BHA GROUP INC, PRE 14A, 1996-01-17

BHA GROUP INC
PRE 14A, 1996-01-17
INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFING EQUIP

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SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )

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 Section 240.14a-11(c) or
Section 240.14a-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] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) 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:

.................................................................

THIS IS A CONFIRMING COPY OF A FILING MADE WITH THE SECURITIES AND EXCHANGE
COMMISSION ON DECEMBER 21, 1995.

PRELIMINARY COPY
----------------

BHA GROUP, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS

TUESDAY, FEBRUARY 20, 1996

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 20, 1996, at 10:30 a.m., Kansas City time, for the
following purposes:

1. To elect directors for the ensuing year;

2. To approve amendments to the Company's Certificate of Incorporation
as follows:

a. To reclassify the Class A Common Stock of the Company as
"Common Stock", set the number of authorized shares of Common
Stock at 20,000,000 shares and eliminate the Class B Common
Stock of the Company;

b. To authorize the Company to issue up to 500,000 shares of
Preferred Stock;

c. To classify the Board of Directors of the Company into three
classes; and

d. To prohibit stockholders from taking action by written consent;

3. To ratify the selection of KPMG Peat Marwick as independent auditors
of the Company for the fiscal year ending September 30, 1996; and

4. To transact such other business as may properly come before the
meeting or any adjournment thereof.

The close of business on January 2, 1996 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 12, 1996

PRELIMINARY COPY
----------------

BHA GROUP, INC.

------------

PROXY STATEMENT
Dated January 12, 1996
For Annual Meeting of Stockholders
to be held Tuesday, February 20, 1996

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 20, 1996 at 10:30 a.m., Kansas City time, and all
adjournments thereof (the "Annual Meeting"). The close of business on January 2,
1996 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, stock represented by proxies
will be voted (i) FOR the election of management's nominees for directors; (ii)
FOR all of the proposed amendments (each, a "Proposed Amendment" and
collectively, the "Proposed Amendments") 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, 1996 ("Fiscal 1996"), 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 12, 1996, 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, 1995, the Company had outstanding 5,463,416 shares of
the Company's $.01 par value Class A Common Stock (the "Class A Common Stock"),
the Company's only class of voting securities outstanding. Each share of Class A
Common Stock outstanding entitles the holder thereof to one vote. The majority
of all the outstanding shares of Class A Common Stock constitutes a quorum at
the

Annual Meeting. If a proxy is marked "abstain," it 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.

ELECTION OF DIRECTORS
(Proposal No. 1)

Nominees for Election of Directors.

Nine directors are to be elected at the Annual Meeting. If the
stockholders approve the Proposed Amendment to classify the Board (see
"Amendment to the Company's Certificate of Incorporation to Classify the Board
(Proposal No. 2c)" below), the Board will be classified into three classes, with
the directors in each class serving three-year terms (or, in each case, until
their respective successors are duly elected and qualified or until their
earlier death, resignation or removal), except that the initial terms of the
Class I, Class II and Class III directors will expire at the annual meetings of
stockholders to be held in 1997, 1998 and 1999, respectively (or, in each case,
until their respective successors are duly elected and qualified or until their
earlier death, resignation or removal). If the stockholders fail to approve such
Proposed Amendment, the Board will continue to have one class of directors,
elected at each annual meeting of stockholders, and those directors elected at
an annual meeting will serve (without regard to the class designations below)
until the next annual meeting of stockholders. In voting for directors, for each
share of Class A 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:

Director
Name Principal Occupation Since Class
- ---- -------------------- ----- -----
<S> <C> <C> <C>
Lamson Rheinfrank, Jr. Chairman of the Board of the Company(1) 1986 III

Michael T. Zak Vice Chairman of the Company(2) 1986 II

James E. Lund Chief Executive Officer and President 1986 III
of the Company(3)

James J. Thome Executive Vice President of the Company(4) 1990 II

James C. King Senior Vice President and Secretary of the 1995 I
Company(5)

Don H. Alexander President and Chief Executive Officer of 1986 III
EMCO Industries, Inc.(6)
</TABLE>

<TABLE>

Robert D. Freeland Chairman of the Board of Havens Steel 1988 I
Company(7)

Thomas A. McDonnell President and Chief Executive Officer of DST 1993 II
Systems, Inc.(8)

Richard C. Green Chairman, President and Chief Executive 1995 I
Officer of UtiliCorp United (9)

</TABLE>

- -----------------------------------

(1) Mr. Rheinfrank, age 55, 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 45, 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 46, 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 40, 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 45, 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 57, has been a Director of the Company since its
inception in July 1986. Mr. Alexander is President and Chief Executive
Officer of EMCO Industries, Inc., a manufacturer of movable wall systems;
Chairman and President of Ventaire Corporation, a Tulsa-based metal
fabrication company; President of Don H. Alexander & Associates, Inc., a
private investment group;

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.

(7) Mr. Freeland, age 58, 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 Treasurer
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 50, 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 mutual fund record keeping company. He has been
employed by DST in various capacities since 1973, prior to which he was a
financial analyst with Kansas City Southern Industries, Inc. He is a
Director of Informix, Inc., The Continuum Company, Inc., First of
Michigan Capitol Corp. and Nellcor Puritan-Bennett, Inc.

(9) Mr. Green, age 41, has been a Director of the Company since November
1995. Mr. Green is Chairman, President and Chief Executive Officer of
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 Civic Council of Kansas City.

Committees and Meetings of the Board.

During the Company's fiscal year ended September 30, 1995 ("Fiscal
1995"), the Board held 4 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. During Fiscal
1995, 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 1995, the Compensation Committee was comprised of
Messrs. Alexander, Freeland and McDonnell. During Fiscal 1995, the Compensation
Committee met 1 time. 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 1995, all of the directors attended at least
75% of the meetings of the Board and committees of which they are members.

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 he attends,
which, upon election, can be made in the form of Class A Common Stock. All
eligible directors elected to receive Class A Common Stock for all compensation
earned in Fiscal 1995.

Section 16 Reporting Obligations.

All officers and directors of the Company filed timely reports under
Section 16(a) of the Securities Exchange Act of 1934 during Fiscal 1995.

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 38, 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 32, 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.

EXECUTIVE COMPENSATION

I. SUMMARY COMPENSATION TABLE

- ------------------------------------------------------------------------------------------------------------------------------------
Annual Compensation Long-Term Compensation
----------------------------------------------------------------------------------------
Awards Payouts
-------------------------------------------------
Securities
Other Under-
Annual Restricted lying All Other
Compen- Stock Options/ LTIP Compen-
Name and Principal Salary Bonus(1) sation 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, 1995 188,400 86,000 65,889(2) 131,779 -- 40,000 13,600 (6)
Chief Executive 1994 182,000 62,600 --(3) -- -- -- 15,432 (7)
Officer and President 1993 176,000 40,000 --(3) -- -- 60,000 12,924 (8)

- ------------------------------------------------------------------------------------------------------------------------------------
Lamson Rheinfrank, 1995 166,600 43,000 10,494(2) 20,988 -- 20,007 12,020 (6)
Jr., 1994 161,000 31,300 --(3) -- -- -- 11,255 (7)
Chairman 1993 155,500 20,000 --(3) -- -- 30,000 10,797 (8)

- ------------------------------------------------------------------------------------------------------------------------------------
Michael T. Zak, 1995 188,400 86,000 31,855(2) 63,710 -- 40,000 10,114 (6)
Vice Chairman 1994 182,000 62,600 --(3) -- -- -- 11,946 (7)
1993 176,000 40,000 --(3) -- -- 60,000 9,263 (8)

- ------------------------------------------------------------------------------------------------------------------------------------
James J. Thome, 1995 166,600 73,100 50,002(2) 100,004 -- 34,009 8,973 (6)
Executive Vice 1994 161,000 53,200 --(3) -- -- -- 8,934 (7)
President 1993 155,500 29,000 --(3) -- -- 45,000 8,269 (8)

- ------------------------------------------------------------------------------------------------------------------------------------
James C. King, 1995 128,400 43,000 26,232(2) 52,463 -- 16,010 9,240 (6)
Senior Vice President 1994 124,000 31,300 --(3) -- -- -- 7,141 (7)
and Secretary 1993 117,000 20,000 --(3) -- -- 24,000 6,526 (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.

(4) The total number of shares of Class A Common Stock issued as restricted
stock that have vested or will vest, in whole or in part, in under three
years from the date of grant and their vesting schedule is as follows:

Mr. Lund, 6875 shares of which 2292 vested on October 18, 1995; 2292 will
vest on October 18, 1996; and 2291 shares will vest on October 18, 1997.

Mr. Rheinfrank, 1095 shares of which 365 vested on October 18, 1995; 365
will vest on October 18, 1996; and 365 shares will vest on October 18,
1997.

Mr. Zak, 3324 shares of which 1108 vested on October 18, 1995; 1108 will
vest on October 18, 1996; and 1108 shares will vest on October 18, 1997.

Mr. Thome, 5218 shares of which 1739 vested on October 18, 1995; 1739
will vest on October 18, 1996; and 1740 shares will vest on October 18,
1997.

Mr. King, 2737 shares of which 912 vested on October 18, 1995; 913 will
vest on October 18, 1996; and 912 shares will vest on October 18, 1997.

(5) Represents payments of bonus awards made pursuant to employment
agreements.

(6) Amounts of All Other Compensation for Fiscal 1995 include the following:

(i) Contributions by the Company under the ESOP -- each executive
$7,500; and
(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.

(7) Amounts of All Other Compensation for Fiscal 1994 include the following:

(i) Contributions by the Company under the ESOP: Mr. Lund, $9,332; Mr.
Rheinfrank, $6,735; Mr. Zak, $9,332; 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.

(8) Amounts of All Other Compensation for Fiscal 1993 include the following:

(i) Contributions by the Company under the ESOP: Mr. Lund, $6,824; Mr.
Rheinfrank, $6,277; Mr. Zak, $6,824; Mr. Thome, $6,796; Mr. King,
$4,786;
(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, $2,039; Mr. Thome,
$1,073; Mr. King, $1,340.

II. OPTION/SAR GRANTS TABLE

No individual grants of stock options and freestanding SARs were made
during Fiscal 1995 to any of the named executive officers.

III. AGGREGATED OPTION EXERCISES IN FISCAL 1995
AND FISCAL YEAR-END ("FY-END") OPTION VALUES

====================================================================================================================================

Shares Value of Unexercised
Acquired Value Number of Unexercised Options In-the Money Options at
on Exercise Realized at FY-End FY-End(2)
Name (#) ($) (#) ($)
- ------------------------------------------------------------------------------------------------------------------------------------
(a) (b) (c) (d) (e)
- ------------------------------------------------------------------------------------------------------------------------------------
Exercisable Unexercisable (1) Exercisable Unexercisable (1)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
James E. Lund -- -- 103,625 84,750 513,826 324,000
- ------------------------------------------------------------------------------------------------------------------------------------
Lamson Rheinfrank, Jr. -- -- 28,875 1,125 79,725 --
- ------------------------------------------------------------------------------------------------------------------------------------
Michael T. Zak -- -- 87,325 3,750 344,469 --
- ------------------------------------------------------------------------------------------------------------------------------------
James J. Thome -- -- 69,209 73,750 288,934 280,000
- ------------------------------------------------------------------------------------------------------------------------------------
James C. King -- -- 35,813 39,188 151,238 144,000
====================================================================================================================================
</TABLE>

- ---------------------------------------

(1) Includes shares 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 Class A Common Stock is equal to at least
$20.00.

(2) The closing price of the Class A Common Stock at the end of Fiscal 1995
was $13.50.

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.

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 modified the executive compensation program to
implement a strategy designed to accomplish the Board's objective. The strategy
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 is being modified 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 will be 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 will be 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
Class A 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 the year ended September 30,
1994, ("Fiscal 1994") the Committee adopted the policy that 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
Class A Common Stock was equal to at least $20.00.

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 1995, the Company's executive
officers earned annual cash incentive awards under the Plan some of which
are summarized in Table I.

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:

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 Class A 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 1995, 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.

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 Class A Common Stock
is equal to at least $20.00. During Fiscal
1995, 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 1995, the Company
awarded a total of 45,000 shares of restricted
stock to the 41 individuals who participated in
the Plan. The number of shares of restricted
stock awarded to each individual was based on
each individual's pro-rata number of stock
options held as of the award date.

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 Class A 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
Class A Common Stock, the Committee seeks to focus the attention of the
executives on the Board's overall objective of building long-term
stockholder value.

COMPENSATION OF CHIEF EXECUTIVE OFFICER

Mr. Lund received total cash compensation amounting to $525,668 in Fiscal
1995. His Fiscal 1995 compensation included a 3.5% increase in base salary over
the year ended Fiscal 1994 which represents a cost-of-living adjustment for such
past year. He earned an annual bonus in Fiscal 1995 that exceeded Fiscal 1994
due to higher Company net earnings and which was determined using the
quantitative criteria described above under "Annual Cash Incentives." Mr. Lund
earned an Incentive Compensation Plan payout in Fiscal 1995 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). Mr. Lund was awarded restricted stock and cash under the Plan amendment
ratified at the February 20, 1995 stockholders' meeting. 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

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, 1990 in the Company's Class A 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

BHA GROUP, INC.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURNS PERFORMANCE GRAPH

1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
BHA....................... 100 85 91 84 79 83
S&P....................... 100 131 146 165 171 221
First Analysis............ 100 117 106 101 102 113

</TABLE>

Comparison of Nine 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 Class A 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

BHA GROUP, INC.
COMPARISON OF NINE-YEAR CUMULATIVE TOTAL RETURNS PERFORMANCE GRAPH

1986 1987 1988 1989 1990 1991 1992 1993 1994 1995
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BHA....................... 100 207 267 625 558 475 508 469 440 462
S&P....................... 100 133 117 155 141 185 205 232 240 312
First Analysis............ 100 181 160 224 195 228 206 196 198 220

</TABLE>

SECURITIES OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

As of December 1, 1995, the Company had outstanding and entitled to vote
5,463,416 shares of Class A Common Stock. As of December 1, 1995, the trustee of
the ESOP ("Trustee") was the registered holder of 245,957 shares of Class A
Common Stock, 228,625 of which have vested in participant accounts. Participants
in the ESOP are entitled to vote those shares which are in their account.

The following table sets forth, as of December 1, 1995, certain
information with respect to (a) each person known by the Company to own
beneficially five percent or more of the outstanding Class A 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>
Percent of
Name and Address Amount and Nature Class A Common
of Beneficial Owner of Beneficial Ownership(1) Stock
- ------------------- -------------------------- --------------
<S> <C> <C>
Prudential Insurance Co. of America 581,600 10.6%
19 Prudential Plaza
Newark, New Jersey 07101

Lamson Rheinfrank, Jr. 359,798(2) 6.6%
642 East 46th Street
Kansas City, Missouri 64110

Robert Fleming, Inc. 349,800 6.4%
1285 Avenue of the Americas
New York, New York 10019

James E. Lund 131,786(3) 2.4%
BHA Group, Inc.
8800 East 63rd Street
Kansas City, Missouri 64133

Michael T. Zak 115,189(4) 2.1%
BHA Group, Inc.
8800 East 63rd Street
Kansas City, Missouri 64133

</TABLE>

<TABLE>
<CAPTION>
Percent of
Name and Address Amount and Nature Class A Common
of Beneficial Owner of Beneficial Ownership(1) Stock
- ------------------- -------------------------- --------------
<S> <C> <C>
James J. Thome 89,704(5) 1.6%
BHA Group, Inc.
8800 East 63rd Street
Kansas City, Missouri 64133

Robert D. Freeland 77,619(6) 1.4%
Havens Steel Company
7219 East 17th Street
Kansas City, Missouri 64126

James C. King 43,303(7) *
BHA Group, Inc.
8800 East 63rd Street
Kansas City, Missouri 64133

Don H. Alexander 15,776(8) *
EMCO Industries, Inc.
10850 Lakeview Avenue
Lenexa, Kansas 66219

Thomas A. McDonnell 12,964(9) *
DST Systems, Inc.
1055 Broadway
Kansas City, Missouri 64105

Richard C. Green 6,216(10) *
UtiliCorp United, Inc.
911 Main
Kansas City, Missouri 64199
------- ----
All directors and executive officers
as a group (11 people) 861,189 14.8%
</TABLE>

- ----------------------------

* Less than 1%

(1) All information is as of December 1, 1995 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 and Exchange Commission. Unless
otherwise indicated, beneficial ownership disclosed consists of sole voting
and dispositive power.

(2) Consists of 80,120 shares of Class A Common Stock held of record by Mr.
Rheinfrank, 149,930 shares of Class A Common Stock held by irrevocable
family trusts of which Mr. Rheinfrank is the co-trustee, 26,640 shares of
Class A Common Stock held by his daughters, 70,320 shares of Class A Common
Stock owned by Mr. Rheinfrank's wife, all of which shares he disclaims any
beneficial interest, options to purchase 28,875 shares of Class A Common
Stock under the Plan which are exercisable within 60 days, 1,825 shares of
restricted stock, and 2,088 shares of Class A 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 2,250 shares of Class A Common Stock held of record by Mr.
Lund, 6,050 shares of Class A Common Stock owned by Mr. Lund's wife, as to
which shares he disclaims any beneficial interest, options to purchase
103,625 shares of Class A Common Stock under the Plan which are exercisable
within 60 days, 11,459 shares of restricted stock, and 8,402 shares of
Class A 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 9,500 shares of Class A Common Stock held of record by Mr. Zak,
2,050 shares of stock held by Mr. Zak and his wife, 3,000 shares of Class A
Common Stock held by his children which shares he disclaims any beneficial
interest, options to purchase 87,325 shares of Class A Common Stock under
the Plan which are exercisable within 60 days, 5,540 shares of restricted
stock, and 7,774 shares of Class A 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 4,743 shares of Class A Common Stock held of record by Mr.
Thome, options to purchase 69,209 shares of Class A Common Stock under the
Plan which are exercisable within 60 days 8,696 shares of restricted stock,
7,056 shares of Class A 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 151 shares of Common Stock held of record by Mr. Freeland,
options to purchase 5,625 shares of Class A Common Stock under the Plan
which are exercisable within 60 days and 71,843 shares of Class A 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 820 shares of Common Stock held of record by Mr. King, options
to purchase 35,813 shares under the Plan which are exercisable within 60
days, 4,562, shares of restricted stock, and 2,108 shares of Class A 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.

(8) Consists of 10,151 shares of Class A Common Stock held of record by Mr.
Alexander and options to purchase 5,625 shares of Class A Common Stock
under the Plan which are exercisable within 60 days.

(9) Consists of 10,151 shares of Class A Common Stock held of record by Mr.
McDonnell and options to purchase 2,813 shares under the Plan which are
exercisable within 60 days.

(10) Consists of 6,216 shares of Common Stock held of record by Mr. Green.

AMENDMENTS TO THE CERTIFICATE OF INCORPORATION
OF THE COMPANY

General

On December 13, 1995, the Board approved the Proposed Amendments and voted
to recommend that the stockholders of the Company approve the Proposed
Amendments. The Proposed Amendments would: (1) reclassify the Class A Common
Stock of the Company as "Common Stock", set the number of authorized shares of
Common Stock at 20,000,000 shares and eliminate the Class B Common Stock of the
Company; (2) authorize the Company to issue up to 500,000 shares of preferred
stock, (3) classify the Board into three equal classes, with one class being
elected each year; and (4) prohibit action by written consent of the
stockholders. A form of a proposed Restated and Amended Certificate
incorporating the Proposed Amendments is set forth as Exhibit A to this proxy
statement.

Each of the Proposed Amendments is being presented individually to
stockholders of the Company for their approval. As more fully discussed below,
the Board believes that the approval of the Proposed Amendments (other than the
reclassification of the Class A Common Stock) would limit the ability of a third
party to effect a change in majority control of the Board without the support of
the incumbent Board.

Adoption of the Proposed Amendments (other than the reclassification of the
Class A Common Stock), both individually and as a whole, may significantly
restrict the ability of stockholders of the Company to change the composition of
the incumbent Board and to benefit from a proposed takeover or change in the
composition of the Board that is opposed by the incumbent Board. If approved,
the Proposed Amendments would collectively, and, in varying degrees,
individually, make the removal of one or all of the directors more difficult. As
a result, the officers of the Company, each of whom serves at the pleasure of
the Board (subject to the terms of any Agreement), could more easily retain
their positions in management. Accordingly, stockholders are urged to read
carefully the following sections of this Proxy Statement, which describe the
Proposed Amendments and their purposes and effects, and Exhibit A hereto, which
sets forth a form of the Restated and Amended Certificate incorporating the
Proposed Amendments.

Purpose and Effects of the Proposed Amendments

The Proposed Amendments (other than the reclassification of the Class A
Common Stock), which make wholesale replacement of the Board difficult, are
intended to strengthen the negotiating position of the Board, and by extension
the position of the stockholders, by discouraging an acquiror from attempting to
coerce the Board through the threat of a proxy contest. The Proposed Amendments
are designed to encourage a potential acquiror to negotiate with the Board
rather than act unilaterally. Similarly, Delaware's "business combination"
statute is intended to encourage a potential acquiror to negotiate with the
Board rather than take unilateral action. The statute generally provides that an
investor who acquires 15% or more of the Company's outstanding voting shares (an
"Interested Stockholder") cannot engage in a merger or other business
combination with the Company for a

period of three years unless (1) before such person becomes an Interested
Stockholder, the Board approved the transaction in which the Interested
Stockholder became an Interested Stockholder or approved the business
combination, (2) the Interested Stockholder acquires at least 85% of the
Company's voting shares (excluding shares owned by officers, directors and
certain employee stock plans) in the same transaction in which it crossed the
15% threshold or (3) after becoming an Interested Stockholder, the Interested
Stockholder obtains approval for the business combination from the Board and the
holders of two-thirds of the Company's voting shares (other than those held by
the Interested Stockholder).

The Proposed Amendments could discourage certain types of transactions,
described below, which involve a threatened change in control of the Company.
The Proposed Amendments could make it more difficult and time-consuming to
change majority control of the Board, thereby reducing the vulnerability of the
Company to an unsolicited offer to take control of the Company. As more fully
described below, the Board believes that, as a general rule, such unsolicited
offers are not in the best interest of the Company and its stockholders.

The Board believes that an imminent threat of removal curtails its ability
to negotiate effectively with a purchaser by depriving the Board of the time and
information necessary to evaluate the takeover proposal, to study alternative
proposals and to help ensure that the best price is obtained. However, takeovers
or changes in the composition of the Board or management of the Company which
are proposed and effected without prior consultation and negotiation with the
Board are not necessarily detrimental to the Company and its stockholders.
Adoption of one or all of the Proposed Amendments may impair the ability of
stockholders to change the composition of the Board and to benefit from a
transaction which the incumbent Board opposes, even if a majority of the
stockholders deem such transaction to be in their best interests. The Board,
however, believes that the benefits of seeking to protect its ability to
negotiate with the proponent of an unfriendly or unsolicited proposal to take
over or restructure the Company outweigh the disadvantages of discouraging such
proposals.

The adoption of the Proposed Amendments would make more difficult or
discourage a proxy contest, the assumption of control by a holder of a
substantial equity interest in the Company or the removal of the incumbent Board
and, therefore, could have the effect of entrenching incumbent management. At
the same time, the Proposed Amendments would help ensure that the Board, if
confronted by a proposal from a third party who has recently acquired a
significant equity interest in the Company, will have sufficient time to review
the proposal, to consider appropriate alternatives to the proposal and to seek a
premium price for the stockholders.

The Proposed Amendments are intended to encourage persons seeking to acquire
control of the Company to initiate such an acquisition through arms-length
negotiations with the Company's management and Board. If adopted, however, the
Proposed Amendments could have the effect of discouraging a third party from
making a tender offer at a price representing a control premium over then
prevailing trading prices or otherwise attempting to effect a change in control
of the Company, even tough such an attempt might be beneficial to the Company
and its stockholders.

The Proposed Amendments are permitted under Delaware law and are consistent
with the rules of the National Market of the National Association of Securities
Dealers, Inc. ("NASDAQ") Automated Quotation System, upon which the Company's
Class A Common Stock is listed and traded. The

Board, which approved the Proposed Amendments and recommended that they be
submitted to the Company's stockholders for adoption, does not presently
contemplate recommending the adoption of any further amendments to the
Certificate which would affect the ability of third parties to take over or
change control of the Company.

By-laws

On December 13, 1995, the Board adopted amendments to the By-laws of the
Company (the "By-laws"), which, if the stockholders approve the Proposed
Amendments, will reflect the Proposed Amendments.

AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION TO
RECLASSIFY THE CLASS A COMMON STOCK;
TO INCREASE THE AUTHORIZED SHARES OF CLASS A COMMON STOCK
AND TO ELIMINATE THE CLASS B COMMON STOCK
(Proposal No. 2a)

The Board proposes and recommends that the Certificate be amended to
reclassify the Class A Common Stock of the Company into one class of common
stock with the name "Common Stock" and to establish the number of authorized
shares of Common Stock available for issuance by the Company as 20,000,000
shares. Currently, 10,000,000 shares of Class A Common Stock and 10,000,000
shares of the Company's $.01 par value Class B Common Stock (the "Class B Common
Stock") are authorized; however, the Class B Common Stock, none of which is
outstanding, is no longer available for issuance. The Proposed Amendment would
eliminate the Class B Common Stock and reclassify the Class A Common Stock, with
the authorized number of shares of such class being increased from 10,000,000 to
20,000,000 shares. The purpose of the Proposed Amendment, in addition to
eliminating the Class B Common Stock, is to insure that there are sufficient
shares of Common Stock available in the event the Company determines to issue
additional shares in order to raise working capital, to make acquisitions or for
other corporate purposes. As of December 1, 1995, 7,042,988 shares of Class A
Common Stock were outstanding or reserved for issuance out of the 10,000,000
currently authorized. If this Proposed Amendment is approved by the
stockholders, each outstanding share of Class A Common Stock shall automatically
be converted into a share of Common Stock.

The management of the Company believes that it is appropriate for the
Company to have additional shares of Common Stock available for issuance in
transactions which are in the best interest of the Company. The Company is not
presently considering any specific proposals for acquisitions or issuances of
additional shares. The Company will not seek further authorization from its
stockholders prior to any issuance of its shares of Common Stock, except as may
be otherwise required by law or by NASDAQ National Market rules.

The Board is seeking stockholder ratification of the amendment to the
Certificate to reclassify the Class A Common stock as "Common Stock", to
increase the authorized shares of Common Stock to

20,000,000 and to eliminate the Class B Common Stock. Stockholder ratification
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 reclassify the Class A Common
Stock as "Common Stock", to increase the authorized shares of Common Stock to
20,000,000 and to eliminate the Class B Common Stock 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.

AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO AUTHORIZE PREFERRED STOCK
(Proposal No. 2b)

The Board proposes and recommends that the Certificate be amended to
authorize 500,000 shares of preferred stock, $.01 par value per share
("Preferred Stock"), which would have such voting powers, designations,
preferences, and relative, participating, optional and conversion or other
special rights, and such qualifications, limitations or restrictions, as the
Board may designate for each class or series issued from time to time. These
would include, but not be limited to (A) the designation of each class or series
and the number of shares that will constitute each such class or series; (B) the
dividend rate for such class or series: (C) the price at which, and the terms
and conditions on which, the shares of such class or series may be redeemed, if
such shares are redeemable; (D) the voting rights, if any, of shares of such
class or series; and (E) the terms and conditions, if any, upon which shares of
such class or series may be converted into shares of other classes or series of
shares of the Company, or other securities.

The Company currently does not have any shares of preferred stock
authorized. All 500,000 shares of Preferred Stock would be available for
issuance without further action by the stockholders of the Company, and the
Company does not intend to seek stockholder approval prior to any issuance of
Preferred Stock, unless otherwise required by law or by NASDAQ National Market
rules. Except as described below, the Board has no present plans for issuance of
any shares of Preferred Stock, nor does it have any present plans to apply for
the listing of the Preferred Stock on a national securities exchange or
quotation on a securities quotation system.

The proposed authorization of Preferred Stock is deemed desirable in that it
would enhance the Company's flexibility in connection with possible future
actions, such as stock splits, stock dividends, financings, mergers,
acquisitions, or other purposes. Having such authorized shares available for
issuance in the future would allow shares to be issued without the expense and
delay of a special stockholders' meeting.

The authorized but unissued shares of Preferred Stock also could be used to
impede a change in control of the Company. Under certain circumstances, such
shares could be used to deter persons seeking to effect a takeover or otherwise
gain control of the Company. For example, a class or series of Preferred Stock
could be designated that would be convertible into Class A Common Stock upon the
happening of a triggering event such as an acquisition of a certain percentage
of the Company's

voting stock. The conversion of the Preferred Stock would dilute the voting
power of the acquiror, and would make subsequent transactions the acquiror may
wish to effect more difficult or costly. Use of the Preferred Stock in the
foregoing manner may be disadvantageous to stockholders who would deem the
attempted takeover efforts as desirable. (The Board is not currently aware of
any planned takeover efforts.) Further, this proposal may be disadvantageous to
stockholders in that Preferred Stock with disproportionate voting rights may be
used to entrench management, making it more difficult to remove directors at a
time when the stockholders would prefer to do so. Preferred Stock also may be
used to prevent or discourage offers to purchase blocks of the Class A Common
Stock, the results of which purchases may cause uncharacteristic or artificial
changes in the market place of the Class A Common Stock.

On December 13, 1995, the Board of Directors adopted a stockholder rights
plan (the "Rights Plan") pursuant to which common stock purchase rights (the
"Rights") were distributed as a dividend to stockholders of record on the close
of business on December 26, 1995. The Rights Plan is designed to deter coercive
takeover tactics by permitting holders of the Rights (other than the person
employing the coercive takeover tactics) to purchase Class A Common Stock (or
Class A Common Stock equivalents) of the Company at a bargain purchase price
upon the occurrence of certain events described in the Rights Plan. If the
amendment creating the Preferred Stock is approved, the Board intends to reserve
a series of units of Preferred Stock (representing Class A Common Stock
equivalents) for issuance upon exercise of the Rights in the event the Rights
ever become exercisable.

The Board is seeking stockholder ratification of the amendment to the
Certificate to authorize Preferred Stock. Stockholder ratification 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 authorize Preferred Stock 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.

AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO CLASSIFY THE BOARD
(Proposal No. 2c)

The Board has unanimously approved, subject to stockholder approval,
adoption of amendments to the Certificate to classify the Board into three
classes of directors (designated Class I, Class II and Class III) serving
staggered three-year terms, with each class being as nearly equal in number as
possible. As a result, approximately one-third of the Board would be elected
each year. Initially, members of all three classes will be elected at the Annual
Meeting. Directors then elected to the Class I will serve until the annual
meeting of stockholders to be held in 1997 (or until their respective successors
are duly elected and qualified or until their earlier death, resignation or
removal). Directors initially elected to the Classes II and III will serve until
the annual meetings of stockholders to be held in 1998 and 1999, respectively
(or until their respective successors are duly elected and qualified or until
their earlier death, resignation or removal). Commencing with the election of
directors to Class I in 1997, each class of directors elected at an annual
meeting of stockholders

would be elected to three-year terms. Any vacancies or newly created
directorships, however occurring, will be filled by a vote of the majority of
the directors then remaining in office. Once elected, a director filling a
vacancy or a newly created directorship will hold office for the term expiring
at the annual meeting of stockholders for the term of the class to which he has
been elected. The By-laws currently provide that directors shall hold office
until the next annual meeting of stockholders and until the election and
qualification of their respective successors.

The Board believes that the proposal to create a classified Board is in the
best interests of the Company and its stockholders. The Board believes that
Board classification will help lend continuity and stability to the management
of the Company and will help assure continuity and stability in the Board's
leadership and policies. Following the classification of the Board, at any given
time approximately two-thirds of the members of the Board will have had prior
experience as directors of the Company. It is believed that this will facilitate
long-range planning, strategy and policy, because it will enhance the likelihood
of continuity and stability in the composition of the Board and its policies.
The Board believes that this, in turn, will permit the Board to more effectively
represent the interests of all stockholders. With a classified Board, it will
generally take two annual meetings of stockholders (rather than one) to elect a
majority of the Board. As a result, a classified Board may discourage proxy
contests for the election of directors or purchases of a substantial block of
stock because its provisions could operate to prevent obtaining control of the
Board in a relatively short period of time.

A classified Board makes it more difficult for stockholders to change the
majority of directors even when the only reason for the change may be the
performance of the directors. Furthermore, the provision for the classified
Board is applicable to every election of directors, rather than only to an
election occurring after a change of control of the Company.

If the proposal to classify the Board is adopted, then, pursuant to the
Delaware General Corporation Law, the holders of a majority of the shares
entitled to vote at an election of directors will be able to remove any director
or the entire Board only for cause (and not without cause).

The information concerning the current nominees for election of directors at
the Annual Meeting and the classes to which they would be elected is set forth
under the caption "Election of Directors (Proposal No. 1)." If the Proposed
Amendments to adopt a classified Board is not approved and implemented, all
directors elected at the Annual Meeting will serve until the next annual meeting
of stockholders (or until their successors are elected and qualified or until
their earlier death, resignation or removal).

The Board is seeking stockholder ratification of the amendment to the
Certificate to classify the Board. Stockholder ratification 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 amendment to the Certificate to classify the
Board and it is intended that shares represented by the enclosed form of proxy
will be voted in favor of such amendment unless otherwise specified in such
proxy.

AMENDMENT TO THE COMPANY'S CERTIFICATE OF INCORPORATION
TO PROHIBIT ACTION BY WRITTEN CONSENT OF STOCKHOLDERS
(Proposal No. 2d)

Unless otherwise provided in the Certificate, Delaware law permits any
action required or permitted to be taken by the stockholders of the Company to
be taken without a meeting and without stockholder vote if a written consent
setting forth the action to be taken is signed by the holders of shares of
outstanding stock having the number of votes necessary to authorize such action
at a meeting of stockholders. Currently, the Certificate does not contain any
provisions regarding stockholder consent actions. This Proposed Amendment would
prohibit the stockholders from taking any permitted or required action by
written consent. As a result of this Proposed Amendment, a majority of
stockholders would be prevented from approving transactions deemed to be
economically advantageous, such as a tender offer at a price representing a
control premium over then prevailing trading prices by written consent.
Additionally, in conjunction with recently adopted amendments to the By-laws
that deny to the stockholders of the Company the right to request a special
meeting of the stockholders, a majority of the incumbent Board could delay until
the annual meeting any action that required stockholder approval, even if the
proponents of the action had sufficient stockholder votes to obtain approval of
the action at a stockholder meeting.

This Proposed Amendment is intended to provide the Board and the
non-consenting stockholders with an opportunity to review any proposed action
and, if necessary, to take any necessary action to protect the interest of
minority stockholders and the Company before the proposed action is taken. As a
result, the Board may take action that certain stockholders do not believe is in
their best interest. The Board, however, believes that action by written consent
of stockholders is inappropriate for a public company and that it is in the best
interest of the stockholders and the Company to require full consideration of a
matter at a meeting of stockholders before acting on it.

The Board is seeking stockholder ratification of the amendment to the
Certificate to prohibit action by written consent of the stockholders.
Stockholder ratification 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
prohibit action by written consent of the stockholders and it is intended that
shares represented by the enclosed form of proxy will be voted in favor of such
amendment 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 1995. KPMG Peat Marwick has been
selected by the Board to serve as the Company's accounting firm Fiscal 1996.
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 ratification of its selection of KPMG Peat
Marwick. Stockholder ratification 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 1996 at the Annual Meeting, the Board, on
recommendation of its Audit Committee, may reconsider the selection.

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 20,
1997, 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 14, 1996.

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 12, 1996

EXHIBIT A

AMENDED & RESTATED
CERTIFICATE OF INCORPORATION
OF
BHA GROUP, INC.

BHA GROUP, INC., a corporation duly organized and existing by virtue of the
General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:

FIRST: BHA Group, Inc. was originally incorporated in the State of Delaware
on July 11, 1986.

SECOND: At a meeting held on December 13, 1995, resolutions were adopted by
the Board of Directors of the Corporation, in accordance with Section 242 of the
General Corporation Law of the State of Delaware, amending and restating the
Certificate of Incorporation of the Corporation and declaring such Amended and
Restated Certificate of Incorporation to be advisable and in the best interests
of the stockholders of the Corporation.

THIRD: The holders of a majority of the shares of outstanding capital stock
of the Corporation entitled to vote duly approved such Amended and Restated
Certificate of Incorporation in accordance with Section 242 of the General
Corporation Law of the State of Delaware at the annual meeting of stockholders
held on February 20, 1996.

FOURTH: Among the changes from the previous Certificate of Incorporation are
the following:

1. The Class A Common Stock, par value $.01 per share (the
"Class A Common Stock") has been reclassified as "Common
Stock" and the total number of authorized shares of Common
Stock has been established as 20,000,000 shares.

2. The Class B Common Stock, par value $.01 per share, of
which no shares are currently outstanding, is no longer
authorized.

3. 500,000 shares of Preferred Stock, $.01 par value per
share, with such powers, rights, preferences, privileges,
qualifications, limitations and restrictions as to be
determined by the Board of Directors, has been authorized.

4. Article Sixth, Subsection 4, which provides for the
classification of the directors, has been added.

5. Article Eleventh, which prohibits shareholders from taking
any action by written consent, has been added.

FIFTH: Upon the filing of this Amended and Restated Certificate of
Incorporation, each of the ____________ currently issued and outstanding shares
of Class A Common Stock shall automatically be converted into one share of
Common Stock. Certificates formally representing shares of Class A Common Stock
shall thereupon and thereafter be deemed to represent a like number of shares of
Common Stock.

IN WITNESS WHEREOF, BHA Group, Inc. has caused this Amended and Restated
Certificate of Incorporation to be signed by James E. Lund, its President and
Chief Executive Officer, and attested by James C. King, its Secretary, this ___
day of February, 1996.
BHA Group, Inc., a Delaware
corporation

By:_________________
James E. Lund
President and Chief Executive
Officer

ATTEST

- ----------------------------
James C. King, Secretary

AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
BHA GROUP, INC.

FIRST: The name of the Corporation is BHA GROUP, INC.

SECOND: The address of the registered office of the Corporation in
the State of Delaware is 410 South State Street, in the City Dover, County of
Kent. The name of its registered agent at that address is United Corporate
Services, Inc.

THIRD: The purpose of the Corporation is to engage in any lawful
act or activity for which a corporation may be organized under the General
Corporation Law of Delaware as set forth in Title 8 of the Delaware Code (the
"GCL").

FOURTH: The Corporation shall have authority to issue 20,500,000
shares of capital stock, consisting of 500,000 shares of Preferred Stock, with
par value of $.01 per share (hereinafter in this Certificate called the
"Preferred Stock"), and 20,000,000 shares of Common Stock, with par value of
$.01 per share (hereinafter in this Certificate called the "Common Stock").

The Preferred Stock may be issued from time to time in one or more
classes or series, each of which class or series shall have such distinctive
designation or title as shall be fixed by the board of directors of the
Corporation (the "Board of Directors") prior to the issuance of any shares
thereof. The Board of Directors is hereby authorized to determine or alter the
powers, rights, preferences, privileges, qualifications, limitations and
restrictions granted to or imposed upon any wholly unissued class or series of
the Preferred Stock, including without limiting the generality of the preceding
clause, the authority to fix or alter the dividend rights, dividend rates,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), the redemption price or prices, and the liquidation
preference of said shares, all as shall be stated in such resolution or
resolutions providing for the issuance of such class or series of the Preferred
Stock as may be adopted from time to time by the Board of Directors. The Board
of Directors is further authorized to determine or alter from time to time the
number of shares of the Preferred Stock constituting any such class or series
and the designation thereof, and to increase or decrease the number of shares of

any class or series subsequent to the issue of shares of that class or series,
but not below the number of shares of such class or series then issued and
outstanding. In case the number of shares of any class or series shall be so
decreased, the shares constituting such decrease shall resume the status which
they had prior to the adoption of the resolution originally fixing the number of
shares of such class or series.

Subject to all of the rights of the holders of shares of the
Preferred Stock that may hereafter be issued, (i) such dividends or
distributions as may be determined by the Board of Directors, at its sole
discretion, may from time to time be declared and paid or made upon the Common
Stock out of assets legally available therefor and (ii) except as otherwise
required by law, each outstanding share of Common Stock shall be entitled to one
vote on each matter on which stockholders of the Corporation or the holders of
Common Stock shall be entitled to vote.

FIFTH: The name and mailing address of the incorporator is as
follows:

Name Mailing Address
---- ---------------
Leslie A. Martey c/o Kronish, Lieb, Weiner & Hellman
1345 Avenue of the Americas
New York, New York 10105

SIXTH: The following provisions are inserted for the management of
the business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the power of the Corporation and of its
directors and stockholders:

(1) The business and affairs of the Corporation shall be
managed by or under the direction of the Board of Directors.

(2) The directors shall have the power without the assent
or vote of the stockholders to make, alter, amend, change, add to
or repeal the By-laws of the Corporation.

(3) Except as provided in any certificate filed pursuant to
Section 151(g) of the GCL of Delaware designating the number of
shares of the Preferred Stock to be issued and the powers, rights,
preferences, privileges, qualifications, limitations and
restrictions granted to and imposed on the holders of shares of
such designated Preferred Stock, the number of directors of the

Corporation shall be as from time to time fixed by, or in the
manner provided in, the By-laws of the Corporation. Election of
directors need not be by written ballot unless the By-laws so
provide.

(4)(a) Except as provided in paragraph (b) hereof, the
Board of Directors shall be and is divided into three classes,
Class I, Class II and Class III, as nearly equal in number of
directors as possible, with the term of office of the directors of
one class expiring each year. Each director shall serve for a term
ending on the date of the third annual meeting following the annual
meeting at which such director was elected; provided, however, that
the directors first elected to Class I shall serve for a term
ending on the date of the first annual meeting next following the
end of the calendar year 1996, the directors first elected to Class
II shall serve for a term ending on the date of the second annual
meeting next following the end of the calendar year 1996, and the
directors first elected to Class III shall serve for a term ending
on the date of the third annual meeting next following the end of
the calendar year 1996. In the event of any change in the
authorized number of directors, the Board of Directors shall
apportion any newly created directorships to, or reduce the number
of directorships in, such class or classes as shall, so far as
possible, equalize the number of directors in each class. If,
consistent with the rule that the three classes shall be as nearly
equal in number of directors as possible, any newly created
directorship is to be allocated to one or more classes, the Board
of Directors shall allocate such directors to the available class
whose term of office is due to expire at the latest date following
such allocation. Notwithstanding any of the foregoing, each
director shall serve for a term continuing until the annual meeting
of the stockholders at which the term of the class to which he was
elected expires and until his successor is elected and qualified or
until his earlier death, resignation or removal.

(b) Notwithstanding any of the provisions of the foregoing
paragraph (a) or any other provision of this Article Sixth,
whenever the holders of any one

or more classes or series of the Preferred Stock issued by the
Corporation shall have the right, voting separately by class or
series, to elect directors at an annual or special meeting of
stockholders, the election, term of office, filling of vacancies,
removal and other features of such directorships shall be governed
by the terms of this Certificate of Incorporation applicable
thereto, and by the terms of any certificate filed pursuant to
Section 151(g) of the GCL of Delaware designating the number of
shares of the Preferred Stock to be issued and the powers, rights,
preferences, privileges, qualifications, limitations and
restrictions granted to and imposed on the holders of such
designated Preferred Stock, and such directors so elected shall not
be divided into classes pursuant to paragraph (a) unless expressly
provided by such terms.

(5) In addition to the powers and authority herein before
or by statute expressly conferred upon them, the directors are
hereby empowered to exercise all such powers and do all such acts
and things as may be exercised or done by the Corporation, subject,
nevertheless, to the provisions of the statutes of Delaware, this
Certificate of Incorporation, and any By-laws adopted by the
stockholders; provided, however, that no By-laws hereafter adopted
by the stockholders shall invalidate any prior act of the directors
which would have been valid if such By-laws had not been adopted.

SEVENTH: Meetings of stockholders may be held within or without the
State of Delaware, as the By-laws may provide. The books of the Corporation may
be kept (subject to any provisions contained in the statutes) outside the State
of Delaware at such place or places as may be designated from time to time by
the Board of Directors or in the By-Laws of the Corporation.

EIGHTH: The Corporation shall, to the full extent permitted by
Section 145 of the GCL, as amended from time to time, indemnify all persons whom
it may indemnify pursuant thereto. Directors of the Corporation shall have no
personal liability for monetary damages for breach of a fiduciary duty of a
director to the full extent permitted by Section 102(b)(7) of the GCL.

NINTH: Whenever a compromise or arrangement is proposed between
this Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of the GCL or on the application of trustees in
dissolution or of any receiver or receivers appointed for this Corporation under
the provisions of Section 279 of the GCL, order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of this Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of this Corporation as consequence of such
compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders, of this Corporation, as the case
may be, and also on this Corporation.

TENTH: The Corporation reserves the right to amend, alter, change
or repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by law, and all rights and powers conferred
upon stockholders, directors and officers are subject to this reservation.

ELEVENTH: Any action required or permitted to be taken by the
holders of capital stock of the Corporation must be effected at a duly called
annual or special meeting of holders of capital stock of the Corporation and no
such action may be effected by any consent in writing by such holders.

APPENDIX 1
PROXY CARD

PRELIMINARY COPY
----------------

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 20, 1996

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 20, 1996, 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:____________________________________________________, 1996

__________________________________________________________________

__________________________________________________________________
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, Thomas A. McDonnell, James
E. Lund, 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 RECLASSIFY THE CLASS A COMMON STOCK AS "COMMON STOCK"; TO INCREASE THE
AUTHORIZED SHARES OF COMMON STOCK TO 20,000,000 AND TO ELIMINATE CLASS B
COMMON STOCK.

[ ] FOR the Amendment to the Certificate.

[ ] AGAINST the Amendment to the Certificate.

[ ] ABSTAIN

3. AMENDMENT TO THE CERTIFICATE TO AUTHORIZE PREFERRED STOCK.

[ ] FOR the Amendment to the Certificate.

[ ] AGAINST the Amendment to the Certificate.

[ ] ABSTAIN

4. AMENDMENT TO THE CERTIFICATE TO CLASSIFY THE BOARD OF DIRECTORS.

[ ] FOR the Amendment to the Certificate.

[ ] AGAINST the Amendment to the Certificate.

[ ] ABSTAIN

5. AMENDMENT TO THE CERTIFICATE TO PROHIBIT STOCKHOLDERS FROM TAKING ACTION BY
WRITTEN CONSENT.

[ ] FOR the Amendment to the Certificate.

[ ] AGAINST the Amendment to the Certificate.

[ ] ABSTAIN

6. RATIFICATION OF KPMG PEAT MARWICK AS INDEPENDENT AUDITORS OF THE COMPANY FOR
THE FISCAL YEAR ENDING SEPTEMBER 30, 1996.

[ ] FOR the ratification of KPMG Peat Marwick.

[ ] AGAINST the ratification of KPMG Peat Marwick.

[ ] ABSTAIN

7. 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 6
listed above.