<SUBMISSION>
<ACCESSION-NUMBER>0000950136-02-001158
<TYPE>10-Q
<PUBLIC-DOCUMENT-COUNT>5
<PERIOD>20020331
<FILING-DATE>20020423
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>BHA GROUP INC
<CIK>0000801128
<ASSIGNED-SIC>3564
<IRS-NUMBER>431416730
<STATE-OF-INCORPORATION>DE
<FISCAL-YEAR-END>0930
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>10-Q
<ACT>34
<FILE-NUMBER>000-15045
<FILM-NUMBER>02618081
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>8800 E 63RD ST
<CITY>KANSAS CITY
<STATE>MO
<ZIP>64133
<PHONE>8163568400
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>8800 E 63RD STREET
<CITY>KANSAS CITY
<STATE>MO
<ZIP>64133
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>file001.txt
<DESCRIPTION>QUARTERLY REPORT
<TEXT>
<PAGE>




                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

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

                                    FORM 10-Q

                QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D)
                   OF THE SECURITIES AND EXCHANGE ACT OF 1934


  For the Quarter Ended                                Commission File Number
      March 31, 2002                                          0-15045


                            BHA Group Holdings, Inc.
         --------------------------------------------------------------
             (Exact Name of Registrant as Specified in Its Charter)


            Delaware                                        43-1416730
-------------------------------                  -------------------------------
(State or Other Jurisdiction of                  (I.R.S. Employer Identification
 Incorporation or Organization)                   Number)


 8800 East 63rd Street, Kansas City, Missouri                 64133
--------------------------------------------------------------------------------
   (Address of Principal Executive Offices)                 (Zip Code)


Registrant's telephone number, including area code        (816) 356-8400
                                                       ---------------------

Indicate by checkmark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding twelve months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

                      Yes       |X|          No
                             --------             --------

As of April 12, 2002, the number of shares outstanding of the Registrant's
Common Stock was 6,117,671.



<PAGE>



                          PART I. FINANCIAL INFORMATION

                    BHA GROUP HOLDINGS, INC. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                           (IN THOUSANDS)                                    MARCH 31           SEPTEMBER 30,
                               ASSETS                                          2002                  2001
                                                                            (UNAUDITED)
                                                                          ----------------     ------------------
<S>                                                                            <C>                <C>
Current assets:
     Cash and cash equivalents                                                 $ 7,144            $  9,471
     Accounts receivable, less allowance for doubtful receivables
         of $1,391 and $1,385, respectively                                     34,049              29,803
     Inventories (note 6)                                                       19,752              22,845
     Income taxes receivable                                                       302                 379
     Prepaid expenses                                                            2,790               2,187
     Deferred income taxes                                                       2,655               2,655
                                                                          ----------------    -------------------
              Total current assets                                              66,692              67,340
                                                                          ----------------    -------------------
Property, plant and equipment, at cost                                          64,456              64,322
     Less accumulated depreciation and amortization                             35,663              36,043
                                                                          ----------------    -------------------
              Net property, plant and equipment                                 28,793              28,279
                                                                          ----------------    -------------------
Property held under capital leases                                               5,678               5,830
Other assets                                                                     7,629               9,713
                                                                          ----------------    -------------------
                                                                              $108,792            $111,162
                                                                          ================    ===================

                LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:
     Current installments of long-term debt and lease obligations             $  2,397             $ 2,499
     Accounts payable                                                           10,476               8,946
     Accrued expenses and other current liabilities                             10,142              10,659
                                                                          ----------------    -------------------
         Total current liabilities                                              23,015              22,104
                                                                          ----------------    -------------------
Long-term deferred income taxes                                                  1,984               1,984
Long-term debt, excluding current installments                                  12,650              17,769
Long-term lease obligations, excluding current installments                      6,145               6,637
Other liabilities                                                                1,321               1,534
Shareholders' equity:
     Common stock $0.01 par value. Authorized 20,000,000 shares:
         Issued 8,863,169 and 8,814,492 shares, respectively                        88                  88
     Additional paid-in capital                                                 62,815              62,536
     Retained earnings                                                          37,883              34,916
     Accumulated - other comprehensive income                                     (809)               (856)
     Less cost of 2,745,498 and 2,706,417 shares, respectively, of
          common stock in treasury                                             (36,300)            (35,550)
                                                                          ----------------    -------------------
              Total shareholders' equity                                        63,677              61,134
                                                                          ----------------    -------------------
                                                                              $108,792             $111,162
                                                                          ================    ===================
</TABLE>



See accompanying notes to condensed consolidated financial statements.


                                      -2-
<PAGE>


                    BHA GROUP HOLDINGS, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
               FOR THE THREE MONTHS ENDED MARCH 31, 2002 AND 2001

                                   (UNAUDITED)
<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)                                        2002                    2001
                                                                             ----                    ----
<S>                                                                        <C>                     <C>
Net sales                                                                  $48,560                 $49,868
Cost of sales                                                               33,643                  35,734
                                                                    -------------------    --------------------
         Gross margin                                                       14,917                  14,134
                                                                    -------------------    --------------------
Operating expenses
     Selling and advertising expense                                         5,226                   5,228
     General and administrative expense                                      5,308                   5,145
                                                                    -------------------    --------------------
         Total operating expenses                                           10,534                  10,373
                                                                    -------------------    --------------------
         Operating income                                                    4,383                   3,761
                                                                    -------------------    --------------------

Interest expense, net                                                          198                     496
                                                                    -------------------    --------------------
         Earnings before income taxes                                        4,185                   3,265
                                                                    -------------------    --------------------

     Income taxes                                                            1,504                   1,096
                                                                    -------------------    --------------------
         Net earnings                                                       $2,681                  $2,169
                                                                    ===================    ====================

Basic earnings per common share                                             $ 0.44                 $  0.35
Diluted earnings per common share                                           $ 0.42                 $  0.34

Basic weighted average number of common
     shares outstanding
                                                                             6,091                   6,169
Diluted weighted average number of common
   shares outstanding
                                                                             6,413                   6,471
</TABLE>


See accompanying notes to condensed consolidated financial statements.



                                      -3-
<PAGE>


                    BHA GROUP HOLDINGS, INC. AND SUBSIDIARIES
                  CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
                FOR THE SIX MONTHS ENDED MARCH 31, 2002 AND 2001

                                   (UNAUDITED)

<TABLE>
<CAPTION>
(IN THOUSANDS, EXCEPT PER SHARE DATA)                          2002                   2001
                                                               ----                   ----
<S>                                                         <C>                   <C>
Net sales                                                   $  89,473             $   94,219
Cost of sales                                                  62,150                 66,813
                                                        ------------------    --------------------
         Gross margin                                          27,323                 27,406
                                                        ------------------    --------------------

Operating expenses
     Selling and advertising expense                           10,304                 10,534
     General and administrative expense                         9,843                  9,687
                                                        ------------------    --------------------
         Total operating expenses                              20,147                 20,221
                                                        ------------------    --------------------
         Operating income                                       7,176                  7,185
                                                        ------------------    --------------------

Interest expense, net                                             402                    978
                                                        ------------------    --------------------
         Earnings before income taxes and the
              cumulative effect of accounting change            6,774                   6,207

Income taxes                                                    2,409                  2,105
                                                        ------------------    --------------------
     Income before cumulative effect of an
         accounting change                                      4,365                   4,102
Cumulative effect of an accounting change, net of
     income tax benefit of $0 (Note 2)                         (1,215)                  --
                                                        ------------------    --------------------
         Net earnings                                       $   3,150             $     4,102
                                                        ==================    ====================

Earnings per common share
     Basic
         Income before cumulative effect of
              accounting change                             $    0.72             $     0.65
         Net income                                         $    0.52             $     0.65
     Diluted
         Income before cumulative effect of
              accounting change                             $    0.68             $     0.62
         Net income                                         $    0.49             $     0.62

Basic weighted average number of common
     shares outstanding                                          6,094                  6,291
Diluted weighted average number of common
     shares outstanding                                          6,380                  6,590

</TABLE>


See accompanying notes to condensed consolidated financial statements.




                                      -4-
<PAGE>


                    BHA GROUP HOLDINGS, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
           FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2002 AND 2001

                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                       Three Months Ended
(IN THOUSANDS)                                                     2002                  2001
                                                                   ----                  ----

<S>                                                              <C>                   <C>
Net earnings                                                     $  2,681              $  2,169

Other comprehensive income:
     Foreign currency translation adjustments                        (167)                   16
     Net change in foreign exchange gains deferred in
         accordance with SFAS No. 133                                  32                    95
                                                             -----------------     -----------------

Comprehensive income                                             $  2,546              $  2,280
                                                             =================     =================


                                                                        Six Months Ended
                                                                   2002                  2001
                                                                   ----                  ----

Net earnings                                                     $  3,150              $  4,102

Other comprehensive income:
     Foreign currency translation adjustments                         (92)                  671
     Net change in foreign exchange gains deferred in
         accordance with SFAS No. 133                                 139                   (14)
                                                             -----------------     -----------------

Comprehensive income                                             $  3,197              $  4,759
                                                             =================     =================
</TABLE>



See accompanying notes to condensed consolidated financial statements.


                                      -5-
<PAGE>


                    BHA GROUP HOLDINGS, INC. AND SUBSIDIARIES
            CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                FOR THE SIX MONTHS ENDED MARCH 31, 2002 AND 2001

                                   (UNAUDITED)

<TABLE>
<CAPTION>
(In thousands, except share and per share data)                            2002                     2001
                                                                           ----                     ----
<S>                                                                        <C>                     <C>
Common stock:
     Balance at beginning of period                                        $   88                  $   87
     Issuance of 48,677 and 15,746 shares of common
         stock in 2002 and 2001, respectively                                  --                       1
                                                                  ---------------------    --------------------
     Balance at end of period                                                  88                      88
                                                                  ---------------------    --------------------
Additional paid-in capital:
     Balance at beginning of period                                        62,536                  61,854
     Excess over par value of common stock issued                             541                     147
     Stock issued from treasury for stock option exercises                   (262)                   (108)
                                                                  ---------------------    --------------------
     Balance at end of period                                              62,815                  61,893
                                                                  ---------------------    --------------------
Retained earnings:
     Balance at beginning of period                                        34,916                  28,440
     Net earnings for the period                                            3,150                   4,102
     Cash dividends of $.03 and $.06 per share paid on
         common stock during 2002 and 2001, respectively                     (183)                   (381)
                                                                  ---------------------    --------------------
     Balance at end of period                                              37,883                  32,161
                                                                  ---------------------    --------------------
Accumulated - other comprehensive income:
     Balance at beginning of period                                          (856)                 (1,634)
     Equity adjustment from foreign currency translation and
         derivative instruments                                                47                     657
                                                                  ---------------------    --------------------
     Balance at end of period                                                (809)                   (977)
                                                                  ---------------------    --------------------
Treasury stock:
     Balance at beginning of period                                       (35,550)                (28,940)
     Acquisition of 53,800 and 437,108 shares of common
         stock, at cost, during 2002 and 2001, respectively                  (788)                 (5,909)
     Issuance of 14,719 and 10,744 treasury shares pursuant to
         stock option exercises, net, during 2002 and 2001,
              respectively                                                     38                    (49)
                                                                  ---------------------    --------------------
     Balance at end of period                                             (36,300)                (34,898)
                                                                  ---------------------    --------------------

     Total shareholders' equity                                          $ 63,677                $ 58,267
                                                                  =====================    ====================
</TABLE>

See accompanying notes to condensed consolidated financial statements.


                                      -6-
<PAGE>


                    BHA GROUP HOLDINGS, INC. AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED MARCH 31, 2002 AND 2001

                                   (UNAUDITED)

<TABLE>
<CAPTION>
(IN THOUSANDS)                                                                2002                2001
                                                                              ----                ----
<S>                                                                          <C>                 <C>
Cash flows from operating activities:
     Net earnings                                                            $3,150              $4,102
     Adjustment to reconcile net earnings to net cash
         provided by operating activities:
         Depreciation and amortization                                        2,636               3,053
         Deferred income taxes                                                   --                (400)
         Cumulative effect of an accounting change                            1,215                  --

     Changes in assets and liabilities:
         Accounts receivable                                                 (4,246)             (7,893)
         Inventories                                                          3,395               2,184
         Prepaid expenses                                                      (603)               (509)
         Accounts payable                                                     1,530              (1,276)
         Accrued expenses and other liabilities                                (667)                628
         Income taxes payable or receivable                                      77                (607)
                                                                      ------------------  ------------------
              Net cash provided by (used in) operating activities             6,487                (718)
                                                                      ------------------  ------------------

Cash flows from investing activities:
     Acquisition of property, plant and equipment                            (2,741)             (2,440)
     Net assets of business acquired (Note 3)                                  (622)                 --
     Change in other assets and liabilities                                     869                  95
                                                                      ------------------  ------------------
         Net cash used in investing activities                               (2,494)             (2,345)
                                                                      ------------------  ------------------

Cash flows from financing activities:
     Payment of cash dividend on common stock                                  (183)               (381)
     Purchase of treasury stock                                                (788)             (5,909)
     Proceeds from issuance of common stock                                     541                 137
     Net stock options exercised                                               (224)               (146)
     Net proceeds (repayments) from borrowings under
         revolving bank lines of credit                                      (3,808)              8,812
     Repayments of long-term debt and other long-term liabilities            (1,905)             (1,025)
                                                                      ------------------  ------------------
         Net cash provided by (used in) financing activities                 (6,367)              1,488
                                                                      ------------------  ------------------

         Equity adjustment from foreign currency translation                     47                 657
                                                                      ------------------  ------------------

     Net decrease in cash and cash equivalents                               (2,327)               (918)
Cash and cash equivalents at beginning of period                              9,471               3,877
                                                                      ------------------  ------------------
Cash and cash equivalents at end of period                                   $7,144             $ 2,959
                                                                      ==================  ==================
</TABLE>


See accompanying notes to condensed consolidated financial statements.


                                      -7-
<PAGE>


                    BHA GROUP HOLDINGS, INC. AND SUBSIDIARIES
              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1)  BASIS OF PRESENTATION AND REVENUE RECOGNITION

These condensed consolidated financial statements reflect all adjustments
(consisting of normal recurring adjustments) which, in the opinion of
management, are necessary to present fairly the financial position, results of
operations and cash flows for the periods presented in conformity with
accounting principles generally accepted in the United States of America applied
on a consistent basis.

These statements should be read in conjunction with the Notes to Consolidated
Financial Statements contained in BHA Group Holdings, Inc.'s (the "Company" or
"BHA") Annual Report to Shareholders for the fiscal year ended September 30,
2001, and with Management's Discussion and Analysis of Results of Operations and
Financial Condition appearing within this quarterly report.

Sales of products are recognized when goods are shipped "free on board" (FOB)
from their shipping point and when all obligations of the Company have been met.

The Company recognizes sales and gross profits on its services using the
percentage of completion method based on total costs incurred as compared to the
total estimated cost of the service contract. Substantially, all projects are
completed in less than 60 days from the date of commencement and the Company
does not engage in any long-term contracts.

The Company's service revenues generally result in gross margins as a percentage
of sales that are lower than the consolidated gross margins by approximately 5%
to 7%. Such revenues often represent installation of the products that are also
sold by the Company. During the quarter ended March 31, 2002, favorable
execution of service contracts resulted in gross margins that were nearly
comparable to those recognized from product sales. Revenues generated by
products and services were as follows (in thousands):

                                           Three Months Ended
                              March 31, 2002               March 31, 2001
                              --------------               --------------
           Products               $37,188                      $39,172
           Services                11,372                       10,696
                            -------------------         ---------------------
             Total                $48,560                      $49,868
                            ===================         =====================



                                            Six Months Ended
                              March 31, 2002               March 31, 2001
                              --------------               --------------
           Products               $72,266                      $73,574
           Services                17,207                       20,645
                            -------------------         ---------------------
             Total                $89,473                      $94,219
                            ===================         =====================


(2)  ACCOUNTING FOR GOODWILL AND OTHER INTANGIBLE ASSETS

Statement of Financial Accounting Standard (SFAS) No. 142. "Accounting for
Goodwill and Other Intangible Assets" was issued in July 2001 and has been
adopted by the Company effective October 1, 2001. SFAS No. 142 requires that
goodwill and intangible assets with indefinite useful lives no longer be
amortized, but instead, such assets must be tested for impairment at least
annually in accordance with the provisions of SFAS No. 142. This statement also
requires that intangible assets with estimable useful lives be amortized over
their respective estimated useful lives and reviewed for impairment in
accordance with SFAS No. 144, Accounting for the Impairment or Disposal of
Long-Lived Assets.

Prior to the adoption of SFAS 142, the Company evaluated the recoverability of
goodwill based upon undiscounted estimated future cash flows. In connection with
the SFAS 142 transitional


                                      -8-
<PAGE>

goodwill impairment evaluation, the Statement requires that the Company perform
an assessment of whether there is an indication that goodwill is impaired as of
the date of adoption, using a fair value model. To accomplish this, the Company
was required to identify its reporting units and to determine the carrying value
of each reporting unit by assigning the assets and liabilities, including the
existing goodwill and intangible assets, to those reporting units as of October
1, 2001. Based upon a discounted cash flow analysis, the Company concluded that
the carrying value of its Europe APC reporting unit exceeded its fair value and
as such the related goodwill was impaired. As a result, the Company recognized a
charge of $1,215,000 during the quarter ending December 31, 2001, to write-off
the goodwill of its Europe segment in its entirety. This write-off has been
recognized as the cumulative effect of a change in accounting principle.

The goodwill affected by this write-off related to two transactions, both of
which were acquisitions of the common stock of the target companies. As such,
there was no adjustment in the tax basis of the assets of such companies at the
time of the acquisitions. Accordingly, no tax benefit can be recorded as a
result of the write-off of the related goodwill.

The remaining acquired intangible assets and goodwill of the Company as of March
31, 2002 were as follows (in thousands):

                                               GROSS              ACCUMULATED
                                          CARRYING AMOUNT         AMORTIZATION
                                          ---------------         ------------
Amortized Intangible Assets:
       Non-compete agreements                $    786             $     311
       Patent rights                            2,026                 1,454
       Customer lists and other                   175                    12
                                       --------------------    -----------------
Total                                        $  2,987             $   1,777
                                       ====================    =================
Unamortized Intangible Assets:
       Trademark and Product Rights          $  1,282
                                       ====================
Goodwill                                     $  4,004
                                       ====================


There were no changes in the carrying value of goodwill during the quarter or
six month period ended March 31, 2002 other than the impairment loss recognized
upon implementation of SFAS No. 142. All of the goodwill recorded on the balance
sheet of the Company at March 31, 2002 relates to the Domestic APC segment.

Amortization expense relative to acquired intangibles was $62,000 for the
quarter and $115,000 for the six months ended March 31, 2002. Amortization of
purchased intangibles for each of the next five years is estimated as follows:
2002 - $240,000, 2003 - $229,000, 2004 - $222,000, 2005 - $222,000 and 2006 -
$222,000.



                                       -9-
<PAGE>



The following table presents net income for each period exclusive of
amortization expense recognized in such periods related to goodwill and other
intangible assets which will no longer be amortized. Also excluded is the loss
reported as a cumulative effect of an accounting change resulting from the
implementation of SFAS No. 142. Amounts are in thousands except per share
information:

<TABLE>
<CAPTION>
                                                                                  THREE MONTHS ENDED
                                                                                  ------------------
PRO FORMA INFORMATION                                                 MARCH 31, 2002         MARCH 31, 2001
                                                                      --------------         --------------
<S>                                                                         <C>                   <C>
Net income as reported                                                      $2,681                $2,169
Add back:
     Amortization of goodwill                                                   --                    55
     Amortization of trademark and product rights                               --                    92
Less tax effect of proforma adjustments                                         --                  (36)
                                                                    -------------------    ------------------
Adjusted net income                                                         $2,681                $2,280
                                                                    ===================    ==================

Diluted earnings per share:
     Net income as reported                                                  $0.42                 $0.34
     Amortization of goodwill, trademark and product rights,
         net of tax                                                             --                   .01
                                                                    -------------------    ------------------
Adjusted net income                                                          $0.42                 $0.35
                                                                    ===================    ==================
</TABLE>

<TABLE>
<CAPTION>
                                                                                   SIX MONTHS ENDED
PRO FORMA INFORMATION                                                 MARCH 31, 2002         MARCH 31, 2001
                                                                      --------------         --------------
<S>                                                                         <C>                   <C>
Net income as reported                                                      $3,150                $4,102
Add back:
     Cumulative effect of accounting change                                  1,215                    --
     Amortization of goodwill                                                   --                   110
     Amortization of trademark and product rights                               --                   184
Less tax effect of proforma adjustments                                         --                  (72)
                                                                    -------------------    ------------------
Adjusted net income                                                         $4,365                $4,324
                                                                    ===================    ==================

Diluted earnings per share:
     Net income as reported                                                  $0.49                 $0.62
     Cumulative effect of accounting change                                    .19                    --
     Amortization of goodwill, trademark and product rights,
         net of tax                                                             --                  0.03
                                                                    -------------------    ------------------
Adjusted net income                                                          $0.68                 $0.65
                                                                    ===================    ==================
</TABLE>

(3)  ACQUISITION OF ASSETS

In November 2001, the Company acquired certain assets including inventory,
equipment, customer lists, and other intangible assets of a fabric filter
manufacturer in Mexico. The purchase price consisted of a cash payment in the
amount of $622,000 together with the assumption of liabilities of approximately
$150,000.

The proforma effect of this transaction is not material to the Company.


                                      -10-
<PAGE>

(4)  DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

The Company has entered into forward exchange contracts with commercial banks in
order to fix the currency exchange rate related to intercompany transactions
with its foreign subsidiaries. Changes in the value of these instruments due to
currency movements offset the foreign exchange gains and losses of the
corresponding intercompany transactions, which primarily relate to the purchases
by the Company's European subsidiaries of inventory from their U.S. affiliates.
In accordance with SFAS 133, these transactions have been determined to be
effective hedges. The fair value of these contracts has been recognized in
accrued liabilities in the consolidated balance sheet. The related gains and
losses are deferred in shareholders' equity (as a component of comprehensive
income). These deferred gains and losses are recognized in income in the period
in which the related purchases being hedged are acquired. The notional amount of
such contracts at March 31, 2002 was $1,320,000, and the market value of these
contracts was $3,000 higher than face value.

(5)  EARNINGS PER COMMON SHARE

Basic earnings per share is computed by dividing net earnings available to
common shareholders by the weighted average number of common shares outstanding
for the period. Diluted earnings per share is computed based upon the weighted
average number of common shares and dilutive common equivalent shares
outstanding. Stock options, which are common stock equivalents, have a dilutive
effect on earnings per share in all periods presented and are therefore included
in the computation of diluted earnings per share. A reconciliation of the
numerators and the denominators of the basic and diluted per-share computations
are as follows:

<TABLE>
<CAPTION>
                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                              FOR THE THREE MONTHS ENDED
                                              March 31, 2002                              March 31, 2001
                                 ------------------------------------------  ------------------------------------------
                                 Net Earnings     Shares       Per-Share     Net Earnings     Shares       Per-Share
                                  (Numerator)    (Denom.)        Amt.         (Numerator)    (Denom.)        Amt.
                                  -----------    --------        ----         -----------    --------        ----
<S>                                 <C>             <C>         <C>             <C>             <C>         <C>
Basic earnings per share:
Earnings available to common
shareholders                        $ 2,681         6,091       $ 0.44          $ 2,169         6,169       $ 0.35

Effect of dilutive
securities--stock options             --              322                         --              302

Diluted earnings per share:
Earnings available to common
shareholders and assumed
conversion                          $ 2,681         6,413       $ 0.42          $ 2,169         6,471       $ 0.34
                                 ==========================================  ==========================================
</TABLE>

<TABLE>
<CAPTION>
                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)
                                                               FOR THE SIX MONTHS ENDED
                                              March 31, 2002                              March 31, 2001
                                 ------------------------------------------  ------------------------------------------
                                 Net Earnings     Shares       Per-Share     Net Earnings     Shares       Per-Share
                                  (Numerator)    (Denom.)        Amt.         (Numerator)    (Denom.)        Amt.
                                  -----------    --------        ----         -----------    --------        ----
<S>                                 <C>             <C>         <C>             <C>             <C>         <C>
Basic earnings per share:
Earnings available to common
shareholders                        $ 3,150         6,094       $ 0.52          $ 4,102         6,291       $ 0.65

Effect of dilutive
securities--stock options             --              286                         --              299

Diluted earnings per share:
Earnings available to common
shareholders and assumed
conversion                          $ 3,150         6,380       $ 0.49          $ 4,102         6,590       $ 0.62
                                 ==========================================  ==========================================
</TABLE>


                                      -11-
<PAGE>

(6)  INVENTORIES

BHA values its inventory at the lower of cost or market. Cost is determined
using the first-in, first-out (FIFO) method.

Components of inventories at March 31, 2002 and September 30, 2001 were as
follows (in thousands):

                                 MARCH 31,          SEPTEMBER 30,
                                    2002                 2001
                              ---------------    ------------------

          Raw materials            $14,997              $15,593
          Work-in-process            2,413                  946
          Finished goods             2,342                6,306
                              ---------------    ------------------
          Total                    $19,752              $22,845
                              ===============    ==================


(7)  BUSINESS SEGMENTS

BHA reports its operations as three business segments, Domestic Air Pollution
Control (Domestic APC), Europe Air Pollution Control (Europe APC), and BHA
Technologies. Domestic APC consists of the air pollution control products and
services sold or managed from the United States. Such sales include shipments
and services throughout North America, Latin America, Asia, and the Pacific Rim,
as such revenues are derived from BHA's U.S. based management group. The Europe
APC segment represents sales of products and services managed from BHA's
European manufacturing, distribution, and sales offices. BHA Europe generally
services customers throughout Europe, as well as in the Middle East and Northern
Africa. BHA Technologies supplies ePTFE membrane products to BHA's APC business,
and is also developing a market for such products outside of air pollution
control.

BHA manages these segments as strategic business units. Europe APC represents a
distinct business unit as it maintains its own manufacturing, sales, marketing,
and project management resources. Sales to other international locations are
included in the Domestic APC business segment, as most or all of the key
manufacturing, engineering, and sales support functions are performed from the
United States. BHA Technologies operates as a distinct entity due to its unique
technologies, as well as the marketing of products unrelated to air pollution
control.

Reportable segment data was as follows (in thousands):

NET SALES

                                            THREE MONTHS ENDED
                                 --------------------------------------
                                     MARCH 31,            MARCH 31,
                                       2002                  2001
                                 -----------------     ----------------

           Domestic APC               $39,858               $40,244
           Europe APC                   5,624                 6,643
           BHA Technologies             3,078                 2,981
                                 -----------------     ----------------
           Total                      $48,560               $49,868
                                 =================     ================




                                      -12-
<PAGE>

NET SALES

                                               SIX MONTHS ENDED
                                 --------------------------------------
                                     MARCH 31,            MARCH 31,
                                       2002                  2001
                                 -----------------     ----------------

           Domestic APC               $72,247               $77,209
           Europe APC                  10,889                11,513
           BHA Technologies             6,337                 5,497
                                 -----------------     ----------------
           Total                      $89,473               $94,219
                                 =================     ================


Net sales represent revenues from sales to unaffiliated customers.


EARNINGS (LOSS) BEFORE INCOME TAXES

                                            THREE MONTHS ENDED
                                 --------------------------------------
                                     MARCH 31,             MARCH 31,
                                       2002                  2001
                                 -----------------     ----------------

           Domestic APC               $3,620                $3,068
           Europe APC                    289                   377
           BHA Technologies              276                 (180)
                                 -----------------
                                                       ----------------
           Total                      $4,185                $3,265
                                 =================     ================

                                             SIX MONTHS ENDED
                                 --------------------------------------
                                     MARCH 31,            MARCH 31,
                                       2002                  2001
                                 -----------------     ----------------

           Domestic APC               $6,082                $5,992
           Europe APC                    236                   601
           BHA Technologies              456                 (386)
                                 -----------------
                                                       ----------------
           Total                      $6,774                $6,207
                                 =================     ================






                                      -13-
<PAGE>


                    BHA GROUP HOLDINGS, INC. AND SUBSIDIARIES
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
                  RESULTS OF OPERATIONS AND FINANCIAL CONDITION


GENERAL

For purposes of this "Management's Discussion and Analysis," as well as the
segment reporting information included in Note 7 to the Condensed Consolidated
Financial Statements, Domestic Air Pollution Control ("Domestic APC") represents
all air pollution control business for which the products or services are sold
or managed from the United States. Generally, this includes revenues to
customers in the U.S. and exports to customers in Canada, Latin America, and
Asia. Europe APC represents all air pollution control business for which the
products or services are sold or managed primarily from Europe. Such revenues
are typically generated in Europe, Northern Africa and the Middle East. BHA
Technologies, a subsidiary engaged in the production and sale of ePTFE membrane
for both APC and non-APC applications, represents BHA's third business segment.


FISCAL 2002 COMPARED TO FISCAL 2001

NET SALES

Consolidated net sales for the six months ended March 31, 2002 ("fiscal 2002")
decreased 5% to $89.5 million from $94.2 million for the same period in fiscal
2001. Consolidated sales for the quarter ended March 31, 2002 ("second quarter")
decreased 3% to $48.6 million from $49.9 million in fiscal 2001. The overall
decline in sales was attributable to the weakness in the worldwide manufacturing
and industrial production and the impact of this weak demand on the Company's
APC business.

Sales in the Domestic APC segment declined 1% for the most recent quarter and 6%
for the first six months of fiscal 2002 as compared to the prior year. Within
this segment, the sales of fabric filter replacement parts and services declined
10% for the six-month period and 4% for the most recent quarter. The sales of
electrostatic precipitator ("ESP") parts and services increased 4% for the most
recent quarter and declined 1% for the first six months of fiscal 2002 as
compared to the prior year. The ESP business has continued to benefit from
favorable business conditions within the U.S. electric utility market for
operators of coal-fired boilers. Export sales decreased 2% for the most recent
quarter and 6% for the first six months of fiscal 2002 as compared to the same
periods in the prior year due to decreased sales in the Pacific Rim.

Sales in the Company's Europe APC segment declined by 15% for the quarter and 5%
for the six-month period as compared to prior year results. The sales decline is
the result of a major ESP rebuild project that was performed in the second
quarter of the prior year.

Shipments of ePTFE membrane from BHA Technologies to third party customers
increased by $0.1 million in the second quarter and $.8 million for the first
six months of fiscal 2002 as compared to the prior year periods. The increase
was attributable to incremental business in non-consumer apparel resulting from
a new customer which supplies ePTFE membrane laminated to base fabric as part of
the supply chain in a government contract.



                                      -14-
<PAGE>

GROSS MARGIN

Consolidated gross margin was 30.7% of sales in the second quarter compared to
28.3% in the prior year. For the first six months of fiscal 2002, the
consolidated gross margin was 30.5% of sales compared to 29.1% in the prior
year. Gross margins as a percentage of sales improved in each of the Company's
business segments. The improvements were attributable to a more favorable mix of
business, lower manufacturing overheads and higher efficiency in plant
utilization. During the most recent quarter, the improved margins were also due,
in part, to several significant service contracts that were completed with
favorable cost variances which are not expected to be recurring.


OPERATING EXPENSES

Operating expenses were $10.5 million (21.7% of sales) for the second quarter of
fiscal 2002 compared to $10.4 million (20.8% of sales) for the same quarter in
fiscal 2001. For the first six months of fiscal 2002, operating expenses were
$20.1 million (22.5% of sales) compared to $20.2 million (21.5% of sales) for
the same period in the prior year. During the first six months of fiscal 2002,
the Company recognized net foreign exchange losses, primarily in the Europe APC
segment, of $0.2 million compared to net foreign exchange gains of $0.2 million
for the same period in the prior year. Additionally, bad debt expense was $0.4
million for the first half of fiscal 2002 compared to $0.2 million for the prior
year period. These increases in operating expenses aggregating $0.6 million,
together with incremental spending on the Company's enterprise resource planning
implementation, were offset by a $0.3 million decrease in amortization resulting
from the implementation of SFAS 142, together with savings recognized through
personnel reductions implemented during the second half of fiscal 2001.


INTEREST EXPENSE

Interest expense was $0.2 million in the second quarter of fiscal 2002 compared
to $0.5 million for the same quarter in fiscal 2001. Interest expense for the
first six months of fiscal 2002 was $0.4 million compared to $1.0 million for
the first six months of the prior year. Average borrowings decreased from $32.1
million in the first half of fiscal 2001 to $24.9 million during the most recent
six months. Additionally, the average interest rate on the Company's borrowings
decreased from 6.3% in the fiscal 2001 period to 3.8% for the first half of
2002. All of the Company's borrowings are at variable interest rates.


EARNINGS BEFORE INCOME TAXES

Pre-tax earnings for the Domestic APC segment were $3.6 million for the second
quarter compared to $3.1 million in the prior year due to improved gross margins
and lower interest costs. For the six months ended in March 2002, Domestic APC
pre-tax earnings improved from $6.0 million to $6.1 million despite a 6%
decrease in sales. The impact of the lower sales volume was offset by improved
gross margins together with a $0.5 million decrease in interest costs
attributable to this segment.

The Europe APC segment reported pre-tax earnings of $0.3 million in the fiscal
2002 second quarter compared to $0.4 million for the same quarter in fiscal
2001. For the six- month periods, pre-tax earnings were $0.2 million in fiscal
2002 compared to $0.6 million in fiscal 2001. The majority of the earnings
decline is the result of foreign exchange. During the first six months of fiscal
2001, this segment reported foreign exchange gains of $0.3 million compared to
losses from foreign exchange of $0.1 million in the fiscal 2002 period.

                                      -15-
<PAGE>

BHA Technologies' pre-tax earnings for the most recent quarter were $0.3 million
compared to a pre-tax loss of $0.2 million in the prior year. For the first six
months of fiscal 2002, BHA Technologies reported pre-tax earnings of $0.5
million compared to a pre-tax loss of $0.4 million for the same period in the
prior year. The turnaround resulted from higher sales volumes and an improved
sales mix. Additionally, in the prior year, BHA Technologies incurred costs
related to the start-up of their Lee's Summit, Missouri production facility.


CUMULATIVE EFFECT OF AN ACCOUNTING CHANGE

During the first quarter of fiscal 2002, the Company adopted SFAS No. 142,
"Accounting for Goodwill and Other Intangible Assets." In accordance with SFAS
No. 142, a loss was recognized relative to the impairment of goodwill of the
Company's Europe APC segment. This loss, in the amount of $1.2 million, was
accounted for as the cumulative effect of a change in accounting policy.


INCOME TAXES

The effective income tax rate for the first six months of fiscal 2002 was 35.6%
compared to 33.9% for the same period in the prior year. The fiscal 2002 tax
rate is higher than the Company's historical rate due to losses on certain
foreign subsidiaries for which the Company has not recognized any tax benefits.


NET EARNINGS

Net earnings for the second quarter of fiscal 2002 were $2.7 million ($0.42 per
diluted share) compared to net earnings of $2.2 million ($0.34 per diluted
share) in the second quarter of fiscal 2001. For the first six months of fiscal
2002, the Company had net earnings of $3.2 million ($0.49 per diluted share)
compared to earnings of $4.1 million ($0.62 per diluted share) for the same
period in the prior year. Exclusive of the cumulative effect of the accounting
change, net earnings for the first six months of fiscal 2002 were $4.4 million
($0.68 per diluted share). The average number of common and common equivalent
shares declined from 6.6 million shares to 6.4 million shares due to stock
repurchased by the Company in the open market in each year.


LIQUIDITY AND CAPITAL RESOURCES

Net working capital decreased from $45.2 million at September 30, 2001 to $43.7
million at March 31, 2002. The current ratio at March 31, 2002 and September 30,
2001 was 2.9 and 3.0, respectively. The Company's cash decreased from $9.5
million at September 30, 2001 to $7.1 million at March 31, 2002.

During the six months ended March 31, 2002, the Company generated $6.5 million
in cash from operating activities compared to $0.7 million used to support
operating activities in the first six months of the prior year. The difference
is the result of improved working capital management.

Investing activities resulted in a net use of cash of $2.5 million and $2.3
million for the six months ended March 31, 2002 and 2001, respectively. The
investment in capital expenditures was $2.7 million for the first six months of
fiscal 2002 and $2.4 million for the first six months of fiscal 2001. The
capital expenditures in fiscal 2002 primarily relate to the Company's enterprise
resource planning software project. Current year investing activities also
included $0.6 million related to the acquisition of certain assets of a fabric
filter manufacturing company in Mexico.


                                      -16-
<PAGE>

During the first six months of fiscal 2002, the Company used cash generated from
operations to repay $5.7 million in bank debt. The Company also used $0.8
million to repurchase common stock. During the first six months of fiscal 2001,
the Company's financing activities consisted primarily of $7.8 million of net
borrowings which were used to repurchase $5.9 million of the Company's common
stock and to fund the Company's capital expenditures during this period.

The Company has financing commitments that include $10.6 million outstanding
under a U.S. term note with a final maturity in 2005 that requires quarterly
payments of $0.6 million; an $18.0 million U.S. revolving credit facility
maturing in 2004; and credit lines in Germany for the U.S. equivalent of $5.0
million maturing in 2004. The Company's unused commitments as of March 31, 2002
were approximately $19.1 million. The Company believes that cash flows from
operations and available credit lines will be sufficient to meet its capital
needs for the foreseeable future.


MANAGEMENT JUDGMENTS AND ESTIMATES

In preparing the financial statements, a number of assumptions and estimates are
determined, that in the judgment of management, are proper in light of existing
general economic and Company-specific circumstances. Examples of areas in which
judgments and estimates are required include the collectibility of receivables,
the value of certain inventories and the evaluation of certain contingent
liabilities, including product warranties and claims arising in the ordinary
course of business. While the Company has taken reasonable care in preparing
these estimates and making these judgments, actual results could and probably
will differ from the estimates. Management believes that any difference in the
actual results from the estimates will not have a material effect upon the
Company's financial position or results of operations.


CRITICAL ACCOUNTING POLICIES

The Company's critical accounting policies include inventory valuation,
estimates related to collectibility of receivables and estimation of potential
warranty claims.

The Company values its inventories on the first-in, first-out (FIFO) accounting
method using standard costs and provides reserves for estimated losses for slow
moving or obsolete items. The reserve requirement is estimated based upon a
review of specific inventory items that are identified as slow moving and
consideration of potential salvage value and carrying costs.

Accounts receivables are reported net of reserves for uncollectible accounts.
The Company estimates the amount of the reserve requirement based upon a review
of delinquent accounts, the Company's historical loss experience and the current
economic factors impacting its customers.

The Company provides warranties on the products and services it sells which vary
in length and terms based upon the nature of such products and services, as well
as the customer's industry. A reserve has been established for potential
warranty claims. The Company estimates its reserve requirement based upon
specific product failures identified, as well as historical loss experiences.


DIVIDEND POLICY

On January 22, 2002, the Company announced a change in its approach to the
payment of cash dividends. In the future, dividends will be paid annually rather
than quarterly. Although no dividend has been declared, the Company anticipates
paying an annual dividend for calendar 2002 of approximately $0.12 per share in
January 2003. This change is intended to streamline the dividend payment process
and lower administrative expenses.


                                      -17-
<PAGE>

OUTLOOK

The strong financial results for the most recently completed quarter indicate
that many of the Company's strategies are working. Specifically, the Company
will continue to focus on managing costs while continuing to invest in those
areas that will provide the greatest advantage in the long term. The Company
will continue to maximize opportunities to service the ESP side of the APC
business and pursue opportunities to expand its business in the sale of ePTFE
membranes to customers in applications outside of air pollution control. The
Company also seeks to expand market share in its core fabric filter business as
conditions in that market remain soft.

Although the Company is pleased to have reported strong earnings and cash flows
for the most recently completed quarter, it continues to remain cautious about
near-term results. Of specific concern is continued weakness in the worldwide
manufacturing and industrial sector. Based on historical trending, the Company
believes that improvement in its market for the sale of fabric filter
replacement parts and services could trail an improvement in overall
manufacturing conditions by as much as six months. The Company expects that in
the interim, competition will be intense and pricing will continue to come under
pressure. The Company is committed to maintaining and expanding its position as
the premier supplier of APC replacement parts and service during this
challenging economic period.

The following is specific guidance for the upcoming quarter. For the third
quarter of fiscal 2002, the Company anticipates that consolidated sales will
decline less than 5% from the same quarter in the prior year. Earnings for the
upcoming quarter are expected to be in the range of $0.23 to $0.28 per diluted
share as compared to $0.26 per diluted share reported for the same period in the
prior year. Visibility with respect to future results beyond 90 days remains a
challenge.


FORWARD-LOOKING INFORMATION

This report contains forward-looking statements that reflect the Company's
current views with respect to future events and financial performance. The
statements are subject to certain risks and uncertainties that could cause
actual results to differ materially from historical results or those
anticipated. The words "should," "believe," "anticipate," "expect," and other
expressions that indicate future events and trends identify forward-looking
statements. Actual future results and trends may differ materially from
historical results or those anticipated depending on a variety of factors,
including, but not limited to, competition, the performance of newly established
domestic and international operations, demand and price for the Company's
products and services, and other factors. Readers should consult the section
entitled "Factors Affecting Earnings and Stock Price" in the Company's annual
report of Form 10-K.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

INTEREST RATES

All of the Company's indebtedness is at variable rates of interest. The Company
has not used derivative financial instruments to hedge its exposure to interest
rate changes. Based upon borrowings outstanding at March 31, 2002, a 1%
fluctuation in market rates would impact interest expense by approximately
$210,000 annually.


EXCHANGE RATES

The Company views its equity investment in a foreign subsidiary as a long-term
commitment and does not hedge the translation exposures relative to such equity
investments.


                                      -18-
<PAGE>

In addition to its equity investment, the Company from time-to-time has U.S.
dollar denominated trade payables and advances due from its European affiliates.
Such amounts are subject to translation exposure. At March 31, 2002, the amount
of such unhedged exposures was approximately $1.0 million, substantially all of
which is related to its affiliates in the European Common Market.


FORWARD EXCHANGE CONTRACTS

BHA periodically enters into forward exchange contracts with commercial banks in
order to fix the currency exchange rate related to intercompany transactions
with its foreign subsidiaries. Changes in the value of these instruments due to
currency movements offset the foreign exchange gains and losses of the
corresponding intercompany transactions. At March 31, 2002, the notional amount
of such forward exchange contracts was approximately $1.3 million and the market
value of these contracts was $3,000 higher than face value.


ACCOUNTS RECEIVABLE

The Company's customer base operates in numerous industries in the U.S. and
internationally. With the weakness in the global manufacturing economy, the
Company is seeing an increasing level of customer bankruptcies and slow payment
problems that management believes have been appropriately reserved for. Although
there is not significant concentration of sales in any one industry or with any
individual customer, certain of the Company's customers operate in industries
such as steel, textile, and foundry, which have been severely impacted by the
current economic environment. Additionally, the Company executes significant
projects and fulfills membrane supply contracts that can result in open
receivables from individual customers that at times exceed $1 million. It is
considered unlikely that the failure of one or more customers would have a
material adverse effect on the Company's financial condition. However, if the
current economic environment persists or deteriorates further, near term
operating results could be adversely impacted by a further increase in bad debt
expense.











                                      -19-
<PAGE>


PART II. OTHER INFORMATION


Item 4 - Submission of Matters to a Vote of Security Holders

On February 19, 2002, at the Annual Meeting of Shareholders of BHA Group
Holdings, Inc.

(a)  The following persons were elected as Directors by the following vote:

                                     FOR           AUTHORITY WITHHELD

    Don H. Alexander              4,789,903              330,874
    Robert D. Freeland            4,789,903              330,874
    Richard C. Green              4,789,903              330,874
    James E. Lund                 4,130,601              990,176
    Thomas A. McDonnell           4,789,903              330,874
    Lamson Rheinfrank, Jr.        4,130,734              990,043
    James J. Thome                4,130,727              990,050


(b)  Voting to amend and restate the Company's Amended and Restated Incentive
     Stock Option Plan was as follows:

             FOR               AGAINST             WITHHELD

          3,419,314            417,040             892,619


(c)  Voting for the ratification of KPMG LLP as the independent auditors of the
     Company for the fiscal year ending September 30, 2002 was as follows:

              FOR              AGAINST             WITHHELD

           5,111,133            4,487                 0


Item 6 - Exhibits and Reports on Form 8-K:

(a)  Exhibit (10e), Amended Exhibit 4.1 (effective as of February 19, 2002), to
     Employment Agreement dated February 1, 2001 between BHA Group Holdings,
     Inc. and Lamson Rheinfrank, Jr.

(b)  Exhibit (10f), Amended Exhibit 4.1 (effective as of February 19, 2002), to
     Employment Agreement between BHA Group Holdings, Inc. and James E. Lund.

(c)  Exhibit (10g), Amended Exhibit 4.1 (effective as of February 19, 2002), to
     Employment Agreement between BHA Group Holdings, Inc. and James J. Thome.

(d)  Exhibit (10h), Amended Exhibit 4.1 (effective as of February 19, 2002), to
     Employment Agreement between BHA Group Holdings, Inc. and James C. Shay.

(e)  During the quarter ended March 31, 2002, there were no reports on Form 8-K
     filed by the Company.



                                      -20-
<PAGE>


                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.

                                BHA GROUP HOLDINGS, INC.
                                (Registrant)





    April 23, 2002              By:  /s/ James C. Shay
----------------------               --------------------------------
         Date                                   (Signature)
                                     James C. Shay
                                     Senior Vice President,
                                     Finance and Administration,
                                     Principal Financial and
                                     Accounting Officer


                                By:  /s/ James E. Lund
                                     --------------------------------
                                                (Signature)
                                     James E. Lund
                                     President and
                                     Chief Executive Officer








                                      -21-





</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(E)
<SEQUENCE>3
<FILENAME>file002.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>

                                                                 Exhibit 10(e)

                             EMPLOYMENT AGREEMENT
                            LAMSON RHEINFRANK, JR.

                 Exhibit 4.1 - Amended as of February 19, 2002

                                 COMPENSATION

1.       Base Salary. During the Employment Period, Employer shall pay to
         Executive a Base Salary, payable in equal monthly installments at
         such times during each month as is customary with Employer with
         respect to its senior executives, at a rate of $184,750 per annum.

2.       Short-Term Bonus Arrangement Applicable for Fiscal Year 2002.

         (a)      Executive shall be entitled to receive an annual cash bonus
                  for fiscal year 2002 based on the consolidated earnings per
                  share of Employer ("EPS") as determined under the following
                  Annual Cash Incentive Matrix:

<TABLE>
<CAPTION>
=================================================================================================

                                  ANNUAL CASH INCENTIVE MATRIX
------------------------ ----------------------- ------------------------ -----------------------

      FISCAL YEAR              EPS/BONUS                EPS/BONUS               EPS/BONUS
------------------------ ----------------------- ------------------------ -----------------------
<S>                      <C>                     <C>                      <C>
         2002                $0.98/$20,000            $1.18/$40,000           $1.28/$100,000
======================== ======================= ======================== =======================
</TABLE>

         (b)      An annual cash bonus shall not be payable for fiscal year
                  2002 if EPS for such fiscal year is less than $0.98.

         (c)      If the EPS for fiscal 2002 is between the EPS levels shown
                  in the above matrix, the amount of the annual cash bonus
                  shall be prorated between such EPS levels. The maximum
                  annual cash bonus for fiscal year 2002 is $100,000.

3.       Short-Term Bonus Arrangement Applicable for Fiscal Years 2003 and
         2004.

         (a)      Fiscal 2002 actual results, exclusive of the $0.19 per share
                  non-recurring charge related to adoption of SFAS 242, will
                  serve as the baseline for establishing the fiscal 2003 and
                  2004 bonus matrix. Under this matrix, incremental bonus
                  payments will be made based on EPS improvements of 8%, 15%
                  and 20% (exclusive of the one-time charge). In the following
                  example, fiscal 2002 results are assumed to be $1.05 per
                  share. Based upon $1.05 in fiscal 2002 EPS, the annual cash
                  incentive matrix for the three-year period would be
                  structured as follows:
<PAGE>

<TABLE>
<CAPTION>
====================================================================================================
                         ANNUAL CASH INCENTIVE MATRIX
--------------------- -------------------------- ------------------------- -------------------------
                           8% EPS IMPROVE/           15% EPS IMPROVE/          20% EPS IMPROVE/
    FISCAL YEAR                BONUS %                   BONUS %                   BONUS %
--------------------- -------------------------- ------------------------- -------------------------
<S>                       <C>                        <C>                       <C>
        2002              $0.98/$20,000              $1.18/$40,000             $1.28/$100,000
--------------------- -------------------------- ------------------------- -------------------------
        2003              $1.34/$20,000              $1.43/$40,000             $1.49/$100,000
--------------------- -------------------------- ------------------------- -------------------------
        2004              $1.45/$20,000              $1.64/$40,000             $1.79/$100,000
--------------------- -------------------------- ------------------------- -------------------------
     Cumulative           $3.77/$60,000              $4.25/$120,000            $4.56/$300,000
===================== ========================== ========================= =========================
</TABLE>

         (b)      An annual cash bonus shall not be payable for fiscal year
                  2003 or fiscal 2004 if EPS for such fiscal year is less than
                  the minimum level for each year as reflected in the matrix.

         (c)      If the EPS for fiscal 2003 or fiscal 2004 is between the EPS
                  levels reflected in the approved matrix, the amount of the
                  annual cash bonus shall be prorated between such EPS levels.
                  The maximum annual cash bonus for fiscal 2003 and fiscal
                  2004 is $100,000.

4.       Short-Term Bonus - Three-Year Cumulative Provision. Due to the
         cyclical nature of the Company's business, the matrix will be
         structured to include a three-year cumulative catch-up provision

         The amount of the annual cash bonus for fiscal year 2004 may be
         increased from the amounts determined in the matrix for such year as
         a result of the cumulative three-year EPS. The following example
         illustrates how the annual cash bonus for fiscal year 2004 may be
         increased by the cumulative three-year EPS (assuming the example
         matrix presented in item 3 above which is reflective of fiscal 2002
         EPS of $1.05).

<TABLE>
<CAPTION>
                                    EPS            BONUS
                                    ---            -----
<S>                                <C>           <C>
     Fiscal Year 2002              $ 1.05        $    27,000
     Fiscal Year 2003              $ 1.32        $         0
     Fiscal Year 2004              $ 1.70        $    64,000
                                   ------        -----------
     Cumulative Three-Year Total   $ 4.07        $    91,000
     Cumulative Adjustment                       $     6,500 (additional amount paid in 2004)
                                                 -----------
     Cumulative Bonus Paid                       $    97,500
</TABLE>

         The cumulative annual bonus for fiscal years 2002, 2003 and 2004
         before cumulative adjustment would be $91,000. Because the cumulative
         three-year EPS of $4.07 is between $3.77 and $4.25, the cumulative
         three-year bonus amount attributable to $4.07 would be $97,500, a
         proration between $3.77/$60,000 and $4.25/$120,000. As such, an
         additional $6,500 would be payable in 2004 to bring the fiscal year
         2004 bonus to $70,500 and the cumulative three-year bonus to $97,500.

5.       Short-Term Bonus - Timing of Payment. Employer shall pay to Executive
         the annual cash bonus payable, if any, within 75 days following the
         end of each fiscal year.

6.       Short-Term Bonus Arrangement(s) Applicable for Fiscal Years After
         2004. Executive shall be entitled to receive annual cash bonuses for
         years after fiscal year 2004 under a bonus arrangement or
         arrangements to be determined by Employer which shall provide
         Executive an annual bonus opportunity of at least $100,000.
<PAGE>

7.       Long-Term Incentive Arrangement Applicable for Fiscal Years 2000,
         2001 and 2002. On November 9, 1999, Executive received a grant of
         options to purchase 18,000 shares of Company Common Stock. Pursuant
         to the Compensation Committee's grant to Executive, the options, to
         the extent not previously exercisable and vested, shall be
         immediately exercisable and vested upon the termination of the
         Employment Period by Employer without cause pursuant to Section 5.1,
         or by Executive for good reason pursuant to Section 5.3, if such
         termination occurs within three months prior to or twelve months
         after a Change in Control.

8.       Long-Term Incentive Arrangement(s) Applicable for Fiscal Years After
         2002. In each fiscal year after 2002, Executive shall be entitled to
         participate in a long-term incentive arrangement or arrangements to
         be determined by Employer, which arrangement or arrangements shall
         provide Executive an opportunity to earn an amount no less than the
         product of $50,000 multiplied by the numbers of fiscal years to which
         the arrangement or arrangements relate.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(F)
<SEQUENCE>4
<FILENAME>file003.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>







                                                                 Exhibit 10(f)

                             EMPLOYMENT AGREEMENT
                                 JAMES E. LUND

                 Exhibit 4.1 - Amended as of February 19, 2002

                                 COMPENSATION

1.       Base Salary. During the Employment Period, Employer shall pay to
         Executive a Base Salary, payable in equal monthly installments at
         such times during each month as is customary with Employer with
         respect to its senior executives, at a rate of $258,750 per annum.

2.       Short-Term Bonus Arrangement Applicable for Fiscal Year 2002.

         (a)      Executive shall be entitled to receive an annual cash bonus
                  for fiscal year 2002 based on the consolidated earnings per
                  share of Employer ("EPS") as determined under the following
                  Annual Cash Incentive Matrix:

<TABLE>
<CAPTION>
=================================================================================================

                                 ANNUAL CASH INCENTIVE MATRIX
------------------------ ----------------------- ------------------------ -----------------------

      FISCAL YEAR              EPS/BONUS                EPS/BONUS               EPS/BONUS
------------------------ ----------------------- ------------------------ -----------------------
<S>                      <C>                     <C>                      <C>
         2002                $0.98/$40,000            $1.18/$80,000           $1.28/$200,000
======================== ======================= ======================== =======================
</TABLE>

         (b)      An annual cash bonus shall not be payable for fiscal year
                  2002 if EPS for such fiscal year is less than $0.98.

         (c)      If the EPS for fiscal 2002 is between the EPS levels shown
                  in the above matrix, the amount of the annual cash bonus
                  shall be prorated between such EPS levels. The maximum
                  annual cash bonus for fiscal year 2002 is $200,000.

3.       Short-Term Bonus Arrangement Applicable for Fiscal Years 2003 and
         2004.

         (a)      Fiscal 2002 actual results, exclusive of the $0.19 per share
                  non-recurring charge related to adoption of SFAS 142, will
                  serve as the baseline for establishing the fiscal 2003 and
                  2004 bonus matrix. Under this matrix, incremental bonus
                  payments will be made based on EPS improvements of 8%, 15%
                  and 20% (exclusive of the one-time charge). In the following
                  example, fiscal 2002 results are assumed to be $1.05 per
                  share. Based upon $1.05 in fiscal 2002 EPS, the annual cash
                  incentive matrix for the three-year period would be
                  structured as follows:






<PAGE>



<TABLE>
<CAPTION>
====================================================================================================
                                  ANNUAL CASH INCENTIVE MATRIX
--------------------- -------------------------- ------------------------- -------------------------
                           8% EPS IMPROVE/           15% EPS IMPROVE/          20% EPS IMPROVE/
    FISCAL YEAR                BONUS %                   BONUS %                   BONUS %
--------------------- -------------------------- ------------------------- -------------------------
<S>                      <C>                     <C>                      <C>
        2002              $0.98/$40,000              $1.18/$80,000             $1.28/$200,000
--------------------- -------------------------- ------------------------- -------------------------
        2003              $1.34/$40,000              $1.43/$80,000             $1.49/$200,000
--------------------- -------------------------- ------------------------- -------------------------
        2004              $1.45/$40,000              $1.64/$80,000             $1.79/$200,000
--------------------- -------------------------- ------------------------- -------------------------
     Cumulative           $3.77/$120,000             $4.25/$240,000            $4.56/$600,000
===================== ========================== ========================= =========================
</TABLE>

         (b)      An annual cash bonus shall not be payable for fiscal year
                  2003 or fiscal 2004 if EPS for such fiscal year is less than
                  the minimum level for each year as reflected in the matrix.

         (c)      If the EPS for fiscal 2003 or fiscal 2004 is between the EPS
                  levels reflected in the approved matrix, the amount of the
                  annual cash bonus shall be prorated between such EPS levels.
                  The maximum annual cash bonus for fiscal 2003 and fiscal
                  2004 is $200,000.

4.       Short-Term Bonus - Three-Year Cumulative Provision. Due to the
         cyclical nature of the Company's business, the matrix will be
         structured to include a three-year cumulative catch-up provision

         The amount of the annual cash bonus for fiscal year 2004 may be
         increased from the amounts determined in the matrix for such year as
         a result of the cumulative three-year EPS. The following example
         illustrates how the annual cash bonus for fiscal year 2004 may be
         increased by the cumulative three-year EPS (assuming the example
         matrix presented in item 3 above which is reflective of fiscal 2002
         EPS of $1.05).

<TABLE>
<CAPTION>
                                     EPS            BONUS
                                     ---            -----
<S>                                <C>           <C>
    Fiscal Year 2002               $ 1.05        $    54,000
    Fiscal Year 2003               $ 1.32        $         0
    Fiscal Year 2004               $ 1.70        $   128,000
                                   ------        -----------
    Cumulative Three-Year Total    $ 4.07        $   182,000
    Cumulative Adjustment                        $    13,000 (additional amount paid in 2004)
                                                 -----------
    Cumulative Bonus Paid                        $   195,000
</TABLE>

         The cumulative annual bonus for fiscal years 2002, 2003 and 2004
         before cumulative adjustment would be $182,000. Because the
         cumulative three-year EPS of $4.07 is between $3.77 and $4.25, the
         cumulative three-year bonus amount attributable to $4.07 would be
         $195,000, a proration between $3.77/$120,000 and $4.25/$240,000. As
         such, an additional $13,000 would be payable in 2004 to bring the
         fiscal year 2004 bonus to $141,000 and the cumulative three-year
         bonus to $195,000.

5.       Short-Term Bonus - Timing of Payment. Employer shall pay to Executive
         the annual cash bonus payable, if any, within 75 days following the
         end of each fiscal year.

6.       Short-Term Bonus Arrangement(s) Applicable for Fiscal Years After
         2004. Executive shall be entitled to receive annual cash bonuses for
         years after fiscal year 2004 under a bonus arrangement or
         arrangements to be determined by Employer which shall provide
         Executive an annual bonus opportunity of at least $200,000.
<PAGE>

7.       Long-Term Incentive Arrangement Applicable for Fiscal Years 2000,
         2001 and 2002. On November 9, 1999, Executive received a grant of
         options to purchase 36,000 shares of Company Common Stock. Pursuant
         to the Compensation Committee's grant to Executive, the options, to
         the extent not previously exercisable and vested, shall be
         immediately exercisable and vested upon the termination of the
         Employment Period by Employer without cause pursuant to Section 5.1,
         or by Executive for good reason pursuant to Section 5.3, if such
         termination occurs within three months prior to or twelve months
         after a Change in Control.

8.       Long-Term Incentive Arrangement(s) Applicable for Fiscal Years After
         2002. In each fiscal year after 2002, Executive shall be entitled to
         participate in a long-term incentive arrangement or arrangements to
         be determined by Employer, which arrangement or arrangements shall
         provide Executive an opportunity to earn an amount no less than the
         product of $100,000 multiplied by the numbers of fiscal years to
         which the arrangement or arrangements relate.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(G)
<SEQUENCE>5
<FILENAME>file004.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>




                                                                 Exhibit 10(g)

                             EMPLOYMENT AGREEMENT
                                JAMES J. THOME

                 Exhibit 4.1 - Amended as of February 19, 2002

                                 COMPENSATION

1.       Base Salary. During the Employment Period, Employer shall pay to
         Executive a Base Salary, payable in equal monthly installments at
         such times during each month as is customary with Employer with
         respect to its senior executives, at a rate of $258,750 per annum.

2.       Short-Term Bonus Arrangement Applicable for Fiscal Year 2002.

         (a)      Executive shall be entitled to receive an annual cash bonus
                  for fiscal year 2002 based on the consolidated earnings per
                  share of Employer ("EPS") as determined under the following
                  Annual Cash Incentive Matrix:

<TABLE>
<CAPTION>
=================================================================================================

                                  ANNUAL CASH INCENTIVE MATRIX
------------------------ ----------------------- ------------------------ -----------------------

      FISCAL YEAR              EPS/BONUS                EPS/BONUS               EPS/BONUS
------------------------ ----------------------- ------------------------ -----------------------
<S>                      <C>                     <C>                      <C>
         2002                $0.98/$40,000            $1.18/$80,000           $1.28/$200,000
======================== ======================= ======================== =======================
</TABLE>

         (b)      An annual cash bonus shall not be payable for fiscal year
                  2002 if EPS for such fiscal year is less than $0.98.

         (c)      If the EPS for fiscal 2002 is between the EPS levels shown
                  in the above matrix, the amount of the annual cash bonus
                  shall be prorated between such EPS levels. The maximum
                  annual cash bonus for fiscal year 2002 is $200,000.

3.       Short-Term Bonus Arrangement Applicable for Fiscal Years 2003 and
         2004.

         (a)      Fiscal 2002 actual results, exclusive of the $0.19 per share
                  non-recurring charge related to adoption of SFAS 142, will
                  serve as the baseline for establishing the fiscal 2003 and
                  2004 bonus matrix. Under this matrix, incremental bonus
                  payments will be made based on EPS improvements of 8%, 15%
                  and 20% (exclusive of the one-time charge). In the following
                  example, fiscal 2002 results are assumed to be $1.05 per
                  share. Based upon $1.05 in fiscal 2002 EPS, the annual cash
                  incentive matrix for the three-year period would be
                  structured as follows:
<PAGE>

<TABLE>
<CAPTION>
====================================================================================================
                         ANNUAL CASH INCENTIVE MATRIX
----------------------------------------------------------------------------------------------------
                           8% EPS IMPROVE/           15% EPS IMPROVE/          20% EPS IMPROVE/
    FISCAL YEAR                BONUS %                   BONUS %                   BONUS %
--------------------- -------------------------- ------------------------- -------------------------
<S>                      <C>                     <C>                      <C>
        2002              $0.98/$40,000              $1.18/$80,000             $1.28/$200,000
--------------------- -------------------------- ------------------------- -------------------------
        2003              $1.34/$40,000              $1.43/$80,000             $1.49/$200,000
--------------------- -------------------------- ------------------------- -------------------------
        2004              $1.45/$40,000              $1.64/$80,000             $1.79/$200,000
--------------------- -------------------------- ------------------------- -------------------------
     Cumulative           $3.77/$120,000             $4.25/$240,000            $4.56/$600,000
===================== ========================== ========================= =========================
</TABLE>

         (b)      An annual cash bonus shall not be payable for fiscal year
                  2003 or fiscal 2004 if EPS for such fiscal year is less than
                  the minimum level for each year as reflected in the matrix.

         (c)      If the EPS for fiscal 2003 or fiscal 2004 is between the EPS
                  levels reflected in the approved matrix, the amount of the
                  annual cash bonus shall be prorated between such EPS levels.
                  The maximum annual cash bonus for fiscal 2003 and fiscal
                  2004 is $200,000.

4.       Short-Term Bonus - Three-Year Cumulative Provision. Due to the
         cyclical nature of the Company's business, the matrix will be
         structured to include a three-year cumulative catch-up provision

         The amount of the annual cash bonus for fiscal year 2004 may be
         increased from the amounts determined in the matrix for such year as
         a result of the cumulative three-year EPS. The following example
         illustrates how the annual cash bonus for fiscal year 2004 may be
         increased by the cumulative three-year EPS (assuming the example
         matrix presented in item 3 above which is reflective of fiscal 2002
         EPS of $1.05).

<TABLE>
<CAPTION>
                                     EPS            BONUS
                                     ---            -----
<S>                                <C>           <C>
    Fiscal Year 2002               $ 1.05        $    54,000
    Fiscal Year 2003               $ 1.32        $         0
    Fiscal Year 2004               $ 1.70        $   128,000
                                   ------        -----------
    Cumulative Three-Year Total    $ 4.07        $   182,000
    Cumulative Adjustment                        $    13,000 (additional amount paid in 2004)
                                                 -----------
    Cumulative Bonus Paid                        $   195,000
</TABLE>

         The cumulative annual bonus for fiscal years 2002, 2003 and 2004
         before cumulative adjustment would be $182,000. Because the
         cumulative three-year EPS of $4.07 is between $3.77 and $4.25, the
         cumulative three-year bonus amount attributable to $4.07 would be
         $195,000, a proration between $3.77/$120,000 and $4.25/$240,000. As
         such, an additional $13,000 would be payable in 2004 to bring the
         fiscal year 2004 bonus to $141,000 and the cumulative three-year
         bonus to $195,000.

5.       Short-Term Bonus - Timing of Payment. Employer shall pay to Executive
         the annual cash bonus payable, if any, within 75 days following the
         end of each fiscal year.

6.       Short-Term Bonus Arrangement(s) Applicable for Fiscal Years After
         2004. Executive shall be entitled to receive annual cash bonuses for
         years after fiscal year 2004 under a bonus arrangement or
         arrangements to be determined by Employer which shall provide
         Executive an annual bonus opportunity of at least $200,000.
<PAGE>

7.       Long-Term Incentive Arrangement Applicable for Fiscal Years 2000,
         2001 and 2002. On November 9, 1999, Executive received a grant of
         options to purchase 36,000 shares of Company Common Stock. Pursuant
         to the Compensation Committee's grant to Executive, the options, to
         the extent not previously exercisable and vested, shall be
         immediately exercisable and vested upon the termination of the
         Employment Period by Employer without cause pursuant to Section 5.1,
         or by Executive for good reason pursuant to Section 5.3, if such
         termination occurs within three months prior to or twelve months
         after a Change in Control.

8.       Long-Term Incentive Arrangement(s) Applicable for Fiscal Years After
         2002. In each fiscal year after 2002, Executive shall be entitled to
         participate in a long-term incentive arrangement or arrangements to
         be determined by Employer, which arrangement or arrangements shall
         provide Executive an opportunity to earn an amount no less than the
         product of $100,000 multiplied by the numbers of fiscal years to
         which the arrangement or arrangements relate.



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(H)
<SEQUENCE>6
<FILENAME>file005.txt
<DESCRIPTION>EMPLOYMENT AGREEMENT
<TEXT>
<PAGE>



                                                                 Exhibit 10(h)

                             EMPLOYMENT AGREEMENT
                                 JAMES C. SHAY

                 Exhibit 4.1 - Amended as of February 19, 2002

                                 COMPENSATION

1.       Base Salary. During the Employment Period, Employer shall pay to
         Executive a Base Salary, payable in equal monthly installments at
         such times during each month as is customary with Employer with
         respect to its senior executives, at a rate of $175,950 per annum.

2.       Short-Term Bonus Arrangement Applicable for Fiscal Year 2002.

         (a)      Executive shall be entitled to receive an annual cash bonus
                  for fiscal year 2002 based on the consolidated earnings per
                  share of Employer ("EPS") as determined under the following
                  Annual Cash Incentive Matrix:

<TABLE>
<CAPTION>
=================================================================================================

                                 ANNUAL CASH INCENTIVE MATRIX
------------------------ ----------------------- ------------------------ -----------------------

      FISCAL YEAR              EPS/BONUS                EPS/BONUS               EPS/BONUS
------------------------ ----------------------- ------------------------ -----------------------
<S>                      <C>                     <C>                      <C>
         2002                $0.98/$35,000            $1.18/$70,000           $1.28/$175,000
======================== ======================= ======================== =======================
</TABLE>

         (b)      An annual cash bonus shall not be payable for fiscal year
                  2002 if EPS for such fiscal year is less than $0.98.

         (c)      If the EPS for fiscal 2002 is between the EPS levels shown
                  in the above matrix, the amount of the annual cash bonus
                  shall be prorated between such EPS levels. The maximum
                  annual cash bonus for fiscal year 2002 is $175,000.

3.       Short-Term Bonus Arrangement Applicable for Fiscal Years 2003 and
         2004.

         (a)      Fiscal 2002 actual results, exclusive of the $0.19 per share
                  non-recurring charge related to adoption of SFAS 142, will
                  serve as the baseline for establishing the fiscal 2003 and
                  2004 bonus matrix. Under this matrix, incremental bonus
                  payments will be made based on EPS improvements of 8%, 15%
                  and 20% (exclusive of the one-time charge). In the following
                  example, fiscal 2002 results are assumed to be $1.05 per
                  share. Based upon $1.05 in fiscal 2002 EPS, the annual cash
                  incentive matrix for the three-year period would be
                  structured as follows:


<TABLE>
<CAPTION>
====================================================================================================
                                  ANNUAL CASH INCENTIVE MATRIX
--------------------- -------------------------- ------------------------- -------------------------
                           8% EPS IMPROVE/           15% EPS IMPROVE/          20% EPS IMPROVE/
    FISCAL YEAR                BONUS %                   BONUS %                   BONUS %
--------------------- -------------------------- ------------------------- -------------------------
<S>                      <C>                     <C>                      <C>
        2002              $0.98/$35,000              $1.18/$70,000             $1.28/$175,000
--------------------- -------------------------- ------------------------- -------------------------
        2003              $1.34/$35,000              $1.43/$70,000             $1.49/$175,000
--------------------- -------------------------- ------------------------- -------------------------
        2004              $1.45/$35,000              $1.64/$70,000             $1.79/$175,000
--------------------- -------------------------- ------------------------- -------------------------
     Cumulative           $3.77/$105,000             $4.25/$210,000            $4.56/$525,000
===================== ========================== ========================= =========================
</TABLE>

         (b)      An annual cash bonus shall not be payable for fiscal year
                  2003 or fiscal 2004 if EPS for such fiscal year is less than
                  the minimum level for each year as reflected in the matrix.

         (c)      If the EPS for fiscal 2003 or fiscal 2004 is between the EPS
                  levels reflected in the approved matrix, the amount of the
                  annual cash bonus shall be prorated between such EPS levels.
                  The maximum annual cash bonus for fiscal 2003 and fiscal
                  2004 is $175,000.

4.       Short-Term Bonus - Three-Year Cumulative Provision. Due to the
         cyclical nature of the Company's business, the matrix will be
         structured to include a three-year cumulative catch-up provision

         The amount of the annual cash bonus for fiscal year 2004 may be
         increased from the amounts determined in the matrix for such year as
         a result of the cumulative three-year EPS. The following example
         illustrates how the annual cash bonus for fiscal year 2004 may be
         increased by the cumulative three-year EPS (assuming the example
         matrix presented in item 3 above which is reflective of fiscal 2002
         EPS of $1.05).

<TABLE>
<CAPTION>
                                      EPS            BONUS
                                      ---            -----
<S>                                 <C>           <C>
    Fiscal Year 2002                $ 1.05        $    47,250
    Fiscal Year 2003                $ 1.32        $         0
    Fiscal Year 2004                $ 1.70        $   112,000
                                    ------        -----------
    Cumulative Three-Year Total     $ 4.07        $   159,250
    Cumulative Adjustment                         $    11,375 (additional amount paid in 2004)
                                                  -----------
    Cumulative Bonus Paid                         $   170,625
</TABLE>

         The cumulative annual bonus for fiscal years 2002, 2003 and 2004
         before cumulative adjustment would be $159,250. Because the
         cumulative three-year EPS of $4.07 is between $3.77 and $4.25, the
         cumulative three-year bonus amount attributable to $4.07 would be
         $170,625, a proration between $3.77/$105,000 and $4.25/$210,000. As
         such, an additional $11,375 would be payable in 2004 to bring the
         fiscal year 2004 bonus to $123,375 and the cumulative three-year
         bonus to $170,625.

5.       Short-Term Bonus - Timing of Payment. Employer shall pay to Executive
         the annual cash bonus payable, if any, within 75 days following the
         end of each fiscal year.

6.       Short-Term Bonus Arrangement(s) Applicable for Fiscal Years After
         2004. Executive shall be entitled to receive annual cash bonuses for
         years after fiscal year 2004 under a bonus arrangement or
         arrangements to be determined by Employer which shall provide
         Executive an annual bonus opportunity of at least $175,000.
<PAGE>

7.       Long-Term Incentive Arrangement Applicable for Fiscal Years 2000,
         2001 and 2002. On November 9, 1999, Executive received a grant of
         options to purchase 27,000 shares of Company Common Stock. Pursuant
         to the Compensation Committee's grant to Executive, the options, to
         the extent not previously exercisable and vested, shall be
         immediately exercisable and vested upon the termination of the
         Employment Period by Employer without cause pursuant to Section 5.1,
         or by Executive for good reason pursuant to Section 5.3, if such
         termination occurs within three months prior to or twelve months
         after a Change in Control.

8.       Long-Term Incentive Arrangement(s) Applicable for Fiscal Years After
         2002. In each fiscal year after 2002, Executive shall be entitled to
         participate in a long-term incentive arrangement or arrangements to
         be determined by Employer, which arrangement or arrangements shall
         provide Executive an opportunity to earn an amount no less than the
         product of $75,000 multiplied by the numbers of fiscal years to which
         the arrangement or arrangements relate.



</TEXT>
</DOCUMENT>
</SUBMISSION>
