<PAGE>
<PAGE>
SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [x]
Filed by a Party other than the Registrant
Check the appropriate box:
[x] Preliminary Proxy Statement [ ] Confidential, For Use of
the Commission Only (as permitted by
Rule 14a-6(e)(2)
[ ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
BHA Group, Inc.
________________________________________________________________________________
(Name of Registrant as Specified in Its Charter)
________________________________________________________________________________
(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
________________________________________________________________________________
(2) Aggregate number of securities to which transaction applies:
________________________________________________________________________________
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
________________________________________________________________________________
(5) Total fee paid:
________________________________________________________________________________
[ ] Fee paid previously with preliminary materials
________________________________________________________________________________
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
________________________________________________________________________________
(2) Form, Schedule or Registration Statement no.:
________________________________________________________________________________
(3) Filing Party:
________________________________________________________________________________
(4) Date Filed:
________________________________________________________________________________
<PAGE>
<PAGE>
BHA GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TUESDAY, FEBRUARY 18, 1997
To the Stockholders of
BHA Group, Inc.
Notice is hereby given that the Annual Meeting of Stockholders of BHA
Group, Inc. (the "Company") will be held at the office of the Company, Second
(2nd) Floor, Brywood Office Tower, 8800 East 63rd Street, Kansas City, Missouri
64133, on Tuesday, February 18, 1997, at 10:30 a.m., Kansas City time, for the
following purposes:
1. To elect directors for the ensuing year;
2. To approve an amendment to the Company's Certificate of Incorporation
changing the Company's name to BHA Group Holdings, Inc;
3. To ratify the selection of KPMG Peat Marwick as independent auditors
of the Company for the fiscal year ending September 30, 1997; and
4. To transact such other business as may properly come before the
meeting or any adjournment thereof.
The close of business on January 7, 1997 has been designated as the
record date for the determination of stockholders entitled to notice of and to
vote at the Annual Meeting of Stockholders or any adjournments thereof.
MANAGEMENT REQUESTS ALL STOCKHOLDERS TO SIGN AND DATE THE ENCLOSED FORM
OF PROXY AND RETURN IT IN THE POSTAGE PAID, SELF-ADDRESSED ENVELOPE PROVIDED FOR
YOUR CONVENIENCE. PLEASE DO THIS WHETHER OR NOT YOU PLAN TO ATTEND THE ANNUAL
MEETING OF STOCKHOLDERS. SHOULD YOU ATTEND, YOU MAY, IF YOU WISH, WITHDRAW YOUR
PROXY AND VOTE YOUR SHARES IN PERSON.
By Order of the Board of Directors
James C. King
Secretary
Kansas City, Missouri
January 15, 1997
<PAGE>
<PAGE>
BHA GROUP, INC.
------------
PROXY STATEMENT
Dated January 15, 1997
For Annual Meeting of Stockholders
to be held Tuesday, February 18, 1997
This Proxy Statement is furnished by the Board of Directors (the "Board")
of BHA Group, Inc. (the "Company") in connection with the solicitation of
proxies to be voted at the Annual Meeting of Stockholders of the Company which
will be held at the principal executive offices of the Company, Second (2nd)
Floor, Brywood Office Tower, 8800 East 63rd Street, Kansas City, Missouri 64133,
on Tuesday, February 18, 1997 at 10:30 a.m., Kansas City time, and all
adjournments thereof (the "Annual Meeting"). The close of business on January 7,
1997 has been designated as the record date (the "Record Date") for the
determination of stockholders entitled to notice of and to vote at the Annual
Meeting.
Any proxy delivered pursuant to this solicitation may be revoked, at the
option of the person executing the proxy, at any time before it is exercised,
either by delivering a signed revocation to the Secretary of the Company at any
time prior to the Annual Meeting, or, at the Annual Meeting, by delivering a
signed revocation to the Chairman of the meeting at any time prior to the
commencement of the voting thereon. A duly executed proxy conferring different
authority than an earlier proxy of the same stockholder will constitute a
revocation of such earlier proxy.
UNLESS OTHERWISE SPECIFIED IN THE PROXY (AND EXCEPT FOR "BROKER NON-VOTES"
DESCRIBED BELOW), STOCK REPRESENTED BY PROXIES WILL BE VOTED (i) FOR THE
ELECTION OF MANAGEMENT'S NOMINEES FOR DIRECTORS; (ii) FOR THE PROPOSED AMENDMENT
TO THE COMPANY'S CERTIFICATE OF INCORPORATION (THE "CERTIFICATE"); (iii) FOR THE
RATIFICATION OF THE SELECTION OF KPMG PEAT MARWICK AS INDEPENDENT AUDITORS OF
THE COMPANY FOR THE FISCAL YEAR ENDING SEPTEMBER 30, 1997 ("FISCAL 1997"); AND
(iv) IN THE DISCRETION OF THE PROXYHOLDERS WITH RESPECT TO SUCH MATTERS AS MAY
COME BEFORE THE ANNUAL MEETING.
The cost of soliciting proxies will be borne by the Company. In addition
to the use of the mails, proxies may be solicited personally or by telephone by
some of the regular employees of the Company. The Company does not expect to pay
any compensation for the solicitation of proxies, but may reimburse brokers and
other persons holding stock in their names, or in the names of nominees, for
their expense incurred in sending proxy materials to their principals and
obtaining their proxies. On or about January 15, 1997, this Proxy Statement and
the accompanying form of proxy are to be mailed to each stockholder of record as
of the Record Date.
As of December 1, 1996, the Company had outstanding 5,993,127 shares of
the Company's $.01 par value common stock (the "Common Stock"), the Company's
only class of voting securities outstanding. Each share of Common Stock
outstanding entitles the holder thereof to one vote. The majority of all the
outstanding shares of Common Stock constitutes a quorum at the Annual Meeting.
Shares of Common Stock represented by proxies that reflect abstentions and
"broker non-votes" (i.e. Common Stock
<PAGE>
<PAGE>
represented at the Annual Meeting by proxies held by brokers or nominees as to
which (i) instructions have not been received from the beneficial owners or
persons entitled to vote and (ii) the broker or nominee does not have the
discretionary voting power on a particular matter) will be counted as a vote
represented and voted at the Annual Meeting for purposes of determining the
number of votes required to approve a proposal. Shares of Common Stock
represented by proxies that withhold authority to vote for a nominee for
election as a director and broker non-votes will not be counted as a vote
represented and voted at the Annual Meeting for purposes of determining the
number of votes required to elect such nominee.
ELECTION OF DIRECTORS
(PROPOSAL NO. 1)
NOMINEES FOR ELECTION OF DIRECTORS.
Nine directors are to be elected at the Annual Meeting, each to hold
office until the next annual meeting of stockholders and until his successor is
duly elected and qualified. In voting for directors, for each share of Common
Stock held of record, such stockholder is entitled to cast one vote either in
favor of or against each candidate, or to abstain from voting on any or all
candidates. IT IS INTENDED THAT SHARES REPRESENTED BY THE ENCLOSED FORM OF PROXY
WILL BE VOTED IN FAVOR OF THE ELECTION OF ALL OF THE NOMINEES NAMED BELOW AS
DIRECTORS, ALL OF WHOM ARE NOW DIRECTORS OF THE COMPANY, UNLESS OTHERWISE
SPECIFIED IN SUCH PROXY. If any of the nominees should become unavailable for
election, the shares represented by such proxies will be voted for such
substitute nominees as may be nominated by the Board. The election of directors
requires the affirmative vote of the holders of a plurality of the shares
present or represented and entitled to vote at the Annual Meeting.
The following information is given with respect to the nominees:
<TABLE>
<CAPTION>
DIRECTOR
NAME PRINCIPAL OCCUPATION SINCE
<S> <C> <C>
Lamson Rheinfrank, Jr. Chairman of the Board of the Company(1) 1986
Michael T. Zak Vice Chairman of the Board of the Company(2) 1986
James E. Lund Chief Executive Officer and President 1986
of the Company(3)
James J. Thome Executive Vice President of the Company(4) 1990
James C. King Senior Vice President and Secretary of the 1995
Company(5)
Don H. Alexander President and Chief Executive Officer of Alexander 1986
& Associates, Inc.
Robert D. Freeland Chairman of the Board of Havens Steel Company(7) 1988
Thomas A. McDonnell President and Chief Executive Officer of DST 1993
Systems, Inc.(8)
</TABLE>
2
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C>
Richard C. Green Chairman, President and Chief Executive 1995
Officer of UtiliCorp United, Inc. (9)
</TABLE>
_____________________
(1) Mr. Rheinfrank, age 56, has been Chairman of the Board of the Company
since its inception in July 1986. He was the Chief Executive Officer and
Chairman of the Board of Directors of Standard Havens, Inc. ("Standard
Havens") from 1967 until May 1989 when Standard Havens, which had been an
affiliate of the Company, was acquired by a subsidiary of Raytheon
Company. Mr. Rheinfrank also serves as a Director of Commerce Bank of
Kansas City and as an advisory director of Havens Steel Company and U.S.
Engineering Co.
(2) Mr. Zak, age 46, has been a Director of the Company since its inception
in July 1986. He has been Vice Chairman of the Company since April 1993
and served as President and Chief Executive Officer from July 1986 to
March 1993. From 1980 to July 1986, he was employed by Standard Havens in
various capacities, first as Controller of the Baghouse Accessories
Division and then as Vice President and Treasurer.
(3) Mr. Lund, age 47, has been a Director of the Company since its inception
in July 1986. He has been President and Chief Executive Officer of the
Company since April 1993 and prior thereto, served as Executive Vice
President. Mr. Lund joined Standard Havens in 1979 as Marketing Manager
of the Baghouse Accessories Division, and served as Manager of Sales and
Marketing from 1980 to 1985, at which time he assumed the position of
Vice President and General Manager of the Baghouse Accessories Division
of Standard Havens.
(4) Mr. Thome, age 41, has been Executive Vice President of the Company since
April 1993 and has been a Director of the Company since February 1990. He
joined the Company in 1986 as National Sales Manager and became Vice
President of the Company in November 1988. Prior to his employment with
the Company, Mr. Thome served in various positions with Standard Havens
from 1979 to 1986.
(5) Mr. King, age 46, has been Senior Vice President and Secretary since
April 1993 and has been a Director of the Company since November 1995. He
joined the Company as Secretary, Treasurer and Chief Financial Officer in
July 1987. From 1983 to 1987 he was Assistant Treasurer and Corporate
Controller of C.J. Patterson Company, a producer of specialty chemicals
for the baking industry. Prior thereto, he was employed as a senior
manager by Mobay Chemical Corporation.
(6) Mr. Alexander, age 58, has been a Director of the Company since its
inception in July 1986. Mr. Alexander is President of Alexander &
Associates, a private investment group; Chairman of EMCO Specialty
Products, Inc; Chairman of Huebert Fiberboard Company of Booneville, MO,
a manufacturing company of fiberboard; Chairman and President of Ventaire
Corporation, a Tulsa-based metal fabrication company; and a Director of
Bank of Blue Valley, a commercial banking company in Overland Park,
Kansas. Prior to 1988 he was President of Perkins Industries, Inc. of
Lenexa, Kansas, a manufacturer of adhesives and resins.
3
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<PAGE>
(7) Mr. Freeland, age 59, has been a Director of the Company since November
1988. He is Chairman of the Board of Havens Steel Company of Kansas City,
Missouri, a structural steel fabricator and erector. From 1983 to 1993,
he was President and Chief Executive Officer and a Director of Havens
Steel Company. Mr. Freeland is a past President and Board Member of the
Central Fabricators Association of Chicago, Illinois. He is the First
Vice Chairman and a Director of the American Institute of Steel
Construction of Chicago, Illinois and is a Director of the Robotics
Container Handling Co. of Belleview, Washington.
(8) Mr. McDonnell, age 51, has been a Director of the Company since December
1993. Mr. McDonnell is the President and Chief Executive Officer of DST
Systems, Inc. ("DST"), a company providing information processing and
computer software services primarily to mutual funds and financial
service organizations. He has been employed by DST in various capacities
since 1973. He is a Director of Informix, Inc., First of Michigan Capitol
Corp. and Nellcor Puritan-Bennett, Inc.
(9) Mr. Green, age 42, has been a Director of the Company since November
1995. Mr. Green is Chairman of the Board of Directors and Chief Executive
Officer of UtiliCorp United, Inc. ("UtiliCorp United"), a global energy
services company. His association with UtiliCorp United began in 1976
with assignments in a variety of operating and staff positions involving
plant supervision, legal, finance and treasury functions. He was
appointed Chief Executive Officer of UtiliCorp United in 1985 and
Chairman of the Board of Directors of UtiliCorp United in 1989. He is a
Trustee of the Center for Strategic and International Studies and the
Urban Institute in Washington, DC; a member of the boards of directors of
Commerce Bank of Kansas City and the Midwest Research Institute; and
Chairman of the Greater Kansas City Community Foundation and affiliated
trusts.
COMMITTEES AND MEETINGS OF THE BOARD.
During the Company's fiscal year ended September 30, 1996 ("Fiscal 1996"),
the Board held one special and four regular meetings. The Board has an Audit
Committee and a Compensation Committee, but does not have a Nominating
Committee. The Audit Committee consists of Messrs. Alexander, Freeland and
McDonnell. In addition to Messrs Alexander, Freeland and McDonnell, Mr. Green
will serve on the Audit Committee starting in Fiscal 1997. During Fiscal 1996,
the Audit Committee met 2 times. The Audit Committee reviews and reports to the
Board with respect to various auditing and accounting matters, including the
nomination of the Company's independent public accountants, the scope of audit
procedures, general accounting policy matters, the Company's internal audit
function, and the performance of the Company's independent public accountants.
During Fiscal 1996, the Compensation Committee was comprised of Messrs.
Alexander, Freeland and McDonnell. Mr. Green will serve on the Compensation
Committee starting in Fiscal 1997. During Fiscal 1996, the Compensation
Committee met once. The Compensation Committee is responsible for the review and
approval of the annual corporate compensation guidelines, management bonuses,
executive officer compensation, and the potential levels of contribution to or
awards under the Company's Employee Stock Option Plan ("ESOP"), 401(k) plan
and the Company's Incentive Stock Option Plan (the "Plan") for the ensuing year.
During Fiscal 1996, all of the directors attended at least 75% of the meetings
of the Board and committees of which they are members.
4
<PAGE>
<PAGE>
DIRECTORS' COMPENSATION.
Currently, each director who is not employed by the Company receives an
annual retainer of $5,000 plus $750 for each meeting of the Board or any
committee he attends, which, upon election, can be made in the form of Common
Stock. All eligible directors elected to receive Common Stock for all
compensation earned in Fiscal 1996.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
All officers, directors and beneficial owners of more than 10% of Common
Stock of the Company filed timely reports under Section 16(a) of the Securities
Exchange Act of 1934 (the "Exchange Act") during Fiscal 1996.
EXECUTIVE OFFICERS
The only executive officers of the Company other than Messrs. Rheinfrank,
Zak, Lund, Thome and King, who are listed above as nominees for director, are H.
Torsten Andersch and James C. Shay.
Mr. Andersch, age 39, is a Vice President having joined the Company's
wholly-owned subsidiary, BHA International GmbH, formerly Filtra GmbH, as Sales
Manager in September 1990. He became Assistant General Manager in December 1990
and was promoted to General Manager of BHA International GmbH in September 1992.
Prior to September 1990, he was employed as Sales Manager at Eastman Christensen
GmbH.
Mr. Shay, age 33, has been Treasurer and Chief Financial Officer since
March 1994. He joined the Company as Controller in June 1992. From 1986-1992, he
was employed at KPMG Peat Marwick as an Audit Manager and in various other
positions.
5
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
I. SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
___________________________ _________________________________
AWARDS PAYOUTS
_________________________________
SECURITIES
OTHER UNDER-
ANNUAL RESTRICTED LYING ALL OTHER
COMPEN- STOCK OPTIONS/ LTIP COMPEN-
NAME AND PRINCIPAL FISCAL SALARY BONUS(1) SATION(2) AWARDS(S)(4) SARS PAYOUTS(5) SATION
POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
(a) (b) (c) (d) (e) (f) (g) (h) (i)
__________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James E. Lund, 1996 195,000 83,750 -- (3) -- -- 66,000 13,800 (6)
Chief Executive 1995 188,400 86,000 65,889 131,779 -- 40,000 13,600 (7)
Officer and
President 1994 182,000 62,600 -- (3) -- -- -- 15,432 (8)
_________________________________________________________________________________________________________
Lamson Rheinfrank, 1996 172,500 41,875 -- (3) -- -- 33,000 12,220 (6)
Jr., 1995 166,600 43,000 10,494 20,988 -- 20,000 12,020 (7)
Chairman 1994 161,000 31,300 -- (3) -- -- -- 11,255 (8)
_________________________________________________________________________________________________________
Michael T. Zak, 1996 195,000 83,750 -- (3) -- -- 66,000 10,774 (6)
Vice Chairman 1995 188,400 86,000 31,855 63,710 -- 40,000 10,114 (7)
1994 182,000 62,600 -- (3) -- -- -- 11,946 (8)
_________________________________________________________________________________________________________
James J. Thome, 1996 172,500 71,188 -- (3) -- -- 56,100 9,810 (6)
Executive Vice 1995 166,600 73,100 50,002 100,004 -- 34,000 8,973 (7)
President 1994 161,000 53,200 -- (3) -- -- -- 8,934 (8)
_________________________________________________________________________________________________________
James C. King, 1996 132,900 41,875 -- (3) -- -- 26,400 9,440 (6)
Senior Vice 1995 128,400 43,000 26,232 52,463 -- 16,000 9,240 (7)
President and
Secretary 1994 124,000 31,300 -- (3) -- -- -- 7,141 (8)
_________________________________________________________________________________________________________
</TABLE>
- -----------------------------------
(1) Bonus payments were based on the Company's financial performance for each
fiscal year (see "Compensation Committee Report on Executive Compensation
- Annual Cash Incentives").
(2) Represents tax gross-up payments of amounts reimbursed during Fiscal 1995
for the payment of taxes.
(3) No amounts for executive perquisites and other personal benefits are shown
because the aggregate dollar amount per executive is less than either
$50,000 or 10% of annual salary and bonus.
6
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(4) The total number of shares and their Fair Market Value ("FMV"), calculated
by multiplying the closing market price of unrestricted Common Stock on a
specific date by the number of shares of restricted stock, and the related
vesting time table is represented in the following schedule:
<TABLE>
<CAPTION>
Number
of Vested Stock Awards - Time Table
Shares
on _____________________________________
Award
Date
and held FMV ($)
as of on FMV ($) Oct. Oct. Oct. Oct. Oct.
Sept. Award on Sept. 18, 18, 18, 18, 18,
Name of Participant 30, 1996 Date 30, 1996 1995 1996 1997 1998 1999
___________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C>
James E. Lund 11,459 $131,779 $166,156 2,292 2,292 2,291 2,292 2,292
Lamson Rheinfrank 1,825 $ 20,988 $ 26,463 365 365 365 365 365
Michael T. Zak 5,540 $ 63,710 $ 80,330 1,108 1,108 1,108 1,108 1,108
James J. Thome 8,696 $100,004 $126,092 1,739 1,739 1,740 1,739 1,739
James C. King 4,562 $ 52,463 $ 66,149 912 913 912 913 912
</TABLE>
As holders of restricted stock, the executives have with respect to the
restricted stock all of the rights of a shareholder of the company,
including the right to vote the restricted stock and receive dividends and
distributions, thereon.
(5) Represents payments of bonus awards made pursuant to the Company's
Incentive Compensation Plan (see "Compensation Committee Report on
Executive Compensation - Stock Compensation - Incentive Compensation
Plan").
(6) Amounts of All Other Compensation for Fiscal 1996 include the following:
(i) Contributions by the Company under the ESOP: each executive $7,500;
(ii) Contributions by the Company under the 401(k) plan: each executive
$600; and,
(iii) Premiums on life insurance for executives paid by the Company: Mr.
Lund, $5,700; Mr. Rheinfrank, $4,120; Mr. Zak, $2,674; Mr. Thome,
$1,710; Mr. King, $1,792.
7
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<PAGE>
(7) Amounts of All Other Compensation for the year ended September 30, 1995
("Fiscal 1995") include the following:
(i) Contributions by the Company under the ESOP: each executive $7,500;
(ii) Contributions by the Company under the 401(k) plan: each executive,
$400; and,
(iii) Premiums on life insurance for executives paid by the Company: Mr.
Lund, $5,700; Mr. Rheinfrank, $4,120; Mr. Zak, $2,214; Mr. Thome,
$1,073; Mr. King, $1,340.
(8) Amounts of All Other Compensation for the year ended September 30, 1994
("Fiscal 1994") include the following:
(i) Contributions by the Company under the ESOP: Mr. Lund, $9,332; Mr.
Rheinfrank, $6,735; Mr. Zak, $9,532; Mr. Thome, $7,461; Mr. King,
$5,401;
(ii) Contributions by the Company under the 401(k) plan: each executive
$400; and,
(iii) Premiums on life insurance for executives paid by the Company: Mr.
Lund, $5,700; Mr. Rheinfrank, $4,120; Mr. Zak, $2,214; Mr. Thome,
$1,073; Mr. King, $1,340.
II. OPTION/SAR GRANTS TABLE
No individual grants of stock options or freestanding SARs were made
during Fiscal 1996 to any of the named executive officers.
III. AGGREGATED OPTION EXERCISES IN FISCAL 1996
AND FISCAL YEAR-END ("FY-END") OPTION VALUES
<TABLE>
<CAPTION>
SHARES VALUE OF UNEXERCISED
ACQUIRED VALUE NUMBER OF SECURITIES UNDERLYING IN-THE MONEY OPTIONS AT
ON EXERCISE REALIZED UNEXERCISED OPTIONS AT FY-END FY-END(3)
NAME (#) ($) (#)(1) ($)
- -----------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
- -----------------------------------------------------------------------------------------------------------
EXERCISABLE UNEXERCISABLE(2) EXERCISABLE UNEXERCISABLE(1)
<S> <C> <C> <C> <C> <C> <C>
JAMES E. LUND 35,613 424,606 82,500 89,100 324,225 522,126
LAMSON RHEINFRANK, JR. -- -- 33,000 -- 142,115 --
MICHAEL T. ZAK 16,075 233,328 82,500 -- 324,225 --
JAMES J. THOME 14,459 209,872 64,350 77,000 245,141 451,220
JAMES C. KING -- -- 42,900 39,600 215,449 232,056
</TABLE>
8
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<PAGE>
- ---------------------------------------
(1) The Company announced a 10% stock dividend in June, 1996. As provided for
in the Plan, the Compensation Committee approved an appropriate adjustment
to the aggregate number of shares available under the Plan and to the
number of shares and the exercise price relating to outstanding options.
The Compensation Committee also reduced the minimum fair market value
requirement associated with the exercisability of certain options from
$20.00 to $18.18. The above reflects these adjustments.
(2) Includes options that (i) have not met vesting requirements or (ii) are
unexercisable under the terms of the stock option agreement until the per
share fair market value of the Common Stock is equal to at least $18.18.
(3) The closing price of the Common Stock at the end of Fiscal 1996 was
$14.50.
Compensation Committee Interlocks and Insider Participation.
During Fiscal 1996, the Compensation Committee was comprised of Messrs.
Alexander, Freeland and McDonnell. No current member of the Compensation
Committee was at any time an officer or employee of the Company or any of its
subsidiaries.
Executive Employment Contracts.
The Company has employment agreements with each of the executive officers
listed in the Summary Compensation Table (each, an "Agreement" and collectively,
the "Agreements"). The Agreements commenced on August 1, 1990, and were amended
and restated on September 1, 1993 and December 10, 1994. The Agreements expire
on September 30, 1997 and are subject to one year automatic extensions on each
October 1, unless either party gives notice within 30 days of such October 1 of
his or its election to have such automatic extensions cease. Each of the
Agreements prohibit the executive from competing with the Company for the three
year period after the termination of such employment with the Company. The
Agreements further provide that if the Company terminates an Agreement without
cause, the executive covered by such Agreement is entitled to the base salary he
would have received through the then current expiration of such Agreement and
the pro rata portion of the annual bonus that would have been earned in the year
of termination. The Agreements also provide for such continuing payments in the
event that the executive terminates his Agreement for good reason, or in certain
instances, for any reason. Compensation paid to the five most highly compensated
executive officers pursuant to the Agreements is included for each executive in
the Summary Compensation Table.
9
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COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Board believes that increasing the value of the Company to its
stockholders is the Board's most important objective and should be the key
measure of management performance. The Board also believes that executive
compensation should be objectively determined. For this reason, the Compensation
Committee (the "Committee"), which is made up of directors who are not employees
of the Company, is responsible for determining the compensation packages of the
Company's executives. The Committee also approves the potential levels of
contribution to the Company's ESOP and 401(K) plans for the ensuing year.
The Committee's role in determining the compensation of the executives of
the Company is to assure that the Company's compensation strategy is aligned
with the Board's overall objective and that executive compensation is structured
to provide fair, reasonable and competitive base salary levels and the
opportunity for the executives to earn incentive compensation reflecting both
the Company's and the individual's performance.
The Committee has implemented an executive compensation program designed
to accomplish the Board's objective. The program is based upon the principles
that: executive performance should be judged and compensated primarily on the
basis of the Company's earnings and the strength of the Company's financial
position; long-term changes in stockholder value are the most appropriate
measure of the Company's financial performance; and the most effective approach
to promoting the financial success of the Company is to align the stockholders'
and the executives' interests.
The Committee concluded that this alignment is best accomplished through a
compensation strategy emphasizing long-term stock ownership. As a result, the
executive compensation program was implemented to increase the proportion of
long-term compensation tied to increases in the Company's earnings, financial
position and appreciation in stockholder value. The annual cash compensation for
executive officers is primarily in the form of base salary, which is being
maintained at levels consistent with competitive market compensation practices,
and annual cash incentives based on quantitative objectives tied to the
Company's financial performance. Annual cash compensation is supplemented with
long-term incentive compensation, primarily in the form of restricted stock and
stock options, intended to link executive compensation to changes in
stockholders' value.
In order to help ensure that the strategy emphasizing long-term stock
ownership is implemented, the Committee has expressed its intent that future
awards of stock incentives to the executives are dependent upon such executives
retaining ownership of a substantial portion of the shares of the Company's
Common Stock acquired through the stock incentive awards. The Committee has
advised the executive officers that they should retain a majority (less shares
forfeited or used to pay the option exercise price or taxes) of all restricted
stock and stock acquired through the exercise of options awarded under those
agreements.
The Committee believes that while the Company should provide an
opportunity for its executives to acquire significant equity in the Company,
realization of the benefits of this opportunity should generally occur only
after the stockholders have benefitted from an increase in the value of their
investment in the Company. For this reason, in Fiscal 1994, the Committee
adopted the policy that
10
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<PAGE>
recipients of stock options awarded after February 1994, would be permitted to
exercise the options, regardless of exercise price, only if the per share fair
market value of the Common Stock was equal to a certain minimum price per share.
The current minimum price per share is $18.18.
The Committee intends that the application of these principles will result
in total executive compensation and capital accumulation potential above
competitive levels for superior stockholder returns and below competitive levels
for average or lesser returns.
There are three components to the Company's executive compensation
packages: base salary, annual cash incentives and stock compensation. Each of
these components is discussed in detail below.
BASE SALARY.
Base salaries are established under the Agreements for each person
within the executive group. Factors considered in establishing salaries
include the responsibilities of the position, compensation of executives
in companies of similar size or in the same industry and external market
conditions. Increases in base salaries have been modest due to the
Committee's policy objective of compensating executives based on financial
performance.
ANNUAL CASH INCENTIVES.
Annual cash incentive awards are based entirely on quantitative
objectives tied to the Company's financial performance. Executives can
earn bonuses based upon the Company's performance as measured against
pre-determined financial objectives for the fiscal year. Performance is
measured by comparing Company net earnings to targeted levels as
established in the Company's business plan and approved by the Committee
for the fiscal year. The ratio of net earnings to targeted levels is
multiplied by each individual's bonus maximum to determine the annual
bonus payout for each period. Each individual's bonus maximum is provided
in his Agreement. The amounts of each individual's maximum bonus were
determined considering the impact on overhead as a percentage of sales,
the responsibility of each position and the compensation level required to
provide a competitive employee compensation package. The annual bonus
component of compensation enables the Company to adjust payouts to
executives based on Company performances with only modest adjustments to
base salaries. During Fiscal 1996, the Company's executive officers earned
annual cash incentive awards pursuant to this policy all of which are
summarized in column d of the Executive Compensation Table.
STOCK COMPENSATION.
The key component to the Committee's strategy is to make stock
incentives, which consist primarily of awards of restricted stock and
stock options, a significant portion of the executives' compensation
package. Stock incentives may be awarded pursuant to the following plans:
11
<PAGE>
<PAGE>
INCENTIVE COMPENSATION PLAN
The Company has an Incentive Compensation Plan pursuant to which
the Board is authorized to grant certain executive officers of the
Company shares of Common Stock or cash following the end of each
fiscal year. The grants are awarded pursuant to a formula which is
based on the financial performance of the Company and its
subsidiaries over a three year period of time. Awards under the
Incentive Compensation Plan require a minimum average earnings
growth for the most recent three year period of time, as determined
by the Committee. Using a three year measurement period for
financial performance enables the Company to provide incentives to
executives for implementing and executing strategies essential to
long-term success. During Fiscal 1996, the Company's executive
officers earned a payout under the Incentive Compensation Plan as
the Company achieved the minimum average earnings growth for the
most recent three year period of time, as determined by the
Committee. Such payouts are summarized in column h of the Executive
Compensation Table.
INCENTIVE STOCK PLAN
Awards under the Plan include:
1. Stock Options: Stock options granted under the Plan
vest over a four year period and expire 10 years from
the date of grant. Pursuant to a policy adopted by
the Committee (discussed above), recipients of
certain stock options are only permitted to exercise
the options, regardless of exercise price, if the per
share fair market value of the Common Stock is equal
to at least $18.18. During Fiscal 1996, no stock
options were granted to any of the named executive
officers.
2. Restricted Stock: The Plan permits the grant of
shares of restricted stock which vest over a five
year period. The issuance of restricted stock is
intended to encourage holders of stock options to
purchase and retain shares issued pursuant to stock
option exercises by allowing holders of stock options
to cover the exercise price and taxes associated with
the exercise of stock options by selling shares of
restricted stock to the Company. During Fiscal 1996,
no restricted stock was issued to any of the
individuals who participate in the Plan.
In determining the amount of future stock incentives to be awarded to an
executive, the Committee will, in addition to other factors, consider
previous awards, whether the executive has exercised, to the extent
possible, options previously awarded and whether the shares of the
Company's Common Stock acquired thereby or shares of restricted stock
previously awarded have been retained by the executive. By linking the
executives' compensation and net worth to the value of the Company's
Common Stock, the Committee seeks to focus the attention of the executives
on the Board's overall objective of building long-term stockholder value.
12
<PAGE>
<PAGE>
COMPENSATION OF CHIEF EXECUTIVE OFFICER
Mr. Lund received total compensation amounting to $358,550 in Fiscal 1996.
His Fiscal 1996 compensation included a 3.5% increase in base salary over Fiscal
1995. He earned an annual bonus in Fiscal 1996 that was comparable with Fiscal
1995, as the Company's net earnings met similar performance criteria as
described under "Annual Cash Incentives" above. Mr. Lund earned an Incentive
Compensation Plan payout in Fiscal 1996 as the Company did achieve the minimum
average annual earnings growth financial objective for the three year period as
provided for under that plan (as described more fully above). The Committee
considers Mr. Lund's compensation to be in line with industry and market size
standards and to be consistent with Company performance objectives.
This report was presented to and approved by the Board.
Don H. Alexander
Robert D. Freeland
Thomas A. McDonnell
13
<PAGE>
<PAGE>
COMPARISON OF FIVE YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPHS FOR
BHA GROUP, INC.
The following graph reflects a comparison of the cumulative total
stockholder return (change in stock price plus reinvested dividends) of an
initial $100 investment on September 30, 1991 in the Company's Common Stock, the
Standard & Poors 500 Stock Index and the First Analysis Environmental Index. The
comparisons in this table are required by the Securities and Exchange
Commission. The stock price performance shown on the graph is not intended to
forecast or be indicative of future price performance.
CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
Indexed Returns
Years Ending
Company/Index Sep. 91 Sep. 92 Sep. 93 Sep. 94 Sep. 95 Sep. 96
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
*BHA GROUP INC 100 107.02 98.70 92.70 97.16 115.81
*S&P 500 INDEX 100 111.05 125.49 130.11 168.82 203.14
FIRST ANALYSIS 100 90.52 86.1 86.75 96.63 107.16
</TABLE>
14
<PAGE>
<PAGE>
COMPARISON OF TEN YEAR-CUMULATIVE TOTAL RETURNS
PERFORMANCE GRAPHS FOR
BHA GROUP, INC.
The following graph reflects a comparison of the cumulative total
stockholder return (change in stock price plus reinvested dividends) of an
initial $100 investment on November 30, 1986 (which corresponds to the month in
which the Company's stock first traded) in the Company's Common Stock, the
Standard & Poors 500 Stock Index and the First Analysis Environmental Index. The
stock price performance shown on the graph is not intended to forecast or be
indicative of future price performance.
CUMULATIVE TOTAL RETURN
<TABLE>
<CAPTION>
Indexed Returns
Years Ending
Company/Index 11/30/86 Sep. 87 Sep. 88 Sep. 89 Sep. 90 Sep. 91 Sep. 92 Sep. 93 Sep. 94 Sep. 95 Sep. 96
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
*BHA GROUP INC 100 207.41 266.66 624.94 558.29 474.99 508.31 468.81 440.30 461.51 550.07
*S&P 500 INDEX 100 133.07 116.62 155.11 140.78 184.65 205.05 231.71 240.26 311.72 375.10
FIRST ANALYSIS 100 145.94 128.83 180.3 157.09 183.84 166.41 158.28 159.47 177.65 197.01
</TABLE>
15
<PAGE>
<PAGE>
SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
As of December 1, 1996, the Company had outstanding and entitled to vote
5,993,127 shares of Common Stock. As of December 1, 1996, the trustee of the
ESOP was the registered holder of 342,567 shares of Common Stock, 285,727 of
which have vested in participant accounts. Participants in the ESOP are entitled
to vote both the vested and unvested shares which are in their account.
The following table sets forth, as of December 1, 1996, certain
information with respect to (a) each person known by the Company to own
beneficially five percent or more of the outstanding Common Stock, (b) each of
the directors and nominees for director of the Company, (c) each of the
executive officers named in the Summary Compensation Table, and (d) all
directors and executive officers of the Company as a group:
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) COMMON STOCK
------------------- -------------------------- ------------
<S> <C> <C>
Fund Asset Management Inc. 562,000 9.4%
800 Grudders Mill Road
Plainsboro, NJ 08536
T. Rowe Price Associates 526,000 8.8%
100 East Pratt Street
Baltimore, Maryland 21202
Robert Fleming, Inc. 394,000 6.6%
320 Park Avenue
New York, New York 10022
Prudential Insurance Co. of America 411,000 6.9%
19 Prudential Plaza
Newark, New Jersey 07101
Lamson Rheinfrank, Jr. 399,850(2) 6.7%
642 East 46th Street
Kansas City, Missouri 64110
Quest Advisory Co. 324,000 5.4%
1414 Avenue of the Americas
New York, New York 10019
James E. Lund
BHA Group, Inc. 130,695(3) 2.2%
8800 East 63rd Street
Kansas City, Missouri 64133
</TABLE>
16
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE PERCENT OF
OF BENEFICIAL OWNER OF BENEFICIAL OWNERSHIP(1) COMMON STOCK
------------------- -------------------------- ------------
<S> <C> <C>
Michael T. Zak 121,307(4) 2.0%
BHA Group, Inc.
8800 East 63rd Street
Kansas City, Missouri 64133
James J. Thome 97,425(5) 1.6%
BHA Group, Inc.
8800 East 63rd Street
Kansas City, Missouri 64133
Robert D. Freeland 86,206(6) 1.4%
Havens Steel Company
7219 East 17th Street
Kansas City, Missouri 64126
James C. King 52,869(7) *
BHA Group, Inc.
8800 East 63rd Street
Kansas City, Missouri 64133
Don H. Alexander 18,122(8) *
EMCO Industries, Inc.
10850 Lakeview Avenue
Lenexa, Kansas 66219
Thomas A. McDonnell 16,570(9) *
DST Systems, Inc.
1055 Broadway
Kansas City, Missouri 64105
Richard C. Green 7,346(10) *
UtiliCorp United, Inc.
911 Main
Kansas City, Missouri 64199
942,844 14.9%
All directors and executive officers
as a group (11 people)
</TABLE>
- ----------------------------
* Less than 1%
(1) All information is as of December 1, 1996 and was determined in
accordance with Rule 13d-3 under the Securities Exchange Act of 1934,
as amended, based upon information furnished by the persons listed or
contained in filings made by them with the Securities
17
<PAGE>
<PAGE>
and Exchange Commission. Unless otherwise indicated, beneficial
ownership disclosed consists of sole voting and dispositive power.
(2) Consists of 90,479 shares of Common Stock held of record by Mr.
Rheinfrank, 155,155 shares of Common Stock held by irrevocable family
trusts of which Mr. Rheinfrank is the co-trustee, 39,072 shares of
Common Stock held by his daughters, 77,352 shares of Common Stock
owned by Mr. Rheinfrank's wife, all of which shares he disclaims any
beneficial interest, options to purchase 33,000 shares of Common
Stock under the Plan which are exercisable within 60 days, 1,825
shares of restricted stock, and 2,967 shares of Common Stock held of
record by the trustee of the ESOP for Mr. Rheinfrank who is entitled
to vote such shares by virtue of the allocation under the ESOP.
(3) Consists of 20,139 shares of Common Stock held of record by Mr. Lund,
6,655 shares of Common Stock owned by Mr. Lund's wife, as to which
shares he disclaims any beneficial interest, options to purchase
82,500 shares of Common Stock under the Plan which are exercisable
within 60 days, 11,459 shares of restricted stock, and 9,942 shares
of Common Stock held of record by the trustee of the ESOP for Mr.
Lund who is entitled to vote such shares by virtue of the allocation
under the ESOP.
(4) Consists of 20,709 shares of Common Stock held of record by Mr. Zak
and his wife, 3,300 shares of Common Stock held by his children which
shares he disclaims any beneficial interest, options to purchase
82,500 shares of Common Stock under the Plan which are exercisable
within 60 days, 5,540 shares of restricted stock, and 9,258 shares of
Common Stock held of record by the trustee of the ESOP for Mr. Zak
who is entitled to vote such shares by virtue of the allocation under
the ESOP.
(5) Consists of 15,940 shares of Common Stock held of record by Mr.
Thome, options to purchase 64,350 shares of Common Stock under the
Plan which are exercisable within 60 days, 8,696 shares of restricted
stock, and 8,439 shares of Common Stock held of record by the trustee
of the ESOP for Mr. Thome who is entitled to vote such shares by
virtue of the allocation under the ESOP.
(6) Consists of 991 shares of Common Stock held of record by Mr.
Freeland, options to purchase 6,188 shares of Common Stock under the
Plan which are exercisable within 60 days and 79,027 shares of Common
Stock held of record by Havens Steel Company, with whom Mr. Freeland
shares investment power through his position as Chairman of the Board
of that Company, but as to which Mr. Freeland disclaims any
beneficial interest.
(7) Consists of 2,512 shares of Common Stock held of record by Mr. King,
options to purchase 42,900 shares under the Plan which are
exercisable within 60 days, 4,562 shares of restricted stock, and
2,895 shares of Common Stock held of record by the trustee of the
ESOP for Mr. King who is entitled to vote such shares by virtue of
the allocation under the ESOP.
18
<PAGE>
<PAGE>
(8) Consists of 18,122 shares of Common Stock held of record by Mr.
Alexander.
(9) Consists of 11,929 shares of Common Stock held of record by Mr.
McDonnell and options to purchase 4,641 shares under the Plan which
are exercisable within 60 days.
(10) Consists of 7,346 shares of Common Stock held of record by Mr. Green.
19
<PAGE>
<PAGE>
AMENDMENT TO THE CERTIFICATE OF INCORPORATION
OF THE COMPANY
(PROPOSAL NO. 2)
The Board has determined that servicing the customers of its core business
through one company, instead of through various subsidiaries, will yield the
greatest sales, marketing and operational efficiencies. To achieve this result,
in November, 1996, the Board approved certain changes to the corporate structure
of the Company. SF Air Filtration, Inc., BHA Company, Inc. and BHA Services,
Inc., all wholly owned subsidiaries of the Company, will be merged into
PrecipTech, Inc. ("PrecipTech"), also a wholly owned subsidiary of the Company,
effective as of December 31, 1996. The Company also will transfer certain assets
to PrecipTech. The result of these transactions is that the sales, marketing and
operational personnel and assets of the Company and these subsidiaries' core
businesses will be consolidated into one company, PrecipTech. In order to
reflect its status as the main operating subsidiary of the Company, the Board
desires to change PrecipTech's name to BHA Group, Inc.; and to change the
Company's name to BHA Group Holdings, Inc. The Board has approved an amendment
to the Certificate and voted to recommend that the stockholders of the Company
approve such amendment changing the name of the Company from BHA Group, Inc. to
BHA Group Holdings, Inc., to reflect the Company's status as a holding company
for PrecipTech (i.e., the new BHA Group, Inc.) and other subsidiaries of the
Company.
The Board is seeking stockholder approval of the amendment to the Certificate
to change the name of the Company from BHA Group, Inc. to BHA Group Holdings,
Inc. Stockholder approval requires the affirmative vote of the holders of a
majority of the shares present or represented and entitled to vote at the Annual
Meeting. THE BOARD RECOMMENDS A VOTE FOR THE AMENDMENT TO THE CERTIFICATE TO
CHANGE THE NAME OF THE COMPANY FROM BHA GROUP, INC. TO BHA GROUP HOLDINGS, INC.
AND IT IS INTENDED THAT SHARES REPRESENTED BY THE ENCLOSED FORM OF PROXY WILL BE
VOTED IN FAVOR OF SUCH AMENDMENT TO THE CERTIFICATE UNLESS OTHERWISE SPECIFIED
IN SUCH PROXY.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
(PROPOSAL NO. 3)
KPMG Peat Marwick is the accounting firm which examined and reported on the
Company's financial statements for Fiscal 1996. KPMG Peat Marwick has been
selected by the Board to serve as the Company's accounting firm for the year
ending September 30, 1997. Representatives of KPMG Peat Marwick are expected to
attend the Annual Meeting, will have the opportunity to make a statement if they
desire to do so and will be available to respond to appropriate questions.
The Board is seeking stockholder approval of its selection of KPMG Peat
Marwick. Stockholder approval requires the affirmative vote of the holders of a
majority of the shares present or represented and entitled to vote at the Annual
Meeting. THE BOARD RECOMMENDS A VOTE FOR THE RATIFICATION OF THE SELECTION OF
KPMG PEAT MARWICK AND IT IS INTENDED THAT SHARES REPRESENTED BY THE ENCLOSED
FORM OF PROXY WILL BE VOTED IN FAVOR OF THE RATIFICATION OF THE SELECTION OF
KPMG PEAT MARWICK UNLESS OTHERWISE SPECIFIED IN SUCH PROXY. If stockholders do
not ratify the appointment of KPMG Peat Marwick as the auditors of the Company
for Fiscal 1997 at the Annual Meeting, the Board, on recommendation of its Audit
Committee, may reconsider the selection.
20
<PAGE>
<PAGE>
TIME FOR SUBMISSION OF PROPOSAL OF STOCKHOLDERS
Any stockholder who intends to present a proposal for action at the Company's
Annual Meeting of Stockholders scheduled to be held on February 24, 1998, must
comply with and meet the requirements of Regulation 14a-8 of the Exchange Act.
That regulation requires, among other things, that a proposal be received by the
Company at its principal executive office, 8800 East 63rd Street, Kansas City,
Missouri 64133, by September 17, 1997.
GENERAL AND OTHER MATTERS
Management knows of no matter other than the matters described above which
will be presented to the Annual Meeting. However, if any other matters properly
come before the meeting, or any of its adjournments, the person or persons
voting the proxies will vote them in accordance with his or their best judgment
on such matters.
You are urged to sign and return your proxy to make certain your shares will
be voted at the Annual Meeting.
By Order of the Board of Directors
James C. King
Secretary
Kansas City, Missouri
January 15, 1997
21
<PAGE>
<PAGE>
PROXY BHA GROUP, INC.
8800 East 63rd Street, Kansas City, Missouri 64133
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS - FEBRUARY 18, 1997
The undersigned hereby appoints James E. Lund and James C. King, or either of
them, as Proxy or Proxies of the undersigned with full power of substitution to
attend and to represent the undersigned at the Annual Meeting of Stockholders of
BHA Group, Inc. (the "Company") to be held on February 18, 1997, and at any
adjournments thereof, and to vote thereat the number of shares of stock of the
Company the undersigned would be entitled to vote if personally present, in
accordance with the instructions set forth on this proxy card. Any proxy
heretofore given by the undersigned with respect to such stock is hereby
revoked.
Dated:___________________________________, 1997
-------------------------------------------
-------------------------------------------
PLEASE SIGN EXACTLY AS NAME APPEARS
ABOVE. FOR JOINT ACCOUNTS, EACH JOINT
OWNER MUST SIGN. PLEASE GIVE FULL TITLE
IF SIGNING IN A REPRESENTATIVE CAPACITY.
[ ] PLEASE CHECK IF YOU PLAN TO ATTEND THE MEETING
PLEASE MARK, DATE AND SIGN THIS PROXY AND RETURN IT IN THE ENCLOSED ENVELOPE
1. ELECTION OF DIRECTORS.
NOMINEES: Don H. Alexander, Robert D. Freeland, Richard C. Green, James C.
King, James E. Lund, Thomas A. McDonnell, Lamson Rheinfrank, Jr., James J.
Thome and Michael T. Zak.
[ ] FOR ALL nominees listed above.
[ ] FOR ALL nominees listed above EXCEPT: _________________________________.
(INSTRUCTION: To withhold authority to vote on any individual nominee, write
the name above.)
[ ] WITHHOLD AUTHORITY to vote for all nominees listed above.
2. AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION (THE "CERTIFICATE")
TO CHANGE THE COMPANY"S NAME FROM BHA GROUP, INC. TO BHA GROUP HOLDINGS, INC.
[ ] FOR the Amendment to the Certificate.
[ ] AGAINST the Amendment to the Certificate.
[ ] ABSTAIN
3. RATIFICATION OF KPMG PEAT MARWICK AS INDEPENDENT AUDITORS OF THE COMPANY FOR
THE FISCAL YEAR ENDING SEPTEMBER 30, 1997.
[ ] FOR the ratification of KPMG Peat Marwick.
[ ] AGAINST the ratification of KPMG Peat Marwick.
[ ] ABSTAIN
4. ON SUCH OTHER MATTERS AS MAY PROPERLY COME BEFORE THE MEETING.
IF NO SPECIFICATION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 THROUGH 3
LISTED ABOVE.
