SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

                           FORM 10-K and ANNUAL REPORT

   [X]        ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the fiscal year ended December 31, 1995

                                       OR

   [  ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934
                   For the transition period from _________________
                                to ________________

                            Commission File No. 0-795


                            BADGER PAPER MILLS, INC.
             (Exact name of registrant as specified in its charter)

           200 West Front Street                     WISCONSIN
                P.O. Box 149                 (State of incorporation)
      Peshtigo, Wisconsin  54157-0149               39-0143840

      (Address of principal executive     (I.R.S. Employer Identification
                  office)                             Number)

        Registrant's telephone number, including area code:  715-582-4551

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

           Securities registered pursuant to Section 12(g) of the Act:
                   Common Stock, Without Nominal or Par Value



   Indicate by checkmark whether the registrant (1) has filed all reports
   required to be filed by Section 13 or 15(d) of the Securities Exchange Act
   of 1934 during the preceding 12 months (or for such shorter period that
   the registrant was required to file such reports) and (2) has been subject
   to such filing requirements for the past 90 days.  Yes   X     No     

   Indicate by checkmark if disclosure of delinquent filers pursuant to Item
   405 of Regulation S-K is not contained herein, and will not be contained,
   to the best of the 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]

   As of February 26, 1996, 1,945,130 shares of common stock were
   outstanding, and the aggregate market value of the common stock (based
   upon the closing sale price of the shares quoted by dealers to each other
   in the Over-The-Counter Market) held by non-affiliates was approximately
   $28,204,000.  Determination of stock ownership by affiliates was made
   solely for the purpose of responding to this requirement, and registrant
   is not bound by this determination for any other purpose.

                       DOCUMENTS INCORPORATED BY REFERENCE

   The Company's Proxy Statement for its 1996 Annual Meeting of Shareholders
   to be filed with the Commission under Regulation 14A is herein
   incorporated by reference into Part III of this Form 10-K to the extent
   indicated in Part III hereof.

   <PAGE>
                             SELECTED FINANCIAL DATA
                 Five-year comparison of selected financial data

                                     Years ended December 31,
                         1995      1994       1993        1992      1991
   Earnings (in
    thousands)                 
     Net sales         $92,648   $73,674     $76,567    $72,152    $69,084
     Cost of sales      83,890    72,949      74,272     76,009     58,919
     Gross profit
      (loss)             8,758       725       2,295     (3,857)    10,165
     Selling and
      administrative
      expenses           3,852     3,872       4,715      5,451      4,325
     Early retirement
      expense              504         -           -          -          -
     Restructuring
      provision              -         -       3,850          -         - 
     Profit (loss)
      from operations    4,402    (3,147)     (6,270)    (9,308)     5,840
     Other income          414     1,068         796      1,056        933
     Interest expense    1,035     1,315         975      1,078        509
     Unrealized
      holding gain or
      loss on trading
      securities           549      (846)         -          -         - 
     Earnings (loss)
      before income
      taxes and
      cumulative
      effect of
      change in
      accounting
      principle          4,060    (4,240)     (6,449)    (9,330)     6,264
     Cumulative
      effect of
      change in
      accounting
      principle              -         -           -       (649)        -
     Income tax
      expense
      (benefit)          1,312    (1,713)     (2,388)    (3,724)     2,050
     Net earnings
      (loss)             2,748    (2,527)     (4,061)    (6,255)     4,214
   Common stock:
     Number of
      shareholders         568       613         633        632        651
     Weighted average
      shares
      outstanding    1,945,997 1,957,163   1,957,176  1,959,467  1,977,538
     Earnings (loss)
      per share          $1.41    ($1.29)     ($2.07)    ($3.19)     $2.13
     Cash dividends
      declared per
      share              $0.10         -       $0.20      $0.80      $0.66
     Book value per
      share             $11.04     $9.77      $11.06     $13.34     $17.38
   Financial position
    (in thousands):
     Working capital   $10,459   ($1,276)       $836    $ 4,310    $14,219
     Capital
      expenditures       2,705     1,654       1,808     11,078      6,653
     Total assets       52,578    54,382      59,046     75,972     58,073
     Long-term debt     17,236    10,651      10,762     18,870      6,975
     Shareholders'
      equity            21,443    19,120      21,650     26,097     34,226

   PART I

   Item 1.  Business

   Badger Paper Mills, Inc. (the Company) was incorporated under the laws of
   the State of Wisconsin in 1929.  It has been producing sulphite pulp and
   paper for over 65 years.  The industry segment in which the Company
   operates is in the production of paper products.  The Company operates
   Plas-Techs, Inc., (Plas-Techs) a wholly-owned subsidiary in Oconto Falls,
   Wisconsin.

   Products and Distribution

   The Company operates an integrated sulphite pulp mill and a paper mill,
   consisting of two paper machines located in Peshtigo, Wisconsin.
   Converting facilities contiguous to the papermaking facilities include
   sheeting, trimming, sealing, packaging, perforating, printing presses,
   rewinders, waxers, paper drilling and die-cutting equipment.  The Company
   also has a printing and converting operation in Oconto Falls, Wisconsin.

   In 1995, the pulp mill produced 35,198 tons of bleached sulphite, of which
   the Peshtigo mill consumed 78 per cent; and the remaining 22 per cent was
   sold on the open market.

   The fine paper division of the Company represented 77 per cent of the
   paper produced by the Company in 1995, and more than 64 per cent of the
   Company's 1995 revenue.  This portion of the Company's business consists
   of papers manufactured on the Fourdrinier paper machine in Peshtigo.  Fine
   paper grades are produced utilizing virgin pulp from the Company's pulp
   mill and purchased on the open market, and/or pre and post consumer
   recycled fibers.  These paper grades include bond, mimeograph,
   duplicating, electrostatic copier, text and cover, and technical and
   specialty papers.  The Company sells a portion of these products under
   certain trademarks and trade names, including Ta-Non-Ka/R/, Copyrite/R/,
   BPM, ENVIROGRAPHIC/R/, and Northern Brights/TM/.  These products are sold
   primarily through paper merchants and brokers who in turn sell to other
   value-adding entities or direct to the consumer.  A portion of the product
   is sold directly to third party value-added converters. Although consumers
   of the Company's fine paper products are located primarily throughout the
   Midwest, purchasers of the Company's products can be found in principal
   cities from coast to coast in North America.

   The MG specialty and packaging papers division represented 30 per cent of
   the Company's 1995 revenue, and 23 per cent of the paper manufactured by
   the Company's two paper machines in 1995.  In addition, paper is purchased
   from other manufacturers to supplement the Company's production capacity
   in order to increase utilization of the converting facilities.  These
   products, which include papers manufactured on the Company's Yankee paper
   machine, consist of converted plain or printed waxed papers, laminating
   grades, machine-glazed, colors and various other specialty papers.  These
   products are sold to manufacturers, consumers and converters throughout
   the Eastern and Central United States by commissioned brokers and by the
   Company's own sales personnel.

   In August, 1994, the Company sold its SHARPrint/TM/ computer paper product
   line, which included converting equipment, finished goods inventory and
   certain intangibles including the trademark, "SHARPrint/TM/."

   The Company's subsidiary, Plas-Techs, Inc., a printing and converting
   facility, compliments the Company's customer base.  Plas-Techs is capable
   of processing various substrates of film and paper, enhancing the
   capabilities and flexibility of both the Company's printing paper
   operations and its flexible packaging paper operations, resulting in an
   expanded business growth for both.  This facility also has rewinding and
   poly bagmaking equipment.

   In December, 1993, the Company disposed of its Dayton Division.  The
   division was originally purchased in 1992 for the purpose of augmenting
   innovated free-sheet production capacity and providing the Company with
   the ability to offer a greater variety of value-added products to the
   marketplace.  Weak overall market activity and lack of support for
   additional capacity in the market segment served by this division prompted
   the sale of this facility.

   Competition

   The paper products manufactured are highly sensitive to competition from
   numerous sources, including other paper products and products of other
   composition.  Price, volume, service and product quality influence
   competition.

   The Company's production of fine papers from the Fourdrinier paper machine
   represents less than one percent of the production capacity in the United
   States.  Competition for these papers comes from other specialty mills in
   North America and imports from other countries.  Competition for MG
   specialty and packaging papers produced from the Yankee paper machine
   comes from other specialty mills; some of the mills are similarly
   constituted as the Company, while others have greater capacity.  Backlogs
   are maintained by offering quality products, prompt service, technical
   assistance, and a research and development program, making new products
   available to meet customer product design specifications.

   Inventories; raw materials

   The principal raw material used in pulp production is poplar pulpwood. 
   This is purchased directly from pulpwood producers within 150 miles of the
   mill.  Sulphite pulp manufactured from the pulpwood provided approximately
   40 per cent of the fiber requirements for the paper machines in 1995.  The
   purchase of hardwood and softwood kraft pulp, along with pre-consumer and
   post-consumer recycled fibers, makes up the balance of the fiber
   requirements.

   Other raw materials are purchased directly from the manufacturers.  The
   Company has at least two sources of supply for major items.  Shortages of
   purchased pulp, pulpwood and certain chemicals (including petrochemicals)
   would have an adverse effect on product and/or product mix.  Although the
   price of purchased fiber has increased substantially in 1995, the increase
   was not accompanied by shortages.

   In-process and finished goods inventory at the end of 1995 was equivalent
   to approximately 35 days of production on the paper machines.

   Energy

   The Company is a large user of electricity and natural gas.  An on-site
   2,000 kilowatt electrical co-generation system has the capability of
   producing approximately 15 per cent of the Company's current electrical
   requirements.  The balance of the Company's electrical requirements are
   purchased from local public or municipal cooperative utilities.  The
   Company's heat requirements come from two dual-fueled boilers capable of
   burning natural gas or fuel oil, and one natural gas boiler.  Natural gas
   is purchased from various sources in the United States and Canada.  The
   sources of natural gas, fuel oil and electricity are adequate to meet the
   needs of the Company.

   Patents

   The Company owns certain patents and licenses used in connection with its
   business, none of which are individually considered material to its
   business.

   Research and development

   A technical staff researches and develops new products.  Expertise of
   outside consultants is also utilized from time to time.  The amounts spent
   on product research and development activities were $300,000 in 1995,
   $200,000 in 1994, and $226,000 in 1993.  The expenditures were focused
   primarily in Peshtigo on research and development of new products for
   flexible packaging and specialty printing papers.

   Backlog

   As of December 31, 1995, the Company's backlog of orders was approximately
   $2,900,000, as compared to $10,500,000 and $3,200,000 at December 31, 1994
   and 1993 respectively.  Rising prices at the end of 1994 fueled the
   backlog, as customers anticipated further price increases.  Conversly, as
   prices were falling rapidly at the end of 1995, customers delayed order
   commitments.

   Customers

   Sales to Alco Standard Corporation represented over 10 percent of the
   Company's net sales, or $10,732,000 in 1995.  In 1994 and 1993, there were
   no customers which represented over 10 percent of the Company's net sales.

   Environmental matters

   Environmental regulations relating to air emissions, water discharges, and
   solid waste disposal continue to have a significant effect on the Company.
   The Environmental Protection Agency has indicated that they intend to have
   promulgated the "cluster rules" for the Company's category, "Paper Grade
   Sulphite", before Labor Day, 1996.  Once these rules have been finalized,
   a compliance time line of three years will become effective, and the
   Company will be able to assess total impact on its operation.  

   Management believes the new "Proposed" regulations that will affect
   ammonia-based sulphite pulping facilities have been modified from their
   original form.  It is expected that the modified proposed regulations will
   require the Company to change its bleaching sequence to eliminate
   elemental chlorine.  This requirement could mean the installation of
   another primary delignification process such as chlorine dioxide or
   oxygen.  Over the years, the Company has gathered data on the
   acceptability of alternative methods of bleaching. If these indications
   are true, the use of chlorine dioxide becomes a very good possibility for
   modification to the first stage of bleaching.  The Company, however, will
   still be faced with the replacement of the sodium hypochlorite which is
   used in our third bleaching stage.  This replacement is dictated by the
   chloroform emissions regulations that are in effect.  Modifications to
   this system could allow for the use of hydrogen peroxide.  

   The Wisconsin Department of Natural Resources (WDNR) has not acted on the
   Title V Air Operating Permit application that was submitted in 1994.  The
   Company will continue to evaluate changes and modifications based on the
   emissions factors as they are developed for the sulphite industry, and
   submit additional information to the WDNR as appropriate.  The Company
   anticipates that sometime during 1996, the Department will start to review
   the applications for the Title V Air Operating permit.  The Company
   discontinued use of the paper mill settling basins for effluent treatment
   in 1995.  All effluents from paper manufacturing operations are now
   combined with the pulp mill's discharge and directed to the Joint
   Industrial Municipal Wastewater Treatment (JWWTP) facility jointly owned
   with the City of Peshtigo, Wisconsin, and operated by the Company.  The
   additional loading to the JWWTP required the rebuilding of the underwater
   mechanisms and the installation of a baffle system in each of the three
   final clarifiers.  These changes, along with the installation of a
   settling polymer system, allowed the system to handle the increased
   loading and still meet the effluent limits for the facility.  

   Federal and state regulations require that a treatment facility have
   sufficient biological sludge storage for 180 days for storage of sludge 
   when the ground is frozen and land spreading operations are suspended. 
   The Company has negotiated an alternative approach to sludge storage with
   the City of Oconto, Wisconsin.  The City of Oconto has installed extra
   sludge handling and storage capacity at its municipal disposal facility. 
   The Company signed an agreement with the City of Oconto for the winter of
   1995-1996 to provide sludge storage for the Company.  This program is in
   lieu of installing the required 180 day storage equipment at the JWWTP
   facility.

   With the combination of the paper mill and pulp mill effluents now being
   directed to the JWWTP, it was necessary to submit a closure plan for the
   paper mill lagoon system to the WDNR.  On December 8, 1995, the WDNR
   approved the plan submitted by the Company.  This closure will be
   completed by December 31, 1996.  In regard to the Harbor Road solid waste
   disposal site, the Company is waiting for the WDNR to approve the closure
   plan for this facility.  The site has been rough graded and is now ready
   for application of the final venting layer and cover.  With the closure of
   the paper mill lagoon system during the summer of 1996, the sludge will be
   removed from the last basin and will be combined with bark from the pulp
   mill to form the compost for the final cover.  The WDNR is aware of the
   conditions at the solid waste disposal site, and it is anticipated that
   they will respond to our final closure plan in 1996.  

   The Storm Water Pollution Prevention Plan for the Company was submitted 
   to and accepted by the WDNR.  During 1996, the Company will establish
   procedures and train employees in the implementation of this requirement. 
   The Company does not anticipate any problems in complying with this
   regulation. 

   Management is currently evaluating all practical options with respect to
   compliance with applicable environmental regulations at the Company's
   sulphite pulping facilty.

   Plas-Techs

   On October 31, 1995, Plas-Techs received an Air Pollution Control
   operating permit.  The type of permit that was received is a Synthetic
   Minor Non-Part 70 which will allow Plas-Techs to grow and expand
   production within the limits established in the operating permit.  This
   operating permit expires on October 31, the year 2000, and Plas-Techs does
   not anticipate any problems meeting all of the requirements as established
   in the permit.  

   Employees

   As of December 31, 1995, the Company had 439 employees, of which 353 were
   covered by six-year collective bargaining contracts effective June 1,
   1995. 

   Item 2.  Properties

   The Company considers its manufacturing and converting facilities to be in
   good repair and suitable for the purpose intended.  

   In 1995, capital improvements included the installation of new combustion
   controls for the dual-fired boilers.  The wastewater treatment facility
   had an upgrade to the disinfection/dechlorination system, as well as a
   rebuild of the clarifiers underwater mechanisms, and installation of a
   baffle system.

   Other capital outlays were used to maintain or improve the current
   manufacturing processes.

   The Company owns 15,600 acres of timber and pulpwood lands, where
   harvesting practices provide improved wildlife habitat and watershed
   protection.  The majority of the lands are accessible to the general
   public for sporting and recreational facilities.  Part of these
   timberlands are no longer compatible with the Company's current fiber
   requirements.  They now provide less than 1 percent of the Company's
   annual wood requirements since the Company converted its pulp mill to 100
   percent poplar for its pulpwood source.  In September, 1995, the Company
   offered to sell 14,000 acres of timberland, representing 85 percent of the
   total land holdings and is currently negotiating the sale of such
   timberland with various parties whose bids for portions of such timberland
   have been accepted by the Company.  The sale of the timberland is expected
   to be consummated prior to May 1, 1996.

   The Company's headquarters and principal facilities are located in
   Peshtigo, Wisconsin.  Its subsidiary, Plas-Techs, Inc., is located in
   Oconto Falls, Wisconsin.

   Item 3.  Legal Proceedings

   The Company has no pending legal proceedings which are of material
   importance.

   Item 4.  Submission of matters to a vote of security holders

   No such matters were submitted to a vote of security holders in the fourth
   quarter, 1995.  

   PART II

   Item 5.  Market for the registrant's common stock and related security
   holder matters

   Badger Paper Mills, Inc. common shares are traded on the NASDAQ market
   under the symbol BPMI.  Shareholders of record as of February 26, 1996,
   total 562.  Stock price and dividend information is found on page 34 of
   this report, which is incorporated herein by reference.

   Item 6.  Selected financial data

   Information regarding selected financial data of the Company is presented
   on page 2 of this report.

   Item 7.  Management's discussion and analysis of financial condition and
   results of operations

                              Results of Operations

   The year 1995 may be best described as a strong starter but a slow
   finisher.  The fine paper division of our business saw its markets rise
   and fall in 1995.  The demand for product remained strong through the
   first three quarters, at which time customers started to adjust
   inventories which slowed orders.  The corresponding softening in prices
   reinforced the customers' decision to reduce inventory levels. 
   Significant downtime by the industry failed to correct the oversupply at
   the mill level, which continued to erode prices through year end.

   Significant inroads were made in securing specialty color business that is
   less sensitive to market fluctuations.  The development of the seven-point
   reply copy grade was a significant portion of the new product production
   that showed excellent efficiency and runnability in the marketplace.  The
   Company entered into an agreement to do additional customer roll sheeting
   for improved utilization of converting equipment as product mix was
   controlled to manufacture more rolls.  This agreement was successfully
   processed through 1995 and continues into 1996.

   The sale of all paper product inventory from the Company's former Dayton
   division was completed through a trade credit arrangement in the fourth
   quarter of 1995.  Revenue recognition from this sale will be recognized as
   trade credits are used over the next three years.

   Similar to the fine paper division, demand for value-added packaging and
   specialty papers produced by the Company's Yankee paper machine remained
   strong for the first three quarters of 1995, but weakened in the fourth
   quarter and into 1996.  The MG specialty and packaging papers division
   kept pace with the rising costs of raw materials by instituting positive
   price adjustments for flexible packaging papers.

   The Company's printing, waxing and specialty converting remains the
   backbone to the MG specialty and packaging papers division.  Threatened by
   various substrates being offered to the packaging industry, the Company's
   ability to use its strong technical expertise to design custom-made
   products allows it to be competitive in the marketplace.  Th Company is
   continually developing new applications and products that can fill limited
   product losses experienced each year.

   Because of interest from current and prospective customers, the Company's
   Board of Directors approved plans for the Peshtigo operations to pursue
   ISO certification.  ISO certification is looked upon in the industry as a
   major asset.  This certification effort assures customers that the Company
   is committed to offer quality products to a global market well into the
   next century.  Badger's quality policy is Badger Paper Mills, Inc. will
   continually meet our customer's needs in a responsible manner.

   The Company's wholly-owned subsidiary, Plas-Techs, Inc., doubled the
   physical size of its existing facility.  Construction of the project began
   during the first quarter, 1995, and was completed late in the second
   quarter, 1995.  Plas-Techs, Inc. business has continually increased in
   excess of 30 percent annually since acquisition, and had outgrown its
   original physical dimensions.  Additional equipment to support production
   demands was installed, existing equipment was relocated to provide for
   improved throughput, and off-site inventory was relocated to the facility.

                                  1995 vs. 1994

   Net sales for 1995 of $92,648,000 compared to $73,674,000 reported a year
   earlier, a 26 percent increase.  The volume of shipments decreased by 6
   percent while the strong market conditions fueled a 34 percent increase in
   average selling price.  The cut size paper market was extremely strong
   through the first three quarters of 1995, but slowed in the fourth
   quarter.  During 1995, the sale to unaffiliated customers of wet lap
   sulphite pulp produced in the pulp mill increased by $3,607,000 to
   $4,734,000 in 1995 from $1,127,000 in 1994.  This was a result of both
   increased pricing and increased shipments.

   Cost of sales of $83,890,000 for 1995 increased 15 percent from
   $72,949,000 for 1994.  Production from operations remained constant from
   1995 to 1994.  Fiber pricing continued its upward trend with strong demand
   through the first half of 1995.  Pulp prices have risen more than 140
   percent over a period of sixteen months.  The additional cost relating to
   pulp was in excess of $13,000,000.

   Gross margins for 1995 of $8,758,000 compare to $725,000 a year earlier,
   and reflect the positive impact of rising paper prices to offset the
   increased pulp prices.

   Selling and administrative expenses totaled $3,852,000 and $3,872,000 for
   1995 and 1994, respectively.

   Changes instituted in our manufacturing and converting facilities have
   resulted in increasing operating efficiencies and reducing production
   costs.  The operating results include a charge in the amount of $504,000
   taken as a result of the expense incurred from the voluntary early
   retirement incentive package offered to hourly workers in the first
   quarter, 1995.  This program allowed the Company to reduce the
   overstaffing brought about by changes implemented in the manufacturing
   process during 1994.

   The Company recognized an unrealized holding gain on trading securities of
   $549,000 in 1995 compared to an $846,000 unrealized holding loss in 1994. 
   Because the Company's investment securities are accounted for as a trading
   account, unrealized gains and losses are included in the Company's
   statement of operations in accordance with FASB No. 115.

   Interest expense for 1995 decreased $10,000 to $1,305,000 from $1,315,000
   reported in 1994.  The reduction in short-term borrowings in 1995 was
   offset by rising interest rates.  The Company's subsidiary, Plas-Techs,
   Inc., contributed approximately 3.2 percent to the consolidated revenue of
   the Company and was profitable for 1995.  

   The Company's effective tax rate was 32.3 percent in 1995 compared to a
   tax benefit of 40.4 percent in 1994.  The 1994 tax benefit results from
   operating losses and exceeds the statutory rates due to research and
   development credits, and tax-exempt interest.  Offsetting the 1994 tax
   benefits were state income taxes and other tax-affected items.   

                                  1994 vs. 1993

   The comparisons between 1994 and 1993 are substantially affected by the
   closure of the Company's Dayton Division.  On August 3, 1993, the Company
   announced that it would close its facility in Dayton, Ohio, and that a
   conditional agreement had been signed to sell the assets of the Dayton
   Division to an acquisition arm of Crosse Pointe Paper Corporation, St.
   Paul, Minnesota.  In the second quarter, 1993, the Company took a pre-tax
   restructuring charge of $3,400,000 to reflect the estimated loss on the
   sale of the Dayton Division based on an anticipated October 4, 1993,
   closing.  A delay in the closing until December 30, 1993, resulted in
   additional costs incurred of $450,000, which amount was added to the
   restructuring provision.  The restructuring charge totaled $3,850,000, and
   related primarily to operating losses at the Dayton Division prior to the
   actual disposal date and a write down of certain inventories to net
   realizable value, offset by the gain on the sale of the property, plant
   and equipment.  The reserve for restructuring of $59,000 at December 31,
   1994, was adequate to meet the remaining commitments related to the Dayton
   Division.

   Net sales for 1994 of $73,674,000 compared to $76,567,000 reported in
   1993, a 4 percent decrease.  The Dayton Division contributed $4,670,000 to
   net sales in 1993.  Volume of shipments from operations other than Dayton
   decreased 3 percent while product mix and positive pricing adjustments
   improved average selling price by 4 percent compared to a year earlier. 
   Weak demand in the domestic uncoated free sheet market reversed during the
   third quarter of 1994; however, the Company's order commitments hindered
   its ability to affect price increases intended to offset raw material
   costs and reflect the demand.  Uncoated free sheet inventories increased
   into the third quarter of 1994 as production exceeded sales.  Increased
   order activity for uncoated free sheet papers beginning in the third
   quarter of 1994 increased volume of shipments for the balance of the year,
   resulting in a 63 percent reduction of work in process and finished goods
   inventory to $3,286,000 at December 31, 1994 from $5,222,000 a year
   earlier.  During 1994, the Company increased the sale of wet lap sulphite
   pulp produced in the pulp mill.  Rising prices and increased demand for
   pulp fibers provided the opportunity for the Company to market its
   sulphite pulp.  Shipments of sulphite pulp during 1994 were in excess of
   its internal needs in the papermaking process.

   Cost of sales of $72,949,000 for 1994 decreased 2 percent from $74,272,000
   for 1993.  Dayton Division contributed $5,591,700 to cost of sales for the
   1993 period.  Production from operations other than Dayton in 1994
   decreased 3 percent from a year earlier due to lower net productivity. 
   Increased cost of pulpwood, purchased fiber and chemicals used in the pulp
   and paper processes, and increased operating and maintenance expenses
   incurred, adversely affected cost of sales.  A 10% reduction in the cost
   of energy partially offset the other increases in cost.  The cost of the
   Company's largest raw material ingredient, purchased fiber, increased 90
   percent between December, 1993 and December, 1994, and continued to
   increase into 1995.  The Company was unable to fully recover the rapidly
   escalating cost of this major raw material ingredient.

   Gross margins for 1994 of $725,000 compare to $2,295,000 a year earlier,
   and reflect the negative impact of rising purchased fiber costs.

   Selling and administrative expenses total $3,872,000 and $4,715,000 for
   1994 and 1993, respectively.  The decrease in 1994 when compared to a year
   earlier is primarily attributable to the exclusion of the Dayton Division
   expenses after June 1, 1993.  The Dayton Division contributed $633,000 to
   selling and administrative expenses in 1993.

   Operating losses for the year improved to $3,147,000 from a year earlier
   loss of $6,270,000.  However, the 1993 operating loss included the Dayton
   Division restructuring costs in the amount of $3,850,000.

   Other income and expense includes interest income of $425,000 for 1994
   compared to $517,000 reported a year earlier.  The decrease in interest
   income is due to lower availability of funds invested during 1994 compared
   to a year earlier.

   Interest expense for 1994 increased $340,000 to $1,315,000 from $975,000
   reported in 1993.  The escalation in interest rates adversely affected the
   cost of borrowing, particularly on the Company's outstanding line of
   credit, as well as on the outstanding debt related to the Company's
   industrial development revenue bonds.  On January 1, 1994, the Company
   adopted Financial Accounting Standards Board Statement No. 115, Accounting
   for Certain Investments in Debt and Equity Securities (FASB No. 115).  The
   Company recognized an unrealized holding loss on trading securities of
   $846,000 for 1994 in accordance with FASB No. 115.  At December 31, 1993,
   the cost of these trading securities approximated market value. 
   Miscellaneous income for 1994 of $643,000 compares to $279,000 a year
   earlier.  The 1994 amount includes the value received in excess of book
   value on the disposition of the SHARPrint/TM/ portion of the business.  

   The Company's effective tax benefit was 40.4 percent in 1994 compared to
   37.0 percent in 1993.  The 1994 tax benefit results from operating losses
   and exceeds the statutory rates due to operating losses, research and
   development credit, and tax-exempt interest.  Offsetting the 1994 tax
   benefits were state income taxes and other tax-affected items.    

   The Company's subsidiary, Plas-Techs, Inc., located in Oconto Falls,
   Wisconsin, contributed approximately 3.5 percent to the consolidated
   revenue of the Company and was profitable for 1994.

                         Liquidity and Capital Resources

   Capital Expenditures

   Capital expenditures were $2,705,000 in 1995 compared to $1,654,000 for
   1994 and $1,808,000 for 1993.  Depreciation and depletion in 1995 totaled
   $3,224,000, and compares to $3,323,000 and $3,723,000 reported in 1994 and
   1993, respectively.

   During 1995, capital expenditures included installation of new combustion
   controls for the dual-fired boilers.  The waste water treatment facility
   disinfection/dechlorination system was upgraded, as well as a rebuild of
   the clarifiers underwater mechanisms, and installation of a baffle system. 
   Plas-Techs doubled its existing physical facility with a building addition
   to accommodate increased business activity and its new duplex rewinder
   that was installed.

   The capital projects for 1996 are expected to approximate $6,670,000.  The
   Company's 1996 projects are directed toward the upgrading and improvement
   of existing manufacturing and converting facilities, and will include
   approximately $500,000 to maintain the integrity and reliability of the
   Company's electrical system.  The Company has begun the process of
   acquiring a metering size press for the Fourdrinier machine, which will
   expand the capabilities of such machine with respect to specialty-coated
   lightweight papers.  The new size press will allow coating to be applied
   onto one or both sides of the sheet simultaneously, giving the Company
   capabilities to infiltrate new markets.  The total cost of this project is
   estimated to be approximately $3,800,000 over the next two years.

   Capital Resources

   During 1995, the Company renegotiated a revolving credit agreement,
   reducing the credit line from $14,250,000 to $13,000,000, and reducing or
   eliminating certain financial covenants.  The renegotiated agreement
   expires April 30, 1998.  The agreement requires the Company to meet
   certain covenants, including the maintenance of tangible net worth of not
   less than $19,000,000 from the date of the agreement through November,
   1995, and then not less than $20,000,000 from December, 1995 through
   November, 1996.  Tangible net worth shall then be maintained at not less
   than $21,500,000 from December, 1996 through November, 1997, and from
   December 1997 thereafter shall not be less than $23,000,000.  In addition,
   the Company must maintain a current ratio of not less than 1.90:1. 
   Certain other covenants limit dividend and certain other restricted
   payments to amounts which do not result in a default and, after giving
   effect to any such payments, the aggregate amount of such payments
   commencing January 1, 1995 and thereafter cannot exceed 33 percent of the
   net income so accumulated from January 1, 1995.  At December 31, 1995, the
   Company was in compliance with the renegotiated agreement.  

   At December 31, 1995, $8,000,000 was outstanding under the revolving
   credit agreement referenced above, a $4,000,000 reduction from the amount
   of such borrowings at December 31, 1994.  On May 1, 1995, the Company
   redeemed $1,300,000 of the $4,000,000 aggregate principal amount of
   outstanding City of Oconto Falls, Wisconsin Variable Rate Demand Limited
   Obligate Industrial Revenue Funding Bonds Series 1992 (Plas-Techs, Inc. 
   Project).  The Company utilized surplus bond proceeds not needed to pay or
   reimburse project costs to reduce an equal amount of outstanding bonds. 
   The remaining portion of the Restricted Fund from Industrial Revenue Bonds
   was used to reimburse qualified project costs.

   In September, 1995, the Company issued notice of a proposed timberland
   sale of approximately 85 percent of the timberlands owned by the Company. 
   The Company had determined that the timberlands no longer were compatible
   with the fiber requirements of the Company's pulpmaking facility.  Bids
   were accepted through December 29, 1995, and on February 29, 1996,
   successful bidders were notified.  The Company expects the sales
   transaction to be completed prior to May 1, 1996.  The after-tax gain on
   sale of the timberlands is estimated at $2.00 per share on currently
   outstanding shares of the Company's common stock.

   Cash Flows

   Cash provided from operations was $6,586,000 in 1995 and $3,235,000 in
   1994.  The improved cash flow is attributable to the increased income
   generated, and $1,174,000 of net proceeds from sales of marketable
   securities.  Cash used in investing activities was $1,290,000 in 1995,
   compared to $817,000 in 1994, as a result of the increased capital
   additions during the year, offset by the utilization of the restricted
   funds from Industrial Development Revenue Bonds.

   Cash used in financing activities in 1995 was $5,836,000 compared to
   $2,108,000 in 1994.  The 1995 amount included reduction in the amounts
   under the revolving credit agreements in the amount of $4,000,000, and the
   payment of $1,411,000 in long-term debt.



   Item 8.  Financial Statements and Supplementary Data



                        REPORT OF INDEPENDENT ACCOUNTANTS



   To the Stockholders and   
      Board of Directors
   Badger Paper Mills, Inc.
   Peshtigo, Wisconsin

   We have audited the accompanying consolidated balance sheets of Badger
   Paper Mills, Inc. and Subsidiary as of December 31, 1995 and 1994, and the
   related consolidated statements of operations, changes in stockholders'
   equity and cash flows for each of the three years in the period ended
   December 31, 1995.  These financial statements are the responsibility of
   the Company's management.  Our responsibility 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 disclosures in the financial 
   statements.  An audit also includes assessing the accounting principles 
   used and significant estimates made by management, as well as evaluating
   the overall financial statement presentation.  We believe that our audits
   provide a reasonable basis for our opinion.

   In our opinion, the financial statements referred to above present fairly,
   in all material respects, the consolidated financial position of Badger 
   Paper Mills, Inc. and Subsidiary as of December 31, 1995 and 1994, and 
   the consolidated results of their operations and their cash flows for 
   each of the three years in the period ended December 31, 1995, in 
   conformity with generally accepted accounting principles.  

   As discussed in Note 1 to the consolidated financial statements, the
   Company adopted Statement of Financial Accounting Standards No. 115,
   Accounting for Certain Investments in Debt and Equity Securities in 1994.



                                                   COOPERS & LYBRAND, L.L.P.

   Milwaukee, Wisconsin
   February 5, 1996



   <PAGE>
     BADGER PAPER MILLS, INC. AND SUBSIDIARY

                           CONSOLIDATED BALANCE SHEETS
                            December 31, 1995 and 1994
                              (dollars in thousands)

    ASSETS                                          1995            1994   
    Current assets:
      Cash and cash equivalents                    $  835         $ 1,375
      Marketable securities                         3,138           3,397
      Accounts receivable, net                      6,955           6,771
      Deferred income taxes                         1,059           1,176
      Inventories                                   7,314           6,319
      Refundable income taxes                         173             299
      Prepaid expenses and other                      560             192
                                                   ------          ------
         Total current assets                      20,034          19,529

    Property, plant, equipment and
     timberland, net                               30,340          30,894
    Restricted funds from Industrial
     Development Revenue Bonds                         34           1,974
    Other assets                                    2,170           1,985
                                                   ------         -------
         Total assets                             $52,578         $54,382
                                                   ======          ======
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
      Revolving credit notes payable              $    --         $12,000
      Current portion of long-term debt               115             111
      Accounts payable                              5,823           5,111
      Accrued liabilities                           3,637           3,583
                                                  -------         -------
         Total current liabilities                  9,575          20,805

    Long-term debt                                 17,236          10,651
    Deferred income taxes                           2,604           2,218
    Other liabilities                               1,720           1,588

    Contingencies (Note 10)
    Shareholders' equity:
      Common stock, no par value; 4,000,000
        shares authorized, 2,160,000 shares
        issued                                      2,700           2,700
      Additional paid-in capital                      168             168
      Retained earnings                            20,633          18,080
      Treasury stock, at cost, 217,670 and
        203,170 shares in 1995 and 1994,
        respectively                               (2,058)         (1,828)
                                                   ------          ------
         Total shareholders' equity                21,443          19,120
                                                  -------         -------
         Total liabilities and shareholders'
           equity                                 $52,578         $54,382
                                                   ======          ======

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


   <PAGE>
     BADGER PAPER MILLS, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF OPERATIONS
                  for the years December 31, 1995, 1994 and 1993
                  (dollars in thousands, except per share data)


                                       1995           1994           1993   

    Net sales                         $92,648       $73,674        $76,567
    Cost of sales                      83,890        72,949         74,272
                                      -------       -------        -------
         Gross margin                   8,758           725          2,295

    Selling and administrative
     expenses                           3,852         3,872          4,715
    Early retirement expense              504            --             --
    Restructuring provision                --            --          3,850
                                      -------       -------        -------
         Operating Income (loss)        4,402        (3,147)        (6,270)
                                      -------       -------        -------
    Other income (expense):
      Interest and dividend
        income                            375           425            517
      Interest expense                 (1,305)       (1,315)          (975)
      Unrealized holding gain
        (loss) on trading
        securities                        549          (846)            --
      Miscellaneous, net                   39           643            279
                                      -------       -------        -------
                                         (342)       (1,093)          (179)
                                      -------       -------        -------
    Income (loss) before income
     taxes                              4,060        (4,240)        (6,449)
    Provision (benefit) for
     income taxes                       1,312        (1,713)        (2,388)
                                      -------       -------        -------
         Net income (loss)            $ 2,748       $(2,527)       $(4,061)
                                       ======       =======         ======
         Net earnings (loss) per
         share                          $1.41        $(1.29)        $(2.07) 
                                        =====         =====          =====

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

   <PAGE>
     BADGER PAPER MILLS, INC. AND SUBSIDIARY

            CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY
               for the years ended December 31, 1995, 1994 and 1993
                              (dollars in thousands)


                                          1995         1994          1993   
    Common stock:
      Balance, December 31             $ 2,700      $ 2,700       $ 2,700
                                        ------       ------        ------
    Additional paid-in capital
      Balance, December 31                 168          168           168
                                        ------       ------        ------
    Retained earnings:
      Balance, January 1                18,080       20,607        25,060
      Net income (loss)                  2,748       (2,527)       (4,061)
      Cash dividends of $.10 and
        $.20 in 1995 and 1993,
        respectively                      (195)          --          (392)
                                        ------       ------        ------
    Balance, December 31                20,633       18,080        20,607
                                        ------       ------        ------
    Treasury stock:
      Balance, January 1                (1,828)      (1,825)       (1,831)
      Acquired during the year
        (15,000 and 500 shares in
        1995 and 1994,
        respectively)                     (233)          (3)           --
      Issued during the year (500
        and 1,000 shares in 1995
        and 1993, respectively)              3           --             6
                                       -------      -------       -------
         Balance, December 31           (2,058)      (1,828)       (1,825)
                                       -------      -------       -------
    Shareholders' equity:
      Balance, December 31             $21,443      $19,120       $21,650
                                       =======      =======       =======

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

   <PAGE>
     BADGER PAPER MILLS, INC. AND SUBSIDIARY

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
               for the years ended December 31, 1995, 1994 and 1993
                              (dollars in thousands)

                                            1995         1994         1993   
    Cash flows from operating
     activities
      Net income (loss)                   $2,748     $(2,527)     $(4,061)
      Adjustments to reconcile to net
        cash provided by operating
        activities:
         Depreciation and depletion        3,224       3,323        3,723
         Deferred income taxes               503      (1,537)      (1,334)
         Net proceeds from sales of
          marketable securities,
           trading                         1,174         320           --
         Unrealized holding (gain) loss
           on marketable securities,
           trading                          (549)        846           --
         Realized loss (gain) on sale
           of marketable securities          159          --         (190)
         Gain on sale of property,
           plant and equipment                --        (460)        (505)
         Changes in assets and
           liabilities:
           Accounts receivable, net         (184)       (663)        (655)
           Inventories                      (995)      2,514        3,505
           Accounts payable and accrued
             liabilities                     801       1,269         (845)
           Refundable income taxes           126         557        1,960
           Other                            (421)       (407)         313
                                          ------      ------       ------
         Net cash provided by operating
           activities                      6,586       3,235        1,911
                                          ------      ------       ------
    Cash flows from investing
     activities:
      Additions to property, plant and
       equipment                          (2,705)     (1,654)      (1,808)
      Proceeds from sale of property,
       plant and equipment (related to
       Dayton Division in 1993)               --         750        4,000
      Purchases of marketable
       securities                           (870)         --       (4,024)
      Proceeds from sale of marketable
       securities                            345          --        5,910
      Restricted funds from Industrial
       Development Revenue Bond            1,940          87        4,579
                                          ------      ------      -------
         Net cash (used in) provided by
           investing activities           (1,290)       (817)       8,657
                                          ------      ------      -------
    Cash flows from financing
     activities:
      Payments on long-term debt          (1,411)       (108)      (8,105)
      Payments on revolving notes
       payable                            (4,000)     (2,000)      (2,250)
      Dividends paid                        (195)         --         (392)
    Acquisition of treasury stock, net      (230)         --           --
                                          ------      ------      -------
         Net cash used in financing
           activities                     (5,836)     (2,108)     (10,747)
                                          ------      ------      -------
    Net (decrease) increase in cash and
     cash equivalents                       (540)        310         (179)

    Cash and cash equivalents:
      Beginning of year                    1,375       1,065        1,244
                                          ------      ------      -------
      End of year                         $  835      $1,375      $ 1,065
                                           =====       =====       ======

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

   <PAGE>
     BADGER PAPER MILLS, INC. AND SUBSIDIARY

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

   1.     Summary of Significant Accounting Principles:

     Badger Paper Mills, Inc. and Subsidiary (the Company) operates in one
     industry segment which is the production of paper products.  The
     following is a summary of significant accounting policies. 

     a.   Consolidation Principles: The consolidated financial statements
          include the accounts of Badger Paper Mills, Inc. and its
          wholly-owned subsidiary.  All significant intercompany accounts and
          transactions have been eliminated.

     b.   Concentration of Credit Risk:  Financial instruments which
          potentially subject the Company to concentrations of credit risk
          consist principally of cash and cash equivalents and trade accounts
          receivable.  The Company places its cash and cash equivalents with
          high quality financial institutions.  The Company provides credit
          in the normal course of business to its customers.  These customers
          are located in the Midwestern region of the United States.  The
          Company performs ongoing credit evaluations of its customers and
          maintains allowances for potential credit losses and generally does
          not require collateral to support the accounts receivable balances.

     c.   Estimates:  Preparation of the consolidated 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 and disclosure of
          contingent liabilities at the date of the financial statements and
          the reported amounts of revenues and expenses during the reported
          period.  Actual results could differ from those estimates.

     d.   Cash Equivalents: For financial reporting purposes, the Company
          considers all highly liquid debt instruments purchased with a
          maturity of three months or less to be cash equivalents.

     e.   Marketable Securities: In 1994, the Company adopted Statement of
          Financial Accounting Standards No. 115, Accounting for Certain
          Investments in Debt and Equity Securities.  The Company has
          classified the majority of its investments as a trading portfolio
          at December 31, 1995 and 1994.  The portfolio consists of debt and
          equity securities.  This statement requires that trading portfolio
          marketable securities be reported at fair value, with unrealized
          gains and losses included in earnings. The remaining investments
          are classified as available for sale. This statement requires that
          available for sale portfolio marketable securities be reported at
          fair value, with unrealized gains and losses included as a
          component of equity.

     f.   Receivables: Accounts receivable are stated net of an allowance for
          discounts and doubtful accounts of $190,000 and $286,000 at
          December 31, 1995 and 1994, respectively. 

     g.   Inventories:  Substantially all inventories are valued at the lower
          of cost or market with cost being determined on the last-in,
          first-out (LIFO) basis.

     h.   Property, Plant, Equipment and Timberland: These assets are stated
          at cost, less depreciation and depletion.  Depreciation of plant
          and equipment is provided on the straight-line basis over the
          estimated useful lives of the assets, and depletion on timberland
          is determined on the cost method.

     i.   Income Taxes: Deferred income taxes are recognized for the tax
          consequences in future years of differences between the tax bases
          of assets and liabilities and their financial reporting amounts at
          each year-end based on enacted tax laws and statutory tax rates
          applicable to the periods in which the differences are expected to
          affect taxable income.  Valuation allowances are established when
          necessary to reduce deferred tax assets to the amount expected to
          be realized.  Income tax expense is the tax payable for the period
          and the change during the period in deferred tax assets and
          liabilities.

     j.   Revenue Recognition:  Revenue is recognized by the Company when
          goods are shipped.

     k.   Research and Product Development Costs:  Research and product
          development costs related to potential new products and
          applications are expensed when incurred.  These costs totaled
          $300,000, $200,000 and $226,000, for 1995, 1994 and 1993,
          respectively, and are included in cost of sales.

     l.   Net Earnings Per Share: Net earnings per share are computed based
          on the weighted average number of shares of common stock
          outstanding during the year (1,953,868 shares, 1,957,163 shares and
          1,957,176 shares in 1995, 1994 and 1993, respectively).

     m.   Restructuring: During 1993, the Company recorded a restructuring
          charge of $3,850,000 which related to the disposition of its Dayton
          division.  The restructuring charge related primarily to operating
          losses the plant incurred prior to the actual disposal date, and
          the writedown of certain inventories to net realizable value,
          offset by the gain on the sale of property, plant and equipment.

     n.   Early Retirement:  During 1995, the Company recorded a charge of
          $504,000 in connection with a voluntary early retirement incentive
          package offered to certain employees.
    
     o.   Reclassifications:  Certain reclassifications have been made to the
          1994 and 1993 financial statements to conform to the 1995
          presentation. 

   2.     Inventories: 

     The major classes of inventories at December 31, 1995 and 1994 are as
     follows (in thousands):

                                      1995           1994

                  Raw materials      $3,483         $3,033
                  Work-in-process     3,831          3,286
                                      -----          -----
                                     $7,314         $6,319
                                      =====          =====

     The current cost of inventories valued on the LIFO cost method
     approximated $12,709,000 and $11,799,000 at December 31, 1995 and 1994,
     respectively.  It is not practical to separate finished stock and
     work-in-process inventories.

   3.     Property, Plant, Equipment, and Timberland:

     The major classes of property, plant, equipment and timberland at
     December 31, 1995 and 1994 are as follows (in thousands):


                                  1995         1994
   Land                        $    117      $    117
   Buildings                      7,440         6,970
   Machinery, equipment and
    railroad siding              67,925        66,081
   Timberland                       533           533
   Construction-in-progress         480           152
                                 ------        ------
                                 76,495        73,853
   Accumulated depreciation
    and depletion                46,155        42,959
                                 ------        ------
                                $30,340       $30,894
                                 ======        ======

     At December 31, 1995 and 1994, $21,810,000 and $21,201,000,
     respectively, of fully depreciated assets were still in use.

   4.     Accrued Liabilities:

     Accrued liabilities at December 31, 1995 and 1994 are as follows (in
     thousands):


                                  1995        1994
   Compensation and related
    taxes                       $2,232        $2,117
   Profit sharing                  668           679
   Other                           737           787
                                 -----         -----
                                $3,637        $3,583
                                 =====         =====

   5.     Debt:

     Long-term debt at December 31, 1995 and 1994 consists of the following
     (in thousands):

                                             1995          1994
            Revolving credit agreement     $ 8,000      $     -  
            Industrial Development
             Revneue Bonds (IDRBs)           7,617          8,983
            Urban Development Action
             Grant                           1,734          1,779
                                           -------         ------
                                            17,351         10,762
            Current portion                    115            111
                                            ------         ------
                                           $17,236        $10,651
                                            ======         ======

     The Company's revolving credit facility provides for borrowings up to
     $13 million and extends to April 30, 1998.  A commitment fee of 3/8% is
     payable for unused amounts.  Interest on borrowings is at the LIBOR rate
     plus 1.5% (totaling 7.125% at December 31, 1995).  Borrowings are
     collateralized by inventory, accounts receivable, marketable securities
     and certain property, plant and equipment.

     Interest on the IDRBs is payable monthly at floating rates determined by
     remarketing agents (5.2% at December 31, 1995) and may be converted to
     fixed rates at certain dates in the future, at the Company's option, as
     specified in the agreements.  The average rate in 1995 for these bonds
     was 4.29%.

     The IDRBs are collateralized by bank letters of credit expiring in 1998. 
     The Company pays annual fees at 1% of the amount available under the
     letters of credit.  As amended in April 1995, the letters of credit
     require, among other items, the Company to maintain minimum tangible net
     worth of $20,000,000 through November 1996 ($21,500,000 from December
     1996 through November 1997 and $23,000,000 thereafter) and a current
     ratio of 1.9 to 1.0 or greater.  Additionally, dividends and treasury
     stock purchases are limited to 33% of the Company's cumulative net
     income from January 1, 1995.

     The Urban Development Action Grant is due in monthly installments of
     $15,437, including interest at an effective rate of approximately 6.5%,
     through maturity in April, 2000, at which time a final payment of
     $1,499,490 is due.  This grant is collateralized by certain machinery
     and equipment.

     Future maturities of long-term debt as of December 31, 1995, are as
     follows (in thousands):

                      Year ending December 31,
                                1996             $    115
                                1997                  119
                                1998                8,123
                                1999                  128
                                2000                1,627
                             Thereafter             7,239
                                                    -----
                                                  $17,351
                                                   ======

   6.     Income Taxes:

     The benefit for income taxes consists of the following (in thousands):

                                      1995        1994        1993
          Currently payable
           (refundable):
               Federal               $  800     $  (188)    $(1,063)
               State                      9          12           9
                                      -----      ------       -----
                                        809        (176)     (1,054)

          Deferred:
               Federal                  503      (1,538)     (1,268)
               State                      -           1         (66)
                                      -----      ------      ------
                                        503      (1,537)     (1,334)
                                      -----      ------      ------
                                     $1,312     $(1,713)    $(2,388)
                                      =====      ======      ======

     The significant differences between the effective tax rate and the
     statutory federal tax rates for 1995, 1994 and 1993 are as follows:

                                      1995       1994        1993
           Statutory Federal tax
            rate                     34.0%      (34.0)%      (34.0)%
               Tax-exempt interest   (1.3)       (1.1)        (1.1)
               State taxes            0.1         0.2         (0.5)
           Research & development
            credits, net              -          (6.4)         -
               Other                 (0.5)        0.9         (1.4)
                                     ----        ----         ----
               Effective tax rate    32.3%      (40.4)%      (37.0)%
                                     ====        ====         ====

     The components of the deferred tax assets and liabilities as of December
     31, 1995 and 1994, are as follows (in thousands):

                                                 1995      1994
               Deferred tax assets:
                    Accounts receivable      $     51 $     86
                    Inventories                   287       62
                    Accrued expenses              657      919
                    Deferred compensation         174      193
                    Postretirement benefits       471      379
                    Unrealized loss on
                    securities                    110      313
                    Federal net operating loss
                    carryforwards                   -      481
                    Tax credit carryforward     2,774    2,620
                    State net operating loss
                    carryforwards                 441      572
                    State credit carryforwards  1,003      859
                         Valuation allowance   (1,079)  (1,094)
                                                -----    -----
                                                4,889    5,390
               Deferred tax liabilities:
                    Fixed assets                6,434    6,432
                                                -----    -----
                         Net liability         $1,545   $1,042
                                                =====    =====

     For Federal income tax purposes, the Company has research and
     development credit carryovers and alternative minimum tax credit
     carryovers of $672,000 and $2,102,000, respectively.  For state income
     tax purposes, the Company has net operating loss and tax credit
     carryovers of $11,136,000 and $1,519,000, respectively.  Certain
     carryforwards expire at various times over the next 10-15 year period. 
     For financial reporting purposes, a valuation allowance has been
     established to the extent the state carry-forwards may expire unused.

    7.    Employee Benefits:

     The Company has profit sharing plans covering substantially all
     employees.  Contribution expenses associated with these plans were
     $668,000, $679,000 and $654,000 in 1995, 1994 and 1993, respectively.

    8.    Supplemental Cash Flow Information:

     At December 31, 1995, 1994 and 1993, accounts payable included $97,000,
     $132,000 and $111,000, respectively, for property and equipment
     additions.

     Cash paid (received) for interest and income taxes during 1995, 1994 and
     1993, was as follows (in thousands):

                                   1995       1994        1993
              Interest            $1,406     $1,340      $2,059
              Income taxes           683       (733)     (3,014)

    9.    Major Customers:

     Sales to a customer, which represents over 10% of the Company's net
     sales, were $10,732,000 in 1995.  In 1994 and 1993, there were no
     customers which represented over 10% of the Company's net sales.

   10.    Contingencies:

     The Company operates in an industry which is subject to laws and
     regulations at both federal and state levels relating to the protection
     of the environment. 

     The Company is subject to proposed United States Environmental
     Protection Agency cluster rules which combine the requirements of the
     Clean Air and Water Acts.  These proposed rules mandate compliance by
     1999 and may substantially alter the operations of the Company's
     sulphite pulp mill.  Due to the evolving nature of these rules and the
     related uncertainty, the Company is currently unable to quantify the
     cost of compliance or the cost of alternative operating options.

     The Company is responsible for the closure of a solid waste landfill,
     estimated to occur in 1997.  The Wisconsin Department of Natural
     Resources is presently considering the Company's proposed methods and
     materials to be used in closing the site.  The range of the costs
     associated with this closure, depending upon the methods and materials
     used, is estimated to be $200,000 to $1,000,000.  The Company is
     accruing the low end of the range over the remaining estimated life of
     the landfill.

     In addition, the Company is subject to various claims, the ultimate
     outcomes of which management cannot predict.  Management believes that
     the outcomes will not have a material adverse effect on the Company's
     consolidated financial position, results of operations or cash flows.

   <PAGE>

   PART III


   Item 9.     Changes in and disagreements with accountants on accounting
               and financial disclosure

   No such disagreements have occurred.

   Item 10.  Directors and executive officers of the registrant


   (a)    Directors of the registrant

     The information required by this item is incorporated by reference from
     the information included under the captions, "Election of Directors" and
     "Compliance with Section 16(a) of the Securities Exchange Act of 1934"
     set forth in the Company's definitive proxy statement for its 1996
     Annual Meeting of Shareholders.


   (b)    Executive officers of registrant

                                                         Period
                                                         Served In
   Name                      Age Office                  This Office

   Claude L. Van Hefty       57  President                1-1/3 Year
                                 Previously Vice
                                  President/Lignin
                                  Sales & Fiber
                                  Procurement             1-1/2 Year
                                 Previously Vice 
                                  President,
                                  General Manager
                                  Dayton Division         1 Year
                                 Director of
                                  Purchasing             13-1/4 Years

   Ralph C. Kinzel           61  Vice President of
                                  Environmental Affairs
                                  and Technical
                                  Services                3-1/4 Years
                                 Previously Manager of 
                                  Environmental Affairs 
                                  and Technical
                                  Services               12-3/4 Years

   Miles L. Kresl, Jr.       56  Vice President/
                                  Administration          2-3/4 Years
                                 Secretary               16-1/4 Years
                                 Treasurer               14-3/4 Years

   Steven A. Spangenberg     37  Vice President/ 
                                  Fine Paper Sales
                                  and Advertising         3-1/4 Years
                                 Previously 
                                  General Manager, 
                                  Plas-Techs
                                  subsidiary              1-1/2 Years
                                 Previously Director
                                  of Marketing            4-1/4 Years

   Mark C. Neumann           36  Vice President/
                                   MG Sales                3/4 Year
                                 Director of Marketing    2-3/4 Years
                                 Sales Representative     7-1/2 Years


           Officers are elected to hold office until the next annual meeting
           of shareholders following the annual meeting of shareholders or
           until their successors are elected and qualified.  There is no
           arrangement or understanding between any of the above officers or
           any other person pursuant to which such officer was selected for
           the office held.  No family relationship of any kind exists
           between the officers.

   ITEM 11.  Executive compensation

           The information required by this Item is incorporated by
           reference from the information included under the captions
           "Executive Compensation", "Report of Compensation Committee on
           Annual Executive Management Compensation", and "Compensation
           Committee Interlocks and Insider Participation" set forth in the
           Company's definitive proxy statement for its 1996 Annual Meeting
           of Shareholders.

   Item 12.  Security ownership of certain beneficial owners and management

   (a)     Security ownership of certain beneficial owners
           The information required by this Item is incorporated by
           reference from the information included under the caption, "Stock
           Ownership of Certain Beneficial Owners and Management", set forth
           in the Company's definitive proxy statement for its 1996 Annual
           Meeting of Shareholders.

   (b)     Security ownership of management
           The information required by this Item is incorporated by
           reference from the information included under the captions,
           "Stock Ownership of Certain Beneficial Owners and Management,"
           and "Election of Directors", set forth in the Company's
           definitive proxy statement for its 1996 Annual Meeting of
           Shareholders.

   Item 13.  Certain relationships and related transactions

           The information required by this Item is incorporated by
           reference from the information included under the caption,
           "Election of Directors", set forth in the Company's definitive
           proxy statement for its 1996 Annual Meeting of Shareholders.

   PART IV

   Item 14.  Exhibits, financial statement schedules and reports on From 8-K

   (a)    (1)  List of financial statements:

          The following is a list of the financial statements of Badger Paper
          Mills, Inc., together with the report of independent accountants,
          included in this report:

                                                                  Pages      

          Report of Independent Accountants  . . . . . . . . . . .  16
             Consolidated Balance Sheets,
               December 31, 1995 and 1994  . . . . . . . . . . . .  17
             Consolidated Statements of Operations
               for the years ended December 31, 1995, 1994
               and 1993. . . . . . . . . . . . . . . . . . . . . .  18
             Consolidated Statements of Changes in Shareholders'
               Equity for the years ended 
               December 31, 1995, 1994 and 1993  . . . . . . . . .  19
             Consolidated Statements of Cash Flows for the
               years ended December 31, 1995, 1994 and 1993  . . .  20
             Notes to Financial Statements . . . . . . . . . . . .  21

   (a)    (2)  List of financial schedules: 

                  The following is a listing of data submitted herewith:

                                                                  Page       

             Report of Independent Accountants on
                 Financial Statements Schedules  . . . . . . . . .  32
             Schedule for the years ended
                 December 31, 1995, 1994 and 1993:
                  II   Valuation and Qualifying
                           Accounts and Reserves . . . . . . . . .  33


   Financial statement schedules other than that listed above are omitted for
   the reason that they are either not applicable, not required, or that
   equivalent information has been included in the financial statements, the
   notes thereto or elsewhere herein.


   (a)    (3)  Exhibits

           (2) Agreement for sale and purchase of assets of Dayton mill of
               Badger Paper Mills, Inc. by Dayton Paper Corporation dated
               August 3, 1993.  (Incorporated by reference to Exhibit 2 to
               the Company's report on Form 10-Q for the quarter ended Sep-
               tember 30, 1993.)
           (3) (i)     Articles of Incorporation (Incorporated by reference
                       to Exhibit 3 to the Company's Annual Report on Form
                       10-K for the year ended, December 31, 1981)
               (ii)    By-laws as amended through December 19, 1994
                       (Incorporated by reference to Exhibit 3(ii) to the
                       Company's Annual Report on Form 10-K for the year ended
                       December 31, 1994)("1994 10-K").
           (4) (i)     U. S. $18,000,000 Credit Agreement by and among Badger
                       Paper Mills, Inc., NEW Riverview Holdings, Inc., Plas-
                       Techs, Inc., and Harris Trust and Savings Bank, indi-
                       vidually and as agent and PNC Bank, Ohio National
                       Association dated as of June 30, 1993.  (Incorporated
                       by reference to Exhibit 4 to the Company's report on
                       Form 10-Q for the quarter ended September 30, 1993).
               (ii)    Waiver and First Amendment thereto dated as of June
                       30, 1993 (Incorporated by reference to Exhibit 4(ii)
                       to the 1994 10-K).
               (iii)   Second Amendment thereto dated as of March 31, 1994
                       (Incorporated herein to Exhibit 4(a) to the Company's
                       Report on Form 10-Q for the quarter ended March 31,
                       1994).
               (iv)    Third Amendment thereto dated August 31, 1994
                       (Incorporated by reference to Exhibit 4(iv) to the
                       1994 10-K).
               (v)     Fourth Amendment thereto dated February 17, 1995 (In-
                       corporated by reference to Exhibit 4(v) to the 1994
                       10-K).
               (vi)    Fifth Amendment thereto dated as of April 28, 1995
                       (Incorporated herein to Exhibit 4 to the Company's
                       Report on Form 10-Q for the quarter ended June 30,
                       1995).
          (10) Material Contracts:**
               (i)     Stock Purchase Agreement dated February 1, 1993, be-
                       tween the Company and Robert Strasburg.  (Incorporated
                       by reference to Exhibit 10(i) to the Company's Annual
                       Report on Form 10-K for the year ended December 31,
                       1992) ("1992 10-K").
               (ii)    Supplemental Executive Retirement Plan dated December
                       18, 1992.  (Incorporated by reference to Exhibit 10
                       (ii) to the 1992 10-K).
               (iii)   Employment Agreement dated January 25, 1993, between
                       the Company and Robert Strasburg.  (Incorporated by
                       reference to Exhibit 10 (iv) to the 1992 10-K).
               (iv)    Health Insurance Retirement Benefit Agreement dated
                       July 22, 1992, between the Company and Edwin A. Meyer,
                       Jr. (Incorporated by reference to Exhibit 10(iv) to
                       the Company's Report on Form 10-K for the year ended
                       December 31, 1993) ("1993 10-K").
               (v)     Health Insurance Retirement Benefit Agreement dated
                       July 22, 1992, between the Company and Bennie C.
                       Burish. (Incorporated by reference to Exhibit 10(v) to
                       the 1993 10-K).
               (vi)    Key Executive Employment and Severance Agreement dated
                       August 1, 1994 between the Company and Robert
                       Strasburg.  (Incorporated by reference to Exhibit
                       10(a) to the Company's Report on Form 10-Q for the
                       quarter ended September 30, 1994).
               (vii)   Executive Employment Agreement dated March 1, 1995,
                       between the Company and Claude L. Van Hefty (Incorpo-
                       rated by reference to Exhibit 10(vii) to the 1994 10-
                       K).

          (23) Consent of Independent Public Accountants
          (27) Financial Data Schedule (EDGAR version only)
          (99) Definitive Proxy Statement for 1996 Annual Meeting of Share-
               holders (to be filed with the Commission under Regulation 14A
               and incorporated by reference herein to the extent indicated
               in this Form 10-K)


        **   Each of the "material contracts" represents a management
             compensatory agreement or arrangement.


   (b)    Reports on Form 8-K: 


             None.


   <PAGE>



   REPORT OF INDEPENDENT ACCOUNTANTS




   To the Stockholders and
       Board of Directors
   Badger Paper Mills, Inc.
       and Subsidiary
   Peshtigo, Wisconsin


   Our report on the financial statements of Badger Paper Mills, Inc. and
   Subsidiary is included on page 16 of this Form 10-K.  In connection with
   our audits of such financial statements, we have also audited the related
   financial statement schedule listed in the index on page 30 of this Form
   10-K.

   In our opinion, the financial statement schedule referred to above, when
   considered in relation to the basic consolidated financial statements
   taken as a whole, presents fairly, in all material respects, the
   information required to be included therein.



                                           COOPERS & LYBRAND, L.L.P.  



   Milwaukee, Wisconsin
   February 5, 1996.

   <PAGE>


   Schedule II - Valuation and Qualifying Accounts and Reserves
   for the years ended December 31, 1995, 1994 and 1993 (in thousands)


   <TABLE>
   <CAPTION>

                 Column A               Column B      Column C        Column D     Column E
                                                     Additions
                                       Balance at    Charged to                   Balance at
                                        Beginning    Costs and                       End of
               Description               of Year      Expenses       Deductions      Year
 
    <S>                                 <C>             <C>           <C>           <C> 
    Deducted in the balance sheet
     from the assets to which they
     apply:
      Allowance for discounts and
        doubtful accounts:
       Year ended December 31, 1995:
         Doubtful accounts               $ 233           $ 661        $  758 (A)    $ 136   
         Discounts                          53           1,052         1,051 (B)       54   
                                         -----           -----         -----        -----   
                                         $ 286          $1,713        $1,809        $ 190   
                                         =====           =====         =====        =====

       Year ended December 31, 1994: 
         Doubtful accounts              $  171          $  772        $  710 (A)    $ 233   
         Discounts                          38             825           810 (B)       53   
                                         -----           -----        ------        -----   
                                        $  209          $1,597        $1,520        $ 286   
                                         =====          ======        ======        =====   

       Year ended December 31, 1993:
         Doubtful accounts              $  194          $  201        $  224 (A)    $ 171   
         Discounts                          34             927           923 (B)       38   
                                         -----           -----        ------        -----   
                                        $  228          $1,128        $1,147        $ 209   
                                         =====           =====        ======        =====   

   <FN>
   (A) Write-off of uncollectible accounts.
   (B) Discounts taken and allowed.

   Column C(2) has been omitted as the answer would be "None."
   </TABLE>


   <PAGE>

                             STOCKHOLDER INFORMATION


   Market makers:                            Stock transfer agent:
   Robert W. Baird & Co., Inc.               Harris Trust & Savings Bank
   Kemper Securities Group, Inc.             111 West Monroe Street
   Herzog, Heine, Geduld, Inc.               Chicago, Illinois  60690
   S. J. Wolfe & Co.


   Stock price and dividend information:  The following table presents high
   and low sales prices of the Company's Common Stock in the indicated
   calendar quarters, as reported on the NASDAQ National Market System.  


   Quarterly Price Ranges of Stock:
                                     
                                      1995                   1994     
     Quarter                      High      Low        High        Low

     First                      $15.25   $ 9.25      $15.25     $11.00
     Second                      15.75    14.00       14.00      11.38
     Third                       16.25    14.44       12.50      11.00
     Fourth                      16.75    15.00       11.75       8.50


   Quarterly Dividends Per Share:  Dividend rates are established by the
   Board of Directors. The Company's line of credit maintains certain
   covenants which control the payment of dividends.  See "Management's
   Discussion and Analysis -- Liquidity and Capital Resources -- Capital
   Resources."


     Quarter                               1995                   1994

     First                                 $  -                   $  -
     Second                                   -                      -
     Third                                  .05                      -
     Fourth                                 .05                      -
                                           ----                   ----
     Total                                 $.10                   $  -
                                           ====                   ====


   Annual meeting of shareholders:
   The annual meeting of shareholders of Badger Paper Mills, Inc. will be
   held at The Best Western Riverfront Inn, 1821 Riverside Avenue, Marinette,
   Wisconsin, on Tuesday, May 14, 1996, at 10:00 a.m.


   <PAGE>
                             DIRECTORS AND OFFICERS


    Board of directors:                  Corporate officers:
    Edwin A. Meyer, Jr.                  Claude L. Van Hefty     
      Chairman of the Board                President/COO/CEO     
      Badger Paper Mills, Inc.              
                                         Ralph C. Kinzel     
    Bennie C. Burish                       Vice President of
      Retired, Former President              Environmental and
      Former Chief Operating                 Technical Service
       Officer
      Badger Paper Mills, Inc.           Miles L. Kresl, Jr.
                                           Vice President/ 
    Thomas J. Kuber                          Administration,        
      President,                             Treasurer and    
        K&K Warehousing;                     Corporate Secretary   
      CEO, Great Lakes Pulp &
        Fibre, Inc.                      
                                         Mark C. Neumann   
    Earl R. St. John, Jr.                  Vice President/
      Owner and President                    MG Sales 
      Earl St. John Forest
        Products, Inc.                   Steven A. Spangenberg
      St. John Trucking, Inc.              Vice President/Fine
                                             Paper Sales and 
    Ralph D. Searles                         Advertising
      President and CEO,              
        Great Northern Corp.

    Claude L. Van Hefty
      President/COO/CEO
      Badger Paper Mills, Inc.


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


                                             BADGER PAPER MILLS, INC.


                                             /s/ Claude L. Van Hefty
                                             Claude L. Van Hefty, President
                                             (Chief Executive Officer)


                                             /s/ Miles L. Kresl, Jr.
                                             Miles L. Kresl, Jr.
                                             Vice President/Administration
                                             Corporate Secretary, Treasurer
                                             (Principal Financial Officer)


                                             /s/ George J. Zimmerman
   DATE:  March 29, 1996                     George J.  Zimmerman
                                             Controller
                                             (Chief Accounting 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:


    /s/ Edwin A. Meyer, Jr.
    Edwin A. Meyer, Jr.    
    Chairman of the Board  
    Date:  March 29, 1996  


    /s/ Bennie C. Burish
    Bennie C. Burish
    Director
    Date:  March 29, 1996


    /s/ Thomas J. Kuber
    Thomas J. Kuber
    Director
    Date:  March 29, 1996


    /s/ Earl R. St. John, Jr.
    Earl R. St. John, Jr.
    Director
    Date:  March 29, 1996


    /s/ Ralph D. Searles
    Ralph D. Searles
    Director
    Date:  March 29, 1996


    /s/ Claude L. Van Hefty
    Claude L. Van Hefty
    Director
    Date:  March 29, 1996

   <PAGE>
                                  EXHIBIT INDEX

                            BADGER PAPER MILLS, INC.
                           ANNUAL REPORT ON FORM 10-K

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995


   Exhibit No.                    Description

   (2)      Agreement for sale and purchase of assets of Dayton mill of
            Badger Paper Mills, Inc. by Dayton Paper Corporation dated August
            3, 1993.  (Incorporated by reference to Exhibit 2 to the
            Company's report on Form 10-Q for the quarter ended September 30,
            1993.)

   (3)      (i)   Articles of Incorporation (Incorporated by reference to
                  Exhibit 3 to the Company's Annual Report on Form 10-K for
                  the year ended, December 31, 1981)

            (ii)  By-laws as amended through December 19, 1994 (Incorporated
                  by reference to Exhibit 3(ii) to the Company's Annual
                  Report on Form 10-K for the year ended December 31,
                  1994)("1994 10-K").

   (4)      (i)   U. S. $18,000,000 Credit Agreement by and among Badger
                  Paper Mills, Inc., NEW Riverview Holdings, Inc., Plas-
                  Techs, Inc., and Harris Trust and Savings Bank, indi-
                  vidually and as agent and PNC Bank, Ohio National
                  Association dated as of June 30, 1993.  (Incorporated by
                  reference to Exhibit 4 to the Company's report on Form 10-
                  Q for the quarter ended September 30, 1993).

            (ii)  Waiver and First Amendment thereto dated as of June 30,
                  1993 (Incorporated by reference to Exhibit 4(ii) to the
                  1994 10-K).

            (iii) Second Amendment thereto dated as of March 31, 1994 (In-
                  corporated herein to Exhibit 4(a) to the Company's Report
                  on Form 10-Q for the quarter ended March 31, 1994).

            (iv)  Third Amendment thereto dated August 31, 1994 (Incorpo-
                  rated by reference to Exhibit 4(iv) to the 1994 10-K).

            (v)   Fourth Amendment thereto dated February 17, 1995 (In-
                  corporated by reference to Exhibit 4(v) to the 1994 10-K).

            (vi)  Fifth Amendment thereto dated as of April 28, 1995
                  (Incorporated herein to Exhibit 4 to the Company's Report
                  on Form 10-Q for the quarter ended June 30, 1995).

  (10)      Material Contracts:**

            (i)   Stock Purchase Agreement dated February 1, 1993, between
                  the Company and Robert Strasburg.  (Incorporated by
                  reference to Exhibit 10(i) to the Company's Annual Report
                  on Form 10-K for the year ended December 31, 1992) ("1992
                  10-K").

            (ii)  Supplemental Executive Retirement Plan dated December 18,
                  1992.  (Incorporated by reference to Exhibit 10 (ii) to
                  the 1992 10-K).

            (iii) Employment Agreement dated January 25, 1993, between the
                  Company and Robert Strasburg.  (Incorporated by reference
                  to Exhibit 10 (iv) to the 1992 10-K).

            (iv)  Health Insurance Retirement Benefit Agreement dated July
                  22, 1992, between the Company and Edwin A. Meyer, Jr.
                  (Incorporated by reference to Exhibit 10(iv) to the
                  Company's Report on Form 10-K for the year ended December
                  31, 1993) ("1993 10-K").

            (v)   Health Insurance Retirement Benefit Agreement dated July
                  22, 1992, between the Company and Bennie C. Burish.
                  (Incorporated by reference to Exhibit 10(v) to the 1993
                  10-K).

            (vi)  Key Executive Employment and Severance Agreement dated
                  August 1, 1994 between the Company and Robert Strasburg. 
                  (Incorporated by reference to Exhibit 10(a) to the
                  Company's Report on Form 10-Q for the quarter ended
                  September 30, 1994).

            (vii) Executive Employment Agreement dated March 1, 1995,
                  between the Company and Claude L. Van Hefty (Incorporated
                  by reference to Exhibit 10(vii) to the 1994 10-K).

     (23)   Consent of Independent Public Accountants

     (27)   Financial Data Schedule (EDGAR version only)

     (99)   Definitive Proxy Statement for 1996 Annual Meeting of Share-
            holders (to be filed with the Commission under Regulation 14A and
            incorporated by reference herein to the extent indicated in this
            Form 10-K)

   **       Each of the "material contracts" represents a management
            compensatory agreement or arrangement.