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                        EMPLOYMENT SEVERANCE AGREEMENT


This Employment Severance Agreement ("Agreement") is made and entered into as
of January 26, 1998 by and between BMC Industries, Inc., a Minnesota
corporation ("Corporation"), and Jeffrey J. Hattara ("Executive").

WHEREAS, the Executive desires to ensure a certain tenure of employment with
the Corporation; and

WHEREAS, the Corporation desires to employ the Executive as its Vice President
of Finance and Administration and Chief Financial Officer, and Executive is
willing to accept such employment by the Corporation, subject to the terms and
conditions set forth in this Agreement.

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

SECTION 1.     TERMS OF EMPLOYMENT.

1.1  DEFINITIONS.  For the purpose of this Agreement, the following terms
shall have the following meanings:

     1.1.1  "Termination For Cause" shall mean termination by the
            Corporation of the Executive's employment by the Corporation by
            reason of the Executive's willful dishonesty toward, fraud upon, or
            deliberate injury or attempted injury to the Corporation, or by
            reason of the Executive's willful material breach of duties which
            has resulted in material injury to the Corporation.

     1.1.2  "Termination Other Than For Cause" shall mean termination by the
            Corporation of the Executive's employment by the Corporation (other
            than in a Termination for Cause).

     1.1.3  "Voluntary Termination" shall mean termination by the Executive
            of the Executive's employment by the Corporation other than
            termination by reason of the Executive's death or disability.

1.2  TERM.  Except in the event of Termination for Cause, the Corporation
intends to employ Executive for a period of at least two years beginning on
January 26, 1998 (the "Term").

1.3  TERMINATION FOR CAUSE.  Termination for Cause may be effected by the
Corporation at any time during the Term of this Agreement and shall be effected
by written notification to the Executive.  Upon Termination of Cause, the
Executive shall promptly be paid all accrued salary, vested deferred
compensation (other than pension or profit sharing plan benefits which will be
paid in accordance with the applicable plan), any benefits under any plans of
the Corporation in which the Executive is a participant


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to the full extent of the Executive's rights under such plans, accrued
vacation pay and any appropriate business expenses incurred by the Executive
in connection with his duties hereunder, all to the date of termination, but
the Executive shall not be paid any other compensation or reimbursement of
any kind, including without limitation, Severance Compensation (as defined
herein).

1.4  TERMINATION OTHER THAN FOR CAUSE.  Notwithstanding anything else in
this Agreement, the Corporation may effect a Termination Other Than For Cause
at any time upon giving written notice to the Executive of such termination.
Upon any Termination Other Than For Cause, the Executive shall promptly be paid
all accrued salary, bonus compensation to the extent earned, if any, in
accordance with the Management Incentive Plan, vested deferred compensation
(other than pension or profit sharing plan benefits which will be paid in
accordance with the applicable plan), any benefits under any plans of the
Corporation in which the Executive is a participant to the full extent of the
Executive's rights under such plans, accrued vacation pay and any appropriate
business expenses incurred by the Executive in connection with his duties
hereunder, all to the date of termination, and Severance Compensation, but no
other compensation or reimbursement of any kind.

1.5  DEATH.  In the event of the Executive's death during the term of
this Agreement, the Executive's employment shall be deemed to have terminated
as of the last day of the month during which his death occurs and the
Corporation shall promptly pay to his estate or such beneficiaries as the
Executive may from time to time designate all accrued salary, bonus
compensation to the extent earned, vested deferred compensation (other than
pension or profit sharing benefits which will be paid in accordance with the
applicable plan), any benefits under any plans of the Corporation in which the
Executive is a participant to the full extent of the Executive's rights under
such plans, accrued vacation pay and any appropriate business expenses incurred
by the Executive in connection with his duties hereunder, all to the date of
termination, but the Executive's estate shall not be paid any other
compensation or reimbursement of any kind, including without limitation,
Severance Compensation.

1.6  VOLUNTARY TERMINATION.  In the event of a Voluntary Termination, the
Corporation shall promptly pay all accrued salary, bonus compensation to the
extent earned, vested deferred compensation (other than pension or profit
sharing plan benefits which will be paid in accordance with the applicable
plan), any benefits under any plans of the Corporation in which the Executive
is a participant to the full extent of the Executive's rights under such plans,
accrued vacation pay and any appropriate business expenses incurred by the
Executive in connection with his duties hereunder, all to the date of
termination, but no other compensation or reimbursement of any kind, including
without limitation, Severance Compensation.

1.7  TERMINATION UPON A CHANGE IN CONTROL.  Notwithstanding the terms of this
Agreement, this Agreement shall be null and void in the event of a Change in
Control, as defined in the Change in Control Agreement between the Executive
and the


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Corporation.  This Agreement shall terminate immediately in the event of a
Change in Control.

SECTION 2.  SEVERANCE COMPENSATION.

      2.1   SEVERANCE COMPENSATION IN THE EVENT OF A TERMINATION OTHER THAN
            FOR CAUSE.   In the event the Executive's employment is
            terminated in a Termination Other Than for Cause, the Executive
            shall be paid as Severance Compensation his base salary (at the
            rate payable at the time of such termination), for a period of
            twelve (12) months from the date of such termination, payable in
            twelve (12) equal monthly installments.  Executive also shall
            continue to receive medical and dental benefits at the
            Corporation's cost for such twelve (12) month period, provided,
            however, that such coverage will cease upon Executive's
            subsequent employment with a new employer.

      2.2   NO SEVERANCE COMPENSATION UPON OTHER TERMINATION.  In the event of a
            Voluntary Termination, Termination for Cause, termination by reason
            of the Executive's death or disability, the Executive or his estate
            shall not be paid any Severance Compensation.

SECTION 3.  WITHHOLDINGS.  All compensation and benefits to the Executive
hereunder shall be reduced by all federal, state, local and other withholding
and similar taxes and payments required by applicable law.

SECTION 4.  ASSIGNMENT.  Except as otherwise provided within this Agreement,
neither party hereto may transfer this Agreement without prior written consent
of the other party.

SECTION 5.  LAW GOVERNING.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Minnesota.  Any dispute
relating to this Agreement shall be settled in the courts of this State.

SECTION 6.  ENTIRE AGREEMENT.  This Agreement contains the entire
understanding between and among the parties and supersedes any prior
understandings and agreements among them respecting the subject matter of this
Agreement.

SECTION 7.  AGREEMENT BINDING.  This Agreement shall be binding upon the
heirs, executors, administrators, successors and assigns of the parties hereto.


     /s/ Jeffrey J. Hattara             BMC Industries, Inc.
     ----------------------
     Jeffrey J. Hattara
                                        By:  /s/Paul B. Burke
                                             -----------------------
                                        Its: Chief Executive Officer