<PAGE> 

                   SECURITIES AND EXCHANGE COMMISSION
                         Washington, D.C. 20549
                   ----------------------------------
                                FORM 10-K

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

    For the fiscal year ended: December 31, 1996

[ ] Transition report pursuant to Section 13 or 15(d) of the Securities 
    Exchange Act of 1934

    For the transition period from: _______________ to _______________.

Commission File Number:  0-4791

                          PAUL MUELLER COMPANY
------------------------------------------------------------------------
         (Exact name of registrant as specified in its charter)

                                Missouri
------------------------------------------------------------------------
     (State or other jurisdiction of incorporation or organization)

                               44-0520907
------------------------------------------------------------------------
                  (I.R.S. Employer Identification No.)

           1600 West Phelps, Springfield, Missouri    65802
------------------------------------------------------------------------
          (Address of principal executive offices)  (Zip Code)

                             (417) 831-3000
------------------------------------------------------------------------
          (Registrant's telephone number, including Area Code)

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

-------------------------    -------------------------------------------
  (Title of each class)      (Name of each exchange on which registered)

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

                  Common Stock par value $1 per share
------------------------------------------------------------------------
                            (Title of class)

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 [ ]

State the aggregate market value of the voting stock held by nonaffili-
ates of the Registrant:  The aggregate market value shall be computed by 
reference to the price at which the stock was sold, or the average bid 
and asked prices of such stock as of a specified date within 60 days 
prior to the date of filing.  Aggregate market value on February 28, 
1997, based on the last reported closing price:  $ 29,436,880

Indicate the number of shares outstanding of each of the Registrant's 
classes of common stock, as of March 14, 1997:  

      Common stock, $1 par value, outstanding:  1,168,021 shares       

Portions of the Proxy Statement for the annual meeting of shareholders 
to be held May 5, 1997, are incorporated by reference into Part III.

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 con-
tained, 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:  [X]

                                    1

<PAGE>   2

PART I

ITEM 1. - DESCRIPTION OF BUSINESS

     A.   GENERAL DEVELOPMENT OF BUSINESS

          The Registrant was incorporated under the laws of Missouri in 
          1946 as the successor to a business begun in 1940 to perform 
          general sheet metal work, primarily for the building industry.  
          In the mid-1940's, the Registrant expanded its operations to 
          include the manufacture of poultry processing equipment and 
          stainless steel cheese-making vats for dairy plants.  The 
          Registrant in 1955 began manufacturing stainless steel milk 
          coolers for dairy farms and in 1960 began manufacturing stain-
          less steel storage tanks and discontinued its sheet metal 
          operations.  The Registrant purchased a water purification 
          product line in January 1987.  Today, the Registrant is one of 
          the world's largest manufacturers of milk coolers for dairy 
          farms.  The Registrant is also one of the nation's leading 
          manufacturers of standard and custom-made stainless steel 
          processing equipment for the food and dairy, beverage, 
          chemical and pharmaceutical, and other industries.

          The Registrant entered into a license agreement in January 
          1992 under which it acquired the right to manufacture and 
          market water distillation equipment.  The agreement provides 
          that sales can be made on an exclusive basis to the water 
          bottling industry and for industrial process water applica-
          tions; pharmaceutical, laboratory and medical applications; 
          and for milk concentration. The Registrant began selling 
          equipment during 1992.

          The Registrant entered into license agreements in February 
          1994 under which it acquired the rights to manufacture and 
          market evaporator assemblies used in liquid-ice systems.  The 
          agreements provide the Registrant an exclusive license to 
          manufacture and to sell or to sublicense its rights for the 
          following applications:  milk cooling on dairy farms; HVAC; 
          gas turbine; process cooling of food and chemicals; and con-
          centration of milk, fruit juices and acid solutions.  The 
          exclusive licenses are restricted to specific territories 
          defined by application.  The licenses are exclusive until 
          expiration of the patents, but may become nonexclusive if 
          royalties fail to equal specified minimum levels for any 
          calendar year.  The Registrant began manufacturing and 
          marketing equipment in 1995.

          The Registrant has a license agreement with a Dutch company, 
          which was extended during 1994 for five years, for the pro-
          duction and sale of Mueller Dairy Farm Equipment in Europe, 
          which provides royalties for the Registrant.

                                    2

<PAGE>   3

     B.   FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS
<TABLE>
                         EARNINGS DATA BY INDUSTRY SEGMENT
<CAPTION>
                                         Dairy Farm   Processing
                                         Equipment    Equipment  Consolidated
                                        -----------  -----------  -----------
                                                         1996
                                        -------------------------------------
          <S>                           <C>          <C>          <C>
          Sales to unaffiliated 
            customers.................. $19,169,174  $64,781,816  $83,950,990
                                        ===========  ===========  ===========
          Operating profit............. $ 2,762,583  $ 5,024,339  $ 7,786,922
                                        ===========  ===========
          General corporate expenses...                            (1,943,816)
          Other income.................                               646,913
                                                                  -----------
          Income from operations 
            before income taxes........                           $ 6,490,019
                                                                  ===========
          Identifiable assets at 
            December 31................ $10,401,372  $21,171,140  $31,572,512
                                        ===========  ===========
          Corporate assets.............                            21,612,459
                                                                  -----------
          Total assets at December 31..                           $53,184,971
                                                                  ===========
          Additions to property, 
            plant and equipment........ $   829,961  $   886,576
                                        ===========  ===========
          Depreciation expense......... $   842,512  $ 1,157,830
                                        ===========  ===========
<CAPTION>
                                                         1995
                                        -------------------------------------
          <S>                           <C>          <C>          <C>
          Sales to unaffiliated 
            customers.................. $17,954,458  $60,421,178  $78,375,636
                                        ===========  ===========  ===========
          Operating profit............. $ 2,545,379  $   819,115  $ 3,364,494
                                        ===========  ===========
          General corporate expenses...                            (1,815,617)
          Other income.................                             1,065,776
                                                                  -----------
          Income from operations 
            before income taxes........                           $ 2,614,653
                                                                  ===========
          Identifiable assets at 
            December 31................ $10,576,803  $24,430,407  $35,007,210
                                        ===========  ===========
          Corporate assets.............                            19,671,694
                                                                  -----------
          Total assets at December 31..                           $54,678,904
                                                                  ===========
          Additions to property, 
            plant and equipment........ $   719,071  $ 1,017,864
                                        ===========  ===========
          Depreciation expense......... $   751,451  $ 1,143,519
                                        ===========  ===========
<CAPTION>
                                                         1994
                                        -------------------------------------
          <S>                           <C>          <C>          <C>
          Sales to unaffiliated 
            customers.................. $22,897,565  $56,577,789  $79,475,354
                                        ===========  ===========  ===========
          Operating profit............. $ 4,276,870  $ 1,601,392  $ 5,878,262
                                        ===========  ===========
          General corporate expenses...                            (1,616,725)
          Other income.................                               829,429
                                                                  -----------
          Income from operations 
            before income taxes........                           $ 5,090,966
                                                                  ===========
          Identifiable assets at 
            December 31................ $10,777,972  $24,431,405  $35,209,377
                                        ===========  ===========
          Corporate assets.............                            19,040,859
                                                                  -----------
          Total assets at December 31..                           $54,250,236
                                                                  ===========
          Additions to property, 
            plant and equipment........ $   810,454  $   934,853
                                        ===========  ===========
          Depreciation expense......... $   828,333  $ 1,276,872
                                        ===========  ===========
</TABLE>

     C.   NARRATIVE DESCRIPTION OF BUSINESS

          The Registrant's industry segments include Dairy Farm Equip-
          ment and Processing Equipment.

          The Dairy Farm Equipment segment includes sales of milk 
          coolers, pre-coolers, automatic washing systems and heat 
          recovery equipment to the dairy farm industry.  The Dairy
          Farm Equipment segment includes sales to domestic and export 
          markets.

                                    3

<PAGE>   4

          The Processing Equipment segment includes:  (1) food, dairy, 
          meat and poultry processing equipment; (2) beer, wine and 
          beverage equipment; (3) chemical and pharmaceutical equipment; 
          (4) industrial heat transfer equipment; (5) thermal energy 
          storage equipment; and (6) water distilling/pure steam gener-
          ating equipment.

          The food, dairy, meat and poultry processing equipment mar-
          kets include stainless steel storage and mixing tanks, food 
          processors, cookers and coolers, and a variety of other 
          custom-fabricated tanks.

          The beer, wine and beverage equipment markets include stain-
          less steel storage and fermentation tanks, brewhouse equipment 
          and other special equipment for breweries, wineries, distil-
          leries and soft drink bottlers.

          The chemical, pharmaceutical and industrial equipment markets 
          include stainless steel and other alloy pressure vessels and 
          tanks, tank components, water purification products, systems 
          and applications for a variety of heat transfer products, and 
          thermal energy storage equipment.

          The Processing Equipment segment includes sales to the domes-
          tic and export markets.

          Information as to classes of products:
<TABLE>
                              SALES DATA BY PRODUCT CATEGORY
                                (In Thousands of Dollars)
<CAPTION>
                                        1996          1995            1994
                                   -------------  -------------  -------------
                                            % of           % of           % of
                                           Total          Total          Total
                                    Sales  Sales   Sales  Sales   Sales  Sales
                                   ------- -----  ------- -----  ------- -----
          <S>                      <C>      <C>   <C>      <C>   <C>      <C>
          DAIRY FARM EQUIPMENT.... $19,169   23%  $17,955   23%  $22,897   29%

          PROCESSING EQUIPMENT
            Food and Beverage 
               Equipment.......... $24,626   29%  $24,972   32%  $22,035   28%
            Chemical, Pharmaceuti-
               cal and Industrial 
               Equipment..........  40,156   48%   35,449   45%   34,543   43%
                                   -------  ----  -------  ----  -------  ----
                                   $64,782   77%  $60,421   77%  $56,578   71%
                                   -------  ----  -------  ----  -------  ----
               TOTAL.............. $83,951  100%  $78,376  100%  $79,475  100%
                                   =======  ====  =======  ====  =======  ====
</TABLE>

          Raw materials used in the fabrication of Registrant's products 
          are readily available from sources in the United States.  The 
          Registrant purchases a component exclusively from a German 
          vendor under a sales and supply agreement for its plate heat 
          exchanger product line.

          Patents held by the Registrant generally are not considered 
          significant to the successful conduct of each segment's busi-
          ness.  Trademarks are registered for the Registrant's name, 
          for certain products sold in the Processing Equipment segment, 
          and for the products sold in the Dairy Farm Equipment segment 
          in the key markets served by the Registrant.  Trademarks are 
          considered significant to the successful conduct of the Dairy 
          Farm Equipment segment business.  Key license agreements that 
          are maintained by the Registrant have been discussed in Sec-
          tion A above.

          In general, the seasonality of the Registrant's business seg-
          ments is not material.

          The Registrant carries a significant inventory of standard 
          sizes of stainless steel coil and plate used in the manufac-
          ture of its products.  For some Processing Equipment orders,

                                    4

<PAGE>   5

          stainless steel is specifically ordered for the project.  The 
          Registrant provides extended payment terms primarily on export 
          shipments with payment secured generally by a letter of credit 
          and to qualifying domestic Dairy Farm Equipment distributors.  
          The Registrant requires down payments or progress payments on 
          significant Processing Equipment orders.

          Sales of the Registrant's products are distributed among 
          several customers, and sales to any one customer are not 
          significant to total consolidated sales.  Sales to any one 
          customer did not exceed 10% of the Registrant's consolidated 
          sales during 1996.

          The backlog of sales was approximately $28,400,000 at February 
          28, 1997, compared to approximately $29,300,000 at February 
          29, 1996.  It is anticipated that substantially all of the 
          February 28, 1997, backlog will be shipped during the current 
          fiscal year.

          In the Processing Equipment segment, there are several compe-
          titors, most of which are smaller than the Registrant.  Many 
          Processing Equipment projects are bid among several possible 
          suppliers, which tends to make pricing very competitive.  The 
          principal methods of competition are price, quality, delivery 
          and service.  In the Dairy Farm Equipment segment, there are 
          relatively few competitors, and the Registrant is one of the 
          largest manufacturers of farm milk coolers in the world.

          During 1996, stainless steel prices declined significantly 
          compared to the prior year.  However, 5% price increases have 
          recently been announced by the major steel suppliers effec-
          tive for both March and May 1997.  There appears to be an 
          upward trend in the market prices of molybdenum, nickel and 
          chromium, which could result in the assessment of surcharges 
          by the mills.  The Registrant's products are priced to cover 
          anticipated material prices.

          The Registrant spent $653,200 in 1996, $597,600 in 1995 and 
          $764,400 in 1994 on research activities relating to the 
          development of new products or services and the improvement 
          of existing products or services.  Eleven full-time adminis-
          trative employees are engaged in this activity.

          It is not anticipated that compliance with Federal, State and 
          local provisions, which have been enacted or adopted regu-
          lating the discharge of materials into the environment or 
          otherwise relating to the protection of the environment, will 
          have a material effect upon the capital expenditures, earnings 
          or competitive position of the Registrant and its subsidiary.

          The number of employees at December 31, 1996, was 877.

          As previously reported, the labor contract with the Sheet 
          Metal Workers Union (which covers a portion of the employees 
          at the Springfield, Missouri, plant) expired on June 11, 1994.  
          Negotiations with union representatives continued until an 
          impasse was reached, and the Registrant implemented specific 
          provisions of its final offer effective September 19, 1994.  
          In November 1994, the Regional Director of the National Labor 
          Relations Board (NLRB) also concluded that a lawful impasse 
          had been reached in negotiations prior to the Registrant's 
          implementation of its offer.

          However, on December 22, 1994, the Regional Director of the 
          NLRB issued an unfair labor practice complaint against the 
          Registrant for refusing to supply information to union repre-
          sentatives about the personal health insurance claims of 
          individual employees and their dependents and reversed his 
          previous decision regarding the implementation of changes in 
          wages and benefits.  A hearing on these and other unfair labor 
          practice issues was held during August 1996 by an administra-
          tive law judge of the NLRB, and a decision is expected in 
          early 1997.  However, a final determination of all the charges 
          may take up to two years, and management believes, based on an 
          evaluation by counsel, that there is no significant financial 
          exposure to the Registrant.

                                    5

<PAGE>   6

          The Registrant currently employs about 900 people, of which 
          approximately 400 at the Springfield, Missouri, facility are 
          represented by the Sheet Metal Workers Union.  The Interna-
          tional Union called a strike which began on July 25, 1995, and 
          the largest number of employees participating was approxi-
          mately 185 during the fourth quarter of 1995.  A substantial 
          number of employees returned to work during 1996, and cur-
          rently there are only 25 employees participating.  No action 
          has been taken by the Union to prevent nonstriking employees 
          from working.

          The Registrant has implemented the provisions of its revised 
          and final offer effective April 1, 1996, which remains open 
          for the Union's acceptance, and no further negotiations are 
          scheduled.  

          The Registrant has facilities located in Springfield, 
          Missouri, and Osceola, Iowa.  There are approximately 800 
          employees assigned to the Springfield facility, and there are 
          an additional 100 employees at the Osceola facility, none of 
          which are represented by a labor union.

     D.   FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS 
          AND EXPORT SALES

          Information about the amounts of export sales is covered in 
          Note 5 of the Notes to Consolidated Financial Statements found 
          in Part II, Item 8, and is incorporated herein by reference.

          Export sales were about 38% Dairy Farm Equipment and 62% 
          Processing Equipment during 1996.

ITEM 2. - PROPERTIES

     The Registrant's primary domestic manufacturing facilities are 
     located in Springfield, Missouri, and occupy approximately 720,000 
     square feet on 50 acres of land.  These facilities are owned by 
     the Registrant, as is all of the equipment it uses.  The original 
     section of the present Springfield plant was built in 1950 and 
     consisted of 23,720 square feet.  Since then, the Registrant has 
     added to this facility many times in the course of a continuing 
     program for enlarging and modernizing its facilities and increasing 
     its capabilities.  The last addition of approximately 14,100 square 
     feet was made in 1981.  In February 1987, the Registrant acquired 
     an additional manufacturing facility in Osceola, Iowa, which con-
     tains approximately 216,000 square feet.

ITEM 3. - LEGAL PROCEEDINGS

     There are no material pending legal proceedings, other than 
     ordinary routine litigation incidental to the business or matters 
     for which insurance coverage is adequate, which involves the Regis-
     trant, nor is any director, officer or any management security 
     holder involved in any litigation that could adversely affect the 
     Registrant.

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

     Registrant did not submit any matter to a vote of security holders, 
     through a solicitation of proxies or otherwise, during the fourth 
     quarter of 1996.

                                    6

<PAGE>   7

ITEM 10. (from PART III) - EXECUTIVE OFFICERS OF THE REGISTRANT

<TABLE>
<CAPTION>
            Name          Age         Position(s) with Registrant
     -------------------  ---  -----------------------------------------
     <S>                  <C>  <C>
     Paul Mueller<F1>     81   Chairman of the Board and Director
     Daniel C. Manna<F1>  50   President and Director
     Donald E. Golik<F1>  53   Senior Vice President and Chief Financial 
                                  Officer, Secretary and Director
<FN>
<F1> Individual has been employed by the Registrant through the past 
     five years.
</FN>
</TABLE>

     Each of the above officers was elected to serve until the next 
     annual meeting of the Board of Directors, which will be held on 
     May 5, 1997, and until his successor shall have been duly elected 
     and qualified or until his earlier resignation or removal.

                                    7

<PAGE>   8

PART II

ITEM 5. - MARKET FOR THE REGISTRANT'S COMMON STOCK AND 
          RELATED SECURITY HOLDER MATTERS

     The Registrant's common stock is traded on the NASDAQ National 
     Market tier of The NASDAQ Stock Market(SM) under the symbol MUEL.  
     As of December 31, 1996, there were approximately 320 shareholders 
     of record and approximately 720 beneficial shareholders.

     Market high and low prices and quarterly cash dividends in 1996 and 
     1995 were as follows:

<TABLE>
<CAPTION>
                       1996 Quarter Ended              1995 Quarter Ended
                 ------------------------------  ------------------------------
                 Mar 31  Jne 30  Spt 30  Dec 31  Mar 31  Jne 30  Spt 30  Dec 31
                 ------  ------  ------  ------  ------  ------  ------  ------
     <S>         <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
     MARKET PRICE 
     OF STOCK
     High....... 34-1/2  34      35      43      31-3/4  33-1/2  37-3/4  34-1/4
     Low........ 30      29-3/4  31-3/4  33      27      29      29-1/2  30 7/8

     CASH 
     DIVIDENDS
     Declared 
     per share.. $0.50   $0.50   $0.50   $0.60   $0.50   $0.50   $0.50   $0.50
</TABLE>

ITEM 6. - SELECTED FINANCIAL DATA
<TABLE>
                      SELECTED FINANCIAL DATA - FIVE-YEAR SUMMARY
<CAPTION>
                         1996        1995        1994        1993        1992
                     ----------- ----------- ----------- ----------- -----------
     <S>             <C>         <C>         <C>         <C>         <C>
     Net sales...... $83,950,990 $78,375,636 $79,475,354 $73,756,659 $74,620,088
     Net income..... $ 4,424,019 $ 1,954,653 $ 3,510,966 $ 2,217,656 $ 2,916,604
     Earnings per 
      common share..      $ 3.79      $ 1.67      $ 3.01      $ 1.90      $ 2.50
     Weighted average
      common shares
      outstanding...   1,168,021   1,168,021   1,168,021   1,168,021   1,168,021
     Dividends de-
      clared per 
      common share..       $2.10       $2.00       $2.00       $2.00       $2.00
     Total assets... $53,184,971 $54,678,904 $54,250,236 $52,947,295 $53,005,481
     Long-term debt. $   161,434 $   161,434 $ 3,153,747 $ 3,153,747 $ 3,153,747
</TABLE>

                                    8

<PAGE>   9

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

     OPERATING RESULTS

     The primary factors affecting 1996 results were a higher level of 
     sales in both business segments and a significant reduction in the 
     required LIFO reserve.

     SALES -- Comparative consolidated sales for the past three years 
     were as follows:
<TABLE>
<CAPTION>
                                                Sales
                                   ------------------------------
                                      (in thousands of dollars)
                                     1996       1995       1994
                                   --------   --------   --------
          <S>                      <C>        <C>        <C>
          Dairy Farm Equipment.... $ 19,169   $ 17,955   $ 22,897
          Processing Equipment....   64,782     60,421     56,578
                                   --------   --------   --------
                                   $ 83,951   $ 78,376   $ 79,475
                                   ========   ========   ========
</TABLE>

     Sales of Dairy Farm Equipment increased by $1,214,000 during 1996 
     compared to 1995.  All of the increase was attributable to domestic 
     operations, as unit sales of milk coolers increased by 17%.  Domes-
     tically, the market remained relatively soft early in 1996 due to 
     extremely high prices for feed.  However, in the spring, the milk 
     price began to escalate and reached an all-time record high level 
     during the third quarter of 1996.  The average price for milk 
     during 1996 was about 13% higher than the average price during 
     1995, as total milk production also declined from the prior year.  
     In spite of high feed prices, milk prices were at levels that 
     allowed dairy farmers to invest in additional milk cooling and 
     storage capacity.  Overall, the level of export sales of Dairy Farm 
     Equipment was comparable between 1996 and 1995.  However, the eco-
     nomic conditions in Argentina and Mexico adversely affected our 
     ability to export to those markets.  Additionally, the effects of 
     "mad cow disease," both in the United Kingdom and Ireland, slowed 
     sales to those countries.  We were able to achieve some growth in 
     other export markets, and this allowed us to maintain export sales 
     at approximately the same level as the prior year.

     During 1995, sales of Dairy Farm Equipment decreased by $4,942,000, 
     with 80% of the decline attributable to domestic operations.  Lower 
     milk prices, poor weather conditions, high feed prices, and low 
     beef prices all combined to adversely affect the profitability of 
     dairy farmers and our ability to sell milk cooling and storage 
     equipment.  The unsettled economic conditions in Argentina and 
     Mexico hampered our ability to export to these key markets.  Al-
     though we were able to increase sales to other export markets, they 
     were not sufficient to offset the significant declines we exper-
     ienced in Argentina and Mexico.

     During the fourth quarter of 1996, the milk price declined by about 
     25%.  For 1997, milk prices will be soft initially, as they are 
     expected to be below the 1996 prices for at least the first few 
     months.  The expectation for 1997 is that the average milk price 
     will be below the 1996 average.  However, with continued strong 
     demand and only a small increase in milk production projected,
     the 1997 average annual price should be at a reasonably favorable 
     level.  We believe the market for Dairy Farm Equipment will remain 
     relatively soft until milk prices improve, and there is a definite 
     indication that feed prices will be maintained at more reasonable 
     levels.  During 1997, we expect continuing recovery in the Argen-
     tine and Mexican economies and continued growth in the United 
     Kingdom market.  We expect relatively stable conditions in the 
     other markets that we serve, which will provide the opportunity 
     for moderate growth in order entry and sales.

     In the domestic Dairy Farm Equipment market, the number of dairy 
     farms continues to decline.  The consolidation process leaves fewer 
     dairy farm operations, but with larger milk cooling and storage 

                                    9

<PAGE>   10

     capacity requirements.  The Registrant is well positioned to meet 
     the cooling and storage requirements of the changing marketplace, 
     and any impact on revenues and profitability will depend upon the 
     rate at which farm consolidation continues.

     During 1996, sales of Processing Equipment increased by about 7%, 
     or $4,361,000.  Although order entry for Processing Equipment was 
     comparable between 1996 and 1995, the backlog at the beginning of 
     1996 for Processing Equipment was approximately $6,000,000 higher 
     than at the beginning of 1995.  During 1996, increases in sales 
     were recorded in our traditional custom-fabricated products, such 
     as Pharmaceutical Processing Equipment and Component Products,
     as well as increases in PyroPure (Registered) Water Purification 
     Systems and Accu-Therm (Registered) Plate Heat Exchangers. During 
     mid-1996, we had approximately 100 employees, who had been on 
     strike, return to work.  The strike primarily affected Proces-
     sing Equipment, and with the return of experienced employees, this 
     allowed us to increase our capacity and efficiency in the fabrica-
     tion of traditional Processing Equipment.  Additionally, export 
     sales of Processing Equipment were approximately 40% higher during 
     1996 as compared to 1995.

     Sales of Processing Equipment improved by about 7% during 1995 
     compared to 1994 levels.  Favorable economic conditions, parti-
     cularly strong capital expenditures, led to an increase in order 
     entry and sales during 1995 for our more traditional custom-
     fabricated products, such as Food Processing Equipment, Component 
     Products, and Temp-Plate Heat Transfer Surface.  The balance of 
     the increase occurred in Commercial Refrigeration and was primarily 
     for thermal energy storage equipment.  Although order entry in-
     creased by 21% during 1995, sales of custom-fabricated products 
     were hampered by the strike called by the Sheet Metal Workers 
     Union, which began during the third quarter.  Additionally, export 
     sales of Processing Equipment were approximately 10% lower during 
     1995 compared to 1994.

     With respect to 1997 operations, the backlog of Processing Equip-
     ment at December 31, 1996, is approximately at the same level it 
     was at the beginning of last year.  Our level of order entry and 
     sales in 1997 will depend on a favorable capital expenditure 
     environment.  Although the outlook is for capital expenditures 
     overall to continue to increase, growth in industrial equipment 
     spending is expected to be sluggish during the early months of 
     1997.  We have noted that our quote activity for Processing Equip-
     ment has been slow initially, which is consistent with the economic 
     outlook.  We expect very competitive conditions for the projects 
     that are available, particularly with respect to price and de-
     livery.  During 1996, stainless steel prices declined to more 
     reasonable levels and surcharges were eliminated.  Looking to 1997, 
     price increases of approximately 5% have been announced by the 
     major mills for both March and May.  Also, the mills are assessing 
     a modest surcharge due to the increase in prices of nickel, chro-
     mium and molybdenum.  However, it appears that stainless steel 
     prices during 1997 will remain at fairly reasonable levels due to 
     the continuing pricing pressure afforded by foreign suppliers.

     As previously reported, the labor contract with the Sheet Metal 
     Workers Union (which covers a portion of the employees at the 
     Springfield, Missouri, plant) expired on June 11, 1994.  Negotia-
     tions with union representatives continued until an impasse was 
     reached, and the Registrant implemented specific provisions of its 
     final offer effective September 19, 1994.  In November 1994, the 
     Regional Director of the National Labor Relations Board (NLRB) also 
     concluded that a lawful impasse had been reached in negotiations 
     prior to the Registrant's implementation of its offer.

     However, on December 22, 1994, the Regional Director of the NLRB 
     issued an unfair labor practice complaint against the Registrant 
     for refusing to supply information to union representatives about 
     the personal health insurance claims of individual employees and 
     their dependents and reversed his previous decision regarding the 
     implementation of changes in wages and benefits.  A hearing on 
     these and other unfair labor practice issues was held during August 
     1996 by an administrative law judge of the NLRB, and a decision is 
     expected in early 1997.  However, a final determination of all the 

                                   10

<PAGE>   11

     charges may take up to two years, and management believes, based on 
     an evaluation by counsel, that there is no significant financial 
     exposure to the Registrant.

     The Registrant currently employs about 900 people, of which approx-
     imately 400 at the Springfield, Missouri, facility are represented 
     by the Sheet Metal Workers Union.  The International Union called 
     a strike which began on July 25, 1995, and the largest number of 
     employees participating was approximately 185 during the fourth 
     quarter of 1995.  A substantial number of employees returned to 
     work during 1996, and currently there are only 25 employees par-
     ticipating.  No action has been taken by the Union to prevent 
     nonstriking employees from working.

     The Registrant has implemented the provisions of its revised and 
     final offer effective April 1, 1996, which remains open for the 
     Union's acceptance, and no further negotiations are scheduled.  

     The Registrant has facilities located in Springfield, Missouri, and 
     Osceola, Iowa.  There are approximately 800 employees assigned to 
     the Springfield facility, and at the Osceola facility, there are an 
     additional 100 employees, none of which are represented by a labor 
     union.

     Total Registrant sales backlog was $27,400,000 at December 31, 
     1996, versus $25,700,000 and $19,500,000 at the end of 1995 and 
     1994, respectively.  The Processing Equipment backlog was 
     $23,000,000, $22,200,000 and $16,200,000 at the end of 1996, 1995 
     and 1994, respectively, with the remaining balance in each year 
     attributable to Dairy Farm Equipment.  Substantially all of the 
     December 31, 1996, backlog will be shipped during the current year.

     OPERATING INCOME -- Operating income for 1996 was $5,843,000 versus 
     $1,549,000 for 1995.  The major factors contributing to the in-
     crease in operating income, in comparing 1996 to 1995, were the 
     increase in sales of $5,575,000 and the significant reduction in 
     the LIFO reserve.  In addition to the increase in sales, gross 
     margins improved in 1996 compared to 1995, particularly for custom-
     fabricated Processing Equipment, which was the product area most 
     affected by the strike.  During 1996, the significant decrease in 
     inventory levels, coupled with the decline in stainless steel 
     prices, resulted in a reduction in the required LIFO reserve, and 
     this had the effect of increasing operating income by approximately 
     $1,859,000.  Expenditures for selling, general and administrative 
     expenses were comparable between 1996 and 1995.  This was due to 
     the curtailment primarily of selling expenses during the first half 
     of 1996 when there was still a significant number of employees par-
     ticipating in the strike.

     Operating income for 1995 was $1,549,000 compared to $4,262,000 for 
     1994.  The major factors contributing to the decrease in operating 
     income were the lower level of sales, the effects of the strike and 
     a large LIFO provision.  In addition to the sales decrease, gross 
     margins declined due to the lower proportion of Dairy Farm Equip-
     ment sales, which have high margins.  Also, the strike adversely 
     impacted efficiency, particularly for custom-fabricated Processing 
     Equipment, and contributed to higher indirect manufacturing costs.  
     During 1995, a considerable increase in stainless steel prices re-
     quired a significant provision to the LIFO reserve, which had the 
     effect of reducing operating income by approximately $1,789,000.  
     The decline in selling, general and administrative expenses was due 
     to lower costs for warranty and service, manufacturers' representa-
     tive's commissions, insurance and product development.

     The profitability of Processing Equipment is much lower than for 
     Dairy Farm Equipment, as a substantial number of Processing Equip-
     ment projects are engineered-to-order.  These projects require much 
     greater support from the sales, engineering and manufacturing areas 
     and a higher degree of skill to fabricate.  Also, the risks of 
     manufacturing are greater because the products are custom-designed 
     and built and, in general, the chances of misinterpretation, errors 
     and mistakes are much greater than with a standard product.  Many 
     of the projects are bid among several possible suppliers, which 
     tends to make pricing very competitive.  In addition, there is a 
     risk of adverse material price variances on some projects in

                                   11

<PAGE>   12

     periods of rising prices due to relatively long lead times between 
     quotation and completion of the project.  

     Dairy Farm Equipment, on the other hand, is a standard product, 
     and engineering designs have been well defined and manufacturing 
     methods have been refined for efficiency.  The proprietary nature 
     of the product also permits more attractive pricing.  There are 
     relatively few competitors, and the Registrant is the largest 
     domestic manufacturer of dairy farm milk coolers.

     Inflation is a factor that affects the cost of operations, and the 
     Registrant seeks ways to minimize the effect on operating results.  
     To the extent permitted by competitive conditions, higher material 
     prices, labor costs and operating costs are passed on to the cus-
     tomer by increasing prices.  The Registrant uses the LIFO method of 
     accounting for inventories, and under this method, the cost of pro-
     ducts sold, as reported in the financial statements, approximates 
     the current replacement cost.  Additionally, the Registrant uses 
     accelerated depreciation methods in charging depreciation expense 
     to current operations, which to a certain extent offsets the effect 
     of the increased cost of replacement productive capacity.

     OTHER INCOME (EXPENSE) -- Although the average interest rate was 
     lower, 1996 interest income increased compared to 1995, as the 
     average level of investable funds was higher.  Interest income 
     increased during 1995 compared to 1994, as the average interest 
     rate was higher, with a lower average level of investable funds.  
     Interest expense amounts in 1996, 1995 and 1994 are consistent with 
     the interest rate levels during those years.  Other income for 1996 
     was lower than 1995 due to an additional 401(k) match, reduced mis-
     cellaneous income, lower trucking operation results, and reduced 
     royalty income.  Other income was higher in 1995 compared to 1994 
     due to increased royalty income, improved trucking operation re-
     sults, and higher miscellaneous income.  

     PROVISION FOR INCOME TAXES -- The effective tax rates in 1996, 
     1995, and 1994 were 31.8%, 25.2%, and 31.0%, respectively.  The 
     effective tax rates for 1996, 1995, and 1994 were below the statu-
     tory rate (34%) primarily as a result of tax-exempt interest, the 
     lower effective tax rate for the foreign sales corporation, and tax 
     credits.

     FINANCIAL CONDITION

     LIQUIDITY - CAPITAL RESOURCES -- Working capital was $26,082,000 
     at December 31, 1996, compared to $23,508,000 at December 31, 1995.  
     The increase in working capital was primarily due to the increase 
     in sales and net income during 1996.  The current ratio, a mea-
     sure of liquidity, was 3.09 at December 31, 1996, versus 2.48 at 
     December 31, 1995.  The Registrant has no significant amount of 
     long-term debt.

     Net cash provided by operations was $9,723,000 in 1996 compared to 
     $5,160,000 in 1995 and $3,615,000 in 1994.  The 1996 cash flow was 
     primarily attributable to net income, a decrease in inventories, 
     and depreciation and amortization expense.  The 1995 cash flow was 
     primarily attributable to net income, depreciation and amortization 
     expense, a decrease in accounts and notes receivable, and an in-
     crease in advanced billings.  The 1994 cash flow was primarily 
     attributable to net income and to depreciation and amortization 
     expense.  

     Capital expenditures for the most recent three years were 
     $2,131,000 in 1996, $2,284,000 in 1995, and $1,635,000 in 1994.  
     The level of planned expenditures for 1997 is $3,000,000, none of 
     which has been committed as of December 31, 1996.  Anticipated 
     expenditures are primarily for plant equipment to maintain quality 
     and improve efficiency.  Management has the discretion of lowering 
     the level of expenditures if the operating results deviate from 
     budgeted performance.

                                   12

<PAGE>   13

     The Registrant does not have a bank borrowing facility, and manage-
     ment believes that cash flows provided by operations and the strong 
     cash and investment position will continue to be sufficient to 
     satisfy the Registrant's working capital requirements, normal capi-
     tal expenditure levels, and anticipated dividends.  A policy of 
     requiring down payments and progress payments on large Processing 
     Equipment orders has had a favorable effect on cash flows.  Manage-
     ment expects internally generated funds to be sufficient to finance 
     operations, and this is consistent with historical performance.

     Statement of Financial Account Standards (SFAS) No. 121, "Account-
     ing for the Impairment of Long-Lived Assets and for Long-Lived 
     Assets to Be Disposed Of," was issued in March 1995, effective for 
     the Registrant's 1996 fiscal year, and the adoption of SFAS No. 121 
     did not have a material effect on the Registrant's financial posi-
     tion or results of operations.

     In October 1995, SFAS No. 123, "Accounting for Stock-Based Com-
     pensation," was issued.  The statement was effective for the 
     Registrant's 1996 fiscal year, and the adoption of SFAS No. 123 
     had no effect on the Registrant's financial position or results of 
     operations.

                                   13

<PAGE>   14

ITEM 8. - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
<TABLE>
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 1996 and 1995
<CAPTION>
                                                          1996         1995
                                                      -----------  -----------
<S>                                                   <C>          <C>
ASSETS
------
Current Assets:
  Cash and cash equivalents (Note 1)................  $ 2,220,648  $ 2,491,167
  Available-for-sale investments, at market (Note 1)   14,605,457   12,063,140
  Accounts and notes receivable, less reserve of 
      $698,036 in 1996 and $531,601 in 1995 for 
      doubtful accounts (Note 1)....................   15,328,569   13,033,660
  Inventories (Note 1) -
    Raw materials and components....................  $ 3,768,312  $ 6,891,452
    Work-in-process.................................      719,176    2,065,719
    Finished goods..................................    1,497,536    2,240,684
                                                      -----------  -----------
                                                      $ 5,985,024  $11,197,855
  Prepayments.......................................      403,260      617,445
                                                      -----------  -----------
          Total Current Assets......................  $38,542,958  $39,403,267
Other Assets (Notes 2 and 3)........................    3,486,087    3,845,380
Property, Plant and Equipment - at cost (Note 1) -
  Land and land improvements........................  $ 2,611,250  $ 2,600,374
  Buildings.........................................   10,477,887   10,260,250
  Shop equipment....................................   23,872,341   22,979,146
  Transportation, office & other equipment..........    9,524,357    9,067,799
  Construction-in-progress..........................      621,210      405,061
                                                      -----------  -----------
                                                      $47,107,045  $45,312,630
  Less - Accumulated depreciation...................   35,951,119   33,882,373
                                                      -----------  -----------
                                                      $11,155,926  $11,430,257
                                                      -----------  -----------
                                                      $53,184,971  $54,678,904
                                                      ===========  ===========

LIABILITIES AND SHAREHOLDERS' INVESTMENT
----------------------------------------
Current Liabilities:
  Current maturities of long-term debt (Note 4).....  $         -  $ 3,000,000
  Accounts payable..................................    2,282,897    1,960,823
  Accrued expenses -
    Income taxes (Note 3)...........................      799,467      333,599
    Payrolls........................................    2,334,298    1,814,523
    Vacations.......................................    1,633,914    1,574,353
    Other...........................................    1,324,925    1,073,379
  Advance billings..................................    4,085,152    6,138,892
                                                      -----------  -----------
          Total Current Liabilities.................  $12,460,653  $15,895,569
Other Long-Term Liabilities (Notes 2)...............    1,188,399    1,218,591
Contingencies (Note 6)..............................
Shareholders' Investment:
  Common stock, par value $1 per share--Authorized 
      20,000,000 shares--Issued 1,342,325 shares....  $ 1,342,325  $ 1,342,325
  Preferred stock, par value $1 per share--
      Authorized 1,000,000 shares--No shares issued.            -            -
  Paid-in surplus...................................    4,306,728    4,306,728
  Retained earnings.................................   36,440,899   34,469,724
                                                      -----------  -----------
                                                      $40,089,952  $40,118,777
  Less - Treasury stock, 174,304 shares, at cost....    2,554,033    2,554,033
                                                      -----------  -----------
                                                      $39,535,919  $37,564,744
                                                      -----------  -----------
                                                      $53,184,971  $54,678,904
                                                      ===========  ===========
</TABLE>

  The accompanying notes are an integral part of these balance sheets.

                                   14

<PAGE>   15

<TABLE>
                      CONSOLIDATED STATEMENTS OF INCOME
            For the Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
                                            1996         1995         1994
                                        -----------  -----------  -----------
<S>                                     <C>          <C>          <C>
Net Sales.............................. $83,950,990  $78,375,636  $79,475,354
Cost of Sales (Note 1).................  62,252,750   61,012,139   58,959,913
                                        -----------  -----------  -----------
  Gross profit......................... $21,698,240  $17,363,497  $20,515,441
Selling, General & Administrative
    Expenses (Note 1)..................  15,855,134   15,814,620   16,253,904
                                        -----------  -----------  -----------
  Operating income..................... $ 5,843,106  $ 1,548,877  $ 4,261,537
Other Income (Expense):
  Interest income...................... $   710,324  $   581,456  $   468,816
  Interest expense.....................    (107,619)    (129,608)     (98,861)
  Other, net...........................      44,208      613,928      459,474
                                        -----------  -----------  -----------
                                        $   646,913  $ 1,065,776  $   829,429
                                        -----------  -----------  -----------
      Income before provision 
        for income taxes............... $ 6,490,019  $ 2,614,653  $ 5,090,966
Provision for Income Taxes (Note 3)....   2,066,000      660,000    1,580,000
                                        -----------  -----------  -----------
Net Income............................. $ 4,424,019  $ 1,954,653  $ 3,510,966
                                        ===========  ===========  ===========
Earnings per Common Share (Note 1).....      $ 3.79       $ 1.67       $ 3.01
                                             ======       ======       ======
</TABLE>

    The accompanying notes are an integral part of these statements.

<TABLE>
            CONSOLIDATED STATEMENTS OF SHAREHOLDERS' INVESTMENT
            For the Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
               Common Stock                                 Treasury Stock
           --------------------   Paid-in    Retained   ---------------------
            Shares      Amount    Surplus    Earnings    Shares      Amount
           ---------  ---------  ---------  ----------  --------   ----------
                         $'s        $'s         $'s                    $'s
<S>        <C>        <C>        <C>        <C>         <C>        <C>
Balance, 
12-31-93   1,342,325  1,342,325  4,306,728  33,676,189  (174,304)  (2,554,033)

Add 
(Deduct):
Net income         -          -          -   3,510,966         -            -
Dividends, 
$2 per com-
mon share          -          -          -  (2,336,042)        -            -
           ---------  ---------  ---------  ----------  --------   ----------
Balance, 
12-31-94   1,342,325  1,342,325  4,306,728  34,851,113  (174,304)  (2,554,033)

Add 
(Deduct):
Net income         -          -          -   1,954,653         -            -
Dividends, 
$2 per com-
mon share          -          -          -  (2,336,042)        -            -
           ---------  ---------  ---------  ----------  --------   ----------
Balance, 
12-31-95   1,342,325  1,342,325  4,306,728  34,469,724  (174,304)  (2,554,033) 

Add 
(Deduct):
Net income         -          -          -   4,424,019         -            -
Dividends, 
$2.10 per 
common 
share              -          -          -  (2,452,844)        -            -
           ---------  ---------  ---------  ----------  --------   ----------
Balance, 
12-31-96   1,342,325  1,342,325  4,306,728  36,440,899  (174,304)  (2,554,033) 
           =========  =========  =========  ==========  ========   ==========
</TABLE>

       The accompanying notes are an integral part of these statements.

                                   15

<PAGE>   16

<TABLE>
                    CONSOLIDATED STATEMENTS OF CASH FLOWS
             For the Years Ended December 31, 1996, 1995 and 1994
<CAPTION>
                                             1996         1995         1994
                                         -----------  -----------  -----------
<S>                                      <C>          <C>          <C>
Cash Flows from Operating Activities:
  Net income............................ $ 4,424,019  $ 1,954,653  $ 3,510,966
  Adjustments to reconcile net income
      to net cash provided by 
      operating activities:
    Bad debt expense....................     279,061      114,432      150,688
    Depreciation and amortization.......   2,560,862    2,507,260    2,739,943
    (Gain) on sales of equipment........      (7,603)      (7,711)     (62,354)
    Changes in assets and liabilities-
      (Increase) decrease in 
          interest receivable...........    (124,140)      83,180       58,629
      (Increase) decrease in accounts
          and notes receivable..........  (2,573,970)   1,691,385   (1,525,390)
      Decrease (increase) in inventories   5,212,831   (1,818,373)    (511,433)
      Decrease (increase) in prepayments     214,185      (24,667)    (151,324)
      Decrease (increase) in 
          other assets..................     203,293     (150,295)    (635,065)
      Increase (decrease) in 
          accounts payable..............     322,074     (325,454)    (300,056)
      Increase (decrease) in 
          accrued expenses..............   1,296,750   (1,543,014)     981,893
      (Decrease) increase in 
          advance billings..............  (2,053,740)   2,890,583     (696,828)
      (Decrease) increase in other 
          long-term liabilities.........     (30,192)    (212,059)      55,142
                                         -----------  -----------  -----------
        Net Cash Provided by 
            Operating Activities........ $ 9,723,430  $ 5,159,920  $ 3,614,811

Cash Flows (Requirements) from 
    Investing Activities:
  Proceeds from maturities 
      of investments.................... $22,431,823  $20,235,000  $18,665,226
  Purchases of investments.............. (24,850,000) (20,170,000) (19,686,944)
  Proceeds from sales of equipment......       7,603       12,376       97,564
  Additions to property, plant 
      and equipment.....................  (2,130,531)  (2,284,352)  (1,634,742)
                                         -----------  -----------  -----------
        Net Cash (Required) by 
          Investing Activities.......... $(4,541,105) $(2,206,976) $(2,558,896)

Cash Flows (Requirements) from 
    Financing Activities:
  Repayment of debt..................... $(3,000,000) $         -  $         -
  Dividends paid........................  (2,452,844)  (2,336,042)  (2,336,042)
                                         -----------  -----------  -----------
        Net Cash (Required) by 
            Financing Activities........ $(5,452,844) $(2,336,042) $(2,336,042)
                                         -----------  -----------  -----------

Net (Decrease) Increase in Cash......... $  (270,519) $   616,902  $(1,280,127)

Cash and Cash Equivalents at 
  Beginning of Year.....................   2,491,167    1,874,265    3,154,392
                                         -----------  -----------  -----------
Cash and Cash Equivalents at 
  End of Year........................... $ 2,220,648  $ 2,491,167  $ 1,874,265
                                         ===========  ===========  ===========
</TABLE>

        The accompanying notes are an integral part of these statements.

                                   16

<PAGE>   17

                NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     December 31, 1996, 1995 and 1994

(1) SUMMARY OF ACCOUNTING POLICIES:

    PRINCIPLES OF CONSOLIDATION -- Paul Mueller Company (Registrant) 
    specializes in the manufacture of high-quality stainless steel tanks 
    and industrial processing equipment.  The Registrant serves the 
    food, beverage, chemical, pharmaceutical and other process indus-
    tries and the dairy farm market.  The financial statements include 
    the accounts of the Registrant and its wholly owned subsidiary, 
    Mueller International Sales Corporation, a foreign sales corpora-
    tion (FSC) (Companies).  All significant intercompany accounts and 
    transactions have been eliminated in consolidation.  Effective 
    January 1, 1997, all trucking operations, previously performed by 
    the Registrant, and the related assets were transferred to Mueller 
    Transportation, Inc., a wholly owned subsidiary.

    USE OF ESTIMATES -- The preparation of financial statements, in 
    conformity with generally accepted accounting principles, requires 
    management to make estimates and assumptions that affect the 
    reported amounts of assets and liabilities, the disclosure of 
    contingent assets and liabilities at the date of the financial 
    statements, and the reported amounts of revenues and expenses during 
    the reporting period.  Actual results could differ from those esti-
    mates.

    REVENUE RECOGNITION AND RETAINAGES -- Revenue from sales of manufac-
    tured products is recognized upon passage of title to the customer, 
    which generally coincides with shipment.  Contracts with some 
    customers provide for a portion of the sales amount to be retained 
    by the customer for a period of time after completion of the con-
    tract.  Retainages included in accounts receivable were $175,900 
    at December 31, 1996, and $69,900 at December 31, 1995.

    INVENTORIES -- The Registrant's inventories are recorded at the 
    lower of cost, last-in, first-out (LIFO), or market.  Cost includes 
    material, labor and manufacturing burden required in the production 
    of the Registrant's products.

    Under the first-in, first-out (FIFO) method of accounting, which 
    approximates current cost, Registrant inventories would have been 
    $7,119,773, $8,978,736, and $6,957,191 higher than those reported 
    at December 31, 1996, 1995 and 1994, respectively.

    A reduction in inventory quantities during 1996 resulted in liqui-
    dation of LIFO quantities recorded at lower costs prevailing in 
    prior years as compared with the cost of 1996 purchases.  The 
    effect was to lower the cost of sales, which increased net income 
    by $531,300, or $0.45 per share.

    Research and Development -- Research and development costs are 
    charged to expense as incurred and were $653,200 in 1996, $597,600 
    in 1995, and $764,400 in 1994.

    DEPRECIATION POLICIES -- The Registrant provides for depreciation 
    expense using principally the double-declining balance method for 
    new items and straight-line method for used items.  The economic 
    useful lives for the more significant items within each property 
    classification are as follows:
<TABLE>
<CAPTION>
                                                        Years
                                                       -------
          <S>                                          <C>
          Buildings...................................      40
          Land improvements........................... 10 - 20
          Shop equipment..............................  5 - 10
          Transportation, office and other equipment..  3 - 10
</TABLE>

    Maintenance and repairs are charged to expense as incurred.  The 
    cost and accumulated depreciation of assets retired are removed 
    from the accounts, and any resulting gains or losses are reflected 
    in net income currently.

                                   17

<PAGE>   18

    EARNINGS PER COMMON SHARE -- The net income per share of common 
    stock has been computed on the basis of weighted average shares 
    outstanding (1,168,021 shares in 1996, 1995 and 1994).

    INVESTMENTS -- The Registrant classifies its investments in tax-
    exempt bonds and tax-exempt variable rate preferred stock funds
    as available-for-sale and records them at market value.  These 
    securities are a part of the Registrant's asset/liability management 
    program and may be sold in response to capital or liquidity needs.  
    Investments in tax-exempt bonds generally have maturities from three 
    to twelve months.  Available-for-sale investments on the accompany-
    ing consolidated balance sheets at December 31, 1996 and 1995, 
    include:
<TABLE>
<CAPTION>
                                                   1996         1995
                                               -----------  -----------
    <S>                                        <C>          <C>
    Tax-exempt bonds.........................  $11,900,000  $ 5,981,823
    Tax-exempt preferred stock funds.........    2,500,000    6,000,000
    Accrued interest.........................      205,457       81,317
                                               -----------  -----------
                                               $14,605,457  $12,063,140
                                               ===========  ===========
</TABLE>

    Unrealized holding gains and losses were not material as of 
    December 31, 1996 or 1995.  There were no realized gains or losses 
    during 1996, 1995 or 1994.

    STATEMENTS OF CASH FLOWS -- For purposes of the statements of cash 
    flows, the Registrant considers all short-term highly liquid invest-
    ments in money market funds to be cash equivalents.

    Interest and income tax payments for each of the three years during 
    the period ended December 31, 1996, were as follows:
<TABLE>
<CAPTION>
                                      1996         1995         1994
                                  -----------  -----------  -----------
    <S>                           <C>          <C>          <C>
    Interest payments...........  $   107,600  $   129,300  $    98,900
                                  ===========  ===========  ===========
    Income tax payments.........  $ 1,336,600  $ 1,275,200  $ 1,493,000
                                  ===========  ===========  ===========
</TABLE>

(2) RETIREMENT PLANS:

    The Registrant has a Profit Sharing and Retirement Savings Plan 
    [401(k) plan] in which substantially all employees are eligible to 
    participate.  The plan provides for a match of employees' contribu-
    tions up to a specified limit.  The plan also has a profit-sharing 
    feature whereby an additional match is made if the Registrant's net 
    income reaches predetermined levels established annually by the 
    Board of Directors.  The funds of the plan are deposited with an 
    insurance company and are invested at the employee's option in one 
    or more investment funds.  The Registrant's contributions to the 
    plan were $587,500 for 1996, $289,800 for 1995, and $404,500 for 
    1994.

    The Registrant has pension plans covering substantially all em-
    ployees.  Benefits under the plans are based either on final 
    average pay or a flat benefit formula.

    Total pension expense under the plans was $364,200 in 1996, $98,700 
    in 1995, and $7,900 in 1994.  Management's policy is to fund pension 
    expense that is currently deductible for tax purposes.

                                   18

<PAGE>   19

    The following table sets forth the funded status of the plans at 
    December 31, 1996 and 1995:
<TABLE>
<CAPTION>
                                   Funded Status
    ---------------------------------------------------------------------------
                                                              December 31
                                                       ------------------------
                                                           1996         1995
                                                       -----------  -----------
    <S>                                                <C>          <C>
    Actuarial present value of accumulated benefit 
      obligation, including vested benefits of 
      $20,155,800 and $18,176,800 at December 31, 
      1996 and 1995, respectively..................... $22,373,300  $20,215,400
                                                       ===========  ===========
    Plans' assets at fair value, primarily listed 
      stocks and insurance company investment funds... $28,502,600  $26,115,400
    Actuarial present value of projected benefit 
      obligation for services rendered to date........  25,145,400   22,819,500
                                                       -----------  -----------
    Assets in excess of projected benefit obligation.. $ 3,357,200  $ 3,295,900
    Unrecognized net (gain)...........................  (3,250,200)  (2,123,600)
    Unrecognized net (asset)..........................  (1,511,400)  (1,862,000)
    Unrecognized prior service cost...................   2,309,100    1,517,300
                                                       -----------  -----------
    Prepaid pension asset............................. $   904,700  $   827,600
                                                       ===========  ===========
</TABLE>

    Prepaid pension assets of $2,452,900 and $2,326,000 at December 31, 
    1996 and 1995, respectively, are included in other assets on the 
    accompanying consolidated balance sheets.  Pension liabilities of 
    $1,548,200 and $1,498,400 at December 31, 1996 and 1995, respec-
    tively, are included in current and other long-term liabilities on 
    the accompanying consolidated balance sheets.

    Net pension expense for the Registrant's plans includes the follow-
    ing components:
<TABLE>
<CAPTION>
                                       1996         1995         1994
                                   -----------  -----------  -----------
    <S>                            <C>          <C>          <C>
    Service cost - benefit  
      earned during year.........  $   897,200  $   662,700  $   794,900
    Interest cost on projected 
      benefit obligation.........    1,692,400    1,493,700    1,316,700
    Actual return on assets......   (3,249,700)  (4,654,500)    (340,100)
    Amortization of unrecognized
      net assets.................     (206,600)    (231,200)    (299,000)
    Deferred asset gain (loss)...    1,230,900    2,828,000   (1,464,600)
                                   -----------  -----------  -----------
    Net pension expense..........  $   364,200  $    98,700  $     7,900
                                   ===========  ===========  ===========
</TABLE>

    The weighted average expected long-term rates of return on plan 
    assets used in the determination of annual pension expense were 8.5% 
    for 1996, 1995 and 1994.  The weighted average assumed discount 
    rates used to measure the projected benefit obligation were 7.5% at 
    December 31, 1996, and 7.25% at December 31, 1995.  The assumed rate 
    of compensation increase used to measure the projected benefit obli-
    gation was 4.5% at December 31, 1996 and 1995, for the applicable 
    plan.

(3) INCOME TAXES:

    The provision for taxes on income from operations includes:
<TABLE>
<CAPTION>
                                         1996        1995        1994
                                      ----------  ----------  ----------
    <S>                               <C>         <C>         <C>
    Current tax expense.............  $1,823,800  $  780,200  $1,667,900
    Deferred, net...................     242,200    (120,200)    (87,900)
                                      ----------  ----------  ----------
                                      $2,066,000  $  660,000  $1,580,000
                                      ==========  ==========  ==========
</TABLE>

    The deferred tax consequences of temporary differences in reporting 
    items for financial statement and income tax purposes are recog-
    nized, if appropriate.  Net deferred tax assets of $693,400 and 

                                   19

<PAGE>   20

    $935,600 at December 31, 1996 and 1995, respectively, are included 
    in other assets on the accompanying consolidated balance sheets.  
    The income tax effect of temporary differences comprising the de-
    ferred tax assets and deferred tax liabilities in the accompanying 
    consolidated balance sheets is a result of the following:
<TABLE>
<CAPTION>
                                                     1996        1995
                                                  ----------  ----------
    <S>                                           <C>         <C>
    Deferred Tax Assets:
        Insurance...............................  $  107,700  $  155,000
        Vacation................................     547,900     532,600
        Warranty................................     142,400      83,500
        Doubtful accounts.......................     258,300     196,700
        Healthcare benefits.....................     185,000     156,000
        AMT carry-forward credit................           -     384,500
        Other...................................     226,000     214,700
                                                  ----------  ----------
                                                  $1,467,300  $1,723,000
                                                  ==========  ==========
    Deferred Tax Liabilities:
        Depreciation............................  $  219,500  $  291,000
        Pensions................................     527,600     469,500
        Other...................................      26,800      26,900
                                                  ----------  ----------
                                                  $  773,900  $  787,400
                                                  ==========  ==========
</TABLE>

    A reconciliation between the statutory federal income tax rate (34%) 
    and the effective rate of income tax expense for each of the three 
    years during the period ended December 31, 1996, follows:
<TABLE>
<CAPTION>
                                  1996              1995              1994
                            ----------------  ----------------  ----------------
                              Amount      %     Amount      %     Amount      %
                            ----------  ----  ----------  ----  ----------  ----
    <S>                     <C>         <C>   <C>         <C>   <C>         <C>
    Statutory federal 
     income tax............ $2,206,600  34.0  $  889,000  34.0  $1,730,900  34.0
    Increase (decrease) in
     taxes resulting from:
      State tax, net of 
       federal benefit.....     67,600   1.0      17,700   0.7      51,600   1.0
      Tax-exempt interest..   (165,700) (2.6)   (147,800) (5.7)   (117,900) (2.3)
      Tax credits..........    (14,400) (0.2)    (23,400) (0.9)    (40,100) (0.8)
      FSC exempt income....   (138,500) (2.1)   (105,400) (4.0)   (128,200) (2.5)
        Other, net.........    110,400   1.7      29,900   1.1      83,700   1.6
                            ----------  ----  ----------  ----  ----------  ----
                            $2,066,000  31.8  $  660,000  25.2  $1,580,000  31.0
                            ==========  ====  ==========  ====  ==========  ====
</TABLE>

(4) DEBT:

    The $3,000,000 Floating Rate Weekly Demand Industrial Development 
    Revenue Bond issue due December 1, 1996, was repaid as required.

(5) OPERATIONS BY INDUSTRY AND EXPORT SALES:

    A description of the various industries in which the Companies 
    operate and a summary of operations by industry are included on 
    pages 4 and 5 of this annual report.  The information included 
    therein is incorporated as an integral part of these consolidated 
    financial statements.

    The Registrant's export sales were $16,263,700 in 1996, $13,385,800 
    in 1995, and $15,105,900 in 1994.

    Export sales during 1996, 1995 and 1994, respectively, were made 
    to the following geographic areas:  North America - $5,581,400, 
    $4,275,800, and $5,940,800; Asia and the Far East - $6,648,300, 

                                   20

<PAGE>   21

    $5,395,200, and $5,176,300; and other areas - $4,034,000, 
    $3,714,800, and $3,988,800.  

    During 1996, 1995 and 1994, sales to any one customer were not 
    in excess of 10% of consolidated sales.

(6) CONTINGENCIES:

    The Registrant employs nearly 900 people, of which approximately 
    400 are represented by the Sheet Metal Workers Union.  The Inter-
    national Union called a strike beginning July 25, 1995, and 
    currently 25 employees are participating.

    The Registrant is a defendant in two lawsuits pending at December 
    31, 1996.  In the opinion of management, after consultation with 
    legal counsel, the outcome of these lawsuits will not have a 
    material adverse effect on the Registrant's consolidated financial 
    statements.
<TABLE>
                 FINANCIAL HIGHLIGHTS BY QUARTER (UNAUDITED)
                    (In Thousands, Except Per Share Data)
<CAPTION>
                                       Quarter Ended
                ---------------------------------------------------------------
                    March 31        June 30       September 30    December 31
                --------------- --------------- --------------- ---------------
                  1996    1995    1996    1995    1996    1995    1996    1995
                ------- ------- ------- ------- ------- ------- ------- -------
                  <F2>                                            <F3>    <F4>
<S>             <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Net sales...... $18,690 $15,764 $21,526 $22,216 $21,187 $21,186 $22,548 $19,210
Gross 
  profit<F1>... $ 4,065 $ 4,578 $ 5,026 $ 5,243 $ 5,426 $ 4,304 $ 7,181 $ 3,238
Net income..... $   500 $   466 $   971 $ 1,027 $ 1,171 $   419 $ 1,782 $    43
Earnings per 
 common share..   $0.43   $0.40   $0.83   $0.88   $1.00   $0.36   $1.53   $0.03
<FN>
<F1> Because the inventory determination under the LIFO method can only 
     be made at the end of each fiscal year based on the inventory 
     levels and costs at that point, interim LIFO determinations must 
     be based on management's estimate of expected year-end inventory 
     levels and costs.

<F2> Net income for the first quarter of 1996 was favorably affected 
     by an insurance refund of $197,000 after tax, or $0.17 per share.

<F3> Net income for the fourth quarter of 1996 was favorably affected 
     by a LIFO adjustment.  The adjustment increased net income by 
     $1,321,300, or $1.13 per share.

<F4> Net income for the fourth quarter of 1995 was adversely affected 
     by a LIFO adjustment.  The adjustment decreased net income by 
     $234,400, or $0.20 per share.
</FN>
</TABLE>

                                   21

<PAGE>   22

                REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Board of Directors of Paul Mueller Company:

     We have audited the accompanying consolidated balance sheets of 
PAUL MUELLER COMPANY (a Missouri corporation) AND SUBSIDIARY as of 
December 31, 1996 and 1995, and the related consolidated statements 
of income, shareholders' investment and cash flows for each of the three 
years in the period ended December 31, 1996.  These financial statements 
are the responsibility of the Registrant's management.  Our responsi-
bility is to express an opinion on these financial statements based on 
our audits.

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

     In our opinion, the financial statements referred to above present 
fairly, in all material respects, the financial position of Paul Mueller 
Company and Subsidiary as of December 31, 1996 and 1995, and the results 
of their operations and their cash flows for each of the three years 
in the period ended December 31, 1996, in conformity with generally 
accepted accounting principles.

     Our audits were made for the purpose of forming an opinion on the 
basic financial statements taken as a whole.  Schedule II is the respon-
sibility of the Registrant's management and is presented for purposes of 
complying with the Securities and Exchange Commission's rules and is not 
part of the basic financial statements.  This schedule has been sub-
jected to the auditing procedures applied in the audit of the basic 
financial statements and, in our opinion, fairly states in all material 
respects the financial data required to be set forth therein in relation 
to the basic financial statements taken as a whole.

                                         /s/  ARTHUR ANDERSEN LLP
Kansas City, Missouri,
     February 13, 1997

ITEM 9. - DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

     There have been no disagreements on accounting principles or finan-
     cial statement disclosure with the independent public accountants.

                                   22

<PAGE>   23

PART III

ITEM 10. - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     Information as to Directors of the Registrant required by Item 10 
     is included on pages 4 and 5 of the Registrant's Proxy Statement 
     for the annual meeting of shareholders to be held May 5, 1997, and 
     is incorporated herein by reference.  The information concerning 
     executive officers is set forth on page 7 of Part I hereof.

ITEM 11. - MANAGEMENT REMUNERATION AND TRANSACTIONS

     Information as to management remuneration and transactions required 
     by Item 11 is included on pages 5 and 6 of the Registrant's Proxy 
     Statement for the annual meeting of shareholders to be held May 5, 
     1997, and is incorporated herein by reference.

ITEM 12. - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
           AND MANAGEMENT

     Information as to security ownership of certain beneficial owners 
     and management required by Item 12 is included on pages 3 and 4 of 
     the Registrant's Proxy Statement for the annual meeting of share-
     holders to be held May 5, 1997, and is incorporated herein by 
     reference.

ITEM 13. - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     Information as to certain relationships and related transactions 
     required by Item 13 is included on page 5 of the Registrant's Proxy 
     Statement for the annual meeting of shareholders to be held May 5, 
     1997, and is incorporated herein by reference.

                                   23

<PAGE>   24

PART IV

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

     A. The financial statements and schedules, required under Part II-
        Item 8, are as follows:

        1. The consolidated financial statements of the Registrant and 
           its subsidiary, for the year ended December 31, 1996:

           - Consolidated Balance Sheets..............December 31, 1996 
                                                      and 1995
           - Consolidated Statements of Income........For years ended 
                                                      December 31, 1996, 
                                                      1995 and 1994
           - Consolidated Statements of 
             Shareholders' Investment.................For years ended 
                                                      December 31, 1996, 
                                                      1995 and 1994
           - Consolidated Statements of Cash Flows....For years ended 
                                                      December 31, 1996, 
                                                      1995 and 1994
           - Notes to Consolidated Financial 
             Statements...............................December 31, 1996, 
                                                      1995 and 1994
           - Financial Highlights by Quarter..........For years ended 
                                                      December 31, 1996 
                                                      and 1995
           - Report of Independent Public Accountants

        2. Additional financial statement schedules included herein:

           -  Schedule II - Valuation and Qualifying Accounts....Page 26

           -  All other schedules are not submitted because they are 
              not applicable or not required, or because the required 
              information is included in the financial statements or 
              notes thereto.

        3. The exhibits set forth in the Exhibit Index found on pages 27 
           through 29.

     B. No reports on Form 8-K were filed by the Registrant during the 
        last quarter of 1996.

                                   24

<PAGE>   25

SIGNATURES -

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

                               PAUL MUELLER COMPANY

DATE   March 14, 1997          BY     /S/    DANIEL C. MANNA
       --------------             -------------------------------------
                                             Daniel C. Manna
                                                President
                                        (Chief Executive Officer)

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

DATE   March 14, 1997          BY     /S/    DANIEL C. MANNA
       --------------             -------------------------------------
                                             Daniel C. Manna
                                                President
                                        (Chief Executive Officer)

DATE   March 14, 1997          BY     /S/     PAUL MUELLER
       --------------             -------------------------------------
                                              Paul Mueller
                                         Chairman of the Board
                                              and Director

DATE   March 14, 1997          BY     /S/    DONALD E. GOLIK
       --------------             -------------------------------------
                                             Donald E. Golik
                                  Senior Vice President, Chief Financial 
                                     Officer, Secretary and Director

DATE   March 14, 1997          BY     /S/   ROBERT A. BECKER
       --------------             -------------------------------------
                                            Robert A. Becker
                                                Director

DATE   March 14, 1997          BY     /S/    JACK S. CURTIS
       --------------             -------------------------------------
                                             Jack S. Curtis
                                                Director

DATE   March 14, 1997          BY     /S/  WILLIAM B. JOHNSON
       --------------             -------------------------------------
                                           William B. Johnson
                                                Director

DATE   March 14, 1997          BY     /S/ CHARLES M. RUPRECHT
       --------------             -------------------------------------
                                          Charles M. Ruprecht
                                                Director

                                   25

<PAGE>   26

                                                            SCHEDULE II
<TABLE>
                   PAUL MUELLER COMPANY AND SUBSIDIARY
                    VALUATION AND QUALIFYING ACCOUNTS
               FOR THE THREE YEARS ENDED DECEMBER 31, 1996
<CAPTION>
               Balance at    Charged to     Charged                     Balance
               Beginning     Costs and      to Other                   at End of
               of Period      Expenses      Accounts     Deductions      Period
                --------      --------      --------      --------      --------
RESERVE FOR 
DOUBTFUL ACCOUNTS
<S>             <C>           <C>           <C>           <C>           <C>
12-31-96.....   $531,601      $316,990      $      -      $150,555<F1>  $698,036
12-31-95.....   $679,018      $ 20,465      $      -      $167,882<F1>  $531,601
12-31-94.....   $595,925      $142,991      $      -      $ 59,898<F1>  $679,018
<FN>
<F1> Accounts written off during the year.
</FN>
</TABLE>

                                   26

<PAGE>   27
<TABLE>
                             EXHIBIT INDEX
<CAPTION>
Number                          Description                          Page No.
------  -----------------------------------------------------------  --------
 <S>    <C>                                                             <C>
  (3)   ARTICLES OF INCORPORATION AND BY-LAWS - The Restated Arti-
        cles of Incorporation of the Registrant filed with the 
        Secretary of State on May 20, 1991, and the Restated 
        By-Laws of the Registrant dated May 6, 1991, attached 
        as Exhibit (3), page 19, of the Registrant's Form 10-K for 
        the year ended December 31, 1991, are incorporated herein 
        by reference.

  (4)   INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS -

        (a) A specimen stock certificate (unlimited denomination) 
            representing shares of the common stock, par value $1 
            per share, attached as Exhibit (4), page 69, of the 
            Registrant's Form 10-K for the year ended December 31, 
            1981, is incorporated herein by reference.

        (b) Shareholder Rights Plan, dated January 29, 1991, between 
            Paul Mueller Company and United Missouri Bank of Kansas 
            City, N.A., is incorporated by reference to Form 8-A
            under the Securities Exchange Act of 1934, dated 
            January 31, 1991, and filed with the Securities and 
            Exchange Commission on February 1, 1991.

 (10)   MATERIAL CONTRACTS -

        (a) Exclusive License Agreement between Registrant and 
            Superstill Technology, Inc. dated January 9, 1992, 
            Addendum No. 1 dated January 28, 1992, and Addendum 
            No. 2 dated June 15, 1992 (portions of this Agreement 
            and Addendums were previously omitted as confiden-
            tial information and were filed separately with the 
            Securities and Exchange Commission)....................     30

        (b) The following Material Contracts, attached as Exhibit 
            (10) of the Registrant's Form 10-Q for the quarter 
            ended September 30, 1995, are incorporated herein by 
            reference:
<C> CAPTION
                              Description                  Page No.
            ---------------------------------------------  --------
            <S>                                               <C>
            1. Paul Mueller Company Tax Savings Plan and 
               Trust, effective January 1, 1996, and 
               adopted by the Board of Directors on 
               August 2, 1995............................     11

            2. Paul Mueller Company Dependent Care Assis-
               tant Plan, effective January 1, 1996, and 
               adopted by the Board of Directors on 
               August 2, 1995............................     22
 <S>    <C>                                                             <C>
        (c) Paul Mueller Company Noncontract Employees Retirement 
            Plan, as amended and restated effective January 1, 1989, 
            and adopted by the Board of Directors of the Registrant 
            on May 7, 1990, was attached as Exhibit (10), page 179, 
            of the Registrant's Form 10-K for the year ended 
            December 31, 1990, and is incorporated herein by 
            reference.  Amendment Number One, effective October 29, 

                                   27

<PAGE>   28

<CAPTION>
Number                          Description                          Page No.
------  -----------------------------------------------------------  --------
 <S>    <C>                                                             <C>
            1991, was adopted by the Board of Directors on October 
            29, 1991, and Amendment Number Two, effective June 1, 
            1992, was adopted by the Board of Directors on May 4, 
            1992, and both were attached as Exhibit (10), page 18, 
            of the Registrant's Form 10-K for the year ended 
            December 31, 1992, and both are incorporated herein by 
            reference.  Amendment Number Three was adopted by the 
            Board of Directors on July 26, 1994, and Amendment 
            Number Four, effective January 1, 1994, was adopted by 
            unanimous consent of the Executive Committee of the 
            Board of Directors on December 5, 1994, and both were 
            attached as Exhibit (10), page 59, of the Registrant's 
            Form 10-K for the year ended December 31, 1994, and both 
            are incorporated herein by reference.  Amendment Number 
            Five, adopted by the Board of Directors on October 31, 
            1995, was attached as Exhibit (10), page 26, of the 
            Registrant's Form 10-Q for the quarter ended September 
            30, 1995, and is incorporated herein by reference.  
            Amendment Number Six, effective January 1, 1996, and 
            executed on May 6, 1996, was attached as Exhibit (10), 
            page 14, of the Registrant's Form 10-Q for the quarter 
            ended March 31, 1996, and is incorporated herein by 
            reference.

        (d) Paul Mueller Company Employee Benefit Plan, amended and 
            restated effective March 22, 1995, and adopted by the 
            Trustees on April 14, 1995, was attached as Exhibit (10), 
            page 10, of the Registrant's Form 10-Q for the quarter 
            ended March 31, 1995, and is incorporated herein by 
            reference.  The First Amendment, adopted by the Trustees 
            on October 12, 1995, was attached as Exhibit (10), page 
            25, of the Registrant's Form 10-Q for the quarter ended 
            September 30, 1995, and is incorporated herein by 
            reference.  The Second Amendment, effective April 1, 
            1996, and executed on May 15, 1996, was attached as 
            Exhibit (10), page 11, of the Registrant's Form 10-Q 
            for the quarter ended June 30, 1996, and is incorporated 
            herein by reference.

        (e) Paul Mueller Company Profit Sharing and Retirement 
            Savings Plan, restated effective January 1, 1993, and 
            adopted by the Trustees on June 22, 1994, was attached 
            as Exhibit (10), page 15, of the Registrant's Form 10-K 
            for the year ended December 31, 1994.

        (f) Paul Mueller Company Contract Employees Retirement 
            Plan, restated effective January 1, 1992, and adopted 
            November 17, 1992, was attached as Exhibit (10), 
            page 22, of the Registrant's Form 10-K for the year 
            ended December 31, 1992, and is incorporated herein by 
            reference.  Amendment Number One, effective September 
            19, 1994, was executed October 20, 1994, and Amendment 
            Number Two, effective January 1, 1993, was executed 
            December 2, 1994, and both were attached as Exhibit 
            (10), page 67, of the Registrant's Form 10-K for the 
            year ended December 31, 1994, and are incorporated 
            herein by reference.  Amendment Number Three, executed 
            April 10, 1996, was attached as Exhibit (10), page 10, 
            of the Registrant's Form 10-Q for the quarter ended 
            March 31, 1996, and is incorporated herein by reference.  
            Amendment Number Four, executed July 26, 1996, was 
            attached as Exhibit (10), page 11, of the Registrant's 
            Form 10-Q for the quarter ended September 30, 1996, and 
            is incorporated herein by reference.

        (g) Sales and Supply Agreement between Registrant and GEA 
            Ahlborn GmbH dated October 1, 1993, attached as 
            Exhibit (10), page 103, of the Registrant's Form 10-K

                                   28

<PAGE>   29

<CAPTION>
Number                          Description                          Page No.
------  -----------------------------------------------------------  --------
 <S>    <C>                                                             <C>
            for the year ended December 31, 1993, is incorporated 
            herein by reference (portions of this Agreement have 
            been omitted as confidential information and have been 
            filed separately with the Securities and Exchange 
            Commission).

        (h) Agreement between Registrant and Sheet Metal Workers' 
            International Association Local No. 208 dated June 12, 
            1991, attached as Exhibit (10), page 59, of the Regis-
            trant's Form 10-K for the year ended December 31, 1991, 
            is incorporated herein by reference.

        (i) Agreement and Declaration of Trust for the Paul Mueller 
            Company Employee Benefit Plan dated May 2, 1988, at-
            tached as Exhibit (10), page 107, of the Registrant's 
            Form 10-K for the year ended December 31, 1988, is 
            incorporated herein by reference.

        (j) Paul Mueller Company Salaried and Clerical Employees 
            Retirement Trust, as amended August 11, 1981, was 
            attached as Exhibit (10), page 318, of the Registrant's 
            Form 10-K for the year ended December 31, 1981, and is 
            incorporated herein by reference.  The First Amendment 
            to the trust, adopted by the Board of Directors on 
            May 1, 1983, was attached as Exhibit (10), page 160, 
            of the Registrant's Form 10-K for the year ended 
            December 31, 1983, and is incorporated herein by 
            reference.

        (k) Executive Compensation Plans and Arrangements:
 <S>       <C>                                                          <C>
             i. Paul Mueller Company Supplemental Executive Retire-
                ment Plan, effective January 1, 1996, adopted by 
                the Board of Directors on February 8, 1996, was 
                attached as Exhibit (10), page 30, of the Regis-
                trant's Form 10-K for the year ended December 31, 
                1995, and is incorporated herein by reference.

            ii. Termination Agreement with Philip K. Daniels, Vice 
                President - Sales and Marketing, dated November 11, 
                1995, was attached as Exhibit (10), page 34, of the 
                Registrant's Form 10-K for the year ended December 
                31, 1995, and is incorporated herein by reference.

           iii. Severance Agreement with Philip K. Daniels, Vice 
                President - Sales and Marketing, attached as Exhibit 
                (10), page 13, of the Registrant's Form 10-Q for the 
                quarter ended June 30, 1994, is incorporated herein 
                by reference.

            iv. Agreement Not to Compete for Philip K. Daniels, Vice 
                President - Sales and Marketing, attached as Exhibit 
                (10), page 14, of the Registrant's Form 10-Q for the 
                quarter ended June 30, 1994, is incorporated herein 
                by reference.

             v. Executive Short-Term Incentive Plan, adopted January 
                31, 1995, attached as Exhibit (10), page 71, of the 
                Registrant's Form 10-K for the year ended December 31, 
                1994, is incorporated herein by reference.
 <S>    <C>                                                             <C>
 (21)   SUBSIDIARIES OF THE REGISTRANT.............................     58

 (27)   FINANCIAL DATA SCHEDULE AS OF DECEMBER 31, 1995............     59
</TABLE>

                                   29