BHA GROUP INC
EMPLOYMENT AGREEMENT
<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.


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