for 1995
dropped to 12.6% from 19.5% in 1994. This 45.7% decline in operating income
resulted from lower sales and the corresponding impact of a high fixed-cost
base. The Company took multiple steps during 1995 to lower its cost base,
including a consolidation of its operating units, aggressive retraining of staff
and digitization of its workflow, a reduction in workforce and a reduction in
sales, general and administrative costs.

Income from Continuing Operations Before Income Taxes. Income from
continuing operations before income taxes for 1995 was $7.2 million as compared
to 1994 income of $16.0 million. Pretax income margin for 1995 was 8.3% versus a
1994 pretax income margin of 15.4%. Pretax income declined as a result of the
significant drop in operating income described above. Interest expense in 1995
was 11.6% higher than 1994, increasing from $3.9 million in 1994 to $4.3 million
in 1995 due to marginally higher average interest rates and higher average
outstanding debt in 1995.

Income from Continuing Operations. Income from continuing operations for
1995 was $6.3 million as compared to 1994 income of $12.3 million. This decline
was the result of the above-mentioned factors. Income from continuing operations
in 1995 contains a tax credit of $1.6 million related to losses from its
Plastics Group.

Net Income (Loss). Net income for 1995 of $6.9 million contains income from
discontinued operations of $0.6 million. This is compared to net income for 1994
of $13.5 million, which also contains $1.2 million of income from discontinued
operations.

QUARTERLY RESULTS OF OPERATIONS

The following table presents certain unaudited quarterly consolidated
financial data for each of the four quarters in 1995 and 1996 and the first
three quarters of 1997. This information was derived from unaudited condensed
consolidated financial statements of the Company that include, in the opinion of
the Company, all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation when read in conjunction with the condensed
consolidated financial statements of the Company included elsewhere in this
Prospectus or incorporated by reference herein. The Company's quarterly results
of operations have fluctuated in the past and may continue to do so in the
future depending upon a variety of factors. See "Risk Factors -- Fluctuations in
Quarterly Operating Results."
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30,
1995 1995 1995 1995 1996 1996 1996
--------- -------- --------- -------- --------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Net sales............ $23,162 $22,689 $21,063 $20,290 $19,280 $21,629 $22,972
Cost of sales........ 12,733 13,251 12,662 12,420 11,453 11,900 13,045
------- ------- ------- ------- ------- ------- -------
Gross profit......... 10,429 9,438 8,401 7,870 7,827 9,729 9,927
Selling, general and
administrative..... 7,355 7,024 6,068 4,669 5,477 6,367 6,109
Write-off of
equipment.......... -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Operating income..... $ 3,074 $ 2,414 $ 2,333 $ 3,201 $ 2,350 $ 3,362 $ 3,818
Income from
continuing
operations......... $ 1,306 $ 1,652 $ 1,349 $ 1,991 $ 1,001 $ 1,510 $ 1,644
Net income........... 1,611 1,997 947 2,381 1,588 2,211 2,221
Earnings per share
from continuing
operations......... $ 0.05 $ 0.07 $ 0.05 $ 0.09 $ 0.04 $ 0.06 $ 0.07
Earnings (loss) per
share.............. 0.07 0.09 0.03 0.11 0.07 0.10 0.10

<CAPTION>
THREE MONTHS ENDED
-------------------------------------------
DEC. 31, MARCH 31, JUNE 30, SEPT. 30,
1996 1997 1997 1997
-------- --------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C>
Net sales............ $ 26,882 $26,192 $29,397 $29,568
Cost of sales........ 14,755 15,163 16,167 16,523
-------- ------- ------- -------
Gross profit......... 12,127 11,029 13,230 13,045
Selling, general and
administrative..... 7,234 7,281 8,374 7,872
Write-off of
equipment.......... 1,050 -- -- --
-------- ------- ------- -------
Operating income..... $ 3,843 $ 3,748 $ 4,856 $ 5,173
Income from
continuing
operations......... $ 1,371 $ 1,890 $ 3,017 $ 3,312
Net income........... (31,004) 1,890 3,017 3,312
Earnings per share
from continuing
operations......... $ 0.05 $ 0.08 $ 0.14 $ 0.15
Earnings (loss) per
share.............. (1.58) 0.08 0.14 0.15
</TABLE>

23
<PAGE> 25

The following table sets forth for the periods indicated the percentage of
net sales represented by the indicated items:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------------------------------------------------------------------------------
MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31, JUNE 30, SEPT. 30, DEC. 31, MARCH 31,
1995 1995 1995 1995 1996 1996 1996 1996 1997
--------- -------- --------- -------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales............... 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of sales........... 55.0 58.4 60.1 61.2 59.4 55.0 56.8 54.9 57.9
----- ----- ----- ----- ----- ----- ----- ------- -----
Gross profit............ 45.0 41.6 39.9 38.8 40.6 45.0 43.2 45.1 42.1
Selling, general and
administrative........ 31.7 31.0 28.8 23.0 28.4 29.5 26.6 26.9 27.8
Write-off of
equipment............. -- -- -- -- -- -- -- 3.9 --
----- ----- ----- ----- ----- ----- ----- ------- -----
Operating income........ 13.3% 10.6% 11.1% 15.8% 12.2% 15.5% 16.6% 14.3% 14.3%
Income from continuing
operations............ 5.6% 7.3% 6.4% 9.8% 5.2% 7.0% 7.2% 5.1% 7.2%
Net income.............. 7.0% 8.8% 4.5% 11.7% 8.2% 10.2% 9.7% (100.02)% 7.2%

<CAPTION>
THREE MONTHS ENDED
--------------------
JUNE 30, SEPT. 30,
1997 1997
-------- ---------
<S> <C> <C>
Net sales............... 100.0% 100.0%
Cost of sales........... 55.0 55.9
----- -----
Gross profit............ 45.0 44.1
Selling, general and
administrative........ 28.5 26.6
Write-off of
equipment............. -- --
----- -----
Operating income........ 16.5% 17.5%
Income from continuing
operations............ 10.3% 11.2%
Net income.............. 10.3% 11.2%
</TABLE>

Results of operations for the quarters shown above include the results of
operations of prepress and digital imaging businesses acquired during such
periods. The quarterly results set forth above may not be indicative of the
future operating results of the Company. See "Risk Factors -- Fluctuations in
Quarterly Operating Results" and "-- Seasonality" below.

LIQUIDITY AND CAPITAL RESOURCES

The Company presently finances its business from available cash held by the
Company and from cash generated from operations. The Company maintains a Cdn$7.5
million unsecured working capital facility for the Company's Canadian operations
and a $10.0 million unsecured credit facility.

On February 7, 1997, the Company received proceeds from the sale of the
Plastics Group of $93.485 million plus or minus working capital adjustments.
Long-term debt and capital lease obligations decreased to $45.0 million at
September 30, 1997 from $67.8 million at September 30, 1996 as the Company
repaid debt with proceeds from the sale of the Plastics Group. The Company had
$20.8 million of available cash and short-term investments at September 30,
1997.

The Company held invested balances of $52.3 million in bond mutual funds,
equity mutual funds, U.S. Treasury and U.S. Government notes, corporate bonds
and equity securities. These funds are available for sale to provide for
acquisitions and corporate requirements. Unrealized appreciation on these
investments of $2.6 million ($1.6 million net of tax effects) at September 30,
1997, has been excluded from earnings in the Company's consolidated statement of
operations and has been included as a separate component of stockholders'
equity.

The Company repaid on or about February 7, 1997, the following debts out of
a portion of the proceeds of the sale of the Plastics Group: (i) the balance
outstanding on a $55.0 million multi-currency Revolving Credit Agreement was
paid in-full and the agreement was canceled; (ii) the interest rate swap
agreement (floating to fixed) was made whole and canceled; and (iii) all notes
payable related to unpaid 1994 S corporation dividends were paid in full and the
notes were canceled.

At September 30, 1997, outstanding debt of the Company consisted of: (i)
unsecured notes issued pursuant to a Note Purchase Agreement dated August 18,
1995, for $40.0 million with terms ranging from 1999 through 2004 (averaging
seven years) at an average interest rate of 6.85%; and (ii) US$4.2 million of
borrowings under the Company's Canadian working capital facility.

Management believes that the level of working capital is adequate for the
Company's liquidity needs related to normal operations both currently and in the
foreseeable future, and that the Company has sufficient resources to support its
growth, either through currently available cash, through cash generated from
future operations or through short-term financing.

24
<PAGE> 26

The Company had capital expenditures in the first nine months of 1997 of
$5.5 million, in 1996 of $9.0 million, in 1995 of $5.4 million, and in 1994 of
$5.1 million. Capital expenditures have been made in 1997 for machinery,
equipment and automation to expand production facilities and improve
productivity. Capital expenditures in 1996 were for the purchase of new
equipment and building renovations. Capital expenditures during 1997 are not
expected to exceed depreciation.

Combined depreciation and amortization at Schawk was $5.3 million for the
first nine months of 1997, $7.4 million in 1996, $7.5 million in 1995 and $7.2
million in 1994.

Acquisition costs during 1996 were $19.6 million. Acquisition costs during
1995 and 1994 were negligible.

The Company repurchased $1.4 million of Class A Common Stock during the
first nine months of 1997, $1.4 million during 1996 and $1.7 million during 1995
under a share repurchase program.

SEASONALITY

Historically, the Company has experienced lower revenues in the first and
fourth quarters due to the seasonal trends of its clients and lower overall
economic activity. However, the Company believes that this seasonal effect on
the Company's revenues will be less pronounced in the future as a result of
frequent redesigns of packaging for promotional and other reasons and the
shorter lead times for the provision of the Company's services and products.

IMPACT OF INFLATION

The Company believes that over the past three years inflation has not had a
significant impact on the Company's results of operations.

25
<PAGE> 27

BUSINESS

GENERAL

The Company is a leading provider of digital imaging prepress services for
the consumer products industry in the United States and Canada. The Company's
facilities produce conventional, electronic and desktop color separations,
electronic production design, film preparation, platemaking and press proofs for
the three main printing processes used in the graphic arts industry:
lithography, flexography and gravure. The Company's services also include both
digital and analog image database archival and management as well as art
production and various related outsourcing services. These services require
skilled, highly trained technicians applying various computerized design,
manipulation and assembly techniques. The preparation of film, digital tape and
press proofs for lithography, flexography and other printing processes related
to packaging accounted for approximately 75% of net sales in 1996 and 77% of net
sales for the nine months ended September 30, 1997. The balance of the Company's
business consists of the production of similar services for point-of-sale,
advertising and direct mail.

The Company has particular expertise in preparing color images for high
volume print production runs of consumer products packaging. The Company
functions as a vital interface between its Fortune 1000 consumer products
clients, their creative designers and their converters or printers in assuring
the production of consistent, high quality packaging materials in increasingly
shorter turnaround and delivery times. The Company's ability to provide high
quality, customized prepress services quickly makes it a valued player in new
product introduction and promotional activity.

The Company maintains both digital and analog data archives of product
package layouts and designs as a value-added service which improves the
Company's efficiency in accommodating clients' rapidly changing packaging design
modifications and product line extensions. By continuing to provide such
high-end, value-added services, the Company commands a significant share of the
market for prepress services for the food and beverage industry, which uniquely
positions it to benefit from positive industry trends.

The Company believes that its clients have increasingly chosen to outsource
their prepress needs to the Company because of its: (i) high quality customized
imaging capabilities; (ii) rapid turnaround and delivery times; (iii) up-to-date
knowledge of the printing press specifications of converters and printers
located throughout the United States and Canada; (iv) digital imaging asset
management; (v) art production; and (vi) the capability to service its clients'
global prepress requirements through the Company's North American facilities and
international alliance partners.

PREPRESS SERVICES INDUSTRY

"Prepress services" are the tasks involved in preparing images and text for
reproduction to exact specifications for a variety of media, including packaging
for consumer products, point-of-sale displays and other promotional materials.
Packaging for consumer products encompasses folding cartons, boxes, trays, cans,
containers, packaging labels and wrap. While prepress work represents a
relatively small percentage of overall product packaging and promotion costs,
the visual impact and effectiveness of product packaging and promotions are
largely dependent upon the quality of prepress work.

Prepress services do not entail the actual printing or production of such
packaging materials, but rather include the various preparatory steps such as
art production design, digital photography, retouching, color separation and
other platemaking services, for use in lithography, flexography and gravure.
"Color separation" refers to preparing color images, text and layout for the
printing process. Prepress services such as color separation work have
traditionally been performed by skilled craftspersons almost entirely by hand,
using what is known as the "conventional" method. With the development of
digital technology, prepress firms such as the Company have become increasingly
computerized, relying instead on digital imaging, in which digitized images and
text are manipulated according to client and converter specifications. On an
increasing basis, clients supply material to the Company in a digitized format
on a variety of media, including tape, floppy disk and CD-ROM.

26
<PAGE> 28

The prepress industry in North America has over 1,300 market participants,
principally independent color separators, such as the Company, converters,
printers and companies that perform these services in-house. The majority of
prepress providers specialize in high volume, commodity-oriented publication
work that includes textbooks, advertising, catalogs, newspapers and magazines.
The Company's target market is the consumer products industry. The North
American market for prepress services to the consumer products industry is
estimated to range from $1.2 billion to $2.0 billion, while the worldwide market
is estimated to be as high as $6.0 billion. The consumer products prepress
industry is highly fragmented with hundreds of market participants, only a small
number of which have annual revenues exceeding $50.0 million. The Company
believes that the number of companies in the North American prepress market for
the consumer products industry will diminish due to consolidation and attrition
caused by competitive forces such as accelerating technological requirements for
advanced systems, equipment and highly skilled personnel and the growing demands
of clients for global capabilities.

The rapid development of lower-cost, faster desktop publishing software
systems has increased the potential for competition in the prepress industry by
lowering barriers to entry relating to equipment costs. However, this
development has also resulted in the proliferation of software systems, many of
which have created training issues. Frequent changes in software necessitates
continuous training and education and investment in faster equipment. It has
also created the demand from clients for increasingly faster turnaround and
delivery times. As technology advances in the imaging industry, speed has become
and continues to be a significant differentiator between the Company and its
competition.

The Company focuses primarily on the food and beverage segment of the
consumer products industry, where packaging requirements are more complex and
demanding due to variations in packaging materials, shapes and sizes, custom
colors, varying storage conditions and marketing enhancements. Product
extensions and frequent packaging redesigns have resulted in an increasing
volume of color separation and related work in the consumer products industry
and in particular for the food and beverage segment. Additional industry trends
include: (i) the shorter turnaround and delivery time requirements from the
creative design phase to final distribution of the packaged product; (ii) an
increasing number of SKUs competing for shelf space and market share; (iii) the
increasing importance of package appearance and promotions due to demonstrated
point-of-sale consumer purchasing behavior; and (iv) increasing requirements for
worldwide quality and consistency in packaging as companies attempt to build
global brand name recognition.

THE COMPANY'S GROWTH STRATEGY

The Company's primary goal is to enhance its leadership positions in the
prepress market for the consumer products industry. Key aspects of the Company's
business strategy to achieve this goal include the following:

- Growth Through Acquisitions and Start-up Operations. The Company's
profitability and ready access to capital have enabled it to make
strategic acquisitions of companies that range in size from $2 million to
$20 million. In its 44-year business history, the Company has integrated
more than 25 prepress and imaging businesses into its operations while
streamlining overhead and improving margins. These acquisitions are
elements of a growth strategy to acquire market niche companies with
Fortune 1000 client lists, excellent client service or proprietary
products and solid management who will continue to operate the business
after the acquisition. These acquired managers receive performance
incentives to continue to profitably grow the business.

The Company intends to continue expanding through acquisitions of
well-managed companies with solid market positions and established client
lists and/or new technologies. Schawk believes that an emphasis on
complementary acquisitions of companies serving targeted markets will
allow it to broaden its product offerings and provide single source
prepress and imaging and image database services.

The Company believes it has greater versatility in meeting the various
requirements of its clients than smaller, less integrated competitors
lacking technical expertise, and that this versatility will result in
greater opportunities for internal growth as well as enhancing the
Company's image as an attractive

27
<PAGE> 29

purchaser for potential consolidation candidates. Schawk believes that
there will continue to be a number of attractive acquisition candidates
in the fragmented and consolidating industry in which it operates,
particularly in the packaging and image database management markets. The
Company expects to strengthen its market position by applying its
management and operational philosophies and practices, which have been
successful in its graphic arts businesses, to newly acquired businesses.

The Company also has been successful in establishing start-up operations in
response to perceived client and market requirements. Schawk intends to continue
this strategy as opportunities warrant. See "--Acquisitions and Start-up
Operations."

- Exploitation of Industry Trends; Outsourcing. The Company has
historically attempted to strengthen its market position by identifying
and exploiting industry trends. As a consequence, the Company is uniquely
positioned to benefit as consumer products companies reduce both their
prepress staffs and total number of suppliers. The Company's on-site
strategy developed as clients outsourced imaging functions in an attempt
to cut costs and turnaround time. The Company intends to expand this
effort as clients require on-site service. Further, the Company believes
that its commitment to client service and its broad array of premium
service offerings position it as a cost effective, value-added supplier
of prepress services. As clients continue to cut their staffing levels,
they are expanding the number of services required of their prepress
suppliers. As a result, fewer of the Company's competitors have the full
complement of capabilities required in the marketplace. The Company
believes outsourcing trends will continue. The following is a partial
listing of the Company's on-site locations:

<TABLE>
<CAPTION>
CLIENT LOCATION
------ --------
<S> <C>
Brachs & Brock Confections, Inc.............. Chattanooga, Tennessee
Campbell Soup Company........................ Camden, New Jersey
International Home Foods..................... Parisippany, New Jersey
The Keebler Company.......................... Elmhurst, Illinois
Nabisco Foods Group.......................... Parisippany, New Jersey
Pepsico, Inc................................. Rye, New York
Pillsbury, Inc............................... Minneapolis, Minnesota
The Quaker Oats Company...................... Chicago, Illinois
Stouffer Foods Corporation................... Solon, Ohio
</TABLE>

The Company has also expanded its imaging operations in Cincinnati,
Ohio. The Company is currently on-site in a client location in
Cincinnati and believes that by locating a facility there, turnaround
and delivery time for its existing clients and access to new client
relationships will be strongly enhanced. The Company has also formed a
start-up operation for a client located in Queretaro, Mexico.

- Exploitation of Technology Advancements. The Company is dedicated to
keeping abreast of and initiating technological process developments in
its industry. To build upon its leadership position, the Company is
actively involved in technical evaluations of various computer systems
and software and also independently pursues software development for
implementation at its operating facilities. The Company continually
invests in new technology designed to support its high quality prepress
services. The Company concentrates its efforts on understanding systems
and software available in the marketplace and creating solutions by
customizing off-the-shelf products to meet a variety of specific client
and internal requirements.

MANAGEMENT PHILOSOPHY

The Company believes that by adhering to its management philosophy, the
Company has gained in market share and improved margin performance in its core
business. The Company's management philosophy incorporates the following key
concepts:

Total Quality Management. A cornerstone of the Company's management
philosophy is its emphasis on high quality. The Company is committed to the
principles of "Total Quality Management" ("TQM") and stresses to all employees,
regardless of level, the importance of striving to meet or exceed client
expectations.

28
<PAGE> 30

Historically, the Company has been committed to employee training and
technological improvements to achieve this level of performance. Through the
Company's application of TQM employees have adopted the necessary commitment to
client service that is essential to quick turnaround and consistent delivery of
high quality services and products. Such increased quality results in decreased
costs to clients and the Company in the long run. The Company views itself as a
service provider to its clients. Understanding the needs of its clients and
customizing its services and products is part of the TQM process that has helped
the Company differentiate itself from the competition. Consequently, the Company
makes the necessary investments to ensure that these services continue to meet
the highest quality standards and needs of its clients.

Client Service. Another key component of the Company's management
philosophy has been its commitment to client service. The Company believes that
this commitment has contributed to the confidence and loyalty its clients have
shown. Because of the increasingly competitive markets faced by its clients, the
Company must be flexible enough to modify its operations in order to meet the
specialized needs of its clients. The Company's emphasis on on-site client
representatives and operations addresses this requirement and has further
solidified existing imaging client relationships.

Employee Training and Investment in Equipment. The Company believes that
its most valuable assets are its employees because its ability to provide
clients with high quality services and products depends upon their dedication
and expertise. The Company provides extensive and continuous training to keep
its employees abreast of the latest technological developments and the
particular needs of its clients. Providing its employees with the latest
equipment, software and training are fundamental to the Company's philosophy.

Technical Expertise. The Company is able to provide its clients with high
quality services and products and quick response time because of its efficient
utilization of state-of-the-art equipment software, digital server, storage
technology and telecommunication systems. As part of its commitment to maintain
its technological expertise, the Company has historically worked with software
developers to create software that fully addresses the Company's and its
clients' needs. The Company acts as a test site for numerous hardware and
software products. In order to facilitate the exchange of information among its
various facilities, in 1991, the Company established the Schawk Technical
Advisory Board for the purpose of coordinating the research and evaluation of
new technologies in the graphic arts industry. This group continues to be
recognized for its efforts and has been invited to lecture at numerous national
and international symposiums and conferences.

SERVICES

The Company offers comprehensive, high quality prepress services. The
Company's facilities produce conventional, electronic and desktop color
separations, electronic production design, film preparation, platemaking and
press proofs for lithography, flexography and gravure. The Company's services
also include both digital and analog image database archival and management as
well as art production and various related outsourcing services.

The Company interfaces between consumer products manufacturers and the
creative designers and converters used by those businesses to produce packaging,
such as folding cartons, boxes, trays, cans, containers, packaging labels and
wrap and related point-of-sale and promotional materials. The Company's services
consist principally of the electronic and digital production of art design,
color separations and color proofs to client and converter specifications and
imaging asset management. These services are an intermediate step between
creative artwork and the actual printing of graphic materials. The production of
color separations requires well-trained and highly skilled technicians applying
various digital and analog image manipulation, assembly and color management
techniques in order to preserve the integrity of the original image when
translated into print and to ensure consistency of the printed materials.

The Company specializes in prepress services relating to the packaging and
promotional needs of clients in the consumer products industry, particularly
Fortune 1000 clients who need to ensure worldwide quality and consistency in the
packaging and related imagery of their products. Consumer products have no
consistent size, shape, color or packaging material. To achieve its clients'
varying requirements, the Company functions as a network of custom job shops
taking advantage of its size for technical expertise while being able to respond
quickly to the increasingly global needs of particular clients.

29
<PAGE> 31

Image quality and consistency and ever-shortening response and delivery
times are becoming increasingly important to consumer products manufacturers as
packaging assumes a greater role in promotion. While prepress work represents a
relatively small percentage of overall packaging costs, the visual impact and
effectiveness of product packaging is largely dependent upon the quality of the
prepress work.

The Company's clients typically outsource their prepress requirements and
assign the Company the responsibility of interfacing with the clients'
designated graphic designers, who design the packaging, and the converters who
print and produce the packaging and related materials. The Company competes on
the basis of offering its multi-national client base: (i) high quality
customized imaging; (ii) rapid turnaround and delivery times; (iii) up-to-date
knowledge of the printing press specifications of converters and printers
located throughout the United States and Canada; (iv) digital imaging asset
management; (v) art production; and (vi) the capability to service its clients'
global prepress requirements through the Company's North American facilities and
international alliance partners.

As technology has created opportunities for quicker production turnarounds
and deliveries, most of the Company's Fortune 1000 consumer products clients
have capitalized on the opportunity to modify their packaging more frequently in
order to customize their promotional activities on a regional, seasonal or
sporting event basis. This activity has greatly increased the importance of
maintaining the integrity of the digital and analog image design and text data
for each package variation.

With its expansion into electronic art production design, the Company is
utilizing its technical expertise to serve clients' requirements in a variety of
outsourcing services including image database archiving, telecommunication and
trafficking. The Company has the capacity to archive and manage past, current
and future package design data and, accordingly, serves as a quick access
library of accurate file data for its clients. The Company is continuously
updating and improving its imaging database management system, called PaRTs(SM)
(Packaging archival Retrieval and Transmission system). The Company believes
that PaRTs(SM) enhances a client's ability to manage its imaging assets more
efficiently and with reduced time commitments. When compared to other database
management systems available in the market place, the Company believes that
PaRTs(SM) contributes to the Company's ability to meet its clients' quick
turnaround and delivery times and quality standards.

The Company has also developed a customized client electronic communication
system called CLICk(TM) (Client Linked Information Centers) for its authorized
clients, designated converters and other authorized personnel. Compatible with
all major platforms and operating systems, CLICk(TM) allows clients to
efficiently communicate with the Company and others on the system using
telephone lines and/or the Internet.

Given the increased computerization of the prepress services industry,
highly trained technicians are essential to the quality of the end product.
Requirements of turnaround speed without a reduction in quality are increasing
as clients strive for differentiation and customization of their products and
brands. Schawk has met these requirements by continuously reinvesting in
technology, training its personnel and establishing numerous satellite on-site
operations to complement its main operating facilities.

To capitalize on market trends, management believes that the Company must
continue to be able to provide clients the ability to make numerous changes and
enhancements with shorter turnaround times than ever before. Accordingly, over
the past two years the Company has focused its efforts on improving its response
times and continues to invest in rapidly emerging technology and the continuing
education of its employees. The Company also educates clients on the
opportunities and complexities of state-of-the-art equipment and software. The
Company believes that its ability to provide quick turnaround and delivery
times, dependability and value-added training and education programs will
continue to give it a competitive advantage in serving clients who require high
volume, high quality product imagery.

The Company's services are distinguished by its ability to complete
prepress services for packaging designs in increasingly short time frames and
with high standards of quality. In order to satisfy client

30
<PAGE> 32

requirements, the Company is frequently required to provide services in as
little as 24 hours. The following core competencies of the Company are described
in more detail below:

- Technical Expertise. The Company places an emphasis on investment in
state-of-the-art systems and equipment and the need for continual
training and development of its employees through programs offered at the
Company-owned training center and operating facilities and on-site at
client locations. The Company has had success in elevating its employees'
competency and its clients' standards to levels requiring the superior
technical expertise and capabilities that distinguish the Company's
services.

- On-Site Personnel. The Company has placed over 60 employees on-site at or
near 19 client locations in an effort to further integrate its prepress
services directly with client operation. This facilitates faster
turnaround and delivery times and fosters stronger client relationships.

- Strong Relationships with Converters and Printers. As each client selects
its own converter(s) and/or printer(s) the Company coordinates
extensively with the converter to ensure uniformity in color and
appearance of the printed product packages. Each client generally selects
its printing services on a bid basis. By using the Company as its imaging
specialist, the print/read imagery information is not captive at any one
printer or converter. This affords each client consistent image
replication at any printing site as the Company can supply any printer or
converter with film customized for its printing press. Additionally, this
allows the client to reproduce its image consistently across many
printing sources and it also provides the client with information as to
location and cost of its press runs.

Over the course of its 44-year business history, the Company has
developed strong relationships with many of the major converters and
printers in the United States and Canada and, as a result, has extensive
knowledge of their equipment, thereby enabling the Company to increase
the overall efficiency of the printing process. Internal operating
procedures and conditions may vary from printer to printer, affecting the
quality of the color image. In order to minimize the effects of these
variations, the Company makes necessary adjustments to its color
separation work to account for irregularities or idiosyncrasies in the
printing presses of each of its clients' converters. The Company strives
to afford its clients total control over their imaging processes with
customized and coordinated services designed to fit each individual
client's particular needs, all aimed at ensuring that the color quality,
accuracy and consistency of a client's printed matter are maintained.

- Imaging Asset Management. The Company maintains and manages a database
for its clients' images and package designs. Once an image is in the
Company's database, the client can make frequent regional, seasonal or
event-related adjustments to the file image prior to printing. The
Company's ability to quickly manipulate digital images enables its
clients to deliver their products to market faster. The Company's
capabilities also allow it to send an image for output and printing
virtually anywhere in the world. As more and more multi-national consumer
products companies strengthen their international packaging quality
control to reflect their global brand image, they are requiring a more
consistent worldwide image. In response to this trend, the Company is
playing an increasing role in ensuring that its clients' images are
satisfactory both domestically and internationally.

ACQUISITIONS AND START-UP OPERATIONS

The Company has acquired and integrated more than 25 prepress and imaging
businesses into its operations since the business was founded in 1953.
Throughout its history, the Company has successfully identified acquisition
candidates that represent market niche companies with Fortune 1000 client lists,
excellent client service or proprietary products and solid management. The
Company favors businesses with management teams that will continue to operate
the businesses as autonomous units. The Company has also commenced a number of
start-up operations over the years when client servicing requirements or market
conditions warranted.

During 1996, the Company made three acquisitions: Converterscan, StanMont,
Inc., and Stebbins Photography. Converterscan, previously based in Stamford,
Connecticut, and Atlanta, Georgia, has expertise

31
<PAGE> 33

in digital imaging and a strong client base. Its two operating facilities and
production and sales organization have been consolidated with the Company's
LSI/Atlanta operation in Georgia. StanMont, Inc. is based in Montreal, Quebec
and has five operating entities or divisions: CyberImages (Toronto), Batten
Graphics (Toronto), PrinterNet (Toronto), Fishbowl Productions (Toronto) and
XZact (Montreal) which will continue as freestanding facilities. StanMont has a
Canadian presence with a strong client base as well as operations with which to
serve the imaging needs of Schawk's consumer products clients in Canada.
StanMont and Batten Graphics/CyberImages currently have significant
relationships with advertising and catalog clients, and offer further growth
opportunities in the packaging market. Stebbins Photography is a digital
photography studio in Minneapolis, Minnesota. Stebbins Photography has a strong
reputation in the emerging digital photography area. The Converterscan, StanMont
and Stebbins acquisitions were made to expand the client base, enhance the
Company's technical capabilities and services and increase its geographic
presence with its multi-national client base.

The Company intends to continue expanding through acquisitions of
well-managed companies with solid market positions and established client lists
and/or new technologies. The Company believes that emphasis on complementary
acquisitions of businesses serving targeted markets will allow it to broaden its
product offerings and provide its clients with a single source for imaging and
image database services. The Company will also continue to analyze and
investigate start-up operations on an ongoing basis.

RESEARCH AND DEVELOPMENT

The Company is dedicated to keeping abreast of and, in a number of cases,
initiating technological process developments in its industry that have
applications for packaging. To build upon its leadership position, the Company
is actively involved in system and software technical evaluations of various
computer systems and software manufacturers and also independently pursues
software development for implementation at its operating facilities. The Company
continually invests in new technology designed to support its high quality
prepress services. The Company concentrates its efforts in understanding systems
and equipment available in the marketplace and creating solutions using
off-the-shelf products, customized to meet a variety of specific client and
internal requirements. PaRTs(SM) and CLICk(TM) are examples of the Company's
commitment to systems development.

As an integral part of its commitment to research and development, the
Company has established the Schawk Technical Advisory Board for the purpose of
researching and evaluating new technologies in the graphic arts and
telecommunications industries. The Advisory Board meets formally, at least
quarterly, to review new equipment and programs, then disseminates the
information to the entire Company and to clients wherever appropriate.

MARKETING AND DISTRIBUTION

The Company markets its services nationally and internationally through
seminars, newsletters and training sessions targeted at existing and potential
clients. The Company sells its services through a group of approximately 100
direct salespersons and 115 client service technicians who call on consumer
products manufacturers, including those in the food and beverage, home products,
pharmaceutical and cosmetics industries and direct mail. The Company has adopted
a team approach to marketing, reflective of its TQM philosophy. Both the
Company's salespersons and the Company's client service technicians share
responsibility for marketing the Company's offerings to existing and potential
clients, thereby fostering long-term institutional relationships with its
clients.

In addition to its operations in the United States and Canada, the Company
considers its start-up prepress and imaging operation in Mexico and alliance
agreements with servicing partners in Europe, the Far East and Australia unique
and increasingly important aspects of its marketing and distribution
capabilities.

CLIENTS

The Company's clients consist of direct purchasers of color separations,
including end-use consumer products manufacturers and direct mailers, converters
and advertising agencies. Many of the Company's

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<PAGE> 34

clients, a large percentage of which are Fortune 1000 companies, are
multi-national in scope and often use numerous converters both domestically and
internationally. Because these clients desire uniformity of color and image
quality across a variety of media, the Company plays a very important role in
coordinating their printing activities by maintaining current equipment
specifications regarding its clients and converters. Management believes that
this role has enabled the Company to establish closer and more stable
relationships with these clients. Converters also have a great deal of
confidence in the quality of the Company's services and have worked closely with
the Company to reduce the converters' required lead time, thereby lowering their
costs. End-use clients often select and utilize the Company to ensure better
control of their packaging or other needs and depend upon the Company to act as
their agent to ensure quality management of data along with consistency among
numerous converters and packaging media. The Company has established 19 on-site
locations at or near clients that require high volume, specialized service. As
its art production services continue to expand, the Company anticipates that it
will further develop its on-site services to its client base.

Many of the Company's clients place orders on a daily and weekly basis and
work closely with the Company year-round as they frequently redesign product
packaging or introduce new products. While certain promotional activities are
seasonal, such as those relating to summer, back-to-school time and holidays,
shorter technology-driven prepress cycle time has enabled consumer products
manufacturers to tie their promotional activities to regional and/or current
events (such as sporting events or motion picture releases), prompting such
manufacturers to redesign their packages more frequently. This has resulted in a
correspondingly higher number of packaging redesign assignments. This
technology-driven trend toward more frequent packaging changes has offset
previous seasonal fluctuations in the volume of the Company's business. In
addition, consumer products manufacturers have a tendency to single-source their
prepress work with respect to a particular product line, so that changes to the
product continuity can be assured. As a result, the Company has developed a base
of steady clients in the food and beverage industry. During 1996, no single
client accounted for more than 8% of the Company's net sales, and the 10 largest
clients in the aggregate accounted for less than 37% of net sales. For the nine
months ended September 30, 1997, no single client accounted for more than 7% of
net sales, and the 10 largest clients accounted for less than 34% of net sales.

The Company's current clients include:

<TABLE>
<S> <C>
Bayer Corporation Lipton Tea Company, Ltd.
Brachs & Brock Confections, Inc. Nabisco Foods Group
Campbell Soup Company Nestle
ConAgra, Inc. Pepsico, Inc.
CPC Best Foods Pillsbury, Inc.
General Mills, Inc. PrintPack
Hershey Foods Corporation Publisher's Clearing House
Hunt-Wesson, Inc. The Quaker Oats Company
International Home Foods SmithKline Beecham
The Keebler Company Stouffer Foods Corporation
Leo Burnett Company, Inc. 7-Up/Dr. Pepper
Lever Brothers
</TABLE>

COMPETITION

The Company's competition comes from three sources: other independent color
separators; converters and printers that have prepress service capabilities; and
consumer products companies who are able to use developing technologies to
execute these services in-house.

Independent color separators are companies whose business is performing
prepress services for one or more of the principal printing processes. The
Company believes that only two firms, Wace Group U.S.A., a subsidiary of Wace
P.L.C., and Southern Graphics, a subsidiary of Reynolds Metals, compete with
Schawk on a national basis. The remaining independent color separators are
regional or local firms that compete in

33
<PAGE> 35

specific markets. To remain competitive, each firm must maintain client
relationships and recognize, develop and exploit state-of-the-art technology and
contend with the increasing demands for speed.

Some converters with prepress service capabilities compete with the Company
by performing such services in connection with printing work. Independent color
separators such as the Company, however, may offer greater technical
capabilities, image quality control and speed of delivery. In addition,
converters often utilize the services of the Company because of the rigorous
demands being caused by the requirement for increased timetables. Increasingly,
converters are being required to invest in technology to improve speed in the
printing process and have avoided spending on prepress technology.

Finally, until recently, the Company faced continuing competition from some
of its own clients who sought to reduce costs by performing color separation
services in-house. As requirements of speed continue to be critical, along with
the recognition of the importance of focusing on their core competencies,
clients have recognized that the Company provides services at a rate and cost
that makes outsourcing more efficient.

PURCHASING AND RAW MATERIALS

The Company purchases photographic film and chemicals, storage media, ink,
plate materials and various other supplies and chemicals on consignment for use
in its business. These items are purchased from a variety of sources and are
available from a number of producers, both foreign and domestic. Materials and
supplies account for only a small portion of the Company's cost of production,
and no shortages are anticipated. Furthermore, as a growing proportion of the
workflow is digital, the already low percentage of materials in cost of sales
will continue to be reduced. Historically, the Company has negotiated and enjoys
significant volume discounts on materials and supplies from most of its
suppliers.

INTELLECTUAL PROPERTY

The Company owns no significant patents. The trademarks "Schawk" and
"Clockface and Creole" and the trade names "Amber Design," "Color Data East,"
"Schawkgraphics," "Schawk Client Services Group," "Schawk Prep," "Lincoln
Graphics," "Litho Colorplate," "LSI/Atlanta," "LSI/Kala," "Process Color Plate,"
"Total Reproductions," "Weston Engraving," "The Palm Group," "Stebbins
Photography," "Blue Barrel," "StanMont," "PrinterNet," "CyberImages," "Batten
Graphics," "Fishbowl," "XZact," "CLICk" and "PaRTs" are the most significant
trademarks and trade names used by the Company.

EMPLOYEES

As of September 30, 1997, the Company had approximately 880 full-time
employees. Of this number, 60% were production employees of which approximately
200 are represented by local units of the Graphic Arts International Union and
approximately 50 were represented by local units of the Toronto Typographical
Union. The Company's union employees are vital to its operations. Collective
bargaining agreements covering the Company's union employees in four facilities
are subject to renegotiation. One is subject to renegotiation in 1998 and three
are subject to renegotiation during 1999-2000. One is presently being
renegotiated. The Company considers its relationships with its employees and
unions to be good.

BACKLOG

The Company does not have or keep backlog figures as projects or orders are
generally in and out of the facilities within five to seven days. Generally, the
Company does not have contracts with its clients, but maintains client
relationships through a combination of service, technology enhancements and
price.

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<PAGE> 36

FACILITIES

The Company owns or leases the following office and operating facilities:

<TABLE>
<CAPTION>
LEASE
OWNED/ EXPIRATION
LOCATION SQUARE FEET LEASED PURPOSE DATE DIVISION
-------- ----------- ------ ------- ---------- --------
(APPROXIMATE)
<S> <C> <C> <C> <C> <C>
Armonk, New York.................. 10,000 Leased General Offices, Month to Color Data East
Operating Facility month
Carmel, Indiana................... 782 Leased Sales and Service October 1998 Weston Engineering
Office
Cherry Hill, New Jersey........... 35,000 Owned General Offices, N/A Lincoln Graphics
Operating Facility
Chicago, Illinois................. 42,000 Leased General Offices, June 2002 Process Color Plate
Operating Facility
Cincinnati, Ohio.................. 4,754 Leased Client Services October 2000 Schawkgraphics
Covington, Kentucky............... 200 Leased Sales Offices Month to LSI/Kala
month
Rosemont, Illinois................ 3,500 Leased Warehouse March 1998 Corporate
Des Plaines, Illinois............. 20,000 Owned Executive Offices N/A Corporate
Des Plaines, Illinois............. 60,000 Leased General Offices, N/A Schawkgraphics
Operating Facility
Hackettstown, New Jersey.......... 3,000 Leased General Offices, December 2000 Amber Design
Operating Facility
Kalamazoo, Michigan............... 67,000 Owned General Offices, N/A LSI/Kala
Operating Facility
Minneapolis, Minnesota............ 31,000 Owned General Offices, N/A Weston Engraving
Operating Facility Litho Colorplate
The Palm Group
Stebbins Photography
Montreal, Quebec, Canada.......... 5,000 Leased General Offices, September 2004 StanMont
Operating Facility
Montreal, Quebec, Canada.......... 30,000 Owned General Offices, N/A StanMont
Operating Facility XZact
Roseville, Minnesota.............. 16,000 Leased General Offices, May 1997 Dimension Imaging
Operating Facility
Smyrna, Georgia................... 20,000 Leased General Offices, October 1998 LSI/Atlanta
Operating Facility
Toronto, Ontario, Canada.......... 30,000 Leased General Offices, December 2004 Batten Graphics
Operating Facility CyberImages
Fishbowl Productions
PrinterNet
</TABLE>

The Company considers its facilities adequate for current and foreseeable
levels of operations.

LEGAL PROCEEDINGS

From time to time, the Company has been a party to routine pending or
threatened legal proceedings and arbitrations. The Company insures some, but not
all, of its exposure with respect to such proceedings. Based upon information
presently available, and in light of legal and other defenses available to the
Company, management does not consider the liability from any threatened or
pending litigation to be material to the Company. The Company has not
experienced any significant environmental problems.

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<PAGE> 37

MANAGEMENT

EXECUTIVE OFFICERS AND DIRECTORS

The Company's executive officers and directors are as follows:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Clarence W. Schawk.......... 71 Chairman of the Board and Director
David A. Schawk............. 41 Chief Executive Officer, President and Director
A. Alex Sarkisian........... 45 Executive Vice President -- Finance, Chief
Financial Officer, Corporate Secretary and
Director
Judith W. McCue............. 49 Director
Robert F. Meinken........... 71 Director
John T. McEnroe............. 45 General Counsel, Assistant Secretary and Director
Hollis W. Rademacher........ 61 Director
Dennis D. Wilson............ 45 Chief Accounting Officer and Director of Financial
Reporting
John P. Cragen.............. 47 Corporate Controller
</TABLE>

Clarence W. Schawk has been Chairman of the Board of the Company since
September 1992, when he was also appointed to the Executive Committee. He served
as Chief Executive Officer of Filtertek from September 1992 until February 1993.
Clarence W. Schawk also served as Chairman of the Board of Old Schawk from 1953
until the Merger with Filtertek and served as Chief Executive Officer until June
1994. He is the father of David A. Schawk, President and Chief Executive Officer
of the Company. Clarence W. Schawk previously served as President and a Director
of the International Prepress Association. Mr. Schawk also served as a Director
of Old Schawk until the Merger.

David A. Schawk was appointed Chief Operating Officer of the Company in
September 1992, and was elected Chief Executive Officer and President in
February 1993. He was appointed to the Board of Directors in September 1992.
David A. Schawk served as the President of Old Schawk from 1987 until the
Merger. David A. Schawk was appointed Chief Executive Officer in June 1994.
David A. Schawk serves on the Company's Executive and 401(k) Administration
Committees. David A. Schawk is the son of Clarence W. Schawk. David A. Schawk
currently serves as a Director of the International Prepress Association. Mr.
Schawk also served as a Director of Old Schawk until the Merger.

A. Alex Sarkisian was appointed Executive Vice President -- Finance and
Chief Financial Officer in October 1997. He has served on the Company's Board of
Directors and as Corporate Secretary since September 1992 and, in 1994, was
appointed Executive Vice President. Mr. Sarkisian was the Executive Vice
President and Secretary of Old Schawk and has held such positions since 1988 and
1986, respectively. Mr. Sarkisian also served as a Director of Old Schawk until
the Merger. He is a member of the Executive and 401(k) Administration
Committees.

Judith W. McCue has been a partner with the law firm of McDermott, Will &
Emery since 1995. Prior thereto, Ms. McCue was a partner with the law firm of
Keck, Mahin & Cate where she practiced from 1972 to 1995. Ms. McCue was
appointed Director of the Company in September 1992 and is a member of the Audit
and Option Committees.

Robert F. Meinken has been a retired private investor and businessman since
1988, after an extensive career in sales and marketing. Mr. Meinken was
appointed Director of the Company in September 1992 and is a member of the Audit
and Option Committees.

John T. McEnroe has been a partner with the law firm of Vedder, Price,
Kaufman & Kammholz, counsel to the Company, since May 1992. Prior to this
position, he was a partner with the law firm of Keck, Mahin & Cate where he
practiced from 1976 to 1992. Mr. McEnroe was appointed a Director of the Company
in September 1992 and is a member of the Executive and Option Committees.

36
<PAGE> 38

Hollis W. Rademacher held various positions with Asiana Bank, N.A.,
Chicago, Illinois, from 1957 to 1993 and was Chief Financial Officer of Asiana
Bank Corporation, Chicago, Illinois, from 1988 to 1993. Mr. Rademacher is
currently self-employed in the fields of consulting and investments in Chicago,
Illinois. Mr. Rademacher was first elected a director of the Company in 1995 and
is a member of the Audit and Option Committees. Mr. Rademacher also serves as a
Director of Cityscape Financial Corporation, College Television Network, and
Wintrust Financial Corporation.

Dennis D. Wilson has been Chief Accounting Officer since 1996 and Director
of Financial Reporting since 1994. From 1992 to 1994, Mr. Wilson was a principal
of Wilson Financial Services, Crete, Illinois, and Chief Financial Officer of
Family Services Center, Matteson, Illinois. Mr. Wilson is a Certified Public
Accountant.

John P. Cragen has been Corporate Controller of the Company since 1994 and
held a similar position with Old Schawk from 1976 to 1994. Mr. Cragen is a
Certified Public Accountant.

Currently, all outside Directors of the Company (except for Mr. McEnroe)
receive a $500 fee for attendance at each regularly scheduled or special board
or committee meeting. All Directors are also reimbursed for ordinary and
necessary expenses incurred in attending Board or committee meetings. Directors
fees are paid to Directors who are compensated employees of the Company as part
of such employees' overall compensation. All non-employee Directors have
received options under the Company's 1991 Outside Directors' Formula Stock
Option Plan.

There is presently one vacancy on the Board of Directors. The Board
presently intends to fill such vacancy, but has not identified any candidate to
date. Any person appointed by the Board to fill such vacancy in accordance with
the Company's By-laws during 1997 will be up for election at the 1998 Annual
Meeting.

EMPLOYMENT AGREEMENTS

In January 1991, the Company entered into employment agreements with
Clarence W. Schawk and David A. Schawk to serve as executive officers. These
agreements, upon review of comparable base salaries for executives of similarly
situated companies, have been amended and restated effective October 1, 1994.
Each employment agreement, as amended and restated in October, 1994, provides
for an initial term of 10 years (through December 31, 2004), with one-year
extensions thereafter unless terminated by either the Company or the executive.
Each employment agreement provides for payment of a base salary, adjustable
annually by the Board of Directors based upon a merit review and to account for
inflation, as well as an annual bonus consisting of short- and long-term
incentives. Clarence W. Schawk's employment agreement provided for a base salary
of $540,000 for the calendar year 1996 and David A. Schawk's employment
agreement provided for a base salary of $432,000 for the calendar year 1996.

The short-term bonus plan contemplates cash payments of 5.0% and 3.0% of
the excess of "adjusted net income" over $10.0 million with respect to Clarence
W. Schawk and David A. Schawk, respectively. "Adjusted net income" means annual
net income after taxes, but before bonuses to the Chairman and the President of
the Company and amortization of goodwill resulting from acquisitions of the
Company consummated after January 1, 1995. The amounts of such cash payments are
subject to adjustment based upon the Company's financial performance during the
relevant fiscal year. The long-term plan contemplates a non-cash distribution of
options calculated to equal 5.0% and 3.0% of the excess of "adjusted net income"
over $10.0 million for Clarence W. Schawk and David A. Schawk, respectively.
There were no short-term plan cash bonus payments made or long-term stock plan
options granted during 1996 to either Clarence W. Schawk or David A. Schawk.

37
<PAGE> 39

PRINCIPAL AND SELLING STOCKHOLDERS

The following table sets forth information regarding the beneficial
ownership of the Class A Common Stock as of the date of this Prospectus by: (i)
each Selling Stockholder; (ii) each member of the Schawk Family; (iii) each of
the Company's directors; and (iv) all directors and executive officers as a
group. Except as shown below, no other person is known by the Company to
beneficially own more than 5% of the outstanding shares of Class A Common Stock.
Unless otherwise indicated, each of the stockholders has sole voting and
investment power with respect to the shares beneficially owned.

<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
BEFORE OFFERING(1) SHARES TO BE AFTER OFFERING(1)
-------------------------- SOLD IN THE --------------------
NAME SHARES PERCENT OFFERING SHARES PERCENT
---- ----------- ------- ------------ ---------- -------
<S> <C> <C> <C> <C> <C>
Clarence W. Schawk(2)........... 11,250,174(3) 56.6% 995,220(4) 10,254,954 47.9%
David A. Schawk(2).............. 1,657,118(5) 8.3 200,000 1,457,118 6.8
Jacques R. Lilly(6)............. 304,780 1.5 304,780 0 0.0
Cathy Ann Schawk(2)(7).......... 1,086,552(8) 5.5 1,086,552 5.1
Judith Lynn Gallo(2)(9)......... 892,088(10) 4.5 892,088 4.2
Lisa Beth Stearns(2)(11)........ 854,122(12) 4.3 854,122 4.0
A. Alex Sarkisian(2)............ 1,315,056(13)(14) 6.4 1,315,056 6.2
John T. McEnroe................. 25,687(15) * 25,687 *
Judith W. McCue................. 24,461(16) * 24,461 *
Robert F. Meinken............... 20,160(17) * 20,160 *
Hollis W. Rademacher............ 15,950(18) * 15,950 *
Directors and Executive Officers
as a group (9 persons)........ 14,319,240(19) 71.2% 13,124,020 60.7%
</TABLE>

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

* Less than 1.0%.

(1) Unless otherwise indicated, beneficial ownership is direct and the person
indicated has sole voting and investment power.

(2) Each is a member of the Schawk Family. The address for each of the Schawk
Family members is 1695 River Road, Des Plaines, Illinois 60018.

(3) Includes currently exercisable options to purchase 84,810 shares; 601,084
shares held directly by Mr. Schawk's wife; 428,890 shares held by the
Clarence W. and Marilyn G. Schawk Family Foundation (the "Schawk Family
Foundation"), a charitable foundation as to which Clarence W. Schawk and
his wife serve as trustees, and 8,471,702 shares held by SGK Investments
Limited Partnership (the "Schawk Family Partnership"), a family limited
partnership, with respect to which Clarence W. Schawk or his wife has
voting power. Clarence W. Schawk and his wife are general partners of
Schawk Family Partnership. Does not include shares beneficially owned by
Clarence W. Schawk's son David A. Schawk, or shares beneficially owned by
Clarence W. Schawk's daughters Cathy Ann Schawk, Judith Lynn Gallo and Lisa
Beth Stearns, or held in family trusts for the benefit of certain of his
grandchildren. Clarence W. Schawk does not share voting power over shares
of the Company held by or on behalf of his children or grandchildren.

(4) Represents 428,890 shares held by the Schawk Family Foundation and 566,330
shares held by the Schawk Family Partnership.

(5) Includes currently exercisable options to purchase 93,060 shares and 91,673
shares held by the Schawk Family Partnership with respect to which David A.
Schawk has voting power. David A. Schawk is a general partner of the Schawk
Family Partnership. Does not include shares beneficially owned by David A.
Schawk's father, Clarence W. Schawk or shares beneficially owned by or held
in family trusts for the benefit of David A. Schawk's sisters Cathy Ann
Schawk, Judith Lynn Gallo and Lisa Beth Stearns, and certain of Clarence W.
Schawk's grandchildren. Includes 475 shares held in joint tenancy and as
custodian for minors gifted to David A. Schawk's friends.

(6) Mr. Lilly's address is P.O. Box 286, Bridgewater Corners, Vermont 05035.

38
<PAGE> 40

(7) Ms. Schawk is the daughter of Clarence W. Schawk and sister of David A.
Schawk, Judith Lynn Gallo and Lisa Beth Stearns.

(8) Includes 289,500 shares held by the Schawk Family Partnership with respect
to which Ms. Schawk has voting power.

(9) Ms. Gallo is the daughter of Clarence W. Schawk and the sister of David A.
Schawk, Cathy Ann Schawk and Lisa Beth Stearns.

(10) Includes 156,000 shares held by the Schawk Family Partnership with respect
to which Ms. Gallo has voting power. Does not include 268,244 shares held
in trust for the benefit of Ms. Gallo's child.

(11) Ms. Stearns is the daughter of Clarence W. Schawk and the sister of David
A. Schawk, Cathy Ann Schawk and Judith Lynn Gallo.

(12) Includes 174,348 shares held by the Schawk Family Partnership with respect
to which Ms. Stearns has voting power. Does not include 368,924 shares held
in trusts for the benefit of Ms. Stearns' children.

(13) Includes currently exercisable options to purchase 45,826 shares.

(14) Includes 800,649 shares held by various Schawk Family trusts for the
benefit of certain of Clarence W. Schawk's grandchildren, and 465,777
shares held by the Schawk Family Partnership with respect to which Mr.
Sarkisian has voting power as trustee for Clarence W. Schawk's
grandchildren.

(15) Includes currently exercisable options to purchase 19,960 shares and 4,726
shares owned indirectly by his spouse.

(16) Includes currently exercisable options to purchase 19,960 shares and the
indirect ownership of 4,501 shares held in retirement trust accounts.

(17) Includes currently exercisable options to purchase 19,960 shares.

(18) Includes currently exercisable options to purchase 14,950 shares.

(19) Includes currently exercisable options to purchase an aggregate of 305,621
shares held by certain executive officers and directors.

CERTAIN TRANSACTIONS

Clarence W. Schawk owns Geneva Waterfront, Inc., a Wisconsin corporation
that owns The Geneva Inn, a hotel in Lake Geneva, Wisconsin. Geneva Waterfront,
Inc. employees are eligible to participate in the Company's health plan. The
Company has been reimbursed for the full costs of such insurance. Schawk
believes that this arrangement benefits the Company because it enhances the
Company's bargaining power with its health insurance providers. The arrangement
is beneficial to Geneva Waterfront, Inc. because it enables Geneva Waterfront,
Inc. to purchase health insurance for its employees at a lower cost than it
would be able to obtain independently. In 1994, 1995 and 1996, the Company
received $167,595, $174,875 and $233,591, respectively, in insurance premium
reimbursements from Geneva Waterfront, Inc.

The Company's facilities at 1200 West Monroe Street, Chicago, Illinois are
leased from The Clarence W. Schawk 1979 Children's Trust, a trust established
for the benefit of the children of Clarence W. Schawk, including David A.
Schawk. Based on third-party appraisals, management believes that the gross rent
and other terms and conditions of this lease are comparable to those that would
have been obtained in an arm's-length transaction. The amount paid by the
Company in each of 1994, 1995 and 1996 under this lease was $380,355.

The Company's facility at 1600 East Sherwin Avenue, Des Plaines, Illinois
is leased from C.W. Properties, Chicago, a group consisting of a Missouri
corporation and certain individuals, all of whom are unrelated to the Schawk
Family. The lease provides for an option to purchase the building and the
adjoining property at 70% of the fair market value. The option is held by
Graphics IV Ltd., an Illinois limited partnership ("Graphics IV"). The limited
partners of Graphics IV are David A. Schawk and the daughters of Clarence W.
Schawk. Based on third party appraisals, management believes that the gross rent
and other terms and conditions of this lease are comparable to those that would
have been obtained in an arm's-length

39
<PAGE> 41

transaction. The amount paid by the Company in 1994, 1995 and 1996 under this
lease was $579,000, $670,986 and $679,347, respectively.

As recently as August, 1997, Clarence W. Schawk purchased shares of Class A
Common Stock on the open market. These purchases have been consistent with Mr.
Schawk's regular pattern over the last two years of purchases on the open market
for his own account, under the Company's employee stock purchase plan and
through the Company's dividend reinvestment plan. In connection with the
Offering, Mr. Schawk has agreed to promptly pay to the Company any gains he
might realize for purposes of Section 16 of the Exchange Act as a result of any
prior purchase of Class A Common Stock. The Company presently estimates the
amount of such gain to be approximately $70,000.

As part of the final settlement of certain stockholders' litigation against
the Company and its directors relating to the Merger, Clarence W. Schawk and
David A. Schawk transferred 159,521 shares of Class A Common Stock to a
settlement fund for the benefit of settlement class members. The shares are
subject to a put agreement whereby the class members may require the Company to
purchase the shares at a price ranging from $7.00 to $9.50 per share. The actual
price depends upon the time of exercise over the exercise period which begins on
the final settlement date and ends on the later of the second anniversary of the
final court approval of the settlement agreement (which occurred on May 21,
1997) or 180 days after the shares are distributed to class members (which is
not anticipated to occur prior to January 1, 1998).

The Company will use the proceeds from the Offering, in addition to other
available funds, to purchase all of the issued and outstanding shares of the
Series A Preferred Stock and Series B Preferred Stock of the Company at a price
of $1,000 per share (the liquidation preference amount per share). All of the
shares of the Series A Preferred Stock and Series B Preferred Stock of the
Company are held by or on behalf of the Schawk Family. Each holder of shares of
the Series A Preferred Stock and Series B Preferred Stock has agreed to sell
such shares to the Company at or prior to the closing of the Offering. The Board
of Directors has conditioned the purchase of such shares on receipt of a
fairness opinion from an independent qualified investment banking firm which
provides that the price paid for the shares of the Series A Preferred Stock and
Series B Preferred Stock is fair to the stockholders of the Company from a
financial point of view.

DESCRIPTION OF CAPITAL STOCK

The Company's Certificate of Incorporation, as amended (the "Certificate of
Incorporation"), fixes the total number of shares of all classes of capital
stock which the Company has the authority to issue at 41,200,000 shares, of
which 1,000,000 shares are shares of Preferred Stock, $0.01 par value per share
(the "Preferred Stock"), 40,000,000 shares are shares of Class A Common Stock,
$0.008 par value per share, and 200,000 shares are shares of Class B Common
Stock, $0.05 par value per share (the "Class B Common Stock").

CLASS A COMMON STOCK

Voting Rights. Each share of Class A Common Stock is entitled to one vote
per share on all matters submitted to a vote of the stockholders.

Dividends. Subject to the rights of holders of Preferred Stock and subject
to any other provisions of the Certificate of Incorporation, holders of Class A
Common Stock are entitled to receive such dividends and other distributions in
cash, property or shares of stock of the Company as may be declared from time to
time by the Board of Directors in its discretion from any assets of the Company
legally available therefor. See "Dividend Policy."

Liquidation Rights. Upon the liquidation, dissolution or winding up of the
Company, the holders of Class A Common Stock are entitled to receive ratably the
net assets of the Company available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding Preferred Stock.
Thereafter all distributions shall be made for the benefit of the holders of
Class A Common Stock.

40
<PAGE> 42

Other Provisions. Class A Common Stock does not have preemptive rights to
subscribe to any additional securities that the Company may issue, and there are
no redemption provisions or sinking fund provisions applicable to the Class A
Common Stock nor is Class A Common Stock subject to calls or assessments by the
Company. All outstanding shares of Class A Common Stock are, and all shares of
Class A Common Stock to be outstanding upon completion of the Offering will be,
validly issued, fully paid and nonassessable.

CLASS B COMMON STOCK

The shares of Class B Common Stock are non-voting. There are presently no
shares of Class B Common Stock outstanding and there is no intention that the
Company will ever issue shares of Class B Common Stock.

PREFERRED STOCK

The Board of Directors has the authority, without further action by the
stockholders, to issue shares of Preferred Stock in one or more series and to
fix the rights, preferences, privileges and restrictions granted to or imposed
upon any unissued shares of Preferred Stock and to fix the number of shares
constituting any series and the designations of such series. Currently, two
series -- Series A Preferred Stock and Series B Preferred Stock -- have been
designated by the Board, both of which series are held by members of the Schawk
Family.

The Company issued 22,000 shares of Series A Preferred Stock and 5,207
shares of the Series B Preferred Stock to the Schawk Family in the Merger. There
are 17,600 shares of Series A Preferred Stock and 5,207 shares of Series B
Preferred Stock outstanding as of the date hereof. The terms and conditions of
the Series A Preferred Stock and Series B Preferred Stock were determined by the
Board of Directors and are set forth in respective certificates of designation
adopted by the Board and filed with the Secretary of State of the State of
Delaware in December 1994. In connection with the Offering, the Company will
repurchase all of the Series A and Series B Preferred Shares of the Company from
the proceeds of the Offering, together with other available funds, at a purchase
price of $1,000 per share plus accrued but unpaid dividends. See "Use of
Proceeds" and "Certain Transactions."

CERTAIN EFFECTS OF AUTHORIZED BUT UNISSUED STOCK

Upon consummation of the Offering, there will be 18,696,261 shares of Class
A Common Stock (of which 2,252,000 shares have been reserved for issuance
pursuant to the exercise of options granted or to be granted under the Company's
option plans) and 972,793 shares of undesignated Preferred Stock available for
future issuance without stockholder approval. To the extent the Company utilizes
a depositary facility in order to issue units representing fractional interests
in deposited shares of Preferred Stock, the Company may effectively increase the
amount of Preferred Stock available for future issuance without stockholder
approval. These additional shares may be utilized for a variety of corporate
purposes, including future public offerings to raise additional capital or to
facilitate corporate acquisitions. The Company does not currently have any plans
to issue additional shares of capital stock, other than shares of Class A Common
Stock which may be issued upon the exercise of options. The Company may issue
Class A Common Stock in connection with the acquisition of other companies.

One of the effects of the existence of unissued and unreserved Class A
Common Stock and undesignated Preferred Stock may be to enable the Board of
Directors of the Company to issue shares to persons friendly to current
management which could render more difficult, delay or discourage an attempt to
obtain control of the Company by means of a merger, tender offer, proxy contest
or otherwise, and thereby protect the continuity of the Company's management.
Although it has no present intention to do so, the Board of Directors of the
Company could issue Preferred Stock with voting, dividend and conversion rights
which could adversely affect the voting power of holders of Class A Common Stock
and the likelihood that such holders receive dividend payments and payments upon
liquidation.

41
<PAGE> 43

DELAWARE TAKEOVER STATUTE

The Company is subject to the restrictions imposed by Section 203 of the
Delaware General Corporation Law, as amended ("Section 203"). Section 203
provides that, subject to certain exceptions specified therein, an "interested
stockholder" of a Delaware corporation shall not engage in any business
combination, including mergers or consolidations or acquisitions of additional
shares of the corporation with the corporation for a three-year period following
the date that such stockholder becomes an "interested stockholder" unless: (i)
prior to such date, the board of directors of the corporation approved either
the business combination or the transaction which resulted in the stockholder
becoming an "interested stockholder;" (ii) upon consummation of the transaction
which resulted in the stockholder becoming an "interested stockholder," the
interested stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding certain shares); or
(iii) on or subsequent to such date, the business combination is approved by the
board of directors of the corporation and authorized at an annual or special
meeting of stockholders by the affirmative vote of at least 66 2/3% of the
outstanding voting stock which is not owned by the "interested stockholder."
Except as otherwise specified in Section 203, an "interested stockholder" is
defined to include (x) any person that is the owner of 15% or more of the
outstanding voting stock of the corporation, or is an affiliate or associate of
the corporation and was the owner of 15% or more of the outstanding voting stock
of the corporation at any time within three years immediately prior to the
relevant date and (y) the affiliates and associates of any such person. The
Schawk Family became "interested stockholders" upon the effective acquisition of
a controlling interest in Filtertek in September 1992.

These provisions could have the effect of delaying, deferring or preventing
a change of control of the Company. The Company's stockholders, by adopting an
amendment to its Certificate of Incorporation or By-laws, may elect not to be
governed by Section 203, effective twelve months after adoption.

LIMITATION OF DIRECTOR LIABILITY AND INDEMNIFICATION

The Company's Certificate of Incorporation contains a provision that limits
the liability of its directors for breaches of their fiduciary duties as
directors to the full extent permitted by the Delaware General Corporation Law.
As a result, directors will not be liable, in certain circumstances, to the
Company or its stockholders for monetary damages arising from a breach of their
fiduciary duties as directors. Such limitation does not, however, affect the
liability of a director: (i) for any transaction from which the director derives
an improper personal benefit; (ii) for acts or omissions not in good faith or
that involve intentional misconduct or a knowing violation of law; (iii) for
improper payment of dividends or redemption of shares; or (iv) for any breach of
the director's duty of loyalty to the Company or its stockholders. The
Certificate of Incorporation provides that the Company shall indemnify its
officers and directors to the fullest extent permitted by applicable law.

TRANSFER AGENT AND REGISTRAR

First Chicago Trust Company of New York serves as the transfer agent and
registrar for the Class A Common Stock.

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<PAGE> 44

SHARES ELIGIBLE FOR FUTURE SALE

All of the 3,000,000 shares sold in the Offering (3,450,000 if the
Underwriters' over-allotment option is exercised in full) will be eligible for
sale in the public market without restriction under the Securities Act except
that any share purchased by an "affiliate" of the Company (as that term is
defined in Rule 144 adopted under the Securities Act) will be subject to the
resale limitations of Rule 144. Upon completion of the Offering, there will be
20,303,739 outstanding shares of Class A Common Stock and the public float will
be increased from 4,705,971 shares to 7,705,971 (8,155,971 shares if the
Underwriters' over-allotment option is exercised in full). Of the remaining
shares outstanding, 159,521 shares will be held by independent parties and
constitute "restricted securities," as defined under Rule 144 of the Securities
Act and subject to the resale limitations thereunder, and 12,818,399 shares will
be beneficially owned by affiliates of the Company and eligible for resale
subject to the limitations under Rule 144. Of the shares held by or on behalf of
the Schawk Family, 2,212,914 shares are freely transferrable under Rule 144, and
13,420,476 shares are eligible for resale subject to the volume limitations of
Rule 144. The Company and the Schawk Family have entered into a registration
rights agreement under which the Schawk Family may cause the Company to register
for sale under the Securities Act up to approximately 12.9 million shares or
include such shares as part of a registered underwritten public offering of
Class A Common Stock by the Company.

In general, under Rule 144 as currently in effect, a person (or persons
whose shares are aggregated) to whom the Rule is applicable, including an
affiliate, who has beneficially owned shares for at least a one-year period (as
computed under Rule 144) is entitled to sell within any three-month period the
number of shares that does not exceed the greater of (i) 1% of the then
outstanding shares of the Class A Common Stock (approximately 200,000 shares
after giving effect to the Offering) and (ii) the reported average weekly
trading volume of the then outstanding shares of Class A Common Stock during the
four calendar weeks immediately preceding the date on which the notice of sale
is filed with the Securities and Exchange Commission. Sales under Rule 144 also
are subject to certain provisions relating to the manner and notice of sale and
the availability of current public information about the Company. A person (or
persons whose shares are aggregated) who is not deemed an affiliate of the
Company at any time during the 90 days immediately preceding a sale, and who has
beneficially owned shares for at least a two-year period (as computed under Rule
144), would be entitled to sell such shares under Rule 144(k) without regard to
the volume limitation and other conditions described above.

Up to 820,000 additional shares of Class A Common Stock may be purchased by
certain employees and directors of the Company pursuant to the exercise of
options granted under the Company's 1988 Equity Option Plan and the 1991 Outside
Directors' Formula Stock Option Plan, of which 486,465 were vested as of
September 30, 1997. The shares of Class A Common Stock issuable upon exercise of
the Options are freely tradable under a registration statement on Form S-8,
except that such shares held by affiliates of the Company will be subject to the
volume limitations of Rule 144.

No prediction can be made as to the effect, if any, that future sales of
shares, including any shares that may be issued in connection with potential
future acquisitions, or the availability of shares for future sale, will have on
the market price prevailing from time to time. Sales of substantial amounts of
Class A Common Stock, or the perception that such sales could occur, could
adversely affect prevailing market prices of the Class A Common Stock and the
Company's ability to raise capital in the future through the sale of additional
securities. See "Risk Factors -- Shares Eligible for Future Sale."

43
<PAGE> 45

UNDERWRITING

Under the terms of, and subject to the conditions in, the Underwriting
Agreement, the form of which is filed as an exhibit to the Registration
Statement of which this Prospectus forms a part, the Underwriters named below,
for whom Lehman Brothers Inc. and McDonald & Company Securities, Inc. are acting
as representatives (the "Representatives"), have severally agreed to purchase
from the Company and the Selling Stockholders, and the Company and the Selling
Stockholders have agreed to sell to each Underwriter, the aggregate number of
shares of Class A Common Stock set forth opposite their respective names below:

<TABLE>
<CAPTION>
NUMBER OF
SHARES
UNDERWRITERS ---------
<S> <C>
Lehman Brothers Inc. .......................................
McDonald & Company Securities, Inc. ........................
---------
Total............................................. 3,000,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the
Underwriters to purchase shares of Class A Common Stock are subject to certain
conditions, and that if any of the foregoing shares of Class A Common Stock are
purchased by the Underwriters pursuant to the Underwriting Agreement, all the
shares of Class A Common Stock agreed to be purchased by the Underwriters must
be so purchased.

The Company and the Selling Stockholders have been advised that the
Underwriters propose to offer the shares of Class A Common Stock directly to the
public at the public offering price set forth on the cover page of this
Prospectus, and to certain selected dealers (who may include the Underwriters)
at such public offering price less a selling concession not in excess of
$ per share. The selected dealers may re-allow a concession not in
excess of $ per share to certain brokers and dealers. After the
Offering, the public offering price, the concession to selected dealers and the
reallowance may be changed by the Underwriters.

The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act and to contribute to payments that the Underwriters may be
required to make in respect thereof.

The Company and the Selling Stockholders have granted to the Underwriters
an option to purchase up to an aggregate of 450,000 shares of Class A Common
Stock, exercisable solely to cover over-allotments, at the offering price to the
public less the underwriting discounts and commissions shown on the cover page
of this Prospectus. Such option may be exercised at any time until 30 days after
the date of the Underwriting Agreement. To the extent that the option is
exercised, each Underwriter will be committed, subject to certain conditions, to
purchase a number of the additional shares of Class A Common Stock proportionate
to such Underwriter's initial commitment as indicated in the preceding table.

Certain stockholders of the Company, owning an aggregate of 16,828,610
shares after the Offering, have agreed that they will not, subject to certain
limited exceptions, directly or indirectly, offer, sell or otherwise dispose of
any shares of Class A Common Stock or any securities convertible into or
exchangeable or exercisable for any such shares for a period of 90 days after
the effective date of the Offering without the prior written consent of Lehman
Brothers Inc. In addition, the Company has agreed that it will not, subject to
certain limited exceptions, directly or indirectly, offer, sell or otherwise
dispose of any shares of Class A Common Stock or any securities convertible into
or exchangeable for such shares without the prior written consent of Lehman
Brothers Inc. for 90 days after the effective date of the Offering.

Until the distribution of the Class A Common Stock is completed, rules of
the Commission may limit the ability of the Underwriters and certain selling
group members to bid for and purchase shares of Class A Common Stock. As an
exception to these rules, the Representatives are permitted to engage in certain

44
<PAGE> 46

transactions that stabilize the price of the Class A Common Stock. Such
transactions may consist of bids or purchases for the purpose of pegging, fixing
or maintaining the price of the Class A Common Stock.

In addition, if the Representatives over-allot (i.e., if they sell more
shares of Class A Common Stock than are set forth on the cover page of this
Prospectus), and thereby create a short position in the Class A Common Stock in
connection with the Offering, the Representatives may reduce that short position
by purchasing Class A Common Stock in the open market. The Representatives also
may elect to reduce any short position by exercising all or part of the
over-allotment option described herein.

The Representatives also may impose a penalty bid on certain Underwriters
and selling group members. This means that if the Representatives purchase
shares of Class A Common Stock in the open market to reduce the Underwriters'
short position or to stabilize the price of the Class A Common Stock, they may
reclaim the amount of the selling concession from the Underwriters and selling
group members who sold those shares as part of the Offering.

In general, purchases of a security for the purpose of stabilization or to
reduce a syndicate short position could cause the price of the security to be
higher than it might otherwise be in the absence of such purchases. The
imposition of a penalty bid might have an effect on the price of a security to
the extent that it were to discourage resales of the security.

Neither the Company nor any of the Underwriters makes any representation or
prediction as to the direction or magnitude of any effect that the transactions
described above may have on the price of the Class A Common Stock. In addition,
neither the Company nor any of the Underwriters makes any representation that
the Representatives will engage in such transactions or that such transactions,
once commenced, will not be discontinued without notice.

LEGAL MATTERS

The validity of the shares of Class A Common Stock being offered hereby and
certain other matters are being passed upon for the Company by Vedder, Price,
Kaufman & Kammholz, Chicago, Illinois. Certain legal matters relating to the
Offering will be passed upon for the Underwriters by Winston & Strawn, Chicago,
Illinois.

EXPERTS

The consolidated financial statements (including a schedule incorporated by
reference) of Schawk, Inc. at December 31, 1996 and 1995 and for each of the
three years in the period ended December 31, 1996, appearing in this Prospectus
and Registration Statement have been audited by Ernst & Young LLP, independent
auditors, as set forth in their reports thereon appearing and incorporated by
reference elsewhere herein, which as to 1994 is based in part on the report of
Arthur Andersen LLP, independent auditors. The financial statements referred to
above are included in reliance upon such reports given upon the authority of
such firms as experts in accounting and auditing.

45
<PAGE> 47

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1994, 1995 AND 1996

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Reports of Independent Auditors............................. F-2
Consolidated Financial Statements:
Consolidated balance sheets............................... F-4
Consolidated statements of operations..................... F-5
Consolidated statements of stockholders' equity........... F-6
Consolidated statements of cash flows..................... F-7
Notes to consolidated financial statements................ F-8
</TABLE>

NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997
(UNAUDITED)

<TABLE>
<S> <C>
Condensed Consolidated Interim Financial Statements:
Condensed consolidated balance sheet...................... F-20
Condensed consolidated statements of operations........... F-21
Condensed consolidated statements of cash flows........... F-22
Notes to condensed consolidated interim financial
statements............................................. F-23
</TABLE>

F-1
<PAGE> 48

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
Schawk, Inc.

We have audited the accompanying consolidated balance sheets of Schawk,
Inc. as of December 31, 1996 and 1995, and the related consolidated statements
of operations, stockholders' equity, and cash flows for each of the three years
in the period ended December 31, 1996. These financial statements are the
responsibility of Schawk, Inc. management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not audit the
1994 financial statements of Filtertek, Inc. (the Plastics Group of Schawk,
Inc.), which statements reflect net income of $4.2 million for the period ended
December 30, 1994 (included in income from discontinued operations). Those
statements were audited by other auditors whose report has been furnished to us,
and our opinion, insofar as it relates to 1994 data included for the Plastics
Group, is based on the report of other auditors.

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 and the report of other auditors provide a reasonable
basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the
consolidated financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Schawk, Inc. at
December 31, 1996 and 1995, and the consolidated 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.

ERNST & YOUNG LLP

Chicago, Illinois
February 14, 1997

F-2
<PAGE> 49

REPORT OF INDEPENDENT AUDITORS

The Board of Directors and Stockholders
Schawk, Inc.

We have audited the consolidated balance sheets of Filtertek, Inc. and
subsidiaries (a Delaware corporation and subsidiary of Schawk, Inc.; previously
a combined entity of Filtertek, Inc. and Filtertek de Puerto Rico, Inc., see
Note 1) as of December 30, 1994 and December 31, 1993, and the related
consolidated statements of income, cash flows and stockholders' equity for the
period ended December 30, 1994 and for the years ended December 31, 1993 and
1992, not separately presented herein. 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. As discussed in Note
2, on October 2, 1993, the Company acquired Fuzere Manufacturing Company, Inc.,
Fuzere Midwest, and Robinson Industries ("Robinson/Fuzere") in a purchase
transaction between companies under common control and accounted for it as
though it was effective September 22, 1992, in a manner similar to
pooling-of-interests accounting. We did not audit the statements of income of
Robinson/Fuzere for the nine months ended September 30, 1993. Such statements
are included in the consolidated financial statements of Filtertek, Inc. and
subsidiaries. The net sales and net income of Robinson/Fuzere for the period
covered by the report of the other auditors represent 17 percent and 35 percent,
respectively, of the total consolidated net sales and net income for the year
ended December 31, 1993. These financial statements were audited by other
auditors whose report has been furnished to us, and our opinion, insofar as it
relates to the amounts included in those financial statements, is based solely
on the reports of the other auditors.

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 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 and the report of
the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the
financial statements referred to above present fairly, in all material respects,
the consolidated financial position of Filtertek, Inc. and subsidiaries as of
December 30, 1994 and December 31, 1993, and the consolidated results of their
operations and their cash flows for the period ended December 30, 1994 and for
the years ended December 31, 1993, and 1992, in conformity with generally
accepted accounting principles.

ARTHUR ANDERSEN LLP

Chicago, Illinois
February 17, 1995

F-3
<PAGE> 50

SCHAWK, INC.

CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
DECEMBER 31
-------------------
1996 1995
-------- --------
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents................................. $ 483 $ 1,917
Trade accounts receivable, less allowance for doubtful
accounts of $760 in 1996 and $984 in 1995.............. 19,294 29,865
Inventories............................................... 3,675 16,806
Prepaid expenses and other................................ 6,258 3,463
Current Assets of Plastics business held for sale......... 27,495 --
Deferred income taxes..................................... 590 1,504
-------- --------
Total current assets........................................ 57,795 53,555
Property and equipment, net................................. 27,453 76,540
Property and equipment of Plastics business held for sale... 48,788 --
Excess of cost over net assets acquired, less accumulated
amortization of $3,449 in 1996 and $6,331 in 1995......... 13,158 47,858
Other assets of Plastics business held for sale............. 9,593 --
Other assets................................................ 4,053 6,510
-------- --------
Total assets................................................ $160,840 $184,463
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable.................................... $ 4,116 $ 7,943
Accrued expenses.......................................... 8,786 11,750
Notes payable to stockholders............................. 5,765 5,765
Current liabilities of Plastics business held for sale.... 7,270 --
Notes payable to banks.................................... 9,586 --
Current portion of long-term debt and capital lease
obligations............................................ 391 1,222
-------- --------
Total current liabilities................................... 35,914 26,680
Long-term debt.............................................. 62,500 69,907
Capital lease obligations................................... 5,285 5,675
Other....................................................... 1,217 1,036
Deferred income taxes....................................... 3,187 4,736
Deferred income taxes of Plastics business held for sale.... 3,811 --
Stockholders' Equity:
Common stock.............................................. 168 165
Preferred stock........................................... -- --
Additional paid-in capital................................ 77,928 75,506
Retained earnings (deficit)............................... (26,987) 4,573
Cumulative foreign currency translation adjustment........ -- (450)
-------- --------
51,109 79,794
Treasury stock, at cost................................... (1,523) (2,695)
Notes receivable from employees........................... (660) (670)
-------- --------
48,926 76,429
-------- --------
Total liabilities and stockholders' equity.................. $160,840 $184,463
======== ========
</TABLE>

See accompanying notes.

F-4
<PAGE> 51

SCHAWK, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-------------------------------
1996 1995 1994
-------- ------- --------
<S> <C> <C> <C>
Net sales................................................... $ 90,763 $87,204 $103,889
Cost of sales............................................... 51,153 51,066 52,486
Selling, general, and administrative expenses............... 25,187 25,116 31,094
Write-off of equipment...................................... 1,050 -- --
-------- ------- --------
Operating income............................................ 13,373 11,022 20,309
Other income (expense):
Interest and dividend income.............................. 340 532 544
Interest expense.......................................... (4,657) (4,306) (3,858)
Other..................................................... -- (5) (1,004)
-------- ------- --------
(4,317) (3,779) (4,318)
-------- ------- --------
Income from continuing operations before income taxes....... 9,056 7,243 15,991
Income tax provision before net operating loss
carryforwards............................................. 3,530 2,577 3,722
Benefit of net operating loss carryforwards................. -- (1,632) --
-------- ------- --------
Income from continuing operations........................... 5,526 6,298 12,269
Income (loss) from discontinued operations:
Income from discontinued operations (net of minority
interest of $1,717 in 1994)............................ 2,490 638 1,200
Loss on disposal of discontinued operations............... (33,000) -- --
-------- ------- --------
Net (loss) income........................................... $(24,984) $ 6,936 $ 13,469
======== ======= ========
Primary and fully diluted earnings per share:
Continuing operations..................................... $ 0.22 $ 0.26 $ --
Discontinued operations................................... (1.56) 0.03 --
-------- ------- --------
Total....................................................... (1.34) 0.29 --
======== ======= ========
Weighted average number of common and common equivalent
shares outstanding........................................ 19,545 19,203 --
Dividends per Class A common share.......................... $ 0.26 $ 0.26 $ --
Pro forma data (Note 15) (unaudited):
Pro forma income taxes.................................... 7,071
Pro forma net income adjusted only for income taxes....... 10,247
</TABLE>

See accompanying notes.

F-5
<PAGE> 52

SCHAWK, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1994, 1995, AND 1996
(THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
OLD SCHAWK, INC. CUMULATIVE
SCHAWK ----------------------------------------- FOREIGN
COMPANIES CLASS A CLASS B SERIES A SERIES B ADDITIONAL CURRENCY
COMMON COMMON COMMON PREFERRED PREFERRED PAID-IN RETAINED TRANSLATION
STOCK STOCK STOCK STOCK STOCK CAPITAL EARNINGS ADJUSTMENT
--------- ------- ------- --------- --------- ---------- -------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1993....................... $ 108 $ -- $-- $-- $-- $16,559 $38,107 $(1,393)
Net income................... -- -- -- -- -- -- 13,469 --
Capital contribution to Flexo
Graphics, Inc.............. -- -- -- -- -- 198 -- --
Dividends.................... -- -- -- -- -- -- (20,398) --
Cumulative foreign currency
translation adjustment..... -- -- -- -- -- -- -- 446
Issuance of Series A
preferred stock............ -- -- -- -- -- 22,000 (22,000) --
Issuance of Series B
preferred stock............ -- -- -- -- -- 5,207 (5,207) --
Deemed purchase of minority
interest................... -- -- -- -- -- 31,502 -- --
Recapitalization for
Merger..................... (108) 155 9 -- -- (54) -- --
----- ---- --- --- --- ------- -------- -------
Balance at December 31,
1994....................... -- 155 9 -- -- 75,412 3,971 (947)
Net income................... -- -- -- -- -- -- 6,936 --
Sale of Class A and B common
stock...................... -- -- -- -- -- 95 -- --
Purchase of Class A and B
treasury stock............. -- -- -- -- -- -- -- --
Cumulative foreign currency
translation adjustment..... -- -- -- -- -- -- -- 497
Conversion of Series A
preferred stock............ -- 1 -- -- -- (1) -- --
Issuance of Class A common
stock under dividend
reinvestment program....... -- -- -- -- -- -- (1,333) --
Cash dividends............... -- -- -- -- -- -- (5,001) --
----- ---- --- --- --- ------- -------- -------
Balance at December 31,
1995....................... -- 156 9 -- -- 75,506 4,573 (450)
Net loss..................... -- -- -- -- -- -- (24,984) --
Sale of Class A and B common
stock...................... -- -- -- -- -- 60 -- --
Purchase of Class A and B
treasury stock............. -- -- -- -- -- -- -- --
Cumulative foreign currency
translation adjustment..... -- -- -- -- -- -- -- (233)
Conversion of Series A
preferred stock............ -- 1 -- -- -- (1) -- --
Issuance of Class A stock in
connection with purchase of
Converterscan.............. -- 2 -- -- -- 2,363 -- --
Issuance of Class A common
stock under dividend
reinvestment program....... -- -- -- -- -- -- (2,607) --
Cash dividends............... -- -- -- -- -- -- (3,969) --
Write-off of foreign currency
adjustment to discontinued
operations................. -- -- -- -- -- -- -- 683
----- ---- --- --- --- ------- -------- -------
Balance at December 31,
1996....................... $ -- $159 $ 9 $-- $-- $77,928 $(26,987) $ --
===== ==== === === === ======= ======== =======

NOTES
RECEIVABLE
TREASURY FROM
STOCK EMPLOYEES
-------- ----------
<S> <C> <C>
Balance at December 31,
1993....................... $(2,262) $ --
Net income................... -- --
Capital contribution to Flexo
Graphics, Inc.............. -- --
Dividends.................... -- --
Cumulative foreign currency
translation adjustment..... -- --
Issuance of Series A
preferred stock............ -- --
Issuance of Series B
preferred stock............ -- --
Deemed purchase of minority
interest................... -- --
Recapitalization for
Merger..................... (63) (685)
------- -----
Balance at December 31,
1994....................... (2,325) (685)
Net income................... -- --
Sale of Class A and B common
stock...................... 130 (130)
Purchase of Class A and B
treasury stock............. (1,833) 145
Cumulative foreign currency
translation adjustment..... -- --
Conversion of Series A
preferred stock............ -- --
Issuance of Class A common
stock under dividend
reinvestment program....... 1,333 --
Cash dividends............... -- --
------- -----
Balance at December 31,
1995....................... (2,695) (670)
Net loss..................... -- --
Sale of Class A and B common
stock...................... 57 (57)
Purchase of Class A and B
treasury stock............. (1,492) 67
Cumulative foreign currency
translation adjustment..... -- --
Conversion of Series A
preferred stock............ -- --
Issuance of Class A stock in
connection with purchase of
Converterscan.............. -- --
Issuance of Class A common
stock under dividend
reinvestment program....... 2,607 --
Cash dividends............... -- --
Write-off of foreign currency
adjustment to discontinued
operations................. -- --
------- -----
Balance at December 31,
1996....................... $(1,523) $(660)
======= =====
</TABLE>

See accompanying notes.

F-6
<PAGE> 53

SCHAWK, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net (loss) income........................................... $(24,984) $ 6,936 $ 13,469
Adjustments to reconcile net (loss) income to cash provided
by operating activities:
Depreciation and amortization............................. 15,435 16,219 14,866
Deferred income taxes..................................... (762) (138) 3,051
Deferred income taxes of Plastics business held for
sale................................................... 3,811 -- --
Other..................................................... 1,378 243 (147)
Loss on disposal of discontinued operations............... 33,000 -- --
Loss on write-off of equipment............................ 1,050 -- --
Changes in operating assets and liabilities, net of
effects from acquisitions:
Trade accounts receivable.............................. 13,219 1,356 (1,146)
Inventories............................................ 11,520 2,272 (1,509)
Prepaid expenses and other............................. (2,279) 1 (169)
Trade accounts payable and accrued expenses............ (12,197) (934) 285
Current assets of Plastics business held for sale...... (27,495) -- --
Current liabilities of Plastics business held for
sale................................................. 7,270 -- --
-------- -------- --------
Net cash provided by operating activities................... 18,966 25,955 28,700
INVESTING ACTIVITIES
Purchases of property and equipment......................... (16,823) (11,027) (13,882)
Cash proceeds from disposal of property and equipment....... 477 96 1,423
Advances from related parties............................... -- -- 1,238
Acquisitions, net of cash acquired.......................... (6,282) (395) (618)
Proceeds from sale of division.............................. 5,000 -- --
Proceeds from long-term note collected...................... 4,034 -- --
Other....................................................... 1,353 475 (401)
-------- -------- --------
Net cash used in investing activities....................... (12,241) (10,851) (12,240)
FINANCING ACTIVITIES
Proceeds from debt.......................................... 3,860 44,500 22,495
Principal payments on debt.................................. (6,732) (50,538) (25,035)
Principal payments on capital lease obligations............. (402) (323) (293)
Principal payments on notes payable to stockholders......... -- (3,015) --
Cash dividends.............................................. (3,969) (5,002) (12,878)
Purchase of common stock.................................... (1,427) (1,688) (1,960)
Issuance of common stock.................................... 60 94 57
Other....................................................... 451 497 (91)
-------- -------- --------
Net cash used in financing activities....................... (8,159) (15,475) (17,705)
-------- -------- --------
Net decrease in cash and cash equivalents................... (1,434) (371) (1,245)
Cash and cash equivalents beginning of year................. 1,917 2,288 3,533
-------- -------- --------
Cash and cash equivalents end of year....................... $ 483 $ 1,917 $ 2,288
======== ======== ========
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION:
Issuance of note in connection with acquisition............. $ -- $ 807 $ --
Dividends issued in the form of Class A common stock........ 2,349 1,333 --
Stock issued in connection with acquisition................. 2,365 -- --
Note received for sale of operating division................ 2,619 -- --
</TABLE>

See accompanying notes.

F-7
<PAGE> 54

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 1. BASIS OF PRESENTATION AND DESCRIPTION OF BUSINESS

Schawk, Inc. (the Company) operated in two business segments, Imaging and
Information Technologies (the Company) and Plastics, until the sale of the
Plastic business segment on February 7, 1997. The Plastics business segment has
been reflected in these financial statements as discontinued operations (see
Note 14). The Company consists of the Company known as Schawk, Inc. (Old Schawk)
and companies previously affiliated through common ownership, Lincoln Graphics,
Inc., and Flexographics, Inc. collectively, the Old Schawk Companies. The
Plastics segment consists of the previously 60% owned subsidiaries, Filtertek,
Inc. and subsidiaries (Filtertek or the Filtertek Companies). The Company is a
leader in the prepress industry in the United States primarily serving consumer
products businesses. The Company offers a complete line of prepress services,
digital image management, art production, digital photography and products for
the production of consumer product packaging and related marketing and
advertising materials. All significant intercompany balances and transactions
have been eliminated.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash Equivalents

Cash equivalents include highly liquid debt instruments and time deposits
with an original maturity of three months or less. Cash equivalents are stated
at cost, which approximates market.

Inventories

Inventories are stated at the lower of cost or market. Certain inventories,
which approximate 34% in 1996 and 10% in 1995, respectively, are determined on
the last in, first out (LIFO) cost basis. The remaining inventories are
determined on the first in, first out (FIFO) cost basis.

Property and Equipment

Property and equipment, including capitalized leases, are stated at cost,
less accumulated depreciation and amortization and are being depreciated and
amortized using the straight-line method over the estimated useful lives of the
assets or the term of the leases, ranging from 3 to 40 years.

Excess of Cost over Net Assets Acquired

Excess of cost over net assets acquired (goodwill) is being amortized using
the straight-line method over periods ranging from 10 to 40 years. The Company
continually evaluates the existence of goodwill impairment on the basis of
whether the goodwill is fully recoverable from projected, undiscounted net cash
flows of the related business unit.

Foreign Currency Translation

Foreign currency assets and liabilities are translated at the rate of
exchange existing at year-end and income and expenses amounts are translated at
the average of the monthly exchange rates. Gains and losses resulting from the
translation of foreign currency financial statements are deferred and classified
as a separate component of stockholders' equity.

Income Taxes

Deferred tax assets and liabilities are determined based on the difference
between the financial statement and tax basis of assets and liabilities using
enacted tax rates in effect for the year in which the differences are

F-8
<PAGE> 55

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

expected to reverse. A valuation allowance is provided when it is more likely
than not that some portion of the deferred tax assets arising from temporary
differences and net operating losses will not be realized.

Prior to 1995 the Old Schawk Companies had elected to be taxed as an S
Corporation under applicable provisions of the Internal Revenue Code (IRC). S
Corporation income for federal income tax purposes is treated substantially as
if the Company were a partnership and, therefore, is not ordinarily subject to
federal income tax. At December 31, 1994, a provision for deferred income taxes
of $3,000 was recorded to reflect the termination of the S Corporation status of
the Old Schawk Companies. For informational purposes, the statement of
operations for 1994 includes an unaudited pro forma adjustment for income taxes
that would have been recorded if these Companies had been C Corporations, based
on the tax laws in effect during those periods.

Use 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 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.

Reclassifications

Certain amounts in the 1994 and 1995 financial statements have been
reclassified to conform to the 1996 presentation.

NOTE 3. ACQUISITIONS

The following acquisitions have been accounted for using the purchase
method of accounting. Accordingly, the purchase price has been allocated to the
respective net assets acquired based on the fair value of such assets, including
certain noncompete agreements and liabilities as of the date of the
acquisitions, and the results of operations have been included in the
accompanying consolidated statements of income from the effective date of the
acquisitions. The effects of the operations of the acquired companies prior to
the date of acquisition were not significant.

StanMont

Effective September 1, 1996, the Company acquired all of the stock of
StanMont Inc., which has operations in Montreal and Toronto, Canada. The
following summarizes the purchase price allocation and cash paid.

<TABLE>
<S> <C>
Fair value of assets acquired, net of cash acquired of
$74....................................................... $ 7,569
Cost in excess of net assets acquired....................... 4,552
Liabilities assumed......................................... (7,762)
-------
Cash paid, net of cash acquired............................. $ 4,359
=======
</TABLE>

The final purchase price is also subject to earn-out conditions based on
pretax earnings as a percentage of net sales for fiscal years 1997 and 1998.

F-9
<PAGE> 56

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Converterscan

Effective August 1, 1996, the Company acquired all of the stock of
Converterscan, Inc., which has operations in Stamford, Connecticut, and Atlanta,
Georgia. The following summarizes the purchase price allocation and cash paid.

<TABLE>
<S> <C>
Fair value of assets acquired, net of cash acquired of
$10....................................................... $ 1,921
Cost in excess of net assets acquired....................... 5,582
Liabilities assumed......................................... (3,215)
Class A common stock issued (305 shares).................... (2,365)
-------
Cash paid, net of cash acquired............................. $ 1,923
=======
</TABLE>

For each of the three years commencing two years after closing, the seller
has the right to put the shares back to the Company at the stock price at the
date of issuance.

Certain issues regarding the final purchase price of these acquisitions are
still subject to ongoing negotiations. The final adjustments to purchase price
will be reflected as an increase or decrease to excess of cost over net assets
acquired.

NOTE 4. RELATED PARTY TRANSACTIONS

Included in prepaid expenses and other at December 31, 1996 and 1995, was
approximately $747 and $362, respectively, of advances to Geneva Waterfront,
Inc., which is owned by a stockholder of the Company. Interest is charged on
these balances at the prime rate.

Stockholders' equity has been reduced by approximately $660 and $670 for
notes receivable from employees at December 31, 1996 and 1995, respectively. The
notes are noninterest-bearing demand notes collateralized by Class B common
stock.

The Company has approximately $5,765 in notes payable at December 31, 1996
and 1995, respectively, payable to certain stockholders. The notes bear interest
at 5%. Interest expense related to these notes was $288, $328 and $100 for 1996,
1995 and 1994, respectively. These notes were paid on February 7, 1997.

NOTE 5. INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1996 1995
------ -------
<S> <C> <C>
Raw materials............................................... $1,512 $ 6,432
Work in process............................................. 2,898 6,565
Finished goods.............................................. -- 4,522
------ -------
4,410 17,519
Less: LIFO reserve.......................................... (735) (713)
------ -------
$3,675 $16,806
====== =======
</TABLE>

F-10
<PAGE> 57

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 6. PROPERTY AND EQUIPMENT

Property and equipment consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1996 1995
-------- --------
<S> <C> <C>
Land and improvements....................................... $ 522 $ 2,315
Building and improvements................................... 7,794 35,998
Machinery and equipment..................................... 47,370 85,067
Leasehold improvements...................................... 3,209 2,786
Building and improvements under capital leases.............. 7,500 7,500
-------- --------
66,395 133,666
Accumulated depreciation and amortization................... (38,942) (57,126)
-------- --------
$ 27,453 $ 76,540
======== ========
</TABLE>

Accumulated depreciation and amortization includes $2,331 and $1,916 for
building and improvements under capital leases at December 31, 1996 and 1995,
respectively. Depreciation and amortization expense for property and equipment
was $6,407 (continuing operations only), $13,937 and $12,868 in 1996, 1995 and
1994, respectively.

NOTE 7. ACCRUED EXPENSES

Accrued expenses consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1996 1995
------ -------
<S> <C> <C>
Accrued compensation and payroll taxes...................... $3,629 $ 6,970
Accrued income taxes........................................ -- 879
Other....................................................... 5,157 3,901
------ -------
$8,786 $11,750
====== =======
</TABLE>

NOTE 8. LONG-TERM DEBT

Long-term debt consists of the following:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1995
------- -------
<S> <C> <C>
Revolving credit facility................................... $22,500 $28,800
Series A senior note payable................................ 10,000 10,000
Series B senior note payable................................ 30,000 30,000
Other....................................................... -- 1,974
------- -------
62,500 70,774
Less: Current portion....................................... -- (867)
------- -------
$62,500 $69,907
======= =======
</TABLE>

The revolving credit facility bears interest at the offshore borrowing rate
(5.6875% at December 31, 1996) of the lead lender plus 0.40% to 0.875% based on
a financial statement ratio of the Company or the Lender's alternative base rate
(8.25% at December 31, 1996), as determined by the Company. The revolving

F-11
<PAGE> 58

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

credit facility was repaid in its entirety (and the credit facility canceled) on
February 7, 1997 from the proceeds of the sale of the Plastics business.

The Company entered into an interest rate swap agreement to hedge the
impact of changes in interest rates on its revolving credit facility. The
agreement converts the interest rate on the revolving credit facility to a fixed
rate of 5.81%. The agreement applies to $16,000 of the outstanding principal
balance, decreasing by $2,000 each quarter until termination in October 1997
($8,000 at December 31, 1996). Net amounts paid or received on interest rate
swap agreements that qualify as hedges are recognized over the term of the
agreement as an adjustment to interest expense. Realized gains and losses
resulting from the termination of interest rate swap agreements are recognized
in the period the agreement is terminated. The swap agreement was canceled on
February 7, 1997, with no significant gain or loss realized.

The Company entered into a senior note agreement for $10,000 Series A
senior notes and $30,000 Series B senior notes. The Series A notes bear interest
at 6.58% and are payable in installments of $5 million in 1999 and 2000. The
Series B notes bear interest at 6.98% and are payable in installments of $6
million from 2001 to 2004. The notes are subject to prepayment in whole or in
part on or after August 18, 1996. Borrowings under the Series A and B senior
notes are unsecured but are subject to certain restrictive covenants. In
addition, the agreement requires the Company to maintain certain net worth and
other financial ratio requirements. The fair value of the senior notes
approximates the carrying value at December 31, 1996.

Interest paid on long-term debt during the years ended December 31, 1996,
1995 and 1994 was approximately $4,561, $5,071 and $5,375, respectively.

Annual maturities of all long-term debt at December 31, 1996 are as
follows:

<TABLE>
<S> <C>
1997............................................... $ --
1998............................................... --
1999............................................... 5,000
2000............................................... 27,500
2001............................................... 6,000
Thereafter......................................... 24,000
-------
$62,500
=======
</TABLE>

The Company has an unsecured $10 million line of credit with a bank in the
United States and unsecured $5.5 million line of credit with a bank in Canada to
provide financing and working capital flexibility. Advances under the Canadian
line of credit bear interest at either the Canadian prime rate or the bank's
cost of funds plus 0.625% at the option of the Company. The interest rates on
the Canadian advances at December 31, 1996, range from 3.85% to 4.73%. At
December 31, 1996, the amounts outstanding under the United States line of
credit and the Canadian line of credit are $4.4 million and $5.2 million,
respectively. Both facilities are due on demand.

F-12
<PAGE> 59

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

NOTE 9. STOCKHOLDERS' EQUITY

Stockholders' equity includes the following:

<TABLE>
<CAPTION>
DECEMBER 31,
---------------
1996 1995
------ ------
<S> <C> <C>
Common stock:
Class A voting, $0.008 par value, 40,000,000 shares
authorized; 20,034,030 and 19,559,771 shares issued at
December 31, 1996 and 1995, respectively; 19,915,693 and
19,310,840 shares outstanding at December 31, 1996 and
1995, respectively........................................ $ 159 $ 156
Class B nonvoting, $0.05 par value, 200,000 shares
authorized; 172,281 shares issued at December 31, 1996 and
1995; 133,324 and 135,310 shares outstanding at December
31, 1996 and 1995, respectively........................... 9 9
------ ------
$ 168 $ 165
====== ======
Preferred stock, 1,000,000 shares authorized:
Series A, $0.01 par value, 17,600 and 19,800 shares issued
and outstanding at December 31, 1996 and 1995,
respectively.............................................. $ -- $ --
Series B, $0.01 par value, 5,207 shares issued and
outstanding at December 31, 1996 and 1995................. -- --
------ ------
$ -- $ --
====== ======
Treasury stock:
118,337 and 248,931 shares Class A at December 31, 1996
and 1995, respectively, and 38,957 and 36,971 shares
Class B at December 31, 1996 and 1995, respectively, at
cost................................................... $1,523 $2,695
====== ======
</TABLE>

On December 30, 1994, the Company issued 22,000 shares of Series A
preferred stock and 5,207 shares of Series B preferred stock. The Series A
preferred shares are mandatorily redeemable by the Company on December 31, 2004,
or, at the option of the Board, on any December 31 through December 31, 2003, by
issuing to the holder for each share of Series A Preferred Stock the number of
shares of Class A Common Stock equal to the sum of $1,000 plus an amount equal
to all accumulated and unpaid dividends per share divided by $13.80, or cash in
the amount of the fair market value, as defined, of the number of shares of
Class A Common Stock. On December 30, 1996 and 1995, the Company issued 159,420
Class A common shares in exchange for 2,200 shares of Series A preferred stock.
The Series B preferred shares are mandatorily redeemable by the Company on
December 31, 1999, under the same redemption formula as Series A. The Series B
shares are also mandatorily redeemable on the date of the consummation of any
offering or private placement of the Company's debt or equity the gross proceeds
of which exceed $25,000. The Company shall redeem all outstanding shares of
Series B preferred stock with respect to each such share $1,000 in cash plus all
accumulated and unpaid dividends per share. Dividends shall accrue on each share
of preferred stock at the rate of 5.0% per year and are payable quarterly.
Holders of preferred shares are entitled to limited voting rights.

In the event of liquidation, dissolution or winding up of the Company, the
holders of Series A preferred stock are entitled to be paid out of the assets of
the Company available for distribution to its stockholders before any payment to
any holders of common stock or any holders of Series B preferred stock an amount
equal to $1,000 per share plus all accumulated and unpaid dividends.

F-13
<PAGE> 60

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Upon the liquidation, dissolution or winding up of the Company, the holders
of Class A and Class B Common Stock are entitled to receive ratably the net
assets of the Company available after the payment of all debts and other
liabilities and subject to the prior rights of any outstanding preferred stock,
until the holders of Class B Common Stock have received distributions (maximum
amount of $10) equal to the par value of their shares. Thereafter, all
distributions shall be made for the benefit of the holders of Class A Common
Stock. Subsequent to December 31, 1996, the Board of Directors authorized the
cancellation of all Class B Common Stock.

NOTE 10. INCOME TAXES

The provision (credit) for income taxes for continuing operations is
comprised of the following:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1996 1995 1994
------ ------ ------
<S> <C> <C> <C>
Current:
Federal................................................ $ 102 $1,445 $ --
State.................................................. 376 255 722
Foreign................................................ (5) -- --
------ ------ ------
473 1,700 722
Deferred:
Federal................................................ 2,767 (642) 2,629
State.................................................. 18 (113) 371
Foreign................................................ 272 -- --
------ ------ ------
3,057 (755) 3,000
------ ------ ------
Total.......................................... $3,530 $ 945 $3,722
====== ====== ======
</TABLE>

On December 30, 1994, Schawk, Inc. recorded a $3,000 deferred income tax
charge related to the termination of the S Corporation status of the Old Schawk
Companies. The 1995 income tax provision includes a benefit of $1,632 for
utilization of net operating loss carryforwards for which no tax benefit was
previously recorded.

Components of deferred income tax assets and liabilities (continuing
operations in 1996) are as follows:

<TABLE>
<CAPTION>
DECEMBER 31,
------------------
1996 1995
------- -------
<S> <C> <C>
Current deferred income taxes:
Inventory................................................. $ 51 $ 256
Accruals and reserves not currently deductible............ 539 2,045
Other..................................................... -- (797)
------- -------
Net current asset........................................... $ 590 $ 1,504
======= =======
Noncurrent deferred income taxes:
Depreciation.............................................. $ 667 $(1,253)
Property and equipment acquisition basis differences...... (1,537) (3,040)
Net operating losses and other credit carryforwards....... -- 1,100
Other..................................................... (2,317) (993)
Valuation allowance....................................... -- (550)
------- -------
Noncurrent liability........................................ $(3,187) $(4,736)
======= =======
</TABLE>

F-14
<PAGE> 61

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

A reconciliation between the provision for income taxes for continuing
operations computed by applying the federal statutory tax rate to income before
income taxes and minority interest and the actual provision is as follows:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1996 1995 1994
----- ------ ------
<S> <C> <C> <C>
Income taxes at statutory rate.............................. 34.0% 34.0% 34.0%
Income exempt from income tax............................... -- -- (34.0)
Net operating loss carryforward not previously benefited.... -- (22.5) --
Nondeductible expenses...................................... 1.7 -- --
State income taxes.......................................... 4.4 2.3 4.5
Deferred tax related to S Corporation termination........... -- -- 18.8
Other....................................................... (1.1) (0.8) --
---- ----- -----
39.0% 13.0% 23.3%
==== ===== =====
</TABLE>

The undistributed earnings of foreign subsidiaries were approximately $402
at December 31, 1996. No income taxes are provided on the undistributed earnings
because they are considered permanently invested. The foreign component of
income before income taxes and minority interest was $669 for 1996 (there was no
foreign component of income before taxes and minority interest in 1995 and
1994.)

Income taxes paid during the years ended December 31, 1996, 1995 and 1994
were approximately $3,702, $1,379 and $959, respectively.

NOTE 11. LEASES AND COMMITMENTS

The Company leases land and a building from an unrelated party. This lease
requires monthly installments of approximately $48 through January 2010. A
related party has an option to purchase the land and building in January 2000.

The Company also leases land and a building from a related party, with
monthly installments of approximately $32 through June 2002. The agreement
contains an option to purchase the land and building at the end of the lease for
90% of fair market value at the end of the lease. The Company is required to pay
utilities, real estate taxes, and insurance on the property on both leases.
These leases are recorded as capital leases.

The Company also leases various plant facilities and equipment under
noncancellable operating leases that expire at various dates through February
2010. Total rent expense incurred under all operating leases was approximately
$660, $1,076 and $808 for the years ended December 31, 1996, 1995 and 1994,
respectively.

F-15
<PAGE> 62

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

Future minimum payments under leases with terms of one year or more are as
follows at December 31, 1996:

<TABLE>
<CAPTION>
CAPITAL OPERATING
LEASES LEASES
------- ---------
<S> <C> <C>
1997........................................................ $ 959 $ 766
1998........................................................ 959 284
1999........................................................ 959 178
2000........................................................ 959 228
2001........................................................ 959 169
Thereafter.................................................. 4,860 503
------ ------
9,655 $2,128
======
Less: Amounts representing interest......................... 3,979
------
5,676
Less: Current portion....................................... 391
------
$5,285
======
</TABLE>

NOTE 12. EMPLOYEE BENEFIT PLANS

The Company has various defined-contribution plans for the benefit of its
employees. The plans provide a 100% match of employee contributions ranging from
2% to 5% of wages (as defined) depending on the division. Contributions to the
plans were $435 (continuing operations only), $1,534 and $1,516 in 1996, 1995
and 1994, respectively.

The Company is required to contribute to certain defined-contribution union
pension plans under various labor contracts covering union employees. Pension
expense related to the union plans of continuing operations, which is determined
based upon payroll data, was approximately $545, $566, and $558 in 1996, 1995
and 1994, respectively.

NOTE 13. STOCK/EQUITY OPTION PLANS

The Company has an Equity Option Plan that provides for the granting of
options to purchase up to 2,252 shares of Class A Common Stock to key employees.
The Company also adopted an Outside Directors' Formula Stock Option Plan
authorizing grants thereunder of options to purchase shares of Class A Common
Stock to nonemployee directors. In addition, options totaling 192 shares were
granted to former employees. Options granted under these plans have an exercise
price equal to the market price of the underlying stock at the date of grant and
are exercisable for a period of ten years from the date of grant and vest over a
three-year period.

F-16
<PAGE> 63

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

A summary of options outstanding at the end of each of the three years
ended December 31, 1996, 1995 and 1994, and other data for the three years then
ended under all option plans, including options granted to the Employees' Stock
Bonus Plan and Trust, follows:

<TABLE>
<CAPTION>
OUTSTANDING OPTIONS
TO PURCHASE CLASS A WEIGHTED AVERAGE
COMMON STOCK OF EXERCISE PRICE
------------------- -----------------
<S> <C> <C>
Balance, December 31, 1993......................... 846 $8.17
Granted............................................ 364 9.64
Exercised.......................................... (22) 6.00
Canceled........................................... (258) 6.08
-------
Balance, December 31, 1994......................... 931 9.37
Granted............................................ 146 7.82
Exercised.......................................... -- --
Canceled........................................... (27) 9.78
-------
Balance, December 31, 1995......................... 1,050 9.11
Granted............................................ 185 7.14
Exercised.......................................... (10) 6.00
Canceled........................................... (53) 9.47
-------
Balance, December 31, 1996......................... 1,172 $8.80
</TABLE>

The following table summarizes information concerning outstanding and
exercisable options at December 31, 1996:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
- ------------------------------------------------------ -------------------------
WEIGHTED
AVERAGE WEIGHTED
RANGE OF REMAINING WEIGHTED AVERAGE OF
EXERCISE NUMBER CONTRACTUAL AVERAGE NUMBER EXERCISABLE
PRICE OUTSTANDING LIFE (YEARS) EXERCISE PRICE EXERCISABLE PRICE
- -------- ----------- ------------ -------------- ----------- -----------
<S> <C> <C> <C> <C> <C>
$6-$9 682 6.2 $ 7.17 519 $ 7.14
9-12 361 7.1 9.76 361 9.76
12-15 129 1.2 14.78 129 14.78
----- -----
1,172 1,009
</TABLE>

Options available for grant under the plans were 588, 773, and 920, at
December 31, 1996, 1995 and 1994, respectively.

The Company has elected to follow Accounting Principles Board Opinion No.
25, "Accounting for Stock Issued to Employees" (APB 25), in accounting for its
employee stock options because, as discussed below, the alternative fair value
accounting provided for under FASB statement No. 123, "Accounting for Stock-
Based Compensation," requires the use of option-valuation models that were not
developed for use in valuing employee stock options. Under APB 25, because the
exercise price of the Company's employee stock options approximates the market
price of the underlying stock on the date of grant, no compensation is
recognized. Pro forma information regarding net income and earnings per share is
required by Statement 123 as if the Company has accounted for its employee stock
options granted subsequent to December 31, 1994, under the fair value method of
that Statement. For purposes of pro forma disclosures, the estimated fair value
of the options is amortized to expense over the options vesting period.

F-17
<PAGE> 64

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The Company's pro forma information follows:

<TABLE>
<CAPTION>
1996 1995
------ ------
<S> <C> <C>
Net income from continuing operations....................... $5,526 $6,298
Pro forma net income from continuing operations............. $5,397 $6,257
Earnings per share from continuing operations............... $ 0.22 $ 0.26
Pro forma earnings per share from continuing operations..... $ 0.21 $ 0.26
</TABLE>

Because Statement 123 is applicable only to options granted subsequent to
December 31, 1994, its pro forma effect will not be fully reflected until 1997.

The fair value of each option grant is estimated on the date of the grant
using the Black-Scholes option valuation model with the following assumptions:

<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Expected dividend yield.................................... 3.0% 3.0%
Expected stock price volatility............................ 39.7% 31.7%
Risk-free interest rate range.............................. 5.5% - 6.6% 6.4% - 7.7%
Weighted-average expected life of options.................. 7 years 7 years
</TABLE>

Option valuation models require the input of highly subjective assumptions.
Because the Company's employee stock options have characteristics significantly
different from those of traded options, and because changes in the subjective
input assumptions can materially affect the fair value estimate in management's
opinion, the existing method does not necessarily provide a reliable single
measure of the fair value of its employee stock options.

In March 1997, the Company paid $794 to Plastics Group employees and
canceled 610 options in connection with the sale of the Plastics Group. The cash
paid was included in the loss on disposal of discontinued operations presented
in the statement of operations for the year ended December 31, 1996.

NOTE 14. DISCONTINUED OPERATIONS

On December 30, 1994, the Old Schawk Companies merged with and into
Filtertek, the Plastics business segment (the Merger). Pursuant to the Merger,
Filtertek issued an aggregate of 16,245,399 shares of Class A Common Stock,
22,000 shares of Series A preferred stock, and 5,207 shares of Series B
preferred stock to the stockholders of the Old Schawk Companies, and the shares
of Filtertek's Class A Common Stock previously held by Old Schawk (which had a
controlling interest prior to the Merger) were canceled.

Because Old Schawk owned a controlling interest of Filtertek prior to the
Merger, AICPA Accounting Interpretation 26 of Accounting Principles Board
Opinion No. 16 required that the Merger be accounted for as if the Old Schawk
Companies acquired all the remaining Class A Common Stock of Filtertek.

The Company's consolidated balance sheet beginning December 31, 1994,
reflects the accounting as described in the previous paragraph as of the date of
the Merger and includes purchase accounting adjustments for the portion of
Filtertek (40%) not owned by Old Schawk prior to the Merger.

On February 7, 1997, the Company sold its Plastics business segment for
cash proceeds of $92 million plus or minus working capital adjustments. The
Company recorded a loss of $33 million to adjust the carrying value of the net
assets of this business to net realizable value at December 31, 1996, and to
reflect the related settlement of stockholder litigation. The consolidated
statements of operations for 1996, 1995 and 1994 have been restated to segregate
the discontinued operations, and the accounts of the discontinued operations
have been segregated in the balance sheet at December 31, 1996.

F-18
<PAGE> 65

SCHAWK, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

The following is a summary of the Plastics business segment historical
results:

<TABLE>
<CAPTION>
1996 1995 1994
------- ------- -------
<S> <C> <C> <C>
Net sales............................................. $77,752 $85,086 $82,256
Operating income...................................... 3,572 2,615 3,964
Income taxes.......................................... 118 209 127
Income from discontinued operations (net of minority
interest of $1,717 in 1994)......................... 2,490 638 1,200
</TABLE>

The difference between the income tax expense of the Plastics Group at the
federal statutory rate and the actual rate is due to nondeductible amortization
and depreciation of purchase accounting adjustments and the lower tax rates of
its Puerto Rico and European divisions.

NOTE 15. EARNINGS PER SHARE

Earnings per share for 1996 and 1995 is computed by dividing net income
less preferred dividends (of $1,250 and $1,360, respectively) by the weighted
average number of common shares outstanding and common stock equivalents that
are primarily stock options. Fully diluted earnings per share is not different
than primary earnings per share.

Historical earnings per share for 1994 is computed by dividing net income
adjusted only for pro forma income taxes by the historical weighted-average
number of common shares outstanding of the Old Schawk Companies. The historical
earnings per share for 1994 adjusted only for pro forma income taxes is as
follows:

<TABLE>
<S> <C>
Net income.................................................. $ 13,469
Pro forma income taxes...................................... 7,071
Pro forma net income adjusted only for income taxes......... 10,247
Primary and fully diluted common shares outstanding......... 507,328
Primary and fully diluted earnings per share adjusted only
for income taxes.......................................... $ 20.20
</TABLE>

Because of the Merger with Filtertek on December 30, 1994, the Company does
not consider the historical earnings per share calculation shown above to be
meaningful information.

F-19
<PAGE> 66

SCHAWK, INC.

CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
SEPTEMBER 30,
1997
-------------
<S> <C>
Assets
Current assets:
Cash and cash equivalents................................. $ 1,878
Short term investments.................................... 18,967
Trade accounts receivable, less allowance for doubtful
accounts of $598....................................... 22,012
Inventories............................................... 5,287
Prepaid expenses and other................................ 2,460
Deferred income taxes..................................... 472
--------
Total current assets........................................ 51,076
Marketable securities....................................... 33,354
Property and equipment, net................................. 27,795
Excess of cost over net assets acquired, less accumulated
amortization of $4,179.................................... 12,414
Other assets................................................ 4,912
--------
Total assets................................................ $129,551
========
Liabilities and Stockholders' Equity
Current liabilities:
Trade accounts payable.................................... $ 3,633
Accrued expenses.......................................... 9,819
Income taxes payable...................................... 7,654
Notes payable to banks.................................... 4,200
Current portion of long-term debt and capital lease
obligations............................................ 391
--------
Total current liabilities................................... 25,697
Long-term debt.............................................. 40,000
Capital lease obligations................................... 4,963
Other....................................................... 1,116
Deferred income taxes....................................... 4,372
Stockholders' equity:
Common stock.............................................. 159
Preferred stock........................................... --
Additional paid-in-capital................................ 78,318
Retained earnings (deficit)............................... (23,491)
Unrealized gain on available for sale securities.......... 1,558
Cumulative foreign currency translation adjustment........ (212)
--------
56,332
Treasury stock, at cost................................... (2,929)
--------
53,403
--------
Total liabilities and stockholders' equity.................. $129,551
========
</TABLE>

See accompanying notes.

F-20
<PAGE> 67

SCHAWK, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>
1997 1996
------- -------
<S> <C> <C>
Net sales................................................... $85,157 $63,881
Cost of sales............................................... 47,853 36,398
Selling, general, and administrative expenses............... 23,527 17,953
------- -------
Operating income............................................ 13,777 9,530
Other income (expense)
Interest and dividend income.............................. 2,149 326
Interest expense.......................................... (2,791) (3,299)
Other..................................................... 563 85
------- -------
(79) (2,888)
------- -------
Income from continuing operations before income taxes....... 13,698 6,642
Income tax provision........................................ 5,479 2,487
------- -------
Income from continuing operations........................... 8,219 4,155
Income from discontinued operations......................... -- 1,866
------- -------
Net income.................................................. 8,219 6,021
Preferred dividends......................................... 855 939
------- -------
Net income available for common shares...................... $ 7,364 $ 5,082
======= =======
Primary and fully diluted earnings per share:
Continuing operations..................................... $ 0.37 $ 0.17
Discontinued operations................................... -- 0.09
------- -------
Total....................................................... $ 0.37 $ 0.26
======= =======
Weighted average number of common and common equivalent
shares outstanding........................................ 19,879 19,463
Dividends per Class A common share.......................... $ 0.195 $ 0.195
</TABLE>

See accompanying notes.

F-21
<PAGE> 68

SCHAWK, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
1997 1996
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income.................................................. $ 8,219 $ 6,021
Adjustments to reconcile net income to cash provided by
operating activities:
Depreciation and amortization............................. 5,309 11,759
Deferred income taxes..................................... 1,303 491
Gain realized on sale of marketable securities............ (567) --
Changes in operating assets and liabilities, net of
effects from acquisitions:
Trade accounts receivable.............................. (2,718) 2,851
Inventories............................................ (1,612) (2,274)
Prepaid expenses and other............................. 3,798 162
Trade accounts payable and accrued expenses............ (3,394) 426
Income taxes payable................................... (6,432) --
-------- --------
Net cash provided by operating activities................... 3,906 19,436
INVESTING ACTIVITIES
Proceeds from disposal of operating division................ 93,485 5,000
Proceeds from sale of marketable securities................. 2,789 --
Proceeds from disposal of property and equipment............ 441 --
Purchase of marketable securities........................... (52,985) --
Purchases of property and equipment......................... (5,458) (9,912)
Acquisitions, net of cash acquired.......................... -- (6,826)
Other....................................................... (749) (1,441)
-------- --------
Net cash provided by (used in) investing activities......... 37,523 (13,179)
FINANCING ACTIVITIES
Proceeds from long-term note collected...................... -- 4,034
Proceeds from sale of common stock.......................... 390 --
Proceeds from debt.......................................... -- 3,035
Principal payments on debt.................................. (27,886) (7,590)
Principal payments on capital lease obligations............. (322) --
Principal payments on notes payable to stockholders......... (5,765) --
Cash dividends.............................................. (4,723) (2,618)
Purchase of common stock.................................... (1,389) (1,269)
Other....................................................... (127) 70
-------- --------
Net cash used in financing activities....................... (39,822) (4,338)
Effect of foreign currency exchange rates................... (212) (397)
-------- --------
Net increase in cash and cash equivalents................... 1,395 1,522
Cash and cash equivalents beginning of period............... 483 1,917
-------- --------
Cash and cash equivalents end of period..................... $ 1,878 $ 3,439
======== ========
SUPPLEMENTARY DISCLOSURE OF CASH FLOW INFORMATION:
Dividends issued in the form of Class A Common Stock........ $ 6 $ 2,104
Cash paid for interest...................................... 3,091 3,336
Cash paid for income taxes.................................. 10,876 2,689
Note received for sale of operating division................ -- 2,619
Class A Common Stock issued in connection with
acquisitions.............................................. -- 3,800
</TABLE>

See accompanying notes.

F-22
<PAGE> 69

SCHAWK, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)

NOTE 1. BASIS OF PRESENTATION

The condensed consolidated financial statements have been prepared pursuant
to the rules and regulations of the Securities and Exchange Commission. Certain
information and footnote disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to such rules and regulations, although
the Company believes the disclosures included are adequate to make the
information presented not misleading. In the opinion of management, all
adjustments necessary for a fair presentation for the periods presented have
been reflected and are of a normal recurring nature. These financial statements
should be read in conjunction with the consolidated financial statements and the
notes thereto for the three years ended December 31, 1996.

The Company consummated the sale of its Plastics business segment on
February 7, 1997 for cash of $93,485 plus or minus working capital adjustments.
The Company recorded a loss of $33 million in the fourth quarter of 1996 to
adjust the carrying value of the net assets of this business to net realizable
value at December 31, 1996, and to reflect the related settlement of stockholder
litigation. The condensed consolidated statements of operations for the nine
months ended September 30, 1996 has been restated to segregate the discontinued
operations.

NOTE 2. INTERIM RESULTS

Results of operations for the interim periods are not necessarily
indicative of the results to be expected for the year.

NOTE 3. DESCRIPTION OF BUSINESS

Schawk, Inc. is a leading provider of digital imaging prepress services for
the consumer products industry in the United States and Canada. The Company
offers its clients a complete line of prepress services, digital image
management, digital photography and art production. The Company also provides
services for point-of-sale, advertising and direct mail.

NOTE 4. INVENTORIES

Inventories consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
1997
-------------
<S> <C>
Raw materials............................................... $1,336
Work in process............................................. 4,686
------
6,022
Less: LIFO reserve.......................................... (735)
------
$5,287
======
</TABLE>

F-23
<PAGE> 70

SCHAWK, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS -- (CONTINUED)
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)

NOTE 5. PROPERTY AND EQUIPMENT

Property and equipment consist of the following:

<TABLE>
<CAPTION>
SEPTEMBER 30,
1997
-------------
<S> <C>
Land and improvements....................................... $ 522
Building and improvements................................... 7,794
Machinery and equipment..................................... 52,828
Leasehold improvements...................................... 3,209
Building and improvements under capital leases.............. 7,500
--------
71,853
Accumulated depreciation and amortization................... (44,058)
--------
$ 27,795
========
</TABLE>

NOTE 6. EARNINGS PER SHARE

In February 1997, the Financial Accounting Standards Board issued Statement
No. 128, Earnings Per Share, which is required to be adopted on December 31,
1997. At that time, the Company will be required to change the method currently
used to compute earnings per share and to restate all prior periods. Under the
new requirements for calculating primary earnings per share, the dilutive effect
of stock options will be excluded. The impact is not expected to have a material
impact on primary or fully diluted earnings per share for the nine-month period
ended September 30, 1997.

NOTE 7. INVESTMENTS

The Company has adopted Statement of Financial Accounting Standards (SFAS)
No. 115, Accounting for Certain Investments in Debt and Equity Securities, which
requires that investments in debt securities and marketable equity securities be
designated as trading, held-to-maturity or available-for-sale. Management
determines the appropriate classification of its securities at the time of
purchase and reevaluates such designation as of each balance sheet date. At
September 30, 1997 all of the Company's investments were classified as available
for sale. Unrealized appreciation on these securities totaled $2,597 ($1,558 net
of tax effects) at September 30, 1997 and is included as a separate component of
stockholders' equity. Available-for-sale securities are carried at fair value,
with unrealized gains and losses, net of income taxes, reported in a separate
component of stockholders' equity. Realized gains and losses and declines in
value judged to be other-than-temporary on available for sale securities are
included in investment income. The cost of securities sold is based on the
specific identification method. Interest and dividends on securities classified
as available-for-sale are included in investment income.

The following table is a summary of available for sale securities at
September 30, 1997:

<TABLE>
<CAPTION>
GROSS
UNREALIZED ESTIMATED
COST GAINS FAIR VALUE
------- ---------- ----------
<S> <C> <C> <C>
Equity securities and equity mutual funds.............. $ 8,297 $2,158 $10,455
U.S. Treasury and U.S. Government notes................ 6,323 23 6,346
Corporate bonds........................................ 3,285 15 3,300
Bond mutual funds...................................... 31,819 401 32,220
------- ------ -------
$49,724 $2,597 $52,321
======= ====== =======
</TABLE>

F-24
<PAGE> 71

SCHAWK, INC.

NOTES TO CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS -- (CONTINUED)
(THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)

During the nine-month period ended September 30, 1997 marketable equity
available-for-sale securities were sold with a fair value at date of sale of
$2,789 with a gross realized gain of $567.

The following table is a summary of available-for-sale securities by
maturity date:

<TABLE>
<CAPTION>
ESTIMATED
COST FAIR VALUE
------- ----------
<S> <C> <C>
Due in one year or less..................................... $20,077 $20,245
Due after one year through five years....................... 20,841 21,107
Due after five years through ten years...................... 509 514
------- -------
Total debt securities....................................... 41,427 41,866
Equity securities........................................... 8,297 10,455
------- -------
$49,724 $52,321
======= =======
</TABLE>

Amounts shown as short-term investments on the balance sheet at September
30, 1997 represent management's estimates of amounts available for current
operations.

F-25
<PAGE> 72

============================================================

NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR MAKE ANY REPRESENTATIONS OTHER THAN THOSE 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 OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH
SUCH OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE
THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO ITS DATE.

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information....................... 3
Incorporation of Certain Information by
Reference................................. 3
Prospectus Summary.......................... 5
Risk Factors................................ 9
The Company................................. 14
Use of Proceeds............................. 15
Price Range of Class A Common Stock......... 16
Dividend Policy............................. 17
Capitalization.............................. 18
Selected Consolidated Financial Data........ 19
Management's Discussion and Analysis of
Financial Condition and Results of
Operations................................ 20
Business.................................... 26
Management.................................. 36
Principal and Selling Stockholders.......... 38
Certain Transactions........................ 39
Description of Capital Stock................ 40
Shares Eligible for Future Sale............. 43
Underwriting................................ 44
Legal Matters............................... 45
Experts..................................... 45
Index to Consolidated Financial
Statements................................ F-1
</TABLE>

============================================================

3,000,000 SHARES

[LOGO]

SCHAWK, INC.

CLASS A COMMON STOCK

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

PROSPECTUS
, 1997
---------------------------
LEHMAN BROTHERS

MCDONALD & COMPANY
SECURITIES, INC.

============================================================
<PAGE> 73

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION

The following table sets forth expenses in connection with the issuance and
distribution of the Class A Common Stock being registered, other than
underwriting discounts and commissions. All of the expenses listed below will be
borne by the Company. All of the amounts shown are estimates, except the SEC
registration fees, the NYSE additional listing fee and the NASD filing fee.

<TABLE>
<CAPTION>
AMOUNT
--------
<S> <C>
SEC registration fees....................................... $ 12,090
NYSE additional listing fee................................. 6,825
NASD filing fee............................................. 4,490
Accounting fees and expenses................................ 50,000
Legal fees and expenses..................................... 150,000
Blue Sky fees and expenses.................................. 10,000
Printing expenses........................................... 70,000
Transfer agent and custodian fees and expenses.............. 10,000
Miscellaneous expenses...................................... 11,595
--------
Total............................................. $325,000
========
</TABLE>

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS

Section 145 of the General Corporation Law of the State of Delaware grants
each corporation organized thereunder the power to indemnify any person who is
or was a director, officer, employee or agent of the corporation, or is or was
serving at its request as a director, officer, employee or agent of another
corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other than
an action by or in the right of the corporation), by reason of being or having
been in any such capacity, if he acted in good faith and in a manner reasonably
believed to be in or not opposed to the best interests of the corporation, and,
with respect to any criminal action or proceeding, had no reasonable cause to
believe his conduct was unlawful. Section 102(b)(7) of the General Corporation
Law of the State of Delaware enables a corporation in its certificate of
incorporation or an amendment thereto validly approved by stockholders to limit
or eliminate the personal liability of its board of directors for violations of
the directors' fiduciary duty of care.

Article Thirteenth of the Certificate of Incorporation of Schawk, Inc., as
amended (the "Certificate of Incorporation") provides that the Company shall
indemnify its officers and directors to the full extent permitted by applicable
law. In addition, Article Fifteenth of the Certificate of Incorporation limits
the personal liability of its board of directors for a breach of the fiduciary
duty of care.

The Company is authorized to purchase and maintain liability insurance on
behalf of its directors and officers to provide coverage for certain liabilities
and expenses incurred by each director and officer in his capacity as such.

The effect of the foregoing provisions of the General Corporation Law of
the State of Delaware and the Certificate of Incorporation would be to permit
such indemnification by the Company for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act").

Under its agreement with the Underwriters, the Company has agreed to
indemnify the Underwriters against liability under the Securities Act.

Pursuant to a letter agreement dated September 21, 1992, with Judith W.
McCue, a director of the Company, the corporation then named Schawk, Inc. ("Old
Schawk"), agreed to indemnify Ms. McCue, the

II-1
<PAGE> 74

law firm of which Ms. McCue is a partner, and the parties of such law firm to
the full extent permitted under the General Corporation Law of the State of
Delaware or other applicable law from and against any and all expenses
(including, without limitation, attorneys' and accountants' fees and costs),
judgments, fines, amounts paid in settlement and other damages or liabilities
arising from or related to any threatened, pending or completed claim, action,
suit or proceeding, whether civil, criminal, administrative or investigative
(including any claim, action, suit or proceeding by or in the right of a
director of the Company or Old Schawk), by reason of Ms. McCue's service as a
director of the Company or agent or representative of Old Schawk or service at
the request of the Company or Old Schawk as a director, officer, employee or
agent of any other corporation, partnership, joint venture, trust or other
enterprise.

ITEM 16. EXHIBITS

The following exhibits required by Item 601 of Regulation S-K have been
included herewith unless otherwise indicated.

<TABLE>
<CAPTION>
COMPANY DOCUMENT OR
EXHIBIT REPORT FROM WHICH
NO. DOCUMENT DESCRIPTION INCORPORATED BY REFERENCE
- ------------ -------------------- -------------------------
<C> <S> <C>

1.1 -- Form of Underwriting Agreement.

2.3 -- Sales Agreement with ESCO Electronics Corporation. Form 8-K
dated February 7, 1997

4.1 -- Specimen Class A Common Stock Certificate. Registration Statement
No. 33-85152

4.2 -- Certificate of Incorporation of Schawk, Inc., as Registration Statement
amended. No. 33-85152

4.3 -- By-Laws of Schawk, Inc., as amended.

5.1 -- Opinion of Vedder, Price, Kaufman & Kammholz, counsel
to the Company.

10.12 -- Schawk, Inc. 1988 Equity Option Plan. 1988 10-K

10.13a -- First Amendment to Schawk, Inc. 1988 Equity Option 1992 10-K
Plan.

10.13b -- Second Amendment to Schawk, Inc. 1988 Equity Option Registration Statement
Plan. No. 33-85152

10.22 -- Lease Agreement dated as of July 1, 1987, and between Registration Statement
Process Color Plate, a division of Schawk, Inc. and No. 33-85152
The Clarence W. Schawk 1979 Children's Trust.

10.23 -- Lease Agreement dated as of June 1, 1989, by and Registration Statement
between Schawk Graphics, Inc., a division of Schawk, No. 33-85152
Inc. and C.W. Properties.

10.26 -- Schawk, Inc. 1991 Outside Directors' Formula Stock Registration Statement
Option Plan, as amended. No. 33-85152

10.27 -- Form of Clarence W. Schawk Amended and Restated Registration Statement
Employment Agreement between Clarence W. Schawk and No. 33-85152
Schawk, Inc.

10.28 -- Form of David A. Schawk Amended and Restated Registration Statement
Employment Agreement between David A. Schawk and No. 33-85152
Schawk, Inc.
</TABLE>

II-2
<PAGE> 75
<TABLE>
<CAPTION>
COMPANY DOCUMENT OR
EXHIBIT REPORT FROM WHICH
NO. DOCUMENT DESCRIPTION INCORPORATED BY REFERENCE
- ------------ -------------------- -------------------------
<C> <S> <C>
10.31 -- Form of Registration Rights Agreement dated December Registration Statement
30, 1994, by and among Schawk, Inc. and certain No. 33-85152
investors.

10.32 -- Money Market Demand Note dated February 7, 1997 from Registration Statement
Schawk, Inc., borrower, to the Northern Trust No. 33-85152
Company, lender.

10.35 -- Letter of Agreement dated September 21, 1992, by and Registration Statement
between Schawk, Inc. and Judith W. McCue. No. 33-85152

10.37 -- Schawk, Inc. Retirement Trust effective January 1, 1996 10-K
1996.

10.38 -- Schawk, Inc. Retirement Plan for Imaging Employees 1996 10-K
Amended and Restated effective January 1, 1996.

10.42 -- Schawk, Inc. Note Agreement dated as of August 18, 1996 10-K
1995.

10.43 -- Stockholder Investment Program dated July 28, 1995. Registration Statement
No. 33-61375

11 -- Statement Re Computation of Per Share Earnings. 1996 10-K/3rd Qtr.
1997 10-Q

21 -- Subsidiaries of the Registrant.

23.1 -- Consent of Ernst & Young LLP.

23.2 -- Consent of Arthur Andersen LLP.

23.3 -- Consent of Vedder, Price, Kaufman & Kammholz
(included in Exhibit 5.1).

24 -- Power of Attorney (included on signature page to
Registration Statement).

27 -- Financial Data Schedule. 1996 10-K/3rd Qtr.
1997 10-Q
</TABLE>

ITEM 17. UNDERTAKINGS

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions or otherwise, the Company has been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer, or controlling person of the Company 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 hereunder, the Company 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 Securities Act and will be governed by
the final adjudication of such issue.

The Company hereby undertakes:

(1) For purposes of determining any liability under the Securities
Act, 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 Company pursuant to Rule 424(b)(1) or (4)
or

II-3
<PAGE> 76

497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.

(2) For the purposes of determining any liability under the Securities
Act, 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 the time shall be
deemed to be the initial bona fide offering thereof.

II-4
<PAGE> 77

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Des Plaines, State of Illinois, on October 28, 1997.

SCHAWK, INC.

By: /s/ DAVID A. SCHAWK
----------------------------------
David A. Schawk
President, Chief Executive Officer
and Director

Each person whose signature appears below constitutes and appoints David A.
Schawk and A. Alex Sarkisian his or her true and lawful attorneys-in-fact and
agents, each acting alone, with full powers of substitution and resubstitution,
for him or her and in his or her name, place and stead, in any and all
capacities, to sign any or all amendments to this registration statement, and to
file the same, with all exhibits thereto and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
order to effectuate such registration process, as fully for all intents and
purposes as he or she might or could do in person, thereby ratifying and
confirming all that said attorney-in-fact and agents, and each of them, or his
or her substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on October 28, 1997, by the
following persons in the capacities indicated:

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ CLARENCE W. SCHAWK
- ----------------------------------------------------- Director and Chairman of the
Clarence W. Schawk Board 10-28-97

/s/ DAVID A. SCHAWK
- ----------------------------------------------------- Director, President and Chief
David A. Schawk Executive Officer 10-28-97

/s/ A. ALEX SARKISIAN Executive Vice
- ----------------------------------------------------- President -- Finance, Chief
A. Alex Sarkisian Financial Officer, Corporate
Secretary and Director 10-28-97

/s/ JUDITH W. MCCUE
- -----------------------------------------------------
Judith W. McCue Director 10-28-97

/s/ ROBERT F. MEINKEN
- -----------------------------------------------------
Robert F. Meinken Director 10-28-97

/s/ JOHN T. MCENROE
- -----------------------------------------------------
John T. McEnroe Director 10-28-97

/s/ HOLLIS W. RADEMACHER
- -----------------------------------------------------
Hollis W. Rademacher Director 10-28-97

/s/ DENNIS D. WILSON
- ----------------------------------------------------- Chief Accounting Officer and
Dennis D. Wilson Director of Financial Reporting 10-28-97
</TABLE>

II-5
<PAGE> 78

EXHIBIT INDEX

<TABLE>
<CAPTION>
COMPANY DOCUMENT OR
EXHIBIT REPORT FROM WHICH
NO. DOCUMENT DESCRIPTION INCORPORATED BY REFERENCE
- ------------ -------------------- -------------------------
<C> <S> <C>
1.1 -- Form of Underwriting Agreement.

2.3 -- Sales Agreement with ESCO Electronics Corporation. Form 8-K
dated February 7, 1997

4.1 -- Specimen Class A Common Stock Certificate. Registration Statement
No. 33-85152

4.2 -- Certificate of Incorporation of Schawk, Inc., as Registration Statement
amended. No. 33-85152

4.3 -- By-Laws of Schawk, Inc., as amended.

5.1 -- Opinion of Vedder, Price, Kaufman & Kammholz, counsel
to the Company.

10.12 -- Schawk, Inc. 1988 Equity Option Plan. 1988 10-K

10.13a -- First Amendment to Schawk, Inc. 1988 Equity Option 1992 10-K
Plan.

10.13b -- Second Amendment to Schawk, Inc. 1988 Equity Option Registration Statement
Plan. No. 33-85152

10.22 -- Lease Agreement dated as of July 1, 1987, and between Registration Statement
Process Color Plate, a division of Schawk, Inc. and No. 33-85152
The Clarence W. Schawk 1979 Children's Trust.

10.23 -- Lease Agreement dated as of June 1, 1989, by and Registration Statement
between Schawk Graphics, Inc., a division of Schawk, No. 33-85152
Inc. and C.W. Properties.

10.26 -- Schawk, Inc. 1991 Outside Directors' Formula Stock Registration Statement
Option Plan, as amended. No. 33-85152

10.27 -- Form of Clarence W. Schawk Amended and Restated Registration Statement
Employment Agreement between Clarence W. Schawk and No. 33-85152
Schawk, Inc.

10.28 -- Form of David A. Schawk Amended and Restated Registration Statement
Employment Agreement between David A. Schawk and No. 33-85152
Schawk, Inc.

10.31 -- Form of Registration Rights Agreement dated December Registration Statement
30, 1994, by and among Schawk, Inc. and certain No. 33-85152
investors.

10.32 -- Money Market Demand Note dated February 7, 1997 from Registration Statement
Schawk, Inc., borrower, to the Northern Trust No. 33-85152
Company, lender.

10.35 -- Letter of Agreement dated September 21, 1992, by and Registration Statement
between Schawk, Inc. and Judith W. McCue. No. 33-85152

10.37 -- Schawk, Inc. Retirement Trust effective January 1, 1996 10-K
1996.

10.38 -- Schawk, Inc. Retirement Plan for Imaging Employees 1996 10-K
Amended and Restated effective January 1, 1996.
</TABLE>
<PAGE> 79
<TABLE>
<CAPTION>
COMPANY DOCUMENT OR
EXHIBIT REPORT FROM WHICH
NO. DOCUMENT DESCRIPTION INCORPORATED BY REFERENCE
- ------------ -------------------- -------------------------
<C> <S> <C>
10.42 -- Schawk, Inc. Note Agreement dated as of August 18, 1996 10-K
1995.

10.43 -- Stockholder Investment Program dated July 28, 1995. Registration Statement
No. 33-61375

11 -- Statement Re Computation of Per Share Earnings. 1996 10-K/3rd Qtr.
1997 10-Q

21 -- Subsidiaries of the Registrant.

23.1 -- Consent of Ernst & Young LLP.

23.2 -- Consent of Arthur Andersen LLP.

23.3 -- Consent of Vedder, Price, Kaufman & Kammholz
(included in Exhibit 5.1).

24 -- Power of Attorney (included on signature page to
Registration Statement).

27 -- Financial Data Schedule. 1996 10-K/3rd Qtr.
1997 10-Q
</TABLE>

<PAGE> 1

EXHIBIT 1.1

3,450,000 SHARES

SCHAWK, INC.

CLASS A COMMON STOCK

UNDERWRITING AGREEMENT

, 1997

LEHMAN BROTHERS INC.
McDONALD & COMPANY SECURITIES, INC.
As Representatives of the several
Underwriters named in Schedule 1,
c/o Lehman Brothers Inc.
Three World Financial Center
New York, New York 10285

Dear Sirs:

Schawk, Inc., a Delaware corporation (the "Company"), and certain
stockholders of the Company named in Schedule 2 hereto (the "Selling
Stockholders"), propose to sell an aggregate of 3,000,000 shares (the "Firm
Stock") of the Company's Class A Common Stock, par value $.008 per share (the
"Common Stock"). Of the 3,000,000 shares of the Firm Stock, 1,500,000 are being
sold by the Company and 1,500,000 by the Selling Stockholders. In addition, the
Company and the Selling Stockholders propose to grant to the Underwriters named
in Schedule 1 hereto (the "Underwriters") an option to purchase up to an
additional 450,000 shares of the Common Stock on the terms and for the purposes
set forth in Section 3 (the "Option Stock"). The Firm Stock and the Option
Stock, if purchased, are hereinafter collectively called the "Stock." This is to
confirm the agreement concerning the purchase of the Stock from the Company and
the Selling Stockholders by the Underwriters named in Schedule 1 hereto (the
"Underwriters").

1. Representations, Warranties and Agreements of the Company and the
Principal Stockholders. The Company and the Principal Stockholders of the
Company named in Schedule 3 hereto (the "Principal Stockholders") represent,
warrant and agree that:

(a) A registration statement on Form S-2, [and an amendment thereto,]
with respect to the Stock has (i) been prepared by the Company in
conformity with the requirements of the United States Securities Act of
1933 (the "Securities Act") and the rules and regulations (the "Rule and
Regulations") of the United States Securities and Exchange Commission (the
"Commission") thereunder, (ii) been filed with the Commission under the
Securities Act and (iii) become effective under the Securities Act. Copies
of such registration statement [and the amendment thereto] have been
delivered by the Company to you as the representatives (the
"Representatives") of the Underwriters. As used in this Agreement,
"Effective Time" means the date and the time as of which such registration
statement, or the most recent post-effective amendment thereto, if any, was
declared effective by the Commission; "Effective Date" means the date of
the Effective Time; "Preliminary Prospectus" means each prospectus included
in such registration statement, or amendments thereof, before it became
effective under the Securities Act and any prospectus filed with the
Commission by the Company with the consent of the Representatives pursuant
to Rule 424(a) of the Rules and Regulations; "Registration Statement" means
such registration statement, as amended at the Effective Time, including
any documents incorporated by reference therein at such time and all
information contained in the final prospectus filed with the Commission
pursuant to Rule 424(b) of the Rules and Regulations in accordance with
Section 6(a) hereof and deemed to be a part of the registration statement
as of the Effective Time pursuant to paragraph (b) of Rule 430A of the
Rules and Regulations; and "Prospectus" means such final
<PAGE> 2

prospectus, as first filed with the Commission pursuant to paragraph (1) or
(4) of Rule 424(b) of the Rules and Regulations. Reference made herein to
any Preliminary Prospectus or to the Prospectus shall be deemed to refer to
and include any documents incorporated by reference therein pursuant to
Item 12 of Form S-2 under the Securities Act, as of the date of such
Preliminary Prospectus or the Prospectus, as the case may be. The
Commission has not issued any order preventing or suspending the use of any
Preliminary Prospectus.

(b) The Registration Statement conforms, and the Prospectus and any
further amendments or supplements to the Registration Statement or the
Prospectus will, when they become effective or are filed with the
Commission, as the case may be, conform in all respects to the requirements
of the Securities Act and the Rules and Regulations and do not and will
not, as of the applicable effective date (as to the Registration Statement
and any amendment thereto) and as of the applicable filing date (as to the
Prospectus and any amendment or supplement thereto) contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; provided that no representation or warranty is made as to
information contained in or omitted from the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Company through the Representatives by or on behalf of any
Underwriter specifically for inclusion therein.

(c) The documents incorporated by reference in the Prospectus, when
they became effective or were filed with the Commission, as the case may
be, conformed in all material respects to the requirements of the
Securities Act or the Exchange Act, as applicable, and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading.

(d) The Company and each of its subsidiaries (as defined in Section
17) have been duly incorporated and are validly existing as corporations in
good standing under the laws of their respective jurisdictions of
incorporation, are duly qualified to do business and are in good standing
as foreign corporations in each jurisdiction in which their respective
ownership or lease of property or the conduct of their respective
businesses requires such qualification, and have all power and authority
necessary to own or hold their respective properties and to conduct the
businesses in which they are engaged; and none of the subsidiaries of the
Company (other than Schawk USA, Inc. and Schawk Canada, Inc. (collectively,
the "Significant Subsidiaries")) is a "significant subsidiary", as such
term is defined in Rule 405 of the Rules and Regulations.

(e) The Company has an authorized capitalization as set forth in the
Prospectus, and all of the issued shares of capital stock of the Company
have been duly and validly authorized and issued, are fully paid and
non-assessable and conform to the description thereof contained in the
Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and issued
and are fully paid and non-assessable and (except for directors' qualifying
shares and except as set forth in the Prospectus) are owned directly or
indirectly by the Company, free and clear of all liens, encumbrances,
equities or claims.

(f) The unissued shares of the Stock to be issued and sold by the
Company to the Underwriters hereunder have been duly and validly authorized
and, when issued and delivered against payment therefor as provided herein,
will be duly and validly issued, fully paid and non-assessable; and the
Stock will conform to the descriptions thereof contained in the Prospectus.

(g) This Agreement has been duly authorized, executed and delivered by
the Company.

(h) The execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed
of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or
any of its subsidiaries is bound or to which any of the property or

2
<PAGE> 3

assets of the Company or any of its subsidiaries is subject, nor will such
actions result in any violation of the provisions of the charter or by-laws
of the Company or any of its subsidiaries or any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and except for the registration of the Stock under
the Securities Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under the Exchange Act
and applicable state securities laws in connection with the purchase and
distribution of the Stock by the Underwriters, no consent, approval,
authorization or order of, or filing or registration with, any such court
or governmental agency or body is required for the execution, delivery and
performance of this Agreement by the Company and the consummation of the
transactions contemplated hereby.

(i) There are no contracts, agreements or understandings between the
Company and any person granting such person the right other than rights
which have been waived or satisfied or described in the Registration
Statement) to require the Company to file a registration statement under
the Securities Act with respect to any securities of the Company owned or
to be owned by such person or to require the Company to include such
securities in the securities registered pursuant to the Registration
Statement or in any securities being registered pursuant to any other
registration statement filed by the Company under the Securities Act.

(j) Except as described in the Prospectus, the Company has not sold or
issued any shares of Common Stock during the six-month period preceding the
date of the Prospectus, including any sales pursuant to Rule 144A under, or
Regulations D or S of, the Securities Act, other than shares issued
pursuant to employee benefit plans, qualified stock options plans,
qualified dividend reinvestment plans or other employee compensation plans
or pursuant to outstanding options, rights or warrants.

(k) Neither the Company nor any of its subsidiaries has sustained,
since the date of the latest audited financial statements included or
incorporated by reference in the Prospectus, any material loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus; and, since such date, there has not been
any change in the capital stock or long-term debt of the Company or any of
its subsidiaries or any material adverse change, or any development
involving a prospective material adverse change, in or affecting the
general affairs, management, financial position, stockholders' equity or
results of operations of the Company and its subsidiaries, otherwise than
as set forth or contemplated in the Prospectus.

(l) The financial statements (including the related notes and
supporting schedules) filed as part of the Registration Statement or
included or incorporated by reference in the Prospectus present fairly the
financial condition and results of operations of the entities purported to
be shown thereby, at the dates and for the periods indicated, and have been
prepared in conformity with generally accepted accounting principles
applied on a consistent basis throughout the periods involved, except as
otherwise stated therein.

(m) Ernst & Young LLP, who have certified certain financial statements
of the Company, whose report appears in the Prospectus or is incorporated
by reference therein and who have delivered the initial letter referred to
in Section 9(g) hereof, are independent public accountants as required by
the Securities Act and the Rules and Regulations; and Arthur Andersen LLP,
whose report appears in the Prospectus or is incorporated by reference
therein and who have delivered the initial letter referred to Section 9(g)
hereof, were independent accountants as required by the Securities Act and
the Rules and Regulations during the periods covered by the financial
statements on which they reported contained or incorporated in the
Prospectus.

(n) The Company and each of its subsidiaries have good and marketable
title in fee simple to all real property and good and marketable title to
all personal property owned by them, in each case free and clear of all
liens, encumbrances and defects except such as are described in the
Prospectus or such as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made
of such property by the Company and its subsidiaries; and all real property
and

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<PAGE> 4

buildings held under lease by the Company and its subsidiaries are held by
them under valid, subsisting and enforceable leases, with such exceptions
as are not material and do not interfere with the use made and proposed to
be made of such property and buildings by the Company and its subsidiaries.

(o) The Company and each of its subsidiaries carry, or are covered by,
insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar businesses
in similar industries.

(p) The Company and each of its subsidiaries own or possess adequate
rights to use all material patents, patent applications, trademarks,
service marks, trade names, trademark registrations, service mark
registrations, copyrights and licenses necessary for the conduct of their
respective businesses and have no reason to believe that the conduct of
their respective businesses will conflict with, and have not received any
notice of any claim of conflict with, any such rights of others.

(q) There are no legal or governmental proceedings pending to which
the Company or any of its subsidiaries is a party or of which any property
or assets of the Company or any of its subsidiaries is the subject which,
if determined adversely to the Company or any of its subsidiaries, might
have a material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries; and to the best of the Company's knowledge,
no such proceedings are threatened or contemplated by governmental
authorities or threatened by others.

(r) The conditions for use of Form S-2, as set forth in the General
Instructions thereto, have been satisfied.

(s) There are no contracts or other documents which are required to be
described in the Prospectus or filed as exhibits to the Registration
Statement by the Securities Act or by the Rules and Regulations which have
not been described in the Prospectus or filed as exhibits to the
Registration Statement or incorporated therein by reference as permitted by
the Rules and Regulations.

(t) No relationship, direct or indirect, exists between or among the
Company on the one hand, and the directors, officers, stockholders,
customers or suppliers of the Company on the other hand, which is required
to be described in the Prospectus which is not so described.

(u) No labor disturbance by the employees of the Company exists or, to
the knowledge of the Company, is imminent which might be expected to have a
material adverse effect on the consolidated financial position,
stockholders' equity, results of operations, business or prospects of the
Company and its subsidiaries.

(v) The Company is in compliance in all material respects with all
presently applicable provisions of the Employee Retirement Income Security
Act of 1974, as amended, including the regulations and published
interpretations thereunder ("ERISA"); no "reportable event" (as defined in
ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company would have any liability; the Company has not
incurred and does not expect to incur liability under (i) Title IV of ERISA
with respect to termination of, or withdrawal from, any "pension plan" or
(ii) Sections 412 or 4971 of the Internal Revenue Code of 1986, as amended,
including the regulations and published interpretations thereunder (the
"Code"); and each "pension plan" for which the Company would have any
liability that is intended to be qualified under Section 401(a) of the Code
is so qualified in all material respects and nothing has occurred, whether
by action or by failure to act, which would cause the loss of such
qualification.

(w) The Company has filed all federal, state and local income and
franchise tax returns required to be filed through the date hereof and has
paid all taxes due thereon, and no tax deficiency has been determined
adversely to the Company or any of its subsidiaries which has had (nor does
the Company have any knowledge of any tax deficiency which, if determined
adversely to the Company or any of its subsidiaries, might have) a material
adverse effect on the consolidated financial position, stockholders'
equity, results of operations, business or prospects of the Company and its
subsidiaries.

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<PAGE> 5

(x) Since the date as of which information is given in the Prospectus
through the date hereof, and except as may otherwise be disclosed in the
Prospectus, the Company has not (i) issued or granted any securities, (ii)
incurred any liability or obligation, direct or contingent, other than
liabilities and obligations which were incurred in the ordinary course of
business, (iii) entered into any transaction not in the ordinary course of
business or (iv) declared or paid any dividend on its capital stock.

(y) Neither the Company nor any of its subsidiaries (i) is in
violation of its charter or by-laws, (ii) is in default in any material
respect, and no event has occurred which, with notice or lapse of time or
both, would constitute such a default, in the due performance or observance
of any term, covenant or condition contained in any material indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties or assets is subject or (iii) is in violation in any material
respect of any foreign or domestic law, ordinance, governmental rule,
regulation or court decree to which it or its property or assets may be
subject or has failed to obtain any material license, permit, certificate,
franchise or other governmental authorization or permit necessary to the
ownership of its property or to the conduct of its business.

(z) Neither the Company nor any of its subsidiaries, nor any director,
officer, agent, employee or other person associated with or acting on
behalf of the Company or any of its subsidiaries, has used any corporate
funds for any unlawful contribution, gift, entertainment or other unlawful
expense relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee
from corporate funds; violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977; or except as set forth on Schedule 4
hereto, made any bribe, rebate, payoff, influence payment, kickback or
other unlawful payment.

(aa) To the best of the Company's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company or any of its subsidiaries is
the subject which, if determined adversely to the Company or any of its
subsidiaries, might have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations, business
or prospects of the Company and its subsidiaries; and, to the best of the
Company's knowledge, no such proceedings are threatened or contemplated by
governmental authorities or threatened by others.

(bb) There has been no storage, disposal, generation, manufacture,
refinement, transportation, handling or treatment of toxic wastes, medical
wastes, hazardous wastes or hazardous substances by the Company or any of
its subsidiaries (or, to the knowledge of the Company, any of their
predecessors in interest) at, upon or from any of the property now or
previously owned or leased by the Company or its subsidiaries in violation
of any applicable law, ordinance, rule, regulation, order, judgment, decree
or permit or which would require remedial action under any applicable law,
ordinance, rule, regulation, order, judgment, decree or permit, except for
any violation or remedial action which would not have, or could not be
reasonably likely to have, singularly or in the aggregate with all such
violations and remedial actions, a material adverse effect on the general
affairs, management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; there has been no material
spill, discharge, leak, emission, injection, escape, dumping or release of
any kind onto such property or into the environment surrounding such
property of any toxic wastes, medical wastes, solid wastes, hazardous
wastes or hazardous substances due to or caused by the Company or any of
its subsidiaries or with respect to which the Company or any of its
subsidiaries have knowledge, except for any such spill, discharge, leak,
emission, injection, escape, dumping or release which would not have or
would not be reasonably likely to have, singularly or in the aggregate with
all such spills, discharges, leaks, emissions, injections, escapes,
dumpings and releases, a material adverse effect on the general affairs,
management, financial position, stockholders' equity or results of
operations of the Company and its subsidiaries; and the terms "hazardous
wastes", "toxic wastes", "hazardous substances" and "medical wastes" shall
have the meanings specified in any applicable local, state, federal and
foreign laws or regulations with respect to environmental protection.

5
<PAGE> 6

2. Representations, Warranties and Agreements of the Selling
Stockholders. Each Selling Stockholder as to paragraphs (a)-(e) and the
Principal Stockholders as to paragraph (f) below severally represents, warrants
and agrees that:

(a) The Selling Stockholder has, and immediately prior to the First
Delivery Date (as defined in Section 5 hereof) the Selling Stockholder will
have good and valid title to the shares of Stock to be sold by the Selling
Stockholder hereunder on such date, free and clear of all liens,
encumbrances, equities or claims; and upon delivery of such shares and
payment therefor pursuant hereto, good and valid title to such shares, free
and clear of all liens, encumbrances, equities or claims, will pass to the
several Underwriters.

(b) The Selling Stockholder has placed in custody under a custody
agreement (the "Custody Agreement" and, together with all other similar
agreements executed by the other Selling Stockholders, the "Custody
Agreements") with , as custodian (the "Custodian"),
for delivery under this Agreement, certificates in negotiable form (with
signature guaranteed by a commercial bank or trust company having an office
or correspondent in the United States or a member firm of the New York or
American Stock Exchanges) representing the shares of Stock to be sold by
the Selling Stockholder hereunder.

(c) The Selling Stockholder has duly and irrevocably executed and
delivered a power of attorney (the "Power of Attorney" and, together with
all other similar agreements executed by the other Selling Stockholders,
the "Powers of Attorney") appointing the Custodian and one or more other
persons, as attorneys-in-fact, with full power of substitution, and with
full authority (exercisable by any one or more of them) to execute and
deliver this Agreement and to take such other action as may be necessary or
desirable to carry out the provisions hereof on behalf of the Selling
Stockholder.

(d) The Selling Stockholder has full right, power and authority to
enter into this Agreement, the Power of Attorney and the Custody Agreement;
the execution, delivery and performance of this Agreement, the Power of
Attorney and the Custody Agreement by the Selling Stockholder and the
consummation by the Selling Stockholder of the transactions contemplated
hereby and thereby will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Selling Stockholder is a party or by
which the Selling Stockholder is bound or to which any of the property or
assets of the Selling Stockholder is subject, nor will such actions result
in any violation of the provisions of the organizational documents or
documents creating a partnership or a trust of the Selling Stockholder or
any statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Selling Stockholder or the
property or assets of the Selling Stockholder; and, except for the
registration of the Stock under the Securities Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under the Exchange Act and applicable state securities laws in
connection with the purchase and distribution of the Stock by the
Underwriters, no consent, approval, authorization or order of, or filing or
registration with, any such court or governmental agency or body is
required for the execution, delivery and performance of this Agreement, the
Power of Attorney or the Custody Agreement by the Selling Stockholder and
the consummation by the Selling Stockholder of the transactions
contemplated hereby and thereby.

(e) The Selling Stockholder has not taken and will not take, directly
or indirectly, any action which is designed to or which has constituted or
which might reasonably be expected to cause or result in the stabilization
or manipulation of the price of any security of the Company to facilitate
the sale or resale of the shares of the Stock.

(f) The Principal Stockholder has no reason to believe that the
representations and warranties of the Company contained in Section 1 hereof
are not materially true and correct, is familiar with the Registration
Statement and the Prospectus (as amended or supplemented) and has no
knowledge of any material fact, condition or information not disclosed in
the Registration Statement, as of the effective date, or the Prospectus (or
any amendment or supplement thereto), as of the applicable filing date,
which has adversely affected or may adversely affect the business of the
Company and is not prompted to sell

6
<PAGE> 7

shares of Common Stock by any information concerning the Company which is
not set forth in the Registration Statement and the Prospectus.

3. Purchase of the Stock by the Underwriters. On the basis of the
representations and warranties contained in, and subject to the terms and
conditions of, this Agreement, the Company agrees to sell 1,500,000 shares of
the Firm Stock and each Selling Stockholder hereby agrees to sell the number of
shares of the Firm Stock set forth opposite his name in Schedule 2 hereto,
severally and not jointly, to the several Underwriters and each of the
Underwriters, severally and not jointly, agrees to purchase the number of shares
of the Stock set forth opposite that Underwriter's name in Schedule 1 hereto.
Each Underwriter shall be obligated to purchase from the Company, and from each
Selling Stockholder, that number of shares of the Firm Stock which represents
the same proportion of the number of shares of the Firm Stock to be sold by the
Company, and by each Selling Stockholder, as the number of shares of the Firm
Stock set forth opposite the name of such Underwriter in Schedule 1 represents
of the total number of shares of the Firm Stock to be purchased by all of the
Underwriters pursuant to this Agreement. The respective purchase obligations of
the Underwriters with respect to the Firm Stock shall be rounded among the
Underwriters to avoid fractional shares, as the Representatives may determine.

In addition, the Company and the Selling Stockholders grant to the
Underwriters an option to purchase up to 450,000 shares of Option Stock. The
first 300,000 shares of the Option Stock shall come from the Selling
Stockholders and the next 150,000 shares of the Option Stock shall come from the
Company. Such options are granted solely for the purpose of covering
over-allotments in the sale of Firm Stock and is exercisable as provided in
Section 5 hereof. Shares of Option Stock shall be purchased severally for the
account of the Underwriters in proportion to the number of shares of Firm Stock
set forth opposite the name of such Underwriters in Schedule 1 hereto. The
respective purchase obligations of each Underwriter with respect to the Option
Stock shall be adjusted by the Representatives so that no Underwriter shall be
obligated to purchase Option Stock other than in 100 share amounts. The price of
both the Firm Stock and any Option Stock shall be $ per share.

The Company and the Selling Stockholders shall not be obligated to deliver
any of the Stock to be delivered on the First Delivery Date or the Second
Delivery Date (as hereinafter defined), as the case may be, except upon payment
for all the Stock to be purchased on such Delivery Date as provided herein.

4. Offering of Stock by the Underwriters.

Upon authorization by the Representatives of the release of the Firm Stock,
the several Underwriters propose to offer the Firm Stock for sale upon the terms
and conditions set forth in the Prospectus.

5. Delivery of and Payment for the Stock. Delivery of and payment for the
Firm Stock shall be made at the office of Lehman Brothers Inc., 333 West 34th
Street, 3rd Floor, New York, NY 10001 at 10:00 A.M., New York City time, on the
[third] full business day following the date of this Agreement or at such other
date or place as shall be determined by agreement between the Representatives
and the Company. This date and time are sometimes referred to as the "First
Delivery Date." On the First Delivery Date, the Company and the Selling
Stockholders shall deliver or cause to be delivered certificates representing
the Firm Stock to the Representatives for the account of each Underwriter
against payment to or upon the order of the Company and the Selling Stockholders
of the purchase price by wire transfer in immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Firm Stock shall be registered in such names and
in such denominations as the Representatives shall request in writing not less
than two full business days prior to the First Delivery Date. For the purpose of
expediting the checking and packaging of the certificates for the Firm Stock,
the Company and the Selling Stockholders shall make the certificates
representing the Firm Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the First Delivery Date.

At any time on or before the thirtieth day after the date of this Agreement
the option granted in Section 3 may be exercised by written notice being given
to the Company and the Selling Stockholders by the Representatives. Such notice
shall set forth the aggregate number of shares of Option Stock as to which the

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<PAGE> 8

option is being exercised, the names in which the shares of Option Stock are to
be registered, the denominations in which the shares of Option Stock are to be
issued and the date and time, as determined by the Representatives, when the
shares of Option Stock are to be delivered; provided, however, that this date
and time shall not be earlier than the First Delivery Date nor earlier than the
second business day after the date on which the option shall have been exercised
nor later than the fifth business day after the date on which the option shall
have been exercised. The date and time the shares of Option Stock are delivered
are sometimes referred to as the "Second Delivery Date" and the First Delivery
Date and the Second Delivery Date are sometimes each referred to as a "Delivery
Date".

Delivery of and payment for the Option Stock shall be made at the place
specified in the first sentence of the first paragraph of this Section 5 (or at
such other place as shall be determined by agreement between the Representatives
and the Company) at 10:00 A.M., New York City time, on the Second Delivery Date.
On the Second Delivery Date, the Company shall deliver or cause to be delivered
the certificates representing the Option Stock to the Representatives for the
account of each Underwriter against payment to or upon the order of the Company
of the purchase price by wire transfer in immediately available funds. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Option Stock shall be registered in such names and
in such denominations as the Representatives shall request in the aforesaid
written notice. For the purpose of expediting the checking and packaging of the
certificates for the Option Stock, the Company shall make the certificates
representing the Option Stock available for inspection by the Representatives in
New York, New York, not later than 2:00 P.M., New York City time, on the
business day prior to the Second Delivery Date.

6. Further Agreements of the Company. The Company agrees:

(a) To prepare the Prospectus in a form approved by the
Representatives and to file such Prospectus pursuant to Rule 424(b) under
the Securities Act not later than Commission's close of business on the
second business day following the execution and delivery of this Agreement
or, if applicable, such earlier time as may be required by Rule 430A(a)(3)
under the Securities Act; to make no further amendment or any supplement to
the Registration Statement or to the Prospectus except as permitted herein;
to advise the Representatives, promptly after it receives notice thereof,
of the time when any amendment to the Registration Statement has been filed
or becomes effective or any supplement to the Prospectus or any amended
Prospectus has been filed and to furnish the Representatives with copies
thereof; to advise the Representatives, promptly after it receives notice
thereof, of the issuance by the Commission of any stop order or of any
order preventing or suspending the use of any Preliminary Prospectus or the
Prospectus, of the suspension of the qualification of the Stock for
offering or sale in any jurisdiction, of the initiation or threatening of
any proceeding for any such purpose, or of any request by the Commission
for the amending or supplementing of the Registration Statement or the
Prospectus or for additional information; and, in the event of the issuance
of any stop order or of any order preventing or suspending the use of any
Preliminary Prospectus or the Prospectus or suspending any such
qualification, to use promptly its best efforts to obtain its withdrawal.

(b) To furnish promptly to each of the Representatives and to counsel
for the Underwriters a signed copy of the Registration Statement as
originally filed with the Commission, and each amendment thereto filed with
the Commission, including all consents and exhibits filed therewith.

(c) To deliver promptly to the Representatives such number of the
following documents as the Representatives shall reasonably request: (i)
conformed copies of the Registration Statement as originally filed with the
Commission and each amendment thereto (in each case excluding exhibits
other than this Agreement and the computation of per share earnings) and,
(ii) each Preliminary Prospectus, the Prospectus and any amended or
supplemented Prospectus and (iii) any document incorporated by reference in
the Prospectus (excluding exhibits thereto); and, if the delivery of a
prospectus is required at any time after the Effective Time in connection
with the offering or sale of the Stock or any other securities relating
thereto and if at such time any events shall have occurred as a result of
which the Prospectus as then amended or supplemented would include an
untrue statement of a material fact or omit to state any material fact
necessary in order to make the statements therein, in the light of the

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<PAGE> 9

circumstances under which they were made when such Prospectus is delivered,
not misleading, or, if for any other reason it shall be necessary to amend
or supplement the Prospectus or to file under the Exchange Act any document
incorporated by reference in the Prospectus in order to comply with the
Securities Act or the Exchange Act, to notify the Representatives and, upon
their request, to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies
as the Representatives may from time to time reasonably request of an
amended or supplemented Prospectus which will correct such statement or
omission or effect such compliance.

(d) To file promptly with the Commission any amendment to the
Registration Statement or the Prospectus or any supplement to the
Prospectus that may, in the judgment of the Company or the Representatives,
be required by the Securities Act or requested by the Commission.

(e) Prior to filing with the Commission any amendment to the
Registration Statement or supplement to the Prospectus, any document
incorporated by reference in the Prospectus or any Prospectus pursuant to
Rule 424 of the Rules and Regulations, to furnish a copy thereof to the
Representatives and counsel for the Underwriters and obtain the consent of
the Representatives to the filing.

(f) As soon as practicable after the Effective Date, to make generally
available to the Company's security holders and to deliver to the
Representatives an earnings statement of the Company and its subsidiaries
(which need not be audited) complying with Section 11(a) of the Securities
Act and the Rules and Regulations.

(g) For a period of five years following the Effective Date, to
furnish to the Representatives copies of all materials furnished by the
Company to its shareholders and all public reports and all reports and
financial statements furnished by the Company to the principal national
securities exchange upon which the Common Stock may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder.

(h) Promptly from time to time to take such action as the
Representatives may reasonably request to qualify the Stock for offering
and sale under the securities laws of such jurisdictions as the
Representatives may request and to comply with such laws so as to permit
the continuance of sales and dealings therein in such jurisdictions for as
long as may be necessary to complete the distribution of the Stock;
provided that in connection therewith the Company shall not be required to
qualify as a foreign corporation or to file a general consent to service of
process in any jurisdiction.

(i) For a period of 90 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or securities convertible
into or exchangeable for Common Stock (other than shares issued pursuant to
employee benefit plans, qualified stock option plans, qualified dividend
reinvestment plans or other employee compensation plans existing on the
date hereof or pursuant to currently outstanding options, warrants or
rights), or sell or grant options, rights or warrants with respect to any
shares of Common Stock or securities convertible into or exchangeable for
Common Stock (other than the grant of options pursuant to option plans
existing on the date hereof), or (2) enter into any swap or other
derivatives transaction that transfers to another, in whole or in part, any
of the economic benefits or risks of ownership of such shares of Common
Stock, whether any such transaction described in clause (1) or (2) above is
to be settled by delivery of Common Stock or other securities, in cash or
otherwise, in each case without the prior written consent of Lehman
Brothers Inc.

(j) Prior to the Effective Date, to apply for the listing of the Stock
on the New York Stock Exchange, Inc. and to use its best efforts to
complete that listing, subject only to official notice of issuance, prior
to the First Delivery Date.

(k) To apply the net proceeds from the sale of the Stock being sold by
the Company as set forth in the Prospectus.

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<PAGE> 10

(l) To take such steps as shall be necessary to ensure that neither
the Company nor any subsidiary shall become an "investment company" within
the meaning of such term under the Investment Company Act of 1940 and the
rules and regulations of the Commission thereunder.

7. Further Agreements of the Selling Stockholders and Principal
Stockholders. Each Selling Stockholder and the Schawk Interests (as set forth on
Schedule 5 hereto) with respect to subparagraph (a) below and each Principal
Stockholder agrees:

(a) For a period of 90 days from the date of the Prospectus, not to,
directly or indirectly, (1) offer for sale, sell, pledge or otherwise
dispose of (or enter into any transaction or device which is designed to,
or could be expected to, result in the disposition by any person at any
time in the future of) any shares of Common Stock or securities convertible
into or exchangeable for Common Stock (other than the Stock) or (2) enter
into any swap or other derivatives transaction that transfers to another,
in whole or in part, any of the economic benefits or risks of ownership of
such shares of Common Stock, whether any such transaction described in
clause (1) or (2) above is to be settled by delivery of Common Stock or
other securities, in cash or otherwise, in each case without the prior
written consent of Lehman Brothers Inc.

(b) That the Stock to be sold by the Selling Stockholder hereunder
which is represented by the certificates held in custody for the Selling
Stockholder, is subject to the interest of the Underwriters and the other
Selling Stockholders thereunder, that the arrangements made by the Selling
Stockholder for such custody are to that extent irrevocable, and that the
obligations of the Selling Stockholder hereunder shall not be terminated by
any act of the Selling Stockholder, by operation of law, by the death or
incapacity of any individual Selling Stockholder or, in the case of a
trust, by the death or incapacity of any executor or trustee or the
termination of such trust, or the occurrence of any other event.

(c) To deliver to the Representatives prior to the First Delivery Date
a properly completed and executed United States Treasury Department Form
W-8 (if the Selling Stockholder is a non-United States person or Form W-9
(if the Selling Stockholder is a United States person.)

8. Expenses. The Company agrees to pay (a) the costs incident to the
authorization, issuance, sale and delivery of the Stock and any taxes payable in
that connection; (b) the costs incident to the preparation, printing and filing
under the Securities Act of the Registration Statement and any amendments and
exhibits thereto; (c) the costs of distributing the Registration Statement as
originally filed and each amendment thereto and any post-effective amendments
thereof (including, in each case, exhibits), any Preliminary Prospectus, the
Prospectus and any amendment or supplement to the Prospectus or any document
incorporated by reference therein, all as provided in this Agreement; (d) the
costs of producing and distributing this Agreement and any other related
documents in connection with the offering, purchase, sale and delivery of the
stock; (e) the costs of delivering and distributing the Custody Agreements and
the Powers of Attorney; (f) any applicable listing or other fees; (g) the fees
and expenses [(not in excess, in the aggregate, of $ )] of qualifying
the Stock under the securities laws of the several jurisdictions as provided in
Section 6(h) and of preparing, printing and distributing a Blue Sky Memorandum
(including related fees and expenses of counsel to the Underwriters); and (h)
all other costs and expenses incident to the performance of the obligations of
the Company and the Selling Stockholders under this Agreement; provided that,
except as provided in this Section 8 and in Section 13 the Underwriters shall
pay their own costs and expenses, including the costs and expenses of their
counsel, any transfer taxes on the Stock which they may sell and the expenses of
advertising any offering of the Stock made by the Underwriters and the Selling
Stockholders shall pay the fees and expenses of their counsel, the Custodian
(and any other attorney-in-fact), and any transfer taxes payable in connection
with their respective sales of Stock to the Underwriters and reimburse the
Company for their pro rata share of the fees and expenses paid by the Company in
connection with the offering of the Stock.

9. Conditions of Underwriters' Obligations. The respective obligations of
the Underwriters hereunder are subject to the accuracy, when made and on each
Delivery Date, of the representations and warranties of the Company and the
Selling Stockholders contained herein, to the performance by the Company and the
Selling

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<PAGE> 11

Stockholders of their respective obligations hereunder, and to each of the
following additional terms and conditions:

(a) The Prospectus shall have been timely filed with the Commission in
accordance with Section 6(a); no stop order suspending the effectiveness of
the Registration Statement or any part thereof shall have been issued and
no proceeding for that purpose shall have been initiated or threatened by
the Commission; and any request of the Commission for inclusion of
additional information in the Registration Statement or the Prospectus or
otherwise shall have been complied with.

(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to such Delivery Date that the Registration Statement or the
Prospectus or any amendment or supplement thereto contains an untrue
statement of a fact which, in the opinion of Winston & Strawn, counsel for
the Underwriters, is material or omits to state a fact which, in the
opinion of such counsel, is material and is required to be stated therein
or is necessary to make the statements therein not misleading.

(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Custody Agreements,
the Powers of Attorney, the Stock, the Registration Statement and the
Prospectus, and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be reasonably satisfactory in all
material respects to counsel for the Underwriters, and the Company and the
Selling Stockholders shall have furnished to such counsel all documents and
information that they may reasonably request to enable them to pass upon
such matters.

(d) Vedder, Price, Kaufman & Kammholz shall have furnished to the
Representatives its written opinion, as counsel to the Company, addressed
to the Underwriters and dated such Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:

(i) The Company and each of its subsidiaries have been duly
incorporated and are validly existing as corporations in good standing
under the laws of their respective jurisdictions of incorporation, are
duly qualified to do business and are in good standing as foreign
corporations in each jurisdiction in which their respective ownership or
lease of property or the conduct of their respective businesses requires
such qualification and have all power and authority necessary to own or
hold their respective properties and conduct the businesses in which
they are engaged;

(ii) The Company has an authorized capitalization as set forth in
the Prospectus, and all of the issued shares of capital stock of the
Company (including the shares of Stock being delivered on such Delivery
Date) have been duly and validly authorized and issued, are fully paid
and non-assessable and conform to the description thereof contained in
the Prospectus; and all of the issued shares of capital stock of each
subsidiary of the Company have been duly and validly authorized and
issued and are fully paid, non-assessable and (except for directors'
qualifying shares) are owned directly or indirectly by the Company, free
and clear of all liens, encumbrances, equities or claims;

(iii) There are no preemptive or other rights to subscribe for or
to purchase, nor any restriction upon the voting or transfer of, any
shares of the Stock pursuant to the Company's charter or by-laws or any
agreement or other instrument known to such counsel;

(iv) The Company and each of its subsidiaries have good and
marketable title in fee simple to all real property owned by them, in
each case free and clear of all liens, encumbrances and defects except
such as are described in the Prospectus or such as do not materially
affect the value of such property and do not materially interfere with
the use made and proposed to be made of such property by the Company and
its subsidiaries; and all real property and buildings held under lease
by the Company and its subsidiaries are held by them under valid,
subsisting and enforceable leases, with such exceptions as are not
material and do not interfere with the use made and proposed to be made
of such property and buildings by the Company and its subsidiaries;

(v) To the best of such counsel's knowledge and other than as set
forth in the Prospectus, there are no legal or governmental proceedings
pending to which the Company or any of its subsidiaries is a party or of
which any property or assets of the Company or any of its subsidiaries
is the subject

11
<PAGE> 12

which, if determined adversely to the Company or any of its
subsidiaries, might have a material adverse effect on the consolidated
financial position, stockholders' equity, results of operations,
business or prospects of the Company and its subsidiaries; and, to the
best of such counsel's knowledge, no such proceedings are threatened or
contemplated by governmental authorities or threatened by others;

(vi) The Registration Statement was declared effective under the
Securities Act as of the date and time specified in such opinion, the
Prospectus was filed with the Commission pursuant to the subparagraph of
Rule 424(b) of the Rules and Regulations specified in such opinion on
the date specified therein and no stop order suspending the
effectiveness of the Registration Statement has been issued and, to the
knowledge of such counsel, no proceeding for that purpose is pending or
threatened by the Commission;

(vii) The Registration Statement and the Prospectus and any further
amendments or supplements thereto made by the Company prior to such
Delivery Date (other than the financial statements and related schedules
therein, as to which such counsel need express no opinion) comply as to
form in all material respects with the requirements of the Securities
Act and the Rules and Regulations; and the documents incorporated by
reference in the Prospectus (other than the financial statements and
related schedules therein, as to which such counsel need express no
opinion), when they were filed with the Commission, complied as to form
in all material respects with the requirements of the Exchange Act;

(viii) To the best of such counsel's knowledge, there are no
contracts or other documents which are required to be described in the
Prospectus or filed as exhibits to the Registration Statement by the
Securities Act or by the Rules and Regulations which have not been
described or filed as exhibits to the Registration Statement or
incorporated therein by reference as permitted by the Rules and
Regulations;

(ix) This Agreement has been duly authorized, executed and
delivered by the Company and is enforceable in accordance with its
terms;

(x) The issue and sale of the shares of Stock being delivered on
such Delivery Date by the Company and the compliance by the Company with
all of the provisions of this Agreement will not conflict with or result
in a breach or violation of any of the terms or provisions of, or
constitute a default under, any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument known to such counsel to
which the Company or any of its subsidiaries is a party or by which the
Company or any of its subsidiaries is bound or to which any of the
property or assets of the Company or any of its subsidiaries is subject,
nor will such actions result in any violation of the provisions of the
charter or by-laws of the Company or any of its subsidiaries or any
statute or any order, rule or regulation known to such counsel of any
court or governmental agency or body having jurisdiction over the
Company or any of its subsidiaries or any of their properties or assets;
and, except for the registration of the Stock under the Securities Act
and such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement by the Company and the consummation of the
transactions contemplated hereby; and

(xi) To the best of such counsel's knowledge, there are no
contracts, agreements or understandings between the Company and any
person granting such person the right (other than rights which have been
waived or satisfied) to require the Company to file a registration
statement under the Securities Act with respect to any securities of the
Company owned or to be owned by such person or to require the Company to
include such securities in the securities registered pursuant to the
Registration Statement or in any securities being registered pursuant to
any other registration statement filed by the Company under the
Securities Act.

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<PAGE> 13

In rendering such opinion, such counsel may state that its opinion is
limited to matters governed by the Federal laws of the United States of America,
the laws of the State of Illinois, the State of New York and the General
Corporation Law of the State of Delaware and that such counsel is not admitted
in the State of Delaware. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and dated
such Delivery Date, in form and substance satisfactory to the Representatives,
to the effect that (x) such counsel has acted as counsel to the Company on a
regular basis, has acted as counsel to the Company in connection with previous
financing transactions and has acted as counsel to the Company in connection
with the preparation of the Registration Statement, and (y) based on the
foregoing, no facts have come to the attention of such counsel which lead it to
believe that (I) the Registration Statement, as of the Effective Date, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein not misleading, or that the Prospectus contains any untrue statement of
a material fact or omits to state a material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (II) any documents
incorporated by reference in the Prospectus, when they were filed with the
Commission contained any untrue statement of a material fact or omitted to state
a material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.

(e) The counsel for each of the Selling Stockholders shall have
furnished to the Representatives its written opinion, as counsel to the
Selling Stockholders for whom it is acting as counsel, addressed to the
Underwriters and dated the First Delivery Date, in form and substance
reasonably satisfactory to the Representatives, to the effect that:

(i) Selling Stockholder has full right, power and authority to
enter into this Agreement the Power of Attorney and the Custody
Agreement; the execution, delivery and performance of this Agreement the
Power of Attorney and the Custody Agreement by each Selling Stockholder
and the consummation by each Selling Stockholder of the transactions
contemplated hereby and thereby will not conflict with or result in a
breach or violation of any of the terms or provisions of, or constitute
a default under, any statute, any indenture, mortgage, deed of trust,
loan agreement or other agreement or instrument known to such counsel to
which any Selling Stockholder is a party or by which any Selling
Stockholder is bound or to which any of the property or assets of any
Selling Stockholder is subject, nor will such actions result in any
violation of the organizational documents or documents creating a
partnership or a trust of any Selling Stockholder or any statute or any
order, rule or regulation known to such counsel of any court or
governmental agency or body having jurisdiction over any Selling
Stockholder or the property or assets of any Selling Stockholder; and,
except for the registration of the Stock under the Securities Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under the Exchange Act and applicable
state securities laws in connection with the purchase and distribution
of the Stock by the Underwriters, no consent, approval, authorization or
order of, or filing or registration with, any such court or governmental
agency or body is required for the execution, delivery and performance
of this Agreement, the Power of Attorney or the Custody Agreement by any
Selling Stockholder and the consummation by any Selling Stockholder of
the transactions contemplated hereby and thereby;

(ii) This Agreement has been duly executed and delivered by or on
behalf of each Selling Stockholder and is enforceable is accordance with
its terms;

(iii) A Power-of-Attorney and a Custody Agreement have been duly
authorized, executed and delivered by each Selling Stockholder and
constitute valid and binding agreements of each Selling Stockholder,
enforceable in accordance with their respective terms;

(iv) Immediately prior to the First Delivery Date, each Selling
Stockholder had good and valid title to the shares of Stock to be sold
by such Selling Stockholder under this Agreement, free and clear of all
liens, encumbrances, equities or claims, and full right, power and
authority to sell, assign, transfer and deliver such shares to be sold
by such Selling Stockholder hereunder; and

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<PAGE> 14

(v) Good and valid title to the shares of Stock to be sold by each
Selling Stockholder under this Agreement, free and clear of all liens,
encumbrances, equities or claims, has been transferred to each of the
several Underwriters.

In rendering such opinion, such counsel may (i) state that its
opinion is limited to matters governed by the Federal laws of the United
States of America, the laws of the State of Illinois and the State of
New York and the General Corporation Law of the State of Delaware and
that such counsel is not admitted in the State of Delaware and (ii) in
rendering the opinion in Section 9(e)(iv) above, rely upon a certificate
of each Selling Stockholder in respect of matters of fact as to
ownership of and liens, encumbrances, equities or claims on the shares
of Stock sold by such Selling Stockholder, provided that such counsel
shall furnish copies thereof to the Representatives and state that it
believes that both the Underwriters and it are justified in relying upon
such certificate. Such counsel shall also have furnished to the
Representatives a written statement, addressed to the Underwriters and
dated the First Delivery Date, in form and substance satisfactory to the
Representatives, to the effect that (x) such counsel [has acted as
counsel to each Selling Stockholder on a regular basis and] has acted as
counsel to each Selling Stockholder in connection with the preparation
of the Registration Statement, and (y) based on the foregoing, no facts
have come to the attention of such counsel which lead it to believe that
the Registration Statement, as of the Effective Date, contained any
untrue statement of a material fact relating to any Selling Stockholder
or omitted to state such a material fact required to be stated therein
or necessary in order to make the statements therein not misleading, or
that the Prospectus contains any untrue statement of a material fact
relating to any Selling Stockholder or omits to state such a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.

(f) The Representatives shall have received from counsel for the
Underwriters, such opinion or opinions, dated such Delivery Date, with
respect to the issuance and sale of the Stock, the Registration Statement,
the Prospectus and other related matters as the Representatives may
reasonably require, and the Company shall have furnished to such counsel
such documents as they reasonably request for the purpose of enabling them
to pass upon such matters.

(g) At the time of execution of this Agreement, the Representatives
shall have received from each of Ernst & Young LLP and Arthur Andersen LLP
letters, in form and substance satisfactory to the Representatives,
addressed to the Underwriters and dated the date hereof from each of the
foregoing (i) confirming that they are independent public accountants
within the meaning of the Securities Act and are in compliance with the
applicable requirements relating to the qualification of accountants under
Rule 2-01 of Regulation S-X of the Commission, (ii) stating, as of the date
hereof (or, with respect to matters involving changes or developments since
the respective dates as of which specified financial information is given
in the Prospectus, as of a date not more than five days prior to the date
hereof), the conclusions and findings of such firm with respect to the
financial information and other matters ordinarily covered by accountants'
"comfort letters" to underwriters in connection with registered public
offerings.

(h) With respect to the letters of Ernst & Young LLP and Arthur
Andersen LLP referred to in the preceding paragraph and delivered to the
Representatives concurrently with the execution of this Agreement (the
"initial letters"), the Company shall have furnished to the Representatives
a letter (the "bring-down letters") of each such accountants, addressed to
the Underwriters and dated such Delivery Date for each of the foregoing (i)
confirming that they are independent public accountants within the meaning
of the Securities Act and are in compliance with the applicable
requirements relating to the qualification of accountants under Rule 2-01
of Regulation S-X of the Commission, (ii) stating, as of the date of the
bring-down letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five
days prior to the date of the bring-down letter), the conclusions and
findings of such firm with respect to the financial information and other
matters covered by the initial letter and (iii) confirming in all material
respects the conclusions and findings set forth in the initial letter.

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<PAGE> 15

(i) The Company shall have furnished to the Representatives a
certificate, dated such Delivery Date, of its Chairman of the Board, its
President or a Vice President and its chief financial officer stating that:

(i) The representations, warranties and agreements of the Company
in Section 1 are true and correct as of such Delivery Date; the Company
has complied with all its agreements contained herein; and the
conditions set forth in Sections 10(a) and 10(m) have been fulfilled;
and

(ii) They have carefully examined the Registration Statement and
the Prospectus and, in their opinion (A) as of the Effective Date, the
Registration Statement and Prospectus did not include any untrue
statement of a material fact and did not omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, and (B) since the Effective Date no event has
occurred which should have been set forth in a supplement or amendment
to the Registration Statement or the Prospectus.

(j) Each Selling Stockholder (or the Custodian or one or more
attorneys-in-fact on behalf of the Selling Stockholders) shall have
furnished to the Representatives on the First Delivery Date a certificate,
dated the First Delivery Date, signed by, or on behalf of, the Selling
Stockholder (or the Custodian or one or more attorneys-in-fact) stating
that the representations, warranties and agreements of the Selling
Stockholder contained herein are true and correct as of the First Delivery
Date and that the Selling Stockholder has complied with all agreements
contained herein to be performed by the Selling Stockholder at or prior to
the First Delivery Date.

(k) (i) Neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Prospectus any loss or
interference with its business from fire, explosion, flood or other
calamity, whether or not covered by insurance, or from any labor dispute or
court or governmental action, order or decree, otherwise than as set forth
or contemplated in the Prospectus or (ii) since such date there shall not
have been any change in the capital stock or long-term debt of the Company
or any of its subsidiaries or any change, or any development involving a
prospective change, in or affecting the general affairs, management,
financial position, stockholders' equity or results of operations of the
Company and its subsidiaries, otherwise than as set forth or contemplated
in the Prospectus, the effect of which, in any such case described in
clause (i) or (ii), is, in the judgment of the Representatives, so material
and adverse as to make it impracticable or inadvisable to proceed with the
public offering or the delivery of the Stock being delivered on such
Delivery Date on the terms and in the manner contemplated in the
Prospectus.

(l) Subsequent to the execution and delivery of this Agreement there
shall not have occurred any of the following: (i) trading in securities
generally on the New York Stock Exchange or the American Stock Exchange or
in the over-the-counter market, or trading in any securities of the Company
on any exchange or in the over-the-counter market, shall have been
suspended or minimum prices shall have been established on any such
exchange or such market by the Commission, by such exchange or by any other
regulatory body or governmental authority having jurisdiction, (ii) a
banking moratorium shall have been declared by Federal or state
authorities, (iii) the United States shall have become engaged in
hostilities, there shall have been an escalation in hostilities involving
the United States or there shall have been a declaration of a national
emergency or war by the United States or (iv) there shall have occurred
such a material adverse change in general economic, political or financial
conditions (or the effect of international conditions on the financial
markets in the United States shall be such) as to make it, in the judgment
of a majority in interest of the several Underwriters, impracticable or
inadvisable to proceed with the public offering or delivery of the Stock
being delivered on such Delivery Date on the terms and in the manner
contemplated in the Prospectus.

(m) The New York Stock Exchange, Inc. shall have approved the Stock
for listing, subject only to official notice of issuance.

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<PAGE> 16

All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance reasonably satisfactory
to counsel for the Underwriters.

10. Indemnification and Contribution.

(a) The Company shall indemnify and hold harmless each Underwriter, its
officers and employees and each person, if any, who controls any Underwriter
within the meaning of the Securities Act, from and against any loss, claim,
damage or liability, joint or several, or any action in respect thereof
(including, but not limited to, any loss, claim, damage, liability or action
relating to purchases and sales of Stock), to which that Underwriter, officer,
employee or controlling person may become subject, under the Securities Act or
otherwise, insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, (i) any untrue statement or alleged untrue statement of a
material fact contained (A) in any Preliminary Prospectus, the Registration
Statement or the Prospectus, including any documents incorporated by reference
in any of the foregoing, or in any amendment or supplement thereto or (B) in any
blue sky application or other document prepared or executed by the Company (or
based upon any written information furnished by the Company) specifically for
the purpose of qualifying any or all of the Stock under the securities laws of
any state or other jurisdiction (any such application, document or information
being hereinafter called a "Blue Sky Application"), (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, including any documents incorporated by reference in any of the
foregoing, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading or (iii) any act or failure to act or any
alleged act or failure to act by any Underwriter in connection with, or relating
in any manner to, the Stock or the offering contemplated hereby, and which is
included as part of or referred to in any loss, claim, damage, liability or
action arising out of or based upon matters covered by clause (i) or (ii) above
(provided that the Company shall not be liable under this clause (iii) to the
extent that it is determined in a final judgment by a court of competent
jurisdiction that such loss, claim, damage, liability or action resulted
directly from any such acts or failures to act undertaken or omitted to be taken
by such Underwriter through its gross negligence or willful misconduct), and
shall reimburse each Underwriter and each such officer, employee or controlling
person promptly upon demand for any legal or other expenses reasonably incurred
by that Underwriter, officer, employee or controlling person in connection with
investigating or defending or preparing to defend against any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Company shall not be liable in any such case to the extent that any
such loss, claim, damage, liability or action arises out of, or is based upon,
any untrue statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus, or in any such amendment or supplement, or in any Blue Sky
Application, in reliance upon and in conformity with written information
concerning such Underwriter furnished to the Company through the Representatives
by or on behalf of any Underwriter specifically for inclusion therein. The
foregoing indemnity agreement is in addition to any liability which the Company
may otherwise have to any Underwriter or to any officer, employee or controlling
person of that Underwriter.

(b) The Selling Stockholders, jointly and severally shall indemnify and
hold harmless each Underwriter, its officers and employees, and each person, if
any, who controls any Underwriter within the meaning of the Securities Act, from
and against any loss, claim, damage or liability, joint or several, or any
action in respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to purchases and sales of Stock), to which
that Underwriter, officer, employee or controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim, damage,
liability or action arises out of, or is based upon, (i) any untrue statement or
alleged untrue statement of a material fact contained in any Preliminary
Prospectus, the Registration Statement or the Prospectus or in any amendment or
supplement thereto or (ii) the omission or alleged omission to state in any
Preliminary Prospectus, Registration Statement or the Prospectus, or in any
amendment or supplement thereto, any material fact required to be stated therein
or necessary to make the statements therein not misleading, and shall reimburse
each Underwriter, its officers and employees and each such controlling person
for any legal or other expenses reasonably incurred by that Underwriter, its
officers and employees or controlling person in connection with investigating or
defending or

16
<PAGE> 17

preparing to defend against any such loss, claim, damage, liability or action as
such expenses are incurred; provided, however, that the Selling Stockholders
shall not be liable in any such case to the extent that any such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission made in
any Preliminary Prospectus, the Registration Statement or the Prospectus or in
any such amendment or supplement in reliance upon and in conformity with written
information concerning such Underwriter furnished to the Company through the
Representatives by or on behalf of any Underwriter specifically for inclusion
therein. The foregoing indemnity agreement is in addition to any liability which
the Selling Stockholders may otherwise have to any Underwriter or any officer,
employee or controlling person of that Underwriter.

(c) Each Underwriter, severally and not jointly, shall indemnify and hold
harmless the Company, its officers and employees, each of its directors, and
each person, if any, who controls the Company within the meaning of the
Securities Act, from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof, to which the Company or any such
director, officer or controlling person may become subject, under the Securities
Act or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, (i) any untrue statement or alleged untrue
statement of a material fact contained (A) in any Preliminary Prospectus, the
Registration Statement or the Prospectus or in any amendment or supplement
thereto, or (B) in any Blue Sky Application or (ii) the omission or alleged
omission to state in any Preliminary Prospectus, the Registration Statement or
the Prospectus, or in any amendment or supplement thereto, or in any Blue Sky
Application any material fact required to be stated therein or necessary to make
the statements therein not misleading, but in each case only to the extent that
the untrue statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with written information concerning
such Underwriter furnished to the Company through the Representatives by or on
behalf of that Underwriter specifically for inclusion therein, and shall
reimburse the Company and any such director, officer or controlling person for
any legal or other expenses reasonably incurred by the Company or any such
director, officer or controlling person in connection with investigating or
defending or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred. The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to the
Company or any such director, officer, employee or controlling person.

(d) Promptly after receipt by an indemnified party under this Section 10 of
notice of any claim or the commencement of any action, the indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under this Section 10, notify the indemnifying party in writing of the
claim or the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which it
may have under this Section 10 except to the extent it has been materially
prejudiced by such failure and, provided further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may have to
an indemnified party otherwise than under this Section 10. If any such claim or
action shall be brought against an indemnified party, and it shall notify the
indemnifying party thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume the
defense of such claim or action, the indemnifying party shall not be liable to
the indemnified party under this Section 10 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation; provided, however, that
the Representatives shall have the right to employ counsel to represent jointly
the Representatives and those other Underwriters and their respective officers,
employees and controlling persons who may be subject to liability arising out of
any claim in respect of which indemnity may be sought by the Underwriters
against the Company or any Selling Stockholder under this Section 10 if, in the
reasonable judgment of the Representatives, it is advisable for the
Representatives and those Underwriters, officers, employees and controlling
persons to be jointly represented by separate counsel, and in that event the
fees and expenses of such separate counsel shall be paid by the Company or
Selling Stockholders. No indemnifying party shall (i) without the prior written
consent of the indemnified parties (which consent shall not be unreasonably
withheld), settle or compromise or consent to the entry of any judgment with
respect to any pending or threatened claim, action, suit or proceeding in
respect of which indemnification or contribution may be sought

17
<PAGE> 18

hereunder (whether or not the indemnified parties are actual or potential
parties to such claim or action) unless such settlement, compromise or consent
includes an unconditional release of each indemnified party from all liability
arising out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with the consent of
the indemnifying party or if there be a final judgment of the plaintiff in any
such action, the indemnifying party agrees to indemnify and hold harmless any
indemnified party from and against any loss or liability by reason of such
settlement or judgment.

(e) If the indemnification provided for in this Section 10 shall for any
reason be unavailable to or insufficient to hold harmless an indemnified party
under Section 10(a), 10(b) or 10(c) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a result
of such loss, claim, damage or liability, or action in respect thereof, (i) in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company and the Selling Stockholders on the one hand and the
Underwriters on the other from the offering of the Stock or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of the Company and
the Selling Stockholders on the one hand and the Underwriters on the other with
respect to the statements or omissions which resulted in such loss, claim,
damage or liability, or action in respect thereof, as well as any other relevant
equitable considerations. The relative benefits received by the Company and the
Selling Stockholders on the one hand and the Underwriters on the other with
respect to such offering shall be deemed to be in the same proportion as the
total net proceeds from the offering of the Stock purchased under this Agreement
(before deducting expenses) received by the Company and the Selling
Stockholders, on the one hand, and the total underwriting discounts and
commissions received by the Underwriters with respect to the shares of the Stock
purchased under this Agreement, on the other hand, bear to the total gross
proceeds from the offering of the shares of the Stock under this Agreement, in
each case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to whether the untrue or alleged
untrue statement of a material fact or omission or alleged omission to state a
material fact relates to information supplied by the Company, the Selling
Stockholders or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Company, the Selling Stockholders and the
Underwriters agree that it would not be just and equitable if contributions
pursuant to this Section were to be determined by pro rata allocation (even if
the Underwriters were treated as one entity for such purpose) or by any other
method of allocation which does not take into account the equitable
considerations referred to herein. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in respect
thereof, referred to above in this Section shall be deemed to include, for
purposes of this Section 11(f), any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim. Notwithstanding the provisions of this Section 10(e), no
Underwriter shall be required to contribute any amount in excess of the amount
by which the total price at which the Stock underwritten by it and distributed
to the public was offered to the public exceeds the amount of any damages which
such Underwriter has otherwise paid or become liable to pay by reason of any
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 10(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation. The Underwriters' obligations
to contribute as provided in this Section 10(e) are several in proportion to
their respective underwriting obligations and not joint.

(f) The Underwriters severally confirm and the Company acknowledges that
the statements with respect to the public offering of the Stock by the
Underwriters set forth on the cover page of, the legend concerning
over-allotments on the inside front cover page of and the concession and
reallowance figures appearing under the caption "Underwriting" in, the
Prospectus are correct and constitute the only information concerning such
Underwriters furnished in writing to the Company by or on behalf of the
Underwriters specifically for inclusion in the Registration Statement and the
Prospectus.

18
<PAGE> 19

11. Defaulting Underwriters.

If, on either Delivery Date, any Underwriter defaults in the performance of
its obligations under this Agreement, the remaining non-defaulting Underwriters
shall be obligated to purchase the Stock which the defaulting Underwriter agreed
but failed to purchase on such Delivery Date in the respective proportions which
the number of shares of the Firm Stock set forth opposite the name of each
remaining non-defaulting Underwriter in Schedule 1 hereto bears to the total
number of shares of the Firm Stock set forth opposite the names of all the
remaining non-defaulting Underwriters in Schedule 1 hereto; provided, however,
that the remaining non-defaulting Underwriters shall not be obligated to
purchase any of the Stock on such Delivery Date if the total number of shares of
the Stock which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such date exceeds 9.09% of the total number of shares of the Stock
to be purchased on such Delivery Date, and any remaining non-defaulting
Underwriter shall not be obligated to purchase more than 110% of the number of
shares of the Stock which it agreed to purchase on such Delivery Date pursuant
to the terms of Section 3. If the foregoing maximums are exceeded, the remaining
non-defaulting Underwriters, or those other underwriters satisfactory to the
Representatives who so agree, shall have the right, but shall not be obligated,
to purchase, in such proportion as may be agreed upon among them, all the Stock
to be purchased on such Delivery Date. If the remaining Underwriters or other
underwriters satisfactory to the Representatives do not elect to purchase the
shares which the defaulting Underwriter or Underwriters agreed but failed to
purchase on such Delivery Date, this Agreement (or, with respect to the Second
Delivery Date, the obligation of the Underwriters to purchase and of the Company
or the Selling Stockholders, as applicable to sell, the Option Stock) shall
terminate without liability on the part of any non-defaulting Underwriter or the
Company or the Selling Stockholders, except that the Company will continue to be
liable for the payment of expenses to the extent set forth in Sections 8 and 13.
As used in this Agreement, the term "Underwriter" includes, for all purposes of
this Agreement unless the context requires otherwise, any party not listed in
Schedule 1 hereto who, pursuant to this Section 11, purchases Firm Stock which a
defaulting Underwriter agreed but failed to purchase.

Nothing contained herein shall relieve a defaulting Underwriter of any
liability it may have to the Company and the Selling Stockholders for damages
caused by its default. If other underwriters are obligated or agree to purchase
the Stock of a defaulting or withdrawing Underwriter, either the Representatives
or the Company may postpone the Delivery Date for up to seven full business days
in order to effect any changes that in the opinion of counsel for the Company or
counsel for the Underwriters may be necessary in the Registration Statement, the
Prospectus or in any other document or arrangement.

12. Termination. The obligations of the Underwriters hereunder may be
terminated by the Representatives by notice given to and received by the Company
and the Selling Stockholders prior to delivery of and payment for the Firm Stock
if, prior to that time, any of the events described in Sections 9(k) or 9(l),
shall have occurred or if the Underwriters shall decline to purchase the Stock
for any reason permitted under this Agreement.

13. Reimbursement of Underwriters' Expenses. If (a) the Company or any of
the Selling Stockholders shall fail to tender the Stock for delivery to the
Underwriters by reason of any failure, refusal or inability on the part of the
Company or the Selling Stockholders to perform any agreement on its part to be
performed, or because any other condition of the Underwriters' obligations
hereunder required to be fulfilled by the Company or the Selling Stockholders is
not fulfilled, the Company and the Selling Stockholders will reimburse the
Underwriters for all reasonable out-of-pocket expenses (including fees and
disbursements of counsel) incurred by the Underwriters in connection with this
Agreement and the proposed purchase of the Stock, and upon demand the Company
and the Selling Stockholders shall pay the full amount thereof to the
Representatives. If this Agreement is terminated pursuant to Section 11 by
reason of the default of one or more Underwriters, neither the Company nor any
Selling Stockholder shall be obligated to reimburse any defaulting Underwriter
on account of those expenses.

14. Notices, etc. All statements, requests, notices and agreements
hereunder shall be in writing, and:

(a) if to the Underwriters, shall be delivered or sent by mail, telex
or facsimile transmission to Lehman Brothers Inc., Three World Financial
Center, New York, New York 10285, Attention:

19
<PAGE> 20

Syndicate Department (Fax: 212-526-6588), with a copy, in the case of any
notice pursuant to Section 10(d), to the Director of Litigation, Office of
the General Counsel, Lehman Brothers Inc., 3 World Financial Center, 10th
Floor, New York, NY 10285;

(b) if to the Company shall be delivered or sent by mail, telex or
facsimile transmission to the address of the Company set forth in the
Registration Statement, Attention: David A. Schawk (Fax: 847-827-1264);

(c) if to any of the Selling Stockholders, shall be delivered or sent
by mail, telex or facsimile transmission to such Selling Stockholder at the
address set forth on Schedule 2 hereto;

(d) if to any of the Principal Stockholders, shall be delivered or
sent by mail, telex or facsimile transmission to such Principal Stockholder
at the address set forth on Schedule 3 hereto;

provided, however, that any notice to an Underwriter pursuant to Section 10(d)
shall be delivered or sent by mail, telex or facsimile transmission to such
Underwriter at its address set forth in its acceptance telex to the
Representatives, which address will be supplied to any other party hereto by the
Representatives upon request. Any such statements, requests, notices or
agreements shall take effect at the time of receipt thereof. The Company and the
Selling Stockholders shall be entitled to act and rely upon any request,
consent, notice or agreement given or made on behalf of the Underwriters by
Lehman Brothers Inc. on behalf of the Representatives and the Company and the
Underwriters shall be entitled to act and rely upon any request, consent, notice
or agreement given or made on behalf of the Selling Stockholders by the
Custodian.

15. Persons Entitled to Benefit of Agreement. This Agreement shall inure to
the benefit of and be binding upon the Underwriters, the Company, the Selling
Stockholders and their respective personal representatives and successors. This
Agreement and the terms and provisions hereof are for the sole benefit of only
those persons, except that (A) the representations, warranties, indemnities and
agreements of the Company and the Selling Stockholders contained in this
Agreement shall also be deemed to be for the benefit of the person or persons,
if any, who control any Underwriter within the meaning of Section 15 of the
Securities Act and (B) the indemnity agreement of the Underwriters contained in
Section 10(c) of this Agreement shall be deemed to be for the benefit of
directors of the Company, officers of the Company who have signed the
Registration Statement and any person controlling the Company within the meaning
of Section 15 of the Securities Act. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Section 15, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.

16. Survival. The respective indemnities, representations, warranties and
agreements of the Company, the Selling Stockholders and the Underwriters
contained in this Agreement or made by or on behalf on them, respectively,
pursuant to this Agreement, shall survive the delivery of and payment for the
Stock and shall remain in full force and effect, regardless of any investigation
made by or on behalf of any of them or any person controlling any of them.

17. Definition of the Terms "Business Day" and "Subsidiary". For purposes
of this Agreement, (a) "business day" means any day on which the New York Stock
Exchange, Inc. is open for trading and (b) "subsidiary" has the meaning set
forth in Rule 405 of the Rules and Regulations.

18. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF NEW YORK.

19. Counterparts. This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original but all such counterparts
shall together constitute one and the same instrument.

20. Headings. The headings herein are inserted for convenience of reference
only and are not intended to be part of, or to affect the meaning or
interpretation of, this Agreement.

20
<PAGE> 21

If the foregoing correctly sets forth the agreement among the Company, the
Selling Stockholders and the Underwriters, please indicate your acceptance in
the space provided for that purpose below.

Very truly yours,

SCHAWK, INC.

By:
-----------------------------------
Title:
--------------------------------

The Selling Stockholders named in
Schedule 2 to this Agreement

By:
-----------------------------------
Attorney-in-Fact

The Principal Stockholders named in
Schedule 3 to this Agreement

By:
-----------------------------------
Clarence W. Schawk

By:
-----------------------------------
David A. Schawk

The Other Schawk Interests named in
Schedule 5 to this Agreement

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

Accepted:

LEHMAN BROTHERS INC.

McDONALD & COMPANY SECURITIES, INC.

For themselves and as Representatives
of the several Underwriters named
in Schedule 1 hereto

By LEHMAN BROTHERS INC.

By
-----------------------------------
Authorized Representative

21
<PAGE> 22

SCHEDULE 1
UNDERWRITERS

<TABLE>
<CAPTION>
NUMBER OF SHARES
NAMES OF UNDERWRITERS OF FIRM STOCK
--------------------- ----------------
<S> <C>
Lehman Brothers Inc. .......................................
McDonald & Company Securities, Inc.

---------
Total.................................................. 3,000,000
=========
</TABLE>

22
<PAGE> 23

SCHEDULE 2
SELLING STOCKHOLDERS

<TABLE>
<CAPTION>
NAMES AND ADDRESSES OF NUMBER OF SHARES
SELLING STOCKHOLDERS OF FIRM STOCK
---------------------- ----------------
<S> <C>
Jacques R. Lilly............................................
360 Fairfield Avenue
Stanford, Connecticut 06902
David A. Schawk.............................................
1695 River Road
Des Plaines, Illinois 60018
SGK Investments Limited Partnership.........................

Clarence W. and Marilyn G. Schawk Family Foundation.........

---------
Total.................................................. 1,500,000
=========
</TABLE>

23
<PAGE> 24

SCHEDULE 3
PRINCIPAL STOCKHOLDERS

<TABLE>
<CAPTION>
NAMES AND ADDRESSES OF PRINCIPAL STOCKHOLDERS
- ---------------------------------------------
<S> <C>
Clarence W. Schawk
1695 River Road
Des Plaines, Illinois 60018
David A. Schawk
1695 River Road
Des Plaines, Illinois 60018
</TABLE>

24
<PAGE> 25

SCHEDULE 4
SECTION 1(Z) DISCLOSURE

25
<PAGE> 26

SCHEDULE 5
SCHAWK INTERESTS

A. Alex Sarkisian, as trustee of

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

[other Schawk Family members]

<PAGE> 1
EXHIBIT 4.3

BY-LAWS
OF
FILTERTEK DE PUERTO RICO, INC.*

ARTICLE I

OFFICES

SECTION 1. REGISTERED OFFICE. The registered office of the
corporation shall be in the City of Wilmington, County of New Castle, State of
Delaware, and the address of the registered office may be changed from time to
time by the Board of Directors.

SECTION 2. OTHER OFFICES. The corporation may have such other
offices, either within or without the State of Delaware, as the business of the
corporation may require from time to time.

ARTICLE II

STOCKHOLDERS

SECTION 1. ANNUAL MEETING. The annual meeting of the
stockholders shall be held on the first Wednesday in May in each year,
beginning with the year 1971, at the hour of 1:00 P.M., for the purposes of
electing directors and for the transaction of such other business as may come
before the meeting. If the day fixed for the annual meeting shall be a legal
holiday, such meeting shall be held on the next succeeding business day. If
the election of directors shall not be held on the day designated herein for
any annual meeting, or at any adjournment thereof, the Board of

__________________________________

*Name changed to Filtertek, Inc. on November 16, 1994. Name changed to
Schawk, Inc. on December 30, 1994.
<PAGE> 2
Directors shall cause the election to be held at a meeting of the stockholders
as soon thereafter as conveniently may be. Election of directors need not be
by written ballot.

SECTION 2. SPECIAL MEETINGS. Special meetings of the
stockholders may be called by the President, and shall be called by the
President at the request in writing of a majority of the Board of Directors or
by the holders of a majority of the outstanding stock of the corporation. All
such requests shall state the purpose of the proposed meeting.

SECTION 3. PLACE OF MEETING. The Board of Directors may
designate any place, either within or without the State of Delaware, as the
place of meeting for any annual meeting or for any special meeting called by
the Board of Directors. A waiver of notice signed by all stockholders may
designate any place, either within or without the State of Delaware, as the
place for the holding of such meeting. If no designation is made, or if a
special meeting be otherwise called, the place of meeting shall be the
registered office of the corporation in the State of Delaware, except as
otherwise provided in Section 5 of this article.

SECTION 4. NOTICE OF MEETING. Written or printed notice
starting the place, day and hour of the meeting, and in the case of a special
meeting, the purpose or purposes for which the meeting is called, shall be
delivered not less than ten (10) nor more than fifty (50) days before the date
of the meeting, or in the case of a merger or consolidation not less than
twenty (20) nor more than forty (40) days before the meeting, either personally
or by mail, by or at the direction of the President, or the Secretary, or the
officer or persons calling the meeting, to each stockholder of record entitled
to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the
stockholder at his address as it appears on the records of the corporation,
with postage thereon prepaid.

5
<PAGE> 3

SECTION 5. MEETING OF ALL STOCKHOLDERS. If all of the
stockholders shall meet at any time and place, either within or without the
State of Delaware, and consent to the holding of a meeting at such time and
place, such meeting shall be valid without call or notice, and at such meeting
any corporate action may be taken.

SECTION 6. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE.
For the purpose of determining stockholders entitled to notice of or to vote at
any meeting of stockholders, or stockholders entitled to receive payment of any
dividend, or in order to make a determination of stockholders for any other
proper purpose, the Board of Directors of the corporation may provide that the
stock transfer books shall be closed for a stated period which shall not be
more than sixty (60) nor less than ten (10) days before the date of such
meeting, nor more than sixty (60) days prior to any other action. If the stock
transfer books shall be closed for the purpose of determining stockholders
entitled to notice of or to vote at a meeting of stockholders, such books shall
be closed for at least ten (10) days, or in the case of a merger or
consolidation not less than twenty (20) days, immediately preceding such
meeting. If the stock transfer books are not closed and no record date is
fixed for the determination of stockholders entitled to notice of or to vote at
a meeting of stockholders, or stockholders entitled to receive payment of a
dividend, the date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record date for such determination of
stockholders.

SECTION 7. VOTING LISTS. The officer or agent having charge of
the transfer books for shares of the corporation shall make, at least ten (10)
days before each meeting of stockholders,

6
<PAGE> 4
a complete list of the stockholders entitled to vote at such meeting, arranged
in alphabetical order, with the address of and the number of shares held by
each, which list, for a period of ten (10) days prior to such meeting, shall be
kept on file at the principal office of the corporation and shall be subject to
inspection by any stockholder at any time during usual business hours. Such
list shall also be produced and kept open at the time and place of the meeting
and shall be subject to the inspection of any stockholder during the whole time
of the meeting. The original share ledger or transfer book shall be prima
facie evidence as to who are the stockholders entitled to examine such list or
share ledger or transfer book or to vote at any meeting of stockholders.

SECTION 8. QUORUM. A majority of the outstanding shares of the
corporation, represented in person or by proxy, shall constitute a quorum at
any meeting of stockholders; provided, that if less than a majority of the
outstanding shares are represented at said meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice.
If a quorum is present, the affirmative vote of the majority of the shares
represented at the meeting shall be the act of the stockholders, unless the
vote of a greater number or voting by classes is required by statute, the
articles of incorporation or these by-laws.

SECTION 9. PROXIES. At all meetings of stockholders, a
stockholder may vote by proxy executed in writing by the stockholder or by his
duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary
of the corporation before or at the time of the meeting. No proxy shall be
valid after three years from the date of its execution, unless otherwise
provided in the proxy.

SECTION 10. VOTING OF SHARES. Subject to the provisions of
Section 12 of this article, each outstanding share, regardless of class, shall
be entitled to one vote upon each matter submitted to vote at a meeting of
stockholders.

7
<PAGE> 5
SECTION 11. VOTING OF SHARES BY CERTAIN HOLDERS. Shares standing
in the name of another corporation, domestic or foreign, may be voted by such
officer, agent, or proxy as the By-Laws of such corporation may prescribe, or,
in the absence of such provision, as the Board of Directors of such corporation
may determine.

Shares standing in the name of a deceased person, a minor ward or an
incompetent person, may be voted by his administrator, executor, court
appointed guardian or conservator, either in person or by proxy without a
transfer of such shares into the name of such administrator, executor, court
appointed guardian or conservator. Shares standing in the name of a trustee
may be voted by him either in person or by proxy.

Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without the transfer thereof into his name if authority so to do
be contained in an appropriate order of the court by which such receiver was
appointed.

A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.

Shares of its own stock belonging to this corporation shall not be
voted, directly or indirectly, at any meeting and shall not be counted in
determining the total number of outstanding shares at any given time, but
shares of its own stock held by it in a fiduciary capacity may be voted and
shall be counted in determining the total number of outstanding shares at any
given time.

8
<PAGE> 6
SECTION 12. INSPECTORS. At any meeting of stockholders, the
chairman of the meeting may, or upon the request of any stockholder shall,
appoint one or more persons as inspectors for such meeting.

Such inspectors shall ascertain and report the number of shares
represented at the meeting, based upon their determination of the validity and
effect of proxies; count all votes and report the results; and do such other
acts as are proper to conduct the election and voting with impartiality and
fairness to all the stockholders.

Each report of an inspector shall be in writing and signed by him or
by a majority of them if there be more than one inspector acting at such
meeting. If there is more than one inspector, the report of a majority shall
be the report of the inspectors. The report of the inspector or inspectors on
the number of shares represented at the meeting and the results of the voting
shall be prima facie evidence thereof.

SECTION 13. INFORMAL ACTION BY STOCKHOLDERS. Any action required
to be taken at a meeting of the stockholders, or any other action which may be
taken at a meeting of the stockholders, may be taken without a meeting, without
prior notice and without a vote if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be necessary to authorize or
take such action at a meeting at which all shares entitled to vote thereon were
present and voted. Prompt notice of the taking of the corporate action without
a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.

9
<PAGE> 7
ARTICLE III

DIRECTORS

SECTION 1. GENERAL POWERS. The business and affairs of the
corporation shall be managed by its board of directors.

SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors of the corporation shall be four. Each director shall hold office
until the next annual meeting of stockholders or until his successor shall have
been elected and qualified. Directors need not be residents of Delaware or
stockholders of the corporation.

SECTION 3. REGULAR MEETINGS. The first meeting of the newly
elected Board of Directors shall be held without other notice than this By-Law,
immediately after, and at the same place as, the annual meeting of
stockholders. The Board of Directors may provide, by resolution, the time and
place, either within or without the State of Delaware, for the holding of
additional regular meetings without other notice than such resolution.

SECTION 4. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by or at the request of the President or and shall be
called by the President on the written request of any two directors. The
person or persons authorized to call special meetings of the Board of Directors
may fix any place, either within or without the State of Delaware, as the place
for holding any special meeting of the Board of Directors called by them.

SECTION 5. NOTICE. Notice of any special meeting shall be given
at least ten (10) days previous thereto by written notice delivered personally
or mailed to each director at his business address, or by telegram. If mailed,
such notice shall be deemed to be delivered when deposited in the United States
mail so addressed, with postage thereon prepaid. If notice be given by
telegram,

10
<PAGE> 8
such notice shall be deemed to be delivered when the telegram is delivered to
the telegraph company. Any director may waive notice of any meeting. The
attendance of a director at any meeting shall constitute a waiver of notice of
such meeting, except where a director attends a meeting for the express purpose
of objecting to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting.

SECTION 6. QUORUM. A majority of the number of directors fixed
by these By-Laws shall constitute a quorum for transaction of business at any
meeting of the Board of Directors, provided, that if less than a majority of
such number of directors are present at said meeting, a majority of the
directors present may adjourn the meeting from time to time without further
notice.

SECTION 7. MANNER OF ACTING. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the act of
the Board of Directors.

SECTION 8. VACANCIES. Any vacancy occurring in the Board of
Directors and any directorship to be filled by reason of an increase in the
number of directors, may be filled by election at an annual meeting or at a
special meeting of stockholders called for that purpose.

SECTION 9. INFORMAL ACTION BY DIRECTORS. Unless specifically
prohibited by the Certificate of Incorporation or By-Laws, any action required
to be taken at a meeting of the Board of Directors, or any other action which
may be taken at a meeting of the Board of Directors or a Committee of Directors
thereof, may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by all the directors entitled to vote with
respect to the subject matter thereof, or by all the members of such committee,
as the case may be. Any such

11
<PAGE> 9
consent signed by all the directors or all the members of the Committee of
Directors shall have the same effect as a unanimous vote. All such writings
are to be filed with the minutes of proceedings of the Board or Committee.

SECTION 10. COMPENSATION. The Board of Directors, by the
affirmative vote of a majority of directors then in office, and irrespective of
any personal interest of any of its members, shall have authority to establish
reasonable compensation of all directors for services to the corporation as
directors, officers or otherwise. By resolution of the Board of Directors the
directors may be paid their expenses, if any, of attendance at each meeting of
the board. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor.

SECTION 11. PRESUMPTION OF ASSENT. A director of the corporation
who is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be conclusively presumed to have assented to
the action taken unless his dissent shall be entered in the minutes of the
meeting or unless he shall file his written dissent to such action with the
person acting as the secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the secretary of the
corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.

SECTION 12. COMMITTEES OF DIRECTORS. The Board of Directors may,
by resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more of the directors of the
corporation. Any such committee, to the extent provided in the resolution of
the Board of Directors, shall have and may exercise all the powers and
authority of the Board of Directors in the management of the corporation,
subject to the

12
<PAGE> 10
restrictions on the authority of any committee imposed by statute. Each such
committee shall keep regular minutes of its meetings and report the same to the
Board of Directors when required.

ARTICLE IV

OFFICERS

SECTION 1. NUMBER. The officers of the corporation shall be a
President, an Executive Vice-President, a Treasurer, a Secretary, a Controller
and such other Vice-Presidents, Assistant Treasurers, Assistant Secretaries or
other officers as may be elected or appointed by the Board of Directors. Any
two or more offices may be held by the same person.

SECTION 2. ELECTION AND TERM OF OFFICE. The officers of the
corporation shall be elected annually by the Board of Directors at the first
meeting of the newly elected Board of Directors held after each annual meeting
of stockholders. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as conveniently may be.
Vacancies may be filled or new offices filled at any meeting of the Board of
Directors. Each officer shall hold office until his successor shall have been
duly elected and shall have qualified or until his death or until he shall
resign or shall have been removed in the manner hereinafter provided. Election
or appointment of an officer or agent shall not of itself create contract
rights.

SECTION 3. REMOVAL. Any officer or agent elected or appointed
by the Board of Directors may be removed by the board of directors whenever in
its judgment the best interests of the corporation would be served thereby, but
such removal shall be without prejudice to the contract rights, if any, of the
person so removed.

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<PAGE> 11
SECTION 4. VACANCIES. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the Board
of Directors for the unexpired portion of the term.

SECTION 5. PRESIDENT. The President shall be principal
executive officer of the corporation and shall in general supervise and control
all of the business and affairs of the corporation. He shall preside at all
meetings of the stockholders and of the Board of Directors. He may sign, with
the Secretary or any other proper officer of the corporation thereunto
authorized by the Board of Directors, certificates for shares of the
corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the Board of Directors has authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated by the Board of
Directors or by these By-Laws to some other officer or agent of the
corporation, or shall be required by law to be otherwise signed or executed;
and in general shall perform all duties incident to the office of President and
such other duties as may be prescribed by the Board of Directors from time to
time.

SECTION 6. THE EXECUTIVE VICE-PRESIDENT. In the absence of the
President or in the event of his inability or refusal to act, the Executive
Vice-President shall perform the duties of the President, and when so acting,
shall have the powers of and be subject to all the restrictions upon the
President. The Executive Vice-President shall also perform such other duties
as from time to time may be assigned to him by the President or by the Board of
Directors.

SECTION 7. THE TREASURER. If required by the Board of
Directors, the Treasurer shall give a bond (which shall be renewed every six
(6) years) for the faithful discharge of his duties in such sum and with such
surety or sureties as the Board of Directors shall determine. He shall:

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<PAGE> 12
(a) have charge and custody of and be responsible for all funds and securities
of the corporation; receive and give receipts for moneys due and payable to the
corporation from any source whatsoever, and deposit all such moneys in the name
of the corporation in such banks, trust companies or other depositaries as
shall be selected in accordance with the provisions of Article V of these
by-laws; (b) in general perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.

SECTION 8. THE SECRETARY. The secretary shall: (a) keep the
minutes of the shareholders' and of the Board of Directors' meetings in one or
more books provided for that purpose; (b) see that all notices are duly given
in accordance with the provisions of these By-Laws or as required by law; (c)
be custodian of the corporate records and of the seal of the corporation and
see that the seal of the corporation is affixed to all certificates for shares
prior to the issue thereof and to all documents, the execution of which on
behalf of the corporation under its seal is duly authorized in accordance with
the provisions of these by-laws; (d) keep a register of the post-office address
of each stockholder which shall be furnished to the Secretary by such
stockholder; (e) sign with the President certificates for shares of the
corporation, the issue of which shall have been authorized by resolution of the
Board of Directors; (f) have general charge of the stock transfer books of the
corporation; (g) in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.

SECTION 9. OTHER VICE-PRESIDENTS, ASSISTANT TREASURERS AND
ASSISTANT SECRETARIES. The other Vice-Presidents, if any, in the absence of
the President

15
<PAGE> 13
and Executive Vice-President, or in the event of their inability or refusal to
act (in the event there are more than one other such Vice Presidents, the
Vice-Presidents in the order of their designation) shall perform 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 Assistant Treasurers shall respectively, if required by the Board
of Directors, give bonds for the faithful discharge of their duties in such
sums and with such sureties as the Board of Directors shall determine. The
Assistant Secretaries as thereunto authorized by the Board of Directors may
sign with the President certificates for shares of the corporation, the issue
of which shall have been authorized by a resolution of the Board of Directors.
The other Vice-Presidents, Assistant Treasurers and Assistant Secretaries, in
general, shall perform such duties as shall be assigned to them by the
Executive Vice-President, Treasurer or the Secretary, respectively, or by the
President or the Board of Directors.

SECTION 10. CONTROLLER. The Controller shall perform the duties
and exercise the powers prescribed from time to time by the President or the
Board of Directors.

SECTION 11. SALARIES. The salaries of the officers shall be
fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the corporation.
ARTICLE V

CONTRACTS, LOANS, CHECKS AND DEPOSITS

SECTION 1. CONTRACTS. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the corporation, and
such authority may be general or confined to specific instances.

16
<PAGE> 14
SECTION 2. LOANS. No loans shall be contracted on behalf of the
corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors. Such authority may be
general or confined to specific instances.

SECTION 3. CHECKS, DRAFTS, ETC. All checks, drafts or other
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation, shall be signed by such officer or
officers, agent or agents of the corporation and in such manner as shall from
time to time be determined by resolution of the Board of Directors.

SECTION 4. DEPOSITS. All funds of the corporation not otherwise
employed shall be deposited from time to time to the credit of the corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VI

CERTIFICATES FOR SHARES AND THEIR TRANSFER

SECTION 1. CERTIFICATES FOR SHARES. Certificates representing
shares of the corporation shall be in such form as may be determined by the
Board of Directors. Such certificates shall be signed by the President and by
the Secretary or an Assistant Secretary and shall be sealed with the seal of
the corporation. All certificates for shares shall be consecutively numbered
or otherwise identified. The name of the person to whom the shares represented
thereby are issued, with the number of shares and date of issue, shall be
entered on the books of the corporation. All certificates surrendered to the
corporation for transfer shall be canceled and no new certificate shall be
issued until the former certificate for the like number of shares shall have
been surrendered and cancelled, except that in case of a lost, destroyed or
mutilated certificate a new one may be issued therefor upon such terms and
indemnity to the corporation as the Board of Directors may prescribe.

17
<PAGE> 15
SECTION 2. TRANSFERS OF SHARES. Transfers of shares of the
corporation shall be made only on the books of the corporation by the holder of
record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the secretary of the
corporation, and on surrender for cancellation of the certificate for such
shares. The person in whose name shares stand on the books of the corporation
shall be deemed the owner thereof for all purposes as regards the corporation.

SECTION 3.

(a) Subject to paragraph (b) of this Section 3,
Article 6 of the By-Laws, upon surrender to any transfer agent of Filtertek de
Puerto Rico, Inc. (Filtertek P.R.) of a certificate for shares of Filtertek
P.R. duly endorsed or accompanied by proper evidence of succession, assignment
or authority to transfer, it shall be the duty of the corporation to issue a
new certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.

(b) Commencing with December 1, 1981,
(hereinafter called the "effective time of the restriction"), and continuing
thereafter until such time as the limitation on transfer provided for the
Pairing Agreement between Filtertek P.R. and Filtertek shall be terminated in
the manner therein provided:

(i) The shares of Class A Common
Stock of Filtertek, P.R. shall not be transferable, and shall
not be transferred on the books of the corporation, unless a
simultaneous transfer is made by the same transferor to the
same transferee of a like number of common shares of
Filtertek, Inc.

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<PAGE> 16
(ii) Any registered holder of a
certificate of Filtertek, Inc. which is endorsed by a legend
evidencing beneficial ownership of shares of Class A Common
Stock of Filtertek P.R. issued prior to the effective time of
the restriction may, upon request and presentation of said
certificate to one of Filtertek P.R.'s transfer agents, obtain
in substitution therefor a certificate or certificates
registered in such holder's name evidencing the same number of
shares of Class A Common Stock of Filtertek P.R. and a like
number of common shares of Filtertek, Inc.

(iii) A legend shall be placed on
the face and reverse side of each certificate evidencing
ownership of shares of common stock of the corporation issued
after the effective time of the restriction, referring to the
restrictions on transfer set forth in this By-Law.

ARTICLE VII

FISCAL YEAR

The fiscal year of the corporation shall begin on the first day of
January in each year and end on the last day of December in each year.
ARTICLE VIII

DIVIDENDS

The Board of Directors may from time to time, declare, and the
corporation may pay, dividends on its outstanding shares in the manner and upon
the terms and conditions provided by law and its Certificate of Incorporation.

19
<PAGE> 17
ARTICLE IX

SEAL

The Board of Directors shall provide a corporate seal which shall be
in the form of a circle and shall have inscribed thereon the name of the
corporation, the year of its organization, and the words, "Corporate Seal,
Delaware."

ARTICLE X

WAIVER OF NOTICE

Whenever any notice whatever is required to be given under the
provisions of these By-Laws or under the provisions of the Certificate of
Incorporation or under the provisions of any statute, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice.
ARTICLE XI

AMENDMENTS

These By-Laws may be altered, amended or repealed and new By-Laws may
be adopted at any regular meeting of the Board of Directors of the corporation,
or at any special meeting of the Board of Directors if notice of and
alteration, amendment, repeal or adoption of new by-laws be contained in the
notice of such special meeting, by a majority vote of the directors present at
the meeting.

20
<PAGE> 18
CERTIFICATE OF AMENDMENT
OF
BY-LAWS
OF
FILTERTEK DE PUERTO RICO, INC.

IT IS HEREBY CERTIFIED THAT:

1. The name of the Corporation (hereinafter called "Corporation") is
FILTERTEK DE PUERTO RICO, INC.

2. The By-Laws of the Corporation are hereby amended by striking out
ARTICLE III, Section 2 hereof, and by substituting in lieu of said
Section 2 of the following new Section 2.

"Section 2. Number, Tenure and Qualifications. The number of
directors of the Corporation shall be seven. Each director shall hold
office until the next annual meeting of stockholders or until his
successor shall have been elected and qualified. Directors need not
be residents of Delaware or stockholders of the Corporation."

3. The amendment of the By-Laws herein certified has been duly adopted in
accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.

Signed and attested to on March 12, 1984.

FILTERTEK DE PUERTO RICO, INC.

/s/
-----------------------------------
Executive Vice President

ATTEST:

/s/
- -----------------------------------
Secretary
<PAGE> 19
CERTIFICATE OF AMENDMENT

BY-LAWS

FILTERTEK DE PUERTO RICO, INC.

IT IS HEREBY CERTIFIED THAT:

1. The name of the Corporation (hereinafter called "Corporation") is
FILTERTEK DE PUERTO RICO, INC.

2. The By-Laws of the Corporation are hereby amended by striking out
ARTICLE III, Section 2 hereof, and by substituting in lieu of said
Section 2 the following new Section 2.

"Section 2. Number, Tenure and Qualifications. The number of
directors of the Corporation shall be nine. Each director shall hold
office until the next annual meeting of stockholders or until his
successor shall have been elected and qualified. Directors need not
be residents of Delaware or stockholders of the Corporation."

3. The Amendment of the By-Laws herein certified has been duly adopted in
accordance with the provisions of Section 242 of the General
Corporation Law of the State of Delaware.

Signed and Attested to as of November 12, 1992.

FILTERTEK DE PUERTO RICO, INC.

/s/ John T. McEnroe
-----------------------------------
John T. McEnroe
Assistant Secretary
<PAGE> 20
CERTIFICATE OF AMENDMENT

BY-LAWS

SCHAWK, INC.

IT IS HEREBY CERTIFIED THAT:

1. The By-laws of the Corporation are hereby amended by striking
out ARTICLE III, SECTION 2, hereof and by substituting in lieu of said SECTION
2 the following new SECTION 2.

"SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors shall be ten (10). Each director shall hold office until
the next annual meeting of stockholders or until his successor shall
have been elected and qualified. Directors need not be residents of
Delaware of stockholders of the Corporation."

Signed and attested to as of January 16, 1995.

SCHAWK, INC.

By: /s/ John T. McEnroe
-----------------------------------
John T. McEnroe
Assistant Secretary
<PAGE> 21
CERTIFICATE OF AMENDMENT

BY-LAWS

SCHAWK, INC.

IT IS HEREBY CERTIFIED THAT:

1. The By-laws of the Corporation are hereby amended by striking
out ARTICLE III, SECTION 2, hereof and by substituting in lieu of said SECTION
2 the following new SECTION 2.

"SECTION 2. NUMBER, TENURE AND QUALIFICATIONS. The number of
directors shall be eight (8). Each director shall hold office until
the next annual meeting of stockholders or until his successor shall
have been elected and qualified. Directors need not be residents of
Delaware or stockholders of the Corporation."

Signed and attested to as of October 28, 1997.

SCHAWK, INC.

By: /s/ John T. McEnroe
-----------------------------------
John T. McEnroe
Assistant Secretary

<PAGE> 1
Vedder, Price, Kaufman & Kammholz EXHIBIT 5.1
222 North LaSalle Street
Suite 2600
Chicago, Illinois 60601-1003

October 29, 1997

Schawk, Inc.
1695 River Road
Des Plaines, Illinois 60018

Ladies and Gentlemen:

We have acted as counsel to Schawk, Inc. (the "Company") in connection
with the registration of 3,450,000 shares of Class A Common Stock, $.008 par
value per share, of the Company (the "Shares"), consisting of (i) 1,650,000
shares being offered by the Company, including 150,000 shares subject to an
underwriters' over-allotment option (the "Company Shares"), and 1,800,000
shares being offered by certain selling stockholders, including 300,000 Shares
subject to an underwriters' over-allotment option (the "Selling Stockholders
Shares"), pursuant to a registration statement on Form S-2 under the Securities
Act of 1993, as amended (the "Registration Statement").

In rendering this opinion, we have assumed the authenticity, accuracy
and completeness of all documents submitted to us as originals, the conformity
to authentic original documents of all documents submitted to us as certified,
conformed or photostatic copies and the genuineness of all signatures. As to
questions of fact material to our opinion, we have relied, without
investigation, upon the representations of: (a) officers of the Company
contained in certificates delivered to us; and (b) public officials.

Based upon the foregoing, we are of the opinion that: (i) the
Company's Shares are duly authorized, and upon issuance and delivery in
accordance with the Underwriting Agreement referred to in the Registration
Statement, will be validly issued, fully paid and non-assessable; and (ii) the
Selling Stockholders Shares have been validly issued and are fully paid and
non-assessable.

We hereby consent to the use of this opinion in connection with the
Registration Statement and the Prospectus included therein and to the use of
our name under the heading "Legal Matters" and the Prospectus.

Very truly yours,

VEDDER, PRICE, KAUFMAN & KAMMHOLZ

<PAGE> 1
EXHIBIT 21

SUBSIDIARIES OF THE REGISTRANT

SCHAWK, INC.

Schawk California, Inc.

Schawk USA, Inc.

Schawk de Mexico, S.A. de C.V.

Schawk GmbH

Schawk Canada, Inc.

StanMont, Inc.

<PAGE> 1
Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm under the captions "Selected
Consolidated Financial Data" and "Experts" and to the use of our report dated
February 14, 1997 in the Registration Statement (Form S-2) and related
Prospectus of Schawk, Inc. for the registration of 3,000,000 shares of its
common stock.

We also consent to the incorporation by reference therein of our report dated
February 14, 1997 with respect to the consolidated financial statements and
financial statement schedule of Schawk, Inc. for the years ended December 31,
1996, 1995 and 1994 included in its Annual Report (Form 10-K) for the year
ended December 31, 1996, filed with the Securities and Exchange Commission.

/s/ Ernst & Young LLP

Chicago, Illinois
October 30, 1997

<PAGE> 1

EXHIBIT 23.2

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation
of our reports dated February 17, 1995 included (or incorporated by reference)
in this registration statement from Schawk, Inc.'s (formerly Filtertek, Inc.)
Form 10-K for the year ended December 31, 1996 and to all references to our firm
included in this registration statement.

Chicago, Illinois
October 29, 1997