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                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549
                                   FORM 10-K
(Mark One)

[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
   ACT OF 1934
                    For the fiscal year ended June 24, 2000

                                      OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
   EXCHANGE ACT OF 1934

  For the transition period from     to

                          Commission File No. 1-11427

                                ---------------
                      NEW ENGLAND BUSINESS SERVICE, INC.
            (Exact name of registrant as specified in its charter)

               Delaware                             04-2942374
    (State or other jurisdiction of    (IRS Employer Identification number)
    incorporation or organization)
                                                       01471
            500 Main Street                         (Zip Code)
         Groton, Massachusetts
    (Address of principal executive
               offices)

      Registrant's telephone number, including area code: (978) 448-6111

Securities registered pursuant to Section 12(b) of the Act:

<TABLE>
<CAPTION>
                                            Name of each exchange
             Title of each class             on which registered
             -------------------           -----------------------
         <S>                               <C>
          Common Stock ($1.00 par value)   New York Stock Exchange
          Preferred Stock Purchase Rights  New York Stock Exchange
</TABLE>

Securities registered pursuant to Section 12(g) of the Act: None

  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 12 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 [_]

  Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]

  The aggregate market value of the Registrant's Common Stock, par value $1.00
per share, held by stockholders who are not affiliates of the Registrant at
August 23, 2000 as computed by reference to the closing price of such stock on
that date was approximately $260,827,818.

  The number of shares of Registrant's Common Stock, par value $1.00 per
share, outstanding at August 23, 2000 was 13,386,382.

Documents Incorporated By Reference

  Portions of the Proxy Statement sent to stockholders in connection with the
Annual Meeting to be held on October 20, 2000 are incorporated by reference
into Items 10, 11, 12 and 13 (Part III) of this Report. Such Proxy Statement,
except for the parts therein which have been specifically incorporated by
reference, shall not be deemed "filed" for the purposes of this report on Form
10-K.

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                                    PART I

ITEM 1. BUSINESS

  New England Business Service, Inc. (the "Company") was founded in 1952,
incorporated in Massachusetts in 1955 and reincorporated in Delaware in 1986.
The Company designs, produces and distributes business forms, checks,
envelopes, labels, greeting cards, signs, stationery and related printed
products, and distributes packaging, shipping and warehouse supplies,
software, work clothing, advertising specialties and other business products
through direct mail, direct sales, telesales, dealers and the Internet to
small businesses throughout the United States, Canada, the United Kingdom and
France. During the past five years the Company has completed several
acquisitions which are described below.

  In January 1997, the Company acquired the outstanding stock of Standard
Forms Limited ("SFL"), a U.K-based company for consideration of approximately
$4,300,000. SFL markets a line of business forms and stationery by direct mail
and through a direct sales force, principally to automotive accounts in the
U.K. and France.

  In March 1997, the Company acquired substantially all of the assets and
assumed certain liabilities of Chiswick Trading, Inc. ("Chiswick") for
consideration of approximately $34,600,000 in cash (net of cash acquired) and
approximately $8,400,000 in Company common stock. Chiswick markets a line of
retail and industrial packaging, shipping and warehouse supplies sold
primarily by direct mail to small wholesalers, manufacturers and retailers.

  In December 1997, the Company acquired all of the outstanding common stock
of Rapidforms, Inc. ("Rapidforms") for consideration of approximately
$82,136,000 in cash (net of cash acquired). Rapidforms designs, produces and
markets business forms, business supplies, holiday greeting cards and
promotional products sold principally by direct mail to small businesses
across the United States. As part of the Rapidforms acquisition, the Company
also acquired Rapidforms' wholly-owned subsidiary, Russell & Miller, Inc.,
which primarily sells in-store retail merchandising supplies.

  In June 1998, the Company acquired all of the outstanding common stock of
McBee Systems, Inc. and all of the assets of McBee Systems of Canada, Inc.
(collectively "McBee") for consideration of approximately $48,518,000 in cash
(net of cash acquired) and $12,600,000 in Company common stock. McBee
manufactures and markets checks and related products to small businesses in
the United States and Canada through a dedicated field sales force.

  In July 2000, the Company acquired all of the outstanding shares of common
stock of PremiumWear, Inc. ("PremiumWear") for $13.50 per share in cash, plus
the assumption of $3,848,000 in debt, which brought the total transaction
value to approximately $41,600,000 (net of cash acquired). PremiumWear designs
and markets knit and woven shirts and other apparel and accessories to the
promotional products/advertising specialty industry.

  The Company reports its operations in three segments entitled "Printed
Products--Direct Marketing," "Printed Products--Direct Sales" and "Packaging
and Display Products." The first two segments sell primarily printed business
products such as checks and business forms but use different distribution
methods; the remaining segment primarily serves as a reseller of packaging and
shipping supplies and retail signage. PremiumWear, which was acquired
following the end of fiscal year 2000, will operate as a separate segment in
fiscal year 2001.

  Additional financial information regarding the segments including the net
sales and operating profit attributable to each of the Company's segments for
the last three fiscal years is contained in the Notes to the Consolidated
Financial Statements included in this Annual Report on Form 10-K.

Products

  The Company's product lines consist of an extensive range of standardized
imprinted manual and computer business forms, custom forms, checks and check
writing systems, envelopes, labels, greeting cards, signs,

                                       1
<PAGE>

stationery and other printed products principally designed and imprinted in-
house. The Company also distributes a variety of industrial shipping and
packaging products including corrugated boxes, polyethylene bags, tape, labels
and shrink wrap as well as retail packaging supplies such as bags, ribbons,
gift wrap and bows. In addition, the Company distributes a variety of other
business products commonly used by small businesses, including merchandising
displays, presentation folders, promotional products, work clothing and
software. Products are either specifically designed for individual lines of
business or are of a type generally used by small businesses and professional
offices. The Company's full range of products are enhanced by high quality,
fast delivery, competitive prices and extensive product guarantees.

  The Company's standard manual business forms include billing forms, work
orders, job proposals, purchase orders, invoices and personnel forms. Standard
manual business forms are designed to provide small businesses with the
financial and other business records necessary to efficiently manage a
business. The Company's stationery line, including letterhead, envelopes and
business cards, is available in a variety of formats and ink colors designed
to provide small businesses with a professional image. Checks and check
writing systems are designed to facilitate payments, the recording of
transactional information and the posting of related bookkeeping entries.

  The Company also offers a full line of printed products compatible with most
accounting software packages commonly used by small businesses. The Company's
computer business forms, including checks, billing forms, work orders,
purchase orders and invoices, are designed to provide small businesses with
the computer compatible records necessary to efficiently manage a business.

  Promotional products, including labels, pricing tags, signage, advertising
specialties, presentation folders and greeting cards, are designed to fulfill
a variety of selling and marketing activities and to provide small businesses
with a professional image. Additionally, the Company markets a line of filing
systems, accountants' supplies and appointment products specifically for use
in small professional offices.

  The majority of the Company's standard products are imprinted to provide
small businesses with an affordable, professional image. Standard imprint
options include consecutive numbering, logos, customer names, addresses, and
phone numbers. The Company also offers a wide range of custom printing
alternatives and a custom logo design service.

  The Company's packaging and shipping supplies, including bags and bag
closures, bubble and polystyrene fill, wrapping materials, boxes, tapes and
mailers, are used principally by small wholesalers, manufacturers and
distributors to package, distribute and market their products. The Company's
line of retail supplies, including signs, merchandising supplies, bags,
ribbons, gift wrap and bows, are used by small retailers to display, market
and package their products.

  The Company also sells the Company Colors(TM) line of work clothing,
including an array of jackets, shirts, pants, hats, sweatshirts, and uniforms
commonly worn in the workplace. The Company Colors line may be embroidered
with business names, logos, and employee names to provide a small business
with a coordinated and professional image.

  The Company distributes Form Magic(R), a proprietary form-filling software
package, third-party accounting software including Peachtree's One-Write
Plus(R) and Intuit's Quickbooks(R), and a line of products designed by
MySoftware Company. Software distributed by the Company is designed to perform
a variety of the tasks required to manage and promote a small business, and is
compatible with certain business forms and other printed products offered by
the Company.

  The Company, through its PremiumWear subsidiary, sells knit and woven sport
shirts under the Munsingwear(R) label to promotional products/advertising
specialty customers pursuant to a license from Perry Ellis International, Inc.
The Company sells its Page & Tuttle(R) brand of knit golf shirts and
coordinated apparel

                                       2
<PAGE>

to specialty market customers. Distribution of PremiumWear products to
customers is through a network of independent sales representatives. Also,
PremiumWear receives commission income from representing other companies'
products to the promotional products industry.

  For a further discussion of the risks and uncertainties associated with
customer preferences and the market for forms and related printed products,
see "Certain Factors That May Affect Future Results" included in Part II, Item
7 to this Annual Report on Form 10-K.

Product Development and Research

  The Company's products are designed principally by an in-house product
development staff or are obtained from third-party sources. The Company relies
upon direct field research with customers and prospects, focus groups, mail
surveys, feedback from distributors, salespeople, representatives and
unsolicited suggestions to generate new product ideas. Product design efforts
are accomplished or directed by Company design personnel who employ manual and
computer design methods to create products. Product design efforts range from
minor revisions of existing manual business forms to the creation of an
entirely new line of products such as the Company Colors line of work
clothing. Throughout the design process, the Company solicits comments and
feedback from customers and prospects, and tests market acceptance through a
variety of direct mail and selling test methods.

  For a further discussion of the risks and uncertainties associated with the
technological changes affecting future demand for the Company's business forms
and related products, see "Certain Factors That May Affect Future Results"
included in Part II, Item 7 to this Annual Report on Form 10-K.

Sales and Marketing

  The Company has established three distinct channels of distribution with the
recent PremiumWear acquisition representing a fourth channel. The Company's
primary channel is direct mail in which up to 100 million pieces of
promotional advertising offering the Company's products are delivered by mail
to customers and prospective customers each year under the NEBS(R),
RapidForms(R), McBee(R), Chiswick(R), Histacount(R), SYCOM(R), R&M Retail
Merchandising(R), Visual Display SolutionsTM, Bags & BowsTM, NCS National
Clothier Supply(R), Main Street(R), Holiday ExpressionsTM, Ad IdeasTM, ASH(R),
NAPCO(R), Education MattersTM, Company Colors, Business EnvelopesTM and SFLTM
brand names. The Company's direct mail efforts are supplemented by the
prospecting and account development efforts of an outbound telemarketing
group.

  The Company's success to date has largely been the result of effective
direct marketing and the strength of its customer relationships. Targeted
direct mail marketing in combination with focused telemarketing allows the
Company to identify and penetrate geographically dispersed but, in the
aggregate, significant markets. The Company targets small businesses with 100
or fewer employees within these markets with specialized promotions and
products specifically designed to meet small business needs. In the direct
mail channel, the Company's promotional materials contain one or more order
forms to be completed by the customer and either mailed, faxed or telephoned
to the Company's telesales and customer service group. The Company and its
subsidiaries also maintain World Wide Web sites for promotion and order
taking.

  The Company's promotional materials include several catalogs containing a
comprehensive display of the Company's forms and checks, work clothing,
packaging supplies and retail merchandising supplies product offerings. In
addition, the Company utilizes smaller catalogs focused on specific products
or targeted to a specific small business segment, promotional circulars with
samples, flyers, and inserts included with invoices, statements and product
shipments. To a lesser extent the Company relies on advertising space in
magazines and post card packages to generate sales leads from prospective
customers. The Company utilizes the United States or the local country postal
service for distribution of most of its advertising materials.

  The Company's second principal channel of distribution is through a field
sales organization of over 430 employees, primarily dedicated to marketing
McBee brand checks and check writing systems, Chiswick brand

                                       3
<PAGE>

packaging and shipping supplies, or Russell & Miller brand retail
merchandising and display products. Initial order support, product reorders
and routine service in the direct sales channel is provided by a network of
customer service representatives located throughout the United States and
Canada.

  The principal focus of the McBee sales force is to generate first-time
buyers for check and check writing system products. Prospective customer leads
are generated for the McBee sales force under referral arrangements with small
business accountants and commercial banks representing approximately 23,000
geographically dispersed branch offices. The McBee sales effort typically
targets small business customers with fewer than 10 employees.

  The principal focus of the Chiswick and Russell & Miller sales forces has
been to develop high-potential customer relationships initially established
through the direct mail channel. The Chiswick and Russell & Miller sales
efforts typically support businesses with more than 100 employees or retail
chains with geographically dispersed store locations.

  The Company's third principal distribution channel is through a network of
independent dealers. The Company distributes a full line of private label
standard and custom printed products, including manual and computer forms,
checks, greeting cards and labels through this dealer network. The Company's
independent dealers typically include local printers, business forms dealers,
stationers, computer stores and system houses and number approximately 25,000.

  The Company's PremiumWear subsidiary represents the fourth channel of
distribution by utilizing independent sales representatives to market its
products and to solicit orders from customers. All products are distributed to
customers through PremiumWear's Tennessee distribution facility.

  The Company has also entered into alliance marketing agreements with third-
party vendors to offer payroll, accounting, web-page development, and direct
marketing services to its base of small business customers. Revenue from these
alliances is generated in the form of royalties and commissions received from
the third-party vendors.

  The Company believes that its sophisticated and extensive marketing
database, customer/prospect lists and referral sources constitute a
competitive advantage. The Company is able to select names and plan promotions
based on a variety of attributes including status as a customer or prospect,
line of business, product purchase history, purchase frequency or purchase
dollar volume. With this data, the Company is able to create and deliver cost-
effective marketing programs to small businesses through direct mail, direct
sales, outbound telemarketing, the Internet or the dealer channel.

  For a further discussion of the risks and uncertainties associated with the
small business market and the Company's direct mail channel, see "Certain
Factors That May Affect Future Results" included in Part II, Item 7 to this
Annual Report on Form 10-K.

Raw Materials, Production and Distribution

  The Company's production and distribution systems are designed to process a
high volume of small dollar orders on a cost-effective basis. The production
and procurement of printed product base stock is driven by forecasts of demand
for the Company's products. The Company produces semi-finished base business
forms, check stock and related products in long runs on high-speed, roll-fed
presses from bond and carbonless papers. The Company purchases base stock from
a number of industry sources at competitive prices. The bond and carbonless
papers used by the Company to produce base stock are purchased from a limited
number of vendors at competitive prices.

  In response to a customer order, the Company's base printed products are
subsequently personalized with a variety of imprint options including customer
names, addresses, phone numbers, consecutive numbering and logos. The Company
operates equipment specifically designed to meet the demands of short-run
personalized

                                       4
<PAGE>

printing. Typesetting and imprinting of customer headings are accomplished
with computerized typesetters, platemaking systems, letter presses, offset
presses and digital presses. In addition, the Company utilizes manual and
semi-automatic bindery equipment. A number of the Company's imprinting presses
have been designed internally or substantially modified to meet the short-run
demands of small businesses. These specialized presses allow the Company to
produce small-order quantities with greater efficiency than would be possible
with stock equipment available from typical printing press equipment
suppliers.

  During the past two years, the Company has experienced an increase in the
revenue generated by the sale of stock business products produced by third
parties, but shipped to customers by the Company, including Chiswick brand
industrial packaging and warehouse supplies, and Bags & Bows retail supplies.
The Company principally utilizes a "pick and pack" operation to aggregate
stock products from warehoused inventory into distinct order groups and to
package these order groups for shipment to the customer. The Company's stock
business products are obtained from a large number of suppliers at competitive
prices. In addition, the Company relies on a limited number of suppliers to
produce and drop-ship products directly to Company customers. The Company
believes that alternative sources are generally available for products
purchased from third-party vendors, and is continually evaluating its sourcing
of these third-party supplied products. PremiumWear primarily sources its
product from "full package" manufacturers in the Far East, and Central and
South America. There currently is reasonable availability of assembly capacity
and raw materials for this product line.

  The Company has no significant backlog of orders. The Company's objective is
to produce and ship product as expeditiously as possible following receipt of
a customer's order. During fiscal year 2000, approximately 70% of printed
products were produced and shipped within one day and approximately 90% within
four days of order. The Company's stock business products are routinely
shipped within 24 hours of receipt of a customer order.

  To facilitate expeditious production and shipment of product, the Company
maintains inventories of unprinted paper ($5,294,000 at June 24, 2000), and
partially printed business forms, packaging, shipping and retail supplies,
work clothing and related business products ($19,284,000 at June 24, 2000).

  The Company ships its products to customers primarily by United Parcel
Service of America, Inc. The Company uses parcel post and overnight delivery
services for distribution of the remainder of its products to customers in the
U.S. and for its international businesses.

  For a further discussion of the risks and uncertainties associated with the
Company's reliance on certain individual third-party vendors to provide raw
materials and services critical to the Company's operation, see "Certain
Factors That May Affect Future Results" included in Part II, Item 7 to this
Annual Report on Form 10-K.

Competition

  The small business forms and supplies industry is highly competitive. The
Company believes that it is well positioned in the small business marketplace,
with a reputation for reasonable prices and high quality, reliability and
service.

  The Company's primary competitors for printed products are the local
printers, business forms dealers, contract stationers and office products
superstores located throughout each of its geographic markets. Local printers
have an advantage of physical proximity to customers, but generally do not
have the capability of producing a broad array of products, particularly those
having a complex construction. In addition, most local printers lack the
economies of scale to produce a small order for a single customer on a cost-
effective basis. General purpose, preprinted business forms offered by
stationers and office product superstores are typically price competitive with
the Company's forms, but lack the design and functionality for specific lines
of business and the custom printing options available with the Company's
products. The Company's principal competitors for stock business products are
the large number of local and regional business supplies jobbers, distributors
and retailers throughout the United States and Canada.

                                       5
<PAGE>

  At present, the Company is aware of more than twenty major independent
companies or divisions of larger companies in its geographic markets offering
printed products and business supplies to small businesses through direct
mail, distributors, or a direct sales force. The primary competitive factors
influencing a customer's purchase decision are product guarantees, breadth of
product line, speed of delivery, product quality, price and customer service.
The Company believes it is the leading direct marketer of business forms,
checks and related printed products to the very small business market in the
United States, Canada and the United Kingdom. The Company defines the very
small business market as businesses with fewer than 20 employees.

  The Company's PremiumWear subsidiary operates in the promotional
products/advertising specialty marketplace for apparel which has become
increasingly competitive and is characterized by a number of broad-line
companies. The principal competitive features are pricing, styling, quality
(both in material and production), and customization services such as
embroidery and screen printing.

  For a further discussion of the risks and uncertainties associated with the
competitive landscape for the Company's products, see "Certain Factors That
May Affect Future Results" included in Part II, Item 7 to this Annual Report
on Form 10-K.

Employees

  The Company had 3,779 full and part-time employees at June 24, 2000. The
Company believes its relationship with its employees to be satisfactory.

Environment

  To the Company's knowledge, no material action or liability exists on the
date hereof arising from the Company's compliance with federal, state and
local statutes and regulations relating to protection of the environment.

ITEM 2. PROPERTIES

  The Company's principal executive offices are located in Groton,
Massachusetts. The Company's principal operating facilities consist of
manufacturing, administrative and warehouse facilities and are located in the
United States, Canada, the United Kingdom and France. Of its principal
operating facilities, the Company owns 832,100 square feet in the aggregate in
Flagstaff, Arizona, Groton and Townsend, Massachusetts, Maryville, Missouri,
Peterborough, New Hampshire, Thorofare, New Jersey, Ogden, Utah, Midland,
Ontario and Chester, England, and leases 826,441 square feet in the aggregate
in Santa Fe Springs, California, Sudbury, Massachusetts, Lithia Springs,
Georgia, Parsippany, New Jersey, Athens, Ohio, Damascus, Virginia, Minnetonka,
Minnesota, Clarksville, Tennessee and Chateau-Renault, France. The Company
also leases space in approximately 80 locations in the United States and
Canada for sales offices.

  The Company believes its existing production and office facilities are
adequate for its present and foreseeable future needs.

ITEM 3. LEGAL PROCEEDINGS

  From time to time the Company is involved in disputes and/or litigation
encountered in the ordinary course of its business. The Company does not
believe that the ultimate impact of the resolution of such outstanding matters
will have a material effect on the Company's business, operating results or
financial condition.

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

  There were no matters submitted to a vote of stockholders during the fourth
quarter of fiscal 2000.


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<PAGE>

ITEM 4.1 EXECUTIVE OFFICERS OF THE REGISTRANT

  The Company's executive officers are elected to office by the Board of
Directors at the first board meeting following the Annual Meeting of
Stockholders or at other board meetings as appropriate, and hold office until
the first board meeting following the next Annual Meeting and until a
successor is chosen. Information regarding the Company's executive officers is
presented below.

  Robert J. Murray, age 59, has been a director of the Company since 1991. Mr.
Murray has been Chairman of the Board, President and Chief Executive Officer
of the Company since 1995. Mr. Murray retired from The Gillette Company, a
diversified consumer products company, in 1995, having been with Gillette for
more than 34 years. From 1991 until his retirement in 1995, Mr. Murray was
Executive Vice President, North Atlantic Group of Gillette. Mr. Murray is a
director of LoJack Corporation and Allmerica Financial Corporation.

  George P. Allman, age 58, joined the Company in 1996, and he has been Senior
Vice President and President of Diversified Operations since 1998. Prior to
that, he served as Vice President, Diversified Operations from 1996 to 1998,
and as Vice President, Retail Sales and Operations during 1996. Prior to
joining the Company, he was a private investor during 1995, and founded and
served as President of GPA Associates, Inc., a diversified promotional
products supplier, from 1984 to 1995.

  David E. Berg, age 43, has been Senior Vice President and President of
PremiumWear since July 2000. Mr. Berg joined the Company in July 2000 in
connection with the Company's acquisition of PremiumWear, Inc., where he has
been President since 1997. Prior to that, he served as PremiumWear's Executive
Vice President of sales and marketing from 1995 to 1997. Mr. Berg has also
served as PremiumWear's Chief Executive Officer since 1999, and he served as
Chief Operating Officer from 1996 to 1999.

  Edward M. Bolesky, age 54, joined the Company in 1981, and he has been
Senior Vice President and President of NEBS Direct Marketing since October
1998. Prior to that, he served as Vice President, Direct Marketing/Telesales
and Service from 1996 to 1998, as Vice President, Business Solutions and
Operations from 1995 to 1996, as Vice President, Manufacturing and Information
Systems during 1995, as Vice President, Operations from 1994 to 1995, and
prior to that, in numerous capacities in operations and administration.

  John F. Fairbanks, age 39, joined the Company in 1994, and he has been
Senior Vice President and President of Chiswick since 1998. Prior to that, he
served as Vice President and Chief Financial Officer from 1996 to 1998, and as
Vice President and Corporate Controller during 1996. He also served as
Treasurer from 1994 to 1996 and during 1998, and as Secretary from 1994 to
1996.

  Joel S. Hughes, age 55, joined the Company in February 1999, and he has been
Senior Vice President, Corporate Channel Marketing since that date. Prior to
joining the Company, he served as Vice President of Marketing, Sales and
Service of Harvard Business School Publishing from 1992 to 1999.

  Daniel M. Junius, age 48, joined the Company in October 1998, and he has
been Senior Vice President and Chief Financial Officer and Treasurer since
that date. Prior to joining the Company, he served as Vice President, Finance
and Chief Financial Officer of Nashua Corporation, a supplier of specialty
imaging products and services, from 1995 to 1998, and as Treasurer of Nashua
Corporation from 1985 to 1998.

  Richard T. Riley, age 44, has been Senior Vice President and President of
Rapidforms since 1998. Mr. Riley joined the Company in 1997 in connection with
the Company's acquisition of Rapidforms, Inc., where he has been President
since 1992. During 1998 he held the additional office of Vice President of the
Company.

  Steven G. Schlerf, age 48, joined the Company in 1979, and he has been
Senior Vice President, Manufacturing and Technical Operations since 1998.
Prior to that, he served as Vice President, Manufacturing and Technical
Operations from 1996 to 1998, as Vice President, Image Manufacturing and
Product Development from 1995 to 1996, and prior to that, in a variety of
capacities in manufacturing and operations.


                                       7
<PAGE>

  Robert D. Warren, age 49, joined the Company in 1996, and he has been Senior
Vice President, Business Management and Development since 1998. Prior to that,
he served as Vice President, Business Management and Development from 1996 to
1998, and as Vice President, Business Management and Business Solutions during
1996. Prior to joining the Company, he served as Vice President, Marketing for
Gillette Stationery Products, North America of The Gillette Company, a
diversified consumer products company, from 1992 to 1996.

                                       8
<PAGE>

                                    PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS

Common Stock

  The Company's Common Stock is listed and traded on the New York Stock
Exchange under the symbol "NEB". For the fiscal periods indicated, the high
and low sales prices for shares of the Company's Common Stock as reported on
the New York Stock Exchange--Composite Transactions Reporting System were as
follows:

<TABLE>
<CAPTION>
Fiscal 2000             High      Low
-----------             ----      ---
<S>                     <C>       <C>
1st Quarter............ 31        26 13/16
2nd Quarter............ 29 15/16  18
3rd Quarter............ 24 7/16   15 3/8
4th Quarter............ 17 1/2    13 1/4
</TABLE>
<TABLE>
<CAPTION>
Fiscal 1999              High     Low
-----------              ----     ----
<S>                      <C>      <C>
1st Quarter............. 32 1/4   26 15/16
2nd Quarter............. 36 3/16  27 1/16
3rd Quarter............. 39 9/16  24
4th Quarter............. 29 9/16  26 1/2
</TABLE>

  As of August 23, 2000, there were 585 stockholders of record, and the
Company believes that as of such date there were approximately 6,000
beneficial owners of the Company's Common Stock, based on information provided
by the Company's transfer agent. Information with respect to dividends paid on
the Company's Common Stock during the past two fiscal years is shown in the
Notes to the Consolidated Financial Statements included in this Annual Report
on Form 10-K.

                                       9
<PAGE>

ITEM 6. SELECTED FINANCIAL DATA

FIVE YEAR SUMMARY
(In thousands, except per share amounts and Other Statistics)

<TABLE>
<CAPTION>
                           June 24,   June 26,   June 27,   June 28,   June 29,
For the fiscal year ended   2000(A)    1999(B)    1998(C)    1997(D)    1996(E)
-------------------------  ---------  ---------  ---------  ---------  ---------
<S>                        <C>        <C>        <C>        <C>        <C>
Income Statement
 Statistics
Net sales................  $ 485,386  $ 470,477  $ 355,767  $ 263,424  $ 254,954
Income before income
 taxes...................     45,697     43,742     41,405     31,380     21,055
  Percent of sales.......        9.4%       9.3%      11.6%      11.9%       8.3%
  Provision for income
   taxes.................     16,339     17,291     16,471     12,731      8,306
  Percent of sales.......        3.4%       3.7%       4.6%       4.8%       3.3%
Net income before equity
 in losses of
 investment..............     29,358     26,451     24,934     18,649     12,749
  Percent of sales.......        6.0%       5.6%       7.0%       7.1%       5.0%
  Return on stockholders'
   equity................       24.2%      23.1%      30.9%      24.6%      13.9%
  Per diluted common
   share.................       2.12       1.81       1.77       1.38        .86
Net income...............     29,358     26,451     24,934     18,649     11,929
  Percent of sales.......        6.0%       5.6%       7.0%       7.1%       4.7%
  Percent of
   stockholders' equity..       24.2%      23.1%      30.9%      24.6%      13.0%
  Per diluted common
   share.................       2.12       1.81       1.77       1.38        .81
Dividends per common
 share...................        .80        .80        .80        .80        .80
---------------------------------------------------------------------------------
Balance Sheet Statistics
Current assets...........  $ 108,216  $  97,903  $ 100,009  $  68,426  $  71,334
Current liabilities......     52,254     45,775     50,677     33,327     27,273
Working capital..........     55,962     52,128     49,332     35,099     44,061
Current ratio............        2.1        2.1        2.0        2.1        2.6
Total assets.............    323,671    300,262    307,577    141,196    103,542
Long-term debt...........    133,500    128,000    141,000     27,000          0
Obligations under capital
 lease...................      2,429          0          0          0          0
Stockholders' equity.....    125,729    121,529    114,505     80,581     75,916
Diluted weighted average
 shares outstanding......     13,868     14,640     14,106     13,525     14,811
Book value per common
 share...................       9.31       8.65       8.01       5.92       5.42
---------------------------------------------------------------------------------
Cash Flow Statistics
EBITDA...................  $  80,043  $  77,081  $  61,194  $  40,954  $  31,403
  Percent of sales.......       16.5%      16.4%      17.2%      15.5%      12.3%
Net cash provided by
 operating activities....     53,104     45,608     41,478     37,763     22,253
Net cash provided (used)
 by investing
 activities..............    (33,168)   (16,125)  (144,207)   (38,936)        56
Net cash provided (used)
 by financing
 activities..............    (20,086)   (35,619)   105,412      1,928    (28,561)
Capital expenditures.....    (21,057)   (16,866)   (13,275)    (9,567)    (9,388)
Depreciation and
 amortization............     25,721     24,845     15,218      9,090     10,329
---------------------------------------------------------------------------------
Other Statistics
Number of employees......      3,779      3,727      3,738      2,164      2,014
Number of stockholders...      6,000      6,200      6,000      6,000      5,800
Number of 24-month
 customers...............  2,602,000  2,526,000  2,507,000  1,651,000  1,535,000
Facilities (in square
 feet)...................  1,659,000  1,531,000  1,594,000    886,000    708,000
</TABLE>
-------------------------------------------------------------------------------
(A)  Included in the 2000 results is a $.9 million tax benefit, or $.07 per
     diluted share, from a favorable state tax ruling effecting prior years'
     taxes.
(B)  Included in the 1999 results is a $.3 million pretax gain, or $.01 per
     diluted share, from the settlement of the Company's Canadian defined
     benefit pension plan.
(C)  Included in the 1998 results is a $.9 million pretax gain, or $.04 per
     diluted share, from the settlement of the Company's U.S. defined-benefit
     pension plan and curtailment of the Company's Canadian defined- benefit
     pension plan.
(D)  Included in the 1997 results is a $3.8 million pretax charge, or $.17 per
     diluted share, related to the elimination of the Company's retail
     initiative with Kinko's and a $2.2 million pretax gain, or $.10 per
     diluted share, from the curtailment of the Company's U.S. defined-benefit
     pension plan.
(E)  Included in the 1996 results is a $3.0 million pretax charge, or $.12 per
     diluted share, related to the closure of the Company's Flagstaff, Arizona
     manufacturing facility.

See the Notes to the Consolidated Financial Statements included in this Annual
Report on Form 10-K.

                                      10
<PAGE>

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
        RESULTS OF OPERATIONS

Overview

  New England Business Service, Inc. (the "Company") was founded in 1952,
incorporated in Massachusetts in 1955 and reincorporated in Delaware in 1986.
The Company designs, produces and distributes business forms, checks,
envelopes, labels, greeting cards, signs, stationery and related printed
products and distributes packaging, shipping and warehouse supplies, software,
work clothing and other business products through direct mail, direct sales,
telesales, dealers and the Internet to small businesses throughout the United
States, Canada, the United Kingdom and France. During the past five years the
Company has completed several acquisitions which are described below.

  In January 1997, the Company acquired the outstanding stock of Standard
Forms Limited ("SFL"), a U.K.- based company for consideration of
approximately $4,300,000. SFL markets a line of business forms and stationery
by direct mail and through a direct sales force, principally to automotive
accounts in the U.K. and France.

  In March 1997, the Company acquired substantially all of the assets and
assumed certain liabilities of Chiswick Trading, Inc. ("Chiswick") for
consideration of approximately $34,600,000 in cash (net of cash acquired) and
approximately $8,400,000 in Company common stock. Chiswick markets a line of
retail and industrial packaging, shipping and warehouse supplies sold
primarily by direct mail to small wholesalers, manufacturers and retailers.

  In December 1997, the Company acquired all of the outstanding common stock
of Rapidforms, Inc. ("Rapidforms") for consideration of approximately
$82,136,000 in cash (net of cash acquired). Rapidforms designs, produces and
markets business forms, business supplies, holiday greeting cards and
promotional products sold principally by direct mail to small businesses
across the United States. As part of the Rapidforms acquisition, the Company
also acquired Rapidforms' wholly-owned subsidiary, Russell & Miller, Inc.,
which primarily sells in-store retail merchandising supplies.

  In June 1998, the Company acquired all of the outstanding common stock of
McBee Systems, Inc. and all of the assets of McBee Systems of Canada, Inc.
(collectively "McBee") for consideration of approximately $48,518,000 in cash
(net of cash acquired) and $12,600,000 in Company common stock. McBee
manufactures and markets checks and related products to small businesses in
the United States and Canada through a dedicated field sales force.

  In July 2000, the Company acquired all of the outstanding shares of common
stock of PremiumWear, Inc. ("PremiumWear") for $13.50 per share in cash, plus
the assumption of $3,848,000 in debt, which brought the total transaction
value to approximately $41,600,000 (net of cash acquired). PremiumWear designs
and markets knit and woven shirts and other apparel and accessories to the
promotional products/advertising specialty industry.

  Any sentence followed by an asterisk (*) in this section constitutes a
forward-looking statement which reflects the Company's current expectations.
There can be no assurance the Company's actual performance will not differ
materially from those projected in such forward-looking statements due to the
important factors described in the section of this Management's Discussion and
Analysis of Financial Condition and Results of Operations titled "Certain
Factors That May Affect Future Results".

Results of Operations

2000 versus 1999

  Over the past several years the Company has made a series of acquisitions
intended to augment the three segments of the Company's business. The first
two segments, Printed Products--Direct Marketing and Printed Products--Direct
Sales, sell primarily printed business products. The third segment, Packaging
and Display

                                      11
<PAGE>

Products, serves as a reseller of packing and shipping supplies and retail
signage. Net sales increased $14.9 million, or 3.2%, to $485.4 million for
fiscal year 2000 from $470.5 million in fiscal year 1999. The net sales
increase was due to growth in sales of seasonal holiday cards and personalized
work clothing sold principally through the Direct Marketing segment. Net sales
increased in the Packaging and Display segment primarily as a result of
expanded distribution facilities. In the Direct Selling segment, net sales
growth was attributable to an increase in orders derived from bank referral
contracts.

  For fiscal year 2000, cost of sales decreased to 35.7% of sales from 36.3%
in fiscal year 1999. This decrease was partially due to increased handling
charges billed to customers which helped to offset transportation costs. In
addition, there were increased efficiencies in the Company's U.S. operating
units primarily selling business forms and related printed products tied in
part to the completion of acquisition integration activities in fiscal 2000.
Cost of sales as a percentage of sales is anticipated to increase during
fiscal year 2001 with the inclusion of PremiumWear.*

  Selling and advertising expense increased to 37.6% of sales in fiscal year
2000 from 37.5% of sales in fiscal year 1999. The increase was due primarily
to the direct sales force employed by McBee and their higher sales growth.
McBee's sales force generates a higher selling and advertising expense as a
percentage of sales than in the Company's other businesses; as the revenue
growth in the Direct Selling segment is increasing at a faster rate than in
other segments they will disproportionately affect consolidated trends. This
increase was partially offset by reduced direct mail costs. Selling and
advertising expense as a percentage of sales is expected to decrease slightly
during fiscal year 2001 due to the inclusion of PremiumWear.*

  General and administrative expense increased to 15.5% of sales in fiscal
year 2000 from 15.2% in fiscal year 1999. During fiscal year 2000, the Company
continued to increase spending levels associated with its program to re-
engineer financial and operational information systems. General and
administrative expense as a percentage of sales is expected to increase
slightly during fiscal year 2001 due to an increase in spending on information
systems.*

  Interest expense remained consistent at 1.8% of sales in fiscal year 2000
and 1999. The Company anticipates that, while on an absolute basis, borrowing
costs will increase due to the aforementioned PremiumWear acquisition, the
percentage relationship to sales should remain relatively consistent.*

  The provision for income taxes as a percentage of pretax income decreased
from 39.5% in fiscal year 1999 to 35.8% in fiscal year 2000 primarily as a
result of a one-time tax benefit due to a favorable state revenue ruling
effecting both current and prior years' taxes. The Company anticipates that
its effective tax rate for fiscal year 2001, including the results of the
ruling and the effect of the PremiumWear acquisition, will increase to
approximately 38.8%.*

  The Company will continue to seek opportunities to acquire companies,
businesses and product lines to enhance the Company's competitive position in
the marketplace or to gain access to new markets, products, competencies or
technologies such as the PremiumWear acquisition completed in July 2000.* In
addition, the Company will continue to seek opportunities to enhance the cost
structure of the Company, to improve operating efficiencies, and to fund
investments in support of the Company's strategies.*

1999 versus 1998

  Net sales increased $114.7 million, or 32.2%, to $470.5 million for fiscal
year 1999 from $355.8 million in fiscal year 1998. The Rapidforms and McBee
acquisitions during fiscal 1998 were primarily responsible for the combined
sales increase of approximately $103.5 million, or 29.1%, in the Printed
Products--Direct Marketing and Printed Products--Direct Sales segments. The
remaining increase in sales, $11.2 million, or 3.1%, was attributable to
growth in the Packaging and Display Products segment, which was primarily the
result of the Rapidforms acquisition as one of its former subsidiaries is
classified in this segment.

                                      12
<PAGE>

  For fiscal year 1999, cost of sales decreased to 36.3% of sales from 38.0%
in fiscal year 1998. This decrease was due to an increase in revenue generated
by higher margin products associated with the acquisition of McBee, increased
handling charges billed to customers which help offset transportation charges
and increased efficiencies in the Company's U.S. operating units selling
primarily business forms and related printed products due, in part, to
acquisition integration related efficiencies. These factors counteracted the
impact of $1.4 million in costs incurred in fiscal year 1999 in conjunction
with activities related to integration of manufacturing facilities among its
Printed Products plants as well as decreasing margins due to product mix shift
away from the Company's core printed products at NEBS and Rapidforms.

  Selling and advertising expense increased to 37.5% of sales in fiscal year
1999 from 34.2% of sales in fiscal year 1998. The increase was due primarily
to the direct sales force employed by McBee which generates a higher selling
and advertising expense as a percentage of sales than in the Company's other
businesses. The Company also incurred $623,000 in costs during the year in
connection with efforts to harmonize product offerings among its Rapidforms,
McBee and NEBS Direct Marketing. In addition, amortization expense related to
the intangible assets of acquisitions climbed from 1.7% of sales in fiscal
year 1998 to 2.6% of sales in fiscal year 1999 due to the effect of intangible
assets created in the McBee acquisition and the full year impact of the
Rapidforms acquisition.

  General and administrative expense remained flat at 15.2% of sales in fiscal
year 1999 and 1998. The year-to-year similarity was the result of a lower
ratio of general and administrative expense to sales associated with the
Company's McBee subsidiary, which offset $642,000 of general and
administrative spending related primarily to systems integration efforts
within the Printed Products operations. During fiscal year 1999, the Company
continued to increase spending levels associated with its program to re-
engineer financial and operational information systems. It should be noted
that the adoption of AICPA Statement of Position 98-1, "Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use," reduced
amounts charged to expense in fiscal 1999 by $1,907,000.

  During fiscal year 1998, the Company amended its defined benefit pension
plan for Canadian employees of NEBS Business Forms, Ltd. to freeze
participation and to allow participants to rollover accrued benefits under the
plan to a defined contribution retirement plan. The Company recorded a
curtailment gain of $313,000 during fiscal year 1998 associated with the
freeze and resultant benefit rollover. During fiscal year 1999, the Company
settled this plan and recorded a settlement gain of $259,000.

  Interest expense increased over the prior year to 1.8% of sales in fiscal
year 1999 compared to 1.3% of sales in fiscal year 1998. This increase in
expense was attributable to debt incurred to finance the acquisitions of
Rapidforms in December, 1997 and McBee in June, 1998.

  The provision for income taxes as a percentage of pretax income decreased
from 39.8% in fiscal year 1998 to 39.5% in fiscal year 1999 due to a reduction
in the Company's effective state tax rate.

New Accounting Pronouncements

  In June, 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities." This standard will be adopted by the
Company in fiscal year 2001. Management believes that the impact of this
standard on its consolidated financial statements will not be material.

  In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 "Revenue Recognition". This SAB was intended to
clarify certain elements of revenue recognition. It is currently being
supplemented by a frequently asked questions document and is required to be
implemented by the Company no later than the fourth quarter of fiscal 2001.
Management believes that this SAB will not materially impact its revenue
recognition practices.

  The Emerging Issues Task Force is currently debating Issue No. 00-10,
"Accounting for Shipping and Handling Revenues and Costs." Specifically, it is
formulating conclusions as to how a seller of goods should

                                      13
<PAGE>

classify revenues and costs attributable to shipping and handling in the
income statement. No final conclusion has been reached. The Company currently
nets such revenues and expenses in the cost of sales line. Should the Emerging
Issues Task Force reach a consensus that such financial statement presentation
should be changed, management will effect such a reclassification, and will
restate previous periods, as appropriate. There would be no effect on reported
net income.

Liquidity and Capital Resources

  Cash provided by operating activities amounted to $53.1 million in fiscal
year 2000, approximately $7.5 million, or 16.4%, higher than the $45.6 million
provided in fiscal year 1999. This increase in cash provided by operating
activities was composed principally of a $2.9 million increase in net income,
$1.7 million in non-cash depreciation and $2.9 million in the amount of cash
provided by working capital and other non-cash adjustments to reported net
income. In fiscal year 1999, cash provided by operating activities increased
$4.1 million, or 10.0%, from the $41.5 million dollars provided in fiscal year
1998 due principally to a $1.5 million increase in net income and a $9.6
million increase in non-cash depreciation and amortization expense, offset in
part by an increase of $7.0 million in the amount of cash used by working
capital and other non-cash adjustments to reported net income.

  Working capital as of June 24, 2000 amounted to $55.9 million, including
$3.5 million of cash and short-term investments. This represents an increase
of $3.8 million from the working capital balance of $52.1 million, including
cash and short-term investments of $3.7 million, at the end of fiscal year
1999. This increase in working capital is not a significant change from the
prior year. Excluding the addition of working capital associated with the
acquisition of PremiumWear, the Company does not expect to experience any
significant change to the amount of working capital investment required to
support its business during fiscal year 2001.*

  Working capital increased in fiscal year 1999 by $2.8 million principally
due to an increase in cash provided by operating activities and the addition
of the working capital balances of companies acquired during fiscal year 1998.

  Capital expenditures of $21.1 million in fiscal year 2000 represented a $4.2
million increase from the $16.9 million expended in fiscal year 1999 and a
$7.8 million increase from the $13.3 million expended in fiscal year 1998.
Capital expenditures over the three-year period have included significant
investment in the purchase, development and implementation of information
systems infrastructure and operating systems including the Company's websites.
In addition, capital expenditures in fiscal year 2000 included investment of
$1.0 million in a leased distribution center in Georgia; in fiscal year 1999 a
$1.2 million expansion of the Company's Midland, Ontario manufacturing
facility; and in fiscal year 1998 the construction of a $3.0 million
telemarketing facility in Flagstaff, Arizona. The Company expects capital
expenditures to approximate $25.0 million in fiscal year 2001, which will
include additional planned improvements in information systems infrastructure
and the Company's websites, and investments to expand embroidery and
distribution capacity at PremiumWear.*

  The Company repurchased 595,157 shares of the Company's common stock for
$14.2 million in cash during fiscal year 2000 and 509,600 shares of the
Company's common stock for $14.0 million in cash during fiscal year 1999. The
Company did not repurchase any shares of common stock in fiscal 1998. In
addition, the Company declared and paid a cash dividend of $.80 per share
during each of the last three fiscal years, amounting to a total of $11.0
million in fiscal 2000, $11.5 million in fiscal 1999 and $11.0 million in
fiscal 1998.

  In addition to its present cash and short-term investment balances, the
Company has consistently generated sufficient cash internally to fund its
needs for working capital, dividends and capital expenditures. The Company
currently has a committed, unsecured, revolving credit agreement for $200
million which matures on December 18, 2002. At June 24, 2000, the Company had
$133.5 million of outstanding debt under this credit facility. The credit
agreement contains various restrictive covenants which, among other things,
require the Company to maintain certain minimum levels of consolidated net
worth and specific consolidated debt and fixed charge ratios. As of June 24,
2000, the Company was in compliance with these provisions.

                                      14
<PAGE>

  In order to effectively fix the interest rate on a portion of the debt
outstanding under the revolving line of credit, the Company has entered into
three interest rate swap agreements with two of the banks party to the credit
agreement. These swap agreements contain notional principal amounts and other
terms determined with respect to the Company's forecasts of future cash flows
and borrowing requirements. At June 24, 2000, the notional principal amount
outstanding under the interest rate swap agreements totaled $77.5 million.

  The Company anticipates that its current cash on hand, cash flow from
operations and additional availability under the line of credit will be
sufficient to meet the Company's liquidity requirements for its operations and
capital expenditures during fiscal year 2001.* However, the Company may pursue
additional acquisitions from time to time, such as the acquisition mentioned
in "Overview", which would likely be funded through the use of available cash,
the issuance of stock, the obtaining of additional credit, or any combination
thereof.*

Certain Factors That May Affect Future Results

  References in this section to "we", "us" and "our" refer to New England
Business Service, Inc.

  We may make forward-looking statements in this report and in other documents
filed with the SEC, in press releases, and in discussions with analysts,
investors and others. These statements include:

  .  descriptions of our operational and strategic plans,

  .  expectations about our future sales and profits,

  .  views of conditions and trends in our markets, and

  .  other statements that include words like "expects", "estimates",
     "anticipates", "believes" and "intends", and which describe opinions
     about future events.

  You should not rely on these forward-looking statements as though they were
guarantees. These statements are based on our expectations at the time the
statements are made, and we are not required to revise or update these
statements based on future developments. Known and unknown risks may cause our
actual results, performance or achievements to be materially different from
those expressed or implied by these statements.

  A majority of our sales and profits come from selling standardized business
forms, checks and related products by mail order, telesales and direct sales
to a target market consisting mainly of small businesses. We believe that the
critical success factors to compete in this market include competitive
pricing, breadth of product offering, product quality and the ability to
attract and retain a large number of individual customers. Known material
risks that may affect those critical success factors are described below.

  Our core business faces increased competition from new sources, such as
office supply superstores and Internet-based vendors. Increased competition
may require us to reduce prices or offer other incentives in order to attract
new customers and retain existing customers, which could reduce our profits.

  Low-price, high-volume office supply chain stores have entered our core
business of selling standardized business forms, checks and related products
to small businesses. Because of their size, these superstores have the buying
power to offer these products at competitive prices. These superstores also
offer the convenience of "one-stop shopping" for a broad array of office
supplies that we do not offer. In addition, national superstore competitors
have greater financial strength to reduce prices or increase promotional
discounts in order to seek or retain market share.

  Recently, Internet-based vendors have begun to compete in our core business.
These vendors include both start-up ventures as well as the online sites of
the office supply national chains. One business model for many Internet-based
vendors is to seek market share as rapidly as possible through significantly
reduced prices and deep discounting.

                                      15
<PAGE>

  If any of these new competitors seek to gain or retain market share through
price reductions or increased discounting, we may be forced to reduce our
prices or match the discounts in order to stay competitive, which could reduce
our profits.

  Technological improvements may reduce our competitive advantage over our
smaller competitors, which could reduce our profits.

  Historically, our relatively greater financial strength and size has enabled
us to offer a broader array of products, particularly those having a complex
construction, at lower prices than the small local and regional dealers,
distributors and printers who constitute our primary competition. Improvements
in the cost and quality of printing technology are enabling these smaller
competitors to gain access to products of complex design and functionality at
competitive costs. Increased competition from local and regional competitors
could force us to reduce our prices in order to attract and retain customers,
which could reduce our profits.

  Because our long-term sales growth is dependent on our ability to
continually attract new customers in our target small business market,
economic events that adversely affect the small business economy may reduce
our sales and profits.

  Average annual sales per customer of our core products have remained
relatively stable over time. As a result, we rely, in part, on continually
attracting new customers for these mature products. Our sales and profits have
been adversely affected in the past by recession-related contractions in the
small business economy. We expect that our sales and profits will continue to
be affected by changes in the levels of small business formations and failures
and from other economic events that affect the small business economy
generally.

  Because our long-term sales growth is dependent on our ability to
continually attract new customers in our target small business market, changes
in the direct marketing industry that reduce our competitive advantage in
contacting prospective customers may reduce our sales and profits.

  Growth in the total number of our direct mail customers depends on continued
access to high-quality lists of newly-formed small businesses. In the past,
our ability to compile proprietary prospect lists was a distinct competitive
advantage. However, the external list compilation industry has grown more
sophisticated and comprehensive lists of new small business formations are now
commercially available to our competitors. In addition, the Internet has the
potential to eliminate our advantage of scale in direct marketing by providing
all competitors, regardless of current size, with access to prospective
customers.

  We currently rely on the speed of our delivery of promotional materials to
prospective customers to gain advantage over competitors. We are also
expanding our Internet product offerings and capabilities and seeking to
increase our visibility on the Internet. Notwithstanding these efforts, a
deterioration in our competitive advantage in contacting prospective customers
could reduce our sales and profits.

  In addition, the enactment of privacy laws could constrain our ability to
obtain prospect lists or telemarket to prospective customers.

  Increase in the cost of paper and in postal rates increase our costs, which
we may be unable to offset by reducing costs in other areas or by raising
prices.

  The cost of paper to produce our products, catalogs and advertising
materials makes up a significant portion of our total costs. We also rely on
the U.S. Postal Service to deliver most of our promotional materials. Prices
for the various types of paper that we use have been volatile, and we expect
them to continue to be so. Third class postal rates have generally increased
over the past ten years, at times significantly. We are not sure that we will
always be able to reduce costs in other areas or increase prices for our
products sufficiently to offset increases in paper costs and postal rates. If
we are unable to offset these cost increases, our profits will be adversely
affected.

                                      16
<PAGE>

  Disruption in the services provided by certain of our critical vendors may
adversely affect our operating performance and profits.

  In order to obtain favorable pricing, we have selected a limited number of
vendors to provide key services to our business. Examples of this are as
follows:

  .  MCI WorldCom provides most of the toll-free telephone lines that we use
     in connection with our direct marketing business,

  .  we use United Parcel Service to deliver most of the products that we
     ship to customers,

  .  we use R.R. Donnelley and Sons for the printing and processing of most
     of the catalogs that we mail each year,

  .  we rely on the postal services of the countries in which we do business
     to deliver our catalogs and other advertising to customers.

  In the past, we have been adversely affected by disruption of some of these
services due to labor actions, system failures, adverse weather conditions and
other natural disasters. If there are future interruptions in service from one
or more of these vendors, we believe that there could be a significant
disruption to our business due to our inability to readily find alternative
service providers at comparable rates.

  Sales of our standardized forms products face technological obsolescence and
changing customer preferences, which could reduce our sales and profits.

  Our standardized business forms, checks and related products provide our
customers with financial and business records to manage their businesses.
Continual technological improvements have provided our target customers in
several market segments with alternative means to enact and record business
transactions. For example, the price and performance capabilities of personal
computers and related printers now provide a cost-competitive means to print
low-quality versions of our business forms on plain paper. In addition,
electronic transaction systems and off-the-shelf business software
applications have been designed to automate several of the functions performed
by our business form products.

  In response to the gradual obsolescence of our standardized forms business,
we continue to develop our capability to provide custom and full-color
products. However, we have less of a cost advantage with these products than
with standardized forms, due to improvements in the cost and quality of
printing technology available to our smaller local and regional competitors.
We are also seeking to introduce new products that are less susceptible to
technological obsolescence. We may develop new products internally, procure
them from third party vendors, or obtain them through the acquisition of a new
business. We generally realize lower gross margins on out-sourced products
than on products that we manufacture ourselves. The risks associated with the
acquisition of new businesses are described below.

  If new printing capabilities and new product introductions do not continue
to offset the obsolescence of our standardized business forms products, there
is a risk that the number of new customers we attract and existing customers
we retain may diminish, which could reduce our sales and profits. Decreases in
sales of our historically high margin standardized business forms products due
to obsolescence could also reduce our gross margins. This reduction could in
turn adversely impact our profits unless we are able to offset the reduction
through the introduction of new high margin products and services or realize
cost savings in other areas.

  Our growth strategy depends, in part, on the acquisition of complementary
businesses that address our target small business market.

  The acquisition of complementary businesses that address our target small
business market has been important to our growth strategy. We intend to
continue this acquisition activity in the future. The success of this activity
depends on the following:

  .  our ability to identify suitable businesses and to negotiate agreements
     on acceptable terms,

                                      17
<PAGE>

  .  our ability to obtain financing through additional borrowing, by issuing
     additional shares of common stock, or through internally generated cash
     flow, and

  .  our ability to achieve anticipated savings and growth and avoid
     disruption to our existing businesses.

In evaluating a potential acquisition, we conduct a business, financial and
legal review of the target. This review is intended to confirm our assumptions
with respect to the projected future performance of the target and to identify
the benefits and risks associated with those assumptions. We cannot be certain
that our review will identify all potential risks associated with the
purchase, integration or operation of acquired businesses. Unanticipated risks
may adversely affect the benefits that we expect to obtain from any given
acquisition.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

  The Company is exposed to a number of market risks, primarily due to the
effects of changes in foreign currency exchange rates and interest rates.
Investments in and loans and advances to foreign subsidiaries and branches,
and their resultant operations, denominated in foreign currencies, create
exposures to changes in exchange rates. The Company's utilization of its
revolving line of credit (which carries a variable interest rate) creates an
exposure to changes in interest rates. The effect, however, of changes in
exchange rates and interest rates on the Company's earnings generally has been
small relative to other factors that also affect earnings, such as business
unit sales and operating margins. This is because (i) foreign operations
represent a relatively small portion of the Company's total activity, the
magnitude of foreign currency transactions has been minimal and forward
foreign currency contracts have been historically entered into to hedge
certain foreign exchange fluctuations; (ii) interest rates have not fluctuated
significantly and a significant portion of the Company's borrowings are fixed
through interest rate swaps. In order to effectively convert the interest rate
of a portion of the Company's debt from a Eurodollar-based floating rate to a
fixed rate, the Company has entered into interest rate swap agreements with
major commercial banks. Although the Company is exposed to credit and market
risk in the event of future nonperformance by any of the banks, management has
no reason to believe that such an event will occur.

  The Company does, however, have a component of its borrowings that is not
hedged. A 10% upward movement in interest rates would impact earnings and cash
flows by approximately $.4 million because of this unhedged position. For more
information on these market risks and financial exposures, see the Notes to
Consolidated Financial Statements included in this Annual Report on Form 10-K.
The Company does not hold or issue financial instruments for trading, profit
or speculative purposes.

  As described above, while the Company has historically hedged short-term
foreign exchange exposures, all such positions were closed in fiscal 2000.
This is because the Company either had its foreign subsidiaries repay any
dollar advances or converted such advances to equity positions in the
subsidiaries. Accordingly, as of the end of the year, the Company had minimal
exposure to exchange rate fluctuation.

  Upon reviewing its derivatives and other foreign currency and interest rate
instruments, based on historical foreign currency rate movements and the fair
value of market-rate sensitive instruments at year-end, the Company does not
believe that changes in foreign currency or interest rates will have a
material impact on its near term earnings, fair values or cash flows.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA

  The Company's financial statements, together with the independent auditors'
report thereon, appear beginning on page F-1 of this Annual Report on Form 10-
K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE

  Not applicable.

                                      18
<PAGE>

                                   PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

  The Company will furnish to the Securities and Exchange Commission not later
than 120 days after the close of its fiscal year ended June 24, 2000 a
definitive Proxy Statement (the "Proxy Statement") for the Annual Meeting of
Stockholders to be held on October 20, 2000. The information required by this
Item concerning the directors of the Company who have been nominated for
reelection is incorporated by reference to "Election of Directors" in the
Proxy Statement.

  Richard H. Rhoads, a director since 1970, has decided to retire from the
Board and will not be standing for re-election at the above-mentioned Annual
Meeting of Stockholders. The information required by this Item concerning Mr.
Rhoads is as follows. Mr. Rhoads, age 70, joined the Company in 1965. From
1975 to 1991, he was Chief Executive Officer of the Company, and from 1988 to
his retirement in 1995, he was Chairman of the Board of the Company.

  The information required by this Item concerning the executive officers of
the Company appears in Part I, Item 4.1 to this Annual Report on Form 10-K.

Section 16(a) Beneficial Ownership Reporting Compliance

  Information regarding compliance with Section 16(a) beneficial ownership
reporting requirements is located in the Proxy Statement under the heading
"Section 16(a) Beneficial Ownership Reporting Compliance" and is incorporated
herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

  The information required by this Item is incorporated by reference to
"Election of Directors" and "Executive Compensation" in the Proxy Statement.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

  The information required by this Item is incorporated by reference to
"Voting Securities" in the Proxy Statement.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

  The information required by this Item is incorporated by reference to
"Certain Relationships and Related Transactions" and "Compensation Committee
Interlocks and Insider Participation in Compensation Decisions" in the Proxy
Statement.

                                      19
<PAGE>

                                    PART IV

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

  The following documents are filed as part of this report:

  (a)(1) Consolidated Financial Statements

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                         <C>
New England Business Service, Inc. and Subsidiaries
Consolidated Balance Sheets as of June 24, 2000 and June 26, 1999.........   F-2
Statements of Consolidated Income and Comprehensive Income for the fiscal
 years ended June 24, 2000, June 26, 1999 and June 27, 1998...............   F-3
Statements of Consolidated Stockholders' Equity for the fiscal years ended
 June 24, 2000, June 26, 1999 and June 27, 1998...........................   F-4
Statements of Consolidated Cash Flows for the fiscal years ended June 24,
 2000, June 26, 1999 and June 27, 1998....................................   F-5
Notes to Consolidated Financial Statements................................   F-6
Independent Auditors' Report..............................................  F-18

  (a)(2) Financial Statement Schedule

Schedule II Valuation and Qualifying Accounts.............................  F-19
</TABLE>

  Schedules I, III, IV and V are omitted as they are not applicable or
required under Regulation S-X.

  (a)(3) List of Exhibits

  Exhibits required to be filed by Item 601 of Regulation S-K are listed in
the exhibit index beginning on page X-1.

  (b) Reports on Form 8-K

  The following report on Form 8-K was filed in the fourth quarter of fiscal
2000.

  On June 9, 2000, on Form 8-K, the Company announced the signing of and filed
a copy of an amendment dated May 26, 2000 to the Company's unsecured,
revolving line of credit agreement.

                                      20
<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 its behalf by the undersigned, thereunto duly authorized.

                                          New England Business Service, Inc.
                                           (Registrant)

                                                   /s/ Robert J. Murray
                                          By: _________________________________
                                               (Robert J. Murray, Chairman,
                                                         President
                                               and Chief Executive Officer)

Date: September 1, 2000
                               POWER OF ATTORNEY

  KNOW ALL MEN BY THESE PRESENTS that each of the undersigned officers and
directors of New England Business Service, Inc., a Delaware corporation (the
"Company"), hereby constitutes and appoints Robert J. Murray and Daniel M.
Junius, and each of them, with full power to act without the other, his or her
true and lawful attorney-in-fact, with full power of substitution and
resubstitution, for him or her and in his or her name, place and stead, in any
and all capacities (until revoked in writing) to sign the Company's Annual
Report on Form 10-K for the fiscal year ended June 24, 2000, and any and all
amendments thereto, and to file the same, with all exhibits thereto and other
documents in connection therewith, with the Securities and Exchange
Commission, hereby ratifying and confirming all that said attorneys-in-fact or
either of them, or their or his substitute or substitutes, may lawfully do or
cause to be done by virtue hereof.

  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 in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
                 Name                            Title                  Date
                 ----                            -----                  ----

<S>                                    <C>                        <C>
       /s/ Robert J. Murray            Chairman, President and      September 1,
______________________________________  Chief Executive Officer         2000
          (Robert J. Murray)            and Director (Principal
                                        Executive Officer)

         /s/ Neil S. Fox               Director                     September 1,
______________________________________                                  2000
            (Neil S. Fox)

       /s/ Robert L. Gable             Director                     September 1,
______________________________________                                  2000
          (Robert L. Gable)

       /s/ Benjamin H. Lacy            Director                     September 1,
______________________________________                                  2000
          (Benjamin H. Lacy)

        /s/ Thomas J. May              Director                     September 1,
______________________________________                                  2000
           (Thomas J. May)

      /s/ Herbert W. Moller            Director                     September 1,
______________________________________                                  2000
         (Herbert W. Moller)

      /s/ Richard H. Rhoads            Director                     September 1,
______________________________________                                  2000
         (Richard H. Rhoads)

        /s/ Brian E. Stern             Director                     September 1,
______________________________________                                  2000
           (Brian E. Stern)

       /s/ M. Anne Szostak             Director                     September 1,
______________________________________                                  2000
          (M. Anne Szostak)

       /s/ Daniel M. Junius            Senior Vice President-       September 1,
______________________________________  Chief Financial Officer         2000
          (Daniel M. Junius)            and Treasurer (Principal
                                        Financial and Accounting
                                        Officer)
</TABLE>

                                      21
<PAGE>

                         INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
                                                                           Page
                                                                           ----
<S>                                                                        <C>
New England Business Service, Inc. and Subsidiaries

Consolidated Balance Sheets as of June 24, 2000 and June 26, 1999 .......   F-2

Statements of Consolidated Income and Comprehensive Income for the fiscal
 years ended June 24, 2000, June 26, 1999 and June 27, 1998 .............   F-3

Statements of Consolidated Stockholders' Equity for the fiscal years
 ended June 24, 2000, June 26, 1999 and June 27, 1998 ...................   F-4

Statements of Consolidated Cash Flows for the fiscal years ended June 24,
 2000, June 26, 1999 and June 27, 1998 ..................................   F-5

Notes to Consolidated Financial Statements...............................   F-6

Independent Auditors' Report.............................................  F-18

Schedule II Valuation and Qualifying Accounts............................  F-19
</TABLE>

                                      F-1
<PAGE>

              NEW ENGLAND BUSINESS SERVICE, INC. AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                        June 24, 2000 and June 26, 1999
                  (In thousands of dollars except share data)

<TABLE>
<CAPTION>
                                                     June 24, 2000 June 26, 1999
                                                     ------------- -------------
<S>                                                  <C>           <C>
                      ASSETS
Current Assets:
Cash and cash equivalents..........................    $   3,469     $  3,684
Accounts receivable (less allowance for doubtful
 accounts of $5,037 in 2000 and $4,899 in 1999)....       55,483       52,546
Inventories........................................       24,578       21,538
Direct mail advertising materials, net and prepaid
 expenses..........................................       16,445       12,946
Deferred income tax benefit........................        8,241        7,189
                                                       ---------     --------
   Total current assets............................      108,216       97,903
Property and Equipment:
 Land and buildings................................       43,553       42,169
 Equipment.........................................      122,163      103,453
                                                       ---------     --------
  Property and equipment...........................      165,716      145,622
  Less accumulated depreciation....................     (101,310)     (90,450)
                                                       ---------     --------
  Property and equipment, net......................       64,406       55,172
Property Held for Sale.............................          --           839
Deferred Income Tax Benefit........................        8,796        6,353
Goodwill, net......................................       60,567       62,626
Tradenames, net....................................       30,792       31,610
Customer Lists, net................................       23,974       31,590
Long-Term Investments..............................       13,369          --
Other Assets.......................................       13,551       14,169
                                                       ---------     --------
   Total...........................................    $ 323,671     $300,262
                                                       =========     ========
       LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable...................................    $  18,951     $ 15,478
Federal and state income taxes.....................          117          --
Accrued bonus distribution.........................        2,382        2,496
Accrued payroll expense............................       11,894       11,245
Accrued employee benefit expense...................        6,839        4,990
Accrued exit costs/restructuring charge............          147        1,135
Obligations under capital lease--current portion...          819          --
Deferred income taxes..............................        1,761        2,068
Other accrued expenses.............................        9,344        8,363
                                                       ---------     --------
   Total current liabilities.......................       52,254       45,775
Obligations Under Capital Lease....................        1,610          --
Revolving Line of Credit...........................      133,500      128,000
Deferred Income Taxes..............................       10,578        4,958
Commitments and Contingencies
Stockholders' Equity:
Preferred stock
Common stock, par value, $1 per share--authorized,
 40,000,000 shares; issued, 15,399,447 shares in
 2000 and 15,358,436 shares in 1999; outstanding,
 13,499,488 shares in 2000 and 14,053,634 shares in
 1999 .............................................       15,399       15,358
Additional paid-in capital.........................       50,337       49,500
Unamortized value of restricted stock awards.......         (115)         --
Accumulated other comprehensive loss...............       (3,399)      (2,654)
Retained earnings..................................      105,278       86,902
                                                       ---------     --------
   Total...........................................      167,500      149,106
Less treasury stock, at cost--1,899,959 shares in
 2000 and 1,304,802 shares in 1999.................      (41,771)     (27,577)
                                                       ---------     --------
   Total stockholders' equity......................      125,729      121,529
                                                       ---------     --------
   Total...........................................    $ 323,671     $300,262
                                                       =========     ========
</TABLE>

See notes to consolidated financial statements.

                                      F-2
<PAGE>

              NEW ENGLAND BUSINESS SERVICE, INC. AND SUBSIDIARIES

           STATEMENTS OF CONSOLIDATED INCOME AND COMPREHENSIVE INCOME

   For the Fiscal Years Ended June 24, 2000, June 26, 1999 and June 27, 1998
                      (In thousands except per share data)

<TABLE>
<CAPTION>
                                                     2000      1999      1998
                                                   --------  --------  --------
<S>                                                <C>       <C>       <C>
Net Sales......................................... $485,386  $470,477  $355,767
  Cost of sales including shipping costs..........  173,514   170,828   135,225
                                                   --------  --------  --------
Gross Profit......................................  311,872   299,649   220,542
Operating Expenses:
  Selling and advertising.........................  182,425   176,439   121,571
  General and administrative......................   75,264    71,454    54,101
                                                   --------  --------  --------
    Total operating expenses......................  257,689   247,893   175,672
Income From Operations............................   54,183    51,756    44,870
Other Income (Expense):
  Interest income.................................      139       221       237
  Interest expense................................   (8,625)   (8,494)   (4,571)
  Gain on pension curtailment/settlement..........      --        259       869
                                                   --------  --------  --------
    Total other income (expense)..................   (8,486)   (8,014)  ( 3,465)
                                                   --------  --------  --------
Income Before Income Taxes........................   45,697    43,742    41,405
Provision For Income Taxes........................   16,339    17,291    16,471
                                                   --------  --------  --------
Net Income........................................   29,358    26,451    24,934
Other Comprehensive Loss..........................     (745)     (317)     (575)
                                                   --------  --------  --------
Comprehensive Income.............................. $ 28,613  $ 26,134  $ 24,359
                                                   ========  ========  ========
Per Share Amounts:
  Basic earnings per share........................ $   2.14  $   1.84  $   1.81
                                                   ========  ========  ========
  Diluted earnings per share...................... $   2.12  $   1.81  $   1.77
                                                   ========  ========  ========
  Dividends....................................... $    .80  $    .80  $    .80
                                                   ========  ========  ========
Basic Weighted Average Shares Outstanding.........   13,717    14,352    13,781
  Plus incremental shares from assumed conversion
   of stock options...............................      151       288       325
                                                   --------  --------  --------
Diluted Weighted Average Shares Outstanding.......   13,868    14,640    14,106
                                                   ========  ========  ========
</TABLE>

See notes to consolidated financial statements.

                                      F-3
<PAGE>

              NEW ENGLAND BUSINESS SERVICE, INC. AND SUBSIDIARIES

                STATEMENTS OF CONSOLIDATED STOCKHOLDERS' EQUITY

   For the Fiscal Years Ended June 24, 2000, June 26, 1999 and June 27, 1998
                                 (In thousands)

<TABLE>
<CAPTION>
                           Common Stock
                              Issued
                          --------------             Accumulated                       Unamortized
                          Number At Par  Additional     Other                             Value
                            of    Value   Paid-In   Comprehensive Retained  Treasury  of Restricted
                          Shares Amount   Capital   Income/(Loss) Earnings   Stock    Stock Awards   Total
                          ------ ------- ---------- ------------- --------  --------  ------------- --------
<S>                       <C>    <C>     <C>        <C>           <C>       <C>       <C>           <C>
Balance, June 28, 1997..  14,616 $14,616  $26,537      $(1,762)   $ 58,024  $(16,834)     $   0     $ 80,581
Issuance of common stock
 to employees pursuant
 to stock plans
 including tax benefit..     187     187    5,804                              1,970                   7,961
Issuance of common stock
 to acquire a business..     382     382   12,218                                                     12,600
Dividends paid..........                                           (10,996)                          (10,996)
Foreign currency
 translation
 adjustment.............                                  (575)                                         (575)
Net income..............                                            24,934                            24,934
                          ------ -------  -------      -------    --------  --------      -----     --------
Balance, June 27, 1998..  15,185  15,185   44,559       (2,337)     71,962   (14,864)         0      114,505
Issuance of common stock
 to employees pursuant
 to stock plans
 including tax benefit..     173     173    4,941                              1,318                   6,432
Dividends paid..........                                           (11,511)                          (11,511)
Acquisition of treasury
 stock..................                                                     (14,031)                (14,031)
Foreign currency
 translation
 adjustment.............                                  (317)                                         (317)
Net income..............                                            26,451                            26,451
                          ------ -------  -------      -------    --------  --------      -----     --------
Balance, June 26, 1999..  15,358  15,358   49,500       (2,654)     86,902   (27,577)         0      121,529
Issuance of common stock
 to employees pursuant
 to stock plans
 including tax benefit..      41      41      837                                          (165)         713
Dividends paid..........                                           (10,982)                          (10,982)
Amortization of
 restricted stock
 awards.................                                                                     50           50
Acquisition of treasury
 stock..................                                                     (14,194)                (14,194)
Foreign currency
 translation
 adjustment.............                                  (770)                                         (770)
Net unrealized
 investment gains.......                                    25                                            25
Net income..............                                            29,358                            29,358
                          ------ -------  -------      -------    --------  --------      -----     --------
Balance, June 24, 2000..  15,399 $15,399  $50,337      $(3,399)   $105,278  $(41,771)     $(115)    $125,729
                          ====== =======  =======      =======    ========  ========      =====     ========
</TABLE>

See notes to consolidated financial statements.

                                      F-4
<PAGE>

              NEW ENGLAND BUSINESS SERVICE, INC. AND SUBSIDIARIES

                     STATEMENTS OF CONSOLIDATED CASH FLOWS

   For the Fiscal Years Ended June 24, 2000, June 26, 1999 and June 27, 1998
                           (In thousands of dollars)

<TABLE>
<CAPTION>
                                                     2000      1999      1998
                                                   --------  --------  ---------
<S>                                                <C>       <C>       <C>
Cash Flows From Operating Activities:
Net income.......................................  $ 29,358  $ 26,451  $  24,934
Adjustments to reconcile net income to net cash
 provided by operating activities:
  Depreciation...................................    14,168    12,432      9,296
  Amortization...................................    11,553    12,413      5,922
  Gain on pension settlement/curtailment.........       --       (259)      (869)
  (Gain)/loss on disposal of equipment...........      (175)      514        (94)
  Deferred income taxes..........................     1,463      (640)     1,852
  Exit costs.....................................      (974)   (2,875)    (1,119)
  Provision for losses on accounts receivable....     4,203     4,151      3,293
  Employee benefit charges.......................       121     3,003      3,980
  Changes in assets and liabilities, net of
   acquisitions:
   Accounts receivable...........................    (7,294)   (5,685)    (3,332)
   Inventories and advertising material..........    (5,542)   (2,466)    (1,503)
   Prepaid expenses and other assets.............    (1,165)      495      1,003
   Accounts payable..............................     3,457        32     (3,908)
   Income taxes payable..........................       606    (2,750)     2,228
   Other accrued expenses........................     3,325       792       (205)
                                                   --------  --------  ---------
     Net cash provided by operating activities...    53,104    45,608     41,478
Cash Flows From Investing Activities:
Additions to property and equipment..............   (21,057)  (16,866)   (13,275)
Acquisition of businesses--net of cash acquired..       --       (256)  (131,596)
Proceeds from sale of facilities and equipment...     1,258       877        262
Proceeds from sale of other assets...............       --        140        --
Investment in other assets.......................   (13,369)      (20)       (60)
Purchases of investments.........................       --        --      (1,561)
Proceeds from sale and maturities of
 investments.....................................       --        --       2,023
                                                   --------  --------  ---------
     Net cash used by investing activities.......   (33,168)  (16,125)  (144,207)
Cash Flows From Financing Activities:
Repayment of debt................................   (96,250) (113,500)   (25,650)
Proceeds from credit line--net of issuance
 costs...........................................   101,406   100,500    138,589
Repayment of obligations under capital lease.....      (592)      --         --
Proceeds from issuance of common stock...........       526     2,923      3,469
Acquisition of treasury stock....................   (14,194)  (14,031)       --
Dividends paid...................................   (10,982)  (11,511)   (10,996)
                                                   --------  --------  ---------
     Net cash provided (used) by financing
      activities.................................   (20,086)  (35,619)   105,412
Effect of Exchange Rate Changes on Cash..........       (65)       48       (276)
                                                   --------  --------  ---------
Net Increase (Decrease) in Cash and Cash
 Equivalents.....................................      (215)   (6,088)     2,407
Cash and Cash Equivalents at Beginning of Year...     3,684     9,772      7,365
                                                   --------  --------  ---------
Cash and Cash Equivalents at End of Year.........  $  3,469  $  3,684  $   9,772
                                                   ========  ========  =========
Supplemental Cash Flow Disclosure:
Interest paid....................................  $  8,417  $  8,867  $   3,791
                                                   ========  ========  =========
Income taxes paid................................  $ 14,514  $ 20,232  $  11,574
                                                   ========  ========  =========
Stock issued in connection with acquisitions.....  $    --   $    --   $  12,600
                                                   ========  ========  =========
Stock issued pursuant to employee benefit plans..  $    --   $  2,774  $   3,836
                                                   ========  ========  =========
Purchase of equipment under capital lease........  $  3,021  $    --   $     --
                                                   ========  ========  =========
</TABLE>

See notes to consolidated financial statements.

                                      F-5
<PAGE>

              NEW ENGLAND BUSINESS SERVICE, INC. AND SUBSIDIARIES

                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies

  Description of Business and Basis of Consolidation--The financial statements
include the accounts of New England Business Service, Inc. and its wholly-
owned subsidiaries (the "Company"). All significant intercompany accounts and
transactions have been eliminated in consolidation. The Company sells
primarily printed business products such as checks and business forms through
a variety of channels and also serves as a reseller of packaging and shipping
supplies and retail signage.

  Significant Estimates--In the process of preparing its consolidated
financial statements, the Company estimates the appropriate carrying value of
certain assets and liabilities which are not readily apparent from other
sources. The primary estimates underlying the Company's consolidated financial
statements include allowances for doubtful accounts, inventory obsolescence,
deferrals of mail advertising costs, accruals for bonuses, recoverability of
deferred tax assets, goodwill and other intangible assets. Actual results may
differ from these estimates.

  Foreign Currency Translation--The financial statements of the Company's
foreign subsidiaries are measured in the respective subsidiary's functional
currency and then translated into U.S. dollars. All balance sheet accounts
have been translated using the year-end rate of exchange, while income
statement accounts have been translated using the average rates prevailing
throughout the year. Resulting translation gains or losses are accumulated in
a separate component of stockholders' equity entitled "Accumulated other
comprehensive loss." Foreign currency transaction gains and losses, including
those related to intercompany transactions, are recorded directly in the
income statement and are immaterial in all periods presented.

  Cash and Cash Equivalents--The Company considers its holdings in short-term
money market accounts and certificates of deposit with an original maturity of
three months or less to be cash equivalents.

  Inventories--Inventories are generally carried at the lower of first-in,
first-out cost or market. At year end, inventories consisted of:

<TABLE>
<CAPTION>
                                                           2000        1999
                                                        ----------- -----------
   <S>                                                  <C>         <C>
   Unprinted paper..................................... $ 5,294,000 $ 1,692,000
   Business forms and related office products..........  19,284,000  19,846,000
                                                        ----------- -----------
     Total............................................. $24,578,000 $21,538,000
                                                        =========== ===========
</TABLE>

  Long-Term Investments--In March 2000, the Company invested $12.9 million and
$.5 million, respectively, in the common stock of Advantage Business Services
Holdings, Inc. and the convertible preferred stock of WebNow.com, Inc. These
investments represent less than a 20% voting interest in these companies.
Also, the securities are not considered to be marketable equity securities
under SFAS 115 because both of the companies are currently privately held and,
hence, the securities are restricted and have no readily determinable market
value. These investments are carried at cost and will periodically be
evaluated to determine whether a decline in fair value below the original cost
basis has occurred and is other than temporary. Both of the investments are
classified as long-term assets on the consolidated balance sheet because of
their non-marketable nature and management's intent to hold these investments
for the long-term.

  Direct Mail Advertising--The Company expenses the production costs of
advertising at the time the advertising is initiated, except for direct-
response advertising, which is capitalized and amortized over its expected
period of future benefit; this period is not in excess of six months. Direct-
response advertising consists primarily of product catalogs and associated
mailing costs. As of June 24, 2000 and June 26, 1999, $10,773,000 and
$8,400,000, respectively, were reported as direct advertising assets and
included in Direct mail advertising materials, net and prepaid expenses in the
consolidated balance sheets. Advertising expense included in selling and
advertising was $59,243,000 in 2000, $56,680,000 in 1999, and $46,271,000 in
1998.

                                      F-6
<PAGE>

  Property and Equipment--Property and equipment are carried at cost.
Depreciation is computed over the estimated useful lives (three to twenty
years) of the assets using the straight-line method. Property held for sale is
stated at the lower of cost or estimated net realizable value.

  Internal Use Software--In March 1998, the AICPA issued Statement of Position
("SOP") 98-1, "Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use." The Company has adopted this statement in fiscal
year 1999. In fiscal year 2000 and 1999, approximately $2,381,000 and
$1,907,000, respectively, in costs which previously would have been expensed
have been capitalized under the caption "Property and equipment, net."

  Goodwill--Goodwill acquired is being amortized on a straight-line basis over
periods of 20 to 40 years. Accumulated amortization amounted to $5,079,000 and
$3,369,000 at June 24, 2000 and June 26, 1999, respectively.

  Customer Lists, Tradenames and Other Assets--Customer lists, tradenames and
other assets are amortized using the straight-line method or the effective-
interest method over their estimated lives. The range of estimated lives and
accumulated amortization balances for each category of assets are as follows:

<TABLE>
<CAPTION>
                                                           2000         1999
                                                       Accumulated  Accumulated
   Description                                Lives    Amortization Amortization
   -----------                              ---------- ------------ ------------
   <S>                                      <C>        <C>          <C>
   Customer lists.......................... 2-18 years $22,462,000  $14,861,000
   Tradenames..............................   40 years   1,907,000    1,090,000
   Other assets:
     Covenant not to compete...............    5 years     390,000      270,000
     Debt issue costs......................  3-5 years     294,000      175,000
     Assembled workforce...................    6 years   1,255,000      885,000
     Bank referral agreements..............   20 years   1,217,000      401,000
</TABLE>

  Revenue Recognition--Revenue is recognized on product sales at the point in
time when persuasive evidence of an arrangement exists, the price is fixed and
final, delivery has occurred and there is reasonable assurance of collection
of the sales proceeds. The Company generally obtains purchase authorizations
from its customers for a specified amount of product at a specified price and
considers delivery to have occurred at the point of shipment. While the
Company does provide its customers with a right of return, revenue is not
deferred. Rather, a reserve for sales returns is provided in accordance with
SFAS 48 based on significant historical experience.

  Income Taxes--The provision for income taxes is determined based upon the
Company's computed total income tax obligation for the year and the change in
the Company's deferred tax balances from year to year. Deferred income taxes
reflect the impact of temporary differences between assets and liabilities
recognized for financial reporting purposes and such amounts recognized for
tax purposes. Such deferred tax assets and liabilities are also adjusted to
reflect changes in the U.S. and applicable foreign tax laws when enacted and
changes in blended state tax rates. Future tax benefits are recognized to the
extent realization of such benefit is more likely than not to occur.

  Per Share Amounts--Basic earnings per share amounts are computed based upon
the weighted average number of shares of common stock outstanding during each
fiscal year. Diluted earnings per share amounts are computed by also giving
consideration to potentially dilutive stock options outstanding. Common stock
equivalents totaling 1.8 million outstanding stock options are not included in
the computation of earnings per share as they are anti-dilutive. In addition,
5,900 contingently returnable restricted shares have not been included in the
earnings per share calculation as they have not vested as of the end of fiscal
year 2000. A reconciliation of outstanding shares is shown on the statements
of consolidated income and comprehensive income.

                                      F-7
<PAGE>

  Concentration of Credit Risk--The Company extends credit to approximately
1.8 million geographically dispersed customers on an unsecured basis in the
normal course of business. No individual industry or industry segment is
significant to the Company's customer base. The Company has in place policies
governing the extension of credit and collection of amounts due from
customers.

  Derivatives--The Company has entered into a variety of intercompany
transactions between members of the consolidated group (which have different
functional currencies) that present foreign currency risk. In the past the
Company has purchased foreign currency forward contracts to minimize the
effect of fluctuating foreign currencies on its reported income; however,
these contracts do not qualify under generally accepted accounting principles
in the United States of America for hedge treatment. Accordingly, these
contracts are carried in the financial statements at the current forward
foreign exchange rates, with the changes in forward rates reflected directly
in income. The offsetting exchange movements on the intercompany balances are
also recognized as a component of operating expenses. There were no such
contracts outstanding at June 24, 2000.

  The Company has entered into interest rate swaps that qualify as matched
swaps that are linked by designation with a balance sheet liability and have
opposite interest rate characteristics of such balance sheet item. Matched
interest rate swaps qualify for settlement accounting. Under settlement
accounting, periodic net cash settlements under the swap agreements are
recognized in income on an accrual basis. These settlements are offset against
interest expense in the statements of consolidated income and comprehensive
income. The implementation of SFAS 133 in fiscal year 2001 is not anticipated
to have a material effect on the income statement relative to the swap
transactions.

  Impairment of Long-Lived Assets--The Company evaluates the recoverability of
long-lived assets in accordance with Statement of Financial Accounting
Standards ("SFAS") No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." There were no adjustments
to the carrying value of any long-lived assets in 2000, 1999 or 1998.

  Accounting for Stock-Based Compensation--SFAS No. 123, "Accounting for
Stock-Based Compensation," encourages, but does not require, companies to
record compensation cost for stock-based employee compensation plans at fair
value. The Company has chosen to continue to account for stock-based
compensation using the intrinsic-value method prescribed in Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees," and related Interpretations.

  New Accounting Pronouncements--In June, 1998, the FASB issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." This standard
will be adopted by the Company in fiscal year 2001. Management believes that
the impact of this standard on its consolidated financial statements will not
be material.

  In December 1999, the Securities and Exchange Commission issued Staff
Accounting Bulletin No. 101 "Revenue Recognition." This SAB was intended to
clarify certain elements of revenue recognition. It is currently being
supplemented by a frequently asked questions document and is required to be
implemented by the Company no later than the fourth quarter of fiscal 2001.
Management currently believes that this SAB will not materially impact its
revenue recognition practices.

  The Emerging Issues Task Force is currently debating Issue No. 00-10,
"Accounting for Shipping and Handling Revenues and Costs." Specifically, it is
formulating conclusions as to how a seller of goods should classify revenues
and costs attributable to shipping and handling in the income statement. No
final conclusion has been reached. The Company currently nets such revenues
and expenses in the cost of sales line. Should the Emerging Issues Task Force
reach a consensus that such financial statement presentation should be
changed, management will effect such a reclassification and will restate
previous periods, as appropriate. There would be no effect on reported net
income.

  Reclassifications--Certain reclassifications have been made to the 1999 and
1998 financial statements to conform with the 2000 presentation.

                                      F-8
<PAGE>

2. 1998 Acquisitions

  On December 23, 1997, the Company acquired all of the outstanding common
stock of Rapidforms, Inc. ("Rapidforms") for consideration of approximately
$82,136,000 in cash (net of cash acquired). The Company also incurred fees of
approximately $407,000 in connection with the acquisition. Rapidforms and its
subsidiaries collectively sell business forms, stationery, merchandising
products and office supplies primarily by direct mail to small businesses
throughout the United States. The acquisition was accounted for using the
purchase method of accounting. Accordingly, Rapidforms' results of operations
are included in the accompanying financial statements from the date of
acquisition. The purchase price, including acquisition costs, was allocated to
the net tangible assets acquired based on the fair value of such assets and
liabilities. The excess cost over fair value of the net tangible assets
acquired was $63,009,000, of which $21,000,000 was allocated to customer
lists, $15,700,000 to tradenames, and the balance of $26,309,000 to goodwill.
The goodwill is being amortized on a straight-line basis over a period of 40
years, while customer lists and the tradenames arising from this transaction
are being amortized over their respective useful lives.

  As part of the purchase accounting for the Rapidforms acquisition and
included in the allocation of the acquisition costs, a liability of $2,910,000
was recorded to cover the anticipated costs related to a plan to close
redundant Rapidforms manufacturing and warehouse facilities and to reduce
manufacturing personnel. Approximately $2,610,000 of the liability was related
to employee termination benefits, and approximately $300,000 was related to
termination of certain contractual obligations. As of June 24, 2000, the
payments of termination benefits and contractural obligations are complete.

  On June 3, 1998, the Company acquired all of the outstanding common stock of
McBee Systems, Inc. and all of the assets of McBee Systems of Canada, Inc.
(collectively "McBee") for consideration of approximately $48,518,000 in cash
(net of cash acquired), and 382,352 shares of Company common stock valued at
approximately $12,600,000, for an aggregate purchase price of $61,118,000. The
Company also incurred fees of approximately $780,000 in connection with the
acquisition. McBee manufactures and markets a line of checks and related
products to small businesses throughout the United States and Canada through a
dedicated field sales force. The acquisition was accounted for using the
purchase method of accounting. Accordingly, McBee's results of operations are
included in the accompanying financial statements from the date of
acquisition. The purchase price, including acquisition costs, was allocated to
the net tangible assets acquired based on the fair value of such assets and
liabilities. The excess cost over fair value of the net tangible assets
acquired was $52,898,000, of which $15,600,000 was allocated to customer
lists, $15,600,000 to tradenames, $4,900,000 to an assembled work force,
$7,400,000 to bank referral agreements, and the balance of $9,398,000 to
goodwill. The goodwill is being amortized on a straight-line basis over a
period of 40 years, while customer lists, the assembled work force, the bank
referral agreements and the tradenames arising from this transaction are being
amortized over their respective useful lives.

  As part of the purchase accounting for the McBee acquisition and included in
the allocation of the acquisition costs, a liability of $1,642,000 was
recorded to cover the anticipated costs (primarily employee termination
benefits) related to a plan to close redundant McBee manufacturing and
warehouse facilities and to reduce manufacturing personnel. The liability
associated with the McBee integration plan remaining as of June 24, 2000 was
$147,000, which is expected to be paid during fiscal year 2001.

  The following unaudited pro forma financial information reflects the
consolidated results of operations of the Company for the year ended June 27,
1998 as though the acquisitions described above had occurred on the first day
of that fiscal year. The pro forma operating results are presented for
comparative purposes only and do not purport to present the Company's actual
operating results had the acquisitions been consummated on June 29, 1997 or
results which may occur in the future:

<TABLE>
<CAPTION>
                                                                       1998
                                                                   ------------
     <S>                                                           <C>
     Net sales.................................................... $457,581,000
     Net income...................................................   24,961,000
     Net income per diluted share.................................         1.73
</TABLE>

                                      F-9
<PAGE>

3. Debt Obligations and Leases

  During March 1997, the Company terminated two existing lines of credit in
the total amount of $20,000,000 and entered into a five year, $60,000,000
committed, unsecured, revolving line of credit agreement with two major
commercial banks. In December, 1997, the Company amended the terms of this
agreement to increase the total committed line to $135,000,000, to expand the
number of participating banks to ten, and to extend the facility maturity date
to December, 2002. In May, 1998, the Company amended the agreement to increase
the total committed line to $165,000,000. In May, 2000, the Company further
amended the agreement to increase the total committed line to $200,000,000.
Under this credit agreement, the Company has the option to borrow at the
Eurodollar rate plus a spread or the agent bank's base lending rate prevailing
from time to time. The effective interest rate as of June 24, 2000 was 7.4%.
The credit agreement contains various restrictive covenants which, among other
things, require the Company to maintain certain minimum levels of consolidated
net worth and specific consolidated debt and fixed charge ratios. At June 24,
2000, the Company was in compliance with such covenants and $133,500,000 was
outstanding under this line. Debt issuance costs incurred in connection with
this facility are amortized over the term of the agreement using the
effective-interest method.

  The Company leases facilities and equipment under long-term leases with non-
related parties. The future minimum rental commitments for leases of certain
facilities and equipment are as follows:

<TABLE>
<CAPTION>
                                                        Operating  Capitalized
   Fiscal Year Ended June                                 Leases     Leases
   ----------------------                               ---------- -----------
   <S>                                                  <C>        <C>
   2001................................................ $5,447,000 $  973,000
   2002................................................  3,492,000    954,000
   2003................................................  2,891,000    732,000
   2004................................................  2,706,000     46,000
   2005................................................  2,425,000        --
   Thereafter..........................................  3,053,000        --
                                                        ---------- ----------
   Total minimum lease payments........................ 20,014,000  2,705,000
                                                        ==========
   Less amount representing interest...................               276,000
                                                                   ----------
   Present value of net minimum lease payments
    including current maturities $819,000..............            $2,429,000
                                                                   ==========
</TABLE>

  Total rental expense was $6,476,000, $6,587,000, and $2,988,000, in 2000,
1999, and 1998, respectively. Included in those amounts were payments for
properties leased from a former executive officer of $1,035,000, $1,171,000
and $998,000 in 2000, 1999 and 1998, respectively.

4. Financial Instruments

  In order to minimize exposure to foreign currency fluctuations with respect
to foreign currency exposures, the Company may enter into forward exchange
rate contracts for the amount of the exposure. At June 24, 2000, the Company
had no outstanding forward currency contracts. Gains or losses on those
previously closed have been immaterial.

  The Company has entered into three interest rate swap agreements with two
major commercial banks in order to effectively convert the interest rate of a
portion of the Company's outstanding revolving credit debt from a Eurodollar-
based floating rate to a fixed rate. The agreements expire on different dates,
and the total notional principal amount decreases over time. Although the
Company is exposed to credit and market risk in the event of future non-
performance by any of the banks, management has no reason to believe that such
an event will occur. Information regarding the agreements as of June 24, 2000
follows:

<TABLE>
<CAPTION>
                                           Fixed                   Agreement
     Notional Principal Amount         Interest Rate Fair Value Expiration Date
     -------------------------         ------------- ---------- ----------------
     <S>                               <C>           <C>        <C>
     $ 7,500,000......................     5.62%      $ 52,000  January 30, 2001
     $45,000,000......................     5.79%       519,000    June 8, 2001
     $25,000,000......................     6.95%        70,000   March 7, 2003
</TABLE>

  As of June 24, 2000 and June 26, 1999, the carrying value of all other
financial instruments approximated fair value.

                                     F-10
<PAGE>

5. Equity Transactions

  The Company has issued a stock purchase right to stockholders for each
outstanding share of common stock of the Company. Each right becomes
exercisable upon the occurrence of certain events, as provided in the Rights
Agreement, and entitles the registered holder to purchase from the Company a
"Unit" consisting of one one-hundredth of a share of preferred stock at a
purchase price of $75.00 per Unit, subject to adjustment to prevent dilution.
In addition, upon the occurrence of certain events, the registered holder will
thereafter have the right to receive, upon payment of the purchase price,
additional shares of common stock and/or cash and/or other securities, as
provided in the Rights Agreement. The rights will expire on October 20, 2004.
The Company may redeem the rights at a price of $.01 per right. The Company
also has authorized but not issued 1,000,000 shares of $1.00 par value
preferred stock.

  On October 25, 1996, the Company's Board of Directors authorized the
repurchase of up to two million shares of the Company's common stock over a
two year period. No purchases were made during 1998 and 1999 under that plan.
On October 23, 1998, the Company's Board of Directors authorized the
repurchase of up to two million additional shares of the Company's common
stock over a two year period, replacing the October 1996 authorization. As of
June 24, 2000, 1,105,000 shares had been purchased under the October 1998,
authorization at a cumulative cost of $28,225,000.

  During fiscal year 2000, the Company awarded restricted stock to several
executive employees. For these awards, which vest after three years, the fair
market value of the shares is expensed over the vesting period. The
unamortized portion of deferred compensation expense is recorded as a
reduction of shareholder's equity. Recipients of all restricted shares have
the right to vote such shares and receive dividends.

6. Stock Options

  At the Company's October 1997 annual meeting, the stockholders approved the
NEBS Key Employee and Eligible Director Stock Option and Stock Appreciation
Rights Plan (the "1997 Plan"). The 1997 Plan amended and restated the
Company's 1990 plan (described below) and 1994 plan (also described below) and
incorporated the two plans into the 1997 Plan. Under the 1997 Plan, the
Company was authorized to issue 1,300,000 shares of common stock pursuant to
the granting of stock options or stock appreciation rights in addition to the
shares remaining available for issuance under the 1990 and 1994 option plans.

  At the Company's 1994 annual meeting, the stockholders approved the NEBS
1994 Key Employee and Eligible Director Stock Option and Stock Appreciation
Rights Plan (the "1994 Plan"). Under the 1994 Plan, the Company was authorized
to issue up to 1,200,000 shares of common stock pursuant to the granting of
stock options or stock appreciation rights.

  At the Company's 1990 annual meeting, the stockholders approved the NEBS
1990 Key Employee Stock Option and Stock Appreciation Rights Plan (the "1990
Plan"). Under the 1990 Plan, the Company was authorized to issue up to
1,000,000 shares of common stock pursuant to the granting of stock options or
stock appreciation rights.

  At the Company's 1980 annual meeting, the stockholders approved the NEBS
1980 Stock Option Plan (the "1980 Plan"). Under the 1980 Plan, the Company was
authorized to issue up to 900,000 shares of common stock pursuant to stock
options or stock appreciation rights. The 1980 Plan expired in 1990, although
shares of common stock may be issued pursuant to options which were
outstanding as of June 24, 2000.

  Under the terms of the Company's stock option plans, options are granted to
purchase stock at fair market value on the date of the option grant. Options
granted have been exercisable in full in terms of up to nine years from the
date of grant and the options expire no later than ten years from the date of
grant. Generally, the options vest and become exercisable over a four year
period, commencing one year after the grant date. As of June 24, 2000,
2,728,850 shares of common stock are reserved for issuance under the Company's
stock option plans, of which 1,608,723 are subject to outstanding options and
1,120,127 remain available for future option grants. During fiscal 2000, the
Company repurchased outstanding options for 861,385 shares at a cost of
$430,693 and charged such buyout amount to compensation expense in general and
administrative expenses.

                                     F-11
<PAGE>

  Options for 1,158,775 shares, 1,053,769 shares and 854,907 shares were
currently exercisable under all option arrangements at June 24, 2000, June 26,
1999 and June 27, 1998, respectively. There were no outstanding stock
appreciation rights under any of the plans during 2000, 1999 or 1998.

  A summary of stock option activity under the Company's stock option plans
during 2000, 1999, and 1998 follows:

<TABLE>
<CAPTION>
                                                                    Weighted-
                                        Number of    Per Share       Average
                                         Shares     Option Price  Exercise Price
                                        ---------  -------------- --------------
   <S>                                  <C>        <C>            <C>
   June 28, 1997....................... 1,662,495  $14.75 - 26.38     $19.89
     Granted...........................   470,500   29.13 - 33.13      30.69
     Exercised.........................  (180,890)  14.75 - 25.75      18.59
     Expired...........................   (60,235)  15.38 - 30.00      20.66
                                        ---------
   June 27, 1998....................... 1,891,870   14.75 - 33.13      22.66
     Granted...........................   597,452   28.88 - 33.88      28.03
     Exercised.........................  (188,344)  14.75 - 30.00      19.03
     Expired...........................   (90,867)  15.38 - 33.13      28.49
                                        ---------
   June 26, 1999....................... 2,210,111   14.75 - 33.88      24.20
                                        =========
     Granted...........................   402,300   21.50 - 27.69      27.52
     Repurchased.......................  (861,385)  25.75 - 33.88      28.34
     Exercised.........................   (30,233)  14.75 - 20.75      17.31
     Expired...........................  (112,070)  25.75 - 33.88      28.68
                                        ---------
   June 24, 2000....................... 1,608,723   14.75 - 33.88      22.63
                                        =========
</TABLE>

  The following table presents information with regard to all stock options
outstanding at June 24, 2000:

<TABLE>
<CAPTION>
                                   Options Outstanding         Options Exercisable
                            --------------------------------- ---------------------
                                         Weighted-
                                          Average
                                         Remaining  Weighted-             Weighted-
     Range of                           Contractual  Average               Average
     Exercise                 Number       Life     Exercise    Number    Exercise
      Prices                Outstanding   (years)     Price   Exercisable   Price
     --------               ----------- ----------- --------- ----------- ---------
   <S>                      <C>         <C>         <C>       <C>         <C>
   $14.75 - 15.88..........    259,142      4.6      $15.29      259,142   $15.28
    17.88 - 19.75..........    456,199      5.1       18.30      451,788    18.31
    20.13 - 21.50..........    112,082      5.6       20.74      103,332    20.69
    25.75 - 33.13..........    781,300      7.7       27.87      344,513    27.58
                             ---------      ---      ------    ---------   ------
                             1,608,723      6.4      $22.63    1,158,775   $20.60
                             =========      ===      ======    =========   ======
</TABLE>

  The Company applies APB Opinion No. 25 to account for its various stock
plans. Accordingly, pursuant to the terms of the plans, no compensation cost
has been recognized for the stock plans. However, if the Company had
determined compensation cost for stock option grants made since 1996 under the
provisions of SFAS No. 123, (the 1996 date coinciding with the adoption of
SFAS No. 123 for disclosure purposes), the Company's net income and net income
per share would have been reduced to the pro forma amounts shown below:

<TABLE>
<CAPTION>
                                               2000        1999        1998
                                            ----------- ----------- -----------
   <S>                                      <C>         <C>         <C>
   Net income:
     As reported........................... $29,358,000 $26,451,000 $24,934,000
     Pro forma.............................  27,921,000  24,911,000  24,357,000
   Net income per diluted share:
     As reported........................... $      2.12 $      1.81 $      1.77
     Pro forma.............................        2.01        1.70        1.73
</TABLE>

                                     F-12
<PAGE>

  The pro forma net income reflects the compensation cost only for those
options granted since 1996. Compensation cost is reflected over a stock
option's vesting period and compensation cost for options granted prior to
June 30, 1995 is not considered. Therefore, the full potential impact of
compensation cost for the Company's stock plans under SFAS No. 123 may not be
reflected in the pro forma net income amounts presented above.

  The fair value of each stock option granted in 2000, 1999 and 1998 under the
Company's stock option plans was estimated on the date of grant using the
Black-Scholes option-pricing model. The following key assumptions were used to
value grants issued for each year:

<TABLE>
<CAPTION>
                                  Weighted-
                                   Average        Average               Dividend
                                Risk Free Rate Expected Life Volatility  Yield
                                -------------- ------------- ---------- --------
   <S>                          <C>            <C>           <C>        <C>
   1998........................     5.54%        5.4 years     28.53%     2.6%
   1999........................     5.94%        5.5 years     24.12%     2.8%
   2000........................     6.20%        5.5 years     21.49%     2.9%
</TABLE>

  The weighted-average fair values per share of stock options granted during
2000, 1999 and 1998 were $6.46, $6.98 and $8.51, respectively. It should be
noted that the Black-Scholes option pricing model used in the calculation was
designed to value readily tradable stock options with relatively short lives.
The options granted to employees are not tradable and have contractual lives
of up to ten years. Management believes that the assumptions used and the
model applied to value the awards yield a reasonable estimate of the fair
value of the grants made under the circumstances.

  At the 1994 annual meeting, the stockholders approved the New England
Business Service, Inc. Stock Compensation Plan (the "Stock Compensation
Plan"). Under the Stock Compensation Plan, up to 300,000 shares of common
stock may be issued to the Company's directors and employees in lieu of cash
compensation otherwise payable. At June 24, 2000, 275,516 shares remain
reserved for issuance under the Stock Compensation Plan. The number and value
of shares issued under this plan have been nominal.

7. 401(k) Plans

  The Company sponsors several 401(k) plans covering substantially all of the
Company's domestic employees. Contributions to the plans are made by way of
participant salary deferrals and Company contributions. Company contributions
include combinations of matching, fixed and discretionary contributions,
subject to a maximum Company obligation ranging from 4% to 9% of an employee's
eligible pay. The Company's aggregate contributions to the plans were
$6,638,000 in fiscal 2000, $6,410,000 in fiscal 1999, and $4,795,000 in fiscal
1998.

8. Pension Plans

  The Company sponsored a defined-benefit, trusteed pension plan (the "DB
Plan") which provided retirement benefits for the majority of its domestic
employees. During the second quarter of 1997, the Company amended its DB Plan.
The amendment specifically froze plan participation at December 31, 1996 and
eliminated further benefit accruals after June 28, 1997. The Company recorded
a plan curtailment gain of $2,187,000 as a component of other income during
1997 associated with the plan amendment. In 1998 the Company terminated the
plan and settled all obligations. The Company recorded a plan settlement gain
of $556,000 associated with the DB plan termination. The Company also
maintains two similar defined benefit plans for its Canadian employees. During
fiscal 1998, the Company amended one of its Canadian defined benefit plans to
freeze participation at December 31, 1997 and recorded a plan curtailment gain
of $313,000 associated with this action. The Company recorded a plan
settlement gain of $259,000 during 1999 related to the Canadian plan
termination.

  In addition, the Company has a supplemental executive retirement plan which
is currently unfunded. Executive employees are eligible to become members of
the plan upon designation by the Board of Directors.

                                     F-13
<PAGE>

Benefits under the plan are based on each participant's annual earnings and
years of service. Provision for this benefit is charged to operations over the
participant's term of employment. The amounts are not significant.

9. Postretirement Benefits Other Than Pensions

  SFAS No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions," requires the accrual of postretirement benefits other than pensions
(such as health care benefits) during the years an employee provides service
to the Company. The Company sponsors a defined benefit postretirement plan
that provides health and dental care benefits for retired Company officers.
The plan is contributory, and retirees' contributions are adjusted annually.

  The following table sets forth the plan's funded status and obligations as
of June 24, 2000 and June 26, 1999:

<TABLE>
<CAPTION>
                                                             2000       1999
                                                          ---------- ----------
   <S>                                                    <C>        <C>
   Accumulated postretirement benefit obligation
    ("APBO"):
     Retirees...........................................  $  394,000 $  461,000
     Eligible active plan participants..................         --         --
     Other active plan participants.....................     447,000    522,000
                                                          ---------- ----------
       Total............................................     841,000    983,000
   Plan assets at fair value............................         --         --
     Accumulated postretirement benefit obligation in
      excess of plan assets.............................     841,000    983,000
     Unrecognized net gain..............................     493,000    259,000
                                                          ---------- ----------
       Net postretirement liability (included in accrued
        employee benefit expense).......................  $1,334,000 $1,242,000
                                                          ========== ==========
</TABLE>

  The components of net periodic postretirement benefits cost for 2000, 1999
and 1998 are as follows:

<TABLE>
<CAPTION>
                                                   2000      1999      1998
                                                 --------  --------  --------
   <S>                                           <C>       <C>       <C>
   Service cost................................. $ 76,000  $ 62,000  $ 47,000
   Interest on accumulated postretirement
    benefit obligation..........................   68,000    70,000    78,000
   Amortization of gain.........................  (17,000)  (14,000)   (5,000)
                                                 --------  --------  --------
     Net periodic postretirement cost........... $127,000  $118,000  $120,000
                                                 ========  ========  ========
</TABLE>

  For measurement purposes, an 8.0% annual rate of increase in the cost of
providing medical benefits was assumed in 2000 with a reduction to a trend
rate of 6% for fiscal 2003.

  The weighted average discount rate used in determining the APBO was 7.5% in
2000 and 7.0% in 1999 respectively.

  The health care cost trend has an effect on the amounts reported. An
increase of 1% in the rate of increase would have had an effect of increasing
the APBO by $135,000 and the net periodic postretirement benefits cost by
$20,000.


                                     F-14
<PAGE>

10. Income Taxes

  The components of income before income taxes were as follows:

<TABLE>
<CAPTION>
                                               2000         1999        1998
                                            -----------  ----------- -----------
     <S>                                    <C>          <C>         <C>
     United States......................... $46,166,000  $43,069,000 $39,817,000
     Foreign...............................    (469,000)     673,000   1,588,000
                                            -----------  ----------- -----------
       Total............................... $45,697,000  $43,742,000 $41,405,000
                                            ===========  =========== ===========
</TABLE>

  Provisions for income taxes under SFAS No. 109 in 2000, 1999 and 1998
consist of:

<TABLE>
<CAPTION>
                                              2000         1999         1998
                                           -----------  -----------  -----------
     <S>                                   <C>          <C>          <C>
     Currently payable:
       Federal............................ $15,270,000  $14,253,000  $10,369,000
       State..............................    (126,000)   3,004,000    3,517,000
       Foreign............................    (268,000)     674,000      733,000
                                           -----------  -----------  -----------
         Total............................  14,876,000   17,931,000   14,619,000
     Deferred.............................   1,463,000     (640,000)   1,852,000
                                           -----------  -----------  -----------
         Total............................ $16,339,000  $17,291,000  $16,471,000
                                           ===========  ===========  ===========
</TABLE>

  The tax effect of significant items comprising the Company's net deferred
tax assets as of June 24, 2000 and June 26, 1999 are as follows:

<TABLE>
<CAPTION>
                                    2000                      1999
                           ------------------------  ------------------------
                             Current    Noncurrent     Current    Noncurrent
                           -----------  -----------  -----------  -----------
<S>                        <C>          <C>          <C>          <C>
Deferred tax assets:
  Accrued vacation........ $ 1,550,000               $ 1,512,000
  Allowance for doubtful
   accounts...............   1,512,000                   926,000
  Accrued expenses........     906,000                 1,201,000
  Sales returns and
   allowances.............     360,000                   327,000
  Inventory...............   1,786,000                 1,668,000
  Employee benefit
   reserves...............   2,127,000                 1,555,000
  Amortization of
   intangible assets......         --   $ 6,780,000          --   $ 4,803,000
  Depreciation............         --     1,590,000          --       933,000
  Other...................         --       426,000          --       617,000
Deferred tax liabilities:
  Amortization............         --    (3,690,000)         --    (2,343,000)
  Depreciation............         --    (6,066,000)         --    (2,335,000)
  Deferred mail
   advertising............  (1,446,000)         --    (1,813,000)         --
  Other...................    (315,000)    (822,000)    (255,000)    (280,000)
                           -----------  -----------  -----------  -----------
Net deferred tax
 assets/(liabilities)..... $ 6,480,000  $(1,782,000) $ 5,121,000  $ 1,395,000
                           ===========  ===========  ===========  ===========
</TABLE>

  Current and non-current amounts have been further segregated on the balance
sheet due to the effect of different tax jurisdictions.

                                     F-15
<PAGE>

  A reconciliation of the provisions for income taxes to the U.S. Federal
income tax statutory rates follows:

<TABLE>
<CAPTION>
                                                               2000  1999  1998
                                                               ----  ----  ----
     <S>                                                       <C>   <C>   <C>
     Statutory tax rate....................................... 35.0% 35.0% 35.0%
     State income taxes (less federal tax benefits)...........  2.4   4.2   6.3
     Revenue ruling benefit (less federal tax expense)........ (2.3)   --    --
     Other--net...............................................   .7    .3  (1.5)
                                                               ----  ----  ----
     Effective tax rate....................................... 35.8% 39.5% 39.8%
                                                               ====  ====  ====
</TABLE>

  The revenue ruling benefit shown above is the result of a one-time tax
benefit due to a favorable state tax revenue ruling received during fiscal
year 2000 affecting prior years.

11. Segment Information

  The Company has segmented its operations in a manner that reflects how its
chief operating decision maker reviews the results of the businesses that make
up the consolidated entity. The Company has identified three reportable
segments. The first segment is titled "Printed Products--Direct Marketing" and
represents those business operations that sell primarily printed business
products such as checks and business forms to small businesses through direct
marketing. The second segment, "Printed Products--Direct Sales," also sells
checks and business forms to small businesses; however, they sell the products
through either distributors or by directly selling to the customer. "Packaging
and Display Products" is the third segment and primarily resells packaging and
shipping supplies and retail signage through a combination of direct marketing
and direct selling efforts.

  The Company evaluates segment performance and allocates resources based on a
profit from operations measure. This measure is akin to income from operations
as reported on the statements of consolidated income and comprehensive income
in that it excludes interest and other income/expense. This measure, however,
also excludes a number of items that are reported within income from
operations. These include amortization, 401(k) expenses, integration charges
and corporate overhead. These items are not used by the chief operating
decision maker in assessing segment results. In order to reconcile the segment
numbers to the Company's income before income taxes, adjustments representing
the items listed above totaling $39,747,000, $40,954,000 and $29,145,000 for
2000, 1999 and 1998, respectively, need to be made to the reported segment
results.

  The following table presents certain segment information:

<TABLE>
<CAPTION>
                                  Printed Products
                            -----------------------------  Packaging and
                            Direct Marketing Direct Sales Display Products    Total
                            ---------------- ------------ ---------------- ------------
   <S>                      <C>              <C>          <C>              <C>
   2000
     Net sales.............   $307,880,000   $102,777,000   $74,729,000    $485,386,000
     Profit from
      operations...........     73,374,000      7,505,000     4,565,000      85,444,000
     Adjustments listed
      above................                                                  39,747,000
     Income before income
      taxes................                                                  45,697,000

   1999
     Net sales.............    306,660,000     93,585,000    70,232,000     470,477,000
     Profit from
      operations...........     69,528,000     11,294,000     3,874,000      84,696,000
     Adjustments listed
      above................                                                  40,954,000
     Income before income
      taxes................                                                  43,742,000

   1998
     Net sales.............    268,814,000     27,908,000    59,045,000     355,767,000
     Profit from
      operations...........     63,806,000      3,060,000     3,684,000      70,550,000
     Adjustments listed
      above................                                                  29,145,000
     Income before income
      taxes................                                                  41,405,000
</TABLE>


                                     F-16
<PAGE>

  The amounts shown reflect a shift of the allocation of centralized
information systems costs to the Printed Products--Direct Sales segment from
the Printed Products--Direct Marketing segment in fiscal year 2000 due to
conversion of McBee's order--taking system to the NEBS Direct Marketing order
entry system in August 1999.

  Total revenues for Printed Products amounted to $410,657,000, $400,245,000
and $296,722,000 in 2000, 1999 and 1998, respectively. Total revenues for
Packaging and Display products are shown under the "Packaging and Display
Products" heading.

12. Quarterly Financial Information (Unaudited)

  The following financial information is in thousands of dollars, except per
share amounts.

<TABLE>
<CAPTION>
                                    First    Second   Third    Fourth   Total
                                   Quarter  Quarter  Quarter  Quarter    Year
                                   -------- -------- -------- -------- --------
   <S>                             <C>      <C>      <C>      <C>      <C>
   2000
     Net sales.................... $113,424 $137,452 $117,367 $117,143 $485,386
     Gross profit.................   73,475   87,732   74,812   75,853  311,872
     Income before income taxes...    9,779   14,206   10,825   10,887   45,697
     Net income...................    5,977    8,695    7,481    7,205   29,358
     Diluted earnings per share...      .42      .62      .55      .53     2.12
                                   ======== ======== ======== ======== ========
     Dividends per share.......... $    .20 $    .20 $    .20 $    .20 $    .80
                                   ======== ======== ======== ======== ========

   1999
     Net sales.................... $112,686 $127,297 $115,044 $115,450 $470,477
     Gross profit.................   71,131   81,044   73,124   74,350  299,649
     Income before income taxes...    9,127   12,737   10,436   11,442   43,742
     Net income...................    5,478    7,912    6,219    6,842   26,451
     Diluted earnings per share...      .37      .53      .42      .47     1.81
                                   ======== ======== ======== ======== ========
     Dividends per share.......... $    .20 $    .20 $    .20 $    .20 $    .80
                                   ======== ======== ======== ======== ========
</TABLE>

13. Subsequent Event

  In July 2000, the Company acquired all the outstanding shares of
PremiumWear, Inc., a designer and marketer of knit and woven shirts and other
apparel and accessories to the promotional products/advertising specialty
industry. The purchase price for the shares was $13.50 per share in cash and
totaled approximately $41,600,000 (net of cash acquired). The Company is
presently undertaking an allocation of this purchase price, but anticipates
that approximately $15,000,000 will be allocated to certain intangible assets.
These intangibles are anticipated to be amortized over 20 years. It is
anticipated that PremiumWear, Inc. will comprise a new reporting segment.

                                     F-17
<PAGE>

                         INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of New England Business Service,
Inc.:

  We have audited the accompanying consolidated balance sheets of New England
Business Service, Inc. and subsidiaries as of June 24, 2000 and June 26, 1999
and the related statements of consolidated income and comprehensive income,
consolidated stockholders' equity, and consolidated cash flows for each of the
three years in the period ended June 24, 2000. Our audits also included the
financial statement schedule listed under Item 14(a)(2). These financial
statements and financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on the
financial statements and financial statement schedule based on our audits.

  We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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, such consolidated financial statements present fairly, in
all material respects, the financial position of New England Business Service,
Inc. and subsidiaries as of June 24, 2000 and June 26, 1999, and the results
of their operations and their cash flows for each of the three years in the
period ended June 24, 2000 in conformity with accounting principles generally
accepted in the United States of America. Also, in our opinion, such financial
statement schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, presents fairly in all material
respects the information set forth therein.

  As discussed in Note 1 to the financial statements, in 1999 the Company
changed its method of accounting for the costs of computer software developed
for internal use to conform with AICPA Statement of Position 98-1 "Accounting
for the Costs of Computer Software Developed or Obtained for Internal Use".

/s/ Deloitte & Touche LLP

Boston, Massachusetts
July 25, 2000

                                     F-18
<PAGE>

                                                                     SCHEDULE II

              NEW ENGLAND BUSINESS SERVICE, INC. AND SUBSIDIARIES

                       VALUATION AND QUALIFYING ACCOUNTS
                           (in thousands of dollars)

<TABLE>
<CAPTION>
                                       Additions
                         Balance at ----------------    Deductions  Balance at
                         Beginning   Charged               from       End of
                           Period   to Income Other     Reserves(2)   Period
                         ---------- --------- ------    ----------- ----------
<S>                      <C>        <C>       <C>       <C>         <C>
Reserves deducted from
 assets to which they
 apply:
 For doubtful accounts
  receivable:
  Year ended June 27,
   1998.................   $3,351    $3,293   $1,053(1)   $3,440      $4,257
  Year ended June 26,
   1999.................    4,257     4,151        0       3,509       4,899
  Year ended June 24,
   2000.................    4,899     4,203        0       4,065       5,037

Reserves included in
 liabilities:
 For sales returns and
  allowances:
  Year ended June 27,
   1998.................      993       866      300(1)      993       1,166
  Year ended June 26,
   1999.................    1,166       985        0       1,166         985
  Year ended June 24,
   2000.................      985     1,059        0         985       1,059
</TABLE>
--------
(1)  Acquired in acquisitions.
(2)  Accounts written off.

                                      F-19
<PAGE>

                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
 Exhibit Number                           Description
 --------------                           -----------
 <C>            <S>
      3.1.1     Certificate of Incorporation of the Registrant. (Incorporated
                 by reference to Exhibit 7(a) to the Company's Current Report
                 on Form 8-K dated October 31, 1986.)

      3.1.2     Certificate of Merger of New England Business Service, Inc. (a
                 Massachusetts corporation) and the Company, dated October 24,
                 1986 amending the Certificate of Incorporation of the Company
                 by adding Articles 14 and 15 thereto. (Incorporated by
                 reference to Exhibit 7(a) to the Company's Current Report on
                 Form 8-K dated October 31, 1986.)

      3.1.3     Certificate of Designations, Preferences and Rights of Series A
                 Participating Preferred Stock of the Company, dated October
                 27, 1989. (Incorporated by reference to Exhibit (3)(c) to the
                 Company's Annual Report on Form 10-K for the fiscal year ended
                 June 30, 1995.)

      3.2       By-Laws of the Registrant, as amended through July 28, 2000;
                 filed herewith.

      4.1       Specimen stock certificate for shares of Common Stock, par
                 value $1.00 per share. (Incorporated by reference to Exhibit
                 (4)(a) to the Company's Annual Report on Form 10-K for the
                 fiscal year ended June 30, 1995.)

      4.2       Amended and Restated Rights Agreement, dated as of October 27,
                 1989 as amended as of October 20, 1994 (the "Rights
                 Agreement"), between New England Business Service, Inc. and
                 Fleet National Bank (formerly known as BankBoston, N.A.), as
                 rights agent, including as Exhibit B the forms of Rights
                 Certificate and Election to Exercise. (Incorporated by
                 reference to Exhibit 4 of the Company's Current Report on Form
                 8-K dated October 20, 1994.)

     10.1.1     Amended and Restated Revolving Credit Agreement dated as of
                 December 18, 1997, by and among the Company, Fleet National
                 Bank, formerly known as BankBoston, N.A. ("Fleet"), and
                 certain other financial institutions. (Incorporated by
                 reference to Exhibit 10.1 to the Company's Current Report on
                 Form 8-K dated January 7, 1998.)

     10.1.2     First Amendment to Amended and Restated Revolving Credit
                 Agreement dated as of May 29, 1998, by and among the Company,
                 Fleet and certain other financial institutions. (Incorporated
                 by reference to Exhibit 10.1 to the Company's Current Report
                 on Form 8-K dated June 18, 1998.)

     10.1.3     Second Amendment to Amended and Restated Revolving Credit
                 Agreement dated as of January 8, 1999, by and among the
                 Company, Fleet and certain other financial institutions.
                 (Incorporated by reference to Exhibit 10.2 to the Company's
                 Quarterly Report on Form 10-Q for the fiscal quarter ended
                 December 26, 1998.)

     10.1.4     Third Amendment to Amended and Restated Revolving Credit
                 Agreement dated as of March 24, 1999, by and among the
                 Company, Fleet and certain other financial institutions.
                 (Incorporated by reference to Exhibit 10.B to the Company's
                 Quarterly Report on Form 10-Q for the fiscal quarter ended
                 March 27, 1999.)

     10.1.5     Fourth Amendment to Amended and Restated Revolving Credit
                 Agreement dated as of September 24, 1999, by and among the
                 Company, Fleet and certain other financial institutions.
                 (Incorporated by reference to Exhibit 10.A to the Company's
                 Quarterly Report on Form 10-Q for the fiscal quarter ended
                 September 25, 1999.)

     10.1.6     Fifth Amendment to Amended and Restated Revolving Credit
                 Agreement dated as of January 21, 2000, by and among the
                 Company, Fleet and certain other financial institutions.
                 (Incorporated by reference to Exhibit 10 to the Company's
                 Quarterly Report on Form 10-Q for the fiscal quarter ended
                 March 25, 2000.)

     10.1.7     Sixth Amendment to Amended and Restated Revolving Credit
                 Agreement dated as of May 26, 2000, by and among the Company,
                 Fleet and certain other financial institutions. (Incorporated
                 by reference to Exhibit 10 to the Company's Current Report on
                 Form 8-K dated May 26, 2000.)

</TABLE>

                                      X-1
<PAGE>

<TABLE>
<CAPTION>
 Exhibit Number                           Description
 --------------                           -----------
 <C>            <S>
    10.2        Agreement and Plan of Merger, dated as of May 26, 2000, among
                 the Company, Penguin Sub, Inc. and PremiumWear, Inc.
                 (Incorporated by reference to Exhibit (d)(1) to the Company's
                 Schedule TO dated June 9, 2000).

    10.3*       NEBS 1997 Key Employee and Eligible Director Stock Option and
                 Stock Appreciation Rights Plan dated July 25, 1997 (including
                 amendment and restatement of the NEBS 1990 Key Employee Stock
                 Option and Stock Appreciation Rights Plan and the NEBS 1994
                 Key Employee and Eligible Director Stock Option and Stock
                 Appreciation Rights Plan), amended through October 23, 1998.
                 (Incorporated by reference to Exhibit 10.1 to the Company's
                 Quarterly Report on Form 10-Q for the fiscal quarter ended
                 September 26, 1998.)

    10.4*       Stock Option Agreement dated February 2, 1996 between the
                 Company and Robert J. Murray. (Incorporated by reference to
                 Exhibit 10.8 to the Company's Annual Report on Form 10-K for
                 the fiscal year ended June 27, 1998.)

    10.5*       NEBS Deferred Compensation Plan for Outside Directors.
                 (Incorporated by reference to Exhibit (10)(d) to the
                 Company's Annual Report on Form 10-K for the fiscal year
                 ended June 25, 1982.)

    10.6.1*     New England Business Service, Inc. Deferred Compensation Plan
                 dated June 25, 1994. (Incorporated by reference to Exhibit
                 (10)(g) to the Company's Annual Report on Form 10-K for the
                 fiscal year ended June 30, 1995.)

    10.6.2*     First Restated Trust Agreement for the New England Business
                 Service, Inc. Deferred Compensation Plan. (Restated effective
                 April 1, 1998.) (Incorporated by reference to Exhibit 10.11.2
                 to the Company's Annual Report on Form 10-K for the fiscal
                 year ended June 27, 1998.)

    10.7*       Supplemental Retirement Plan for Executive Employees of New
                 England Business Service, Inc. (Incorporated by reference to
                 Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q
                 for the fiscal quarter ended September 26, 1998.)

    10.8*       New England Business Service, Inc. Stock Compensation Plan
                 dated July 25, 1994, amended through October 23, 1998.
                 (Incorporated by reference to Exhibit 10.2 to the Company's
                 Quarterly Report on Form 10-Q for the fiscal quarter ended
                 September 26, 1998.)

    10.9*       Form of Restricted Stock Award Agreement issuable under the
                 Company's Stock Compensation Plan in connection with the
                 Executive Bonus Plans for 1999 and 2000 (Incorporated by
                 reference to Exhibit 10.12 to the Company's Annual Report on
                 Form 10-K for the fiscal year ended June 26, 1999.)

    10.10*      Executive Bonus Plan for 2001; filed herewith.

    10.11*      Change in Control agreement dated November 27, 1996 between
                 the Company and Robert J. Murray. (Incorporated by reference
                 to Exhibit (10)(o) to the Company's Annual Report on Form 10-
                 K for the fiscal year ended June 28, 1997.)

    10.12*      Change in Control agreement dated November 27, 1996 between
                 the Company and John F. Fairbanks. (Incorporated by reference
                 to Exhibit (10)(p) to the Company's Annual Report on Form 10-
                 K for the fiscal year ended June 28, 1997.)

    10.13*      Change in Control agreement dated November 27, 1996 between
                 the Company and George P. Allman. (Incorporated by reference
                 to Exhibit (10)(q) to the Company's Annual Report on Form 10-
                 K for the fiscal year ended June 28, 1997.)

    10.14*      Change in Control agreement dated November 27, 1996 between
                 the Company and Robert D. Warren. (Incorporated by reference
                 to Exhibit (10)(r) to the Company's Annual Report on Form 10-
                 K for the fiscal year ended June 28, 1997.)

</TABLE>

                                      X-2
<PAGE>

<TABLE>
<CAPTION>
 Exhibit Number                           Description
 --------------                           -----------
 <C>            <S>
    10.15*      Change in Control agreement dated November 27, 1996 between the
                 Company and Edward M. Bolesky. (Incorporated by reference to
                 Exhibit (10)(t) to the Company's Annual Report on Form 10-K
                 for the fiscal year ended June 28, 1997.)

    10.16*      Change in Control agreement dated November 27, 1996 between the
                 Company and Steven G. Schlerf. (Incorporated by reference to
                 Exhibit (10)(u) to the Company's Annual Report on Form 10-K
                 for the fiscal year ended June 28, 1997.)

    10.17*      Change in Control agreement dated April 2, 1997 between the
                 Company and Richard T. Riley. (Incorporated by reference to
                 Exhibit 10.23 to the Company's Annual Report on Form 10-K for
                 the fiscal year ended June 27, 1998.)

    10.18*      Change in Control agreement dated November 18, 1998 between the
                 Company and Daniel M. Junius. (Incorporated by reference to
                 Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q
                 for the fiscal quarter ended December 26, 1998.)

    10.19*      Change in Control agreement dated April 2, 1997 between the
                 Company and Joel S. Hughes. (Incorporated by reference to
                 Exhibit 10.A to the Company's Quarterly Report on Form 10-Q
                 for the fiscal quarter ended March 27, 1999.)

    10.20*      Form of amendment dated July 23, 1999 to the Change in Control
                 Agreements included as Exhibits 10.11 through 10.19 hereto.
                 (Incorporated by reference to Exhibit 10.23 to the Company's
                 Annual Report on Form 10-K for the fiscal year ended June 26,
                 1999.)

    10.21*      Employment Agreement dated May 26, 2000 between PremiumWear,
                 Inc. and David E. Berg. (Incorporated by reference to Exhibit
                 99.4 (a) to the Current Report on Form 8-K dated May 26, 2000
                 of PremiumWear, Inc. (File No. 000-28501)).

    10.22.1*    Amended and Restated Change in Control Severance Agreement
                 dated as of May 22, 2000 between PremiumWear, Inc. and David
                 E. Berg. (Incorporated by reference to Exhibit 99.3 to the
                 Current Report on Form 8-K dated May 26, 2000 of PremiumWear,
                 Inc. (File No. 000-28501)).

    10.22.2*    First Amendment to Amended and Restated Change in Control
                 Severance Agreement dated as of May 26, 2000 between
                 PremiumWear, Inc. and David E. Berg. (Incorporated by
                 reference to Exhibit 99.5 (a) to the Current Report on Form 8-
                 K dated May 26, 2000 of PremiumWear, Inc. (File No. 000-
                 28501)).

    10.23*      NEBS 2000 Stock Option Plan for PremiumWear Employees dated
                 July 14, 2000. (Incorporated by reference to Exhibit 99 to the
                 Company's Registration Statement on Form S-8 (File No. 333-
                 43028), filed on August 4, 2000).

    10.24**     Agreement dated as of September 19, 1995 between New England
                 Business Service, Inc. and Appleton Papers, Inc. (Incorporated
                 by reference to the Company's Quarterly Report on Form 10-Q
                 for the fiscal quarter ended December 27, 1997.)

    21          List of Subsidiaries.

    23          Independent Auditors Consent--Deloitte & Touche LLP.

    24          Power of Attorney (included in the signature page of this
                 Annual Report on Form 10-K).

    27          Article 5 Financial Data Schedule.
</TABLE>
--------
*  Identifies a management contract or compensatory plan or arrangement in
   which an executive officer or director of the Company participates.
** Confidential treatment has been requested with respect to certain portions
   of this exhibit. Omitted portions have been filed separately with the
   Securities and Exchange Commission.

                                      X-3