EMPLOYMENT   AGREEMENT   dated  as  of  February  19,  1996  (the
"Agreement"),  between AMERICAN COLOR ("AC"),  a division of SULLIVAN  GRAPHICS,
INC.,  a  New  York  corporation  (the  "Company")  and  TERRENCE  M.  RAY  (the
"Executive").

               WHEREAS,  AC desires to employ  Executive as its  Executive  Vice
President/ Director of Operations;

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

        1.     EMPLOYMENT AND DUTIES

               1.1. General.  The Company hereby employs the Executive,  and the
Executive agrees to serve, as Executive Vice President/Director of Operations of
AC, upon the terms and conditions  contained herein.  The Executive shall report
directly  to the  President  of AC and shall be  responsible  for all  pre-press
operational  aspects of AC. The  Executive  shall  perform such other duties and
services for the Company,  commensurate with the Executive's position, as may be
designated  from time to time by the  President of AC. The  Executive  agrees to
serve the Company  faithfully and to the best of his ability under the direction
of the President of AC.

               1.2. Exclusive  Services.  Except as may otherwise be approved in
advance  by  the  President  of AC,  and  except  during  vacation  periods  and
reasonable  periods  of  absence  due to  sickness,  personal  injury  or  other
disability,  the  Executive  shall devote his full working time  throughout  the
Employment  Term (as  defined in Section  1.3) to the  services  required of him
hereunder.  The Executive  shall render his services  exclusively to the Company
during the Employment Term, and shall use his best efforts,  judgment and energy
to improve and advance the  business  and  interests  of the Company in a manner
consistent with the duties of his position.

               1.3. Term of Employment.  The Executive's  employment  under this
Agreement shall commence as of the date of this Agreement and shall terminate on
the earlier of (i) the third anniversary of the date of this Agreement,  or (ii)
termination of the Executive's employment pursuant to this Agreement;  provided,
however,  that the term of the  Executive's  employment  shall be  automatically
extended without further action of either party for additional one year periods,
unless written  notice of either party's  intention not to extend has been given
to the  other  party at  least  one year  prior  to the  expiration  of the then
effective  term.  The period  commencing  as of the date of this  Agreement  and
ending on the third anniversary  thereof or such later date to which the term of
the  Executive's  employment  under this  Agreement  shall have been extended is
hereinafter referred to as the "Employment Term".

               1.4.  Reimbursement of Expenses. AC shall reimburse the Executive
for  reasonable  travel  and  other  business  expenses  incurred  by him in the
fulfillment  of his duties  hereunder upon  presentation  by the Executive of an
itemized  account  of such  expenditures,  in  accordance  with  AC's  practices
consistently applied.



<PAGE>


                                      - 2 -



        2.     SALARY

               2.1. Base Salary. From the date of this Agreement,  the Executive
shall be entitled to receive a base salary ("Base Salary") at a rate of $218,000
per annum,  payable in arrears in equal  installments  not less  frequently than
biweekly in accordance with AC's payroll  practices,  with such increases as may
be provided in accordance  with the terms hereof.  Once  increased,  such higher
amount shall constitute the Executive's annual Base Salary.

               2.2. Annual Review. The Executive's Base Salary shall be reviewed
by the President of AC, based upon the Executive's  performance,  not less often
than  annually,  and may be  increased  but not  decreased.  In  addition to any
increases  effected as a result of such review,  the President of AC at any time
may in its sole discretion increase the Executive's Base Salary.

               2.3. Initial Bonus. Upon the six-month anniversary of Executive's
employment  hereunder,  Executive  shall  receive  an  initial  bonus of between
$20,000- 25,000.

               2.4.  Annual Bonus.  After the date of this  Agreement,  AC shall
annually adopt a bonus plan and  performance  criteria upon which the bonuses of
executives of AC shall be based. During his employment under this Agreement, the
Executive  shall be  entitled to receive a bonus under such plan of up to 40% of
his Base Salary if the budget performance criteria are satisfied.


        3.     EMPLOYEE BENEFITS

               3.1.  The  Executive  shall,  during  his  employment  under this
Agreement, be included to the extent eligible thereunder in all employee benefit
plans,  programs or  arrangements  (including,  without  limitation,  any plans,
programs  or   arrangements   providing  for  retirement   benefits,   incentive
compensation,  profit sharing,  bonuses,  disability  benefits,  health and life
insurance,  or vacation and paid holidays) which shall be established by AC for,
or made available to, its senior executives.

               3.2. At such time as options  are  available  under the  Sullivan
Communications,  Inc.  ("SCI") Stock Option Plan,  but in no event later than at
the time of an initial  public  offering of the common  stock of SCI,  Executive
shall be granted  options to purchase  500 shares of the common  stock of SCI at
the price determined pursuant to such Plan.

               3.3.  The  Executive  shall be  entitled  to  participate  in the
Company's Supplemental Executive Retirement Plan (the "SERP") at a benefit level
of $25,000 per annum upon retirement in accordance with the terms of the SERP.





<PAGE>


                                      - 3 -

        4.     TERMINATION OF EMPLOYMENT

               4.1.  Termination Without Cause; Resignation for Good Reason.

               4.1.1.  General.  Subject to the provisions of Sections 4.1.2 and
4.1.3,  if, prior to the  expiration of the  Employment  Term,  the  Executive's
employment  is  terminated  by the Company  without Cause (as defined in Section
4.3), or if the Executive  terminates his  employment  hereunder for Good Reason
(as defined in Section 4.4), the Company shall (x) continue to pay the Executive
the Base Salary (at the rate in effect on the date of such  termination) for the
greater of (i) the  remainder  of the  Employment  Term and (ii) a period of one
year  beginning as of the date of  termination  (such  period being  referred to
hereinafter as the "Severance Period"), at such intervals as the same would have
been paid had the  Executive  remained in the active  service of AC, and (y) pay
the Executive a pro rata portion of the bonus or incentive  payment to which the
Executive  would have been  entitled  for the year of  termination  pursuant  to
Section 2.3 and Section 2.4 had the Executive  remained  employed for the entire
year,  which bonus shall be payable at the time  payments  under the  applicable
bonus  plan or  incentive  program  are paid to AC's  executives  generally.  In
addition,  the Executive shall be entitled to continue to participate during the
Severance Period in all employee benefit plans (other than  equity-based  plans,
except  to the  extent  otherwise  provided  therein,  or bonus  plans)  that AC
provides (and continues to provide)  generally to its  employees,  provided that
the  Executive  is entitled to continue to  participate  in such plans under the
terms  thereof.  The Executive  shall have no further right to receive any other
compensation  or benefits  after such  termination  or resignation of employment
except as determined in accordance with the terms of the employee  benefit plans
or programs of AC.

               4.1.2.  Conditions Applicable to the Severance Period. If, during
the Severance Period,  the Executive  materially  breaches his obligations under
Section  7 of this  Agreement,  the  Company  may,  upon  written  notice to the
Executive, terminate the Severance Period and cease to make any further payments
or provide any benefits described in Section 4.1.1.

               4.1.3. Date of Termination. The date of termination of employment
with Cause shall be the date specified in a written notice of termination to the
Executive.  The date of resignation  for Good Reason shall be the date specified
in the  written  notice  of  resignation  from  the  Executive  to the  Company;
provided,  however,  that no such written  notice shall be effective  unless the
cure period  specified  in Section 4.4 has  expired  without the Company  having
corrected, to the reasonable satisfaction of the Executive,  the event or events
subject to cure. If no date of  resignation  is specified in the written  notice
from the Executive to the Company,  the date of  termination  shall be the first
day following such expiration of such cure period.

               4.2.   Termination for Cause; Resignation Without Good Reason.

               4.2.1.  General.  If, prior to the  expiration of the  Employment
Term, the Executive's employment is terminated by AC for Cause, or the Executive
resigns from his employment  hereunder other than for Good Reason, the Executive
shall be entitled  only to payment of his Base Salary as then in effect  through
and including the date of termination or  resignation.  The Executive shall have
no further  right to  receive  any other  compensation  or  benefits  after such
termination or  resignation  of  employment,  except as determined in accordance
with the terms of the employee benefit plans or programs of AC.




<PAGE>


                                      - 4 -



               4.2.2.  Date of  Termination.  Subject to the  proviso to Section
4.3, the date of termination  for Cause shall be the date specified in a written
notice of  termination to the  Executive.  The date of resignation  without Good
Reason shall be the date specified in the written notice of resignation from the
Executive to the Company,  or if no date is specified therein,  10 business days
after  receipt  by the  Company  of  written  notice  of  resignation  from  the
Executive.

               4.3. Cause. Termination for "Cause" shall mean termination of the
Executive's employment because of:

               (i) any act or omission  that  constitutes  a material  breach by
        Executive of any of his obligations under this Agreement;

               (ii)  the  continued  failure  or  refusal  of the  Executive  to
        substantially  perform  the  duties  reasonably  required  of  him as an
        employee of the Company;

               (iii) any willful and material  violation by the Executive of any
        Federal or state law or  regulation  applicable  to the  business of the
        Company or any of its  affiliates,  or the  Executive's  conviction of a
        felony,  or any willful  perpetration  by the  Executive of a common law
        fraud; or

               (iv) any  other  willful  misconduct  by the  Executive  which is
        materially  injurious to the financial  condition or business reputation
        of, or is otherwise  materially  injurious to, the Company or any of its
        affiliates (it being  understood that the good faith  performance by the
        Executive  of the duties  required of him  pursuant to Section 1.1 shall
        not constitute "misconduct" for purposes of this clause (iv));

provided, however, that if any such Cause relates to the Executive's obligations
under this Agreement, the Company shall not terminate the Executive's employment
hereunder  unless the Company first gives the Executive  notice of its intention
to terminate and of the grounds for such termination, and the Executive has not,
within 20 business days following receipt of the notice, cured such Cause, or in
the event such Cause is not  susceptible  to cure within  such 20  business  day
period, the Executive has not taken all reasonable steps within such 20 business
day period to cure such Cause as promptly as practicable thereafter.

               4.4. Good Reason.  For purposes of this Agreement,  "Good Reason"
shall mean any of the following (without the Executive's prior written consent):

               (i) a decrease in the Executive's  base rate of compensation or a
        failure by the Company to pay material  compensation  due and payable to
        the Executive in connection with his employment;

               (ii) a material  diminution of the  responsibilities  or title of
        the Executive with the Company;




<PAGE>


                                      - 5 -



               (iii) a material  breach by the Company of any term or  provision
        of this  Agreement;  provided,  however,  that  no  event  or  condition
        described  in  clauses  (i)  through  (iii) of this  Section  4.4  shall
        constitute  Good  Reason  unless  (X) the  Executive  gives the  Company
        written  notice of his  objection to such event or  condition,  (Y) such
        event or  condition is not  corrected by the Company  within 20 business
        days of its  receipt of such  notice (or in the event that such event or
        condition is not  susceptible to correction  within such 20 business day
        period,  the Company has not taken all  reasonable  steps within such 20
        business  day period to correct  such event or  condition as promptly as
        practicable  thereafter)  and (Z) the Executive  resigns his  employment
        with the Company and its  subsidiaries  not more than 60 days  following
        the expiration of the 20 business day period  described in the foregoing
        clause (Y).


        5.     DEATH, DISABILITY OR RETIREMENT

               In the event of  termination  of  employment  by reason of death,
Permanent Disability (as hereinafter  defined) or retirement,  the Executive (or
his  estate,  as  applicable)  shall be  entitled  to Base  Salary and  benefits
determined under Sections 2 and 3 hereof through the date of termination.  Other
benefits shall be determined in accordance with the benefit plans  maintained by
the AC, and the Company shall have no further obligation hereunder. For purposes
of this Agreement,  "Permanent Disability" means a physical or mental disability
or  infirmity  of  the  Executive  that  prevents  the  normal   performance  of
substantially all his duties as an employee of the Company,  which disability or
infirmity shall exist for any continuous period of 180 days.


        6.     MITIGATION OF DAMAGES

               The  Executive  shall be required  to mitigate  the amount of any
payment  provided for in Section 4.1 by seeking other  employment,  and any such
payment will be reduced in the event such other employment is obtained.


        7.     NON-SOLICITATION; CONFIDENTIALITY; NON-COMPETITION

               7.1 Non-solicitation. For so long as the Executive is employed by
the Company and continuing for two years  thereafter,  the Executive  shall not,
without the prior written consent of the Company,  directly or indirectly,  as a
sole proprietor,  member of a partnership,  stockholder or investor,  officer or
director of a corporation, or as an employee, associate,  consultant or agent of
any person,  partnership,  corporation or other business  organization or entity
other than the Company: (x) solicit or endeavor to entice away from the Company,
SCI or any of their  respective  subsidiaries  any  person or entity who is, or,
during the then most recent 12-month  period,  was employed by, or had served as
an agent or key  consultant  of,  the  Company,  SCI or any of their  respective
subsidiaries; or (y) solicit or endeavor to entice away from the Company, SCI or
any of their respective  subsidiaries any person or entity who is, or was within
the then most  recent  12-month  period,  a customer  or client  (or  reasonably
anticipated (to the general  knowledge of the Executive or the public) to become
a  customer  or  client)  of  the  Company,  SCI  or  any  of  their  respective
subsidiaries.




<PAGE>


                                      - 6 -



               7.2 Confidentiality.  The Executive covenants and agrees with the
Company that he will not at any time,  except in performance of his  obligations
to the  Company  hereunder  or with the prior  written  consent of the  Company,
directly or indirectly,  disclose any secret or confidential information that he
may learn or has learned by reason of his association  with the Company,  SCI or
any of their  respective  subsidiaries  and affiliates.  The term  "confidential
information"  includes  information not previously disclosed to the public or to
the trade by the Company's  management,  or otherwise in the public domain, with
respect  to the  Company's,  SCI's or any of  their  respective  affiliates'  or
subsidiaries', products, facilities, applications and methods, trade secrets and
other intellectual property, systems, procedures, manuals, confidential reports,
product  price  lists,   customer  lists,   technical   information,   financial
information (including the revenues, costs or profits associated with any of the
Company's  products),  business  plans,  prospects or  opportunities,  but shall
exclude any  information  which (i) is or becomes  available to the public or is
generally  known in the  industry or  industries  in which the Company  operates
other  than as a result of  disclosure  by the  Executive  in  violation  of his
agreements  under this Section 7.2 or (ii) the Executive is required to disclose
under any applicable laws,  regulations or directives of any government  agency,
tribunal or authority  having  jurisdiction  in the matter or under  subpoena or
other process of law.

               7.3 No  Competing  Employment.  For so long as the  Executive  is
employed by the  Company and  continuing  for two years  thereafter  (or, if the
Executive is entitled to a continuation  of his Base Salary under Section 4.1.1,
the period during which such Base Salary is continued), the Executive shall not,
directly  or  indirectly,  as  a  sole  proprietor,  member  of  a  partnership,
stockholder or investor  (other than a stockholder  or investor  owning not more
than a 5% interest),  officer or director of a  corporation,  or as an employee,
associate, consultant or agent of any person, partnership,  corporation or other
business  organization  or entity other than the  Company,  SCI, or any of their
respective subsidiaries,  render any service to or in any way be affiliated with
a competitor  (or any person or entity that is  reasonably  anticipated  (to the
general knowledge of the Executive or the public) to become a competitor) of AC,
the Company, SCI or any of their respective subsidiaries.

               7.4.  Exclusive   Property.   The  Executive  confirms  that  all
confidential  information  is and shall  remain the  exclusive  property  of the
Company.  All  business  records,  papers  and  documents  kept  or  made by the
Executive  relating  to the  business  of the  Company  shall be and  remain the
property of the  Company,  except for such papers  customarily  deemed to be the
personal copies of the Executive.

               7.5.  Injunctive Relief.  Without intending to limit the remedies
available to the Company, the Executive acknowledges that a breach of any of the
covenants  contained in this  Section 7 may result in material  and  irreparable
injury to the Company,  SCI or their  respective  affiliates or subsidiaries for
which  there is no  adequate  remedy  at law,  that it will not be  possible  to
measure  damages for such  injuries  precisely  and that, in the event of such a
breach or threat  thereof,  the  Company  shall be  entitled to seek a temporary
restraining order and/or a preliminary or permanent  injunction  restraining the
Executive from engaging in activities prohibited by this Section 7 or such other
relief as may be required  specifically  to enforce any of the covenants in this
Section  7. If for any  reason,  it is held  that the  restrictions  under  this
Section 7 are not reasonable or that consideration therefor is inadequate,  such
restrictions shall be interpreted or modified to include as much of the duration
and scope  identified in this Section 7 as will render such  restrictions  valid
and enforceable.


<PAGE>


                                      - 7 -



        8.     ENFORCEMENT OF AGREEMENT

               In the event that legal action is  undertaken  by either party to
enforce any  provision  of this  Agreement,  the  Company  shall  reimburse  the
Executive  for any  related  reasonable  legal fees and  out-of-pocket  expenses
directly  attributable  to such  action,  provided  that  such  legal  fees  are
calculated  on an hourly,  and not on a  contingency  fee,  basis and  provided,
further, that the Executive shall bear all such fees and out-of-pocket  expenses
(and  reimburse  the Company for its portion of such  expenses)  if the relevant
trier- of-fact  determines that the Executive's  claim or position was frivolous
and without reasonable foundation.


        9.     REPRESENTATION

               The Executive hereby  represents that (i) he is not in possession
of any documents or materials containing information  constituting  Confidential
Information  (as such term is defined  in the  employment  agreement  (the "Wace
Agreement")  dated October 4, 1988 between  Executive and Techtron Graphic Arts,
Inc.  ("Wace"),  (ii) he has not and will not violate the provisions of the Wace
Agreement,  including  without  limitation,  Section 13 thereof and (iii) he has
read and will comply with the provisions of Exhibit C attached hereto.


        10.    INDEMNIFICATION

               The Company  shall  indemnify the Executive and hold him harmless
against any and all damages,  expenses and attorney's fees relating to any Claim
(as hereinafter defined). As used herein, "Claim" means any threatened,  pending
or completed action, suit, proceeding, alternative dispute resolution mechanism,
inquiry,  hearing or  investigation  by Wace against the  Executive  based on an
alleged  breach by the Executive of the Wace  Agreement,  if such alleged breach
occurred after the date hereof.  Notwithstanding the foregoing,  no amount shall
be payable to the Executive pursuant to the immediately  preceding  paragraph to
the extent that (i) the  Executive  is in breach of this  Agreement  or (ii) the
Executive enters into a settlement agreement with Wace in which he agrees to pay
Wace an amount to settle  such Claim.  If either (i) or (ii) of the  immediately
preceding  sentence is true,  the  Executive  shall  immediately  reimburse  the
Company for any payment it made to him pursuant to the preceding paragraph,  and
the Company  shall have the right to set off the amount of any such payment from
any amounts it owes the Executive.


        11.    MISCELLANEOUS

               11.1. Notices.  All notices or communications  hereunder shall be
in writing, addressed as follows:

               To the Company:

                           American Color
                           2340 East Polk
                           Phoenix, AZ 85006
                           Telecopier No. (602) 244-1467
                           Attention:  James A. Caccavo, President




<PAGE>


                                      - 8 -



               with a copy to:

                           Sullivan Graphics, Inc.
                           225 High Ridge Road
                           Stamford, CT 06905
                           Telecopier No.:  (203) 978-5408
                           Attention:    Timothy M. Davis
                                         Senior Vice President,
                                         General Counsel and Secretary


               To the Executive:

                           Terrence M. Ray
                           2 South 405 Seneca Drive
                           Wheaton, IL 60187


               with a copy to:

                           Thomas P. Riordan, Esq.
                           Riordan, Larson, Bruckert & Moore
                           208 S. LaSalle Street
                           Suite 650
                           Chicago, IL  60604
                           Telecopier Fax:  (312) 346-1168

All such  notices  shall be  conclusively  deemed  to be  received  and shall be
effective,  (i) if sent by hand delivery, upon receipt, (ii) if sent by telecopy
or facsimile  transmission,  upon  confirmation of receipt by the sender of such
transmission  or (iii) if sent by registered or certified mail, on the fifth day
after the day on which such notice is mailed.

               11.2.  Severability.  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  prohibited by or invalid
under  applicable law, such provision will be ineffective  only to the extent of
such  prohibition  or  invalidity,  without  invalidating  the remainder of such
provision or the remaining provisions of this Agreement.

               11.3. Assignment. The Company's rights and obligations under this
Agreement  shall  not be  assignable  by the  Company  except as  incident  to a
reorganization, merger or consolidation, or transfer of all or substantially all
of the  Company's  business  and  properties  (or  portion  thereof in which the
Executive is employed). Neither this Agreement nor any rights hereunder shall be
assignable or otherwise subject to hypothecation by the Executive.

               11.4.  Entire  Agreement.  This  Agreement  represents the entire
agreement of the parties and shall  supersede  any and all  previous  contracts,
arrangements  or  understandings  between the Company  and the  Executive.  This
Agreement may be amended at any time by mutual written  agreement of the parties
hereto.







<PAGE>


                                      - 9 -



               11.5.  Withholding.  The  payment of any amount  pursuant to this
Agreement shall be subject to applicable withholding and payroll taxes, and such
other deductions as may be required under the Company's  employee benefit plans,
if any.

               11.6.   Governing  Law.  This   Agreement   shall  be  construed,
interpreted,  and  governed  in  accordance  with the  laws of New York  without
reference to rules relating to conflict of law.

               IN WITNESS  WHEREOF,  the Company has caused this Agreement to be
duly  executed and the  Executive  has hereunto set his hand,  as of the day and
year first above written.

                                       AMERICAN COLOR,
                                       a Division of Sullivan Graphics, Inc.



                                       By:  /s/ James A. Caccavo
                                           ---------------------------------
                                                  James A. Caccavo
                                                     President



                                       EXECUTIVE:


                                            /s/ Terrence M. Ray
                                           ---------------------------------
                                                   Terrence M. Ray