**EMPLOYMENT AGREEMENT **

     This Employment Agreement("Agreement") is entered into and made effective as of December 3,2001 by and between BMC Industries, Inc., its subsidiaries and divisions("Company") and Curtis E. Petersen ("Employee").

     WHEREAS, Company desires to employ Employeeand Employee desires to be employed by the Company; and

     WHEREAS, Employee and Company desire toformalize their relationship, and provide for certain benefits and certainprotections to Employee and Company subject to and in accordance with thisAgreement;

     NOW THEREFORE, in consideration of the mutualcovenants and agreements contained herein and for good and valuableconsideration, the receipt and sufficiency of which are hereby acknowledged,the parties agree as follows:

**1.        Employment and Term. **Company agrees to employ Employee in the capacity of SeniorVice-President and Chief Financial Officer, for a period of two years,commencing on December 3, 2001 and continuing until December 3, 2003 (the"Agreement Termination Date"), unless sooner terminated as providedin this Agreement.  Employee agrees to serve and remain in such employmentin accordance with this Agreement.  Throughout the term of this Agreement,Employee shall devote his full time and attention during normal business hoursto the business and affairs of Company, except for vacations, Company holidaysor periods of illness or incapacity.  This Agreement will be automaticallyrenewed for successive one (1) year periods after such initial term, unless anduntil terminated by either party effective as of the end of such initial term,or successive one-year renewal period, on not less than sixty (60) dayswritten notice before the end of such initial term or any such successiveone-year renewal period.

**2.        Position and Duties. **Employee shall serve full-time in the position of SeniorVice-President and Chief Financial Officer of the Company.  Employee shallperform such duties in this position as may be prescribed by the ChiefExecutive Officer or the Board of Directors.  Employee agrees to devotehis full-time business efforts, attention and energies to the diligentperformance of his duties on behalf of the Company, and will not, during theterm of his employment by the Company, engage in any activity or acceptemployment, full or part-time, from any other person, firm, corporation,governmental agency or other entity which, in the opinion of the Company, wouldconflict with or detract from the capable performance of Employee's duties andobligations to the Company.  Employee further agrees to comply faithfullywith all policies established by Company.** **

**3.        Compensation.**

**           (a)       BaseSalary.  **As compensation for the services rendered under thisAgreement, Company agrees to pay Employee a base salary of $205,000.00 perannum, less applicable deductions and withholdings as required by law, subjectto annual adjustment at the discretion of Company's Board of Directors. Employee shall be paid a portion of his base salary as frequently as similarlysituated employees. Currently, similarly situated employees are paid on abi-weekly basis.

           **(b)        OtherWage Based Benefits.  **During the term of this Agreement, Employee shallbe eligible for participation in Company's Executive Perk and Flex BenefitPlans and any bonus/incentive plan that is generally provided to employees atthe same or similar level, which, as of the date of this Agreement, consists ofthe Management Incentive Plan ("MIP") (attached as Exhibit A to thisAgreement).  Employee will participate in MIP with a targeted bonusopportunity of 50% of base salary and a maximum opportunity of 75% ofEmployee's base salary, depending upon the financial performance of BMC. Participation in any bonus/incentive plan is subject to the Company's right tomodify, substitute or terminate such plan at its sole discretion. Employee shall also receive a Non-Qualified Stock Option (NQSO) grant for50,000 shares of BMC common stock, effective on the date of thisAgreement.  The option exercise price will be the average of the high andlow trading price of BMC stock on the New York Stock Exchange on suchdate.  This option will have a three (3) year vesting period for25,000 shares and a five (5) year vesting period for the remaining 25,000shares, with the first installment of each becoming exercisable on the firstanniversary date of this Agreement.  Under the vesting schedule for theseoptions, which is attached as Exhibit B to the Agreement, partial year vestingis not allowed.

**4.        Benefits andVacation.  **During the term of this Agreement, Employee shall havethe right to participate in any group insurance and other fringe benefit planswhich are generally provided to employees at the same or similar level,subject, however, to the Employee's qualification for participation in suchbenefit plans pursuant to the terms and conditions under which such benefitplans are offered.  The Company will execute a Change in Control Agreementwith Employee in the form attached hereto as Exhibit C.  Employee alsowill be entitled to an amount of vacation as is consistent with and does nototherwise interfere with Employee's duties hereunder and to all legal holidaysobserved by the Company, in each case, in accordance with the Company'spolicies as in effect from time-to-time.  

**5.        Expenses.  **TheCompany agrees to reimburse Employee for ordinary and necessary businessexpenses incurred by him in performing services for the Company in accordancewith established corporate policies as may be in effect from time to time.

**6.        Representation ofEmployee.  **Employee represents and warrants that he is not partyto or otherwise subject to or bound by the terms of any contract, agreement orunderstanding that in any manner will limit or otherwise affect his ability toperform his obligations under this Agreement.

**7.        Termination ofEmployment.  **This Agreement shall terminate on the first to occurof the following events (the "Events of Termination"):
|   | (a)        | The Agreement Termination Date                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
|--------|-----------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b)        | On the date of the Employee's  death                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|   | (c)        | On the date of Employee's total disability,  subject to Employee's right to Separation Pay Upon a Determination of Total  Disability as defined in paragraph 10 of this Agreement.  As used  herein, the term "total disability" shall mean any disability,  whether caused by illness, injury or other incapacity, which prevents  Employee from fulfilling his regular duties for a period of ninety days or  more, despite the availability of a reasonable accommodation |
|   | (d)        | Company may terminate Employee for Cause, as defined in  paragraph 8 of this Agreement; or                                                                                                                                                                                                                                                                                                                                                                                                  |
|   | (e)        | Company may terminate Employee without cause, subject to  Employee's right to Separation Pay or Change in Control Pay, as described in  paragraph 9 of this Agreement.                                                                                                                                                                                                                                                                                                                      |

Employee's employment under this Agreement (but not Employee's rights andobligations under Paragraph 11 of this Agreement), and all of Company's rightsand obligations under this Agreement (but not its rights and obligations underParagraph 11) shall terminate upon the termination of this Agreement.

**8.        Termination forCause.**  Company may discharge Employee and terminate hisemployment immediately, without any prior notice, at any time, for Cause. As used in this Agreement, the term "Cause" shall include:
|   | (a)        | any act of fraud or dishonesty by  Employee                                                                                                                                                                                                                            |
|--------|-----------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | (b)        | repeated violations by Employee  of his obligations under this Agreement that are demonstrably willful and deliberate  on Employee's part and that are not remedied within a reasonable period after  Employee's receipt of notice of such violations from the Company |
|   | (c)        | Employee's continued act of insubordination  or refusal to perform assigned duties after Employee has been provided at  least ten (10) days notice in writing of what performance is required; or                                                                      |
|   | (d)        | willfully engaging in illegal  conduct that is materially and demonstrably injurious to the Company.                                                                                                                                                                   |

For the purposes of this Paragraph 8, no act, or failure to act, onEmployee's part shall be considered "dishonest", "willful"or "deliberate" unless done, or omitted to be done, by Employee inbad faith, and without reasonable belief that Employee's action or omission wasin, or not opposed to, the best interest of the Company.  Any act, orfailure to act, based upon the advice of counsel for the Company shall beconclusively presumed to be done, or omitted to be done, by Employee in goodfaith and in the best interest of the Company. 

**9.       Separation Pay.  **IfEmployee is terminated for Cause or voluntarily resigns, he is not entitled toSeparation Pay.  If at any time during his employment by the Company,Employee's employment is terminated by Company *other than* (a) for Cause,(b) on account of Employee's death or total disability, or (c) for reasonswhich invoke section 2 of the Change in Control Agreement, then Company shallpay Employee Separation Pay in an amount equal to Employee's annual salaryunder this Agreement.  This Separation Pay shall be disbursed to Employeewithin thirty (30) days after Employee's termination date.  In addition,Employee will be entitled to the payment of MIP, if any, or any incentive planoffered in replacement of MIP, with respect to the fiscal year in which suchtermination occurs; provided, that, such payment shall be pro-rated to the dateof termination.  Such payment shall be paid as and when contemplated underMIP, or any replacement thereof, notwithstanding that the Termination Date mayhave previously occurred.  This paragraph 9 shall survive termination ofthis Agreement and be effective so long as Employee remains an employee of theCompany.  No Separation Pay shall be due to Employee or his estate in theevent of Employee's death.  Employee shall not be entitled to receive bothSeparation Pay and Change in Control Pay.

**10.       Separation Pay Upon aDetermination of Total Disability.  **If Company determines thatEmployee is totally disabled, as defined in Paragraph 7(c), Company mayterminate this Agreement.  As Separation Pay upon such a determination,Company shall pay Employee an amount equal to Employee's annual salary underthis Agreement.  This Separation Pay shall be disbursed to Employee withinthirty (30) days after Company's termination of this Agreement in accordancewith the terms of this Paragraph 10.

**11.        Confidentiality**. Employee recognizes and acknowledges that due to the nature of hisemployment and the position of trust that he will hold, he will have specialaccess to, learn, be provided with, and in some cases, will prepare and createfor the Company, trade secrets and other confidential and proprietaryinformation relating to the Company's business, including, but not limited tofinancial information, business plans, marketing information, businessstrategies, methods, operations and procedures, correspondence, customer lists,special customer requirements and methods of servicing the customers, and otherinformation concerning the Company's customers and customer contacts. Employee acknowledges and agrees that such information is the exclusiveproperty of the Company, that it has been and will continue to be of centralimportance to the business of the Company, and that the disclosure of it to, oruse by, others will cause the Company substantial and irreparable losses. Accordingly, Employee will not, either during his employment or at any timeafter the termination of his employment with the Company for any reason, use,reproduce or disclose any trade secrets or other confidential or proprietaryinformation relating to the business of the Company or its customers which isnot generally available to the public, except as may be necessary indischarging his assigned duties as an employee of the Company.  Employee'sconfidentiality obligations under this are in addition to, and not in lieu of,any confidentiality obligations that may apply to Employee under any rule orpolicy of the Company, and any other agreement, statute or common law.

**12.        Company Property.** All correspondence, records and other documents, including all copies,which come into Employee's possession by, through, or in the course of hisemployment with the Company, regardless of the source and whether or notcreated by Employee, are the sole and exclusive property of the Company, andimmediately upon the termination of Employee's employment for any reason,Employee shall return to the Company all such documents and other property ofthe Company.  Employee agrees that the Company may withhold any sumsotherwise due to Employee upon termination until Employee has satisfied allobligations under this Paragraph.

**13.       Reasonableness ofRestrictions.  **Employee has carefully read and considered theprovisions of Paragraph 11 of this Agreement and, having done so, agrees thatthe restrictions set forth in such paragraph are fair and reasonable and are reasonablyrequired for the protection of the interests of Company, its directors,officers, and other employees.

**14.       Right To InjunctiveRelief. **Employee agrees that in the event of any breach byEmployee of Paragraph 11 of this Agreement, the Company shall be entitled toimmediate and permanent injunctive relief restraining said breach, in additionto and not in lieu of any action for damages or any other legal, equitableremedies available to the Company for said breach.

**15.        Severability. **This Agreement is intended to limit disclosure and competition byEmployee to the maximum extent permitted by law.  If it shall be finallydetermined by any court of competent jurisdiction ruling on this Agreement thatthe scope or duration of any limitation contained in this Agreement is tooextensive to be legally enforceable, then the parties hereto agree that thescope or duration of such limitation shall be deemed to be the maximum scope orduration of such limitation shall be deemed to be the maximum scope or durationthat shall be determined by a court of competent jurisdiction to be legallyenforceable and Employee hereby consents to the enforcement of such limitationas so modified.

**16.        Applicable Law. **This Agreement shall be construed in accordance with and governed bythe substantive laws of the State of Minnesota (except with respect toconflicts of law).  The parties agree that all actions or proceedings inany way, manner or respect, arising out of or from or related to this Agreementshall be litigated in courts which have situs within the State ofMinnesota.  The parties further consent to and submit to the jurisdictionof any local, state or federal court located within Minnesota and each partyhereby waives any right it may have to transfer or change the venue of anylitigation brought against such party by the other in accordance with thisAgreement.

**17.        Binding Effect. **The Agreement is binding upon and shall inure to the benefit of theparties and their legal representatives, successors and assigns.

**18.        Complete Agreement. **This Agreement, together with the Non-Statutory Stock OptionAgreement dated December 3, 2001, supersedes that certain Agreement, datedAugust 8, 2001, between Vision-Ease Lens, Inc. and Employee, and reflects theentire understanding of the parties with respect to the subject matterhereof.  This Agreement may not be changed or altered except by writingsigned by the parties hereto.

**19.        Waiver.  **Thewaiver by either party of any breach of any provision of this Agreement shallnot be construed to be a waiver by such party of any succeeding breach of suchprovision or a waiver by such party of any breach of any other provision.

**20.        Counterparts. **This Agreement may be executed in counterparts, each of which shalltogether constitute one and the same instrument.

IN WITNESS WHEREOF, the parties have duly executed this Agreement as of thedate first above written.

 
| Dated:  February 13, 2002 | **BMC INDUSTRIES, INC.**                                                                                                      |
|-------------------------------------|-------------------------------------------------------------------------------------------------------------------------------|
|                                |                                                                                                                          |
|                                | By:  /s/Jon A. Dobson_______________                                                                                |
|                                |                                                                                                                          |
|                                | Its:  V.P., General Counsel and Secretary________                                                                   |
|                                |                                                                                                                          |
|                                |                                                                                                                          |
| Dated:  February 13, 2002 | **CURTIS E. PETERSEN**                                                                                                        |
|                                |                                                                                                                          |
|                                |                                                                                                                          |
|                                | _/s/Curtis E.  Petersen                  |