<PAGE>

                                 UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C. 20549

                                   FORM 10-K

[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997 OR

[   ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM           TO

COMMISSION FILE NUMBER 001-14210

                           LUMEN TECHNOLOGIES, INC.
            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

       Delaware                                          13-3868804
(STATE OF INCORPORATION)                   (I.R.S. EMPLOYER IDENTIFICATION NO.)

   555 Theodore Fremd Avenue, Rye, NY                     10580
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE)                 (ZIP CODE)

Registrant's telephone number, including area code:  914-967-9400

Securities registered pursuant to Section 12(b) of the Act:

                                                         Name of each exchange
Title of each class                                       on which registered
Common Stock, par value $.01                            New York Stock Exchange

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

INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS) AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES [X]  NO [ ]

THE AGGREGATE MARKET VALUE OF THE VOTING STOCK HELD BY NON AFFILIATES OF THE
REGISTRANT AT APRIL 9, 1998 WAS $157,818,658, COMPUTED BY REFERENCE TO
THE CLOSING PRICE AS OF THAT DATE.

THE NUMBER OF SHARES OUTSTANDING OF THE REGISTRANT'S ONLY CLASS OF COMMON
STOCK AS OF APRIL 9, 1998 WAS 19,667,415 SHARES.


<PAGE>

DOCUMENTS INCORPORATED BY REFERENCE:  NONE.

INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM 405
OF REGULATION S-K IS NOT CONTAINED HEREIN AND WILL NOT BE CONTAINED TO THE
BEST OF REGISTRANT'S KNOWLEDGE IN DEFINITIVE PROXY OR INFORMATION STATEMENTS
INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY AMENDMENT TO
THIS FORM 10-K. [ X ]




































                                      2
<PAGE>



                           LUMEN TECHNOLOGIES, INC.
                            (F/K/A BEC GROUP, INC.)

                          ANNUAL REPORT ON FORM 10-K
                     FOR THE YEAR ENDED DECEMBER 31, 1997


                               TABLE OF CONTENTS


                                                                          PAGE
                                    PART I

Item 1.         Business..................................................  4
Item 2.         Properties................................................  8
Item 3.         Legal Proceedings.........................................  9
Item 4.         Submission of Matters to a Vote of Security Holders.......  9
                                                                            
                                    PART II                                 
                                                                            
Item 5.         Market for Registrant's Common Equity                       
                and Related Stockholder Matters........................... 10
Item 6.         Selected Financial Data................................... 11
Item 7.         Management's Discussion and Analysis of                    
                Financial Condition and Results of Operations............. 13
Item 7A.        Quantitative and Qualitative                               
                Disclosure About Market Risk.............................. 17
Item 8.         Financial Statements and Supplementary Data............... 18
Item 9.         Changes In and Disagreements With Accountants              
                on Accounting and Financial Disclosure.................... 43
                                                                           
                                   PART III                                
                                                                           
Item 10.        Directors and Executive Officers of the Registrant........ 44
Item 11.        Executive Compensation.................................... 46
Item 12.        Security Ownership of Certain Beneficial                   
                Owners and Management..................................... 52
Item 13.        Certain Relationships and Related Transactions............ 54
                                                                           
                                    PART IV                                
                                                                           
Item 14.        Exhibits, Financial Statement Schedules,                   
                and Reports on Form 8-K................................... 55
                                                                          


                                       3


<PAGE>





                                    PART I


ITEM 1.           BUSINESS

GENERAL

         Lumen Technologies, Inc., a Delaware corporation (the "Company" or
"Lumen"), is a manufacturer and marketer of products and systems for specialty
light source markets. On March 12, 1998, the Company completed the merger of
ILC Technology, Inc. ("ILC") into a wholly-owned subsidiary of the Company
(the "ILC Merger"), and on March 11, 1998 the Company consummated the Bolle
Spinoff (as defined below). Prior to March 12, 1998 the Company was known as
BEC Group, Inc. ("BEC"). The Company was incorporated on December 28, 1995,
under the name BEC Group, Inc., as a wholly owned subsidiary of Benson Eyecare
Corporation, a Delaware corporation ("Benson"). As a result of the ILC Merger
and the Bolle Spinoff (as defined below), the Company is presently positioned
to focus on its specialty lighting and related businesses. Although the
consummation of these transactions occurred after the end of the fiscal year
reported herein, the information set forth in this Annual Report on Form 10-K
is limited to the Company's continuing businesses as constituted as of the
date hereof, without descriptive narrative of discontinued operations.
Financial Statements included herein reflect the Bolle operations as
discontinued, but do not reflect the ILC Merger.

         The Company was formed in connection with the Essilor Merger (as
defined below), pursuant to which Benson stockholders received all of the
outstanding shares of common stock of the Company in a pro rata distribution
(the "BEC Spinoff"). The BEC Spinoff and merger of Essilor Acquisition
Corporation with and into Benson (the "Essilor Merger") occurred on May 3,
1996 (the "Effective Date"). On May 3, 1996, Benson also consummated the sale
to the Monsanto Company of the assets of its Orcolite ophthalmic lens
manufacturing operation (the "Asset Sale"). Prior to the BEC Spinoff, Benson
contributed to the Company all of the assets of its then non-prescription
eyewear and optics related businesses and the Company assumed all of the
liabilities of Benson's non prescription eyewear and optics related
businesses.

         In December 1996, the Company sold to Foster Grant Holdings, Inc.
("Holdings") all of the issued and outstanding shares of capital stock of the
entities comprising the Foster Grant Group ("FGG"). Holdings, a Delaware
corporation, is a subsidiary of Accessories Associates, Inc. ("AAi"), a Rhode
Island corporation.

         Following the divestiture of its prescription eyewear business in May
1996 in connection with the Essilor Merger and Asset Sale and the sale of FGG
in December 1996, the Company had two core businesses: ORC Technologies, Inc.
("ORC"), which manufactures and distributes lighting, electronic and
electroformed products to a diverse customer base, and Bolle America, Inc.
("Bolle America"), the exclusive marketer and distributor of Bolle(R) premium
sunglasses, sport shields and goggles in the U.S., Mexico and Costa Rica. On
July 10, 1997, the Company, through its then subsidiary Bolle Inc. ("Bolle")
acquired Holding B.F. ("Bolle France"), a French holding company owning the
Bolle(R) trademark and Bolle design and manufacturing rights worldwide,
together with certain additional distribution rights. The Company thereby
combined in Bolle worldwide rights to the Bolle(R) trademark and brand and the
associated design manufacturing rights, as well as a substantial worldwide
distribution network.

         Effective March 11, 1998, the Company distributed to its stockholders
of record as of such date, on a pro rata basis, all of the Company's equity
interest in Bolle and the Bolle business (the "Bolle Spinoff"). The Company's
stockholders of record on that date received one share of Bolle common stock
for every three shares of the Company's common stock then held. In connection
with the Bolle Spinoff, the Company assigned to Bolle, and Bolle assumed, all
of the Company's business, assets and liabilities then existing, other than
those relating to the Company's specialty lighting business, ORC Electronics
Products and ORC Electroformed Products and certain additional assets and
liabilities retained by the Company. The Bolle operations are, for accounting
purposes, treated as discontinued operations in the consolidated financial
statements included herein.

         On March 12, 1998, the Company effected the merger of ILC with and
into BILC Acquisition Corp., a wholly owned subsidiary of the Company (the
"ILC Merger") pursuant to the terms of an Agreement and Plan of 


                                      4
<PAGE>

Merger, dated as of October 30, 1997, as amended (the "ICL Merger Agreement").
ILC designs, develops, manufactures and markets high intensity lamps and
lighting products for the medical, industrial, aerospace, scientific,
entertainment and military industries. Effective October 30, 1997, the Company
also acquired a 30% common stock equity interest in Voltarc Technologies, Inc.,
a Delaware corporation ("Voltarc"), preferred stock convertible at any time by
Lumen into the additional number of shares to Voltarc's common stock which
would give the Company 40% of Voltarc's then outstanding common stock and an
option to acquire the remaining equity of Voltarc. Voltarc also is engaged in
the design, manufacture and distribution of specialty lighting products.

BUSINESS AND PRODUCTS

         The Company conducts its core business primarily through its primary
subsidiaries, ORC and ILC which are involved in the design, manufacture and
distribution of specialty lighting products.

         ORC's operations consist of three related businesses located at the
Company's facilities in Azusa, California: Lighting Products, Electronic
Products and Electroformed Products. ILC's operations are located at the
Company's facilities in Sunnyvale, California.

         The Company's specialty lighting operations design, manufacture and
market lighting products for the medical, industrial, aerospace, scientific,
entertainment, cinema and military industries. Its products are used in a
variety of applications, including high intensity illumination systems and
mini-systems that incorporate lamps, optics and electronic systems. Lamps for
the industrial market are used in photo exposure systems, specialty lighting
applications and in various other high technology equipment. The medical
market is serviced with fiber optic illumination components and systems used
with medical endoscopes as illumination for diagnostic and minimally invasive
surgical procedures. Products include a specially designed ceramic lamp with
integral parabolic reflector, optical components, power supply and fiber optic
illumination systems. The Company supports the worldwide cinema market with a
wide range of short-arc xenon lamps used in projectors and buildings, stadium
and theater lighting.

         The Company's products include pulsed and direct current arc lamps
that are designed to satisfy a wide variety of laser and industrial
applications requiring rigorous, high-performance standards ("flashlamps");
Cermax(R) lamps, which are short arc xenon lamps that are optically
pre-aligned, encased in a safe ceramic body bonded to a metallized sapphire
window, and are capable of transmitting the full spectrum from infrared to UV
wavelengths and fully-encased and open frame power supplies, lamp holders,
fiber optic light sources and other equipment to support its Cermax(R) product
line; high intensity lamps for video projection utilizing the Company's
proprietary Daymax(R) and Cemax(R) technologies and, mercury xenon short arc
lamps which are used to expose patterns during the fabrication of
semiconductor products ("stepper lamps"). The Company's other products include
mercury capillary lamps, Daymax(R) metal halide lamps and products for the
aerospace and military markets.

         The primary market for the Company's Cermax(R) product line is fiber
optic illumination for medical procedures such as endoscopy. The market for
Cermax(R) lightsources and related equipment used in endoscopy is composed of
two segments: a high-intensity or critical segment and a low-intensity or
non-critical segment. Critical endoscopy applications require high-intensity
Cermax(R) lightsources with specialized power supplies. The low-intensity
market is dominated by manufacturers of halogen lightsources. Ancillary
industrial uses for Cermax(R) lightsources include illuminating areas that are
difficult to inspect, such as nuclear reactors or jet engines; also analytical
instruments, and, spot UV curing lightsources. Daymax(R) lamps simulate stable
daylight conditions. These products are now used primarily in the
entertainment business. Applications include: indoor and outdoor lighting for
motion picture and television productions, high speed and special effects
lighting, concert and stadium lighting and theatrical lighting. The Company
also has developed a series of integral low-power metal halide lamps (less
than 500 watts) for commercial projection, stage and medical applications. The
Company also manufactures mercury capillary lamps using technology and
processes that are similar to those developed for stepper lamps. The primary
applications for mercury capillary lamps include the photolithography of grid
patterns on color television screens and printed circuit boards for computers.
In the aerospace market, the Company offers standard, modified and customer
systems covering the visible, infrared and UV spectrum to meet each space
lighting requirement. The Company is the only domestic manufacturer of space
lighting qualified to serve NASA 


                                      5
<PAGE>

and other government agencies in Japan and Europe. The Company's products for
the military market include infrared lamps used by the military on tanks and
aircraft to deflect offensive heat seeking missiles.

         ORC Electronic Products manufactures photoexposure systems, including
the Opti-Beam(R) and ProForm(R) lines. These highly sophisticated systems are
used in the production of high density, fine-line circuit boards,
microcircuits, flexible circuits and flat panel displays. The business has
focused on the upper end of the market where its proprietary optics
technology, vision alignment systems and superior automated material handling
capabilities allow for imaging fine line circuitry with exceptional
throughput.

         ORC Electroformed Products supplies a wide range of electroformed
products to a variety of industrial customers. Its products include (i)
electroformed nickel and copper components such as cold shields, flashlight
and search light reflectors, abrasion resistant shields for use on airplane
and helicopter rotor blades and highly polished spheres, parabolas and
ellipses for industrial uses and, (ii) tooling used in the manufacture of hard
resin and polycarbonate ophthalmic lenses.

CUSTOMERS

         The Company is not dependent upon a single customer or a few
customers, and no one customer of the Company accounts for more than 10% of
the Company's consolidated revenues. The Company serves a wide range of
customers in the medical, industrial and entertainment industries. The
Company's top 25 customers represent less than 40% of its specialty lighting
business. ORC Electronic Products sells capital equipment to international
technologically based customers. Its products sell for price points ranging
from $30,000 to in excess of $1.0 million and its customer base changes each
year.

SUPPLY AGREEMENTS

         The Company does not have any significant supply agreements and most
materials used are available from more than one vendor. The Company continues
to identify and qualify alternate sources of supply.

MARKETING AND SALES

         The Company markets and sells its products both to original equipment
manufacturers ("OEMs") through a direct sales force and also to end-users
through sales representatives and distributors. The Company's sales
organization includes regional sales managers and teams of market development
managers with global responsibilities aligned along specific markets such as
the semiconductor, video projection and medical markets. In addition, the
Company maintains customer service groups at its facilities in California and
Cambridge, England to provide sales and customer service support to its
customer base and network of domestic and foreign sales representatives and
distributors.

         The Company's European sales office, which is located at the
facilities of Q-Arc in Cambridge, England, markets and sells the complete line
of lamp and equipment products and provides local customer support for
European customers.

MANUFACTURING

         The Company has built substantial expertise in the fields of sealing
technology (ceramic-to-metal, quartz-to-metal, vacuum sealing), materials
research, plasma physics, electrical engineering, optoelectronics and
electrode technology. The manufacturing of most of lamp and power supply
products is labor and capital intensive, and accordingly, the labor force is
highly skilled and experienced.

         The Company's specialty lighting facilities in California and in
Cambridge, England are all ISO 9002 certified. ISO certification ensures
customers that the Company's specialty lighting business has a quality system
that will result in continuous product quality improvement. It is a
recognition of a commitment to quality through all sections of the
organization.



                                      6
<PAGE>

INTELLECTUAL PROPERTY

         The Company holds several United States and foreign patents related
to the key features of several of its products and has several patent
applications pending in the United States. While these patents tend to enhance
the Company's competitive position, the Company believes that success depends
primarily upon its proprietary technological, engineering, production and
marketing skills and the high quality of its products. The names of several of
the Company's products are registered as trademarks in the United States
Patent and Trademark Office and in several other countries in which the
Company's products are sold. Registered trademarks include Opti-Beam(R),
ProForm(R), Cermax(R) and Daymax(R).

         The Company's patents expire at various dates between 1998 and 2013.
There can be no assurance that any patents held by the Company will not be
challenged and invalidated, that patents will issue from any of the Company's
pending patent applications or that any claim allowed from existing or pending
patents will be of sufficient scope or strength to provide meaningful
protection or any commercial advantage to the Company. Competitors also may be
able to design around the Company's patents.

COMPETITION

         The markets in which the Company competes are different but parallel
in that all of the Company's operations are affected by changes and growth in
technological, specifically optics related, industries.

         The Company's specialty lighting businesses compete on the basis of
product quality performance, competitive pricing, applications engineering,
superior customer service, reputation and price. The Company competes in many
markets in which technology develops and improves rapidly, stimulating the
Company to enhance the capability of its products and technologies.
Competitors consist of both large and small companies located in the United
States, Japan and Europe. They include EG&G, Inc., Osram GmbH, Philips
Electronics N.V., Ushio and Koto. In many market segments, the competition has
established the benchmark for product acceptance at a very high level, which
requires the Company to improve continuously all phases of its processes for
customer satisfaction. The Company believes that by exploiting market areas in
which the Company has technological, manufacturing and marketing strengths,
the Company can compete effectively. At the same time, by focusing its product
development and acquisition activities in these areas, the Company believes
that it can defend its strengths and maintain its leadership in selected
markets.

         ORC Electronic Products competes in the worldwide photo exposure
system market and is considered one of the market leaders for producing "next
generation" equipment for its customers. Because of the growth potential of
the market, an increasing number of competitors are entering the markets
served by ORC Electronic Products. Although U.S. and international patents are
obtained wherever appropriate, products can be and are being replicated by
competitors, sometimes at a lower cost to the customer. ORC Electronics
Products' competitive advantages include advanced, effective research and
development and quality products.

         ORC Electroformed Products' core markets include metal optics and
erosion shields for helicopter rotor blades and propellers. The business also
continues to find new uses for its electroformed technology. Because it
produces specialty products for specific customers, repeat business is common
and electroforming competitors are few in the markets served.

EMPLOYEES

         The Company employs approximately 1,210 employees. None of the
Company's employees are covered by any collective bargaining agreements. The
Company considers its relations with its employees to be satisfactory.

ENVIRONMENTAL MATTERS

         Compliance with environmental laws and regulations has not had a
material effect on BEC's earnings to date and is not expected to have a
material effect in the future, nor has BEC been required to undertake
significant capital expenditures to meet environmental regulations. It is
management's view at this time that compliance with 


                                      7
<PAGE>

federal, state and local provisions regulating the discharge of material into 
the environment or otherwise relating to the protection of the environment will
not have a material adverse effect upon the capital expenditures, earnings, or
competitive position of the Company.

         The Company was named as a "Potentially Responsible Party" with
regard to pollution contained in the aquifer below the Company's Azusa
facility. After further technical and legal review, the Environmental
Protection Agency informed the Company that it will take no action against the
Company with respect to the site and will not require the Company to
participate with the parties preparing a remediation plan for the site. Based
on current information, the Company anticipates that it also will be given the
opportunity to participate in a lump sum cash settlement and consent decree to
be negotiated with a nominal contributors, providing the Company protection
against any potential third party claims for contribution with respect to the
site. The cost of any such cash settlement is not anticipated to have a
material effect on the Company, its operations or its financial results. In
addition, if the Company were required to bear any portion of the remediation
costs, the Company believes it would have a claim against the prior owner of
the property for contribution or cost recovery. There can be no assurance,
however, that such a claim would be successful.

         For additional data describing the Registrant's operations, see
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations."


ITEM 2.           PROPERTIES

As of March 31, 1998, the locations of the Company's principal facilities are
as follows:

<TABLE>
<CAPTION>
                                                                              APPROXIMATE SQUARE
        LOCATION            PRINCIPAL USE/USER                                   FEET OF SPACE
---------------------------------------------------------------------------------------------------
<S>                         <C>                                               <C>
OWNED:

Azusa, CA                   Office and manufacturing facilities/ORC                 188,750
Sunnyvale, CA               Office and manufacturing facilities/ILC                  97,000
Santa Clara, CA             Office and manufacturing facilities/ORC                  20,000
Cambridge, England          Office and manufacturing facilities/Q-Arc                36,000

LEASED:
Rye, NY                     Principal executive office of the Company                 3,000
Santa Clara, CA             Office and manufacturing facilities/ILC                   7,700
</TABLE>




         The Company's facilities are substantially fully utilized; however,
Q-Arc presently occupies approximately two-thirds of the facility in
Cambridge, England, leaving approximately 11,000 square feet available for
future expansion. The Company believes that its facilities are reasonably
suitable for the purpose to which they are put and that, subject to possible
changes to accommodate centralization and consolidation of its business
activities, they are adequate for the Company's immediate foreseeable needs.


                                      8
<PAGE>


ITEM 3.                    LEGAL PROCEEDINGS

         The Company believes that there are no material pending legal
proceedings to which it is a party or to which any of its property is subject.

ITEM 4.                    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         No matters were submitted to a vote of the Company's stockholders
during the fourth quarter of 1997.

         At a Special Meeting of the Stockholders held on March 11, 1998, the
Company's Stockholder's approved the following proposals, by the votes
indicated:

<TABLE>
<CAPTION>
         PROPOSAL                                                               VOTE:
                                                              YES                NO              ABSTAIN
<S>      <C>                                              <C>                    <C>             <C>
1.       To ratify and confirm the ILC Merger and
         related issuance of shares of common stock       11,492,429             56,757          286,757

2.       To effect a one-for-two reverse split of
         the Company's common stock                       11,607,789            130,687          309,625

3.       To elect Messrs. Augur, Baumgartner, Capra
         and Clairmont Directors of the Company
         (votes given are in respective order)            11,715,520              -0-            332,501
                                                          11,556,371              -0-            481,730
                                                          11,729,416              -0-            318,685
                                                          11,730,480              -0-            317,613

4.       To effect the change of the Company's name
         to "Lumen Technologies, Inc."                    11,696,885             63,663          287,553

5.       To ratify and approve an amendment of the
         Company's 1996 Incentive Stock Plan              10,762,830            563,332          509,781

         Martin E. Franklin, Ian G.H. Ashken, David L. Moore, William T.
Sullivan and Nora A. Bailey continued to serve as directors of the Company
after the ILC merger.
</TABLE>




                                      9
<PAGE>





                                    PART II

ITEM 5.           MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED 
                  STOCKHOLDER MATTERS

         The Company's common stock commenced trading publicly on May 3, 1996,
the date of the BEC Spinoff and Essilor Merger. The Company's common stock is
listed on The New York Stock Exchange. Until March 12, 1998, the Company's
common stock was listed under the symbol "EYE." Since March 12, 1998, the
Company's common stock has been listed under the symbol "LNM".

         The following table sets forth the high and low sale prices of the
Company's common stock as reported on the composite tape of the exchange for
each of the quarters indicated.

<TABLE>
<CAPTION>
         FISCAL YEAR                                                    HIGH                      LOW
         -----------                                                    ----                      ---
         <S>                                                           <C>                       <C>
         1997
              Fourth Quarter.......................................    $5.13                     $4.25
              Third Quarter........................................    $4.63                     $4.25
              Second Quarter.......................................    $5.38                     $4.25
              First Quarter........................................    $6.13                     $4.94

         1996
              Fourth Quarter.......................................    $ 5.25                    $ 4.00
              Third Quarter........................................    $ 5.75                    $ 3.63
              Second Quarter.......................................    $ 7.75(1)                 $ 4.00(1)
              First Quarter........................................      N/A(1)                    N/A(1)
</TABLE>


(1)      The Company's common stock commenced trading publicly on May 3, 1996.
         Common stock of the Company's predecessor, Benson, also previously
         traded publicly prior to that date under the symbol "EYE." High and
         low sale prices of Benson common stock during the first quarter of
         1996 were, respectively, $9.38 and $7.88; high and low sale prices of
         Benson common stock for the period April 1, 1996 through May 3, 1996
         were, respectively, $9.25 and $9.00. In connection with the Essilor
         Merger and BEC Spinoff, each Benson stockholder received one share of
         the Company's common stock for each two shares of Benson common stock
         then held.

         As of April 8, 1998, there were approximately 1,000 stockholders of
record of the Company's common stock (representing approximately 7,000
beneficial owners of the Company's common stock). No dividends have ever been
declared on the Company's common stock, other than in connection with the
distribution of shares of Bolle common stock in connection with the Bolle
Spinoff and common stock of the Company in connection with the BEC Spinoff.
However, for accounting purposes, cash proceeds received by the holders of
Benson common stock in connection with the Essilor Merger were reflected as
dividends. The Company has no intention of paying dividends in the foreseeable
future. Additionally, the terms of the Company's senior debt agreement
prohibit payment of any cash dividends. It is the present policy of the
Company's Board of Directors that any retained earnings accumulated will be
used to finance future acquisitions and expansion of the Company's operations.

         Pursuant to the terms of the Amended and Restated Share Purchase
Agreement, dated July 9, 1997, by and among Bolle, on the one hand and Mr.
Robert Bolle, Mr. Maurice Bolle, Mr. Franck Bolle, Ms. Patricia Bolle
Pasaquay, Ms. Brigitte Bolle and Ms. Christelle Roche (collectively, the
"Sellers") on the other hand, among other things, the Company issued (i)
warrants to the Sellers to purchase an aggregate of up to 2,130,000 shares of
Common Stock at an exercise price of $3.10 per share, subject to adjustment,
and (ii) 10,000 shares of Series A Preferred Stock of the Company having a
value of approximately $9.3 million. The issuance of such securities was
exempt from the registration provisions of the Securities Act of 1933 pursuant
to Section 4(2) thereof and the rules promulgated thereunder, and the
securities issued in connection therewith were deemed to be restricted
securities. No underwriter was engaged in connection with such sales of
securities.


                                      10
<PAGE>





ITEM 6.           SELECTED FINANCIAL DATA

                            SELECTED HISTORICAL FINANCIAL DATA
                           (IN THOUSANDS EXCEPT FOR PER SHARE DATA)

         The following selected historical combined financial data have been
derived from audited historical financial statements and should be read in
conjunction with the unaudited interim historical financial statements of the
Company. All per share and per share information has been restated to give
effect to the May 3, 1996 and March 11, 1998 reverse stock splits.

<TABLE>
<CAPTION>
                                                                                       YEAR ENDED DECEMBER 31,
                                                                                       -----------------------
                                                                             Actual      Actual      Actual      Actual      Actual
                                                                             ------      ------      ------      ------      ------
                                                                              1997       1996(2)      1995     1994(1)(2)    1993(3)
                                                                              ----       -------      ----     ----------    -------
<S>                                                                        <C>         <C>         <C>         <C>         <C>     
Statement of Operations Data:
   Net Sales ...........................................................   $ 48,128    $ 42,574    $ 41,244    $ 39,047    $ 43,762
   Cost of sales .......................................................     30,603      25,676      23,725      14,405      14,417
                                                                           --------    --------    --------    --------    --------
   Gross profit ........................................................     17,525      16,898      17,519      24,642      29,345
   Selling, general and administrative expenses ........................     10,905      10,020      13,820      25,159      31,936
   Special charges and spinoff expenses ................................      9,571        ----       5,237        ----        ----
   Interest expense ....................................................      3,458       2,942       4,087       3,142         492
   Other expense (income) ..............................................     (1,102)     (1,378)     (3,337)     (1,169)       (121)
                                                                           --------    --------    --------    --------    --------
   Income (loss) from continuing operations before income taxes.........     (5,307)      5,314      (2,288)     (2,490)     (2,962)
   Provision for (benefit from) income taxes ...........................     (1,656)      1,870      (1,339)     (1,006)       (291)
                                                                           --------    --------    --------    --------    --------
   Income (loss) from continuing operations ............................     (3,651)      3,444        (949)     (1,484)     (2,671)

   Income (loss) from discontinued operations ..........................     (1,282)     79,312      (5,811)     11,650       1,519
                                                                           --------    --------    --------    --------    --------
   Net income (loss) ...................................................   $ (4,933)   $ 82,756    $ (6,760)   $ 10,166    $ (1,152)
                                                                           ========    ========    ========    ========    ========
   Basic EPS Earnings (loss) per share:
     From continuing operations ........................................   $  (0.44)   $   0.40    $  (0.12)   $  (0.26)   $  (0.58)
                                                                           --------    --------    --------    --------    --------
     From discontinued operations ......................................      (0.15)       9.29       (0.77)       2.01        0.33
                                                                           $  (0.59)   $   9.69    $  (0.89)   $   1.75    $  (0.25)
                                                                           ========    ========    ========    ========    ========
       Weighted average shares outstanding .............................      8,803       8,537       7,620       5,810       4,640




                                      11
<PAGE>


   Diluted EPS
      From continuing operations .......................................     $(0.44)      $0.40      $(0.12)     $(0.26)     $(0.58)
      From discontinued operations .....................................      (0.15)       9.22       (0.77)       2.01        0.33
                                                                           --------    --------    --------    --------    --------
                                                                             $(0.59)     $ 9.62      $(0.89)     $ 1.75      $(0.25)
                                                                           ========    ========    ========    ========    ========

   Weighted average shares outstanding .................................      8,803       8,600       7,620       5,810       4,640

BALANCE SHEET DATA:
   Working capital .....................................................     34,337       2,385     151,270     110,712      25,650
   Total Assets ........................................................    119,689      75,071     269,739     214,630      57,717
   Long term debt ......................................................     31,349       3,597      18,606      56,187         584

   Convertible subordinated debt .......................................     23,742      21,922      40,950      40,950         ---
   Other long term liabilities .........................................      8,307      10,754       5,517       5,868       2,705
   Mandatorily Redeemable Preferred Stock ..............................      9,294         ---         ---         ---         ---
   Stockholders' equity ................................................   $  3,163     $ 7,604    $131,134    $111,093     $41,054
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)      Includes the results of operations of ORC from the date of purchase
         October 12, 1994. Remaining results of operations represent divested
         businesses. See the accompanying audited consolidated financial
         statements of the Company.

(2)      No dividends were declared or paid in the periods presented except
         for the dividend paid in 1996 by Benson as a result of the Essilor
         Merger in 1996 and $50 paid in 1994 by Bolle America before it was
         acquired by Benson in a pooling of interests transaction.

(3)      All results of operations shown represent divested business.


                                      12
<PAGE>

ITEM 7.           MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 
                  AND RESULTS OF OPERATIONS

General

         The Company was incorporated on December 28, 1995, as a wholly owned
subsidiary of Benson Eyecare Corporation, a Delaware corporation ("Benson"),
in connection with the Essilor Merger (as defined below), pursuant to which
Benson stockholders received all of the outstanding shares of common stock of
the Company in a pro rata distribution (the "BEC Spinoff"). The BEC Spinoff
and Essilor Merger occurred on May 3, 1996. As a result thereof, Essilor
purchased Benson and the Omega Group, Benson's wholesale optical laboratory
business. On May 3, 1996, Benson also consummated the sale to the Monsanto
Company of the assets of its Orcolite ophthalmic lens manufacturing operation
(the "Asset Sale"). Prior to the BEC Spinoff, Benson contributed to the Company
all of the assets of its then non-prescription eyewear and optics related
businesses and the Company assumed all of the liabilities of Benson's
non-prescription eyewear and optics related businesses.

         In December 1996, the Company sold to Foster Grant Holdings, Inc.
("Holdings") all of the issued and outstanding shares of capital stock of the
entities comprising Foster Grant Group ("FGG"). Holdings, a recently formed
Delaware corporation, is a wholly owned subsidiary of Accessories Associates,
Inc. ("AAi"), a Rhode Island corporation.

         On March 11, 1998, the Company consummated its spin off of Bolle to
the Company's stockholders. The Company's stockholders of record on that date
received one share of Bolle common stock for every three shares of the
Company's common stock held at the time of the Bolle Spinoff. Bolle is listed
on NASDAQ (under the symbol "BEYE"). In connection with the Bolle Spinoff, the
Company assigned to Bolle, and Bolle assumed, all of the Company's business,
assets and liabilities, other than those relating to the Company's specialty
lighting business, ORC Electronic Products and ORC Electroformed Products
operations and certain additional assets and liabilities retained by the
Company.

         The above transactions are presented as discontinued operations in
the consolidated financial statements for the periods presented.

YEAR ENDED DECEMBER 31, 1997 COMPARED TO YEAR ENDED DECEMBER 31, 1996

         Net sales of $48.1 million for the year ended December 31, 1997
increased 13% from $42.6 million for the year ended December 31, 1996. This
increase was due to strong internal growth and corresponding growth in the
Company's niche markets.

         Gross margin decreased from 40% for the year ended December 31, 1996
to 36% for the year ended December 31, 1997 due to the sales mix being more
heavily weighted to the relatively lower gross margin product lines at ORC
Electronic Products and market pressure on average selling prices in the
specialty lighting products business.

         For the year ended December 31, 1997, selling, general and
administrative expenses of $10.9 million or 23% of sales represented a $.09
million increase compared to prior year; however, as a percentage of sales,
such expenses decreased from 23.5% to 22.6%.

         Special charges and spinoff expenses of $9.6 million in 1997
consisted of the Bolle Spinoff expenses and impaired value provisions against
long term assets, primarily :

         (a)      $6.2 million charge to reflect the impairment of the
                  Company's long term investment in Eyecare Products
                  ("Eyecare"). This investment has historically been accounted
                  for under the equity method reflecting the Company's
                  percentage shareholding and the long term nature of this
                  investment. In connection with the Spinoff and the transfer
                  of the Eyecare shares to Bolle, the 


                                      13
<PAGE>

                  Company has reassessed Eyecare's operating performance and
                  market performance and accordingly has written down its
                  investment in Eyecare to market value at December 31, 1997.

         (b)      A $2.2 million charge to reflect the impairment of the
                  Sterling Vision, Inc. Converted Subordinated Note due 2015,
                  due to Sterling's recent operating performance and negative
                  operating cash flows.

         Interest expense of $3.5 million for the year ended December 31, 1997
increased from $2.9 million in the prior year due primarily to higher average
debt during 1997.

         The Company recorded a net tax benefit of $3.7 million or 42.7% of
income before taxes for 1997. Continuing operations recorded a net tax benefit
of $1.7 million, and discontinued operations recorded a net tax benefit of
$2.0 million. Prior year provision to return reconciliation and acquisitions
made in 1997 had a significant impact on the tax rate. In 1996, the effective
tax rate was 2.7% of income before taxes primarily due to the effects of
divestitures made in 1996.

YEAR ENDED DECEMBER 31, 1996 COMPARED TO YEAR ENDED DECEMBER 31, 1995

         Net sales for the year ended December 31, 1996 were $42.6 million
compared to $41.2 million for the year ended December 31, 1995. Sales of $2.6
million from Superior Eye Care, Inc., which was sold on June 28, 1995, were
included in 1995. The growth primarily resulted from growth at ORC,
particularly ORC Electronic Products, which reflected the continued growth of
ORC's served markets.

         Adjusted for the fee income from Superior Eye Care, Inc., the gross
profit margin remained relatively flat, increasing from 39% in 1995 to 40% in
1996.

         Selling, general and administrative expenses decreased from $13.8
million or 33% of net sales in 1995 to $10.0 million or 24% of sales,
reflecting both a total dollar and percentage of sales decrease despite
increased sales. The Company's costs have decreased with the smaller size of
the Company as compared to Benson and the divestiture of Superior Eyecare,
Inc. in June 1995. ORC continued to combine sales growth with cost
efficiencies while maintaining strong operating margins.

         Interest expense in 1996 was $2.9 million, down from $4.1 million in
1995, reflecting both lower credit facility balances and lower average
interest rates.

         Other income consists primarily of equity income from the Company's
investment in Eyecare Products plc and interest income from notes receivable.
Equity income decreased from $0.5 million in 1995 to $0.3 million in 1996. In
1995 other income was also higher due to nonrecurring income earned from the
sale of assets.

         The Company recorded a tax provision of $2.3 million or 2.7% of net
income before taxes for 1996. Continuing operations recorded a tax provision
of $1.9 million, and discontinued operations recorded a tax provision of $.4
million. Divestitures made during 1996 had a significant impact in
substantially reducing the rate for 1996. In 1995, the effective tax rate was
(2.9%) due to a valuation allowance established. The valuation allowance was
released in 1996.

LIQUIDITY AND CAPITAL RESOURCES

         On March 12, 1998 in conjunction with the ILC Merger and the Spinoff,
the Company and its subsidiaries (not including Bolle) entered into a Second
Amended and Restated Credit Agreement (the "New Credit Agreement"). The New
Credit Agreement provides for a $40 million revolving credit facility, which
includes a letter of credit subfacility of $5 million and a $30 million term
facility. The interest rate applicable to the facilities will equal the Base
Rate or the Eurodollar Rate (each as defined in the New Credit Agreement), as
the Company may from time to time elect. The Base Rate will generally be equal
to the sum of (a) the greater of (i) the prime rate as announced from time to
time by NationsBank or (ii) the Federal Funds Rate plus one-half percent
(0.5%), and (b) a margin ranging from 0% to 0.25%, depending on the Company's
satisfaction of certain financial criteria. The Eurodollar Rate will generally
be equal to the interbank offered rate, as adjusted, to give effect to reserve


                                      14
<PAGE>

requirements, plus a margin ranging from 0.875% to 1.75%, depending upon the
Company's satisfaction of certain financial criteria. A commitment and related
fees of $420 were paid upon the closing of the New Credit Agreement.

YEAR ENDED DECEMBER 31, 1997

         Net cash provided by operating activities of continuing operations
during the year ended December 31, 1997 of $5.1 million represents the net
loss offset by the non-cash special charges and spinoff expenses and the
positive effect of decreased accounts receivable and increased accounts
payable. These sources of cash offset by an increase in other assets.
Depreciation and amortization for the year ended December 31, 1997 was $1.5
million compared to $1.1 million for the same period last year. Cash paid for
acquisitions in 1997 represents the purchases of the assets of Byers Equipment
and QSP Coating Technologies by ORC, the purchase of a controlling interest in
Wolfram Electric, Inc. and the purchase of a minority interest in Voltarc
Technologies, Inc. Capital expenditures of $1.4 million were higher than prior
year's of $0.6 million. These operating and investing activities were
primarily financed through credit facility borrowings.

         The Company continues to expect cash flow from operations combined
with available borrowing capacity under the Company's revolving credit
facility to be sufficient to fund the Company's operating needs at least
through 1998.

YEAR ENDED DECEMBER 31, 1996

         Net cash provided by continuing operations in 1996 was $1.8 million
with net income plus non-cash expenses being offset by increases in
inventories and other assets. Movements in accounts receivable and accounts
payable were not significant to overall cash flows.

         During 1996, the disposition of the prescription eyewear business and
FGG provided total cash proceeds from operating, investing and financing
activities of approximately $285 million. Most of the cash received for the
sale of the prescription eyewear business was used to pay a dividend of $230
million to stockholders in conjunction with the Merger and Spinoff. The
remaining cash proceeds were used to pay down short and long-term debt leaving
the Company with lower debt levels at the end of 1996.

         Future acquisitions may be financed by debt or equity offerings. In
the short term, liquidity needs were met from cash flow from operations,
working capital management and the Company's Credit Agreement. On a long-term
basis, the Company's management has had a successful track record of being
able to access the public equity and debt markets for capital and liquidity.

YEAR ENDED DECEMBER 31, 1995

         In 1995, Benson's loss from continuing operations of $0.9 million
included substantially all non-cash special charges and depreciation and
amortization expense of $6.4 million. Changes in assets and liabilities
resulted in uses of cash except for the $2.4 million increase in accounts
payable resulting in cash used by continuing operating activities of $12.5
million

         In 1995, the prescription eyewear business completed acquisitions
which, in addition to capital expenditures, resulted in the use of cash by
discontinued operations investing activities.

         Capital expenditures in 1995 included $0.8 million for the
installation and implementation of a new management information system at ORC
in addition to normal course of business expenditures.

         In June 1995, Benson completed a primary public stock offering of
approximately 2.35 million shares of common stock at an offering price of
$10.125 per shares. Net proceeds to the Company aggregating approximately
$22.1 million were used to pay down debt, to fund acquisitions and for general
corporate purposes, including working capital needs.



                                      15
<PAGE>

         On March 6, 1995, all borrowings under the Second Amended and
Restated Loan and Security Agreement were refinanced under a Third Amended and
Restated Loan and Security Agreement (the "Amended Agreement"), with the
Company becoming the Borrower. Borrowings under the Amended Agreement bear
interest at variable rates based upon the Eurodollar Rate, with an initial
base rate equivalent to LIBOR plus 112 basis points. The facility is secured
by inventory, trade receivables and intangible assets until various
requirements are met, after which time the collateral will be released.

COMPUTER SYSTEMS AND YEAR 2000

         The Company has conducted an internal review of its computer systems
to identify systems that could be affected by the "Year 2000: issue. The Year
2000 issue is the result off computer programs being written using two digits
rather than four to define the applicable year. Computer programs that have
time-sensitive software may recognize a date using "00" as the year 1900
rather than the year 2000, which could result in a major system failure or
miscalculations for systems utilizing such software. Based upon its internal
review, the Company presently believes that the Year 2000 issue will not pose
significant operational problems for the Company's computer systems. Most of
the Company's material programs are already Year 2000 compatible, while
potentially incompatible systems are currently being upgraded. All of the
Company's material programs are anticipated to be Year 2000 compatible prior
to end of 1998. The Company also intends to use reasonable efforts to assess
whether any Year 2000 noncompliance of the computer systems of entities with
which the Company's computer systems interact, including suppliers, customers
and financial service organizations, could have an adverse impact on the
Company.

FORWARD-LOOKING STATEMENTS

         The Company is including the following cautionary statement in this
Form 10-K to make applicable and take advantage of the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995 for any
forward-looking statements made by, or on behalf of, the Company.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, future events or performance, and underlying assumptions
and other statements which are other than statements of historical facts. From
time to time, the Company may publish or otherwise make available
forward-looking statements of this nature. All such subsequent forward-looking
statements, whether written or oral and whether made by or on behalf of the
Company, are also expressly qualified by these cautionary statements. Certain
statements contained herein are forward-looking statements and accordingly
involve risk and uncertainties which could cause actual results or outcomes to
differ materially from those expressed in the forward-looking statements. The
forward-looking statements contained herein are based on various assumptions,
many of which are based, in turn, upon further assumptions. The Company's
expectations, beliefs and projections are expressed in good faith and are
believed by the Company to have a reasonable basis, including without
limitation, management's examination of historical operating trends, data
contained in the Company's records and other data available from third
parties, but there can be no assurance that management's expectations, beliefs
or projections will result or be achieved or accomplished. In addition to the
other factors and matters discussed elsewhere herein, the following are among
the factors that, in the view of the Company, could cause actual results to
differ materially from those discussed in the forward-looking statements:

1.       Changes in economic conditions, in particular those which affect the
         Company's principal markets.

2.       Changes in senior management of or control of the Company

3.       Inability to obtain new customers or retain existing ones

4.       Significant changes in competitive factors, including product pricing
         conditions, affecting the Company.

5.       Governmental/regulatory actions and initiatives, including those
         affecting financings.

6.       Significant changes from expectations in actual capital expenditures
         and operating expenses.



                                      16
<PAGE>

7.       Occurrences affecting the Company's ability to obtain funds from
         operations, debt or equity to finance needed capital expenditures and
         other invesments.

8.         Significant changes in rates of interst, inflation or taxes.

9.       Significant changes in the Company's relationship with its employees
         and the potential adverse effects if labor disputes or grievance were
         to occur.

ITEM 7A.          QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

         Approximately $18 million off the Company's 1997 revenues and $70
million of its assets at December 31, 1997 were denominated in French Francs,
not including the French Franc denominated debt detailed below. The Company
may from time to time enter into forward or option contracts to hedge the
related foreign exchange risks. The Company does not enter into market risk
sensitive transactions for trading or speculative purposes.

         On March 11, 1998, in conjunction with the Spinoff, the French Franc
denominated debt included in the table below was paid down. The table below
provides information about the Company's financial instruments, as of December
31, 1997, that were sensitive to changes in interest and foreign exchange
currency rates. The 1997 amounts approximate fair value. The table presents
principal cash flows by contractual maturity dates. The information is
presented in US dollar equivalents using the USD/FF exchange rate at December
31, 1997 of 5.9912. USD is the Company's reporting currency. The instruments'
actual cash flows are denominated in both US Dollars (USD) and French Francs
(FF), as indicated.


<TABLE>
<CAPTION>
USD Equivalent
(in thousands)                                               Expected year of Maturity

                                                                                        There-             Fair
                                                                                        ------             ----
                                  1998     1999       2000     2001          2002        after     Total   Value
                                  ----     ----       ----     ----          ----        -----     -----   -----
<S>                             <C>       <C>        <C>      <C>          <C>           <C>      <C>      <C>
Variable rate short term debt
Denominated in FF                4,282
Denominated in USD              19,000

Variable rate long term debt
Denominated in FF                1,000    2,500      3,500    5,000         2,987                 14,987
Denominated in USD               1,159    2,675      4,191    5,210         2,730        2,556    18,521
</TABLE>


         The weighted average interest rate on variable rate short term and
long term debt for the year ended December 31, 1997 was 6.4%.












                                      17
<PAGE>

ITEM 8.           FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA





REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and Stockholders of Lumen Technologies, Inc. (formerly
BEC Group, Inc.)

In our opinion, the accompanying consolidated balance sheets and the related
consolidated statements of operations, of comprehensive income (loss), of
stockholders' equity and of cash flows present fairly, in all material
respects, the financial position of Lumen Technologies, Inc. (formerly BEC
Group, Inc.) and its subsidiaries at December 31, 1997 and 1996, and the
results of their operations and their cash flows for each of the three years
in the period ended December 31, 1997, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of
the Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.

As discussed in Note 1, on March 11, 1998, the Company distributed the stock
of its subsidiary, Bolle Inc., to the Company's stockholders and on March 12,
1998 merged with ILC Technology, Inc.

PRICE WATERHOUSE LLP
Dallas, Texas
April 9 , 1998


                                      18
<PAGE>





<TABLE>
<CAPTION>
                                       LUMEN TECHNOLOGIES, INC. F/K/A BEC GROUP, INC.
                                                 CONSOLIDATED BALANCE SHEETS
                                                    (AMOUNTS IN THOUSANDS)
                                                                                                     December 31,
                                                                                              --------------------------
                                                                                                1997             1996
                                                                                              --------         ---------
<S>                                                                                                <C>              <C>   
ASSETS
Current assets:
   Cash and cash equivalents                                                                       $762             $2,164
   Trade receivables, less allowance for doubtful accounts of $586 and $503                      10,214              7,280
   Inventories                                                                                    9,534              9,317
   Investment in and net receivables from discontinued operations (Note 3)                       51,567             11,167
   Other current assets                                                                           6,094              3,651
                                                                                              ---------           --------
      Total current assets                                                                       78,171             33,579
Property and equipment, net                                                                      13,763             13,114
Goodwill, net                                                                                    12,138             11,372
Intangible assets, net                                                                            1,225              1,296
Equity in and notes receivable from affiliated companies                                          8,773             11,435
Other assets                                                                                      5,619              4,275
                                                                                              ---------           --------
      Total assets                                                                             $119,689            $75,071
                                                                                              =========           ========
LIABILITIES AND STOCKHOLDERS' EQUITY 
Current liabilities:
   Short-term debt and current maturities of long term debt                                     $25,458            $17,645
   Accounts payable                                                                               4,891              2,858
   Accrued compensation                                                                           1,390              2,134
   Other accrued expenses                                                                        12,095              8,557
                                                                                              ---------           --------
      Total current liabilities                                                                  43,834             31,194
Long-term debt                                                                                   31,349              3,597
Convertible subordinated notes                                                                   23,742             21,922
Other long-term liabilities                                                                       8,307             10,754
                                                                                              ---------           --------
      Total liabilities                                                                         107,232             67,467
                                                                                              ---------           --------

Commitments and contingencies
Mandatorily redeemable preferred stock--par value $1; 500 shares authorized;
    10 issued and outstanding                                                                     9,294
                                                                                              ---------
Stockholders' equity:
   Common stock--par value $.01; 50,000 shares authorized; 8,815 issued; 8,813
    and 8,857 outsanding                                                                             88                 88
   Additional paid-in capital                                                                    28,743             28,791
   Treasury stock - 2 and 58 shares at cost                                                         (17)              (557)
   Accumulated deficit                                                                          (25,651)           (20,718)
                                                                                              ---------           --------
      Total stockholders' equity                                                                  3,163              7,604
                                                                                              ---------           --------
      Total liabilities and stockholders' equity                                               $119,689            $75,071
                                                                                              =========           ========
</TABLE>

         See accompanying notes to consolidated financial statements.


                                      19
<PAGE>





<TABLE>
<CAPTION>
                                       LUMEN TECHNOLOGIES, INC. F/K/A BEC GROUP, INC.
                                            CONSOLIDATED STATEMENTS OF OPERATIONS
                                        (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

                                                                                           For the year ended December 31,
                                                                                     ---------------------------------------------
                                                                                         1997            1996              1995
                                                                                       --------        --------           -------
<S>                                                                                     <C>             <C>               <C>   
Continuing operations:
Net sales                                                                              $48,128         $42,574           $41,244
Costs and expenses:
   Costs of sales                                                                       30,603          25,676            23,725
   Selling, general and administrative expense                                          10,905          10,020            13,820
   Special charges and spinoff expenses                                                  9,571                             5,237
   Interest expense                                                                      3,458           2,942             4,087
   Other income, net                                                                    (1,102)         (1,378)           (3,337)
                                                                                     ---------        --------           -------
      Total costs and expenses                                                          53,435          37,260            43,532
Income (loss) from continuing operations before income taxes                            (5,307)          5,314            (2,288)
Provision (benefit) for incomes taxes from continuing operations                        (1,656)          1,870            (1,339)
                                                                                     ---------        --------           -------
Income (loss) from continuing operations                                               $(3,651)         $3,444             $(949)
                                                                                     ---------        --------           -------
Discontinued operations (Note 3):
Income (loss) from operations of the Prescription Eyewear Business, Foster             $(1,282)         $4,302           $(5,811)
Grant Group and Bolle (less applicable taxes of $(2,020), $384 and $1,139 in
1997, 1996 and 1995, respectively) 

Net gain on the sales of the Prescription Eyewear Business, and Foster Grant 
Group net of phase out losses of $2,902
                                                                                                        75,010
                                                                                     ---------        --------           -------
Income (loss) from discontinued operations                                             $(1,282)        $79,312           $(5,811)
                                                                                     ---------        --------           -------
Net income (loss)`                                                                     $(4,933)        $82,756           $(6,760)
Basic earnings (loss) per share:
   From continuing operations                                                           $(0.44)          $0.40            $(0.12)
   From discontinued operations                                                          (0.15)           9.29             (0.77)
                                                                                     ---------        --------           -------
                                                                                        $(0.59)          $9.69            $(0.89)
                                                                                     ---------        --------           -------
Basic EPS weighted average shares outstanding                                            8,803           8,537             7,620

Diluted earnings (loss) per share:
    From continuing operations                                                          $(0.44)          $0.40            $(0.12)
    From discontinued operations                                                         (0.15)           9.22             (0.77)
                                                                                     ---------        --------           -------
                                                                                        $(0.59)          $9.62            $(0.89)
                                                                                     ---------        --------           -------
Diluted EPS weighted average shares outstanding                                          8,803           8,600             7,620


         See accompanying notes to consolidated financial statements.



                                      20
<PAGE>


                LUMEN TECHNOLOGIES, INC. F/K/A BEC GROUP, INC.
                   STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
                            (AMOUNTS IN THOUSANDS)





</TABLE>
<TABLE>
<CAPTION>
                                                                  For the year ended December 31
                                                       --------------------------------------------------------
                                                            1997                1996                  1995
                                                       --------------      --------------       ---------------
<S>                                                      <C>                  <C>                  <C>      
Net income (loss)                                        $ (4,933)            $ 82,756             $ (6,760)
Foreign currency translation adjustments                     (462)                                       26
Reclassification adjustment - (before taxes)                                        77
                                                        ---------            ---------            ---------
Comprehensive income (loss) before tax                     (5,395)              82,833               (6,734)
Other comprehensive income tax effect                         197                   (2)                  (9)
                                                        ---------            ---------            ---------
Comprehensive income (loss)                              $ (5,198)            $ 82,831             $ (6,743)
                                                        =========            =========            =========
</TABLE>

















          See accompanying notes to consolidated financial statements


                                      21
<PAGE>





<TABLE>
<CAPTION>
                                       LUMEN TECHNOLOGIES, INC. F/K/A BEC GROUP, INC.
                                       CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                                     FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
                                                   (AMOUNTS IN THOUSANDS)


                                                                                           ADDITIONAL       RETAINED
                                            ISSUED COMMON       TREASURY       COMMON       PAID-IN         EARNINGS       TREASURY
                                                 SHARES          SHARES        STOCK        CAPITAL         (DEFICIT)        STOCK
                                            -------------       --------       ------      ----------       ---------      --------
<S>                                               <C>              <C>          <C>        <C>               <C>          <C>     
1995:
Balance - December 31, 1994                       7,268            49           $72        $105,001          $7,385       $(1,365)
   Shares issued for acquisitions                    79                           1           2,845
   Shares issued through public offering,
     net of expenses                                589                           6          22,030
   Exercise of stock options                         79                           1           1,412
   Other issuances of common stock                   10                                         506
   Net loss                                                                                                 (6,760)
                                            -----------   -----------  ------------  --------------  --------------  -------------
Balance - December 31, 1995                       8,025            49            80         131,794             625        (1,365)

1996:
   Exercise of stock options                        126                           1           2,326
   Other issuances of common stock                   66                                       1,567
   Cancel treasury stock                           (49)           (49)                       (1,365)                        1,365
   Repurchases of treasury stock                                   58                                                        (557)
   Dividend to stockholders                                                                (125,972)       (104,099)
   Conversion of 8% Convertible Notes 
    due 2001                                        647                           7          20,441
    Net income                                                                                               82,756
                                            -----------   -----------  ------------  --------------  --------------  -------------
Balance - December 31, 1996                       8,815            58            88          28,791         (20,718)         (557)

1997:
   Exercise of stock options                                      (84)                          (48)                          789
   Repurchase of treasury stock                                    28                                                        (249)
   Net loss                                                                                                 (4,933)
                                            -----------   -----------  ------------  --------------  --------------  -------------
Balance - December 31, 1997                       8,815             2           $88         $28,743       $(25,651)          $(17)
                                            ===========   ===========  ============  ==============  ==============  =============
</TABLE>






         See accompanying notes to consolidated financial statements.


                                      22
<PAGE>





                     LUMEN TECHNOLOGIES, INC. F/K/A BEC GROUP, INC.
                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
                                                                                     FOR THE YEAR ENDED DECEMBER 31,
                                                                              ----------------------------------------------
                                                                                 1997              1996              1995
                                                                              ----------        ----------        ----------
<S>                                                                           <C>              <C>              <C>       
Cash flows from operating activities:
Income (loss) from continuing operations                                      $  (3,651)       $   3,444        $    (949)
Adjustments to reconcile income (loss) to net cash provided
(used) by operating activities:
Special charges and spinoff expenses, net of payments                             9,571                             4,120
Depreciation and amortization                                                     1,477            1,105            1,234
Bad debt expense                                                                    163               26              280
Loss (gain) on sale of property and equipment                                                        414             (316)
Other                                                                                                                  15
Changes in current assets and liabilities (net of effect of companies
acquired):
Trade receivables                                                                (3,017)             (89)          (2,201)
Inventories                                                                        (217)          (1,371)             256
Other assets                                                                        723           (2,054)          (3,529)
Accounts payable                                                                  2,033              356            2,383
Accrued expenses and other                                                       (1,972)               3           (4,663)
Cash provided (used) by discontinued operations                                     144            6,853           (9,122)
                                                                              ---------        ---------        ---------
Net cash provided (used) by operating activities                              $   5,254        $   8,687        $ (12,492)
                                                                              ---------        ---------        ---------
Cash flows from investing activities:
Cash expended in acquisitions, net of cash received                              (5,164)                           (3,865)
Capital expenditures                                                             (1,372)            (618)          (1,619)
Notes receivable from affiliates                                                   (815)
Proceeds from sale of fixed assets                                                                   155            3,648
Cash provided (used) by discontinued operations                                 (33,848)         276,112          (36,887)
                                                                              ---------        ---------        ---------
Net cash provided (used) by investing activities                              $ (41,199)       $ 275,649        $ (38,723)
                                                                              ---------        ---------        ---------
Cash flows from financing activities:
Net proceeds from (payments for) issuance of long-term debt                      27,350          (15,364)           3,010
Proceeds (payments) from revolving credit lines and short term debt               7,813          (45,000)          (8,938)
Proceeds from issuance of common stock                                              492            1,944           23,569
Cash dividend to stockholders                                                                   (230,071)
Cash provided (used) by discontinued operations                                  (1,112)           2,264           26,198
                                                                              ---------        ---------        ---------
Net cash provided (used) by financing activities                              $  34,543        $(286,227)       $  43,839
                                                                              ---------        ---------        ---------
Net decrease in cash                                                          $  (1,402)       $  (1,891)       $  (7,376)
Cash and cash equivalents at beginning of year                                    2,164            4,055           11,431
                                                                              ---------        ---------        ---------
Cash and cash equivalents at end of year                                      $     762        $   2,164        $   4,055
                                                                              =========        =========        =========
</TABLE>
                                  (Continued)


                                      23
<PAGE>






<TABLE>
<CAPTION>
                                       LUMEN TECHNOLOGIES, INC. F/K/A BEC GROUP, INC.
                                            CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                    (AMOUNTS IN THOUSANDS)
                                                         (CONTINUED)

                                                                                          For the year ended December 31
                                                                                   --------------------------------------------
                                                                                     1997              1996              1995
                                                                                   --------          --------         ---------
Supplemental disclosures of cash flow information:
<S>                                                                                 <C>               <C>               <C>   
   Interest paid                                                                    $2,167            $6,710            $9,100
   Income taxes paid                                                                  $484            $2,581              $910
</TABLE>



         Noncash transactions:
1997

         o        Recorded $1,835 of interest on convertible subordinated
                  notes which is accrued until conversion, redemption or
                  maturity.

         o        The acquisition of Bolle France included in discontinued
                  operations was consummated during the year. The acquisition
                  was funded with cash, equity and debt. The fair values of
                  the assets and liabilities at the date of acquisition were
                  as follows:

Cash                                                    $1,294
Accounts receivable                                      9,441
Inventories                                              6,167
Other current assets                                       388
Property and equipment                                   3,949
Goodwill                                                22,642
Trademark                                               40,000
Other assets                                               181
Short-term debt                                          (175)
Accounts payable and accrued liabilities               (9,756)
Other long-term liabilities                           (15,896)


1996

         o        $20,448 of Benson convertible notes were converted into
                  equity during 1996 in conjunction with the Essilor Merger.

         o        $500 of notes receivable from Superior Vision Services, Inc.
                  ("SVS") was forgiven during 1996.

         o        Recorded $1 million of non-interest bearing convertible
                  preferred stock as partial consideration on the sale of FGG.

                                  (Continued)


                                      24
<PAGE>





                LUMEN TECHNOLOGIES, INC. F/K/A BEC GROUP, INC.
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                            (AMOUNTS IN THOUSANDS)
                                  (CONTINUED)
1995

         o        Recorded a $1.9 million non-interest bearing convertible
                  note receivable in exchange for notes and trade receivables.

         o        Certain business combinations and divestitures were
                  consummated during the year. The acquisitions were funded
                  through a combination of cash, equity and debt. The fair
                  values of the assets and liabilities at the dates of
                  acquisition were allocated as follows: Accounts receivable
                  $2,888, Property and equipment $622, Goodwill $13,841,
                  Intangible assets $1,350, Other assets $358, Accounts
                  payable and accrued liabilities $(1,840), and Other
                  long-term assets and liabilities $2,416.





























         See accompanying notes to consolidated financial statements.


                                      25
<PAGE>





                LUMEN TECHNOLOGIES, INC. F/K/A BEC GROUP, INC.
                  NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
    (AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA, UNLESS OTHERWISE NOTED)

NOTE 1 -- SPINOFF AND MERGER SUBSEQUENT TO YEAR END

         On March 11, 1998, the Company distributed its subsidiary, Bolle Inc.
("Bolle"), to its stockholders via a spinoff (the "Spinoff"). In the Spinoff,
Company stockholders received one share of Bolle for every three shares of
Company common stock. In conjunction with the Spinoff, the Company and Bolle
entered into a Management Services Agreement and a Bill of Sale and Assignment
Agreement (the "Contribution Agreement"). The Management Services Agreement
provides management services to Bolle for an agreed fee. In accordance with
the Contribution Agreement, (i) the Company assigned to Bolle all of the
Company's assets other than the assets related to the ORC Technologies, Inc.
("ORC") Business (as defined in the Contribution Agreement ) and certain other
specific assets retained by the Company; and (ii) Bolle will assume all of the
Company's liabilities prior to the Spinoff other than those related to the ORC
Business and certain specific liabilities.

         On March 12, 1998, the Company (through its wholly-owned subsidiary,
BILC Acquisition Corp.) completed its merger with ILC Technology, Inc. (the
"ILC Merger"). Under the terms of the agreement, ILC shareholders received
4.4084 shares of the company's Common Stock (or 2.2042 shares, after giving
effect to a one-for-two reverse split of the Company's Common Stock) for each
share of ILC Common Stock outstanding. In conjunction with the ILC Merger, the
Company changed its name to Lumen Technologies, Inc. The effect of the
one-for-two reverse split has been retroactively presented in these financial
statements.

         The accompanying consolidated financial statements (i) reflect the
continuing operations of ORC; (ii) reflect Bolle net assets as "Investment in
and net receivables from discontinued operations" and Bolle's results of
operations as discontinued for all periods presented; (iii) do not reflect the
ILC Merger and (iv) do not reflect the disposition of certain assets and
liabilities pursuant to the Contribution Agreement.

         On a proforma basis, had the above transactions occurred at December
31, 1997, the Company's total assets and stockholders' equity would have been
approximately $130 million (unaudited) and $35 million (unaudited),
respectively.

NOTE 2 -- BUSINESS

Business

         During the periods presented, Lumen Technologies, Inc. ("Lumen" or
the "Company") had one core business, ORC which manufactures and markets
specialty lighting, electronic and electroformed products to a diverse
customer base. The evolution of the Company was accomplished through a series
of acquisitions and divestitures which were consummated during the period from
October 1992 through December 1997 (Notes 3 and 6). The name was changed from
BEC Group, Inc. in conjunction with the Spinoff (Note 1) and the ILC Merger
(Note 1) in March 1998.


                                      26
<PAGE>

NOTE 3 -- DISCONTINUED OPERATIONS

Bolle Inc.

         On March 11, 1998, the Company completed the Spinoff of Bolle to the
Company's stockholders (Note 1). Accordingly, the accompanying financial
statements reflect the results of operations of Bolle as discontinued
operations for all periods presented but do not reflect the transfer of the
other assets and liabilities to Bolle Inc. at the time of the Spinoff in
conjunction with the Contribution Agreement. After the Spinoff, the
"Investment in and net receivables from discontinued operations" caption will
be reduced to zero and will be accompanied by a corresponding entry to reduce
paid in capital.

Foster Grant Group and Dallas Corporate Headquarters

         On December 12, 1996, the Company sold to Foster Grant Holdings, Inc.
("Holdings") all of the issued and outstanding shares of capital stock of the
entities comprising the Foster Grant Group ("FGG"). At closing, the Company
received $29 million in cash and 100 shares of non-voting preferred stock with
a maximum redemption value of $6 million (the "Preferred Stock"). By agreement
with Accessories Associates, Inc. ("AAi"), the Company may, at its option,
exchange the Preferred Stock for shares of AAi common stock if AAi completes
an initial public offering ("IPO") at any time within three (3) years of
closing. Upon any such exchange, the Company will receive the number of shares
of AAi common stock equal to $6 million divided by 85% of the IPO offering
price, as set forth in the AAi final IPO prospectus. Any such shares of AAi
common stock will not be registered for resale under federal securities laws,
but will bear "piggyback" registration rights. If the Preferred Stock is not
converted, it will be redeemed by Foster Grant Holdings, Inc. ("Holdings") on
or before February 28, 2000 for up to $6 million, based on FGG's net sales
for the year ending December 31, 1999. The cash consideration was used to pay
down the company's credit facility and pay transaction expenses. The results
of operations for FGG and the Dallas Corporate Headquarters, which was closed
in connection with the sale of FGG, are presented as discontinued operations
of the Company. The assets of FGG, net of liabilities, are presented as
investment in discontinued operations at December 31, 1995. A loss of $26.1
million including transaction expenses and phase-out losses, net of taxes was
recorded on the sale. All rights, liabilities and obligations of the Company
with respect to the Preferred Stock and/or agreement by and between the
Company, AAi Holdings and/or FGG was assigned to, and assumed by, Bolle in
connection with the Spinoff.

Prescription Eyewear Business

         On May 3, 1996, Benson Eyecare Corporation (the predecessor of the
Company) ("Benson"), the Company, Essilor International, S.A. ("Essilor"),
Essilor of America, Inc. ("Essilor of America"), a wholly owned subsidiary of
Essilor and Essilor Acquisition Corporation, Inc. ("Essilor Sub"), a wholly
owned subsidiary of Essilor of America, entered into an Agreement and Plan of
Merger, as amended pursuant to which Essilor purchased Benson and the Omega
Group, Benson's wholesale optical laboratory business (the "Essilor Merger").
Benson also entered into an Asset Purchase Agreement, pursuant to which
Benson's lens manufacturing business, Orcolite, was purchased by the Monsanto
Company (the "Asset Sale"). The Omega Group and Orcolite comprised the
Prescription Eyewear Business of Benson. In connection with the Spinoff, Bolle
will agree to indemnify the Company against any and all liabilities, damages,
costs or other expenses arising in connection with the Essilor transaction,
except to the extent arising as a result of the ORC Business.

         Pursuant to the Essilor Merger, each outstanding share of Benson
common stock was exchanged for $6.60 in cash and one share of the Company's
Common Stock was received for every two shares of Benson Common Stock. Upon
consummation of the Essilor Merger, the equity interest in Benson of its
stockholders ceased and Benson became a wholly owned subsidiary of Essilor of
America. Also upon consummation of the Essilor Merger, the Company became a
registrant whose common shares are traded on the NYSE.


                                      27
<PAGE>


         For accounting purposes, the company was considered the continuing
entity. Accordingly, in substance, the Merger and Asset Sale were considered
to be a sale of Omega and Orcolite by the Company to Essilor and Monsanto
Company, respectively. Upon approval of the Essilor Merger, Benson's
historical consolidated financial statements, adjusted for the sale of the
Prescription Eyewear business, became the historical financial statements of
the Company. The gain on the sale of these businesses of $100.7 million and
the results of operations for these businesses are presented as discontinued
operations of the Company. The cash merger consideration is treated as a
dividend by the Company. The assets of the discontinued operations, net of
liabilities, are presented as investment in discontinued operations at
December 31, 1995. The accounting treatment of the Essilor Merger and Asset
Sale differed from the legal and federal income tax treatment.

         During the third quarter of 1996, the final Closing Balance Sheet for
the sale of Omega was agreed upon by the Company and Essilor. According to the
terms of the Essilor Merger, a purchase price adjustment of $2.1 million was
paid to Essilor on October 3, 1996, decreasing the gain on the sale.
Additionally, Essilor and the Company agreed to settle the Contingent
Valuation Right (the "CVR") early for cash of $2.2 million payable by the
Company to Essilor in January 1997. Accordingly, the gain on the sale
increased by approximately $2.4 million. The net result of the described
adjustments, in addition to the adjustment of certain accruals relating to the
Merger, was a $791 incremental gain on the sale of the Prescription Eyewear
Business recorded in discontinued operations in the third quarter.

         Summarized information on the combined discontinued operations,
excluding the net gain on the transactions follows. The amounts represent the
operating results of FGG, the Prescription Eyewear Business and Bolle Inc.
business through their respective measurement dates.

<TABLE>
<CAPTION>
                                                       FOR THE YEAR ENDED
                                            ------------------------------------------
                                               1997            1996           1995
                                            ---------       ----------      ---------
<S>                                          <C>              <C>            <C>     
Net sales                                    $32,160          $125,987       $260,591

Income (loss) before income taxes             (3,369)            4,686         (4,672)
Income tax expense (benefit)                  (2,020)              384          1,139
Minority interests                               (67)
                                            --------          --------      ---------
Net income (loss)                            $(1,282)           $4,302       $ (5,811)
                                            ========          ========      =========
</TABLE>


         Pursuant to the Essilor Merger, all Benson stock options were
canceled. Continuing Company option holders received cash and new options in
exchange for their Benson options. Option holders from discontinued operations
received cash and the Company stock in exchange for their Benson options.

NOTE 4 -- SPECIAL CHARGES AND SPINOFF EXPENSES

         The Company's special charges and spinoff expenses of $9.6 million
for the year ended December 31, 1997 include the following items:

         (i)      A $6.2 million charge to reflect the impairment of the
                  Company's long term investment in Eyecare Products plc
                  ("Eyecare") (Note 10). This investment has historically been
                  accounted for under the equity method reflecting the
                  Company's percentage shareholding and the long term nature
                  of this investment. In connection with the Spinoff and the
                  transfer of the Eyecare shares to Bolle, the Company has
                  reassessed Eyecare's operating performance and market
                  performance and accordingly has written down its investment
                  in Eyecare to market value at December 31, 1997.


                                      28
<PAGE>





         (ii)     A $2.2 million charge to reflect the impairment of the
                  Sterling Vision, Inc. Convertible Subordinated Note Due 2015
                  due to Sterling's recent operating performance and negative
                  operating cash flows.

         (iii)    Spinoff expenses of $1.2 million for expenses relating to
                  the distribution of Bolle Inc. See Note 1.

         The Company's special charges of $5.2 million for the year 1995
included primarily: (i) a $4.3 million charge to reflect the impairment of
certain notes receivable and trade accounts receivable from OCA Acquisition,
Inc., d/b/a/ Optical Corporation of America ("OCA") prior to the exchange of
such assets for a non-interest bearing convertible note receivable from
Sterling Vision, Inc.; (ii) the write-off of $500 of deferred financing costs
in connection with a change in the Company's banking syndicate in September
1995. None of the above items relate to the operations of the ORC business.

NOTE 5 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation
         The consolidated financial statements include the accounts of the
Company and its majority owned subsidiaries over which the Company asserts
control. Investments in less than 50% owned affiliates are accounted for by
the equity method, investments in less than 20% owned affiliates are accounted
for by the cost method (Note 10). All significant intercompany transactions,
profits and accounts have been eliminated in consolidation.

Cash Equivalents

         Cash equivalents include all temporary cash investments with original
maturities of three months or less. The carrying value is equal to market
value.

Revenue Recognition

         The Company recognizes revenue upon shipment or delivery of products.

Concentration of Credit Risk and Major Customers

         The Company is not subject to significant concentrations of credit
risk. However, trade receivables arising from sales to customers are not
collateralized and as a result management continually monitors the financial
condition of these customers to reduce the risk of loss. Notes receivable
relate to the divestiture of certain businesses and related assets in 1995 and
1994. The carrying values of notes receivable approximate fair value.

Inventories

         Inventories, which consist primarily of raw materials and finished
goods held for resale, are stated at the lower of cost or market value and
determined on a first-in-first-out basis.

Warranties

         Certain sales are subject to warranty against defects in material and
workmanship for varying periods. The Company provides for such potential
future costs at the time the sales are recorded.


                                      29
<PAGE>






Property and Equipment

         Property and equipment are stated at cost. Additions and improvements
are capitalized. Maintenance and repairs are expensed as incurred.
Depreciation is computed on a straight line basis for financial reporting
purposes, and on an accelerated basis for tax purposes, over the estimated
useful lives of the assets. Useful lives range from 3 to 5 years for office
equipment to 30 years for buildings. Asset cost and accumulated depreciation
amounts are removed for dispositions and retirements, with resulting gains and
losses reflected in earnings.

Goodwill and Intangible Assets

         Goodwill represents the excess cost over the fair value of net assets
acquired in business combinations accounted for under the purchase method.
Intangible assets consist principally of trademarks and other identifiable
intangible assets.

         Goodwill and intangible assets are amortized on a straight line basis
over estimated useful lives which approximate 40 years for goodwill, 20 years
for trademarks, and from 3-10 years for other identifiable intangibles. At
each balance sheet date, the Company evaluates the realizability of goodwill
and intangible assets based upon expectations of undiscounted cash flows of
each subsidiary having a significant goodwill or intangible asset balance.
Should this review indicate that goodwill or intangible assets will not be
recoverable, the Company's carrying value of the goodwill or intangible assets
will be reduced by the estimated shortfall of discounted cash flows. Based
upon its most recent analysis, the Company believes that no material
impairment of goodwill or intangible assets exists.

Income Taxes

         Deferred income taxes are provided on the difference in basis of
assets and liabilities between financial reporting and tax returns using
enacted tax rates. A valuation allowance is recorded when realization of
deferred tax assets is not assured.

Investments in Affiliates

         Investments in affiliates owned less than 20% are carried on the
balance sheet according to the cost method. Investments in more than 20% owned
affiliates are carried on the balance sheet according to the equity method.

Earnings Per Share

         Basic earnings per share is computed by dividing net earnings or loss
available to common stockholders by the weighted average number of outstanding
shares of common stock. Diluted earnings per share includes weighted average
common stock equivalents outstanding during each year in the denominators,
unless the effect is anti-dilutive. Common stock equivalents consist of the
dilutive effect of common shares which may be issued upon exercise of stock
options, warrants or conversion of debt.

         In accordance with Securities and Exchange Commission Staff
Accounting Bulletin No. 98, the weighted average number of outstanding common
shares and common stock options is calculated based on the historical timing
of the common stock transactions. Also, the May 3, 1996 and March 12, 1998
reverse stock splits have been retroactively reflected in the Company's
financial statements.


                                      30
<PAGE>


Reclassifications

         Certain amounts in the 1996 and 1995 financial statements have been
reclassified to conform with the 1997 presentation.

Estimates

         The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.

NOTE 6 -- BUSINESS COMBINATIONS AND DIVESTITURES

1997 BUSINESS COMBINATIONS

Bolle France

         On July 9, 1997, the Company acquired, in a transaction accounted for
as a purchase, all of the shares of Bolle France which included Bolle France
and several consolidated and unconsolidated subsidiaries, for a total purchase
price of approximately $58,235, comprised of cash of $31,000, BEC Series A
mandatorily redeemable preferred stock of $9,294, Bolle mandatorily redeemable
preferred stock of $11,055 and Bolle common stock of $3,302, as well as direct
acquisition costs of $3,595. Where such consideration was denominated in
French Francs, the July 10, 1997 exchange rate of 5.9197 was used to translate
to US Dollars.

Voltarc Technologies

                  On October 1, 1997, the Company expanded its interests in
the specialty lighting business. Pursuant to the terms of a Stock Purchase and
Option Agreement (the "Voltarc Purchase Agreement") dated as of October 1,
1997 among the Company, ORC, Voltarc and certain stockholders of Voltarc (the
"Voltarc Stockholders"), the Company and ORC acquired (a) 30% of the common
stock of Voltarc, for $1,800,000, (b) 12,000 shares of preferred stock of
Voltarc, convertible at ORC's option into approximately 10% of the total
number of shares of Voltarc issued and outstanding for $1,200,000 and (c) a
call option to acquire the remaining shares of capital stock of Voltarc from
the remaining Voltarc Stockholders in March 1999 if certain earnings
benchmarks are met. Pursuant to the Voltarc Purchase Agreement, the Voltarc
stockholders also received the right to put the remaining shares of Voltarc
common stock to the Company or ORC upon the occurrence of certain events. In
addition, ORC made available to Voltarc a subordinated revolving credit
facility in the amount of $800,000. The Company accounts for its investment in
Voltarc under the equity method. Voltarc is a manufacturer and marketer of
specialty lighting products.

1997 AND 1996 DIVESTITURES

         For a discussion of 1997 and 1996 divestitures see Note 3.



                                      31
<PAGE>





1995 BUSINESS COMBINATION

Bolle America, Inc.

         Effective November 2, 1995, the Company acquired all of the
outstanding common stock of Bolle America, Inc. ("Bolle America") in exchange
for 3,265 shares of the Benson Common Stock, valued at $31 million. The
business combination was accounted for as a pooling of interests and
accordingly, the financial statements of Bolle America were combined with
those of the Company. The Company entered into employment, consulting and
noncompete agreements with the former president of Bolle America providing for
annual payments of $255 from 1996 through 2000. Bolle America's results are
included in discontinued operations.

1995 DIVESTITURES

         Effective September 15, 1995, the Company exchanged its interests in
notes receivable and trade accounts receivable from OCA for a non
interest-bearing convertible note receivable from Sterling Vision, Inc. (Note
4).

         Effective June 30, 1995, the Company sold 100% of the issued and
outstanding capital stock of Superior Eye Care for aggregate consideration of
$5 million. There was no gain or loss recorded on the transaction.

NOTE 7 -- INVENTORIES

         Inventories consist of the following at December 31:

<TABLE>
<CAPTION>
                                                           1997                 1996
                                                         ---------            ---------
<S>                                                          <C>                  <C>   
Raw materials                                                $4,604               $4,534
Work in progress                                              2,859                2,655
Finished goods                                                2,739                2,504
Reserves                                                       (668)                (376)
                                                        -----------           ----------
                                                             $9,534               $9,317
                                                        ===========           ==========
</TABLE>

NOTE 8 -- PROPERTY AND EQUIPMENT

         Property and equipment consists of the following at December 31:

<TABLE>
<CAPTION>
                                                             1997                 1996
                                                          ---------            ---------
<S>                                                          <C>                  <C>   
Land                                                         $1,632               $1,631
Buildings                                                    10,458               10,401
Machinery and equipment                                       3,775                3,224
Furniture and fixtures                                          291                  203
Leasehold improvements                                           57                   42
Construction in progress                                        603
                                                        -----------           ----------
                                                             16,816               15,501
Less accumulated depreciation                                (3,053)              (2,387)
                                                        -----------           ----------
Net property and equipment                                  $13,763              $13,114
                                                        ===========           ==========
</TABLE>



                                      32
<PAGE>






         Depreciation expense for the years ended December 31, 1997, 1996 and
1995 was $1,097, $748 and $742, respectively.

         Land and buildings totaling $6.1 million net of accumulated
depreciation are subject to operating leases. The minimum future rental income
is as follows:


1998                                              $1,257
1999                                                 762
2000                                                 494
2001                                                 494
Thereafter
                                              ----------
                                                  $3,007
                                              ==========

NOTE 9 -- GOODWILL AND INTANGIBLE ASSETS

         Intangible assets and accumulated amortization consist of the
following at December 31:

                                                  1997                 1996
                                                --------             --------

Goodwill                                          $13,011             $11,939
Trademarks                                          1,482               1,498
Other identifiable intangible assets                   __                (16)
                                               ----------            --------
                                                   14,493              13,421
Less accumulated amortization                     (1,130)               (753)
                                               ----------            --------
                                                  $13,363             $12,668
                                               ==========            ========

         Amortization expense for goodwill and intangible assets for the years
ended December 31, 1997, 1996 and 1995, was $380, $357 and $492, respectively.

NOTE 10 -- EQUITY IN AND NOTES RECEIVABLE FROM AFFILIATED COMPANIES

Eyecare Products plc

         The Company first invested in Eyecare Products plc in December 1993.
For the years ended December 31, 1997, 1996 and 1995, the Company recognized
equity earnings of $595, $275 and $525, respectively, on its investment in
Eyecare. The Company entered into an agreement, dated November 14, 1996, as
amended, with Lantis Eyewear Corporation ("Lantis"), whereby the Company sold
3,500 shares of Eyecare to Lantis and granted Lantis an option to acquire the
Company's remaining interest in Eyecare. Lantis did not exercise its December
1997 option as the operating performance of Eyecare was below Lantis'
expectations and its market price was below the option floor price. The
Company currently maintains a 23% interest in Eyecare. Due to the value
impairment and the Company's intention to dividend this investment to Bolle
according to the Contribution Agreement, this investment was written down to
market value at December 31, 1997 resulting in a special charge of $6.2
million.


                                      33
<PAGE>


         Eyecare Products shares two common directors with the Company, and
the Company has a management agreement with Eyecare Products under which a
management fee is paid to the Company, not to exceed .5% of Eyecare Products
net sales. No management fee was charged in 1997. The Company recognized
management fee income of $100 and $300 during each of the years December 31,
1996 and 1995, respectively.

NOTE 11 -- CREDIT FACILITIES

Short-Term Debt

         Short-term debt consists of the following at December 31:

<TABLE>
<CAPTION>
                                                  1997             1996
                                                -------          -------
<S>                                             <C>              <C>    
Credit Agreement                                $23,282          $17,500
Current maturities of long-term debt              2,159              145
Other short term debt                                17               
                                                -------          -------
                                                $25,458          $17,645
                                                =======          =======
</TABLE>


Credit Agreement

         On April 3, 1996, the Company and certain of its subsidiaries entered
into a credit facility (the "Credit Agreement") with a syndicate of lenders
(the "Lenders"), led by NationsBank, N.A., ("NationsBank"). The Original
Credit Agreement, as amended effective December 12, 1996 and July 10, 1997,
provided for a $70 million revolving credit facility, which included a letter
of credit subfacility of $5 million, and two $15 million term facilities. The
interest rate applicable to the credit facilities will equal the Base Rate,
the Eurodollar Rate or the French Franc Libor Rate (each, as defined in the
Credit Agreement), as the Company may from time to time elect. The Base Rate
will generally be equal to the sum of (a) the greater of (i) the prime rate as
announced from time to time by NationsBank or (ii) the Federal Funds Rate plus
one-half percent (0.5%), and (b) a margin ranging from 0% to .375%, depending
upon the Company's satisfaction of certain financial criteria. The Eurodollar
Rate and the French Franc Libor Rate will generally be equal to the interbank
offered rate, as adjusted to give effect to reserve requirements, plus a
margin ranging from .625% to 1.625%, depending upon the Company's satisfaction
of certain financial criteria. A commitment fee of $175 was paid upon closing
the Credit Agreement in April 1996 and a commitment fee of $596 was paid upon
Closing of the July 10, 1997 amendment.

         At December 31, 1996, the Company had aggregate borrowing capacity
under the Credit Agreement of $25 million. During 1996, the weighted average
interest rate on borrowings under the facility was 7.1%, the average
outstanding balance was $42.3 million, and the maximum balance outstanding was
$68 million.

         At December 31, 1997, the Company had aggregate borrowing capacity
under the Credit Agreement of $70 million. During 1997, the weighted average
interest rate on borrowings under the facility was 6.7%, the average
outstanding balance was $35.4 million, and the maximum balance outstanding was
$53.4 million.

         On March 11, 1998, in conjunction with the ILC Merger and the
Spinoff, the Company and its subsidiaries (excluding Bolle) entered into a
Second Amended and Restated Credit Agreement (the "New Credit Agreement"). The
New Credit Agreement provides for a $40 million revolving credit facility,
which includes a letter of credit subfacility of $5 million, and a $30 million
term facility. The interest rate applicable to the facilities will equal the
Base Rate or the Eurodollar Rate (each, as defined in the New Credit
Agreement), as the Company may from time to time elect. The Base Rate will
generally be equal to the sum of (a) the greater of (i) the prime rate as
announced 


                                      34
<PAGE>

from time to time by NationsBank or (ii) the Federal Funds Rate plus
one-half percent (0.5%), and (b) a margin ranging from 0% to 0.25%, depending
on the Company's satisfaction of certain financial criteria. The Eurodollar
Rate will generally be equal to the interbank offered rate, as adjusted, to
give effect to reserve requirements, plus a margin ranging from 0.875% to
1.75%, depending upon the Company's satisfaction of certain financial
criteria. Commitment and related fees of $420 were paid upon the closing of
the New Credit Agreement.

         At December 31, 1997, the Company was in compliance with all debt
covenants.

Long-Term Debt

         Long-term debt consists of the following at December 31:


                                             1997              1996
                                            ------            ------
Credit Agreement                            $29,987
Mortgage                                      3,521           $3,742
                                            -------           ------
                                             33,508            3,742
Less current maturities                     (2,159)            (145)
                                            -------           ------
                                            $31,349           $3,597
                                            =======           ======


         Aggregate maturities of long-term debt are as follows:

1998                                                 $2,159
1999                                                  5,175
2000                                                  7,691
2001                                                 10,210
2002                                                  5,717
Thereafter                                            2,556
                                                 ----------
                                                    $33,508
                                                 ==========

         The fair value of long term debt is estimated using incremental
borrowing rates currently available to the Company. The carrying value of
long-term debt approximates fair value.

Convertible Subordinated Notes

         On May 9, 1994, Benson completed a public offering of $40,950
Convertible Subordinated Notes, due 2001 with a coupon rate of 8% and a
conversion price of $9.056 per Benson share. In connection with the Essilor
Merger, holders of $40,896 Convertible Subordinated Notes due 2001 accepted a
Conversion and Exchange Agreement whereby they exchanged one-half of their
principal amount and a portion of accrued interest for new 8% Convertible
Notes due 2002 (the "New Notes"). The other half of their notes was converted
into Merger Consideration using a $7.90 conversion price. The New Notes accrue
interest semi-annually but do not pay interest until conversion, redeemption
or maturity. Accordingly, $2,723 of accrued interest is included in the
Convertible Subordinated Notes balance at December 31, 1997. Interest may be
paid in cash or in kind at the option of the Company. The conversion price for
the New Notes was $5.75. As of December 31, 1997, there were $21,019 New Notes
and $0 Benson Notes outstanding. The Company registered the New Notes with the
Securities and Exchange Commission effective January 28, 1997. Since December
31, 1997, $8,045 of New Notes have converted into BEC stock.



                                      35
<PAGE>

Mortgage

         The Company has a $3,521 mortgage bearing interest at LIBOR plus 1.85
basis points, secured by land and buildings in Dallas, Texas, with monthly
principal and interest payments of $41 due through April 2001. Such payments
are paid using rental income from FGG which occupies the building. The
building and related mortgage were transferred to Bolle Inc. under the
Contribution Agreement. A contract to sell the property at a value in excess
of the mortgage valuation has been entered into.

NOTE 12 -- INCOME TAXES

         The Company accounts for income taxes under SFAS No. 109. "Accounting
for Income Taxes". SFAS No. 109 requires an asset and liability approach to
accounting for income taxes.

         Income (loss) before provision for income taxes consists of the
following for the periods ended:

                                          DECEMBER 31,
                         ---------------------------------------------------
                               1997             1996              1995
                         ---------------    ------------     ---------------
U.S.                         $(9,766)          $85,010          $(6,960)
Foreign                        1,157
                         ---------------    ------------     ---------------
                             $(8,609)          $85,010          $(6,960)
                         ===============    ============     ===============

         The provision (benefit) from income taxes consists of the following
for continuing and discontinued operations for the periods ended:

<TABLE>
<CAPTION>
                                                 1997             1996               1995
                                              ----------       ----------         ----------
<S>                                             <C>              <C>                <C>   
Continuing operations:
   Current:
      Federal                                   $1,177           $2,365             $(138)
      State and local                               67              141               (27)
   Deferred                                     (2,900)            (636)            (1,174)
                                              --------         --------            -------
                                               $(1,656)          $1,870            $(1,339)
                                              ========         ========            =======
</TABLE>

<TABLE>
<CAPTION>
Discontinued operations:                                1997           1996          1995
U.S.:                                                 --------        ------        ------
<S>                                                   <C>               <C>            <C> 
    Current                                           $(1,713)          $623           $719
    Deferred                                             (961)          (239)           420
Foreign:
    Current                                             1,803
    Deferred                                           (1,149)
                                                      -------         ------         ------
                                                      $(2,020)          $384         $1,139
                                                      -------         ------         ------
Total provision (benefit) from income taxes           $(3,676)        $2,254         ($200)
                                                      =======         ======         ======
</TABLE>



                                       36
<PAGE>


         The Company's effective tax rates for continuing and discontinued
operations differ from the Federal statutory rate as follows:

<TABLE>
<CAPTION>
                                                                1997               1996          1995
                                                               ------             ------        ------
<S>                                                           <C>                  <C>          <C>    
Expected tax (benefit) at statutory rate                      (35.0%)              35.0%        (35.0%)
State income taxes                                             (2.0%)               2.0%         (2.0%)
Provision to return adjustment                                 (7.6%)
Effects of acquisitions and divestitures                        4.7%              (32.9%)         4.2%
Valuation allowance                                                                (1.6%)        16.9%
Goodwill amortization                                           3.0%                1.3%         10.9%
Other, net                                                     (5.8%)              (1.1%)         2.1%
                                                             ---------          ---------      --------
                                                              (42.7%)               2.7%         (2.9%)
                                                             =========          =========      ========
</TABLE>

         Significant components of deferred income taxes for continuing and
discontinued operations are as follows at December 31:

                                                 1997            1996
                                                -------         -------
Net operating loss carryforward                  $1,072
Capital loss carryforward                           607          $2,263
Accounts receivable                                 283             173
Notes receivable                                  1,748             959
Office closing                                                      848
Investments                                       3,927
Inventories                                         298             190
Assets of discontinued operations                 2,329             452
Other, net                                          587             398
                                                -------         -------
Gross deferred tax asset                         10,851           5,283
Valuation allowance                               (607)         (2,263)
                                                -------         -------
Deferred tax asset                               10,244           3,020
Fixed assets                                      (666)           (650)
Intangible assets                                  (28)           (128)
                                                -------         -------
Deferred tax liability                            (694)           (778)
                                                -------         -------
Net deferred tax asset                           $9,550          $2,242
                                                =======         =======

Discontinued Operations

         The Company recorded gross deferred tax assets of $2,329 and $452 for
discontinued operations for the years ended December 31, 1997 and 1996,
respectively. In connection with the divestitures in 1996, substantially all
net operating loss carryforwards were utilized to reduce income taxes
currently payable. The balance of the valuation allowance at December 31, 1995
was released in 1996 as the utilization of the net operating loss
carryforwards was assured due to the gains recognized on the divestitures. Net
operating loss carryforwards related to discontinued operations amount to
approximately $5.6 million and $0 at December 31, 1997 and 1996 respectively.



                                      37
<PAGE>

Continuing Operations

         The Company recorded gross deferred tax assets of $8,522 and related
valuation allowance of $607 for continuing operations for the year ended
December 31, 1997. The capital loss generated on the sale of Foster Grant
Group and the related valuation allowance were revalued during 1997. Net
operating loss carryforwards related to continuing operations amount to
approximately $2.9 million and $0 at December 31, 1997 and 1996, respectively.
The net operating loss carryforwards begin to expire in the year 2008.

         The Company recorded gross deferred tax assets of $4,831 and related
valuation allowance of $2,263 for continuing operations for the year ended
December 31, 1996. A capital loss carryforward was generated through the sale
of FGG. A valuation allowance of $2,263 was established for the entire net tax
benefit of the capital loss carryforward as the realization was not assured.
The effect on the income tax provision for continuing operations related to
the valuation allowance was a charge of $2,263. The capital loss carryforward
expires in the year 2001.

NOTE 13 - SHARE REPURCHASE PROGRAM

         On September 9, 1996, the Company adopted a share repurchase program
whereby the Company may repurchase, pursuant to Rule 10(b)-18 under the
Securities and Exchange Act of 1934, shares of its common stock in the open
market. The repurchase program became active in December 1996 following
the FGG disposal. Repurchased shares may be issued from time to time upon (i)
exercise of options granted under the Company's 1996 Stock Incentive Plan
and/or (ii) under the Company's 1996 Employee Stock Purchase Plan. During
1996, the Company purchased 58 shares of its common stock at an average price
of $9.60 per share. During 1997, the Company purchased 28 shares of its common
stock at $8.96 per share. During 1997, the Company used 84 treasury shares to
satisfy options exercised. The Company discontinued its share repurchase
program in July 1997, as it was prohibited by the July 1997 amendment to the
Credit Agreement, as amended (See Note11).

NOTE 14 - STOCK OPTION PLANS

         The Company applies APB Opinion No. 25 and related Interpretations in
accounting for its stock option plans, which are described below. Accordingly,
no compensation cost has been recognized for its stock option plans. Had
compensation cost been determined based on the fair market value at the grant
dates for awards under those plans consistent with the method provided by SFAS
No. 123, the Company's net income (loss) and net income (loss) per share would
have been as set forth in the tables below. All option information has been
restated to give effect to the May 3, 1996 and March 12, 1998 reverse stock
splits.

<TABLE>
<CAPTION>
                                                                YEAR ENDED DECEMBER 31,
                                                          -------------------------------------
                                                            1997           1996          1995
                                                          --------       --------      --------
<S>                                   <C>                 <C>            <C>           <C>     
Net income (loss)                     As reported         $(4,933)       $82,756       $(6,760)
                                      Pro Forma           $(6,183)       $78,592      $(10,236)
Basic earnings (loss) per share       As reported          $(0.59)         $9.69        $(0.89)
                                      Pro Forma            $(0.73)         $9.21        $(1.34)
Diluted earnings (loss) per share     As Reported          $(0.59)         $9.62        $(0.89)
                                      Pro Forma            $(0.73)         $9.14        $(1.34)
</TABLE>





                                      38
<PAGE>


         The fair value of each option grant is estimated on the date of grant
using the Black-Scholes option pricing model with the following weighted
average assumptions used for all grants:

                                      1997           1996           1995
                                      ----           ----           ----
Dividend yield                          0%             0%             0%
Expected volatility                    50%            64%            64%
Risk free rate of return              6.5%             5%             5%
Expected turnover                       7%             7%             7%
Expected term                       5 years         5 years        5 years


         The weighted average fair values of Benson options granted during the
years ended December 31, 1996 and 1995 were $10.24 and $9.60, respectively.
The weighted average fair value of the Company options granted during 1997 was
$8.80 and 1996 was $9.26.

         The Company may grant nonqualified stock options, incentive stock
options or stock appreciation rights to officers, directors, consultants and
key employees of the Company.

         Options under the nonqualified stock option plan are granted to
officers, directors and key employees at prices determined by the Company
Board based upon market value on the date of grant. There were no shares
available under the plan for future grants at December 31, 1997. The plan was
amended on March 11, 1998 to increase the number of authorized options and to
ensure current grants were in compliance with the plans.

         As a result of the Essilor Merger and Asset Sale, all Benson options
were canceled. Option holders received consideration (including new Company
options) for their Benson options. Accordingly, all options were issued under
the Company Stock Compensation Plan on or after May 3, 1996.

         A summary of Benson option transactions is as follows:

<TABLE>
<CAPTION>
                                                            OPTION PRICE RANGE       NUMBER OF       EXPIRATION 
                                                                 PER SHARE             OPTIONS           DATE
                                                            ------------------       ---------       ----------
<S>                                                            <C>                     <C>           <C>   
Outstanding at 1/1/95                                          $3.00 - 16.90           1,144         1995 -2001
Granted                                                       $12.26 - 19.74             284
Exercised                                                      $3.00 - 14.50            (159)
Cancelled                                                     $14.00 - 14.50             (62)
                                                                                     ---------
Outstanding at 12/31/95                                        $3.00 - 19.74           1,207         1996 -2002
Granted                                                       $15.74 - 19.00             134
Exercised                                                      $5.00 - 14.50            (163)
Cancelled                                                      $3.00 - 19.50              (8)
Cancelled in connection with Merger and Asset Sale                                    (1,170)
                                                                                     ---------
Outstanding at 12/31/96                                                                  -0-
</TABLE>




                                      39
<PAGE>





         A summary of the Company option transactions is as follows:

                                     WEIGHTED
                              AVERAGE EXERCISE PRICE        NUMBER OF OPTIONS
                              ----------------------        -----------------
Outstanding at 12/31/95                                            -0-
Granted                               $9.26                      1,025
Exercised                             $5.42                       (45)
Cancelled                             $9.88                       (73)
Outstanding at 12/31/96               $9.40                        907
Exercisable at 12/31/96               $7.80                        195
                                                              
Granted                               $8.80                        883
Exercised                             $8.82                       (83)
Forfeited                            $10.02                       (57)
Outstanding at 12/31/97               $9.08                      1,650
Exercisable at 12/31/97               $8.68                        316
                              

         Options generally vest evenly over a three-or four-year period
beginning one year from the date of grant and expire seven years from the date
of grant. The 316 exercisable options at 12/31/97 had an option price range of
$1.66 -- $10.25. The weighted average remaining contractual life of the 1,650
options outstanding as of December 31, 1997 was 5.5 years.

         A summary of the price ranges of exercisable and outstanding options 
as of December 31, 1997 and 1996 is as follows:

<TABLE>
<CAPTION>
                                                1997                                         1996
                        -----------------------------------------------------  ----------------------------------------------------
Price Range Per Share      Number of     Weighted Average  Weighted Average       Number of    Weighted Average  Weighted Average
---------------------      ---------     ----------------- -----------------      ---------    ----------------- ----------------
                            Options         Remaining       Exercise Price         options         Remaining       Exercise Price
                            -------         ----------      --------------         -------         ----------      --------------
                                         Contractual Life                                       Contractual Life
                                         ----------------                                       ----------------
<S>                         <C>          <C>                <C>                    <C>          <C>                <C>
Outstanding options:
$ 0.00 - $ 4.00                    6                5.3            $2.32                  6               6.3             $2.32
$ 4.01 - $ 6.00                   28                5.3            $4.88                 28               6.3             $4.88
$ 6.01 - $ 8.00                   79                3.2            $7.72                 88               4.1             $7.72
$ 8.01 - $10.00                  996                6.2            $8.80                196               3.8             $8.92
$10.01 - $12.00                  541                4.4           $10.10                589               5.1            $10.10
                                 ---                                                    ---
                               1,650                5.5            $9.08                907               4.8             $9.40
Exercisable options:
$ 0.00 - $ 4.00                    6                               $2.32                  6                               $2.32
$ 4.01 - $ 6.00                   28                               $4.88                 28                               $4.88
$ 6.01 - $ 8.00                   69                               $7.72                 63                               $7.74
$ 8.01 - $10.00                   76                               $8.92                 87                               $8.86
$10.01 - $12.00                  137                              $10.10                 11                              $10.10
                                 ---                                                     --
                                 316                               $8.68                195                               $7.80
</TABLE>




                                      40
<PAGE>

NOTE 15 - EARNINGS PER SHARE COMPUTATION

<TABLE>
<CAPTION>
                                           1997                              1996                               1995
                             ------------------------------------------------------------------------------------------------------
                                         Weighted                          Weighted                          Weighted
                                          Average   Per Share               Average   Per Share               Average   Per Share
                                Loss      Shares     Amount      Income     Shares      Amount      Loss      Shares      Amount
                                ----      ------     ------      ------     ------      ------      ----      ------      ------
<S>                             <C>       <C>       <C>        <C>         <C>          <C>        <C>       <C>         <C>
Net income (loss) from
   continuing operations        $(3,651)                        $3,444                             $(949)
Less: Preferred stock
          Dividend                  232
                                -------
BASIC EPS
Income (loss) from
 continuing operations
 available to common
 stockholders                   $(3,883)  8,803     $(0.44)     $3,444      8,537       $0.40      $(949)     7,620     $(0.12)
EFFECT OF DILUTIVE
SECURITIES
Stock options                                                                  63          __
DILUTED EPS
Income from continuing
  operations available to
  common stockholders
  plus assumed conversions      $(3,883)  8,803    $(0.44)      $3,444      8,600       $0.40      $(949)     7,620     $(0.12)
</TABLE>


In 1997 and 1995, due to the net loss from continuing operations, although
there were stock options outstanding, they were not included in the
computation of diluted EPS as the effect would be antidilutive. At December
31, 1997 and 1996 the Company had convertible debt outstanding convertible
into 1,828 shares of common stock. At December 31, 1995 Benson had convertible
debt outstanding convertible into 2,261 shares of common stock. Such shares
were not included in the computation of diluted EPS because the conversion
price was greater than the average market price of the common shares. Warrants
outstanding at December 31, 1997 issued in conjunction with the acquisition of
Bolle France were not included in the calculation of diluted EPS because the
effect would be antidilutive. Such warrants were cancelled on March 11, 1998
in conjunction with Spinoff.

NOTE 16 -- RELATED PARTY TRANSACTIONS

         Ms. Nora Bailey, a member of the Company's Board of Directors since
May 1996, is an attorney specializing in federal tax law. In her professional
capacity she has rendered legal advice and related services to both the
Company and its predecessor, Benson. Ms. Bailey has rendered such services
both prior to and subsequent to her appointment to the Company Board of
Directors, and it is anticipated that from time to time in the future she will
be engaged to provide similar legal services to the Company. All fees paid to
Ms. Bailey in connection with such services have been agreed in arms' length
negotiations and are in accordance with Ms. Bailey's usual and customary
billing practices. Fees paid to Ms. Bailey by the Company in connection with
such services are not paid in consideration of her services as a director.
Aggregate fees billed to Benson and the Company by Ms. Bailey during 1997 and
1996 were approximately $90 and $73, respectively.



                                      41
<PAGE>





         On December 12, 1996, in connection with the sale of FGG by the
Company, Marlin Capital, LP ("Marlin"), a Delaware limited partnership,
invested $2.5 million in convertible preferred stock of the buyer AAi; upon
conversion, AAi common stock received by Marlin would bear demand and
piggyback registration rights. Marlin Holdings, Inc. ("MH"), a Delaware
corporation, is the general partner of Marlin. Mr. Martin E. Franklin, the
Company's Chairman and Chief Executive Officer, is the Chief Executive Officer
and principal stockholder of MH. Mr. Ashken, the Company's Chief Financial
Officer and a Director, also is a stockholder and executive officer of MH. Mr.
Franklin also has been named a member of AAi's Board of Directors.

         Mr. Franklin serves as non-executive chairman of Eyecare Products.
Mr. Ashken serves as a director of Eyecare Products.

NOTE 17 --  COMMITMENTS AND CONTINGENCIES

         The Company is subject to various litigation incidental to business.
Irrespective of any indemnification that may be received, the Company does not
believe that exposure on any matter will result in a significant impact on the
Company's financial condition, results of operations or cash flows.

NOTE 18 -- QUARTERLY FINANCIAL DATA (UNAUDITED)

<TABLE>
<CAPTION>
                                            FOR THE YEAR ENDED DECEMBER 31, 1997
                                                                      Q1          Q2         Q3         Q4
----------------------------------------------------------------------------------------------------------------
<S>                                                                 <C>        <C>        <C>         <C>    
Net sales                                                           $10,963    $12,200    $12,058     $12,907
Gross profit                                                          4,457      4,520      4,459       4,089
Income (loss) from continuing operations                              1,038        993        699      (6,381)
Basic and diluted earnings (loss) per share                           $0.12      $0.11      $0.07      $(0.74)
from continuing operations

                                            FOR THE YEAR ENDED DECEMBER 31, 1996
                                                                      Q1          Q2         Q3         Q4
----------------------------------------------------------------------------------------------------------------
Net sales                                                           $10,771    $11,206    $10,007     $10,590
Gross profit                                                          4,281      4,328      4,025       4,264
Income from continuing operations                                       779      1,210      1,045         410
Basic and diluted earnings per share from continuing                  $0.09      $0.14      $0.12       $0.05
operations

                                            FOR THE YEAR ENDED DECEMBER 31, 1995
                                                                      Q1          Q2         Q3         Q4
----------------------------------------------------------------------------------------------------------------
Net sales                                                            $9,547    $10,511     $9,875     $11,311
Gross profit                                                          4,324      4,745      3,728       4,722
Income (loss) from continuing operations                                145        629     (1,083)       (640)
Basic and diluted earnings (loss) per share from continuing           $0.02      $0.09     $(0.14)     $(0.09)
operations
</TABLE>





                                      42
<PAGE>








ITEM 9.           CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING 
                  AND FINANCIAL DISCLOSURE

         There were no disagreements with the Company's independent
accountants on any matter of accounting principles or practices, financial
disclosure, or auditing scope or procedure, which if not resolved to such
accountants' satisfaction would have caused them to make reference to the
subject matter of the disagreement in connection with their report.






























                                      43
<PAGE>


                                   PART III

ITEM 10.          DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT


         The executive officers and directors as of the date hereof are as
follows:

<TABLE>
<CAPTION>
NAME                                      AGE                        OFFICE
----                                      ---                        ------
<S>                                       <C>            <C>
Martin E. Franklin(1)(2)                  33             Chairman of the Board of Directors and Director
Richard D. Capra(1)                       65             Chief Executive Officer and Director
Ian G.H. Ashken(1)                        37             Executive Vice President of Finance and 
                                                         Administration, Chief Financial Officer, 
                                                         Assistant Secretary and Director
Harrison H. Augur(2)                      55             Director
Nora A. Bailey(3)                         56             Director
Henry C. Baumgartner(3)                   65             Director
George B. Clairmont(3)(4)                 48             Director
David L. Moore(2)(4)                      40             Director
William T. Sullivan(4)                    53             Director
</TABLE>



-------------------------------------------------------------------------------
(1)      Member of Executive Committee
(2)      Member of Nominating Committee
(3)      Member of Audit Committee
(4)      Member of Compensation/Stock Option Committee


         Martin E. Franklin is currently Chairman of Lumen Technologies, Inc.,
a NYSE listed company, Chairman of Bolle Inc., a NASDAQ listed company, and
non-executive Chairman of Eyecare Products plc, a London Stock Exchange listed
company. Mr. Franklin was Chairman and Chief Executive Officer of BEC Group,
Inc. ("BEC") from May 1996 to March 1998. Mr. Franklin was Chairman and Chief
Executive Officer of Benson Eyecare Corporation ("Benson"), the predecessor
company to BEC from October 1992 through May 1996. Mr. Franklin has been the
Chairman of the Board and Chief Executive Officer of Pembridge Holdings, Inc.
since 1990. From 1988 to 1990, Mr. Franklin was Managing Director of Pembridge
Associates, Inc. Both Pembridge Associates, Inc. and Pembridge Holdings
specialize in merchant banking and related services. Mr. Franklin has been
Chairman and Chief Executive Officer of Marlin Holdings, Inc., the general
partner of Marlin Capital, L.P., since October 1996. Mr. Franklin also serves
on the Boards of Specialty Catalog Corp. and certain private companies. Mr.
Franklin received a B.A. in political science from the University of
Pennsylvania.

         Richard D. Capra was elected to the Company's Board of Directors on
March 12, 1998, on which date he also was named its Chief Executive Officer.
Mr. Capra served as a member of the ILC Board from 1995 through March 1998.
From July 1996 through March 1998, Mr. Capra served as President and Chief
Operating Officer of ILC. From January 1991 to July 1996, Mr. Capra served as
a management consultant and a director of several companies in the electrical
and lighting business. He was President and Chief Executive Officer of Philips
Lighting Inc., U.S., from 1983 to 1991.

         Ian G.H. Ashken, A.C.A. was appointed Executive Vice President, Chief
Financial Officer, Assistant Secretary and a Director of the Company in
December 1995. Mr. Ashken was Chief Financial Officer of Benson and a director
of Benson from October 1992 to May 1996. Mr. Ashken also served as Benson's
Executive Vice President from October 1994 to May 1996; Secretary from October
1992 to December 1993; and, Assistant Secretary from December 1993 to May
1996. Mr. Ashken has been the Executive Vice President and a director of
Pembridge Holdings, Inc. since 1990. Since October 1996, Mr. Ashken has been
Vice Chairman of Marlin Holdings, Inc., the 


                                      44
<PAGE>

general partner of Marlin Capital, L.P. Mr. Ashken is a director of Eyecare
Products plc, a London Stock Exchange listed company, Bolle Inc., a NASDAQ
listed company, and certain private companies. Mr. Ashken received his B.A.
(Hons) in Economics and Accounting from the University of Newcastle in
England.

         Harrison H. Augur was elected to the Company's Board of Directors on
March 12, 1998. Mr. Augur served as a member of the Board of Directors of ILC
since 1989. He has been General Partner of Capital Asset Management since June
1987. From April 1981 to August 1991, Mr. Augur served as Executive Vice
President and Director of Worms & Co., Inc.

         Nora A. Bailey, Esq. became a member of the Company's Board of
Directors in May 1996. Ms. Bailey is a federal income tax attorney with a
specialty in mergers and acquisitions and has many multinational clients. Ms.
Bailey and her firm from time to time have been engaged to provide legal
advice to the Company. Until 1993, she was a partner in Ivins, Phillips &
Barker in Washington D.C., which she joined in 1972. Ms. Bailey also serves on
the Board of Bolle Inc. Ms. Bailey received her J.D. from The University of
Michigan Law School.

         Henry C. Baumgartner was a co-founder of ILC; he served ILC in
various management positions and as a member of the ILC Board from 1967through
March 1998. Mr. Baumgartner was appointed Chairman of the ILC Board in July
1996 and Chief Executive Officer of ILC in April 1990. From April 1990 to July
1996, Mr. Baumgartner served as the President of ILC; prior to 1990, he served
as Chief Executive Officer and Chairman of the Board of ILC from November
1986.

         George B. Clairmont was elected to the Company's Board of Directors
on March 12,1998. Mr. Clairmont served as a member of the Board of Directors
of ILC from July 1997 through March 1998. He has been President of Clairvest
Corporation, a New York-based registered investment adviser, since 1983. Mr.
Clairmont also serves as a director of Thomson-Leeds Corporation, a designer
and manufacturer of point of sales displays.

         David L. Moore became a member of the BEC Board in May 1996. For more
than the last five years Mr. Moore has been President and Chief Executive
Officer of Century 21 Home Improvements, and for more than fifteen years has
been President and Chief Executive Officer of Garden State Brickface, Inc., a
leading New York metropolitan area residential and commercial remodeling firm.
Mr. Moore also serves on the Board of Bolle Inc. Mr. Moore received his B.A.
in Economics from Amherst College and his M.B.A. from Harvard University.

         William T. Sullivan became a member of the BEC Board in May 1996. Mr.
Sullivan has been President and Chief Executive Officer of, and a member of
the Board of Directors of, Sight Resource Corporation, an optical retailer,
since January 1998. Mr. Sullivan was President and Chief Operating Officer of
BEC from April 1996 to April 1997. Upon Benson's acquisition of ORC in October
1994, Mr. Sullivan was appointed Benson's Executive Vice President of
Operations. From July 1993 to October 1994, Mr. Sullivan served as the
President of the Consumer Optical Group of ORC. From August 1987 through July
1993, Mr. Sullivan served as Group Vice President of the Consumer Optical
Group of ORC. Prior to joining ORC, Mr. Sullivan was President of Pearle
Vision Centers.

DIRECTORS.

         Pursuant to the terms of the ILC Merger agreement, for a period of
two years following the date of the ILC Merger, the Board of Directors shall
be composed of five (5) members designated by the Company (or the successors
of such designees) and four (4) members designated by ILC (or the successors
of such designees). At the Company's Special Meeting of Stockholders held on
March 11, 1998 for the purpose of ratifying and approving the ILC Merger,
Messrs. Baumgartner, Capra, Augur and Clairmont, IL s designees, were
nominated and elected as directors of the Company. Each of Messrs. Franklin,
Ashken, Moore and Sullivan and Ms. Bailey remained a director of the Company
as the Company's designees. Directors of the Company are elected annually at
the Annual Meeting of Stockholders. Their respective terms of office continue
until the next Annual Meeting of Stockholders and until their successors have
been elected and qualified in accordance with the Company's Restated By-laws.
There are no family relationships among any of the directors or executive
officers of the Company.


                                      45
<PAGE>






COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.

         Section 16(a) of the Securities Exchange Act of 1934, (the "Exchange
Act") requires the Company's directors and executive officers, and persons who
own more than ten percent (10%) of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission ("SEC") and
the stock exchange upon which the Company's stock is listed, initial reports
of ownership and reports of changes in ownership of common stock and other
equity securities of the Company. Officers, directors and greater than
ten-percent shareholders are required to SEC regulation to furnish the Company
with copies of all Section 16(a) forms they file. To the Company's knowledge,
based solely on review of the copies of such reports furnished to the Company
during the last fiscal year ended December 31, 1997, all Section 16(a) filing
requirements applicable to its officers, directors and greater than ten
percent (10%) beneficial owners were complied with.


ITEM 11.          EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

         The following Table sets forth all compensation paid to, deferred or
accrued for the benefit of the Company's Chief Executive Officer and of all
other executive officers of the Company who earned total compensation for 1997
exceeding $100,000 (the "Executive Group"). Except as disclosed below, no
executive officer of the Company had a total annual salary and bonus for 1997
exceeding $100,000.

<TABLE>
<CAPTION>
                                                                                    LONG TERM
                                                                                  COMPENSATION
                                              ANNUAL COMPENSATION(1)                 AWARDS
                                                                                     OPTIONS/            ALL OTHER
NAME AND PRINCIPAL POSITION(2)        YEAR        SALARY            BONUS            SARS(3)           COMPENSATION
------------------------------        ----        ------            -----            -------           ------------
<S>                                   <C>        <C>                 <C>            <C>                <C>
Martin E. Franklin                    1997       $257,500            $300,000       550,000             $34,541(4)
  Chairman, Chief Executive           1996       $277,455            $602,477       550,000             $ 5,700(4)
  Officer                             1995       $300,000             $50,000         -0-                    -0-
Ian G.H. Ashken                       1997       $206,000            $168,750       100,000              27,546(4)
  Chief Financial Officer,            1996       $212,981             $86,813       275,000            $132,275(4)(5)
  Executive Vice President of         1995       $190,000                 -0-         -0-                    -0-
  Finance and Administration,
  and Assistant Secretary
William T. Sullivan(6)                1997       $71,464                  -0-         -0-             $350,000
   Chief Operating Officer            1996       $212,981             $84,775       372,250           $961,618(4)(5)
   and President                      1995       $195,000                 -0-        40,000(7)        $106,340(4)(5)
-----------------------------------------------------------------------------------------------------------------------------
</TABLE>


(1)      Included in the table are amounts received as compensation from
         Benson during the periods in question and prior to the BEC Spinoff on
         May 3, 1996.

(2)      Indicates positions held during fiscal year ended December 31, 1997

(3)      All awards reflected in this column represent stock options granted
         under the Company's 1996 Stock Incentive Plan (as amended). Option
         numbers are not adjusted to reflect the effect of the one-for-two
         split of the Company's common stock effective March 11, 1998.

(4)      addition to compensation reflected in this or any other table below,
         the Company maintains "split dollar" life insurance policies for
         Messrs. Franklin and Ashken, respectively, in amounts of $5 million
         and $3 million; amounts indicated as "All Other Compensation" for
         Messrs. Franklin and Ashken for 1997 


                                      46
<PAGE>

         reflect $28,877 and $21,882, respectively, reported as income in
         connection with such life insurance. "All Other Compensation" also
         includes employer matching contributions under the Company's 401(k)
         savings plan, as follows: Mr. Franklin, $5,700 for 1996 and $5,664
         for 1997; Mr. Ashken, $5,700 for 1996 and $5,664 for 1997; Mr.
         Sullivan, $5,700 for 1996 and $____ for 1997. Bonus earned by Mr.
         Franklin in 1996 included a one-time bonus of $400,000 in recognition
         of Mr. Franklin's successful efforts in connection with the Essilor
         Merger and BEC Spinoff.

(5)      Includes cash payments received in connection with the cancellation
         on May 3, 1996 of then outstanding Benson Options upon the
         consummation of the Essilor Merger and BEC Spinoff.

(6)      Mr. Sullivan resigned as an executive officer of the Company
         effective March 29, 1997; he remains a Director of the Company. "All
         Other Compensation" for Mr. Sullivan for 1997 reflects payments
         received pursuant to a severance agreement relating to Mr. Sullivan's
         resignation. See "Executive Compensation - Employment Agreements."

(7)      Represents options granted under the former Benson option plan, all
         of which were cancelled in connection with the Essilor Merger and BEC
         Spinoff on May 3, 1996.


OPTIONS/SAR GRANTS TABLE

         Except as stated below, no stock options or stock appreciation rights
(SARs) were granted in 1997 to the named executive officers. The figures
disclosed below have not been adjusted to take into account the effect of the
Bolle Spinoff, ILC Merger or a one-for-two reverse split of the Company's
common stock occurring in March 1998.


<TABLE>
<CAPTION>
                      NUMBER OF         % OF TOTAL                                          POTENTIAL REALIZED VALUE
                      SECURITIES          OPTIONS           EXERCISE                           AT ASSUMED RATES OF
                      UNDERLYING        GRANTED TO              OR                           STOCK APPRECIATION FOR
                       OPTIONS         EMPLOYESS IN        BASE PRICE       EXPIRATION           OPTION TERM(2)
     NAME             GRANTED(1)        FISCAL YEAR          ($/SH)            DATE         5%
     ----             ----------       ------------        ----------       ----------      ---
                                                                                            10%
                                                                                            ---
<S>                       <C>                <C>            <C>            <C>               <C>           <C>
Martin E. Franklin        550,000  (3)       31%            $4.25          03/25/2007(3)     $1,322,290    $1,831,261
Ian G.H. Ashken           100,000             6%            $4.25          05/03/2007(3)       $240,416      $332,957
William T. Sullivan           -0-            -0-             N/A                N/A                 N/A           N/A
---------------------------
</TABLE>

(1)      For additional information concerning stock options, see "Executive
         Compensation--Compensation Under Plans."

(2)      These columns illustrate the hypothetical appreciation of the stock
         options under the assumption that each option appreciates at the rate
         of 5% and 10%, respectively, compounded annually until the date of
         expiration.

(3)      These options vest on the earlier of (a) the date on which the
         Company's common stock has traded at an average closing bid price
         equal to $7.50/share for a twenty (20) consecutive trading day period
         or (b) March 25, 2005.



                                      47
<PAGE>

OPTIONS/SAR EXERCISE AND FISCAL YEAR-END OPTION/SAR VALUE TABLE

The following table provides information on options/SARs exercised during
fiscal 1997 by the Executive Group and the value of each such officer's
unexercised options/SARs as of the end of such fiscal year. The figures
disclosed below have not been adjusted to take into account the effect of the
Bolle Spinoff, ILC Merger or a one- for-two reverse split of the Company's
common stock occurring in March 1998.


<TABLE>
<CAPTION>
                                     AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR

                                           AND FISCAL YEAR-END OPTIONS/SAR VALUES

         SHARES ACQUIRED ON                     NUMBER OF UNEXERCISED IN-                  VALUE OF UNEXERCISED IN-THE-
              EXERCISE                     THE-MONEY OPTIONS/SARS AT FY-END (#)           MONEY OPTIONS/SARS AT FY-END($)
              --------                     ------------------------------------           -------------------------------
          NAME             (#)      VALUE ($)
          ----             ---      REALIZED          EXERCISABLE      UNEXERCISABLE      EXERCISABLE      UNEXERCISABLE
                                    --------          -----------      -------------      -----------      -------------
<S>                        <C>         <C>               <C>              <C>              <C>               <C>
Martin E. Franklin(1)      -0-         N/A               137,500          962,500          $1,131,656        $1,352,844

Ian G.H. Ashken(2)         -0-         N/A                93,750          281,250            $124,453          $356,484

William T. Sullivan(3)     -0-         N/A               295,000            2,500            $359,015            $2,968


-----------------------------------------------------------------------------------------------------------------------------
</TABLE>

(1)      Based on the closing price of BEC common stock on the New York Stock
         Exchange on December 31, 1997 of $5.937 and average exercise prices
         of $4.98 to $4.56 per share, respectively, for exercisable and
         unexercisable options.

(2)      Based on the closing price of BEC common stock on the New York Stock
         Exchange on December 31, 1997 of $5.937 and average exercise prices
         of $4.61 to $4.67 per share, for exercisable and unexercisable
         options.

(3)      Based on the closing price of BEC common stock on the New York Stock
         Exchange on December 31, 1997 of $5.937 and exercise prices of $4.72
         to $4.75 per share, for exercisable and unexercisable options.



DIRECTORS' COMPENSATION

         Except as stated below, the Company's directors received no
compensation in connection with their services as directors on the Board of
Directors in 1997. For services rendered in 1997, all non-executive directors
received fees or remuneration in the amount of $15,000; fees are paid
quarterly, in arrears. Ms. Bailey's law firm has received payment for legal
services from time to time provided to the Company, but such payments were not
made in consideration of Ms. Bailey's services as a director. Additionally,
all non-executive directors are entitled to receive automatic grants of stock
options of the Company's common stock in compensation for their services. See
"Compensation Under Plans-1996 Stock Incentive Plan." See, also "Employment
Agreements." In addition, upon the retirement of Mr. Richard D. Hanselman and
Dr. Charles S. Sydnor from the Company's Board of Directors, effective March
12, 1998, the Company caused all then-outstanding options granted to such
Directors to vest fully.




                                      48
<PAGE>

EMPLOYMENT AGREEMENTS

         Martin E. Franklin. Mr. Franklin has entered into an employment
agreement with the Company (the "Franklin Employment Agreement"), pursuant to
which he served as Chief Executive Officer and Chairman of the Company for an
initial period of three years, and thereafter subject to annual renewal. By
agreement, Mr. Franklin presently serves as Chairman of the Board and Mr.
Capra has assumed duties as Chief Executive Officer, effective March 12, 1998.
Pursuant to the Franklin Employment Agreement, Mr. Franklin receives an annual
base salary which is subject to (i) increase each year by a minimum of the
annual rate of increase in the Consumer Price Index, and (ii) discretionary
increases determined by the Compensation Committee of the Board of Directors
from time to time; Mr. Franklin also may receive a bonus based on performance
criteria to be approved by the Board of Directors. Mr. Franklin's annual base
salary for 1998 has been set at $300,000. The agreement may be terminated by
either party upon at least 90 days' notice prior to the end of the initial
term or any subsequent renewal term. The Company may terminate the agreement
with cause in the event of the death, permanent disability or certain
misconduct of Mr. Franklin. The Company may terminate Mr. Franklin's
employment without cause upon 30 days' notice, in which event Mr. Franklin
will be entitled to receive a severance payment equal to one year's current
base salary and his existing benefits for a period of one year and any
non-vested stock options then outstanding will automatically vest. The
agreement contains noncompetition and nonsolicitation restrictions effective
during the employment term and for a period of one year thereafter.

         Ian G.H. Ashken. Mr. Ashken has entered into an employment agreement
with the Company. Under the agreement, Mr. Ashken serves as Chief Financial
Officer of the Company and receives an annual base salary which is subject to
(i) an increase each year by a minimum of the annual rate of increase in the
Consumer Price Index, and (ii) discretionary increases determined by the
Compensation Committee of the Board of Directors from time to time; Mr. Ashken
also may receive a bonus based on performance criteria to be determined by the
Board of Directors. Mr. Ashken's annual base salary for 1998 has been set at
$250,000. The other terms of Mr. Ashken's employment agreement are the same as
the terms of the Franklin Employment Agreement.

         Richard D. Capra. Mr. Capra has entered into an employment agreement
with the Company, effective March 12, 1998. Under the agreement, Mr. Capra
will serve as Chief Executive Officer and President of the Company for a
period of one (1) year. Mr. Capra will receive a base salary in the amount of
$250,000. In addition, Mr. Capra, in consideration of his agreement to
terminate his previously existing employment arrangements, will receive the
sum of $980,000, payable over a period of four (4) years. Mr. Capra is not
eligible for a bonus or any other additional compensation. The other terms of
Mr. Capra's employment agreement are materially the same as Mr. Franklin's and
Mr. Ashken's agreements.

         Henry C. Baumgartner. Mr. Baumgartner has entered into an agreement
with the Company, effective March 12, 1998, pursuant to which he agreed to
terminate all previously existing employment arrangements with ILC in return
for payments totaling $1,100,000, payable over a term of five years.

         William T. Sullivan. In connection with Mr. Sullivan's resignation as
an executive officer and employee of the Company, to be effective March 29,
1997 Mr. Sullivan received payment of $350,000. The Company additionally
agreed to vest at March 29, 1997 all options previously granted to Mr.
Sullivan then outstanding and not yet vested; all presently unexercised
options granted to Mr. Sullivan will remain exercisable through September 30,
1998.

COMPENSATION UNDER PLANS

1996 STOCK INCENTIVE PLAN.

         On April 2, 1996, the Company's Board of Directors adopted the
Company's 1996 Stock Incentive Plan (the "Plan") and on April 2, 1996, Benson,
as the then sole shareholder of the Company, approved the Plan. Effective
March 12, 1998, the Company's stockholders approved an Amended Plan in
connection with the ILC Merger and Bolle Spinoff, to increase to the number of
shares reserved for issuance pursuant to awards granted under the Plan and to
effect certain technical changes to conform to current SEC regulations and
provisions of the Internal Revenue Code. Pursuant to the Plan, employees and
consultants of the Company and its subsidiaries and affiliates 


                                      49
<PAGE>

(other than employees subject to a collective bargaining agreement) are
eligible to be selected by the Compensation Committee as participants to
receive discretionary awards of various forms of equity-based incentive
compensation, including stock options, stock appreciation rights ("SARs"),
restricted stock awards, performance share unit awards and phantom stock unit
awards, and awards consisting of combination of such incentives. Approximately
250 persons are eligible to participate in the Plan.

         The Plan is administered by the Compensation Committee of the
Company's Board of Directors (the "Compensation Committee"). The Compensation
Committee, in its sole discretion, will determine which eligible employees and
consultants of the Company and its subsidiaries may participate in the Plan
and the type, extent and terms of the equity-based awards to be granted to
them. Members of the Compensation Committee, because of their status as
non-employee Directors, will receive automatic non- discretionary annual
grants of stock options pursuant to the Plan.

         Under the Plan, at the time of the Essilor Merger and BEC Spinoff,
each non-employee Director automatically was granted an option to purchase
10,000 shares of the Company's common stock. Thereafter, on the date that a
person first becomes a non-employee Director, he or she will automatically be
granted an option to purchase 10,000 shares of the Company's common stock.
Thereafter, on the date of each annual meeting of stockholders of the Company,
each non-employee Director will automatically be granted an option to purchase
2,500 shares of the Company's common stock. All such automatic grants to
non-employee Directors are hereafter called "Director Options." Each Director
Option has an exercise price per share equal to the fair market value of one
share of the Company's common stock on the date of grant and vests and becomes
exercisable over a four year period beginning on the first anniversary of the
date of grant at the rate of 25% of each Director Option on each of the four
years immediately following the date of grant. These grants are the only
grants made to non-employee Directors under the Plan. The Compensation
Committee has no discretion to make any grants under the Plan to non-employee
Directors. All Director Options will be NQSO's (as defined below).

         Stock options granted by the Compensation Committee under the Plan
may be "incentive stock options ("ISOs"), within the meaning of Section 422 of
the Code, or "non qualified stock options" ("NQSO's"). The exercise price of
the options will be determined by the Compensation Committee when the options
are granted, subject to a minimum price in the case of ISOs of the fair market
value of the Company's common stock on the date of grant, unless the
Compensation Committee, in its sole discretion, determines to grant a discount
NQSO in lieu of a reasonable amount of salary or cash bonus, in which case the
exercise price may be 85% of the fair market value of the Company's common
stock on the date of grant. The option exercise price for all options granted
under the Plan may be paid in cash or in shares of the Company's common stock
having a fair market value on the date of exercise equal to the exercise price
or, in the discretion of the Compensation Committee, by delivery to the
Company of (i) other property having a fair market value on the date of
exercise equal to the option exercise price, or (ii) a copy of irrevocable
instructions to a stockbroker to deliver promptly to the Company an amount of
sale or loan proceeds sufficient to pay the exercise price.

         An SAR may be granted by the Compensation Committee as a supplement
to a related stock option or may be granted independent of any option. SARs
granted in connection with an option will become exercisable and lapse
according to the same vesting schedule and lapse rules that are established
for the corresponding option. SARs granted independent of any option will vest
and lapse according to the terms and conditions set by the Compensation
Committee. An SAR will entitle its holder to be paid an amount equal to the
excess of the fair market value of the Company's common stock subject to the
SAR on the date of exercise over the exercise price of the related stock
options, in the case of an SAR granted in connection with an option, or the
fair market value of the Company's common stock on the date of grant in the
case of an SAR granted independent of an option.

         Shares of the Company's common stock covered by a restricted stock
award will not be issued to the recipient at the time the award is granted but
will be deposited with an escrow agent until the end of the restricted period
set by the Compensation Committee. During the restricted period, restricted
stock will be subject to transfer restrictions and forfeiture in the event of
termination of employment with the Company or a subsidiary and other
restrictions and conditions established by the Compensation Committee at the
time the award is granted.



                                      50
<PAGE>

         A phantom stock unit award will provide for the future payment of
cash or the issuance of shares of the Company's common stock to the recipient
if continued employment or other conditions established by the Compensation
Committee at the time of grant are attained.

         A performance share unit award will provide for the future payment of
cash or the issuance of shares of the Company's common stock to the recipient
upon the attainment of certain corporate performance goals established by the
Compensation Committee over three to five year performance award periods. At
the end of each performance award period, the Compensation Committee decides
the extent to which the corporate performance goals have been attained and the
amount of cash or the Company's common stock to be distributed to the
participant.

OTHER

         The Company does not maintain a pension plan or other actuarial or
defined benefit retirement plan for its named executive officers. The Company
does not maintain any long-term incentive plans, and there was no repricing of
outstanding options or SARs held by any of the Company's executive officers
during fiscal year 1997. The Company's named executive officers are eligible
to participate in benefit plans generally available to the Company's
employees, including a 401(k) savings plan and the health and life insurance
programs.

         During 1997 and through March 12, 1998 the Company's Compensation
Committee was composed of Mr. Hanselman, Mr. Moore and Dr. Sydnor (Chairman).
Effective March 12, 1998, the Compensation Committee comprises of Mr. Moore
(Chairman), Mr. Clairmont and Mr. Sullivan. For information concerning certain
transactions between members of the Compensation Committee and the Company,
see "Executive Compensation-Directors' Compensation."























                                      51
<PAGE>






ITEM 12.         SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

         The following table sets forth, to the knowledge of the Company and
as of March 26, 1998, (unless otherwise indicated), (i) the number of shares
of Common stock owned of record or beneficially, or both, by each person who
owned of record, or is known by BEC to have beneficially owned, individually,
or with his associates, more than 5% of such shares then outstanding; (ii) the
number of shares owned beneficially by each director of the Company; and (iii)
the number of shares owned beneficially by all directors and executive
officers as a group. Unless otherwise noted, each person holds sole voting and
investment power with respect to the shares shown opposite his name. All
figures are adjusted to reflect the effect of the one one-for-two reverse
split of the Company's common stock that was effected on March 11, 1998 and
the ILC Merger, which was effective March 12, 1998.

<TABLE>
<CAPTION>
                                                                Amount and Nature of                  Percent of
Name and Address of Beneficial Owner                          Beneficial Ownership(1)                    Class
------------------------------------                          -----------------------                    -----
<S>                                                                <C>                                   <C>
Martin E. Franklin....................................             1,054,057(2)                          5.1%
   555 Theodore Fremd Avenue
   Suite B-302
   Rye, New York

Richard D. Capra......................................               310,986(3)                          1.5%

Ian G.H. Ashken.......................................               221,875(4)                          1.1%

Harrison H. Augur.....................................               136,660(5)                            *

Nora A. Bailey........................................                18,750(6)                            *

Henry C. Baumgartner..................................               570,309(7)                          2.8%

George B. Clairmont...................................               392,127                             1.9%

David Moore...........................................                10,175(6)                            *

William T. Sullivan...................................               139,048(8)                            *

All Executive Officers and Directors..................             2,853,962(9)                         13.1%
as a group (7 persons)





                                      52
<PAGE>



Westport Asset Management, Inc.                                    1,544,152(10)                         7.6%
    253 Riverside Avenue
    Westport CT.  06880

Millbrook Partners, L.P...............................             1,327,600(11)                         6.5%(7)
    2102 Sawgrass Village Dr., Ponte Vedra Beach
    Florida 32082

Marvin Schwartz.......................................             1,324,615(12)                         6.5%(8)
    c/o Neuberger & Berman, LLC,
    605 Third Avenue, New York, NY 10158-3698

Royce & Associates, Inc...............................           1,1,324,615(13)                         5.6%
    1414 Avenue of the Americas
    New York N.Y  10019
</TABLE>



*        Less than 1%.

(1)      Shares not outstanding but deemed beneficially owned by virtue of the
         right of an individual to acquire them within 60 days upon the
         exercise of an option are treated as outstanding for purposes of
         determining beneficial ownership and the percent beneficially owned
         by such individual and for the executive officers and directors as a
         group.

(2)      Includes 402,250shares that Mr. Franklin has a right to acquire
         within 60 days upon the exercise of options. Excludes 7,691 shares
         held in trust for Mr. Franklin's minor children, as to which shares
         Mr. Franklin disclaims beneficial ownership.

(3)      Includes 308,588 shares that Mr. Capra has right to acquire within 60
         days upon exercise of options.

(4)      Includes 121,875 shares that Mr. Ashken has a right to acquire within
         60 days upon the exercise of options. Excludes 2,500 shares held in
         trust for Mr. Ashken's minor children, as to which shares Mr. Ashken
         disclaims beneficial ownership.

(5)      Includes 110,210 shares that Mr. Augur has right to acquire within 60
         days upon exercise of options.

(6)      Includes 2,500 shares that the Director has a right to acquire within
         60 days upon the exercise of options.

(7)      Includes 352,671 shares that Mr. Baumgartner has right to acquire
         within 60 days upon exercise of options.

(8)      Includes 97,500 shares that Mr. Sullivan has a right to acquire
         within 60 days upon the exercise of options and 848 shares with
         respect to which Mr. Sullivan shares voting and investment power with
         his spouse.

(9)      Includes 1,450,618 shares that members of the group have a right to
         acquire within 60 days upon the exercise of options. Excludes 10,191
         shares held in trust for directors' children, as to which they
         disclaim beneficial ownership.

(10)     Shareholdings indicated are adjusted to reflect the effect of the ILC
         Merger and the Company's one-for-two reverse stock split, occurring
         on March 12, 1998 and March 11, 1998, based on a Schedule 13G dated


                                      53
<PAGE>

         February 13, 1997. Westport Asset Management, Inc. ("Westport")
         reported beneficial ownership of 700,500 shares of ILC common stock,
         of which it reported 691,500 shares were held in discretionary
         managed accounts and 8,900 shares were beneficially owned by officers
         and stockholders of Westport.

(11)     Shareholdings indicated are adjusted to reflect the effect of the ILC
         Merger and the Company's one-for-two reverse stock split, occurring
         on March 12 and March 11, 1998, respectively, based on a Schedule 13D
         filed March 31, 1997. Millbrook Partners, L.P. ("Millbrook") and Mark
         M. Mathes, its general partner, reported that, as of December 31,
         1996 they held an aggregate 2,655,200 shares of the Company's common
         stock, or 15.2% of the shares then outstanding. Millbrook and Mr.
         Mathes reported that they share voting and dispositive power with
         respect to 2,577,200 of such shares, or 14.7% of the shares then
         outstanding, while Mr. Mathes holds sole voting and dispositive power
         with respect to 78,000 of such shares.

(12)     Based on a Schedule 13D dated March 26, 1998. Marvin Schwartz, acting
         in his personal capacity and not as a principal of Neuberger &
         Berman, LLC ("N&B"), reported that he is the beneficial owner of
         1,324,615 shares of the Company's common stock, constituting 6.5% of
         the total shares outstanding as of that date. Mr. Schwartz reported
         that 500,307 of such shares are held in his personal account. Mr.
         Schwartz reported that 824,308 of such shares are held in street name
         in accounts for the benefit of M

(13)     Schwartz's family; Mr. Schwartz reported that he holds discretionary
         and shared dispositive power over such accounts. Mr. Schwartz
         reported that N&B has no voting or dispositive power over any of such
         shares. Shareholdings indicated are adjusted to reflect the effect of
         the ILC Merger and the Company's one-for-two reverse stock split,
         occurring on March 11 and March 12, 1998, respectively, based on a
         Schedule 13G/A dated June 6, 1997. A group including Mr. Charles
         Royce, Royce & Associates ("Royce") and Royce Management Company
         ("RMC") reported beneficial ownership of 519,920 shares of ILC common
         stock, of which 461,620 shares were reported to be owned by Royce and
         58,300 were reported to be owned by RMC. Mr. Royce disclaimed
         beneficial ownership of any such shares.

ITEM 13.          CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

         The Company has entered into indemnification agreements with each of
its directors, officers and certain executives, pursuant to which the Company
has agreed to indemnify each indemnitee to the fullest extent authorized by
law against any and all damages, judgments, settlements and fines ("losses")
in connection with any action, suit, arbitration or proceeding or any inquiry
or investigation, whether brought by or in the right of the Company or
otherwise, whether civil, criminal, administrative, investigative or other, or
any appeal therefrom, by reason of an indemnitee's serving as a director of
the Company. An indemnitee is not entitled to indemnification for any losses
that are (i) based or attributable to the indemnitee gaining in fact any
personal profit or advantage to which the indemnitee is not entitled, (ii) for
the return by the indemnitee of any remuneration paid to the indemnitee
without the previous approval of the Stockholders of the Company which is
illegal, (iii) for violations of Section 16 of the Securities Exchange Act of
1934 or similar provisions of state law, (iv) based upon knowingly fraudulent,
dishonest or willful misconduct and (v) not permitted to be covered by
applicable law. The agreements provide that the indemnification under the
agreement is not exclusive of any other rights the indemnitee may have under
the Company's Restated Certificate of Incorporation, Restated By-laws,
applicable Delaware corporate statutes or any agreement or vote of
stockholders.

         The Company's non-employee Directors receive automatically stock
option grants under the terms of the Company's 1996 Stock Incentive Plan (as
amended). Each of Mr. Franklin, Mr. Ashken and Mr. Sullivan also has received
stock option grants under the terms of the 1996 Stock Incentive Plan, and
Messrs. Franklin, Ashken, Capra, Baumgartner and Sullivan have entered into
agreements with the Company. See "Executive Compensation."

         On December 12, 1996, in connection with the sale of the Foster Grant
Group by the Company, Marlin Capital, LP ("Marlin"), a Delaware limited
partnership, invested $2.5 million in convertible preferred stock of the buyer
Accessories Associates, Inc. ("AAi"); upon conversion, AAi common stock
received by Marlin would bear demand and piggyback registration rights. Marlin
Holdings, Inc. ("MH"), a Delaware corporation, is the general partner of
Marlin. Mr. Martin E. Franklin, the Company's Chairman and Chief Executive
Officer, is the Chief Executive Officer and principal stockholder of MH. Mr.
Ashken, the Company's Chief Financial Officer and a 


                                      54
<PAGE>

Director, also is a stockholder and executive officer of MH. Mr. Franklin also 
has been named a member of AAi's Board of Directors.

         Ms. Nora A. Bailey, a member of the Company's Board of Directors
since May 1996, is an attorney specializing in federal tax law. Martin E.
Franklin, Ian G.H. Ashken, David L. Moore, William T. Sullivan and Nora A.
Bailey continued to serve as directors of the Company after the ILC Merger. In
her professional capacity she has rendered legal advice and related services
to both the Company and its predecessor, Benson. Ms. Bailey has rendered such
services both prior to and subsequent to her appointment to the Company's
Board of Directors, and it is anticipated that she from time to time in the
future will be engaged to provide similar legal services to the Company. All
fees paid to Ms. Bailey in connection with such services have been agreed in
arms' length negotiations and are in accordance with Ms. Bailey's usual and
customary billing practices. Fees paid to Ms. Bailey by the Company in
connection with such services are not paid in consideration of her services as
a director. Aggregate fees billed to the Company by Ms. Bailey during 1997
were approximately $90,000.


         No other significant transactions, business relationships, or
indebtedness are known to exist between the Company and related parties
(defined as directors, executive officers, nominees for director, security
holders of more than 5% of the voting stock or any members of the immediate
family of any of the foregoing persons).

                                    PART IV

ITEM 14.        EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(A)      1.       FINANCIAL STATEMENTS:

<TABLE>
<CAPTION>
         CONSOLIDATED FINANCIAL STATEMENTS:                                                                 PAGE:
                  <S>                                                                                        <C>
                  Reports of Independent Accountant..............................................            ___

                  Consolidated Balance Sheets at December 31, 1997 and 1996                                  ___

                  Consolidated Statements of Operations for the years
                     ended December 31, 1997, 1996 and 1995......................................            ___

                  Consolidated Statements of Stockholders' Equity for the years
                     ended December 31, 1997, 1996 and 1995......................................            ___

                  Consolidated Statements of Cash Flows for the years ended
                     December 31, 1997, 1996 and 1995............................................            ___

                  Notes to Consolidated Financial Statements.....................................            ___

</TABLE>
         2.       FINANCIAL STATEMENT SCHEDULES:

                  All other schedules for which provision is made in the
                  applicable accounting regulations of the Securities and
                  Exchange Commission are not required under the related
                  instructions or are inapplicable, and therefore have been
                  omitted.

         3.       EXHIBITS:

         The following exhibits are filed herewith:

EXHIBIT NO.                                          DESCRIPTION



                                      55
<PAGE>

         2.1      Agreement and Plan of Merger, dated as of October 30, 1997,
                  by and among the Company, BILC Acquisition Corp. and ILC.
                  Incorporated by reference to Exhibit 2.1 of the Company's
                  registration statement on Form S-4, Registration No.
                  333-40519 (the "S-4 Registration Statement".)

         2.2      Amendment No. 1 to the Merger Agreement dated January 6,
                  1998 by and among the Company Acquisition Corp. and ILC.
                  Incorporated by reference to Exhibit 2.2 of the S-4
                  Registration Statement.

         3.1      Restated Certificate of Incorporation of the Company.
                  Incorporated by reference to Exhibit 3.1 to the Company 's
                  Registration Statement on Form S-1, as amended, Registration
                  Statement No. 333-3186 (the "S-1 Registration Statement.")

         3.2      By-laws of the Company. Incorporated by reference to Exhibit
                  3.2 to the S-1 Registration Statement.

         3.3      Certificate of Designations of the Series A Preferred Stock
                  of the Company. Incorporated by reference to Exhibit 3.1 to
                  the Current Report on the Company's Form 8-K, date of event
                  July 10, 1997.

*        3.4      Certificate of Amendment to the Restated Certificate of
                  Incorporation of the Company.

*        3.5      Amendment No. 1 to By-laws of the Company.

         4.1      The Company's 1996. Stock Incentive Plan. Incorporated by
                  reference to Exhibit 4.1 to the S-1 Registration Statement.

         4.2      Agreement for Conversion and Exchange of Note, by and among
                  Benson Eyecare Corporation; the Company ; and Convertible
                  Note holders. Incorporated by reference to Annex F to Benson
                  Eyecare Corporation's Proxy Statement dated April 5, 1996,
                  File No. 1-9435.

         4.3      The Company 1996 Employee Stock Purchase Plan (this exhibit
                  as filed includes the subscription and withdrawal forms for
                  Plan participants). Incorporated by reference to Exhibit 4.2
                  to the Company's Quarterly Reports on Form 10-Q for the
                  period ended June 30, 1996.

         4.4      Registration Rights Agreement, dated as of May 3, 1996, by
                  and among the Company and Convertible Note holders.
                  Incorporated by reference to Exhibit 4.4 to the Company's
                  Registration Statement on Form S-3, as amended, Registration
                  No. 333-18947 ("S-3 Registration Statement").

         4.5      Indenture, dated as of May 3, 1996, including form of
                  Convertible Note. Incorporated by reference to Exhibit 4.5
                  to S-3 Registration Statement

*        4.6      The Company's Amended and Restated 1996 Stock Incentive Plan.

         10.1     Agreement and Plan of Merger, dated as of February 11, 1996,
                  between Essilor International, S.A., Essilor of America,
                  Inc., Essilor Acquisition Corporation, Benson Eyecare
                  Corporation, the Company and Omega Opco, Inc. Incorporated
                  by reference to Exhibit 10.1 to the S-1 Registration
                  Statement.

         10.2     Form of Spinoff Agreement between Benson Eyecare Corporation
                  and the Company. Incorporated by reference to Exhibit 10.2
                  to the S-1 Registration Statement.

         10.3     Indemnification Agreement dated as of February 11, 1996, by
                  and among Essilor International, S.A., Essilor of America,
                  Inc., Essilor Acquisition Corporation, Benson Eyecare
                  Corporation, and the Company . Incorporated by reference to
                  Exhibit 10.3 to the S-1 Registration Statement.



                                      56
<PAGE>

         10.4     Form of Indemnification Agreement. Incorporated by reference
                  to Exhibit 10.4 to the Company's Current Report on Form 10-Q
                  for the period ending March 31, 1996.

         10.5     Asset Purchase Agreement dated as of February 11, 1996, by
                  and among Benson Eyecare Corporation, the Company and
                  Optical Radiation Corporation and Monsanto Company.
                  Incorporated by reference to Exhibit 10.2 to Benson Eyecare
                  Corporation's Current Report on Form 8-K date of event
                  February 12, 1996.

         10.6     Credit Agreement among the Company and NationsBank, N.A., et
                  al, dated as of April 3, 1996. Filed together with such
                  Exhibit 10.6 are copies of the following ancillary
                  agreements (incorporated by reference to Exhibit 106 to the
                  Company's Quarterly Report on Form 10-Q for the period ended
                  June 30, 1996).

                  (a)      Subsidiary Guaranty Agreement dated as of April 3,
                           1996, among certain subsidiaries of the Company and
                           NationsBank, N.A.

                  (b)      Assignment of Patents, Trademarks, Copyrights and
                           Licenses, dated as of April 3, 1996.

                  (c)      Intellectual Property Security Agreement dated as
                           of April 3, 1996.

                  (d)      Stock Pledge Agreement, dated as of April 3, 1996.

                  (e)      Collateral Assignment of Partnership Interests,
                           dated as of April 3, 1996.

                  (f)      Security Agreement, dated as of April 3, 1996.

         10.7     Amendment No. 1 to Credit Agreement (see Exhibit 10.6 above)
                  dated as of June 17, 1996, by and among the Company, et al.
                  Incorporated by reference to Exhibit 10.7 of the Company's
                  Annual Report on Form 10-K for the year ended December 31,
                  1996.

         10.8     Amendment No. 2 to Credit Agreement (see Exhibit 10.6,
                  above) dated as of October 31, 1996, by and among the
                  Company et al. Incorporated by reference to Exhibit 10.1 to
                  the Company's Quarterly Report on Form 10-Q for the period
                  ended September 30, 1996.

         10.9     Amendment No. 3 to Credit Agreement (see Exhibit 10.6,
                  above), dated December 1996, by and among the Company, et
                  al. Incorporated by reference to the Company's Annual Report
                  on Form 10-K for the year ended December 31, 1996.

         10.10    Stock Purchase Agreement, dated as of November 13, 1996, by
                  and among the Company, Foster Grant Group, L.P., Foster
                  Grant Holdings, L.P. and Accessories Associates, Inc.
                  Incorporated by reference to Exhibit 2.1 to the Company 's
                  Quarterly Report on Form 10-Q/A for the period ended
                  September 30, 1996.

         10.11    Employment Agreement dated as of July 1, 1993, between the
                  Company and Mr. Martin E. Franklin. Incorporated by
                  reference to Exhibit 10.34 to Benson Eyecare Corporation's
                  Registration Statement on Form S-1, Registration No.
                  33-63864 (the "Benson S-1 Registration Statement").

         10.12    Amendment No. 1, dated as of October 31, 1996, to Employment
                  Agreement dated July 1, 1993, between the Company and Mr.
                  Martin E. Franklin. Incorporated by reference to Exhibit
                  10.12 to the Company's Annual Report on Form 10-K for the
                  year ended December 31, 1996.

         10.13    Employment Agreement dated as of July 1, 1993, between the
                  Company and Mr. Ian G.H. Ashken. Incorporated by reference
                  to Exhibit 10.2 to Benson S-1 Registration Statement.



                                      57
<PAGE>

         10.14    Amendment No. 1, dated as of October 31, 1996, to Employment
                  Agreement dated July 1, 1993, between the Company and Mr.
                  Ian G.H. Ashken. Incorporated by reference to Exhibit 10.14
                  to the Company's Annual Report on Form 10-K for the year
                  ended December 31, 1996.

         10.15    Merger Agreement dated as of June 30, 1994, among the
                  Company (as assignee), Benson Acquisition Company, Inc. and
                  Optical Radiation Corporation. Incorporated by reference to
                  Exhibit 99.1 to Benson Eyecare Corporation's Current Report
                  on Form 8-K, date of event June 30, 1994.

         10.16    Amendment No. 1 to Merger Agreement, dated as of July 6,
                  1994, among the Company (as assignee), Benson Acquisition
                  Company, Inc. and Optical Radiation Corporation.
                  Incorporated by reference to Exhibit 99.2 to Benson Eyecare
                  Corporation's Current Report on Form 8-K, date of event June
                  30, 1994.

         10.17    Amendment No. 2 to Merger Agreement, dated as of August 29,
                  1994, by and among the Company, Optical Radiation
                  Corporation and Benson Acquisition Corporation. Incorporated
                  by reference to Annex E to Benson Eyecare Corporation's
                  registration Statement on Form S-4, dated September 12,
                  1994.

         10.18    Agreement and Plan of Reorganization, dated as of September
                  30, 1994, by and among Superior Vision Services, Inc. the
                  Company (as assignee) and Charles D. Fritch, M.D. The
                  Company agrees to furnish supplementally to the Commission
                  upon request a copy of any omitted schedules or exhibits.
                  Incorporated by reference to Exhibit 10.2 to Benson Eyecare
                  Corporation's Quarterly Report on Form 10-Q for the period
                  ended September 30, 1994.

         10.19    Loan Agreement by and among the Company (as assignee) and
                  First Interstate Bank of Texas, N.A. relating to the real
                  property located in Dallas, Texas. Incorporated by reference
                  to Exhibit 10.24 to Benson Eyecare Corporation's Annual
                  Report on Form 10-K for the year ended December 31, 1995.

         10.20    First Amendment to Loan Agreement (see Exhibit 10.19, above)
                  and other loan documents, dated May 3, 1996, by and among
                  Foster Grant Group, L.P., the Company, and, first Interstate
                  Bank of Texas, N.A. Incorporated by reference to Exhibit
                  10.20 to the Company's Annual Report on Form 10-K for the
                  year ended December 31, 1996.

         10.21    Second Amendment to Loan Agreement (see Exhibit 10.19,
                  above) and Other Loan Documents, dated December 12, 1996, by
                  and among Wells Fargo Bank (Texas), N.A. (as successor to
                  First Interstate Bank of Texas, N.A.), ORC Management
                  Corporation, Foster Grant Group, L.P., and the Company.
                  Incorporated by reference to Exhibit 10.21 to the Company's
                  Annual Report on Form 10-K for the year ended December 31,
                  1996.

         10.22    Deed of Trust, Security Agreement and Financing Statement,
                  dated March 31, 1995, relating to mortgage of real property
                  located in Dallas, Texas, Incorporated by reference to
                  Exhibit 10.22 to the Company's Annual Report on Form 10-K
                  for the year ended December 31, 1996.

         10.23    Agreement and Plan of Merger, dated as of July 26, 1995,
                  among Benson Eyecare Corporation, Benson Acquisition Corp.,
                  and Bolle America, Inc. Incorporated by reference to Exhibit
                  10.1 to Benson Eyecare Corporation's Current Report on Form
                  8-K, dated August 3, 1995.

         10.24    Separation Agreement by and between the Company and Mr.
                  William T. Sullivan. Incorporated by reference to Exhibit
                  10.24 to the Company's Annual Report on Form 10-K for the
                  year ended December 31, 1996.

         10.25    Amended and Restated Share purchase Agreement, dated July 9,
                  1997, by and among the Company, and Bolle Inc., on the one
                  hand, and Mr. Robert Bolle, Mr. Maurice Bolle, Mr. Franck
                  Bolle, Mrs. Patricia Bolle Passaquay, Ms. Brigitte Bolle and
                  Mrs. Christelle Roche (collectively, the 


                                      58
<PAGE>

                  "Sellers"). Incorporated by reference to Exhibit 10.1 to the
                  Company's Current Report on Form 8-K, date of event July 10, 
                  1997.

         10.26    Warrant Agreement, dated as of July 9, 1997, by and among
                  the Company and each of the Sellers. Incorporated by
                  reference to Exhibit 10.2 to the Company's Current Report on
                  the Form 8-K, date of event July 10, 1997.

         10.27    Amendment and Restated Credit Agreement, dated as of July
                  10, 1997, among the Company as Borrower, and NationsBank
                  National Association, Bank of Boston Connecticut, Caisse
                  Nationale de Credit Agricole, European American Bank,
                  Imperial Bank, National City Bank of Kentucky, and the other
                  financial institutions from time to time parties thereto, as
                  Lenders, and NationsBank, National Association, as Agent.
                  Incorporated by reference to Exhibit 10.3 to the Company's
                  Current Report on Form 8-K, date of event July 10, 1997.

         10.28    Voting Agreement dated as of October 30, 1997, between ILC
                  and Martin E. Franklin. Incorporated by reference to Exhibit
                  10.28 of the S-4 Registration Statement.

         10.29    Voting Agreement dated as of October 30, 1997 between the
                  Company, Acquisition Corp. and Henry C. Baumgartner.
                  Incorporated by reference to Exhibit 10.29 of the S-4
                  Registration Statement.

         10.30    Indemnification Agreement between the Company, Acquisition
                  Corp. and Bolle. Incorporated by reference to Exhibit 10.5
                  to the Company's Current Report on Form 8-K, date of event -
                  March 11, 1998.

         10.31    Bill of Sale and Assignment Agreement between the Company
                  and Bolle. Incorporated by reference to Exhibit 10.4 to the
                  Company's Current Report on Form 8-K, date of event - March
                  11, 1998.

         10.32    Management Services Agreement between Bolle and the Company.
                  Incorporated by reference to Exhibit 10.6 to the Company's
                  Current Report on Form 8-K, date of event - March 11, 1998.

         10.33    Fairness Opinion of Raymond James & Associates, Inc.
                  (incorporated by reference from Annex D to the Joint Proxy
                  Statement/Prospectus in the S-4 Registration Statement).

         10.34    Fairness Opinion of Donaldson, Lufkin & Jenrette Securities
                  Corporation (incorporated by reference from Annex E to the
                  Joint Proxy Statement/Prospectus).

         10.35    Assignment Agreement and First Amendment to Amended and
                  Restated Credit Agreement, dated as of March 11, 1998 among
                  the Company, ORC Technologies, Inc., ORC Management
                  Corporation, Bolle America, Inc., Bolle Inc. and
                  NationsBank, National Association, et al. Incorporated by
                  reference to Exhibit 10.2 to the Company's Current Report on
                  Form 8-K, date of event - March 11, 1998.

         10.36    Second Amended and Restated Credit Agreement among the
                  Company and NationsBank, National Association, et al., dated
                  as of March 12, 1998. Incorporated by reference to Exhibit
                  10.3 to the Company's Current Report on Form 8-K, date of
                  event - March 11, 1998. Filed together with such Exhibit
                  10.3 are copies of the following agreements:

                  (a)      Second Amended and Restated Guaranty Agreement
                           dated as of March 12, 1998.

                  (b)      Second Amended and Restated Intellectual Property
                           Security Agreement, dated as of March 12, 1998.

                  (c)      Second Amended and Restated Stock Pledge Agreement,
                           dated as of March 12, 1998.



                                      59
<PAGE>

                  (d)      Second Amended and Restated Security Agreement,
                           dated as of March 12, 1998.

*        10.37    Agreement between Henry C. Baumgartner and the Company, dated
                  as of March 12, 1998..

*        10.38    Agreement between Richard D. Capra and the Company, dated as 
                  of March 12, 1998.

*        21       Subsidiaries of the Registrant.

*        24.1     Consent of Price Waterhouse LLP.

*        27       Financial Data Schedule (for electronic filing only).

*  FILED ELECTRONICALLY HEREWITH.


(B) REPORTS ON FORM 8-K IN THE FOURTH QUARTER OF 1997:

                  (i)      The Company filed no Reports on Form 8-K in the 
                           fourth quarter of 1996.



                                      60
<PAGE>


                           LUMEN TECHNOLOGIES, INC.

                                  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 on the 10th day of April, 1998.

                                            Lumen Technologies, Inc.


                                            By:  /s/ Martin E. Franklin
                                                 -------------------------
                                                     Martin E. Franklin
                                                     Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities indicated.

<TABLE>
<CAPTION>
<S>                                             <C>
/s/  Martin E. Franklin                         /s/  Richard D. Capra
------------------------------------            --------------------------------
Martin E. Franklin                              Richard D. Capra
Director and Chairman of the Board              Director and Chief Executive Officer

Dated: April 10, 1998                           Dated: April 10, 1998


/s/  Ian G.H. Ashken                            /s/  David L. Moore
------------------------------------            --------------------------------
Ian G. H. Ashken                                David L. Moore
Director and Chief Financial Officer,           Director
Executive Vice President of Finance and
Administration;                                 Dated: April 10, 1998

Dated: April 10, 1998                           


/s/  Nora A. Bailey                             
------------------------------------            --------------------------------
Nora A. Bailey                                  William T. Sullivan
Director                                        Director

Dated: April 10, 1998                           Dated:         , 1998


/s/  Harrison H. Augur                          /s/ George B. Clairmont
------------------------------------            --------------------------------
Harrison H. Augur                               George C. Clairmont
Director                                        Director

Dated:         , 1998                           Dated: April 10, 1998




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


                                      61
<PAGE>

Henry C. Baumgartner
Director

Dated:             , 1998
      -------------
</TABLE>

                                      62
<PAGE>

                                 EXHIBIT INDEX


         2.1      Agreement and Plan of Merger, dated as of October 30, 1997,
                  by and among the Company, BILC Acquisition Corp. and ILC.
                  Incorporated by reference to Exhibit 2.1 of the Company's
                  registration statement on Form S-4, Registration No.
                  333-40519 (the "S-4 Registration Statement".)

         2.2      Amendment No. 1 to the Merger Agreement dated January 6,
                  1998 by and among the Company Acquisition Corp. and ILC.
                  Incorporated by reference to Exhibit 2.2 of the S-4
                  Registration Statement.

         3.1      Restated Certificate of Incorporation of the Company.
                  Incorporated by reference to Exhibit 3.1 to the Company 's
                  Registration Statement on Form S-1, as amended, Registration
                  Statement No. 333-3186 (the "S-1 Registration Statement.")

         3.2      By-laws of the Company. Incorporated by reference to Exhibit
                  3.2 to the S-1 Registration Statement.

*        3.3      Certificate of Designations of the Series A Preferred Stock
                  of the Company. Incorporated by reference to Exhibit 3.1 to
                  the Current Report on the Company's Form 8-K, date of event
                  July 10, 1997.

*        3.4      Certificate of Amendment to the Restated Certificate of
                  Incorporation of the Company.

         3.5      Amendment No. 1 to By-laws of the Company.

         4.1      The Company's 1996. Stock Incentive Plan. Incorporated by
                  reference to Exhibit 4.1 to the S-1 Registration Statement.

         4.2      Agreement for Conversion and Exchange of Note, by and among
                  Benson Eyecare Corporation; the Company ; and Convertible
                  Note holders. Incorporated by reference to Annex F to Benson
                  Eyecare Corporation's Proxy Statement dated April 5, 1996,
                  File No. 1-9435.

         4.3      The Company 1996 Employee Stock Purchase Plan (this exhibit
                  as filed includes the subscription and withdrawal forms for
                  Plan participants). Incorporated by reference to Exhibit 4.2
                  to the Company's Quarterly Reports on Form 10-Q for the
                  period ended June 30, 1996.

         4.4      Registration Rights Agreement, dated as of May 3, 1996, by
                  and among the Company and Convertible Note holders.
                  Incorporated by reference to Exhibit 4.4 to the Company's
                  Registration Statement on Form S-3, as amended, Registration
                  No. 333-18947 ("S-3 Registration Statement").

         4.5      Indenture, dated as of May 3, 1996, including form of
                  Convertible Note. Incorporated by reference to Exhibit 4.5
                  to S-3 Registration Statement.

*        4.6      The Company's Amended and Restated 1996 Stock Incentive Plan.

         10.1     Agreement and Plan of Merger, dated as of February 11, 1996,
                  between Essilor International, S.A., Essilor of America,
                  Inc., Essilor Acquisition Corporation, Benson Eyecare
                  Corporation, the Company and Omega Opco, Inc. Incorporated
                  by reference to Exhibit 10.1 to the S-1 Registration
                  Statement.



                                      63
<PAGE>

         10.2     Form of Spinoff Agreement between Benson Eyecare Corporation
                  and the Company. Incorporated by reference to Exhibit 10.2
                  to the S-1 Registration Statement.

         10.3     Indemnification Agreement dated as of February 11, 1996, by
                  and among Essilor International, S.A., Essilor of America,
                  Inc., Essilor Acquisition Corporation, Benson Eyecare
                  Corporation, and the Company. Incorporated by reference to
                  Exhibit 10.3 to the S-1 Registration Statement.

         10.4     Form of Indemnification Agreement. Incorporated by reference
                  to Exhibit 10.4 to the Company's Current Report on Form 10-Q
                  for the period ending March 31, 1996.

         10.5     Asset Purchase Agreement dated as of February 11, 1996, by
                  and among Benson Eyecare Corporation, the Company and
                  Optical Radiation Corporation and Monsanto Company.
                  Incorporated by reference to Exhibit 10.2 to Benson Eyecare
                  Corporation's Current Report on Form 8-K date of event
                  February 12, 1996.

         10.6     Credit Agreement among the Company and NationsBank, N.A., et
                  al, dated as of April 3, 1996. Filed together with such
                  Exhibit 10.6 are copies of the following ancillary
                  agreements (incorporated by reference to Exhibit 106 to the
                  Company's Quarterly Report on Form 10-Q for the period ended
                  June 30, 1996).

                  (a)      Subsidiary Guaranty Agreement dated as of April 3,
                           1996, among certain subsidiaries of the Company and
                           NationsBank, N.A.

                  (b)      Assignment of Patents, Trademarks, Copyrights and
                           Licenses, dated as of April 3, 1996.

                  (c)      Intellectual Property Security Agreement dated as
                           of April 3, 1996.

                  (d)      Stock Pledge Agreement, dated as of April 3, 1996.

                  (e)      Collateral Assignment of Partnership Interests,
                           dated as of April 3, 1996.

                  (f)      Security Agreement, dated as of April 3, 1996.

         10.7     Amendment No. 1 to Credit Agreement (see Exhibit 10.6 above)
                  dated as of June 17, 1996, by and among the Company, et al.
                  Incorporated by reference to Exhibit 10.7 of the Company's
                  Annual Report on Form 10-K for the year ended December 31,
                  1996.

         10.8     Amendment No. 2 to Credit Agreement (see Exhibit 10.6,
                  above) dated as of October 31, 1996, by and among the
                  Company et al. Incorporated by reference to Exhibit 10.1 to
                  the Company's Quarterly Report on Form 10-Q for the period
                  ended September 30, 1996.

         10.9     Amendment No. 3 to Credit Agreement (see Exhibit 10.6,
                  above), dated December 1996, by and among the Company, et
                  al. Incorporated by reference to the Company's Annual Report
                  on Form 10-K for the year ended December 31, 1996.

         10.10    Stock Purchase Agreement, dated as of November 13, 1996, by
                  and among the Company, Foster Grant Group, L.P., Foster
                  Grant Holdings, L.P. and Accessories Associates, Inc.
                  Incorporated by reference to Exhibit 2.1 to the Company 's
                  Quarterly Report on Form 10-Q/A for the period ended
                  September 30, 1996.

         10.11    Employment Agreement dated as of July 1, 1993, between the
                  Company and Mr. Martin E. Franklin. Incorporated by
                  reference to Exhibit 10.34 to Benson Eyecare Corporation's
                  Registration Statement on Form S-1, Registration No.
                  33-63864 (the "Benson S-1 Registration Statement").



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<PAGE>

         10.12    Amendment No. 1, dated as of October 31, 1996, to Employment
                  Agreement dated July 1, 1993, between the Company and Mr.
                  Martin E. Franklin. Incorporated by reference to Exhibit
                  10.12 to the Company's Annual Report on Form 10-K for the
                  year ended December 31, 1996.

         10.13    Employment Agreement dated as of July 1, 1993, between the
                  Company and Mr. Ian G.H. Ashken. Incorporated by reference
                  to Exhibit 10.2 to Benson S-1 Registration Statement.

         10.14    Amendment No. 1, dated as of October 31, 1996, to Employment
                  Agreement dated July 1, 1993, between the Company and Mr.
                  Ian G.H. Ashken. Incorporated by reference to Exhibit 10.14
                  to the Company's Annual Report on Form 10-K for the year
                  ended December 31, 1996.

         10.15    Merger Agreement dated as of June 30, 1994, among the
                  Company (as assignee), Benson Acquisition Company, Inc. and
                  Optical Radiation Corporation. Incorporated by reference to
                  Exhibit 99.1 to Benson Eyecare Corporation's Current Report
                  on Form 8-K, date of event June 30, 1994.

         10.16    Amendment No. 1 to Merger Agreement, dated as of July 6,
                  1994, among the Company (as assignee), Benson Acquisition
                  Company, Inc. and Optical Radiation Corporation.
                  Incorporated by reference to Exhibit 99.2 to Benson Eyecare
                  Corporation's Current Report on Form 8-K, date of event June
                  30, 1994.

         10.17    Amendment No. 2 to Merger Agreement, dated as of August 29,
                  1994, by and among the Company, Optical Radiation
                  Corporation and Benson Acquisition Corporation. Incorporated
                  by reference to Annex E to Benson Eyecare Corporation's
                  registration Statement on Form S-4, dated September 12,
                  1994.

         10.18    Agreement and Plan of Reorganization, dated as of September
                  30, 1994, by and among Superior Vision Services, Inc. the
                  Company (as assignee) and Charles D. Fritch, M.D. The
                  Company agrees to furnish supplementally to the Commission
                  upon request a copy of any omitted schedules or exhibits.
                  Incorporated by reference to Exhibit 10.2 to Benson Eyecare
                  Corporation's Quarterly Report on Form 10-Q for the period
                  ended September 30, 1994.

         10.19    Loan Agreement by and among the Company (as assignee) and
                  First Interstate Bank of Texas, N.A. relating to the real
                  property located in Dallas, Texas. Incorporated by reference
                  to Exhibit 10.24 to Benson Eyecare Corporation's Annual
                  Report on Form 10-K for the year ended December 31, 1995.

         10.20    First Amendment to Loan Agreement (see Exhibit 10.19, above)
                  and other loan documents, dated May 3, 1996, by and among
                  Foster Grant Group, L.P., the Company, and, first Interstate
                  Bank of Texas, N.A. Incorporated by reference to Exhibit
                  10.20 to the Company's Annual Report on Form 10-K for the
                  year ended December 31, 1996.

         10.21    Second Amendment to Loan Agreement (see Exhibit 10.19,
                  above) and Other Loan Documents, dated December 12, 1996, by
                  and among Wells Fargo Bank (Texas), N.A. (as successor to
                  First Interstate Bank of Texas, N.A.), ORC Management
                  Corporation, Foster Grant Group, L.P., and the Company.
                  Incorporated by reference to Exhibit 10.21 to the Company's
                  Annual Report on Form 10-K for the year ended December 31,
                  1996.

         10.22    Deed of Trust, Security Agreement and Financing Statement,
                  dated March 31, 1995, relating to mortgage of real property
                  located in Dallas, Texas, Incorporated by reference to
                  Exhibit 10.22 to the Company's Annual Report on Form 10-K
                  for the year ended December 31, 1996.

         10.23    Agreement and Plan of Merger, dated as of July 26, 1995,
                  among Benson Eyecare Corporation, Benson Acquisition Corp.,
                  and Bolle America, Inc. Incorporated by reference to Exhibit
                  10.1 to Benson Eyecare Corporation's Current Report on Form
                  8-K, dated August 3, 1995.



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<PAGE>

         10.24    Separation Agreement by and between the Company and Mr.
                  William T. Sullivan. Incorporated by reference to Exhibit
                  10.24 to the Company's Annual Report on Form 10-K for the
                  year ended December 31, 1996.

         10.25    Amended and Restated Share purchase Agreement, dated July 9,
                  1997, by and among the Company, and Bolle Inc., on the one
                  hand, and Mr. Robert Bolle, Mr. Maurice Bolle, Mr. Franck
                  Bolle, Mrs. Patricia Bolle Passaquay, Ms. Brigitte Bolle and
                  Mrs. Christelle Roche (collectively, the "Sellers").
                  Incorporated by reference to Exhibit 10.1 to the Company's
                  Current Report on Form 8-K, date of event July 10, 1997.

         10.26    Warrant Agreement, dated as of July 9, 1997, by and among
                  the Company and each of the Sellers. Incorporated by
                  reference to Exhibit 10.2 to the Company's Current Report on
                  the Form 8-K, date of event July 10, 1997.

         10.27    Amendment and Restated Credit Agreement, dated as of July
                  10, 1997, among the Company as Borrower, and NationsBank
                  National Association, Bank of Boston Connecticut, Caisse
                  Nationale de Credit Agricole, European American Bank,
                  Imperial Bank, National City Bank of Kentucky, and the other
                  financial institutions from time to time parties thereto, as
                  Lenders, and NationsBank, National Association, as Agent.
                  Incorporated by reference to Exhibit 10.3 to the Company's
                  Current Report on Form 8-K, date of event July 10, 1997.

         10.28    Voting Agreement dated as of October 30, 1997, between ILC
                  and Martin E. Franklin. Incorporated by reference to Exhibit
                  10.28 of the S-4 Registration Statement.

         10.29    Voting Agreement dated as of October 30, 1997 between the
                  Company, Acquisition Corp. and Henry C. Baumgartner.
                  Incorporated by reference to Exhibit 10.29 of the S-4
                  Registration Statement.

         10.30    Indemnification Agreement between the Company, Acquisition
                  Corp. and Bolle. Incorporated by reference to Exhibit 10.5
                  to the Company's Current Report on Form 8-K, date of event -
                  March 11, 1998.

         10.31    Bill of Sale and Assignment Agreement between the Company
                  and Bolle. Incorporated by reference to Exhibit 10.4 to the
                  Company's Current Report on Form 8-K, date of event - March
                  11, 1998.

         10.32    Management Services Agreement between Bolle and the Company.
                  Incorporated by reference to Exhibit 10.6 to the Company's
                  Current Report on Form 8-K, date of event - March 11, 1998..

         10.33    Fairness Opinion of Raymond James & Associates, Inc.
                  (incorporated by reference from Annex D to the Joint Proxy
                  Statement/Prospectus in the S-4 Registration Statement).

         10.34    Fairness Opinion of Donaldson, Lufkin & Jenrette Securities
                  Corporation (incorporated by reference from Annex E to the
                  Joint Proxy Statement/Prospectus).

         10.35    Assignment Agreement and First Amendment to Amended and
                  Restated Credit Agreement, dated as of March 11, 1998 among
                  the Company, ORC Technologies, Inc., ORC Management
                  Corporation, Bolle America, Inc., Bolle Inc. and
                  NationsBank, National Association, et al. Incorporated by
                  reference to Exhibit 10.2 to the Company's Current Report on
                  Form 8-K, date of event - March 11, 1998.

         10.36    Second Amended and Restated Credit Agreement among the
                  Company and NationsBank, National Association, et al., dated
                  as of March 12, 1998. Incorporated by reference to Exhibit
                  10.3 to the Company's Current Report on Form 8-K, date of
                  event - March 11, 1998. Filed together with such Exhibit
                  10.3 are copies of the following agreements:



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<PAGE>

                  (a)      Second Amended and Restated Guaranty Agreement
                           dated as of March 12, 1998.

                  (b)      Second Amended and Restated Intellectual Property
                           Security Agreement, dated as of March 12, 1998.

                  (c)      Second Amended and Restated Stock Pledge Agreement,
                           dated as of March 12, 1998.

                  (d)      Second Amended and Restated Security Agreement,
                           dated as of March 12, 1998.

*        10.37    Agreement between Henry C. Baumgartner and the Company, dated
                  as of March 12, 1998.

*        10.38    Agreement between Richard D. Capra and the Company, dated as
                  of March 12, 1998.

*        21       Subsidiaries of the Registrant.

*        24.1     Consent of Price Waterhouse LLP.


*        27       Financial Data Schedule (for electronic filing only).


* FILED ELECTRONICALLY HEREWITH.



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