<PAGE>
 
                                   FORM 10-K
                      SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, DC  20549


[X]  Annual Report pursuant to Section 13 or 15(d) of the Securities
     Exchange Act of 1934 (fee required)

                   FOR FISCAL YEAR ENDED SEPTEMBER 30, 1996

                                      OR

[ ]  Transaction Report pursuant to section 13 or 15(d) of the Securities
     Exchange Act of 1934 (no fee required)

                       COMMISSION FILE NUMBER 0 - 14358

                               PARIS CORPORATION
            (Exact name of Registrant as specified in its Charter)

         PENNSYLVANIA                                          23-1645493

(State or other Jurisdiction of                            (I.R.S. Employer
incorporation of organization)                             Identification No.)


  5 RADNOR CORPORATE CENTER, 100 MATSONFORD ROAD, SUITE 105, RADNOR, PA 19087
              (Address of principal executive office) (zip code)

                          Telephone:  (610) 964-0758
             (Registrant's telephone number, including area code)

       Securities registered pursuant to Section 12(b) of the act:  None

          Securities registered pursuant to section 12(g) of the act:

                                     TITLE
                   Capital Stock, $.004/par value per share
                                        
        Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding twelve months (or for such shorter period that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days.

                           Yes [X]           No [ ]

        The aggregate market value of the voting stock held by nonaffiliates of
the registrant as of November 15, 1996 was $1,327,943.

        Number of shares of outstanding common stock as of November 15, 1996 -
3,632,531 shares.

        Definitive Proxy Statement for the January 24, 1997 annual meeting of
the stockholders has been filed within 120 days after the end of the fiscal year
covered by this annual report.
<PAGE>
 
ITEM 1 - BUSINESS

GENERAL
-------

        Paris Corporation ("Paris"), formerly Paris Business Forms, Inc.,
incorporated in 1964 under the laws of the Commonwealth of Pennsylvania, is a
holding company with four wholly owned subsidiaries, viz., two active operating
companies in New Jersey and Texas, one inactive Florida corporation, and a
Delaware corporation which owns the Companys trademarks.  Paris Business
Products, Inc., a New Jersey corporation and Paris Business Forms, Inc., a Texas
corporation, are the two operating companies, with plants in New Jersey and
Texas, respectively.  PBF Corporation is the Delaware corporation.  The Texas
and Florida corporations are both wholly owned subsidiaries of the New Jersey
corporation.  Paris also has a 44% interest in a corporation, Signature
Corporation, formed in 1992, to market office products through the supermarket
and drug chain channels.  Xerox Corporation and two individuals own the
remainder of the interest in Signature Corporation.

        In January, 1996, Paris changed its corporate name to Paris Corporation
from Paris Business Forms, Inc.

        The Company converts mill paper rolls to business forms at its two
manufacturing and distribution plants in New Jersey and Texas and distributes
office products, computer products and software through a number of market
channels including forms dealers, paper merchants, stationers, office product
and computer superstores, consumer electronics retailers, buying groups,
catalogs, supermarkets, and drugstore chains.  Products include stock and custom
continuous forms; mill cut, value added, and custom cut sheets; paper handling
products for small offices and home offices, computer based printers and
scanners, office products and on-demand laser software.  Geographically the
Company markets its products throughout the United States and Canada through
Company sales representatives, independent representatives, brokers, dealers,
and distributors.

        Traditionally, the principal focus of the business was the manufacture
of continuous forms designed to run on dot matrix and high speed impact
printers.  The Company serves the stock green bar continuous forms market , as
well as the custom forms market for commercial businesses providing business
forms to customer specifications.  In recent  years, with printer technology
changing to laser and inkjet imprinting and the evolution of software to provide
design capability to the user, the demand for continuous forms has begun to
decline and is expected to continue at a negative 5% to 10% annual declining
rate into the future.  Accordingly, the Company is changing its focus to the
development and sale of value added and custom cut sheet products used on laser
and inkjet printers.  Perfed, punched, lined cut sheets, high quality printing
cuts, collated sets, colored cuts and novelty cut products have been recently
introduced.  Additional diversification strategies in hardware and software
products have been successfully embarked on within the last two years.

        The newest retail line, Burlington(TM), specifically targeted to the
small office and home office user, has been an affirmation of the decision to
evolve as a technologically responsive leader in the business products industry.
Home offices in the United States total 47 million, with home based businesses
totaling over 13 million in 1995 and that number is anticipated to grow.  Our
retail line of products capitalizes on ink jet and laser printer capabilities
with offerings such as business cards, greeting cards and stationery for small
office and home office use.  Additionally, sales of our specialty ink jet
papers, formulated to provide maximum color contrast and optimal absorption, is
expected to grow exponentially with the rise in popularity of ink jet printers.
Projected sales for the ink jet printer market for 1997 is expected to be over
eight million units.

        Signature Corporation, the 44% owned joint venture with Xerox
Corporation to distribute office products to the food and drug store markets,
continues to generate strong growth in revenues.  Formed in late 1992,
Signatures sales have doubled in each of the past two years, with stores served
increasing from 

                                       2
<PAGE>
 
550 to 6800 currently. This penetration represents approximately 13% of the
total number of food and drug outlets in the United States. In 1997, sales are
expected to double again, reflecting continuing growth with existing customers
and new account acquisitions.

COMPETITION
-----------

        The business forms market is divided into two major segments.  One
segment sells directly to end users.  The other segment, which Paris serves,
distributes its forms through resellers and retailers.

        In the reseller market, the Company competes principally with four
companies in stock computer paper.  Although the Company does not compete
directly with the approximate dozen direct sellers, weak industry conditions
have forced the direct sellers to market to the smaller companies which
traditionally bought through the indirect market.  The Companys selling prices
have suffered accordingly, but lost market share has been minimal.  With respect
to custom forms, all of the direct and approximately four hundred regional
companies participate in that market.

        The demand for continuous computer forms is declining at an overall
annual rate of 5-10%, consistent with the replacement rate of impact printers
with laser and ink jet printers.  It appears that this transition is occurring
at a slower pace in commercial businesses, where impact line printer
installations have a longer life.  The home office/small office (SOHO) market,
generally served by the retail channel, is declining at a faster pace than
average.  The Company sells through both the commercial and SOHO user channels.
Accordingly, it is suffering margin erosion due to competitive attempts to gain
or sustain market share via pricing.  Ultimately, industry consolidation may
stabilize pricing and eventually improve margins, but the Company expects to be
challenged on price in its core business in the foreseeable future.

SUPPLIERS
---------

        The Company purchases registered bond paper, (consisting of a wide
variety of weights, widths, colors, sizes and qualities), cut sheet, and
carbonless paper principally from the major United States paper mills.  The
Company believes that it has good relationships with all of its suppliers.

        During the fiscal year ended September 30, 1995, the major paper mills
shifted some capacity, or in some cases eliminated capacity, creating a shortage
in raw paper supply for the Company and the paper industry at large.  As a
result, paper costs accelerated at a rapid pace, nearly doubling during the
period of July to December, 1994, and increased another 25%  from January, 1995
to September, 1995.  The tight supply conditions ceased after September, 1995,
with reduced demand from manufacturers and distributors throughout the supply
channel due to high inventory levels.  During the fiscal year ended September
30, 1996, supplier pricing declined as much as the previous year increase and
returned to price levels of two years prior.  The Company expects far less
volatility over the next twelve months and supply consistent with demand.

        The Company has partnered or formed strategic alliances with a number of
companies to provide raw material, market support, and/or name recognition for
its value added cut sheet product and non-paper products.  Xerox and the Company
have formed Signature Corporation to market office products under the Xerox
brand name through the supermarket and drugstore chains.  The Company has
entered into a distribution agreement with Seiko Instruments, Inc. to sell a
label printer product through selected markets in the United States.  Paris
contracted with Microtek, Inc., a billion dollar Taiwanese manufacturer, to
private label manufacture a scanner product with optical recognition software
capability, and with another Taiwan Company, Asco Products, Inc. to provide a
variety of products, viz., a private label paper folder for managing mail
distribution and after-market paper feed trays for Hewlett Packer laser
printers.  Currently, the Company represents the largest volume customer of
Boise Cascade for certain specialty retail cut sheet products.  The Company
believes the strong relationship between Paris and Boise will provide the
Company a solid footing for future cut sheet supply.  Finally, Paris is working
with a number of entrepreneurial 

                                       3
<PAGE>
 
startup companies with unique products that fit well within the existing product
offerings. Touch-It Corporation produces heat sensitive envelopes, folders, and
note pads that change color when touched. Compu-Notes, Inc. produces clip
boards, binders and address books made from recycled circuit boards. Paris is
working closely with both of these firms to introduce their products to certain
select markets.

SEGMENTS AND MAJOR CUSTOMERS
----------------------------

        The Company operates in three segments or lines of business, including
stock continuous forms and cut sheets, continuous forms and cut sheets and
office products.  Financial information for each of the Company's segments
including net sales, operating income, total assets, capital expenditures and
sales to major customers, are included in the accompanying financial statements.

        No customer accounts for more than 10% of the Company's custom
shipments.  However, one customer, Office Depot, Inc., a leading office
superstore, accounts for more than 24% of stock computer paper shipments.  The
loss of Office Depot would have a material adverse affect on net sales and gross
profits.  A pending merger of Office Depot and Staples is awaiting government
approval.  It is inevitable that suppliers will be eliminated by the merged
company.  However, at this time, Paris is unable to predict the impact of the
merger on the Company's future sales volume.  The Company has been a major
supplier to Office Depot, Inc. for the past eight years.  However, there are no
contractual relationships guaranteeing our continued presence as a vendor.

EMPLOYEES
---------

        As of September 30, 1996, the Company employed approximately 190 people
in manufacturing, sales and administrative functions in its corporate offices
and plants in New Jersey and Texas.

DISTRIBUTION AND MARKETING
--------------------------

        The Company markets the custom and stock forms products through
approximately 2,500 independent dealers in the United States and Canada, as well
as through retail superstores.  The independent distributors rely on several
manufacturers, like the Company, to supply these end users.  The distributors
range in size from a single individual to a distributorship with several offices
and an extensive sales force.  The Company operates, or contracts for storage
space, in several strategically located warehouses along the east coast,
southeast and southwest regions of the country.  These locations are used as the
storage and shipping points for its stock forms.  Currently, the Company's
primary method of generating sales contacts is through its own sales force,
sales representatives, extensive marketing programs, referral and reputation.

        The sales force consists of a National Sales Manager and five
salespersons covering New England, Mid-Atlantic, Southeast, Midwest and
Southwest regions of the eastern United States.  A network of independent sales
representatives covering the entire United States has been assembled over the
past two years to sell the new non-paper products through major resellers and
retailers.  New marketing positions have been created to support the new product
line.

MANUFACTURING
-------------

        The Company's custom paper products are manufactured in the New Jersey
plant with five rotary presses and two collators.  The rotary presses range in
size from 17" to 22" and provide the Company with the ability to produce a
broad  spectrum of form sizes.  Each piece of machinery requires a skilled
operator; support personnel are required on some equipment.  The custom forms
operation runs primarily two shifts per day, however some equipment runs three
shifts.  The estimated annual capacity of the custom business is approximately
$12 million in sales at current prices.

                                       4
<PAGE>
 
        The Company's stock form business is manufactured from two locations.
The New Jersey facility has six presses and one collator, and Texas has three
presses and one collator.  The majority of the stock forms is produced to be
sold from inventory.  Each plant is also capable of producing customized
computer paper or stock forms upon order.  The stock operation is three shifts
per day, five days per week, with overtime on an as-needed basis.  The estimated
annual capacity of the stock business is approximately $55 million in sales at
current prices.

        The Company's equipment is very well suited to produce nearly all of the
forms products required by a forms distributor or retailer.  The Company
continues to monitor any new product requirements of its forms distributors and
assess what new equipment or equipment modifications are required to produce the
products.

OPERATIONS
----------

        The Company owns a 159,000 square foot plant and corporate office in
Burlington, New Jersey and leases a 45,000 square foot plant in Fort Worth,
Texas.  Of the approximate 200,000 square feet of space, 5% is devoted to
offices, 50% to warehouse and 45% to paper conversion.  There are nine stock
presses, five custom presses and three collators operating at the two plants.
There are no union affiliations among the 124 hourly and 66 salaried employees
at the Company's two locations.  The Company ships via common carrier trucks
either directly to its customers from its plant warehouses or through contract
distribution sites or cross dock sites.

        Utilization of production capacity approximated 80% in the New Jersey
plant and 45% in the Texas plant over the past twelve months.  Two expiring
equipment leases in 1997 will reduce capacity levels and the Company has the
option of purchasing the equipment at lease termination if new demand exists to
support the capacity.

        In April, 1995 the Florida plant was closed and certain equipment was
sold or scrapped.  In addition, a press was purchased at the expiration of the
lease and resold at a profit.  The Company expects to maintain its present two
plants in fiscal 1997, but will continue to reduce capacity or increase demand
whenever possible in its stock continuous forms business to maximize
utilization.

        Custom forms capacity has been converted from roll to sheeting
capability and will continue over the next two years to address the shift in
demand from continuous forms to cut sheet forms.  Currently, 40% of capacity is
directed to custom cut sheets.  By 1997, 100% of production will be allocated to
cut sheet products.

        The Company has adequate domestic and foreign paper supply sources with
paper mills and brokers at the present time.  However, no new mill capacity is
scheduled until 1997.  The mills are reallocating capacity to higher grade
papers that yield higher margins and, as a result, are de-emphasizing forms bond
used in continuous form production.

        During fiscal 1995, the mills commenced on an allocation program
yielding lower levels of supply to all their customers, including Paris.  In
addition, the supply of foreign paper was absorbed in Europe.  The resulting
tight supply conditions yielded much higher market prices for the Company, equal
to or greater than the higher raw paper increases.  The Company was able to
utilize its long term relationships with the mills and brokers and buying
expertise to obtain lower but adequate paper tonnage to satisfy its customer
base and certain new accounts at higher price levels.  As a result, record
profits occurred in fiscal 1995 despite unit volume decreasing approximately
60%, as pricing increased at a much greater rate resulting in margins of 30%
compared to the average in prior years of 15%.  Due to the paper mill
allocations that occurred in the first nine months of fiscal 1995, Paris built
inventory levels far in excess of normal levels, reaching in excess of five
months supply by September, 1995.  The Company, like many of its competitors and
dealers, purchased paper in anticipation of future shortage and even higher
prices during 

                                       5
<PAGE>
 
the summer of 1995. At the beginning of fiscal 1996, Paris was caught at the top
of the cycle with a large amount of high-priced inventory as paper prices
started to decline. Selling of that inventory resulted in a significant
reduction in operating margins well into the third fiscal quarter. Additionally,
Paris manufacturing facilities were operating below full capacity levels,
reflecting the ongoing decline in demand by consumers for continuous forms paper
products. Paris resolved the inventory problem in the fourth quarter and is
currently purchasing its paper supplies at prevailing market prices. We are
continuing to shift capacity from continuous forms to the fast-growing custom
cut sheet market. As demand for these products accelerate, we anticipate
improvement in operating margins in the months ahead.

OTHER MATTERS
-------------

        The corporate structure of the Company's legal entities was reorganized
in fiscal 1995.  Paris Business Forms, Inc. (PBFI), the public company,
transferred substantially all of the operating assets and liabilities to a newly
formed subsidiary corporation, Paris Business Products, Inc. (PBP).  The Texas
operating corporation, Paris Business Forms, Inc. (PBFITX) and a newly formed
Florida corporation, Paris Business Products, Inc. (PBPFL), are subsidiaries of
PBP.  PBFI is now a holding Company which owns the Burlington, New Jersey plant
and cash and near cash investments.  PBP, PBFITX and PBPFL are operating
corporations.  PBF Corporation, a Delaware corporation, owns the Company
trademarks and remains a subsidiary of PBFI.

        The Internal Revenue Service completed an audit of the Company's profit
sharing plan, corporate tax returns, and employment tax filings for the periods
1992, 1993 and 1994.  Total assessments, interest, and penalties were $209,000.

        In 1995, the Board of Directors approved upon the termination of his
employment, the President and Chairman of the Board, shall receive $100,000 per
year for four years in recognition of past services.  Accordingly, $400,000 in
deferred compensation liability was recognized and included in the 1995
financial statements.  As a result of the losses from operations in 1996, the
Board of Directors terminated the Chairmans deferred compensation plan.
Accordingly, the $400,000 liability was reversed in 1996 as a reduction of
general and administrative expenses.

        The working capital line of credit with the Company's bank expired on
September 30, 1996 and was extended until December 31, 1996.  Outstanding
borrowings at September 30, 1996 were $3,926,500 with an availability of
$4,000,000.  The Company is presently in negotiation with several banks to
obtain a new line of credit facility by December 31, 1996.  The Company expects
to have a new asset-based credit facility in place by late December, 1995 or
early January, 1997.

ITEM 2 - PROPERTIES

        The Burlington, New Jersey facility serves as the corporate office,
manufacturing plant and distribution center.  The building has been expanded to
159,000 square feet.  The original facility of 116,000 square feet, including
5,000 square feet of office space, was constructed and occupied during the first
half of 1986.  The warehouse addition of 34,000 square feet was completed during
the summer of 1988.

        The Fort Worth, Texas facility was sold in June, 1994 and replaced by a
45,000 square foot leased facility.

        In March 1992 the Company purchased a 70,000 square foot building in
Jacksonville, Florida to expand stock forms operations.  The cost of the
building plus improvements was approximately $1.3 million.  In April 1995, the
Florida facility was sold for $1,050,000, and the facility was not replaced.

                                       6
<PAGE>
 
ITEM 3 - LEGAL PROCEEDINGS

        There are no material legal proceedings in process as of the date of
this filing.

ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

        There were no matters submitted to a vote of security holders during the
year ended September 30, 1996.

                                       7
<PAGE>
 
                                    PART II


ITEM 5 - MARKET FOR REGISTRANTS COMMON STOCK AND RELATED SECURITY HOLDERS
MATTERS

(A) The Company's common stock is traded in the over-the-counter market and is
listed on the National Association Of Stock Dealers Daily Quotation Service
(NASDAQ) National Market System.  The Symbol for the Company is PBFI.  The
registrar and transfer agent is ChaseMellon Bank.  The table below shows the
quarterly price range of Paris Corporation common shares, as shown by the
National Daily Quotation Service.
<TABLE>
<CAPTION>
 
 
                                         RANGE OF SALE PRICES
                                         --------------------

                              1996 FISCAL YEAR          1995 FISCAL YEAR
                              ----------------          ----------------
<S>                          <C>         <C>           <C>         <C>
                              HIGH         LOW          HIGH         LOW
First Quarter                8 1/4       4 7/8         3 3/8       2 1/2
Second Quarter                   6       3 1/4         4 1/8           2
Third Quarter                5 3/4       3 1/2         5 1/2       3 3/4
Fourth Quarter                   5       3 1/2         9 3/4       5 1/8
</TABLE> 
 
(B) The approximate number of shareholders of record as of November 15, 1996
    was 200.

                                      8 
<PAGE>
 
ITEM 6 - SELECTED FINANCIAL DATA


                       FOR THE YEAR ENDED SEPTEMBER 30,
                  (IN THOUSANDS EXCEPT FOR PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
 
                                 1996     1995     1994      1993     1992
                                 ----     ----     ----      ----     ----  

<S>                            <C>       <C>      <C>      <C>       <C>
NET SALES                      $57,442   $64,916  $57,892  $59,158   $61,755
 
INCOME (LOSS)
FROM OPERATIONS                 (5,495)    5,722      297   (1,489)    1,155
 
NET INCOME (LOSS)               (3,401)    3,451      429     (998)      712
 
EARNINGS PER SHARE                (.92)      .91      .12     (.27)      .19
 
TOTAL ASSETS                    28,741    41,188   24,747   27,041    27,254
 
WORKING CAPITAL                 12,048    15,255   11,866   10,414     9,312
 
LONG TERM DEBT                                      2,061    3,179     1,950
(excluding current portion)
 
SHAREHOLDERS' EQUITY           $17,184   $21,108  $17,494  $17,065   $18,144
 
CASH DIVIDENDS PER SHARE          NONE      NONE     NONE     NONE      NONE
</TABLE>

                                       9
<PAGE>
 
ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE FINANCIAL CONDITION AND
RESULTS OF OPERATIONS. ($ in thousands, except statistical data)

Liquidity and Capital Resources

     Working capital at the end of fiscal years 1996, 1995 and 1994 was $12,048,
$15,255 and $11,866, respectively.  Working capital decreased $3,207 during the
fiscal year ended September 30, 1996.  The primary use of working capital was to
fund the net loss of $3,400, net of non-cash expenses for depreciation ($1,134)
and equity in joint venture loss ($303) and non-cash gains on the sale of fixed
assets ($46).  Treasury stock purchases ($426), capital expenditures, net
($394), and additional joint venture investment ($390) accounted for the
remainder of the working capital deficit during the year.

     Cash and cash equivalents at the end of fiscal years 1996, 1995 and 1994
was $916, $5,227 and $2,081, respectively. Cash and cash equivalents decreased
$4,311 in fiscal 1996. Cash used in operations was $93 despite the net loss of
$3,400 due to the reduction of beginning inventories by $10,662, offset by a
decrease in payables and accruals of $4,872, repayment of a term loan ($1,650)
and reduction of the working capital line of credit ($1,000), the purchase of
marketable securities ($1,160), the payment of prior year federal income taxes
($1,105), and the current year federal income tax benefit receivable ($1,865).

     Inventories were reduced to normal supply levels during 1996 decreasing
beginning inventories of $17,347 to $6,686 by year end.  Profit margins were
significantly impacted during the year as the high cost inventories were shipped
during a period of eroding sell prices.  Competitively priced raw material
purchases did not resume until the third quarter of the fiscal year.  The
drawdown on the line of credit in 1995 to finance part of the inventory build
was approximately $5,000; due to the operating losses incurred in 1996 only
$1,000 was repaid against the prior year drawdown.

     The company has a $4,000 line of credit available through a commercial bank
at the prime rate less one-half percentage point (8.5% at September 30, 1996).
The outstanding balance on the line at year end was $3,927, as compared to the
prior two years balances of $4,927 and $0, respectively. See Note 6 in the Notes
to Consolidated Financial Statements for more detail. In addition, the company
has available $916 in cash and cash equivalents and $4,778 in diversified
marketable securities as of September 30, 1996.

     The company leased one custom press and two stock presses in the current
fiscal year.  The custom press was purchased at the expiration of the lease
during the year.  The two stock press leases will expire in fiscal 1997.  The
New Jersey plant and office is owned and unencumbered.  The Texas plant is
leased through August, 1999.

     Capital expenditures for fiscal years ended September 30, 1996, 1995 and
1994 were $456, $921 and $356, respectively. During the current fiscal year,
significant expenditures included a plant consolidation ($185), the purchase of
a custom press at lease expiration ($98), computer hardware and software
upgrades to the companys system ($93), development cost for a new software
product ($42) and a vehicle purchase ($40).

     The term loan outstanding at September, 1995 of $1,650 was repaid in full
during fiscal 1996.

     The fiscal 1996 net operating loss will be carried back to the prior year
for federal income tax purposes and the company expects a refund of
approximately $1,865 by March, 1997.

     Internally generated cash flows appear to be adequate to support currently
planned business operations. However, certain events such as significant
acquisitions or capital expenditures could require external financing.

                                      10
<PAGE>
 
1996 compared to 1995

  Net sales for the fiscal year ended September 30, 1996 decreased 12% or $7,474
due to (1) a 7% decline in stock computer paper volume ($1,500), generally
attributable to the diminishing demand for impact printer paper products; (2)
15% lower selling prices for both stock computer paper and custom forms
($8,280), essentially proportionate to the raw paper cost decreases from the
mills; (3) a higher rate of sales rebates and product returns ($319) resulting
from the companys focus on the retail channel; (4) offset by a 120% increase in
new product offerings ($2,625), viz., laser and inkjet papers, specialty office
and consumer products, and computer hardware/software.

  Despite 7% lower volumes in stock computer paper and approximately 22% lower
raw paper costs for both stock computer paper and custom forms, resulting in
$2,640 of lower product cost, cost of sales increased $3,821 or 7% in the
current fiscal year principally due to the significant overstocking of raw paper
inventories at the beginning of the year at the market price peak ($4,678).  As
a result, weakening sell prices through the first three quarters of the year
resulted in abnormally low margins until the inventories were reduced to normal
operating levels in the fourth quarter.  Other factors causing higher product
costs in fiscal year 1996 were the increased volume of new product sales
($2,056), greater freight costs ($500) due to the companys major customer
requiring direct store delivery instead of shipments to regional distribution
centers as well as importation costs on certain hardware products foreign
sourced.  Factory overhead cost reduction programs ($350), improved production
efficiency ($200), and increased capacity utilization ($373) provided
counterbalancing reductions in cost of sales.

  Gross profit declined $11,295 in 1996 as compared to 1995 primarily for two
reasons, viz., the significant drop in sell prices due to lower demand and
competitive pressures ($7,000) plus the effect of the excessive inventories
carried through most of the year bearing disproportionate unit cost relative to
the market ($4,500).  To a lesser extent, lower volume contributed negatively
($400).  However, new products generated approximately $600 additional gross
profit in 1996.

  Sales and marketing expenses were $755 greater in 1996 principally due to new
product offerings requiring greater expenditures for staff ($250), travel and
entertainment ($170), advertising ($150), product samples ($70), direct mail
campaigns ($70), and public relations ($45).  General and administrative
expenses decreased $833 due to termination of a deferred compensation plan
($800), a reduction in the required bad debt reserve ($290) and legal expense
accruals ($53) offset by an assessment from a federal employment tax audit $160,
higher professional fees $40, depreciation $70, and miscellaneous expenses $40.

  Interest expense was higher in 1996 by $144 principally due to the greater
utilization of the companys credit line resulting in additional interest of $244
less the interest savings of $100 from the payoff of the industrial revenue note
in the second quarter of the fiscal year.

  In 1996, other income, net, of $685 exceeded other expense, net, of $237 in
1995 by $922.  Losses of approximately $500 on the disposal of factory equipment
and the Florida plant sale occurred in the prior year; there were no significant
sales or disposals in the current fiscal year.  In addition, investment income
and gains on the sale of stock investments in FY96 exceeded the prior year by
approximately $400.

  Income tax expense in FY95 and income tax benefit in FY96 were at effective
tax rates of 34%.

  Inflation is not expected to have a material effect on future sales or
earnings.

                                       11
<PAGE>
 
1995 compared to 1994

  Net sales for the fiscal year ended September 30, 1995 increased $7,024 or 12%
as compared to fiscal 1994, due to increases in average selling prices of 59% in
stock continuous forms products and 14% in custom forms resulting in higher
revenues of $18,811 and $1,031, respectively, in these business segments.
Offsetting the favorable price levels in fiscal 1995 was a decline in unit
volume of 30% or $14,662 in the Companys core computer paper business due to the
shrinking market for impact printer paper products averaging approximately 10%
per year and the industry paper supply shortages resulting from paper mill
supply allocations in the Companys third and fourth quarters of fiscal 1995.

  Cost of sales remained relatively stable ($67 change) in fiscal 1995 versus
1994.  The lower sales volume of 30% was offset by higher unit costs of equal
effect due to raw material paper cost escalation during the year.

  Gross profit increased $7,091 (145%) from fiscal 1994 to fiscal 1995
principally from the net incremental positive margins of $6,514 in the stock
computer paper business segment resulting from selling price increases outpacing
higher unit paper costs and declining volume.  Conversely lower margins occurred
in the custom business forms segment of $511 where higher unit costs could not
be entirely passed on to customers through higher prices.  Sales of new products
yielded incremental profit of $700.  Cost reduction efforts resulted in
significant savings from the closing of various distribution sites and the
Florida manufacturing plant in the amount of $630.  The cost of underutilization
of factory capacity of $242 accounted for the majority of the remaining gross
profit change.

  Selling expenses increased $569 (33%) due to marketing and staffing cost
associated with new product introductions, viz., salaries of $175, promotional
materials and related expenses of $110, advertising expense of $108, trade show
expense of $72, and other sundry increases of $104.  General and administrative
expenses increased $1,097 (39%) due to the following:  $400 for the adoption of
a deferred compensation plan, increased salaries and benefits of $206, an
increase in bad debt expense of $197, and other sundry increases of $294.

  Interest expense increased $18 for the fiscal year ended September 30, 1995,
in comparison to the prior fiscal year.  The change resulted from interest
incurred on a working capital loan of $68, offset by a decrease of $50 due to
the paydown of mortgage debt and a bank term loan.

  Other net expense increased $348 for the fiscal year ended September 30, 1995
in comparison to the prior fiscal year.  The increase was due principally to the
loss on equipment sales and the retirement of dormant and underutilized fixed
assets of $368.  The shutdown of the Jacksonville, Florida facility comprised
$198 of the loss on fixed assets.

                                       12
<PAGE>
 
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

              INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE> 
<CAPTION> 

CONSOLIDATED FINANCIAL STATEMENTS:                              PAGE
<S>                                                             <C>  
CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996
 AND 1995                                                        14
 
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE YEARS
 ENDED SEPTEMBER 30, 1996, 1995, AND 1994                        15
 
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY FOR
 THE YEARS ENDED SEPTEMBER 30, 1996, 1995, 1994 AND 1993         16
 
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEARS
 ENDED SEPTEMBER 30, 1996, 1995 AND 1994                         17
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                       18 - 29
 
REPORT OF INDEPENDENT ACCOUNTANTS                                30
 
SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS                  31
 
REPORT OF INDEPENDENT ACCOUNTANTS ON S-X SCHEDULE                32
 
</TABLE>

  FINANCIAL STATEMENT SCHEDULES NOT INCLUDED IN THIS FORM 10-K HAVE BEEN OMITTED
BECAUSE THEY ARE NOT APPLICABLE OR THE REQUIRED INFORMATION IS SHOWN IN THE
FINANCIAL STATEMENTS OR NOTES THERETO.

                                       13
<PAGE>
 
<TABLE>
<CAPTION>
 
                     Consolidated Balance Sheet
                     --------------------------
 
                                                September 30,
                                                -------------
                                              1996          1995
                                        ---------------------------
<S>                                       <C>           <C>
Assets
Current Assets:
    Cash and cash equivalents             $   916,438   $ 5,227,249
    Marketable securities                   4,778,296     3,657,894
    Accounts receivable, less allowance
     for doubtful accounts of
      $415,536 and $505,379 at
       September 30, 1996 and 1995,         6,696,174     6,549,451
       respectively
    Inventories                             6,685,752    17,347,847
    Recoverable income taxes                1,865,502
    Prepaid expenses                          314,364       299,536
    Deferred income taxes, net of a
     valuation allowance of                 1,223,204     1,233,000
     $500,000 in 1996
                                        -------------   -----------
        Total Current Assets               22,479,730    34,314,978
Property, plant and equipment, net          6,106,857     6,800,179
Other assets                                  154,414        73,112
                                        -------------   -----------
        Total Assets                      $28,741,001   $41,188,268
                                        =============   ===========
 
Liabilities and Shareholders' Equity
Current Liabilities:
    Current portion of long-term debt                   $ 1,650,000
    Note payable, bank                      3,926,500     4,926,500
    Accounts payable and accrued            6,193,513    10,775,630
     expenses
    Accrued payroll and related expenses      311,903       602,603
    Income taxes payable                                  1,105,000
                                        -------------   -----------
       Total Current Liabilities           10,431,916    19,059,733
Deferred income taxes                       1,125,075     1,020,413
                                        -------------   -----------
       Total Liabilities                   11,556,991    20,080,146
                                        -------------   -----------
Shareholders' equity:
    Common stock, $.004 par value;             
     authorized 10,000,000                                   
     shares; issued 3,937,517 shares           15,751        15,751
    Additional paid-in capital              8,588,243     8,588,243
    Retained earnings                      10,281,707    13,682,551
    Unrealized gain on marketable              24,070       121,314
     securities
                                        -------------   -----------
                                           18,909,771    22,407,859
    Less:  common stock held in
     treasury, at cost; 304,986 and        
     208,111 shares at September 30,
     1996 and 1995, respectively           (1,725,761)   (1,299,737)
                                        -------------   -----------
       Total Shareholders' Equity          17,184,010    21,108,122
                                        -------------   -----------
       Total Liabilities and              
        Shareholders Equity               $28,741,001   $41,188,268 
                                        =============   =========== 
 
The accompanying notes are an integral part of these financial
 statements.
</TABLE>

                                       14
<PAGE>
 
<TABLE>
<CAPTION>
 
                     Consolidated Statement of Operations
                     ------------------------------------
 
                                               Year ended September 30,
                                               ------------------------
 
                                           1996          1995          1994
                                       ------------   -----------  -----------
 
 
<S>                                     <C>           <C>          <C>
Net sales                               $57,442,027   $64,916,361  $57,892,384
                                       ------------   -----------  -----------
Costs and expenses:
 
 Cost of products sold                   56,786,409    52,965,236   53,032,423
 
 Selling expenses                         3,065,770     2,311,026    1,742,278
 
 General and administrative expenses      3,085,272     3,917,856    2,820,476
 
 Interest expense                           347,113       203,299      185,532
 
Other expense (income), net                (685,082)      237,328     (110,342)
                                       ------------   -----------  -----------
 
        Total costs and expenses         62,599,482    59,634,745   57,670,367
                                       ------------   -----------  -----------
 
Income (loss) before income taxes and
 cumulative effect of change in
  accounting principle                   (5,157,455)    5,281,616      222,017
 
Provision for income taxes (benefit)     (1,756,611)    1,830,229      154,841
                                       ------------   -----------  -----------
 
Income (loss) before cumulative
 effect of change in
  accounting principle                   (3,400,844)    3,451,387       67,176
 
Cumulative adjustment from adoption                                    
 of FASB 109                                                           362,000
                                       ------------   -----------  -----------
 
Net income (loss)                       $(3,400,844)  $ 3,451,387     $429,176
                                       ============   ===========  ===========
 
Earnings per share from operations           $(0.92)        $0.91        $0.02
 
Earnings per share from FASB 109
  cumulative adjustment                                                   0.10
                                       ------------   -----------  -----------
 
Earnings per share                           $(0.92)        $0.91        $0.12
                                       ============   ===========  ===========
 
</TABLE>

   The accompanying notes are an integral part of these financial statements.

                                       15
<PAGE>
 
<TABLE>
<CAPTION>
                                                          Consolidated Statement of Shareholders' Equity
                                                         -----------------------------------------------
 
                                                              ADDITIONAL
                                             COMMON STOCK      PAID IN      RETAINED    UNREALIZED     TREASURY
                                           SHARES    AMOUNT    CAPITAL      EARNINGS       GAIN         STOCK         TOTAL
                                        -------------------  -----------  -----------  -----------  ------------  ------------
<S>                                       <C>        <C>      <C>         <C>           <C>          <C>           <C>
Balance at September 30, 1993             3,937,517  $15,751  $8,588,243  $ 9,801,988                $(1,340,724)  $17,065,258
 
Net Income                                                                    429,176                                  429,176
                                        --------------------  ----------  -----------  -----------  ------------  ------------
 
Balance at September 30, 1994             3,937,517   15,751   8,588,243   10,231,164                 (1,340,724)   17,494,434
 
Net Income                                                                  3,451,387                                3,451,387
 
Issuance of 14,089 treasury shares                                                                        40,987        40,987
 
Unrealized gain on marketable
securities, net of income tax effect:
 
   Effect of accounting change
   October 1, 1994                                                                          36,574                      36,571
 
   Increase in unrealized gain on
   marketable securities during                                                             84,740                      84,740
   1995
                                         -----------  -------  ----------  -----------  -----------  ------------  ------------
 
Balance at September 30, 1995             3,937,517   15,751   8,588,243   13,682,551      121,314    (1,299,737)   21,108,122
 
Purchase of 96,875 treasury shares                                                                      (426,024)     (426,021)
 
Net loss                                                                   (3,400,844)                              (3,400,844)
 
   Decrease in unrealized gain
   on marketable securities
   during 1996:                                                                            (97,244)                    (97,244)
                                        -----------  -------  ----------  -----------  -----------  ------------  ------------
 
Balance at September 30, 1996             3,937,517  $15,751  $8,588,243  $10,281,707     $ 24,070   $(1,725,761)  $17,184,010
                                        ===========  =======  ==========  ===========  ===========  ============  ============
 
 
</TABLE>
   The accompanying notes are an integral part of these financial statements.

                                       16
<PAGE>
  
                     Consolidated Statement of Cash Flows
                     ------------------------------------
<TABLE>
<CAPTION>
                                                  Year ended September 30,
                                          ----------------------------------------
 
                                              1996           1995          1994
                                              ----           ----          ---- 
<S>                                       <C>           <C>            <C> 
Cash flow from operating activities:      $(3,400,844)  $  3,451,387   $   429,176
                                          -----------   ------------   -----------
  Net income (loss)
  Adjustments to reconcile net income
   (loss) to net cash provided by 
   (used in) operating activities:
   Depreciation                             1,134,320      1,135,108     1,290,431
   (Gain) loss on sale of property,           
    plant and equipment                       (46,066)       367,907        (4,204)
   (Gain) loss on sale of marketable         
    securities                               (861,459)      (376,204)     (283,352)
   Provision for bad debts                     40,000        330,000       166,004
   Provision for equity in loss on            
    investment in joint venture               303,500        129,334       204,000   
   Deferred income tax (credit) expense       114,458       (842,369)     (477,422)
   (Increase) decrease in:
        Accounts receivable                  (186,724)      (489,906)    1,022,381
        Inventories                        10,662,097    (13,032,729)     (180,044)
        Recoverable income taxes           (1,865,502)                     740,304
        Prepaid expenses                      (14,829)        (5,130)       (4,880)
        Other assets                            5,196          3,624       124,297
        Increase (decrease) in:
        Accounts payable and accrued       
         expenses                          (4,582,116)     7,859,969      (661,820)  
        Accrued payroll and related          
         expenses                            (290,699)       (29,394)      170,162
        Income taxes payable, current      (1,105,000)       806,449
                                          -----------   ------------   -----------
      Total adjustments                     3,307,176     (4,143,341)    2,105,857
                                          -----------   ------------   -----------
        Net cash provided by (used in)        
         operating activities                 (93,668)      (691,954)    2,535,033
                                          -----------   ------------   -----------
Cash flows from investing activities:
  Investment in joint venture                (390,000)
  Proceeds from sale of marketable            
   securities                                 901,901        429,174     2,249,069
  Purchase of marketable securities        (1,258,088)    (1,020,638)   (1,750,137)
  Proceeds from sale of property, plant        
   and equipment                               61,000      1,120,807       970,092 
  Purchase of property, plant and            
   equipment                                 (455,931)      (921,499)     (355,959)
                                          -----------   ------------   -----------
        Net cash provided by (used in)     
         investing activities              (1,141,118)      (392,156)    1,113,065
                                          -----------   ------------   -----------
Cash flows from financing activities:
  Repayments of long-term debt             (1,650,000)      (736,667)   (2,442,666)
  (Purchase) issuance of treasury stock      (426,025)        40,987
  Proceeds (repayments) of working         
   capital line of credit                  (1,000,000)     4,926,500
                                          -----------   ------------   -----------
        Net cash provided by (used in)     
         financing activities              (3,076,025)     4,230,820    (2,442,666)
                                          -----------   ------------   -----------
  Net increase (decrease) in cash and      
   cash equivalents                        (4,310,811)     3,146,710     1,205,432
  Cash and cash equivalents, at             
   beginning of year                        5,227,249      2,080,539       875,107
                                          -----------   ------------   -----------
  Cash and cash equivalents, at end of    
   year                                   $   916,438   $  5,227,249   $ 2,080,539
                                          ===========   ============   ===========
 
Supplemental disclosures of cash flow
 information:
  Cash paid during the year for:
    Interest                              $   347,113   $    203,299   $   185,532
                                          ===========   ============   ===========
 
    Income taxes                          $         0   $  1,753,912   $   452,205
                                          ===========   ============   ===========
</TABLE> 

The accompanying notes are an integral part of these financial statements.

                                       17
<PAGE>
 
Notes to Consolidated Financial Statements

NOTE 1 - NATURE OF OPERATIONS AND BASIS OF PRESENTATION:

Paris Corporation and subsidiaries (collectively, the Company) manufacture stock
and custom business forms, provide value added services to cut sheet products,
and distribute office products and computer/printer peripheral products.  The
Company manufactures stock and custom forms in Burlington, New Jersey and stock
forms in Fort Worth, Texas.  The Company markets through retailers, resellers,
and dealers throughout the United States and Canada.

Effective January 26, 1996, Paris Business Forms, Inc. (a Pennsylvania publicly
held corporation) adopted a new name, Paris Corporation.

The consolidated financial statements include the accounts of Paris Corporation
and its wholly-owned subsidiaries with appropriate elimination of intercompany
accounts and transactions.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.

Use of Estimates:
The presentation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of revenues and expenses during the reporting
period.  Actual results could differ from those estimates.

Cash and Cash Equivalents:
The Company considers short-term investments purchased with an original maturity
of three months or less to be cash equivalents.

Investments in Debt and Equity Securities:
At October 1, 1994, the Company adopted Statement of Financial Accounting
Standards No. 115, Accounting for Certain Investments in Debt and Equity
Securities: (SFAS No. 115).  The adoption of SFAS No. 115 resulted in an
increase in stockholders equity of $36,574, net of taxes of $18,841.  In
accordance with SFAS No. 115, prior years financial statements have not been
restated to reflect the change in accounting method.

Marketable Securities:
At September 30, 1996 and 1995, marketable debt and equity securities have been
categorized as available for sale.  Such securities are stated at fair value
based upon quoted market prices.  Unrealized holding gains and losses are
reported as a separate component of stockholders equity.  The Company accounts
for investments in limited partnerships under the equity method of accounting.

Inventories:
Inventories are stated at the lower cost or market.  Cost is determined by the
first-in, first-out method (FIFO).

Property, plant and equipment:
Property, plant and equipment are stated at cost.  Expenditures for renewals and
betterments which increase the useful life or capacity of property, plant and
equipment are also capitalized at cost.  Expenditures for repairs and
maintenance are charged to income as incurred.  Gain or loss on the retirement
or disposal of capital assets is reflected in income in the period of disposal.

Depreciation is computed using the straight-line method over the estimated
useful lives of the assets.

                                       18
<PAGE>
 
Joint venture:
The company is a joint venture participant with Xerox Corporation in Signature
Corporation, Inc.  This investment is accounted for using the equity method.

Per share data:
Earnings per share data have been computed on the basis of the weighted average
number of shares of common stock outstanding (3,632,531 shares in 1996,
3,729,406 shares in 1995 and 3,715,317 shares in 1994), plus the dilutive effect
of common stock equivalents (stock options) computed using the treasury stock
method which resulted in an aggregate of 3,707,700 shares in 1996, 3,795,087
shares in 1995 and 3,715,317 shares in 1994.

Acquisitions:
In October 1995, the Company invested an additional $390,000 in Signature
Corporation, Inc. (Signature), a joint venture corporation that markets office
products through the supermarket and drugstore retail chains.  The Companys
original investment of $333,334 for 33% of the common stock of the joint venture
in December 1992 has been written off completely by the recognition of the
Companys equity in the operating losses of Signature of $129,334 and $204,000 in
fiscal 1995 and 1994, respectively. With the additional capital investment, the
Company has increased ownership to 44% of the common stock of Signature.  During
the year ended September 30, 1996, the Company wrote off $303,500 of the
$390,000 investment due to the operating losses of the joint venture.

The Company invested $455,931 in property, plant, and equipment during the year,
of which $185,916 related to the reorganization and plant consolidation of the
Burlington, New Jersey facility, $97,500 related to the purchase of a custom
press which was formerly leased, $122,552 related to the purchasing of personal
computers and related software and equipment.

Dispositions:
The Jacksonville, Florida facility was sold in April 1995, due to plant
rationalization and reorganization.  The net sales proceeds were $978,182 and
the loss realized was $56,955.  The retirement of other assets related to the
Jacksonville closing resulted in a loss of $141,291.

                                       19
<PAGE>
 
NOTE 3 - MARKETABLE SECURITIES
 
Marketable securities classified as current assets at September 30, 1996 and
1995, are summarized as follows:

<TABLE> 
<CAPTION> 
 
1996                              Fair Value            Cost
----                             -------------      -------------
<S>  <C>                          <C>                 <C>
     Equity Securities:
        Stocks                    $1,014,398          $1,024,347
        Mutual Funds                 515,962             481,943
        Limited Partnerships       3,329,789           3,247,936
                                 -------------      -------------
        Total                     $4,860,149          $4,754,226
                                 =============      =============
 
1995
----
     Equity Securities:
        Stocks                    $  659,361          $  554,493
        Mutual Funds                 543,433             464,356
        Limited Partnerships       2,455,100           2,455,100
                                 -------------       ------------
        Total                     $3,657,894          $3,473,949
                                 =============       ============
 
</TABLE> 
 
The Company accounts for investments in limited partnerships under the equity
method of accounting. These investments are not subject to SFAS No. 115.
 
Gross unrealized holding gains and losses at September 30, 1996 and 1995, are as
follows:
<TABLE> 
<CAPTION> 

 
                                  Unrealized         Unrealized
1996                                Gains             Losses
----                            -------------       -------------
<S>  <C>                          <C>                <C> 
     Equity Securities:
        Stocks                    $   75,758         $   85,706
        Mutual Funds                  34,019
        Limited Partnerships          81,853
                                -------------       -------------
        Total                     $  191,630         $   85,706
                                =============       ============= 
 
1995
----
     Equity Securities:
        Stocks                    $  112,120         $    7,252
        Mutual Funds                  79,077
        Limited Partnerships
                                 ------------       -------------
        Total                     $  191,197         $    7,252
                                 ============       =============
 
</TABLE>

Proceeds from the sale of securities classified as available for sale for the
year ended September 30, 1996 and 1995 were $901,901 and $429,174, respectively.
Fiscal 1996 and 1995 gross realized gains and losses were $892,762 and $31,303,
and $412,861 and $36,657, respectively, and are included in other income.  For
the purpose of determining gross realized gains and losses, the cost of
securities sold is based upon specific identification.

                                       20
<PAGE>
 
NOTE 4 - INVENTORIES:

Inventories consist of the following at September 30, 1996 and 1995:
<TABLE>
<CAPTION>
 
 
                           September 30,
                           -------------
                        1996           1995
                    -------------  ------------
 
<S>                 <C>            <C>
Raw materials          $2,563,401   $12,410,365
Work in progress          152,193        76,350
Finished goods          3,970,158     4,861,132
                    -------------  ------------
 
Total                  $6,685,752   $17,347,847
                    =============  ============
 
 
 
</TABLE>
NOTE 5 - PROPERTY, PLANT AND EQUIPMENT:

Property, plant and equipment consist of the following at September 30, 1996 and
1995:
<TABLE>
<CAPTION>
 
                                                September 30,
                                               --------------
                            Estimated
                           useful lives       1996           1995
                           ------------  --------------  ------------
 
<S>                        <C>           <C>             <C>
Land                                       $   489,600   $   489,600
Building and building
 improvements               10-30 years      4,966,712     4,951,312
Machinery and equipment      7-10 years      8,577,235     8,352,740
Furniture and fixtures         10 years        366,285       366,285
Automobiles and trucks        4-6 years        159,308       171,352
                                       --------------- -------------
                                            14,559,140    14,331,289
Less - accumulated depreciation             (8,452,283)   (7,531,110)
                                       --------------- -------------
 
Property, plant and equipment, net         $ 6,106,857   $ 6,800,179
                                       =============== =============
 
</TABLE>
Depreciation expense totaled $1,134,320, $1,135,108 and $1,290,431 for the years
ended September 30, 1996, 1995 and 1994, respectively.

                                       21
<PAGE>
 
NOTE 6 - NOTES PAYABLE AND LONG TERM DEBT:

Long-term debt consists of the following at September 30, 1996 and 1995:
<TABLE>
<CAPTION>
 
 
 
                                             September 30,
                                             -------------
                                          1996           1995
                                          ----           ----
<S>                                       <C>            <C>  
New Jersey Economic Development 
Authority (NJEDA) Bond, interest 
payable monthly  at a rate of 75% 
of prime (9.00% at September 30, 1995), 
principal payable in  monthly 
installments of $12,500, with the 
unamortized principal balance due on 
February 1, 1996.                              $ 0       $ 1,650,000
                                       -------------   --------------

                                                 0         1,650,000
Less current portion                             0        (1,650,000)
                                       -------------   --------------
 
Total                                          $ 0       $         0
                                       =============   ==============
 
</TABLE>

The Company has a line of credit payable on demand with a commercial bank.
Under the agreement, the Company can borrow up to $6,000,000 through March 28,
1996, after which the line of credit was reduced to $4,000,000 through maturity
at September 30, 1996.  The line of credit is secured by the Company's accounts
receivable and inventory.  The line of credit expired on September 30, 1996 and
was extended until December 31, 1996 with the pledge of additional collateral of
the New Jersey facility which has a net book value of $3,424,000.  The
borrowings outstanding at September 30, 1996 were $3,926,500 and $4,926,500 at
September 30, 1995.  Interest is payable monthly.  The interest rate on the line
of credit is prime rate less 1/2% (8.5% at September 30, 1996).  Interest
expense related to the line of credit was $314,011 and $67,786 for the years
ending September 30, 1996 and 1995, respectively.

In January 1996, the Company paid off the New Jersey Economic Development
Authority (NJEDA) Bond in the amount of $1,612,500.

                                       22
<PAGE>
 
NOTE 7 - INCOME TAXES:
 
The composition of the provision (credit) for income taxes is as follows:
<TABLE>
<CAPTION>
 
               For the year ended September 30,
             -------------------------------------
 
                 1996         1995         1994
                 ----         ----         ----
<S>          <C>           <C>          <C>
Current:
  Federal    $(1,786,483)  $2,533,000   $ 270,263
  State                       196,000
             -----------   ----------   ---------
              (1,786,483)   2,729,000     270,263
             -----------   ----------   ---------
Deferred:
  Federal         (5,136)    (877,771)   (115,422)
  State           35,008      (21,000)
             -----------   ----------   ---------
                  29,872     (898,771)   (115,422)
             -----------   ----------   ---------
Total        $(1,756,611)  $1,830,229   $ 154,841
             ===========   ==========   =========
 
</TABLE>

The fiscal 1996 U.S. Federal tax provision reflects the realization of the
Company's net deferred tax assets due to the carryback of the current year's
loss.  At September 30, 1996, approximately $1,865,000 of recoverable income
taxes relate to the carryback.  The Company has state net operating loss
carryforwards of $6,485,000, available to offset future state taxable income.
These state net operating loss carryforwards expire in the years 2000 through
2003.  In fiscal 1995, the Company utilized approximately $1,900,000 of
$2,700,000 of state net operating loss carryforwards available, among the
consolidated entities, to offset state income taxes of approximately $95,000 for
the year ended September 30, 1995.

The current year valuation allowance of $500,000 relates to deferred tax assets
established under FASB 109 for state net operating loss carryforwards, which
will be carried forward to future years for possible utilization.  No benefit
for these carryforwards has been recognized in the current year.

Reconciliations of income taxes with the amounts which would result from
applying the U.S statutory rate are as follows:
<TABLE>
<CAPTION>
 
                                             For the year ended September 30,
                                          -------------------------------------
 
                                             1996         1995        1994
                                             ----         ----        ----
<S>                                       <C>           <C>          <C>     
Provision (credit) at statutory rate      $(1,753,535)  $1,795,749   $ 75,426
Increases (reductions) in taxes
 resulting from asset writedowns                          (200,040)   107,713
State income taxes, net of federal
  income tax benefit                                       113,520
Adjustment of prior year accruals                          175,000
Other, net                                     (3,076)     (54,000)   (28,358)
                                          ------------  ----------- ----------
Total                                     $(1,756,611)  $1,830,229   $154,781
                                          ============  =========== ==========
 
The components of the deferred tax asset at September 30, 1996 and 1995
are as follows:
 
                                              1996           1995
                                              ----           ----
<S>                                        <C>            <C>     
Reserve for doubtful accounts              $  272,000     $  260,000
Reserve for inventory obsolescence
  and writedown to net realizable value       408,000        510,000
Accrued compensation                           27,000        258,000
Writedown of investment in
  Signature Corporation                       262,000        142,000
Contingencies                                 286,000
State NOL carry forwards                      468,000
Valuation allowance, deferred tax asset      (500,000)
Other, Net                                                    63,000
                                            ----------    -----------
Total                                       $1,223,000    $1,233,000
                                            ==========    ===========
 
</TABLE>

                                       23
<PAGE>
 
NOTE 8 - SHAREHOLDERS EQUITY:
 
The Company adopted a stock option plan effective October 1, 1985. A total of
261,000 shares of common stock were initially authorized and reserved for
issuance under the plan. As a result of stock dividends in 1988 and 1987, the
total stock options authorized is 315,810. The plan expired in October 1995. In
November 1995, the Board of Directors adopted the Company's 1995 Stock Option
Plan to permit the issuance of incentive stock options under Section 422 of the
Internal Revenue Code of Non-Qualified Stock Options. There are 500,000 shares
of Common Stock authorized for non-qualified and incentive stock options under
the 1995 plan, which are subject to adjustment in the event of stock splits,
stock dividends and other situations. Under the plan, no options may be granted
more than ten years after the effective date of plan. The exercise price of all
incentive stock options granted under the option plan may be no less than fair
market value of such shares on the date of grant. Stock option activity for
1996, 1995 and 1994 is as follows:
 
<TABLE> 
<CAPTION> 
 
                                             1996        1995        1994
                                             ----        ----        ----
<S>                                        <C>         <C>         <C>    
Options outstanding at October 1            303,300     211,000     173,000
Options granted                              48,000     146,000      73,000
Options expired/exercised                   (35,000)    (56,700)    (35,000)
                                        -----------   ----------- ----------
Options outstanding and exercisable at      316,300     300,300     211,000
 September 30
                                        ===========   =========== ==========
Options available for grant at              452,000      15,510     104,810
 September 30
                                        ===========   =========== ==========
Options price range at September 30       $1.875 to   $1.875 to   $1.875 to
                                          $7.975      $7.975      $9.08
</TABLE>

                                       24
<PAGE>
 
NOTE 9 - COMMITMENTS AND CONTINGENCIES:
 
LEASES:

The Company has certain operating leases, primarily for machinery and equipment
and the Ft. Worth, Texas facility, expiring at various dates.  Total rental
expenses amounted to $410,508 in 1996; $498,547 in 1995; and $648,428 in 1994.

As of September 30, 1996, minimum rental payments under noncancelable operating
leases were as follows:
 
                      Year    Amount
                      -----  --------
 
                      1997   $274,716
                      1998    166,928
                      1999    103,125
                           ----------
                      Total  $544,769
                           ==========
 
SERVICE CONTRACTS:
 
The Company has an agreement with an outside contractor to perform warehousing
and distribution services for the Fort Worth, Texas facility.  The services
include staffing and managing personnel, provision of all equipment, material,
and services in order to maintain the facility, and the design of a warehouse
management system.  Total service contract expense was $204,844 in 1996, and
$212,415 in 1995.
 
As of September 30, 1996, the minimum payments under the service contracts were
as follows:
 
                  Year    Amount
                  -----  --------
 
                  1997   $216,264
                  1998    222,744
                  1999    229,428
                       ----------
                  Total  $668,436
                       ==========
 
CONTINGENCIES:
 
The Company has agreements with certain customers and vendors which include
potential rebates, commissions and other liabilities upon the fulfillment of
certain terms and conditions.  Management has estimated and recorded contingent
liabilities of approximately $690,000 and $0 at September 30, 1996 and 1995,
respectively, related to these agreements and other potential liabilities.

                                       25
<PAGE>
 
NOTE 10 - PROFIT SHARING AND DEFERRED COMPENSATION PLAN:

The Company has a noncontributory profit sharing plan which covers substantially
all employees and provides benefits upon retirement, death or termination of
employment.  Amounts attributable to participant accounts are based on their
compensation and the meeting of a required vesting schedule.  The plan provides
for contributions determined annually by the Board of Directors.  The Companys
policy is to currently fund all contributions determined by the Board of
Directors.  Contributions totaled  $0, $0, and $100,000, for the years ended
September 30, 1996, 1995 and 1994, respectively.

In 1995, the Board of Directors approved upon the termination of his employment,
the President and Chairman of the Board, shall receive $100,000 per year for
four years in recognition of past services.  Accordingly, $400,000 in deferred
compensation liability was recognized and included in the 1995 financial
statements.  As a result of the losses from operations in 1996, the Board of
Directors terminated the Chairmans deferred compensation plan.  Accordingly, the
$400,000 liability was reversed in 1996 as a reduction of general and
administrative expenses.

                                       26
<PAGE>
 
NOTE 11 - SEGMENT INFORMATION:
 
The Company currently operates in three basic segments or lines of business.
These segments are (1) stock continuous forms and cutsheets, (2) custom
continuous forms and cutsheets, and (3) office products, including
computer/printer hardware and software products. The following table sets forth
certain financial information with respect to these segments and reconciles such
information to the consolidated financial statements.

<TABLE> 
<CAPTION> 

                                                                      Year-ended September 30,
                                                                      ------------------------
                                                                   1996         1995          1994
                                                                   ----         ----          ----
<S>                                                            <C>           <C>           <C>  
Net sales of products and services:                               
  Stock forms                                                  $48,231,271   $55,283,756   $50,081,522
  Custom forms                                                   7,232,703     8,823,616     7,810,862
  Office products, hardware/software                             1,978,053       808,989
                                                               -----------   -----------   -----------
      Total                                                    $57,442,027   $64,916,361   $57,892,384
                                                               ===========   ===========   ===========
Segment operating income (loss):                          
  Stock forms:                                                 $(4,460,757)  $ 6,289,470   $    67,299
  Custom forms                                                    (159,855)     (581,486)      244,616
  Office products, hardware/software                              (999,189)     (398,654)
  Corporate                                                        124,376       412,913       (14,708)
                                                               -----------   -----------   -----------
      Total                                                    $(5,495,425)  $ 5,722,243   $   297,207
                                                               ============  ===========   ===========
Corporate Consolidated income (loss) before taxes:        
  Segment operating income (loss)                              $(5,495,424   $ 5,722,243   $   297,207
  Interest expense                                                (347,113)     (203,299)     (185,532)
  Other  income (expense) items                                    685,082      (237,328)      110,342
                                                                -----------  -----------   -----------
      Total                                                    $(5,157,455)  $ 5,281,616   $   222,017
                                                                ===========  ===========   ===========
Assets:                                                   
  Stock forms                                                   12,844,233   $23,488,774   $12,979,371
  Custom forms                                                   2,921,664     3,228,294     6,304,754
  Corporate                                                     12,975,104    14,471,200     5,462,967
                                                                ----------   -----------   -----------
      Total consolidated                                       $28,741,001   $41,188,268   $24,747,092
                                                                ===========  ===========   ===========
                                                          
Capital expenditures:                                     
   Stock forms                                                   $ 190,683   $   122,812   $   291,022
   Custom forms                                                     85,258       599,214        20,012
   Corporate                                                       179,990       199,473        44,925
                                                                 ---------   -----------   -----------
       Total consolidated                                        $ 455,931   $   921,499   $   355,959
                                                                 =========   ===========   ===========
                                                          
Depreciation expense:                                     
   Stock forms                                                   $ 451,835   $   287,472   $   446,029
   Custom forms                                                    263,688       477,500       488,495
   Corporate                                                       418,797       370,136       355,907
                                                                 ---------   -----------   -----------
       Total consolidated                                       $1,134,320   $ 1,135,108   $ 1,290,431
                                                                ==========   ===========   ===========
</TABLE> 
 
Segment operating income is determined by deducting from sales of products and
services, cost of products sold, and selling, general and administrative
expenses directly related or allocable to the segment. Not included in segment
operating income are certain income and expense items such as interest income
and expense, other income and income taxes.
 
During the years ended September 30, 1996, 1995 and 1994, net sales to one stock
customer accounted for approximately 24%, 35%, and 33% of the total net sales,
respectively. The same customer accounted for 28%, 20% and 27% of the accounts
receivable balance at September 30, 1996, 1995 and 1994, respectively.

                                       27
<PAGE>
 
NOTE 12 - QUARTERLY FINANCIAL DATA (UNAUDITED):
<TABLE> 
<CAPTION> 
 
 
                                                                         Quarter  ended
                                                                         --------------
                                                            (in thousands, except per share amounts)
 
                                                        Dec 31      Mar 31        Jun 30        Sept 30
                                                        ------      ------        ------        -------
<S>                                                   <C>          <C>           <C>           <C>   
1996:
Net sales                                             $16,603      $13,500       $ 14,218        $13,121
Gross profit                                              836         (134)           (36)           (11)
Income (loss) before taxes                               (387)      (2,109)        (1,872)          (789)
Net  income (loss) (1)                                   (255)      (1,392)        (1,236)          (518)
Earnings (loss) per share                             $ (0.07)      $(0.37)       $ (0.33)       $ (0.15)
 
1995:
Net sales                                             $14,017      $19,403        $16,741        $14,755
Gross profit                                            1,839        4,070          3,560          2,482
Income before taxes                                       547        1,452          1,915          1,367
Net income (loss)                                         361          958          1,164            968
Earnings per share                                      $0.10        $0.26          $0.30        $  0.25
 
1994:
Net sales                                             $15,261      $13,638        $14,506        $14,487
Gross profit                                            1,064          997          1,222          1,575
Income (loss) before taxes                               (271)        (159)            54            597
Income (loss) before cumulative effect
  of change in account principle                         (179)        (105)            36            315
Cumulative effect on prior years (to
  September 30, 1993) of change in
  accounting for income taxes.                           (362)
Net income (loss)                                         183         (105)            36            315
Earnings per share                                      $0.05       $(0.03)         $0.01        $  0.08
 
</TABLE> 
 
 
(1) Net income for the quarter ended due to the correction of an error. December
31, 1995, previously reported as $405 is restated above to ($255) due to the
correction of an error.

                                       28
<PAGE>
 
NOTE 13 - OTHER EXPENSE (INCOME), NET:
 
 
Other expense (income), net, consist of the following at September 30, 1996, 
1995 and 1994:

<TABLE> 
<CAPTION> 
 
                                                    September 30,
                                                    -------------
                                             1996        1995        1994
                                             ----        ----        ----
<S>                                       <C>         <C>         <C>
Gain on marketable securities             $(861,459)  $(376,204)  $(283,352)
(Gain)/loss on fixed asset disposal         (46,066)    367,907      (4,204)
Equity in joint venture losses, and         
 other expenses                             431,972     217,390     303,526
Interest income                            (152,373)   (184,596)    (78,098)
Other, net                                  (57,157)    212,832     (48,214)
                                          ----------  ----------  ----------

Total                                     $(685,082)  $ 237,328   $(110,342)
                                          ==========  ==========  ==========
 
 
</TABLE>

                                       29
<PAGE>
 
                             REPORT OF INDEPENDENT
                         CERTIFIED PUBLIC ACCOUNTANTS
                         ============================



To the Shareholders and Board of Directors,
Paris Corporation
Burlington, New Jersey

        We have audited the accompanying consolidated balance sheets of Paris
Corporation, and subsidiaries as of September 30, 1996 and 1995 and the related
consolidated statements of operations, shareholders equity, and cash flows for
each of the three years in the period ended September 30, 1996. These financial
statements are the responsibility of the Companys management. Our responsibility
is to express an opinion on these financial statements based on our audi ts.

        We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

        In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial position of
Paris Corporation, and subsidiaries as of September 30, 1996 and 1995 and the
results of its operations and its cash flows for each of the three years in the
period ended September 30, 1996 in conformity with generally accepted accounting
principles.



Parente, Randolph, Orlando, Carey and Associates
Media, Pennsylvania
November 8, 1996

                                       30
<PAGE>
 
                               PARIS CORPORATION
                               -----------------
                                  SCHEDULE II
                                  -----------
                       VALUATION AND QUALIFYING ACCOUNTS
                       ---------------------------------
<TABLE>
<CAPTION>
 
                                             Additions  
                              Balance at     charged to                Balance at
                               beginning      cost and                  end of   
                               of period      expenses    Deductions    period   
                             -------------  ------------  ----------  ---------- 
<S>                          <C>            <C>           <C>         <C>
 
For the year ended
 September 30, 1996:
  Allowance for
   doubtful accounts:             $505,379       $40,000    $129,843      $415,536
  Allowance for
   contingency reserve:                 $0      $690,000          $0      $690,000
  Allowance for
   inventory obsolescence       $1,078,588            $0    $ 88,598      $989,990
 
For the year ended
September 30, 1995:
  Allowance for
   doubtful accounts:             $449,403      $330,000    $274,024      $505,379
  Allowance for
   inventory obsolescence         $544,584      $534,004          $0    $1,078,588


For the year ended
September 30, 1994:
  Allowance for
   doubtful accounts:             $511,118       $129,780   $191,495      $449,403
  Allowance for
   inventory obsolescence         $350,000       $194,584         $0      $544,584

</TABLE> 
ITEM 9 - CHANGES IN AND DISAGREEMENTS OF ACCOUNTING AND FINANCIAL DISCLOSURE

None.

                                       31
<PAGE>
 
                             REPORT OF INDEPENDENT
                         CERTIFIED PUBLIC ACCOUNTANTS
                       ON FINANCIAL STATEMENT SCHEDULES
                       --------------------------------


To The Shareholders and
 Board of Directors
Paris Corporation
Burlington, New Jersey:

        We have audited the basic consolidated financial statements of Paris
Corporation and subsidiaries as of September 30, 1996 and 1995, and for each of
the years in the three year period ended September 30, 1996, and have issued our
report thereon dated November 8, 1996, such consolidated financial statements
and report are included elsewhere in this Form 10K. Our audit also included
financial statement schedules of Paris Corporation and subsidiaries listed in
Item 14. These financial statement schedules are the responsibility of the
Companys management. Our responsibility is to express an opinion on the
financial statement schedules based on our audits. In our opinion, such
financial statement schedules referred to above, when considered in relation to
the basic consolidated financial statements taken as a whole, present fairly in
all material respects the information set forth therein.



Parente, Randolph, Orlando, Carey & Associates
Media, Pennsylvania
November 8, 1996

                                       32
<PAGE>
 
                                   PART III

ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

        Directors of the Company are elected for a term of one year. The current
Directors and Officers of the Company, together with their ages, positions,
backgrounds, and business experiences are set forth below:

 
NAME                       AGE  POSITION WITH THE COMPANY
----                       ---  -------------------------
 
Dominic P. Toscani, Sr.     68  President, Chief Executive
(4)                             Officer, Treasurer and
                                Chairman of the Board of
                                Directors
 
Dominic P. Toscani, Jr.     38  Senior Vice President,
(2),(4)                         Secretary and Director
 
Gerard M. Toscani           36  Senior Vice President
(3),(4)                         and Director
 
Thomas A. Baglio            35  Vice President of Sales
 
Jim Grey                    42  Vice President of Operations
 
John A. Whiteside           48  Chief Financial Officer
 
Donald Velardi              54  Director of Information Services
 
Palmer E. Retzlaff          65  Director
(2),(3)
 
Frank A. Mattei, M.D.       75  Director
(1),(2)
 
Oscar Tete                  72  Director
(1)
 
John V. Petrycki            56  Director
(1),(3)

        (1)  Member of Compensation and Stock Option Committee
        (2)  Member of Audit Committee.
        (3)  Member of the Investment and Finance Committee
        (4)  Dominic P. Toscani, Sr. is the father of Dominic P. Toscani, Jr.
             and Gerard M. Toscani.

        Dominic P. Toscani, Sr. is the founder of the Company, has served as a
        Direct or and has been responsible for its management since its
        inception. Prior to the founding of the Company, Mr. Toscani was a
        practicing attorney.

        Dominic P. Toscani, Jr. became a Director of the Company in 1992. He was
        appointed Senior Vice President and Secretary during fiscal 1990 and was
        the Company's Vice President of Operations since January 1987. He
        previously served as Operations Manager since 1982.

                                       33
<PAGE>
 
        Gerard M. Toscani became a Director of the Company in 1992. He was
        appointed Senior Vice President during fiscal 1990 and was the Company's
        Vice President of Sales and Marketing since January 1987. He previously
        served as Sales and Marketing Manager since September 1982.

        Thomas A. Baglio became Vice President of Sales in May of 1992. He
        served as Regional Sales Manager for the Company since January 1991. For
        the three years prior to January 1991 he was a Sales Manager with SCM
        Allied Paper.

        Jim Grey became Vice President of Operations in September 1993. He has
        been with the Company over eight years and has previously served as
        General Manager of the New Jersey facility.

        John A. Whiteside became Chief Financial Officer in January 1994. He
        served as Operations Manager and Controller of a H.J. Heinz Company
        subsidiary from 1990 until 1994. For the five years prior, he served as
        the Vice President of Finance for Ultra Precision, Inc.

        Donald Velardi became Director of Information Services in July 1994. He
        served as Director, Management Information Systems with Ronpak, Inc.
        from 1987-1994 and Manager, Information Services with Seimens Corporate
        Research and Support, Inc. from 1984 through 1987.

        Palmer E. Retzlaff became a Director in November 1993. He has been
        President of Southwest Grain Co., Inc. since 1973. Previously he was the
        General Manager of the Philadelphia Eagles.

        Frank A. Mattei was elected to the Board of Directors in March 1986. He
        has been a practicing orthopedic surgeon over the past five years and is
        associated with North Philadelphia Health System, (formerly Girard
        Medical Center), and St. Agnes Medical Center in Philadelphia.

        Oscar Tete was elected to the Board of Directors in March 1986. Mr. Tete
        retired in 1990. He was an Executive Vice President of First Fidelity
        Bank in Burlington, New Jersey since 1972.

        John Petrycki was elected to the Board of Directors in August 1995. Mr.
        Petrycki retired in 1995. He was President and CEO of PNC Bank in south
        central Pennsylvania.

                                       34
<PAGE>
 
ITEM 11 - SUMMARY COMPENSATION

        The following table contains information regarding the individual
compensation of the seven most highly compensated officers of the Company in
fiscal years 1996, 1995 and 1994.

                                  Summary Compensation Table


                                           Annual Compensation
                                        --------------------------------------
  
            Name and              Fiscal                            Other
       Principal Position          Year    Salary     Bonus         Annual
                                                               Compensation (1)
-------------------------------------------------------------------------------

Dominic P. Toscani, Sr.             1996   $303,102   $20,000           $8,000
Chairman of the Board               1995   $285,362   $50,000           $8,000
and President                       1994   $296,400   $10,000           $8,000
 
Dominic P. Toscani, Jr.             1996   $198,712   $20,000           $8,000
Senior Vice President               1995   $179,092   $62,500           $8,000
and Secretary                       1994   $129,538   $30,000           $8,000
 
Gerard M. Toscani                   1996   $198,712   $20,000           $8,000
Senior Vice President               1995   $179,092   $62,500           $8,000
                                    1994   $136,046   $30,000           $8,000
 
Thomas A. Baglio                    1996   $120,641   $ 5,000           $    0
Vice President of Sales             1995   $110,962   $10,000           $    0
                                    1994   $ 89,614   $ 4,000           $    0
 
James Grey (2)                      1996   $ 83,923   $ 5,000           $2,000
Vice President of Operations        1995   $ 77,212   $13,000           $2,350
                                    1994   $ 65,000   $ 2,500           $3,000
 
John A. Whiteside (2)               1996   $ 94,415   $ 5,000           $    0
Chief Financial Officer             1995   $ 84,144   $10,000           $    0
 
Donald G. Velardi (2)               1996   $ 71,334   $ 5,000           $    0
Director of Information Services    1995   $ 67,192   $ 7,000           $    0

(1)  Represents the use of a company car.
(2)  Compensation data for these officers is provided in only the years for
     which they served as officers the entire fiscal year.

     All officers serve at the discretion of the board of Directors and are
appointed to their respective offices for one year term.

                                       35
<PAGE>
 
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT


                SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
                            (AS NOVEMBER 15, 1996)


Title of       Name and Address of     Amount and Nature of    Percent of
Class            Beneficial Owner    Beneficial Ownership (1)   Class (1)
--------       -------------------   ------------------------  -----------

Common        Dominic P. Toscani (2)         1,085,198            29.2
Stock         and Nancy C. Toscani 
              122 Kissel Road      
              Burlington, NJ  08016 
 
Common        Frank A. Mattei                1,262,185            34.0
Stock         1016 Mercer Street    
              Cherry Hill, NJ  08034 
 
Common        The Caritas Foundation (3)       359,215             9.7
Stock         700 Hobbs Road            
              Wayne, PA  19087           
 
Common        FMR Corporation                  238,500              6.4
Stock         82 Devonshire Street 
              Boston, MA  02109

(1)  Based on 3,632,531 shares outstanding and 316,300 options currently
     exercisable on November 15, 1996.
 
(2)  Includes 955,947 shares personally held; 38,506 shares held by Paris
     Corporation, Profit Sharing Plan of which Mr. Toscani is the Plan Trustee;
     14,745 shares held by Toscani Investment Company, a family partnership; and
     72,000 options exercisable as of November 15, 1996.
 
(3)  The Caritas Foundation, a tax exempt organization formed under Section
     501(C)(3) of the Internal Revenue Code of 1954, as amended, was organized
     in 1984 by Dominic P. Toscani, Sr. to promote the objectives of free
     enterprise and to support individual freedom. At the present time Reverend
     Peter Toscani, O.S.A., is sole trustee of the foundation.

                                       36
<PAGE>
 
                       SECURITY OWNERSHIP OF MANAGEMENT
                            AS OF NOVEMBER 15, 1996

 
                                                Number of
Shareholder                                 Shares owned (1)    Percent (1)
 
Frank A. Mattei                                 1,262,185           34%
1016 Mercer Street
Cherry Hill, NJ 08034
 
Dominic P. Toscani, Sr. (2) (4)                 1,085,198         29.2%
and Nancy C. Toscani
122 Kissel Road
Burlington, NJ 08016
 
The Caritas Foundation (3)                        359,215          9.7%
 
FMR Corporation                                   238,500          6.4%
82 Devonshire Street
Boston, MA 02109
 
Dominic P. Toscani, Jr. (4)                       111,210          2.9%
 
Gerard M. Toscani (4)                             110,487          2.9%
 
Oscar Tete                                          4,102            *
 
Palmer E. Retzlaff                                  6,000            *
 
John Petrycki                                       2,000            *
 
All Directors (present and proposed)            3,073,397         82.7%
and officers as a group (12 persons)(4)
 
 * Less than 1%
(1)  Based on 3,632,531 shares outstanding and 316,300 options currently
     exercisable on November 15, 1996.
(2)  Includes 959,947 shares personally held; 38,506 shares held by Paris
     Corporation Profit Sharing Plan of which Mr. Toscani is the Plan Trustee;
     14,745 shares held by Toscani Investment company, a family partnership; and
     72,000 options exercisable as of November 15, 1996.
(3)  The Caritas Foundation, a tax exempt organization formed under Section 501
     (c) (3) of the Internal Revenue code of 1954, as amended, was organized in
     1984 by Dominic P. Toscani, to promote the objectives of free enterprise
     and to support individual freedom. At the present time Reverend Peter
     Toscani, O.S.A., is sole trustee of the Foundation. The Foundations address
     is 700 Hobbs Road, Wayne, Pennsylvania 19087.
(4)  Includes options currently exercisable individually and all officers as a
     group (256,000).

ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

        There are no other material relationships or transactions which qualify
for disclosure under this caption.

                                       37
<PAGE>
 
PART IV

ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
          ON FORM 8-k

        This consolidated financial statements and related schedules filed as
part of this Annual Report on Form 10-K are included in Part II, Item 8.

EXHIBITS:

        The following exhibits (with the exception of Exhibit 3.4, 10.5(b), 10.7
And 22(a)) are incorporated by reference to the Company's registration statement
on Form S-18 (no.-3-3344-W) filed February 13, 1986 with the Securities and
Exchange Commission and effective march 25, 1986. Exhibit 3.4, 10.5(b) And 10.7
are incorporated by reference to the Company's fiscal 1989 Form 10-K filed with
the Securities and Exchange Commission on December 19, 1989. Exhibit 22(a) is
incorporated by reference to the Company's fiscal 1990 Form 10-K filed with the
Securities and Exchange Commission on December 27, 1991.

        3.1        Articles of Incorporation of the Company.
        3.2        Amendment to Articles of Incorporation, dated January 6,
                   1986.
        3.3        Amendment to Articles of incorporation, dated January 7,
                   1986.
        3.4        By-laws of Company, as amended.
        4.2(a)     Form of Warrant to Purchase Common Stock of Company.
        10.5       Companys Profit Sharing Plan, dated October 1, 1979.
        10.5(a)    Amendment to Profit Sharing Plan, dated October 2, 1985.
        10.5(b)    Amendment to Profit Sharing Plan, dated October 1, 1986.
        10.6       Company's Stock Option Plan, dated October 1, 1985.
        10.7       Line of Credit (loan agreement) of $2,000,000 from the
                   Fidelity Bank.
        10.9       Bucks County Industrial Development Authority Loan Agreement
                   for 1,500,000 dated April 10, 1985.
        10.9(a)    Letter Amendment, dated March 4, 1986 from Special Counsel to
                   Fidelity Bank.
        10.9(b)    Letter Amendment, dated March 5, 1986 from Fidelity Bank to
                   Special Counsel.
        10.10      New Jersey Economic Development Authority Note for 3,000,000
                   by Company, dated September 10, 1985.
        10.10(a)   Letter Agreement, dated March 4,1986 from Special Counsel to
                   Fidelity Bank.
        10.10(b)   Letter Amendment dated March 5, 1986 from Fidelity Bank to
                   Special Counsel.
        10.10(c)   Letter dated, March 24, 1986 from Special Counsel to Fidelity
                   Bank with respect to the New Jersey Economic Development
                   Authority Loan.
        22(a)      List of Subsidiaries.


REPORTS ON FORM 8-K

        None.

                                       38
<PAGE>
 
                                  SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on behalf
by the undersigned, thereunto duly authorized.


                               PARIS CORPORATION



Date:                               By: 
     ------------------                 ----------------------------------------
                                        Dominic P. Toscani, Sr.,
                                        (President, Chairman Board of Directors)


Date:                               By: 
     ------------------                 ---------------------------------------
                                        John A. Whiteside
                                        (Chief Financial Officer)


        Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.



                                  SIGNATURES



---------------------------------------         --------------------------------
Dominic P. Toscani, Sr.          (Date)         Frank A. Mattei           (Date)
(President, Chairman Board of Directors)        (Director)



---------------------------------------         --------------------------------
John A. Whiteside                (Date)         Palmer E. Retzlaff        (Date)
(Chief Financial Officer)                       (Director)



---------------------------------------         --------------------------------
Dominic P. Toscani, Jr.          (Date)         Oscar Tete                (Date)
(Director)                                      (Director)



---------------------------------------         --------------------------------
Gerard M. Toscani                (Date)         John V. Petrycki          (Date)
(Director)                                      (Director)

                                       39