<PAGE>

                                                                   Exhibit 10.21


                              EMPLOYMENT AGREEMENT
                              --------------------


          EMPLOYMENT AGREEMENT dated as of January 1, 1998 between LASER TECH
COLOR, INC., a Delaware corporation (the "Company"), and DAMIEN GOUGH (the
"Executive").

          WHEREAS, the Company and the Executive have entered into an employment
agreement dated November 27, 1995, the term of which is scheduled to expire on
the third anniversary of such date (the "Prior Agreement");

          WHEREAS, the Company desires to continue to employ the Executive to
serve as President of the Company, upon the terms and subject to the conditions
set forth herein (the terms of which shall supersede the Prior Agreement);

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


          1. EMPLOYMENT. The Company hereby agrees to employ the Executive and
the Executive hereby agrees to be employed by the Company upon the terms and
subject to the conditions contained in this Agreement. The term of employment of
the Executive by the Company pursuant to this Agreement shall commence on
January 1, 1998 and, unless earlier terminated pursuant to Section 4, shall end
on December 31, 2001 (the "Employment Period.")


          2. DUTIES AND RESPONSIBILITIES. The Company shall employ the Executive
during the Employment Period as its President. Subject to the powers, authority
and responsibilities vested in the Board, in duly constituted committees of the
Board and in the Chief Executive Officer of the Company, Executive shall have
responsibility in the areas of manufacturing, sales, marketing and
administration of the Company. During the Employment Period, the Executive shall
perform faithfully and loyally and to the best of his abilities the duties
assigned to him hereunder, shall devote his full business time, attention and
effort to the affairs of the Company, and shall use his reasonable best efforts
to promote the interests of the Company. During the Employment Period, the
Executive shall also perform such other duties (not inconsistent with the
position of a senior executive of the Company) on behalf of the Company, or on
behalf of Big Flower Holdings, Inc. (the "Parent") and its affiliated

<PAGE>

companies, as may from time to time be authorized or directed by the Board of
Directors of the Company (the "Board"). The Executive shall report to the Chief
Executive Officer of the Company.

          3. COMPENSATION. (a) BASE SALARY. During the Employment Period, the
Company shall pay to the Executive a base salary, payable in accordance with the
Company's executive payroll policy, at an initial rate of $250,000 for the
Company's 1998 fiscal year commencing on January 1, 1998, increasing by $25,000
per annum effective as of the first day of each subsequent fiscal year in the
Employment Period ("Base Salary"). In the event this Agreement is executed after
the first day of the Employment Period, the Company shall, as soon as
practicable thereafter, make additional payments of cash compensation to the
Executive to the extent necessary to provide him with an annual rate of
compensation of $250,000 for the Company's 1998 fiscal year.

          (b) ANNUAL PERFORMANCE BONUS. For each fiscal year in the Employment
Period, the Executive shall be eligible to receive an annual cash incentive
bonus as determined pursuant to the bonus program established by the Board for
executives of the Company for each fiscal year (the "Annual Bonus"). The amount
of the Annual Bonus payable to the Executive under such bonus program shall be
equal to $100,000 if the Company's achieves the target financial objectives
prescribed by such bonus program, based on the Company's budget for such fiscal
year as approved by the Board. The program may provide for an increased Annual
Bonus (up to an additional $100,000) in the event the Company exceeds the target
financial objectives prescribed by such program, or may provide for a reduced
Annual Bonus (or no Annual Bonus) in the event such targets are not achieved.
The bonus program shall prescribe the formula pursuant to which these amounts
are calculated, and the target financial objectives related thereto. The Annual
Bonus to which the Executive is entitled hereunder shall be paid as soon as
practicable after the Company's independent accountants certify or otherwise
issue an opinion concerning the Company's consolidated financial statements for
the fiscal year to which such Annual Bonus relates.

          (c) RETENTION BONUS. If the Executive is employed by the Company on
the last day of the Employment Period and has not received a notice of
termination from the Company pursuant to this Agreement as of such date, the
Executive shall be entitled to a cash bonus (the "Retention Bonus"). The amount
of the Retention Bonus shall be equal to 25% of the total Annual Bonuses, if
any, payable under Section 3(b) hereof for each of the four fiscal years of the
Company in the Employment Period. 

<PAGE>

The Retention Bonus to which the Executive is entitled hereunder shall be paid
as soon as practicable after the Company's independent accountants certify or
otherwise issue an opinion concerning the Company's consolidated financial
statements for the fiscal year ending December 31, 2001.

          (d) STOCK OPTIONS. In connection with this Agreement, the Executive
was granted an option, pursuant to the Big Flower Holdings, Inc. 1993 Stock
Award and Incentive Plan to purchase from the Parent 85,000 shares of the
Parent's common stock, par value $0.01, at a purchase price per share equal to
$26.75 per share (which is equal to the closing price of the Parent's common
stock on February 17, 1998, the date on which the Compensation Committee of the
Board approved the grant of such option). The stock option agreement evidencing
such option and prescribing the terms and conditions for the exercise thereof is
attached to this Agreement as EXHIBIT A.

          (e) OTHER BENEFITS. During the Employment Period, the Executive shall
be entitled to participate in the Company's employee benefit plans generally
available to senior executives of the Company, including group health, long-term
disability, pension and retirement plans (all such benefits being hereinafter
referred to as the "Employee Benefits"), on the same terms and conditions as
such benefits are available to such other senior executives. The Executive shall
be entitled to take time off for vacation or illness in accordance with the
Company's policy for senior executives and to receive all other fringe benefits
as are from time to time made generally available to senior executives of the
Company.

          (f) EXPENSE REIMBURSEMENT. During the Employment Period, the Company
shall reimburse the Executive for all proper expenses incurred by him in the
performance of his duties hereunder in accordance with the Company's policies
and procedures, including, but not limited to, reasonable entertainment
expenses, automobile expenses, and travel and lodging expenses.


          4. TERMINATION OF EMPLOYMENT DURING EMPLOYMENT PERIOD.

          (a) TERMINATION WITHOUT CAUSE. At any time during the Employment
Period, the Company may terminate the Executive's employment without Cause (as
defined below) by giving the Executive at least 30 days' prior written notice of
the effective date of termination. If the Company terminates the employment of
the Executive hereunder, the Executive shall be entitled to:

          (1) continued payments of Base Salary (as increased

<PAGE>

     from time to time in accordance with Section 3(a) hereof) through the last
     day of the Employment Period, or, if later, through the first anniversary
     of the date on which the Company provides written notice to the Executive
     of its intent to terminate his employment hereunder (paid on substantially
     the same schedule that payroll payments would have been made if the
     Executive had continued in active employment with the Company); and

          (2) any Annual Bonus earned but not yet paid for any fiscal year of
     the Company ended on or prior to the effective date of the Executive's
     termination of employment, plus additional Annual Bonuses in an amount
     equal to $100,000 for each subsequent fiscal year in the Employment Period
     (each of which shall be payable as soon as practicable after the end of
     each such fiscal year).

Notwithstanding clauses (1) and (2) above and subject to the provisions of
Section 7 hereof, the amounts payable to the Executive hereunder shall be
reduced by the amount of salary, bonus and other compensation that the Executive
receives from a subsequent employer for employment during the Employment Period.
The Executive shall use reasonable efforts to seek other employment for this
purpose.

          (b) TERMINATION FOR CAUSE. At any time during the Employment Period,
the Company may terminate the Executive's employment for Cause (as defined
below). Such termination shall be effective as of the date on which the Company
provides the Executive with written notice of such termination (or such later
date as the Company may specify in such written notice). If the Company
terminates the employment of the Executive hereunder, the Executive shall be
entitled to:

          (1) payment of Base Salary earned but not yet paid through the date of
     termination; and

          (2) any Annual Bonus earned but not yet paid for any fiscal year of
     the Company ended on or prior to the effective date of the Executive's
     termination of employment.

For purposes of this Agreement, "Cause" shall mean:

          (i)  fraud, misrepresentation, embezzlement, or other act of material
     misconduct (including, without limitation, a violation of Section 7 hereof)
     against the Company, the Parent, or any direct or indirect subsidiary
     thereof (collectively, the "Controlled Group");

          (ii)  substantial and willful failure, as determined by 

<PAGE>

     the Board, to render services in accordance with the terms of this
     Agreement provided that (A) a demand for performance of services had been
     delivered to the Executive by the Board at least 15 days prior to
     termination identifying the manner in which such Board believes that the
     Executive has failed to perform and (B) the Executive thereafter has failed
     to remedy such failure to perform during such 15-day period;

          (iii) substantial and willful violation of any rules or regulations of
     any governmental or regulatory body material to the business of any member
     of the Controlled Group; or

          (iv) conviction of or plea of guilty or NOLO CONTENDERE to a felony.

The exercise of the right of the Company to terminate the Executive's employment
pursuant to this Section 4(b) shall not abrogate, and shall be in addition to,
the rights or remedies of the Company in respect of the breach giving rise to
such termination.

          (c) TERMINATION ON ACCOUNT OF DEATH. Upon the death of the Executive,
this Agreement shall automatically terminate on the date of death, and the
Executive's beneficiary (as determined below) shall be entitled to:

          (1) payment of Base Salary earned but not yet paid through the date of
     termination, plus an additional payment equal to the Executive=s rate of
     Base Salary in effect on the date of the Executive's death for a period of
     six months following the date of the Executive=s death (or until the last
     day of the Employment Period, if earlier); and

          (2) any Annual Bonus earned but not yet paid for any fiscal year of
     the Company ended on or prior to the date of the Executive's death.

          (d) VOLUNTARY TERMINATION BY EXECUTIVE. The Executive shall have the
right to terminate his employment with the Company for any reason by giving at
least 30 days= written notice to the Company (which period of notice may be
waived by agreement of the Executive and the Company). In the event of the
Executive=s termination of employment hereunder, he shall be entitled to:

          (1) accrued Base Salary through and including the effective date of
     the Executive's termination of employment, plus continued payments (paid on
     substantially the same schedule that payroll payments would have been made
     if the Executive had continued active employment with the Company) at the
     rate of Base Salary in effect on the date of termination of employment for
     a period of 18 months 

<PAGE>

     following the date of termination; PROVIDED, HOWEVER, that the Company, in
     its sole discretion, may at any time during such 18-month period notify the
     Executive in writing that he is no longer subject to the non-competition
     restrictions prescribed by Section 7(b), at which time the Executive shall
     no longer be entitled to received continued payments pursuant to this
     paragraph; and

          (2) any Annual Bonus earned but not yet paid for any fiscal year of
     the Company ended on or prior to the effective date of the Executive's
     termination of employment.

          (e) TERMINATION OF EMPLOYMENT ON ACCOUNT OF DISABILITY. The Company
may, upon at least 20 days= prior written notice to the Executive, terminate
this Agreement in the event of the Executive=s Disability (as hereinafter
defined). For purposes of this Agreement, "Disability" means a physical or
mental condition that causes the Executive to be unable to perform, with or
without reasonable accommodation, the essential functions of President of the
Company during at least 90 days of any 12-month period, or which is expected to
cause the Executive to be unable to perform such functions, with or without
reasonable accommodation, during at least 90 days in a succeeding 12-month
period. In the event of termination of this Agreement hereunder, the Executive
shall be entitled to:

          (1) accrued Base Salary through and including the effective date of
     termination of this Agreement, plus an additional payment equal to the
     Executive=s rate of Base Salary in effect on the date of termination of
     this Agreement for a period of six months following the date of such
     termination (or until the last day of the Employment Period, if earlier);
     and

          (2) any Annual Bonus earned but not yet paid for any fiscal year of
     the Company ended on or prior to the effective date of termination of this
     Agreement.

In the event of any dispute regarding the existence of the Executive's
Disability hereunder, the matter shall be resolved by the good faith
determination of a majority of the Board upon consultation with a physician
qualified to practice medicine in the state of the Executive's residence to be
selected by the Board in its sole discretion. For this purpose, the Executive
shall submit to appropriate medical examinations.

          5. EMPLOYEE BENEFITS PAYABLE UPON TERMINATION OF EMPLOYMENT. The
benefits to which the Executive (or his beneficiary) is entitled upon
termination of employment shall be determined in accordance with the terms of
the Company's employee 

<PAGE>

benefit plans. Nothing in this Agreement shall provide for payment of welfare
benefits for claims incurred after the date of such termination of employment or
shall provide any vesting or accrual rights upon or after termination of
employment in addition to those prescribed by the terms of the Company's
employee benefit plans.


          6. FEDERAL AND STATE WITHHOLDING. The Company shall be entitled to
deduct from the amounts payable to the Executive pursuant to this Agreement the
amount of all required federal, state, local or other withholding taxes in
accordance with the Executive's Form W-4 on file with the Company, and all
applicable federal employment taxes.


          7. CONFIDENTIALITY; NON-COMPETITION.

          (a) CONFIDENTIALITY. During the Employment Period and thereafter, the
Executive shall not, except as may be required to perform his duties hereunder
or as required by applicable law, disclose to others or use, whether directly or
indirectly, any Confidential Information (as hereinafter defined) regarding any
member of the Controlled Group. For purposes of this Agreement, "Confidential
Information" shall mean information about any member of the Controlled Group,
and its respective business, operations, clients and customers, that is not
available to the general public and that was learned by the Executive in the
course of his employment by any member of the Controlled Group during the
Employment Period or prior thereto, including (without limitation) any data,
formulae, information, proprietary knowledge, trade secrets and client and
customer lists and all papers, resumes, records and the documents containing
such Confidential Information. The Executive acknowledges that such Confidential
Information is specialized, unique in nature and of great value to the Company,
and that such information gives the Company a competitive advantage. Upon the
termination of his employment with the Company or any of its affiliates for any
reason whatsoever, the Executive shall promptly deliver to the Company all
documents (and all copies thereof) containing any Confidential Information as
well as all other property of the Company.

          (b) NON-COMPETITION. In consideration of the premises contained
herein, the Executive agrees that for the period commencing with the first day
of the Employment Period and ending with the date that is 18 months after the
date on which the Executive terminates employment with the Company (or with
Parent or any subsidiary thereof) or, if later, the last date for which the
Executive receives continued payments of Base Salary after 

<PAGE>

termination of employment pursuant to Section 4 (the "Term"), he shall not,
without the prior written consent of the Board:

          (1) directly or indirectly (through an affiliate or associate of the
     Executive (each, an "Affiliate"), or otherwise) or by action in concert
     with others, own, manage, operate, join, control, finance or participate in
     the ownership, management, operation, control or financing of, or be
     connected as a principal, agent, representative, consultant, investor,
     owner, partner, manager, joint venturer or otherwise with, or permit his
     name to be used by or in connection with, any business, enterprise or other
     entity engaged anywhere in the United States, Canada, Mexico or the United
     Kingdom in competition with any business or operations of the Company or
     any member of the Controlled Group for which the Executive has any
     Confidential Information, including but not limited to (A) electronic
     pre-press services (including, but not limited to, image capture, image
     retouching, page composition proofing or any manufacturing process designed
     to prepare images for printing) or (B) the business of retail inserts,
     advertising circulars or newspaper printing; PROVIDED, HOWEVER, that
     nothing contained in this paragraph shall prohibit the Executive from
     having passive investments of less that 5% of the outstanding equity
     securities in any entity listed for trading on a national stock exchange or
     quoted on any automated quotation system; PROVIDED, FURTHER, HOWEVER, that
     the foregoing shall not prohibit the Executive from (I) engaging in
     competition with a business or operation of the Controlled Group which
     represents less than 5% of the Controlled Group's consolidated net revenue
     during the 12-month period ending on the Controlled Group's most recently
     completed fiscal quarter prior to the Executive engaging in such business
     (the "Period") (other than those businesses and operations enumerated in
     clauses (A) and (B) above), or (II) engaging in competition with a business
     or operation of the Company which represents less than 15% of the Company's
     net revenue during the Period (other than those businesses and operations
     enumerated in clauses (A) and (B) above), if, in each case, the Executive
     has not had active personal involvement in such business or operation of
     the Controlled Group or the Company, as the case may be, at any time during
     the Period or thereafter;

          (2) directly or indirectly (through an Affiliate or otherwise) hire or
     seek to otherwise employ in any capacity, as employee, consultant, agent or
     otherwise any individual who is an employee of any member of the Controlled
     Group on the date of this Agreement or the date on which the individual is
     solicited for employment by the Executive; or

<PAGE>

          (3) directly or indirectly (through an Affiliate or otherwise)
     acquire, manage, operate, join, control, finance, or participate in the
     acquisition, management, operation, control or financing of, or be
     connected as a principal, agent, representative, consultant, investor,
     owner, partner, manager, joint venturer or otherwise with, any Person with
     whom any member of the Controlled Group at any time during the Term
     contemplated a similar relationship, if the Executive was at any time
     during the Term aware of such contemplated relationship.

In addition, the Executive shall not, without the prior written consent of the
Board, directly or indirectly (through an Affiliate or otherwise), enter into
any contract, agreement or arrangement, whether oral or written, with the
Company.

          (c) INVENTIONS. The Executive hereby assigns to the Company his entire
right, title and interest in and to all discoveries and improvements, patentable
or otherwise, trade secrets and ideas, writings and copyrightable material,
which may be conceived by the Executive or developed or acquired by him during
the Employment Period, which may pertain directly or indirectly to the business
of the Company or any other member of the Controlled Group. The Executive agrees
to disclose fully all such developments to the Company upon its request, which
disclosure shall be made in writing promptly following any such request. The
Executive shall, upon the Company's request, execute, acknowledge and deliver to
the Company all instruments and do all other acts which are necessary or
desirable to enable the Company or any other member of the Controlled Group to
file and prosecute applications for, and to acquire, maintain and enforce, all
patents, trademarks and copyrights in all countries.

          (d) ENFORCEMENT. The Executive acknowledges that (i) the provisions of
this Section 7 are reasonable and necessary to protect the legitimate interests
of the Company, (ii) any violation of this Section 7 will result in irreparable
injury to the Company, and damages at law will not be reasonable or adequate
compensation to the Company for a violation of this Section 7, and (iii) the
Company shall be entitled to have the provisions of this Section 7 specifically
enforced by preliminary and permanent injunctive relief without the necessity of
proving actual damages and without posting bond or other security. In the event
that any of the provisions of this Section 7 should ever be deemed by a court or
an arbitrator to exceed the time, geographic, product or any other limitations
prescribed by applicable law, then such provisions shall be deemed reformed so
that such provisions shall be valid, binding and enforceable to the maximum
extent permitted by applicable law. In connection 

<PAGE>

with any action by one of the parties to enforce an arbitration award against
the other party or to obtain interim injunctive or other relief pending an
arbitration decision, the Executive and the Company each intend to and do hereby
(a) consent to personal jurisdiction of the courts of the State of Delaware, (b)
consent to service of process by certified mail to the address set forth in
Section 11, (c) waive any objection to venue in such jurisdiction, and (d) waive
any claim that any such court is an inconvenient forum. Nothing in this
subsection shall affect the right of either party to serve process in any other
manner permitted by law.

          8. EXECUTIVE REPRESENTATIONS. The Executive represents and warrants to
the Company that (a) the execution, delivery and performance of this Agreement
by the Executive do not and will not breach, violate or cause a default under
any contract, agreement, instrument, order, judgment or decree to which the
Executive is a party or by which he is bound, (b) except for the Prior
Agreement, the Executive is not a party to or bound by any employment agreement,
non-competition agreement or confidentiality agreement with any other person or
entity, and (c) upon the execution and delivery of this Agreement by the
Company, this Agreement shall be the valid and binding obligation of the
Executive, enforceable in accordance with its terms.

          9. ARBITRATION. Any dispute or controversy between the Company and the
Executive, whether arising out of or relating to this Agreement, the breach of
this Agreement, any statutory or common law claim arising out of the Executive's
employment relationship with the Company, or otherwise, shall be settled by
arbitration administered by the American Arbitration Association ("AAA") in
accordance with its Commercial Rules then in effect and judgment on the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof. Any arbitration shall be held before a single arbitrator who shall be
selected by the mutual agreement of the Company and the Executive, unless the
parties are unable to agree to an arbitrator, in which case, the arbitrator will
be selected under the procedures of the AAA. The arbitrator shall have the
authority to award any remedy or relief that a court of competent jurisdiction
could order or grant, including, without limitation, the issuance of an
injunction. However, either party may, without inconsistency with this
arbitration provision, apply to any court having jurisdiction over such dispute
or controversy and seek interim provisional, injunctive or other equitable
relief until the arbitration award is rendered or the controversy is otherwise
resolved. Except as necessary in court proceedings to enforce this arbitration
provision or an award rendered hereunder, or to obtain interim relief, neither a
party to such an arbitration proceeding nor an arbitrator may disclose the

<PAGE>

existence, content or results of any arbitration hereunder without the prior
written consent of the Company and the Executive. The Company and the Executive
acknowledge that this Agreement evidences a transaction involving interstate
commerce. Notwithstanding any choice of law provision included in this
Agreement, the United States Federal Arbitration Act shall govern the
interpretation and enforcement of this arbitration provision. The arbitration
proceeding shall be conducted in Chicago, Illinois or such other location to
which the parties may agree.

          The foregoing paragraph shall apply to any dispute or controversy
between the Executive and any member of the Controlled Group other than the
Company, or between the Executive and any officer of a member of the Controlled
Group (including an officer of the Company), only if such Controlled Group
member or officer, as the case may be, consents thereto. If this Section 9
applies to the resolution of any such dispute or controversy, any reference in
the foregoing paragraph to the "Company" or a "party" shall be deemed a
reference to such Controlled Group member or officer, as the context requires.

          10. SURVIVAL. Sections 5, 7, 8 and 9 of this Agreement shall survive
and continue in full force and effect in accordance with their respective terms,
notwithstanding any termination of the Employment Period.

          11. NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed given when (a)
delivered personally or by overnight courier to the following addresses of the
other party hereto (or such other address for such party as shall be specified
by notice given pursuant to this Section) or (b) sent by telecopy to the
following telecopy numbers of the other party hereto (or such other telecopy
number for such party as shall be specified by notice given pursuant to this
Section), with the confirmatory copy delivered by overnight courier or United
States Postal Service to the addresses of such party pursuant to this Section:

     If to the Company, to:

          Laser Tech Color, Inc.
          Attention: Corporate Secretary
          2010 Westridge Drive
          Irving, Texas  75038
          Telecopy No.: (972) 753-7829

     with a copy to:

          Big Flower Holdings, Inc.
          Attention:  Mark A. Angelson

<PAGE>

          3 East 54th Street
          New York, New York  10022
          Telecopy No.: (212) 521-1640


     If to the Executive, to:

          Damien Gough

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

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

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

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

          12. SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
the validity, legality or enforceability of any other provision of this
Agreement or the validity, legality or enforceability of such provision in any
other jurisdiction, but, subject to Section 7(d), this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.

          13. ENTIRE AGREEMENT. This Agreement, and the agreements referenced
herein, constitute the entire agreement and understanding between the parties
with respect to the subject matter hereof and supersede and preempt any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related in any manner to the subject matter hereof.


          14. SUCCESSORS AND ASSIGNS. This Agreement shall be enforceable by the
Executive and his heirs, executors, administrators and legal representatives,
and by the Company and its successors and assigns. Any successor of the Company
shall assume the liabilities of the Company hereunder. This agreement may not be
assigned to any person by the Executive.


          15. GOVERNING LAW. This Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the State of Delaware
without regard to principles of conflict of laws.

<PAGE>

          16. AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended or waived only by the written agreement of the Company and the
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.


          17. BENEFICIARIES/REFERENCES. The Executive shall be entitled, to the
fullest extent permitted by law, to select and to change a beneficiary or
beneficiaries to receive any compensation or benefit hereunder following the
Executive's death, by giving written notice to the Company. In the event of the
Executive's death or a judicial determination of his incompetence, references in
this Agreement to the Executive shall be deemed, where appropriate, to refer to
his beneficiary, estate or other legal representative.


          18. HEADINGS. The headings of the Sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.


          19. INTERPRETATION. Both parties and their counsel have participated
in the drafting and review of this Agreement, and this Agreement shall not be
construed for or against either party.


          20. EXECUTION. This Agreement may be executed in two counterparts,
each of which shall be deemed to be an original and both of which together shall
constitute one and the same instrument.


          IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
this 17th day of August, 1998.



                                        LASER TECH COLOR, INC.




                                        By: /s/ Mark Angelson
                                           -------------------------------------
                                        Title: Exec. V.P.
                                              ----------------------------------



                                        /s/ Damien Gough
                                        ----------------------------------------
                                        Damien Gough

<PAGE>

                                    EXHIBIT A


                      NON-QUALIFIED STOCK OPTION AGREEMENT

          NON-QUALIFIED STOCK OPTION AGREEMENT (the "Agreement"), dated as of
February 17, 1998, by and between Big Flower Holdings, Inc., a Delaware
corporation (the "Company"), and Damien Gough (the "Optionee"), an executive of
Laser Tech Color, Inc., a subsidiary of the Company ("Laser Tech").

          Pursuant to the Company's Restated 1993 Stock Award and Incentive Plan
(as amended to date, the "Plan"), the Compensation Committee of the Board of
Directors of the Company, as the Administrator of the Plan (the "Committee"),
has determined that the Optionee is to be granted an option (the "Option") to
purchase shares of the Company's common stock, par value $0.01 per share (the
"Common Stock"), on the terms and conditions set forth herein, and hereby grants
such Option. It is intended that the Option constitute a non-qualified stock
option. Any capitalized terms not defined herein shall have their respective
meanings set forth in the Plan.

          1. NUMBER OF SHARES AND OPTION PRICE. The Option entitles the Optionee
to purchase 85,000 shares of Common Stock (the "Option Shares") at a price (the
"Option Price") of $26.75 per share, which is equal to the closing price per
share of Common Stock on the date hereof as reported on the New York Stock
Exchange.

          2. MAXIMUM OPTION TERM. Unless previously terminated pursuant to this
Agreement, the term of the Option and of this Agreement shall expire on the
tenth anniversary of the date hereof (the "Option Term").

          3. CONDITIONS OF EXERCISE. (a) The Option shall vest and become
exercisable:

               (i)  with respect to 25% of the Option Shares on December 31,
          2000 if the Optionee is employed by any member of the Controlled Group
          (as defined in Section 6) on that date, and

               (ii) with respect to all remaining Option Shares on December 31,
          2001 if the Optionee is employed by any member of the Controlled Group
          (as defined in Section 6) on that date.

          (b) To the extent exercisable in accordance with subsection (a) above,
the Option may be exercised in whole or in part at any 

<PAGE>

time or from time to time prior to expiration of the Option Term.

          4. NONTRANSFERABILITY OF OPTION. Except as otherwise provided herein,
the Option and this Agreement are not transferable. More particularly, but not
by way of limiting the generality of the foregoing, except as otherwise provided
herein, the Option may not be assigned, transferred, pledged or hypothecated in
any way, shall not be assignable by operation of law, except in the event of
death, and shall not be subject to execution, attachment or similar process. Any
attempted assignment, transfer, pledge, hypothecation or other disposition of
the Option contrary to the provisions hereof, and the levy of any execution,
attachment or similar process upon the Option shall be null and void and without
effect.

          5. METHOD OF EXERCISE OF OPTION. The Option may be exercised by means
of written notice of exercise to the Company specifying the number of shares to
be purchased, accompanied by payment in full of the aggregate Option Price in
cash or by certified or cashier's check.

          6. EFFECT OF TERMINATION OF EMPLOYMENT. (a) In the event the
Optionee's employment with Laser Tech (or with the Company or any direct or
indirect subsidiary thereof (the "Controlled Group") is terminated for Cause (as
defined in the Optionee's employment agreement with Laser Tech dated as of
January 1, 1998), the Option shall expire immediately.

              (b) If the Optionee ceases to be employed with all members of the
Controlled Group for any reason other than for Cause (including, without
limitation, on account of death, disability or retirement of the Optionee), all
Options that are exercisable on the effective date of the Optionee's termination
of employment shall remain exercisable for a period of 90 days from the
effective date of such termination of employment, but in no event beyond the
expiration of the Option Term.

          7. NOTICES. Any notice required or permitted under this Agreement
shall be in writing and shall be deemed given when delivered personally or by
facsimile, or when deposited in a United States Post Office or an overnight
delivery service, in either case, postage prepaid, addressed, as appropriate, to
the Optionee at the address set forth below or such other address as the
Optionee may designate in writing to the Company, or to the Company: Attention:
Secretary (or his/her designee), at the Company's address or such other address
as the Company may designate in writing to the Optionee.

          8. FAILURE TO ENFORCE NOT A WAIVER. The failure of the Company to
enforce at any time any provision of this Agreement 

<PAGE>

shall in no way be construed to be a waiver of such provision or of any other
provision hereof.

          9. GOVERNING LAW. This Agreement shall be governed by and construed
according to the laws of the State of Delaware without regard to its principles
of conflict of laws.

          10. INCORPORATION OF PLAN. The Plan is hereby incorporated by
reference and made a part hereof, and the Option and this Agreement shall be
subject to all terms and conditions of the Plan.

          11. AMENDMENTS. This Agreement may be amended or modified at any time
only by an instrument in writing signed by the parties hereto.

          12. RIGHTS AS A STOCKHOLDER. Neither the Optionee nor any of
Optionee's successors in interest shall have any rights as a stockholder of the
Company with respect to any Option Shares until the date of issuance of a stock
certificate for such shares of Common Stock.

          13. AGREEMENT NOT A CONTRACT OF EMPLOYMENT. Neither the Plan, the
granting of the Option, this Agreement nor any other action taken pursuant to
the Plan shall constitute or be evidence of any agreement or understanding,
express or implied, that the Optionee has a right to continue as an employee of
any member of the Controlled Group for any period of time or at any specific
rate of compensation.

          14. AUTHORITY OF THE COMMITTEE. The Committee shall have full
authority to interpret and construe the terms of the Plan and this Agreement.
The determination of the Committee as to any such matter of interpretation or
construction shall be final, binding and conclusive.


          IN WITNESS WHEREOF, the parties have executed and delivered this
Non-Qualified Stock Option Agreement on the day and year first above written.


                                        BIG FLOWER HOLDINGS, INC.



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


                                        The undersigned hereby accepts and
                                        agrees to all the terms and
                                        provisions of the foregoing
                                        Agreement and to all the terms and
                                        provisions of the Plan herein
                                        incorporated by reference.




                                        ----------------------------------------
                                        Damien Gough