BOLLE INC, 424B3, 1998-08-04

BOLLE INC
424B3, 1998-08-04
OPHTHALMIC GOODS

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Filed Pursuant to Rule 424(b)(3)
Registration File No.: 333-56687

PROSPECTUS

UP TO 1,850,000 SHARES OF COMMON STOCK
BOLLE INC.

This Prospectus relates to the proposed sale of up to 1,850,000 shares
(the "Shares") of Common Stock, par value $0.01 per share ("Common Stock") of
Bolle Inc., a Delaware corporation ("Bolle" or the "Company"), by certain
stockholders of the Company (the "Selling Stockholders"). The Shares may be
offered by the Selling Stockholders from time to time in transactions on the
Nasdaq Stock Market's National Market ("Nasdaq"), in negotiated transactions,
through the writing of options on the Shares or a combination of such methods
of sale, at fixed prices which may be changed, at market prices prevailing at
the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Selling Stockholders may effect such transactions by
selling the Shares in or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Stockholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions). See "SELLING STOCKHOLDERS" and "PLAN OF DISTRIBUTION."

None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company. The Company has agreed to bear
all expenses estimated at $200,000 in connection with the registration of the
Shares being offered by the Selling Stockholders. The Company has agreed to
indemnify certain Selling Stockholders, each underwriter, broker or dealer, if
any, and their respective directors, officers, employees or controlling persons
against certain liabilities, including liabilities under the Securities Act of
1933, as amended (the "Securities Act").

The shares of Common Stock are listed on Nasdaq under the symbol
"BEYE." On July 30, 1998, the closing price of the Common Stock, as reported by
Nasdaq, was $5.125 per share.

SEE "RISK FACTORS" BEGINNING ON PAGE 7 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO
THE CONTRARY
IS A CRIMINAL
OFFENSE.

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

The date of this Prospectus is July 31, 1998

<PAGE>

PROSPECTUS SUMMARY

The following is a summary of certain information contained elsewhere
in this Prospectus. Reference is made to, and this Prospectus Summary is
qualified in its entirety by, the more detailed information, including the
Consolidated Financial Statements and notes thereto, contained herein or
incorporated by reference in this Prospectus. Unless the context otherwise
requires, the term the "Company" or "Bolle" refers to Bolle Inc., a Delaware
corporation, and its consolidated subsidiaries; the term "Bolle America" refers
to Bolle America, Inc., a Delaware corporation and a wholly owned subsidiary of
the Company; the term "Bolle France" refers to Bolle International S.A., a
French corporation and a wholly owned subsidiary of the Company, and its
consolidated subsidiaries and the term "Bolle Australia" refers to Bill Bass
Optical Pty. Ltd and its affiliate Parkhurst Oaks Pty. Ltd. "Lumen" refers to
Lumen Technologies, Inc. and its predecessor, BEC Group, Inc., the former
parent company of Bolle Inc. The symbol "$" refers to U.S. dollars.

THE COMPANY

The Company designs, manufactures and markets premium sunglasses and
sport shields, goggles and safety and tactical eyewear under the Bolle(R)
brand. Bolle(R) products enjoy worldwide recognition and a high quality image
in the sport and active lifestyle markets, particularly skiing, golf and
cycling, as well as a growing reputation in the larger, fashion driven
recreational sunglass market. The Company's safety and tactical business, which
accounts for approximately half of the Company's aggregate unit sales, serves
the specialty segment of the safety eyewear market, including laser protection
products and military applications.

The recent creation of Bolle Inc. through the combination of Bolle
America and Bolle France consolidates the Company's ownership of the worldwide
rights to the Bolle(R) trademark for the Company's products with its
international manufacturing and distribution capabilities into one
organization. For the first time, the Company is positioned to develop and
execute a unified marketing strategy targeted at promoting the Company's
competitive advantages. The Company believes that these advantages include its
strong brand name, integrated design, production and marketing capabilities,
superior technology, specialized product offerings, established international
distributors in over 40 countries and a one hundred year-long heritage of
producing quality products. The Company intends to integrate its international
distributors into a cohesive worldwide network and add new distributors through
acquisitions or distributorship agreements. See "BUSINESS--Business Strategy."

In recent years, the retail sunglass market has experienced the
emergence of a specific premium market, reflected by increased sales of
higher-priced and quality-oriented products. The Company competes in this
premium sunglass market. Based on available industry data, the Company believes
that sales of premium sunglasses grew from $825 million in 1989 to $1.6 billion
in 1996. The factors which contribute to the growth of this market include
advancements in product technology, growing demand for specialized sunglasses,
increased health concerns and greater fashion and image consciousness, all of
which encourage multiple purchases. The Company also competes in the special
purpose safety and tactical eyewear market. The factors which may contribute to
the potential growth of this market include increasing regulation of safety
eyewear, new special purpose applications, advancements in product technology,
and growing demand for more style-oriented products. The Company believes that
both its sunglass and safety and tactical eyewear products, with their
increased user-specific characteristics and proven reputation for style and
high performance, reflect consumer preferences in their respective markets.

The Company has recently announced the following corporate
developments, which constitute a significant start to its growth strategy:

Worldwide Marketing Initiative. The Company has launched a worldwide marketing
initiative to promote a consistent brand image through (i) coordinated
advertising campaigns in major international and local media and at retail
locations; (ii) focused sponsorship of athletes attracting international
interest; and (iii) for the first time, a single marketing and product brochure
for distributors worldwide. Through a sport-specific marketing approach, the
Company plans to emphasize the technological, style and performance
characteristics of Bolle(R) products. In March, 1998, Sunglass Hut
International, Inc. ("Sunglass Hut") identified Bolle as one of a select number
of

2
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preferred vendors. The Company intends to grow its business with Sunglass Hut
through prime store locations, cooperative marketing and chain wide
distribution of products.

Significant Endorsement Advertising. As part of its strategy of
building a unified global marketing program, the Company has entered into
agreements with several world-famous athletes to endorse Bolle(R) products.
Such athletes include Martina Hingis, the youngest number one ranked player in
the history of women's tennis; Jacques Villeneuve, the current formula one
racing world champion; Picabo Street, 1998 Olympic Super G gold medalist;
Jean-Luc Cretier, 1998 Olympic downhill gold medalist; and Steve Jones, winner
of the 1996 U.S. Open golf championship. In addition, Bolle has sponsorship
programs with over a thousand athletes worldwide who wear Bolle(R) products in
competition.

Focused Product Offerings. The market for premium sunglasses has shown
a trend towards consumer preference for sport-specific eyewear. In 1992, the
Company was the first to introduce a line of sunglasses specifically designed
for golfers. The Company is in the process of focusing its sunglasses and sport
glasses based on their use rather than their design, style or other defining
criteria. For instance, the Company recently introduced its Competivision(TM)
sunglasses, a model of sunglasses specifically suited to the needs of tennis
players with a high performance selective light filtration system designed to
enhance the clarity of yellow tennis balls. The Company has a tradition of
designing and manufacturing eyewear for sporting activities in consultation
with its sponsored athletes.

Supply Agreement for Metal Eyewear. Consistent with its traditional
focus on technological innovation, in October 1997, the Company entered into a
three-year exclusive supply agreement (the "Alyn Supply Agreement") with Alyn
Corporation ("Alyn"), a manufacturer of specialized metal frames, to create
premium sunglass frames using Boralyn(R), a special patented metal matrix
providing greater strength and stiffness to weight ratios than titanium, which
is currently considered the leading metal for advanced metal eyewear.
Development work on the Boralyn(R) line is in progress, with a launch planned
for 1999.

Acquisition of Distributors. As part of its strategy of consolidating
its distributors, the Company acquired, in March 1998, Bolle (Canada) Inc.
("Bolle Canada"), the distributor of the Company's products in Canada.
Additionally, pursuant to a Share Sale Agreement, dated May 28, 1998 (the
"Share Sale Agreement") among the Company and each of Keith Archibald
Collicoat, Eric Henry Collicoat and Roger Howard Gibbons as trustees of the
Bill Bass Trust (the "Bill Bass Trust"), the Company acquired, in June 1998,
75% of Bolle Australia, which constitutes the largest independent distributor
of the Company's products and the sole distributor of the Company's products in
Australia, where the Company believes it commands a leading market share. The
Bolle Australia acquisition also gives the Company control over 100% of Bolle
Sunglasses Ltd. ("Bolle Sunglasses") and Bolle Asia Ltd. ("Bolle Asia"), the
distributors of the Company's sunglass products in the United Kingdom and
Southeast Asia, respectively. Bolle Australia sold over $10,000,000 of Bolle(R)
products in 1997.

Private Placement. The Company completed, on June 1, 1998, the sale of
$7,000,000 aggregate principal amount of its Zero Coupon Convertible
Subordinated Notes due 2002 (the "Convertible Notes") to OZ Master Fund, Ltd.
("Och Ziff Fund"), an affiliate of Och-Ziff Capital, pursuant to the terms of a
Convertible Note Purchase Agreement, dated May 29, 1998, between the Company
and Och-Ziff Fund (the "Convertible Note Purchase Agreement") and an exemption
from registration under the Securities Act. See "RECENT DEVELOPMENTS" and
"DESCRIPTION OF CAPITAL STOCK--Convertible Notes." The Convertible Notes are
convertible at any time at the option of the holder(s) thereof and, under
certain circumstances, of the Company into a maximum of 1,333,333 Shares of
Common Stock. Under certain circumstances, including if the Company fails to
convert or redeem any Convertible Notes when due, the Company becomes obligated
to repay the principal amount of such Convertible Notes (up to a maximum of
$7,000,000) in cash and to issue up to a maximum of 360,000 Shares to the
holder(s) of such Convertible Notes. All the Shares issuable pursuant to the
terms of the Convertible Note Purchase Agreement will, if issued, be eligible
for resale pursuant to this Prospectus. See "SELLING STOCKHOLDERS" and "PLAN OF
DISTRIBUTION."

3
<PAGE>

The Company became a publicly-held company on March 11, 1998,
following the spinoff by Lumen to its stockholders of all of its equity
interest in the Company (the "Spinoff"). In connection with the Spinoff,
pursuant to a Bill of Sale and Assignment Agreement (the "Contribution
Agreement") and an Indemnification Agreement (the "Indemnification Agreement")
entered into between the Company and Lumen on March 11, 1998, Lumen assigned to
the Company, and the Company assumed, all of Lumen's assets and liabilities
prior to the Spinoff other than those related to Lumen's ORC Business (as
defined in the Contribution Agreement). See "RECENT DEVELOPMENTS--Spinoff."

The Company is incorporated in Delaware. Its principal executive
offices are located at 555 Theodore Fremd Avenue, Suite B-302, Rye, New York
10580, and its telephone number is (914) 967-9475.

<TABLE>
<CAPTION>
THE OFFERING
<S> <C>
COMMON STOCK OFFERED HEREBY............... Up to 1,850,000 Shares(1)
COMMON STOCK OUTSTANDING.................. 6,892,826 shares(2)
NASDAQ NATIONAL MARKET SYMBOL............. BEYE
</TABLE>

(1) Includes 248,388 Shares issued in connection with the closing of the Bolle
Australia acquisition. The remainder of such Shares is issuable by the
Company pursuant to the Convertible Note Purchase Agreement and in
connection with the Bolle Australia acquisition. This number includes up
to a maximum of 360,000 Shares issuable by the Company under certain
circumstances, including if the Company fails to convert or redeem any
Convertible Notes when due. The aggregate number of shares offered
hereunder may be increased if, as contemplated under the terms of its
arrangement with each Selling Stockholder, the Company issues additional
Shares to such Selling Stockholder to prevent dilution resulting from
stock splits, stock dividends or similar transactions. Any additional
Shares which may thus be issued by the Company shall be eligible for
resale pursuant to this Prospectus, as permitted by Rule 416 under the
Securities Act.

(2) Based on the number of shares of Common Stock outstanding as of July 30,
1998. Excludes (i) an aggregate of 2,500,000 shares of Common Stock
reserved for issuance under the Bolle 1998 Stock Incentive Plan (the
"Plan"), of which options ("Bolle Options") for approximately 869,450
shares have been granted, and (ii) an aggregate of 663,618 shares of
Common Stock reserved for issuance upon exercise of outstanding warrants
to purchase Common Stock at $9.95 per share ("Bolle Warrants"). See
"EXECUTIVE COMPENSATION--Bolle 1998 Stock Incentive Plan" and "DESCRIPTION
OF CAPITAL STOCK--Warrants."

RISK FACTORS

Investors should consider the material risk factors involved in connection
with an investment in the Common Stock and the impact of various events which
could adversely affect the Company's business. See "RISK FACTORS."

4
<PAGE>

SUMMARY HISTORICAL AND PRO FORMA FINANCIAL DATA

(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

The following selected historical and pro forma financial data have
been derived from audited historical financial statements and should be read in
conjunction with the consolidated financial statements of the Company and its
significant subsidiaries included herein.

The Company was formed in 1997 to complete Lumen's acquisition of
Bolle France and therefore has only one year of historical activity or
financial statements. Bolle America was purchased by Lumen in November 1995 in
a pooling of interests transaction. In conjunction with the purchase of Bolle
France, Bolle America became a subsidiary of the Company. Accordingly, for
accounting purposes only, Bolle America is treated as the acquirer of Bolle
France and therefore the predecessor business for historical financial
statement purposes.

The following unaudited Bolle Inc. pro forma combined statement of
operations data give effect to the acquisitions of Bolle France and Bolle
Australia under the purchase method of accounting and reflect the Contribution
Agreement and the issuance of the Convertible Notes as of it had occurred at
the beginning of the period. The following pro forma combined balance sheet
data only give effect to the acquisition of Bolle Australia and the issuance of
the convertible debt, as the effect of the acquisition of Bolle France and the
Contribution Agreement are already included in the Company's actual balance
sheet as of March 31, 1998. The actual statement of operations data presented
include the results of Bolle France for the six months ended December 31, 1997
(post-acquisition period) and the quarter ended March 31, 1998.
<TABLE>
<CAPTION>
PRO PRO
FORMA FORMA
COMBINED HISTORICAL COMBINED HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL
-------- ---------- -------- ---------- ---------- ---------- ---------- ----------
QUARTER ENDED MARCH 31, YEAR ENDED DECEMBER 31,
- --------------------------------------------------------- ---------------------------------------------------------------------
1998 1998 1997 1997(1) 1996(2) 1995(3) 1994(4) 1993
----------- ------------ ----------- ---------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:

Net sales....................... $14,256 $10,728 $56,080 $32,160 $24,425 $24,829 $23,094 $18,377
Cost of sales................... 6,835 5,288 26,436 15,354 12,130 12,181 10,814 9,126
----------- ------------ ----------- ----------- ---------- ---------- ----------- ----------
Gross profit................... 7,421 5,440 29,644 16,806 12,295 12,648 12,280 9,251
Selling, general and
administrative expenses
(including advertising and 6,825 5,430 26,378 16,342 11,374 10,275 8,871 7,384
sponsoring expenses).........
Merger and acquisition
integration related expenses. 3,750 3,050
Interest expense (income).... 371 484 1,498 963 (256) (302) 316 336
Other expense (income).......... (562) (515) (1,644) (693) (450) 48 (104) (295)
----------- ------------ ----------- ----------- ---------- ---------- ----------- ----------
Income (loss) before income
taxes and minority interests.... 787 41 3,412 (3,556) 1,627 (423) 3,197 1,826
Provision for income taxes...... 286 16 4,147 1,099 635 364 1,260 700
----------- ------------ ----------- ----------- ---------- ---------- ----------- ----------
Net income (loss) before

minority interests........... 501 25 (735) (4,655) 992 (787) 1,937 1,126
----------- ------------ ----------- ----------- ---------- ---------- ----------- ----------
Minority interests.............. 96 319
Preferred dividends............. 139 29 511
----------- ------------ ----------- -------- ---------- ---------- ---------- ----------
Net income (loss) attributable
to common stock.............. $266 $ (4) $(1,565) $(4,655) $992 $(787) $1,937 $1,126
=========== ============ =========== =========== ========== ========== =========== ==========
Basic and diluted EPS (5)....... $0.04 $(0.00) $(0.23) $(2,586.11) $9,920 $(0.22) $0.65 $0.38
Weighted average basic and
diluted shares outstanding... 6,884 1,476 6,884 1.8 0.1 3,510.6 2,997.0 2,963.0
French Franc per US Dollar
exchange rate (6)............ 6.0951 6.0951 5.6835 5.9843

Australian Dollar per U.S.
Dollar exchange rate (7)..... 0.6918 0.7673

</TABLE>

5
<PAGE>

<TABLE>
<CAPTION>
PRO
FORMA
COMBINED HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL
-------- ---------- ---------- ---------- ---------- ---------- ----------
QUARTER ENDED MARCH 31, YEAR ENDED DECEMBER 31,
------------------------ ---------------------------------------------------------
1998 1998 1997(1) 1996(2) 1995(3) 1994(4) 1993
----------- ------------ ---------- ---------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:

Working capital (deficiency).... $ 11,856 $ 9,137 $(20,936) $8,535 $11,395 $12,781 $1,060
Total assets.................... 116,880 106,829 94,697 15,624 16,309 17,549 9,629
Long term debt.................. 10,542 12,042 57 49
Convertible debt................ 7,000
Mandatorily redeemable
preferred stock.............. 20,709 20,709 11,055
Stockholders' equity............ 38,548 36,348 18,843 9,743 12,770 13,433 1,584
French Franc per US Dollar
exchange rate (6)............ 6.1890 6.1890 5.9912
US Dollar per Australian Dollar
exchange rate (7)............ 0.6503
</TABLE>

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

(1) On July 10, 1997, the Company acquired Bolle France and related assets in
a transaction accounted for as a purchase. Accordingly, the results of
operations for Bolle France are included in historical results of
operations from that date.

(2) In 1996, the Company paid a dividend to Lumen (its then current
stockholder) of $4,019.

(3) In November 1995, Lumen acquired Bolle America in a transaction accounted
for as a pooling of interests. Accordingly, Bolle America is included in
all periods presented.

(4) In 1994, Bolle America paid a $50 dividend to its then current
shareholders.

(5) Despite the loss before tax of $3,556 the Company recorded a tax charge of
$1,099 primarily due to the creation of a valuation allowance against the
entire net tax benefit arising from domestic operations, resulting in a
net loss of $4,655. If the 1997 statutory tax rate of 37% had been applied
to pro forma combined income before income taxes, pro forma EPS would have
been $0.19.

(6) Represents the exchange rates used to translate the results of operations
and balance sheet amounts of Bolle France. The exchange rate shown for the
actual results of operations for the year ended December 31, 1997
represents the average exchange rate for the six months ended December 31,
1997 used to translate the results of operations of Bolle France included
in the Company's actual result.

(7) Represents the exchange rates used to translate the results of operations
and balance sheet amounts of Bolle Australia.

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<PAGE>

RISK FACTORS

An investment in the Common Stock offered hereby involves a high
degree of risk. Prospective investors should carefully consider the following
risk factors in addition to the other information set forth in this Prospectus
in connection with an investment in the Common Stock offered hereby.

This Prospectus contains statements which constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act and Section
21E of the Exchange Act which can be identified by the use of forward-looking
terminology such as "believes," "expects," "may," "will," "should," "could" or
"anticipates" or the negative thereof or other variations thereon or comparable
terminology, or by discussions of strategy that involve risks and
uncertainties. Forward-looking statements, such as the Company's plans to
expand its product line, brands and marketing activities and other statements
contained herein regarding matters that are not historical facts, are only
predictions. No assurance can be given that the future results will be
achieved; actual events or results may differ materially as a result of risks
facing the Company. Such risks include, but are not limited to, the Company's
ability to successfully market its products to current and new customers,
identify, finance and complete suitable acquisitions and design and manufacture
new products, all in a timely manner, at reasonable costs and on satisfactory
terms and conditions that could cause actual results to differ materially from
the future results indicated, expressed or implied, in such forward-looking
statements.

POSSIBLE INABILITY TO SUSTAIN AND MANAGE GROWTH. There are significant
risks associated with the Company's growth. The Company expanded its operations
significantly with the acquisition of Bolle France in July 1997. The Company
intends to grow through brand extension and possible strategic acquisitions,
including acquisitions of distributors of its products around the world. There
can be no assurance that the Company's efforts in managing its internal growth
or pursuing those acquisitions will be successful.

To manage growth effectively, the Company will be required to continue
to implement changes in various aspects of its business at a rapid pace,
continuously develop new designs and features, expand its information systems
and operations, and train and manage an increasing number of management-level
and other employees. If management is unable to anticipate or manage these
changes effectively, the Company's operating results could be materially
adversely affected.

To pursue external growth, the Company will need to identify
acquisition candidates the operations of which can be integrated effectively
and profitably into the Company on acceptable terms. There can be no assurance
that the Company will succeed in finding such candidates or obtaining such
terms or, where required, receive consent from its lenders. Future acquisitions
by the Company could result in the incurrence of debt, the potentially dilutive
issuance of equity securities and the incurrence of contingent liabilities and
amortization expenses related to goodwill and other intangible assets, which
could materially adversely affect the Company's business, operating results and
financial condition.

The success of the Bolle France, Bolle Canada and Bolle Australia
acquisitions or any other future acquisition by the Company depends on its
ability to integrate effectively the acquired businesses. The process of
integrating acquired businesses may involve numerous risks, including
difficulties in the assimilation of operations and products, the diversion of
management's attention from other business concerns, risks of entering markets
in which the Company has limited or no direct prior experience and the
potential loss of key employees of the acquired businesses. Additionally, there
can be no assurance that any future acquisitions will not have a material
adverse effect on the Company's operating results particularly during the
period immediately following such acquisitions. Prior to the acquisition by
Lumen, Bolle France has not been in compliance with certain government-related
requirements. The Company is currently in the process of reorganizing Bolle
France to improve administration and compliance. Approximately $1,000,000 has
been accrued on Bolle France's Financial Statements to cover costs and expenses
which the Company expects to incur in connection with this reorganization. This
financial exposure arises in connection with the Company's transition from a
private company to a publicly-held company. The costs and expenses incurred in
bringing Bolle France or other future acquisitions into compliance with
applicable regulatory requirements may have a material adverse effect on the
Company's

7
<PAGE>

business, financial condition and results of operations. Except as disclosed
herein, the Company has no present understandings, commitments or agreements
with respect to any material acquisition.

DEPENDENCE UPON NEW PRODUCT INTRODUCTIONS. The Company's historical
success, including that of Bolle France, is attributable, in substantial part,
to its timely introduction of products which are perceived to be an improvement
in performance or fashion over products available in the market. The Company's
future success will depend, in substantial part, upon its continued ability to
develop and introduce such innovative products, and there can be no assurance
as to the Company's ability to do so. In recent years the Company has
introduced a number of new product offerings within existing product
collections and a number of new collections. The success of any product line is
dependent upon various factors, including product demand, production capacity
and the availability of raw materials and critical manufacturing equipment. In
addition, competitors may follow the Company's introduction of successful
products with similar product offerings. The uncertainty associated with all
the above factors, and any change in such factors from the Company's
expectations, could result in cost increases and/or delays or cancellation of
such new products or product lines and may also cause actual results to differ
materially from those projected.

Innovative designs are often not successful, and successful product
designs can be displaced by other product designs introduced by competitors
which shift market preferences in their favor. There is no assurance that the
Company will be able to create innovative products and designs which are also
popular with customers. In addition, although the Company seeks to protect its
products through patents and other proprietary rights, there can be no
assurance that such protection will prevent competitors from offering similar
products. As a result of these and other factors, there can be no assurance
that the Company will successfully maintain or increase its market share.

ASSUMPTION OF LIABILITIES AND INDEMNIFICATION OF LUMEN BY THE COMPANY.
Under the terms of the Contribution Agreement and the Indemnification Agreement
entered into between Lumen and the Company in connection with the Spinoff, the
Company assumed all of Lumen's liabilities prior to the Spinoff other than
those related to Lumen's ORC Business (as defined in the Contribution
Agreement) and has agreed to indemnify Lumen against all of Lumen's liabilities
prior to the Spinoff other than substantially all liabilities related to the
ORC Business. Potential liabilities which the Company has assumed and/or
against which the Company will indemnify Lumen pursuant to the Contribution
Agreement include, without limitation, (a) potential liabilities arising in
connection with the sale of businesses previously owned by Lumen or its
predecessor, Benson Eyecare Corporation ("Benson"), including: the merger of
Essilor Acquisition Corporation ("Essilor") with and into Benson; the sale of
the Foster Grant Group, L.P. ("Foster Grant") by Lumen; the sale of the Orolite
division to Monsanto Company ("Monsanto Company"), and (b) potential
liabilities of Lumen under applicable environmental laws, including any such
liabilities related to the ORC Business to the extent such liabilities arose
before the Spinoff. For a detailed description of the potential liabilities of
Lumen assumed by the Company and the Company's indemnification obligations to
Lumen under the Contribution Agreement and the Indemnification Agreement, see
"RECENT DEVELOPMENTS--Spinoff." Pursuant to the Contribution Agreement and the
Indemnification Agreement, the Company may bear the burden of obligations and
losses not directly related to the business of the Company if the Company is
called upon to discharge and pay these obligations and liabilities.

In connection with the Spinoff, the Company also agreed to assume all
obligations and liabilities of Lumen incurred by Lumen in connection with the
purchase of Bolle France. In addition to Lumen's indemnification obligations to
the sellers of Bolle France under the Amended and Restated Share Purchase
Agreement (the "Share Purchase Agreement") dated July 9, 1997 among Lumen, the
Company and each of Maurice Bolle, Robert Bolle, Franck Bolle, Patricia Bolle
Passaquay, Brigitte Bolle and Christelle Roche (collectively, the "Sellers,"
and each, a "Seller") which became the sole responsibility of the Company, the
remainder of Lumen's liabilities and obligations to the Sellers were assumed by
the Company through the issuance of shares of its Series B Preferred Stock (the
"Series B Preferred Stock"), Bolle Options and the exchange of outstanding
warrants to purchase common stock of Lumen for Bolle Warrants. See "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS--Certain Transactions." Should the
Company be required to discharge its liabilities pursuant to the foregoing
arrangements, including the Contribution Agreement and the Indemnification

8
<PAGE>

Agreement, or to redeem under certain circumstances the shares of its Series A
Preferred Stock (the "Series A Preferred Stock") or Series B Preferred Stock
prior to maturity, such payments could have a material adverse effect upon the
Company.

INVESTMENTS IN AFFILIATES AND OTHER ASSETS. The Company holds,
directly or indirectly, investments aggregating approximately $5,500,000 in
debt and equity securities of various unconsolidated entities which are not
controlled by the Company, including investments in Eyecare Products, plc
("Eyecare Products") and Accessories Associates International, Inc. ("AAi").
The Company received these assets from Lumen as part of the Spinoff. The
Company's management is not involved in the day-to-day operations of these
entities. There can be no assurance that fluctuations in the value of these
assets will not have a material adverse impact on the Company.
See "RECENT DEVELOPMENTS--Spinoff."

LIMITED OPERATING HISTORY. The Company was formed on February 3, 1997.
Although the financial statements and pro forma financial statements of the
Company include the results of its subsidiaries Bolle America, Bolle France and
Bolle Australia, which were operated as separate companies for many years, the
Company itself, as a consolidated entity, has a limited operating history upon
which potential investors may base an evaluation of its performance. Limited
actual historical financial information upon which to base an evaluation of the
Company's performance and an investment in the Common Stock is available.

MARKET CYCLES AND RECENT DECLINES IN SALES GROWTH IN THE SUNGLASS
MARKET. Suppliers of premium sunglasses have experienced declining sales and
excess inventory since the last quarter of 1996. The results of the Company and
its competitors were affected by this market trend and the operating
difficulties (including excess inventory) experienced throughout the year 1997
by the largest sunglass specialty retail chain. There can be no assurance that
the Company will be able to maintain or increase its sales, and should it fail
to do so, the Company's financial condition and results of operations could be
adversely affected.

SUSCEPTIBILITY TO CHANGING CONSUMER PREFERENCES. The eyewear industry
is subject to rapidly changing consumer preferences. The Company's sunglasses,
particularly its recreational sunglasses, are susceptible to fashion trends.
Unanticipated shifts in consumer preferences may adversely affect the Company's
sales, resulting in excess inventory and underutilized manufacturing capacity.
While the Company has a limited ability to modify slow-moving models to better
satisfy consumer preferences and otherwise utilize excess inventory and
manufacturing capacity, the Company cannot ensure that any such actions will be
sufficient to redress a market misjudgment. Accordingly, an unanticipated
change in consumer preferences could adversely affect the Company's results of
operations and financial condition.

HIGHLY COMPETITIVE MARKETS. Both the sunglass and personal safety
eyewear markets are highly competitive. Certain companies that engage in these
markets have significantly greater financial, distribution and marketing
resources than the Company, and certain of the Company's competitors have
significantly greater brand awareness than the Company in certain important
markets. See "BUSINESS--Competition."

Within various niches of the sports segment of the premium eyewear
market, the Company competes with mostly smaller sunglass and goggle companies
and a limited number of larger competitors. In order to retain its market
share, the Company must continue to be competitive in the areas of quality,
technology, method of distribution, style, brand image, intellectual property
protection and customer service. The purchasing decisions of athletes, sports
enthusiasts and recreational wearers with respect to high performance eyewear
often reflect highly subjective preferences which can be influenced by many
factors, including advertising, media, product endorsements, product
improvements and changing styles. The Company could therefore face competition
from existing or new competitors that introduce and promote eyewear which is
perceived by consumers to offer performance advantages over, or greater
aesthetic appeal than, the Company's products. These competitors include
established branded consumer products companies that have greater financial and
other resources than the Company. No assurance exists that new developments by
the Company's competitors will not render some or all of the Company's
potential products obsolete or non-competitive, which would have a material
adverse effect on the Company's business, financial condition and results of
operations.

9
<PAGE>

The Company also competes in the broader, recreational segment of the
premium sunglass market. This segment is fragmented and highly competitive and
is generally more fashion-oriented. A number of established companies compete
in this wider market, several of which have greater financial and other
resources than the Company. This size advantage may enable these competitors to
negotiate exclusive supply contracts with certain retailers. In certain
geographic markets, such as the U.S., certain of the Company's competitors have
achieved greater brand awareness among consumers than has the Company.

The personal safety eyewear market is also highly fragmented.
Competitors range from small manufacturers offering single product lines to a
limited number of large competitors offering multiple product lines, some of
which have greater financial or other resources than the Company. There can be
no assurance that the Company will be able to compete successfully against
current and future competitors or that the competitive pressures faced by the
Company will not adversely affect its financial performance. See
"BUSINESS--Competition." The Company has recently entered the safety eyewear
business in the U.S. There can be no assurance that this endeavor will be
successful.

RISKS ASSOCIATED WITH ADVERTISING STRATEGY. Although the Company will
seek to increase its visibility in the premium sunglass and sport eyewear world
markets through significantly increased and focused advertising campaigns, the
Company's advertising strategy may be unsuccessful at channeling consumer
preferences toward the Company's products, and the Company could be adversely
affected by such a failure while having incurred substantially increased
advertising and marketing costs.

DEPENDENCE UPON ENDORSEMENT CONTRACTS. As part of its marketing
strategy, the Company has retained a number of world-class athletes, including
tennis champion Martina Hingis, formula one champion Jacques Villeneuve, 1998
Olympic skiing gold medalists Picabo Street and Jean-Luc Cretier and U.S. Open
golf champion Steve Jones for the purpose of promoting the Company's products.
The Company intends to establish additional contacts with, and obtain
endorsements from, prominent athletes and public personalities. These
endorsement contracts generally have two-to three-year terms and include terms
and conditions specifically negotiated with each athlete. There can be no
assurance that the Company will be able to attract and retain athletes or
personalities to wear or endorse its products. If the Company were to lose the
benefit of its existing endorsements arrangements or were unable to arrange
additional endorsements of its products by athletes and/or public personalities
on terms it deems reasonable, it could be required to modify its marketing
plans and could be forced to rely more heavily on other forms of advertising
and promotion, which might not prove to be as effective as endorsements.

FOREIGN CURRENCY EXPOSURE; RISKS RELATING TO INTERNATIONAL SALES. As a
substantial amount of the Company's sales are currently invoiced in French
Francs and operating expenses are incurred in France, the Company's operating
results are affected by currency fluctuation, particularly between the U.S.
dollar and the French Franc. Since 1996, the French Franc has depreciated by
over 20% against the U.S. dollar which has had a material adverse impact on the
translation of Bolle France's operating results. As the Company's international
operations grow, future movements of the exchange rate of the U.S. Dollar
against the French Franc and other currencies may have an adverse impact on the
reported results of the Company.

Sales outside the United States accounted for approximately 40% of the
Company's net sales for the years ended December 31, 1997. While the Company
expects international sales to continue to account for a significant portion of
its sales, there can be no assurance that the Company will be able to maintain
or increase its international sales. The Company's international business may
be adversely affected by changing economic conditions in foreign countries and
fluctuations in currency exchange rates. The Company's international sales are
also subject to risks associated with tariff regulations, "local content" laws
requiring that certain products contain a specified minimum percentage of
domestically-produced components, political and social instability, labor
stoppages and trade restrictions. In addition, there can be no assurance that
the Company's brands and products will be popular in the various countries in
which the Company's products are or will be offered, or that the Company will
be successful in preventing competitors from producing and selling eyewear
products using the same or substantially similar design and manufacturing
process as the Company.

10
<PAGE>

VARIABLE INTEREST RATE EXPOSURE. As a substantial amount of the
Company's indebtedness denominated in Dollars is currently incurred at a
variable interest rate under the Credit Agreement, the Company's operating
results could be adversely affected if interest rates were to rise
significantly above current levels. See "RECENT DEVELOPMENTS--Credit
Agreement." Interest expense on the Convertible Notes recognized in the
Company's statement of operations will fluctuate with the market value of the
Common Stock.

RELIANCE ON SUPPLIERS, SUBCONTRACTORS AND DISTRIBUTORS. The Company
relies on a variety of subcontractors in France for the supply of several
components of its products and part of its manufacturing process. Although to
date the Company has not experienced any significant difficulty in obtaining
these components, there can be no assurance that shortages will not arise in
the future. The effect of the loss of any such sources or a disruption in their
business will depend primarily upon the availability of, and access to,
suitable alternative sources. The failure by the Company to meet the minimum
purchase requirements set forth in the Alyn Supply Agreement would result in
the loss of the Company's exclusive supply of Boralyn(R) metal frames. The loss
of the Company's sources for lens blanks or metal frames (for instance, as a
result of the termination of the Alyn Supply Agreement), or any disruption in
such sources' business or failure by them to meet the Company's product needs
on a timely basis could cause, at a minimum, temporary shortages in needed
materials and could have a material adverse effect on the Company's results of
operations. There can be no assurance that precautions taken by the Company
will be adequate or that, if it should become necessary, an alternative source
of supply could be identified in a timely manner. See "BUSINESS--Design and
Production" and "--Suppliers."

The Company relies for a significant part of its business on third
parties to ensure the worldwide marketing and distribution of its products.
Although to date the Company has not experienced any significant difficulty in
the distribution of its products, there can be no assurance that such
independent distributors will meet the Company's sales expectations or that the
Company will be able to continue to maintain or expand its existing
distribution network. See "BUSINESS--Sales and Distribution."

RELIANCE ON MANAGEMENT SERVICES AGREEMENT. In connection with the
Spinoff, the Company entered into a Management Services Agreement with Lumen
(the "Management Services Agreement"), pursuant to which certain executives of
Lumen provide key management services to the Company in return for the payment
by the Company of a $60,000 monthly fee. The Management Services Agreement has
an initial term of three years, and will thereafter be automatically renewed
for successive one-year periods until terminated by either party upon ninety
days' written notice. There is no assurance that Lumen will not terminate the
Management Services Agreement before or after its initial term. The loss of the
services provided under the Management Services Agreement by certain executives
of Lumen to the Company could have a material adverse effect on the Company's
operations. The Company plans to renegotiate the Management Services Agreement
to reduce its reliance on Lumen and to reduce its monthly fee paid for Lumen's
services to $50,000. The Company plans to use the savings generated by such
renegotiation to retain an executive who shall act as the Company's own
full-time Chief Financial Officer. There can be no assurance that the Company
will be able to renegotiate the Management Services Agreement or to identify
and hire a new Chief Financial Officer.

Pursuant to the Management Services Agreement, Lumen also makes
available to the Company the services of Martin E. Franklin, as Chairman of the
Board of Directors of the Company, and Mr. Ian G. H. Ashken, as Executive Vice
President of Finance and Administration, Chief Financial Officer and Assistant
Secretary. The loss of the services that are provided by Mr. Franklin or Mr.
Ashken to the Company could have a material adverse effect on the Company.
There is no assurance that Lumen or the Company will be able to retain the
services of Mr. Franklin or Mr. Ashken in the future.

DEPENDENCE ON KEY PERSONNEL. The Company's success depends, in
substantial part, on the efforts and abilities of Martin E. Franklin, the
Company's Chairman of the Board, Gary Kiedaisch, the Company's Chief Executive
Officer, and Ian G. H. Ashken, the Company's Executive Vice President of
Finance and Administration, Chief Financial Officer and Assistant Secretary.
The Company does not maintain key management life insurance policies on its key
personnel. The loss of the service of any of the foregoing key personnel could
have a material adverse effect on the Company's business, financial condition
and results of operations. Mr. Kiedaisch has entered

11
<PAGE>

into an employment agreement with the Company which continues until August 2000
unless earlier terminated by either party with or without cause. There is no
assurance that, if Mr. Kiedaisch's employment with the Company were terminated,
the Company would be able to retain the services of a person qualified to fill
his position. Messrs. Franklin and Ashken also hold senior executive positions
at Lumen and will therefore devote such time and efforts to the business of the
Company as may be reasonably requested by the Company under the Management
Services Agreement. However, a substantial portion of their time will be spent
in connection with their positions at Lumen and other entities at which they
are employees or directors. The Company believes that its future success will
depend in large part on its ability to attract and retain directly or through
the Management Services Agreement the services of highly skilled and qualified
personnel. Although the Company to date has been successful in attracting and
retaining qualified personnel, there can be no assurance that the Company will
not experience a shortage of qualified personnel in the future. See
"MANAGEMENT."

CONFLICTS OF INTEREST; BENEFITS TO CERTAIN INSIDERS. The executive
officers of Bolle, who (except Mr. Kiedaisch) are also executive officers of
Lumen, and Messrs. Franklin, Ashken and Moore and Ms. Bailey, who are members
of the Board of Directors of Bolle and are also directors of Lumen, may have
potential conflicts of interest with respect to material transactions involving
Lumen and the Company. These potential conflicts of interest may adversely
affect the future value of the Company's shares. See "MANAGEMENT" and "CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS--Management Services Agreement" and
"--Relationships with Directors."

INFORMATION SYSTEMS; YEAR 2000 COMPLIANCE. The Company is in the
process of upgrading its information systems to adequately support the
implementation of its worldwide marketing strategy. The upgraded systems are
expected to include a number of integrated applications, including order entry,
billing and labeling which function properly with respect to dates in the year
2000 and thereafter and the single currency which is scheduled to be introduced
in the European Union beginning in 1999. This upgrading process will
significantly affect many aspects of the Company's business, including its
manufacturing, sales and marketing functions. The successful implementation and
integration of the new applications will be important to facilitate future
growth. The Company could experience unanticipated delays in the upgrading of
its information systems and such upgrading could cause significant disruption
in operations. If the Company is not successful in upgrading its information
systems, fails to train its personnel in their use in a timely manner or if the
Company experiences difficulties in the upgrading process, the Company could
experience problems with the delivery of its products or its ability to access
timely and accurate financial and operating information could be adversely
affected. In addition, delays in implementing the new systems could require
additional expenditures by the Company to modify or replace portions of its
existing information systems so that they will function properly with respect
to dates in the year 2000 and thereafter and the new European currency. There
can be no assurance that the Company will be able to correct any problems with
respect to such dates or the new currency in a timely manner. The Company could
also be adversely affected by year 2000 non-compliance of the computer systems
of the entities with which the Company interacts, including suppliers,
customers and financial service organizations. Any failure by the Company to
respond properly to these problems or any other difficulties which the Company
may face with its information systems could have a material adverse effect on
the Company's business and financial results.

ACCOUNTING TREATMENT OF INTANGIBLE ASSETS. The Company's total
goodwill and intangible assets as of December 31, 1997 was approximately
$64,000,000. These assets are currently being amortized at a rate of
approximately $1,600,000 a year. This amortization expense will decrease the
Company's income over the life of the assets being amortized. The carrying
value of long lived assets will be reviewed regularly and there is no guarantee
that the Company will not suffer a significant charge in the future from the
impairment of long lived assets. The Company may acquire businesses using
purchase accounting which may create more intangible assets and goodwill
amortization. While the Company believes its accounting treatment for goodwill
and intangible assets has been and will continue to be appropriate, there can
be no assurance that additional goodwill and intangible amortization or
write-offs will not have a material adverse effect on the Company's financial
position or results of operations.

UNCERTAIN PROTECTION OF PROPRIETARY RIGHTS. The Company relies in part
on patent, trade secret, unfair competition, trade dress, trademark and
copyright law to protect its rights to certain aspects of its products,

12
<PAGE>

including product designs, proprietary manufacturing processes and
technologies, product research and concepts and recognized trademarks, all of
which the Company believes are important to the success of its products and its
competitive position. There can be no assurance that any pending trademark or
patent application will result in the issuance of a registered trademark or
patent, or that any trademark or patent granted will be effective in thwarting
competition or be held valid if subsequently challenged. In addition, there can
be no assurance that the actions taken by the Company to protect its
proprietary rights will be adequate to prevent imitation of its products, that
the Company's proprietary information will not become known to competitors,
that the Company can meaningfully protect its rights to unpatented proprietary
information or that others will not independently develop substantially
equivalent or better products that do not infringe on the Company's
intellectual property rights. No assurance can be given that others will not
assert rights in, and ownership of, the patents and other proprietary rights of
the Company. In addition, the laws of certain foreign countries do not protect
proprietary rights to the same extent as the laws of the United States. See
"BUSINESS--Intellectual Property."

The Company's strategy is to assert vigorously its intellectual
property rights, and, if required, to devote reasonable efforts and resources
to the processing of trademark applications, the enforcement of patents issued
and trademark registrations granted to the Company, to the protection of trade
secrets, trade dress or other intellectual property rights owned by the Company
and to the determination of the scope of validity of the proprietary rights of
others that might be asserted against the Company. A substantial increase in
the level of potentially infringing activities by others could require the
Company to increase significantly above past levels the resources devoted to
such efforts. In addition, an adverse determination in any future litigation
could subject the Company to the loss of its rights to a particular patent,
trademark, copyright or trade secret, could require the Company to grant
licenses to third parties, could prevent the Company from manufacturing,
selling or using certain aspects of its products or could subject the Company
to substantial liability, any of which could have a material adverse effect on
the Company's results of operations.

PRODUCT LIABILITY. The Company may be subject to product liability
claims which generally would seek damages for personal injuries allegedly
sustained as a result of defects in the Company's products. A successful
product liability claim brought against the Company could have a material
adverse effect upon the Company's business, operating results and financial
condition. This risk, which is faced by any manufacturer of eyewear products,
may be greater for the Company as a result of its focus on eyewear products
used in activities associated with greater physical risks, such as activities
requiring the use of safety eyewear, sports and other activities involving
special or extreme situations. Although the Company has not been subject to a
significant product liability claim to date, the growth of the Company's
business in the United States (where litigation is more prevalent) or elsewhere
could result in greater exposure to such risk.

SPECIFIC RISKS ASSOCIATED WITH THE COMPANY'S SAFETY AND TACTICAL
EYEWEAR BUSINESS. The Company's safety and tactical eyewear business, which
represented more than 50% of the Company's total unit sales in 1997, is subject
to specific risks in addition to all the risks described herein. The primary
users of the Company's safety eyewear products are industrial workers. As a
result, decreases in general employment levels of industrial workers may have
an adverse effect on the Company's sales. The Company's sales may also be
adversely affected by changes in safety regulations covering industrial workers
and in the level of enforcement of such regulations. Changes in regulations
could reduce the need for and the utility of certain products manufactured by
the Company. A substantial portion of the sales of tactical eyewear products by
the Company is made pursuant to procurement contracts with the defense forces
of various countries. Such contracts typically include specific termination and
modification provisions and are subject to laws and regulations pursuant to
which the governmental party is granted significantly greater rights than under
regular commercial supply contracts.

QUARTERLY FLUCTUATIONS OF RESULTS; SEASONALITY OF BUSINESS. The
Company's business is affected by economic factors and seasonal consumer buying
patterns. The Company's quarterly results of operations have fluctuated and may
continue to fluctuate as a result of a number of factors, including the timing
of the introduction of new products, the mix of product sales and weather
patterns. Historically, the Company's sales, in the aggregate, generally have
been higher in the period from March to September than during the rest of the
year.

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<PAGE>

UNPREDICTABILITY OF DISCRETIONARY CONSUMER SPENDING. The success of
the Company's business depends to a significant extent upon a number of factors
relating to discretionary consumer spending, including general economic
conditions affecting disposable consumer income, such as employment, business
conditions, interest rates and taxation. Any significant decline in such
general economic conditions or uncertainties regarding future economic
prospects that adversely affect discretionary consumer spending generally, or
purchasers of discretionary optical products specifically, could have a
material adverse effect on the Company's results of operations.

RECENT TRADING MARKET; VOLATILITY OF STOCK PRICE. Prior to the Spinoff
which occurred on March 11, 1998, there was no trading market for the Common
Stock and the Company has only a limited trading history. The stock of new and
relatively small issuers in immature or developing markets is frequently
subject to sharp increases and decreases in market value, and trading prices of
the Common Stock could vary significantly over relatively short periods of
time. The market price of the Common Stock may be subject to significant
fluctuations in response to variations in quarterly operating results and other
factors. Fluctuations in the market price of the Common Stock will directly
affect the interest expense related to the Convertible Notes recorded in the
Company's statement of operations. In addition, the securities markets have
experienced significant price and volume fluctuations from time to time in
recent years that have often been unrelated or disproportionate to the
operating performance of particular companies. These broad fluctuations may
adversely affect the market price of the Common Stock. There can be no
assurance that an active trading market will be sustained after the sale of any
of the Shares offered hereby.

SHARES ELIGIBLE FOR FUTURE SALE; FUTURES SALES BY SIGNIFICANT
STOCKHOLDERS. Sales of a substantial number of shares of Common Stock in the
public market or the prospect of such sales could adversely affect prevailing
market prices for the Common Stock. In addition to the 1,850,000 Shares which
may be sold hereunder by the Selling Stockholders, of the 6,636,261 shares of
Common Stock distributed pursuant to the Spinoff, approximately 5,843,261
shares are freely tradable without restriction or the requirement of future
registration under the Securities Act. All of the remaining 793,000 shares are
eligible for resale pursuant to Rule 144 under the Securities Act subject to
manner of sale, volume, notice and information requirements and applicable
contractual restrictions.

Following the expiration in July 2000 of certain contractual
restrictions on resale, all the shares of Bolle Common Stock held by the
Sellers, or approximately 4% of the Bolle Common Stock outstanding will be
eligible for sale by the Sellers pursuant to the provisions of Rule 144 under
the Securities Act. Upon the redemption in full of all the shares outstanding
of the Bolle Series B Preferred Stock, all the shares of Bolle Common Stock
received by Mr. Franklin pursuant to the Spinoff, or approximately 10% of the
total number of shares of Bolle Common Stock outstanding, will be eligible for
sale by Mr. Franklin in accordance with applicable law. No assurance can be
given that the Sellers or Mr. Franklin will not decide, based upon prevailing
market conditions, to dispose of all or a portion of their investment in the
Company after the expiration of applicable restrictions. The future sale of a
substantial number of shares of Common Stock may have an adverse impact on the
market price of the Common Stock. See "--Recent Trading Market; Volatility of
Stock Price."

Substantially all of the 869,450 Bolle Options which were outstanding
on July 30, 1998 were granted in connection with the Spinoff at in-the-money
exercise prices. The Company has registered up to 2,500,000 shares of Common
Stock for issuance upon exercise of Bolle Options granted to its employees
under the Plan, including the Bolle Options currently outstanding. In addition,
under the Warrant Agreement dated March 11, 1998 among the Company and each of
the Sellers (the "Warrant Agreement"), 663,618 shares of Common Stock issuable
upon exercise of the Bolle Warrants are subject to demand registration rights
vesting on the date a Warrant is first exercised, which may be as early as July
1999. The Company has agreed to register such shares for resale under the
Securities Act. During the term of such options and warrants and any additional
stock, warrants and/or options which the Company may issue to raise capital in
the future, the holders thereof are given the opportunity to profit from a rise
in the market price of the Common Stock. The exercise of such options and
warrants may have an adverse effect on the market value of the Common Stock.
The existence of such options and warrants may adversely affect the terms on
which the Company can obtain additional equity financing. To the extent the
exercise prices of such options and warrants are less than the net tangible
book value of the Common Stock at the time such

14
<PAGE>

options are exercised, the Company's stockholders will experience an immediate
dilution in the net tangible book value of their investment.

RESTRICTED DIVIDEND POLICY. The Company does not currently intend to
declare or pay any dividends on the Common Stock. The payment of cash dividends
in the future will depend on the Company's earnings, financial condition,
capital needs and other factors deemed relevant by the Company's Board of
Directors including corporate law restrictions on the availability of capital
for the payment of dividends, the rights of holders of any series of preferred
stock in issue and the limitations, if any, on the payment of dividends under
any then-existing credit facility or other indebtedness. Under the terms of the
Credit Agreement dated March 11, 1998 among the Company and the lenders party
thereto, as amended (the "Credit Agreement") and the Convertible Notes, the
Company's ability to pay cash dividends on the Common Stock is restricted and
the Company expects that any other bank revolving credit facility or other
indebtedness, if any, that the Company may incur in the future will contain
similar restrictions. Pursuant to the Indemnification Agreement, the Company is
further restricted from paying dividends on shares of Common Stock unless
certain minimum net worth requirements are met until, at the latest, the end of
the year 2003, except that the Company may declare dividends payable solely in
shares of capital stock which do not carry mandatory redemption or other
repayment rights. Furthermore, for so long as shares of the Series B Preferred
Stock are outstanding, the Company may not, without the consent of the holders
of at least 90% of such shares, declare or pay a dividend or otherwise make a
distribution on any security issued by the Company which is junior to the
Series B Preferred Stock with respect to dividends or upon liquidation,
including the Series A Preferred Stock. See "USE OF PROCEEDS" and "DESCRIPTION
OF CAPITAL STOCK--Preferred Stock."

POTENTIAL ANTITAKEOVER EFFECT OF THE INDEMNIFICATION AGREEMENT AND
CERTAIN CHARTER PROVISIONS. Pursuant to the Indemnification Agreement, the
Company and its subsidiaries may not enter into certain business combinations,
including a consolidation or merger or transfer of all or substantially all of
its assets, unless the resulting entity is either the Company or a U.S.
corporation which expressly assumes all of the Company's obligations and
restrictions under the Indemnification Agreement. Furthermore, the resulting
entity must have a consolidated tangible net worth equal to or greater than
that of the Company prior to the combination. These limitations could remain
applicable until, at the latest, the end of the year 2003. In addition, the
Series B Preferred Stock is redeemable in full upon a change of control
resulting in the Company's payment in full of all amounts due with respect to
the Credit Agreement. These restrictions could have the effect of deterring a
potential acquirer.

The Company has in excess of 20,000,000 and 125,000 shares of
authorized and unissued Common Stock and preferred stock, respectively, which
could be issued to a third party selected by management or used as the basis
for a stockholders' rights plan. This stock could have the effect of deterring
a potential acquiror. The ability of the Board of Directors of the Company to
establish the terms and provisions of different series of preferred stock could
discourage unsolicited takeover bids from third parties. See "DESCRIPTION OF
CAPITAL STOCK--Preferred Stock."

USE OF PROCEEDS

The Company will not receive any proceeds from the sale of the shares
by the Selling Stockholders. All proceeds will be received by the Selling
Stockholders.

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<PAGE>

PRICE RANGE OF COMMON STOCK

The Common Stock has been quoted on Nasdaq under the symbol "BEYE"
since March 12, 1998. The following table reflects the high and low sales
prices per share of the Common Stock as reported by Nasdaq.

HIGH LOW
---- ---
1998
- ----
First quarter (from March 12, 1998)................... $8.25 $6.44
Second quarter (through June 30, 1998)................ $7.125 $4.75

On July 30, 1998, the last reported sales price of the Common Stock
reported on Nasdaq was $5.125 per share. As of July 30, 1998, there were
approximately 780 holders of record of Common Stock.

DIVIDEND POLICY

The Company has not declared or paid any cash dividends on the Common
Stock, although Bolle America, the Company's predecessor for accounting
purposes, declared and paid dividends in 1994 and 1996. See "PROSPECTUS
SUMMARY--Summary Historical Consolidated Financial and Operating Data,"
"SELECTED FINANCIAL DATA" and the respective notes thereto. The Company intends
to retain future earnings, if any, to finance the development and expansion of
its businesses and, therefore, does not anticipate declaring or paying any
dividends on the Common Stock in the foreseeable future. The payment of cash
dividends in the future will depend on the Company's earnings, financial
condition, capital needs and other factors deemed relevant by the Board,
including corporate law restrictions on the availability of capital for the
payment of dividends, the rights of holders of any series of preferred stock
that may hereafter be issued and the limitations, if any, on the payment of
dividends under any then-existing credit facility or other indebtedness. The
Credit Agreement and the Convertible Notes restrict the Company's ability to
pay cash dividends on shares of Common Stock. In addition, the Company expects
that any other bank revolving credit facility or indebtedness, if any, that the
Company may incur would contain similar restrictions. Pursuant to the
Indemnification Agreement, the Company is further restricted from paying
dividends on shares of Common Stock, unless certain minimum net worth
requirements are met, until at the latest the end of the year 2003, except that
the Company may declare dividends payable in stock which does not carry
mandatory redemption or other repayment rights. Furthermore, for so long as
shares of the Series B Preferred Stock are outstanding, the Company may not,
without the consent of the holders of at least 90% of such shares, declare or
pay a dividend or otherwise make a distribution on any security issued by the
Company which is junior to the Series B Preferred Stock with respect to
dividends or upon liquidation, including the Series A Preferred Stock.

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<PAGE>

SELECTED FINANCIAL DATA

(DOLLARS IN THOUSANDS EXCEPT PER SHARE DATA)

The Company was formed in 1997 to complete Lumen's acquisition of
Bolle France and therefore has only one year of historical activity or
financial statements. Bolle America was purchased by Lumen in November 1995 in
a pooling of interests transaction. In conjunction with the purchase of Bolle
France, Bolle America became a subsidiary of the Company. Accordingly, for
accounting purposes only, Bolle America is treated as the acquiror of Bolle
France and therefore the predecessor business for historical financial
statement purposes.

PRO FORMA PRO FORMA
COMBINED HISTORICAL COMBINED HISTORICAL HISTORICAL HISTORICAL HISTORICAL HISTORICAL
-------- ---------- -------- ---------- ---------- ---------- ---------- ----------
QUARTER ENDED MARCH 31, YEAR ENDED DECEMBER 31,
------------------------- ---------------------------------------------------------------------------
1998 1998 1997 1997(1) 1996(2) 1995(3) 1994(4) 1993
------------ ------------ ------------ ----------- ----------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:

Net sales.................... $14,256 $10,728 $56,080 $32,160 $24,425 $24,829 $23,094 $18,377
Cost of sales................ 6,835 5,288 26,436 15,354 12,130 12,181 10,814 9,126
------------ ------------ ------------ ----------- ----------- ----------- ---------- --------------
Gross profit................. 7,421 5,440 29,644 16,806 12,295 12,648 12,280 9,251
Selling, general and
administrative expenses
(including advertising 6,825 5,430 26,378 16,342 11,374 10,275 8,871 7,384
and sponsoring expenses)..
Merger and acquisition
integration related 3,750 3,050
expenses..................
Interest expense (income). 371 484 1,498 963 (256) (302) 316 336
Other expense (income)....... (562) (515) (1,644) (693) (450) 48 (104) (295)
------------ ------------ ------------ ----------- ----------- ----------- ---------- --------------
Income (loss) before income
taxes and minority
interests................. 787 41 3,412 (3,556) 1,627 (423) 3,197 1,826
Provision for income taxes... 286 16 4,147 1,099 635 364 1,260 700
------------ ------------ ------------ ----------- ----------- ----------- ---------- --------------
Net income (loss) before
minority interests.......... 501 25 (735) (4,655) 992 (787) 1,937 1,126
Minority interests........... 96 319
Preferred dividends.......... 139 29 511
============ ============ ============ =========== =========== =========== ========== ==============
Net income (loss)
attributable to common
stock..................... $266 $ (4) $(1,565) $(4,655) $992 $(787) $1,937 $1,126
============ ============ ============ =========== =========== =========== ========== ==============
Basic and diluted EPS (5).... $0.04 $(0.00) $(0.23) $(2,586.11) $9,920 $(0.22) $0.65 $0.38
Weighted average basic and
diluted shares outstanding 6,884 1,476 6,884 1.8 0.1 3,510.6 2,997.0 2,963.0
French Franc per US Dollar
exchange rate (6)......... 6.0951 6.0951 5.6835 5.9843
Australian Dollar exchange
per U.S. Dollar exchange 0.6918 0.7673
rate (7)..................
BALANCE SHEET DATA:

Working capital (deficiency). $ 11,856 $ 9,137 $(20,936) $8,535 $11,395 $12,781 $1,060
Total assets................. 116,880 106,829 94,697 15,624 16,309 17,549 9,629
Long term debt............... 10,542 12,042 57 49
Convertible debt............. 7,000
Mandatorily redeemable
preferred stock........... 20,709 20,709 11,055
Stockholders' equity......... 38,548 36,348 18,843 9,743 12,770 13,433 1,584
French Franc per US Dollar
exchange rate (6)......... 6.1890 6.1890 5.9912
US Dollar per Australian
Dollar exchange rate (7).. 0.6503
</TABLE>

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

17
<PAGE>

(1) On July 10, 1997, the Company acquired Bolle France and related assets
in a transaction accounted for as a purchase. Accordingly, the results
of operations for Bolle France are included in historical results of
operations from that date.

(2) In 1996, the Company paid a dividend to Lumen (its then current
stockholder) of $4,019.

(3) In November 1995, Lumen acquired Bolle America in a transaction
accounted for as a pooling of interests. Accordingly, Bolle America is
included in all periods presented.

(4) In 1994, Bolle America paid a $50 dividend to its then current
shareholders.

(5) Despite the loss before tax of $3,556 the Company recorded a tax
charge of $1,099 primarily due to the creation of a valuation
allowance against the entire net tax benefit arising from domestic
operations, resulting in a net loss of $4,655. If the 1997 statutory
tax rate of 37% had been applied to pro forma combined income before
income taxes, pro forma EPS would have been $0.19.

(6) Represents the exchange rates used to translate the results of
operations and balance sheet amounts of Bolle France. The exchange
rate shown for the actual results of operations for the year ended
December 31, 1997 represents the average exchange rate for the six
months ended December 31, 1997 used to translate the results of
operations of Bolle France included in the Company's actual result.

(7) Represents the exchange rates used to translate the results of
operations and balance sheet amounts of Bolle Australia.

18
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

General

Until March 11, 1998, Bolle Inc. was a subsidiary of Lumen. Bolle Inc.
was organized on February 3, 1997 in connection with the July 1997 acquisition
by Lumen of Holding B.F., the French holding company that owned Bolle(R)'s
design and manufacturing operations and certain distribution interests,
including the worldwide rights to the Bolle(R) brand. Bolle Inc. is a holding
company, the principal subsidiaries of which are Bolle America and Bolle
France. Lumen acquired Bolle America in November 1995 and contributed Bolle
America to Bolle Inc. in July 1997. Prior to being acquired by Lumen, Bolle
America was a public company. Bolle Inc. became a publicly-held company on
March 11, 1998, as a result of the Spinoff by Lumen to its stockholders of all
of its equity interest in the Company.

Due to the acquisition of Bolle France on July 10, 1997, only six
months of results of operations of Bolle France are included in the results of
operations for the year ended December 31, 1997.

The Company has begun to develop and implement a global brand
management and marketing program, resulting in increased advertising expenses.
There can be no assurance that such increased expenses will result in increased
sales. The Company expects that these and other expenditures required to
implement its strategic plan will limit its earnings potential, particularly in
1998, and that the effects of its efforts may not be realized until 1999, if at
all.

The Company is in the process of upgrading its information systems to
support the implementation of its strategy and anticipated growth. The new
systems are expected to function properly with respect to dates in the year
2000 and thereafter and the new single currency which is scheduled to be
introduced by the European Union at the beginning of 1999. While the Company's
systems have been adequate to date, the Company began implementing the new
systems in 1997 and plans to complete implementation during 1999. See "RISK
FACTORS--Information Systems; Year 2000 Compliance."

It is not anticipated that operating on a standalone basis following
the Spinoff will have a significant impact on the results of operations,
financial position or cash flows of the Company other than that which is
disclosed herein. The Company was operated as a separate segment of Lumen's
business and will continue to receive management and administrative services
from Lumen on similar terms to those reflected in the historical financial
statements under the Management Services Agreement.

Pro forma results of operations

On a pro forma basis, including the results of Bolle France and Bolle
Australia as if the acquisitions of Bolle France and Bolle Australia had
occurred on January 1, 1997, the Company's sales were $56.1 million for the
year ended December 31, 1997 and $14.3 million for the quarter ended March 31,
1998. The Company, on a pro forma basis, experienced a decline in sales and
profitability from 1996 to 1997. The decline in sales and earnings reflected
the following: (i) a declining rate of sales growth in the U.S. premium
sunglass industry; (ii) the realization by Sunglass Hut that it had significant
excess inventory and its resultant reduction of purchases from suppliers,
including the Company; (iii) the impact of the supply/demand imbalance in the
premium sunglass industry caused in part by this retailer's inventory surplus,
although the Company's sales to this retailer were not significant. (The
existence of excess inventory in the market produced downward price pressure
and greater competition in all the Company's distribution channels); (iv) the
loss of the Company's largest OEM customer due to a decision by the customer to
stop outsourcing production of their sunglass lines; (v) an approximate 16%
negative swing in the average exchange rate between the U.S. dollar (the
Company's functional currency) and the French Franc; and (vi) a lack of new
sunglass designs due to the distractions experienced by members of the Bolle
family (including Bolle France's chief product designer) while negotiating the
sale of the family business.

19
<PAGE>

Additionally, the average exchange rate between the U.S. Dollar and the
Australian Dollar has also been declining significantly over the last year.

In March 1998, the Company was named as one of a limited number of
preferred vendors by Sunglass Hut. Notwithstanding this positive development,
the Company continues to take measures to assure it does not become unduly
reliant on any one customer. While the Company believes that the market is
clearing the excess inventory that adversely impacted the premium sunglass
sector in 1997, there can be no assurance that inventory issues will not
resurface. To that end, the Company is placing increased emphasis on the
introduction of new products and on conveying an image which will support its
sales in a period of future market decline. The benefits are being offset
somewhat by French Franc exchange rates which continue to negatively affect the
Company's results of operations.

Quarter ended March 31, 1998 compared to quarter ended March 31, 1997

Net sales of $10.7 million for the quarter ended March 31, 1998
increased from $5.1 million for the comparable period in 1997 as a result of
the acquisition of Bolle France on July 10, 1997, offset by a decrease in sales
in the United States. Continued soft conditions in the U.S. market for premium
sunglasses contributed to the decrease in sales in North America.

Gross profit of $5.4 million or 50.7% for the quarter ended March 31,
1998 increased from $2.3 million or 45.1% for the quarter ended March 31, 1997.
The increase in gross margin percentage reflects the higher gross margins of
the Company's integrated manufacturing and distribution operations following
the acquisition of Bolle France.

Selling, general and administrative expenses for the quarters ended
March 31, 1998 and 1997 were $5.4 million and $3.0 million, or 51% and 60% of
net sales, respectively. The reduction in selling, general and administrative
expense as a percentage of net sales reflects the change in the Company's mix
of business following the acquisition of Bolle France.

Interest expense of $0.5 million for the quarter ended March 31, 1998
reflects the cost of debt incurred to fund the Bolle France acquisition for two
months and reduced debt levels due to the Spinoff after March 11, 1998.
Interest expense for the quarter ended March 31, 1997 was immaterial.

Other income consists primarily of foreign exchange transaction gains
of $0.45 million for the quarter ended March 31, 1998. Other income for the
comparable period in 1997 includes allocated equity income and management fee
income from Eyecare Products of $0.25 million.

Income taxes represent 39% of pretax profit for the quarter ending
March 31, 1998 compared to a benefit of 32% against the pretax loss for the
quarter ending March 31, 1997. The increase in the effective tax rate reflects
the acquisition of Bolle France.

Year ended December 31, 1997 compared to year ended December 31, 1996

Net sales of $32.2 million for the year ended December 31, 1997
increased from $24.4 million for the comparable period in 1996, as a result of
the acquisition of Bolle France on July 10, 1997, offset by a $5.7 million
decrease in sales in the United States. Soft conditions in the U.S. market for
premium sunglasses contributed to the decrease in sales in North America. The
largest sunglass specialty retail chain, which had been growing rapidly up
until the fourth quarter of 1996, began closing outlets and returning excess
inventory at the end of 1996 and throughout 1997, negatively affecting the
entire premium sunglass industry. This customer represented 14% of the
Company's sales for the year ended December 31, 1996 and less than 4% of the
Company's sales for the year ended December 31, 1997. While overall retail
sales of premium sunglasses continued to grow (though at a slower pace than in
prior years), many premium sunglass manufacturers, including the Company, had
overproduced in anticipation of significantly higher sales and took significant
returns which eroded profit margins. The Company expects market conditions to
improve during 1998.

20
<PAGE>

Gross margin increased from 50.3% for the year ended December 31, 1996
to 52.3% for the year ended December 31, 1997, reflecting the higher gross
margins of the Company's integrated manufacturing and distribution operations
following the Acquisition.

Advertising and sponsoring expenses increased $0.5 million on a sales
increase of $7.7 million due to the acquisition of Bolle France. As a
percentage of sales, advertising and sponsoring expenses fell from 13.4% in
1996 to 11.6% in 1997, although advertising and sponsoring expenses in the U.S.
increased to 17%.

For the year ended December 31, 1997 selling, general and
administrative expenses of $12.6 million increased from $8.1 million for the
year ended December 31, 1996, reflecting the acquisition of Bolle France. As a
percentage of sales, selling, general and administrative expenses increased
from 33.1% to 39.1% in 1997. This increase resulted from the Company's change
in mix of business following the acquisition of Bolle France.

Interest expense of $1.0 million for the year ended December 31, 1997
reflects the interest expense on the debt incurred to fund the acquisition of
Bolle France. In the comparable period in 1996 the Company's cash on hand
generated interest income of $0.3 million.

As a result of the above factors, pre-tax income decreased to a loss
before taxes of $3.6 million in 1997 from income before taxes of $1.6 million
in 1996. Excluding the impact of $3.8 million of merger and acquisition
integration expenses, income before taxes for 1997 would have been $0.2
million.

Other income consists of allocated equity income and management fee
income from Lumen's investment in Eyecare Products of $0.6 million for the year
ended December 31, 1997 and $0.4 million for the year ended December 31, 1996.
This income was allocated to the Company by Lumen. For each of the years ended
December 31, 1997 and December 31, 1996 other income also included $0.1 million
of foreign exchange transaction gains.

The Company recorded a net tax provision of $1.1 million despite the
loss before taxes of $3.6 million for the year ended December 31, 1997. A
provision was recorded as a result of the Company establishing a valuation
allowance against the entire domestic net deferred tax asset for 1997. The
acquisition of Bolle France in 1997 had a significant impact on the tax rate
due to higher overall French taxes. In 1996, the effective tax rate was 39% of
net income before taxes.

Year ended December 31, 1996 compared to year ended December 31, 1995

Net sales were flat for the year ended December 31, 1996 compared to
the prior year. Although the premium sunglass market continued to grow, Bolle
America (the only business included in the Company at that time) was impacted
by industry problems described above that reduced sales in the fourth quarter.
At the end of 1996 and into 1997, the Company's "grass roots" distribution to
many smaller, loyal retail outlets worked in its favor by lessening the effect
of sales declines experienced in certain of the Company's larger customers. For
the years ended December 31, 1996 and 1995, the Company's sales were
substantially all in the United States.

During 1996 and 1995, the Company purchased substantially all of its
products from Bolle France, which did not change its pricing significantly
during those years. Accordingly, the gross margin of 50% in 1996 did not change
materially from the 1995 gross margin of 51%.

For the year ended December 31, 1996, advertising and sponsoring
expenses were $3.3 million versus $2.7 million for the prior year. As a
percentage of sales, advertising and sponsoring expenses increased from 10.7%
in 1995 to 13.4% in 1996. This increase was due to the Company's strategy of
building the Bolle brand in the United States where it competes with other
brands which are heavily marketed and advertised.

Selling, general and administrative costs increased from $7.6 million
in 1995 to $8.1 million in 1996 primarily due to corporate allocation of its
stockholder's general and administrative expenses in 1996. In 1995, because the
Company was acquired by its stockholder in November, no allocations were
effected. In November

21
<PAGE>

1995, the Company was acquired by its stockholder in a transaction accounted
for as a pooling of interests. Accordingly, the merger related costs of $3.1
million are included in the results of the Company for 1995.

In both 1996 and 1995, the Company's cash on hand resulted in interest
income of $0.3 million.

Other income in 1996 includes $0.4 million of allocated equity income
from Lumen's investment in Eyecare Products. This income was allocated to the
Company by Lumen. During 1995, because the acquisition of the Company by Lumen
did not occur until November, the comparable equity income was not allocated.
The 1995 amount consists of foreign exchange losses.

The effective tax rate of 39% in 1996 represents an operating basis
provision while the 1995 benefit reflects the significant effect of the merger
related expenses.

LIQUIDITY AND CAPITAL RESOURCES

Quarter ended March 31, 1998

Net cash provided by operations of $2.0 million represents the nominal
net income, as well as decreases in accounts receivable and inventory and
increases in accounts payable. Depreciation and amortization for the quarter
ended March 31, 1998 was $0.7 million compared to $0.1 million for the same
period in 1997, reflecting the acquisition of Bolle France, Capital
expenditures of $0.08 million represent an increase of approximately $0.05
million from the comparable period in 1997. These operating and investing
activities were financed through proceeds from indebtedness to related parties
through March 10, 1998. On March 11, 1998 the Company executed a Credit
Agreement with a banking syndicate. Proceeds from the Credit Agreement were
used to repay a portion of indebtedness to Lumen. The remaining indebtedness to
Lumen was capitalized in connection with the execution of the Contribution
Agreement on March 12, 1998. There are currently no intercompany credit
arrangements between Lumen and the Company. Management believes that
availability under the Credit Agreement, along with cash provided from
operations, will be sufficient to fund the Company's cash, operating, investing
and debt servicing requirements for the next twelve months. It is not expected
that repatriation of French Franc cash flows, if any, will have a significant
impact on liquidity.

Year ended December 31, 1997

Net cash provided by operating activities during the year ended
December 31, 1997 of $1.1 million represents the net loss offset by the
positive effect on non-cash expenditures and the reduction of inventory and
accounts receivable. Depreciation and amortization for the year ended December
31, 1997 was $1.5 million compared to $0.4 million for 1996, reflecting the
acquisition of Bolle France. Cash paid for acquisitions in 1997 represents the
purchase of Bolle France net of cash received from the acquisition. Capital
expenditures of $0.7 million representing a $0.3 million increase over 1996 was
due to the acquisition. These operating and investing activities were financed
through proceeds from indebtedness to related parties, primarily through
borrowings from Lumen which were funded by Lumen through its revolving credit
facility. During 1997 the Company borrowed US dollars from Lumen at a rate of
8% and French Francs at a rate of 5.5%. On March 11, 1998 the Company executed
the Credit Agreement which has substantially the same terms as the Lumen
facility. Proceeds from the Credit Agreement were used to repay a portion of
indebtedness to related parties. There are currently no intercompany credit
arrangements between Lumen and the Company. Management believes that
availability under the Credit Agreement, along with cash provided from
operations will be sufficient to fund the Company's cash, operating, investing
and debt servicing requirements through the end of 1998. It is not expected
that repatriation of French Franc cash flows, if any, will have a significant
impact on liquidity.

In conjunction with the acquisition of Bolle France and the Spinoff,
the Company is subject to interest on approximately $17 million of senior
indebtedness owed to NationsBank at an average current rate of approximately
6.5%. Although this represents significantly less than the indebtedness owed by
Bolle America to Lumen outstanding prior to the Spinoff, it is nevertheless
higher than indebtedness had been prior to the Bolle France acquisition. In
addition, the acquisition of Bolle France has resulted in additional annual
depreciation and

22
<PAGE>

amortization of approximately $1.6 million, significantly increasing selling,
general and administrative expenses as a percentage of sales.

In connection the issuance of the Convertible Notes, non cash interest
expense will be recognized in the statement of operations and the effective
rate will fluctuate inversely with the market value of the Common Stock.

In connection with the Contribution Agreement executed on March 12,
1998, between Lumen and the Company, approximately $17 million of indebtedness
to related parties incurred to finance the acquisition of Bolle France was
capitalized. This reduction in the Company's debt improves working capital
levels.

SEASONALITY

The Company's sunglass business is seasonal in nature with the second
quarter having the highest sales due to the increased demand for sunglasses
during that period. The Company's goggle business is seasonal in nature with
the first quarter having the highest sales due to the increased demand for
goggles during the ski season. This seasonality is partially offset by safety
eyewear sales worldwide.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Approximately $6.5 million of the Company's revenues for the quarter
ended March 31, 1998 and $80 million of its total assets, including intangible
assets of $59 million as of March 31, 1998 were denominated in French Francs.
Approximately $12 million of indebtedness at March 31, 1998 was denominated in
French Francs bearing interest at variable rates based upon the French Franc
LIBOR rate. 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.

NEW ACCOUNTING STANDARD

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," establishes standards for reporting of operating segment
information in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
statements issued to shareholders. The statement is effective for all periods
beginning after December 15, 1997. The Company presently reports as one
operating segment and two geographical segments, and expects to continue to do
so. The Company plans to adopt SFAS No. 131 in its financial statements for the
year ended December 31, 1998.

23
<PAGE>

RECENT DEVELOPMENTS

On March 11, 1998, the Company became a publicly-held company as a
result of the Spinoff by Lumen to its stockholders of all of its equity
interest in the Company. In connection with the Spinoff, Lumen and Bolle
entered into various transactions, including transactions that result in
ongoing relationships between them as described below. As a development to its
business strategy, the Company has agreed to acquire its Australian
distributor. To help finance this strategy, the Company secured a credit
facility for an aggregate of U.S. $28,000,000 and recently completed the sale
of $7,000,000 aggregate principal amount of its Convertible Notes.

SPINOFF

Transfer of the Non-ORC Business to the Company. Effective March 11,
1998, the Company received from Lumen all of Lumen's assets other than assets
related to Lumen's ORC Business (as defined in the Contribution Agreement) and
certain other specified assets retained by Lumen, and the Company assumed all
of Lumen's liabilities prior to the Spinoff other than those related to the ORC
Business. Pursuant to the terms of the Contribution Agreement, the Company
assumed and has agreed to pay, when and as due, and discharge all debts,
liabilities, obligations and taxes in respect of these assets and liabilities.
Assigned assets and assumed liabilities include, without limitation, all
interests, rights, duties and obligations of Lumen relating to AAi (which
purchased Foster Grant) and to Superior Vision Services, Inc.; certain assets,
rights, and obligations relating to Sterling Vision, Inc.; the Management
Agreement between Lumen and Eyecare Products, as well as all of Lumen's right,
title and interest in and to shares of stock of Eyecare Products; and all
rights and interests in and to rental payments received by Lumen (as assignee)
pursuant to an Industrial Lease by and between Bartley Optical Sales, Inc. and
ORC dated as of December 8, 1995 and a Lease Agreement, dated as of May 3,
1996, between Monsanto Company and ORC.

Investments in Affiliates and Other Assets. As a result of the
Spinoff, the Company holds a 23% equity interest in Eyecare Products. Eyecare
Products, which is quoted on the London Stock Exchange, is one of the largest
optical frame manufacturers in France with approximately $90,000,000 in sales
in 1997. Eyecare Products has one operating subsidiary, L'amy Group. Eyecare
Products reported net assets of approximately $28.5 million at December 31,
1997 with profit before tax of approximately $1.7 million. The Company has
entered into an option agreement to sell its investment in Eyecare Products at
the end of 1998. However, there is no certainty that this option will be
exercised and accordingly, the Company has been advised that Eyecare Products
is also actively exploring other possible strategic initiatives. The Company
and Eyecare Products have explored manufacturing product for each other as
Eyecare Products specializes in metal frames and the Company specializes in
nylon frames. However, to date there is no significant business between the two
companies.

As a result of the Spinoff, the Company also owns convertible
redeemable preferred stock of Foster Grant Holdings, Inc. (the "FGH Preferred
Stock") with a book value of $1,000,000. The FGH Preferred Stock is convertible
into shares of common stock of AAi. AAi, which purchased the Foster Grant
business from Lumen in 1996, is a privately held company and is the largest
distributor of value-priced sunglasses, reading glasses and jewelry accessories
in the United States. Pursuant to the Contribution Agreement, Bolle has agreed
that, to the extent Bolle exchanges all, but not less than all, of its FGH
Preferred Stock for shares of common stock of AAi, Bolle will deliver to Lumen
35.71% of all the AAi shares received by Bolle (the "AAi shares"), together
with any rights attaching thereto. If AAi undertakes a successful initial
public offering before December 1999, the Company can elect to receive the
equivalent of $7,000,000 in equity in AAi in exchange for its FGH Preferred
Stock (if not already exchanged), of which the Company will keep $4,500,000 and
Lumen will receive $2,500,000 pursuant to the terms of the Contribution
Agreement. However, the Contribution Agreement provides that in the event that
Bolle does not obtain the AAi Shares, Bolle agrees to pay to Lumen the first
$2,500,000 received by Bolle from proceeds (the "Proceeds") relating to (i) the
sale by Bolle of its shares of FGH Preferred Stock or (ii) the redemption by
Foster Grant Holdings, Inc. of the FGH Preferred Stock. In the event that Lumen
does not receive either the AAi Shares or $2,500,000 from Bolle, as described
above, on or before the date that is five years after the effective date of
BEC's merger with ILC Technology, Inc. ("ILC") (March 12, 1998), Bolle shall
promptly pay to Lumen an amount equal to $2,500,000 less any amount previously
paid to Lumen by Bolle from the proceeds.

24
<PAGE>

In exchange for receiving assets under the Contribution Agreement, the
Company has assumed liability for and has agreed to indemnify Lumen against,
the following potential liabilities, which do not involve any material present
claims or known liabilities, in connection with Lumen's indemnification
obligations under the following: a guaranty of the minimum display purchase
requirements of Foster Grant from HMG World-Wide Corporation and its subsidiary
Intermark Corp., a Foster Grant supplier; certain agreements and obligations
under a (since then repaid) $3,500,000 mortgage with Wells Fargo Bank (Texas)
and Lumen as successor to Foster Grant; any remaining Lumen or Benson
obligations relating and pursuant to (i) the Agreement and Plan of Merger dated
July 26, 1995, among Benson, BEC Acquisition Corp. and Bolle America, (ii) the
Asset Purchase Agreement dated May 3, 1996, among Benson, Lumen, and Monsanto
Company, and (iii) the merger of Essilor into Benson, effective May 3, 1996;
certain immaterial pending litigation; and the Stock Purchase Agreement between
Lumen and Lantis Eyewear Corporation, dated November 14, 1996, as amended
relating to the Eyecare Products shares transferred to the Company pursuant to
the Contribution Agreement. See "RISK FACTORS--Assumption of Liabilities and
Indemnification of Lumen by the Company."

In May 1998 the Company sold the Foster Grant building which it
received in connection with the Spinoff and was leased by Foster Grant, for
approximately $5,800,000, representing net cash proceeds of approximately
$2,000,000 after mortgage repayment and expenses.

In addition, the Indemnification Agreement, which is in effect until
June 30, 2000, except for liabilities under environmental laws, for which the
term is seven years, and tax liabilities, for which the term is the applicable
statute of limitations, provides that the Company will indemnify Lumen against
any and all liabilities incurred or suffered by Lumen related to the following:
(i) Lumen and its subsidiaries, excluding the ORC Business, prior to or in
connection with the Spinoff; (ii) the Company and its subsidiaries subsequent
to the Spinoff; (iii) any environmental laws in connection with the business
operations of Lumen or its subsidiaries or their predecessors (including the
ORC Business) prior to the date of the Spinoff and the current, past or future
business operations of the Company and its subsidiaries or any of their
predecessors; (iv) any claims by Monsanto Company for indemnification in
connection with the Asset Purchase Agreement among Benson, Lumen and Monsanto
Company dated February 11, 1996; and (v) the enforcement by Lumen of its rights
under the Indemnification Agreement, and that Lumen will indemnify the Company
against all losses that are suffered by Bolle related to: (i) Lumen's business
after the Spinoff; (ii) the ORC Business before the Spinoff (other than
environmental liabilities); or (iii) enforcing the Company's rights under the
Indemnification Agreement. In addition, the Indemnification Agreement sets
forth each party's rights and obligations with respect to payments and refunds
relating to certain taxes and related matters such as the filing of tax returns
and the conduct of audits or other proceedings involving claims made by taxing
authorities. In general, Bolle has agreed to indemnify Lumen for taxes relating
to the business of Lumen (excluding the ORC Business) and for taxes
attributable to the Spinoff and certain other transactions, and Lumen has
agreed to indemnify Bolle for taxes relating to the ORC Business. In addition,
the Indemnification Agreement sets forth each party's rights and obligations
with respect to payments and refunds relating to certain taxes and related
matters such as the filing of tax returns and the conduct of audits or other
proceedings involving claims made by taxing authorities. In general, the
Company has agreed to indemnify Lumen for taxes relating to the business of
Lumen (excluding the ORC Business) and for taxes attributable to the Spinoff
and certain other transactions, and Lumen has agreed to indemnify the Company
for taxes relating to the ORC Business. See "RISK FACTORS--Assumption of
Liabilities and Indemnification of Lumen by the Company."

Management Services Agreement. Bolle and Lumen have entered into a
Management Services Agreement pursuant to which Lumen has agreed to provide
certain management services to Bolle in return for the payment by Bolle of a
$60,000 monthly fee. See "RISK FACTORS--Management Services Agreement" and
"CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS--Management Services
Agreement."

Assumption by the Company of Lumen's Liabilities Relating to the
Acquisition of Bolle France. The Company assumed all obligations and
liabilities of Lumen to each of the Sellers which Lumen incurred in connection
with the purchase of Bolle France. In addition, each Seller conveyed to the
Company all shares of Lumen preferred stock held by such Seller and the Company
issued in exchange to each Seller, an amount of shares of Series B Preferred
Stock equal to the number of shares of Lumen preferred stock conveyed by such
Seller

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to the Company. No shares of Common Stock were issued to the holders of
outstanding shares of Lumen preferred stock or Series A Preferred Stock
pursuant to the Spinoff. Lumen furthermore canceled all Lumen warrants
outstanding as of the Spinoff record date, and the Company issued in exchange
to each holder of canceled Lumen warrants, Bolle Warrants to purchase 663,618
shares of Common Stock, with an exercise price per Warrant equal to $9.95. No
shares of Common Stock were issued to holders of outstanding Lumen warrants or
Bolle Warrants pursuant to the Spinoff.

See "DESCRIPTION OF CAPITAL STOCK--Preferred Stock" and "--Warrants."

Bolle Options. Lumen options outstanding with respect to employees who
were employed by the Company after the Spinoff were canceled in exchange for
Bolle Options having similar terms and conditions and an equivalent economic
value to the canceled Lumen options. In addition, management employees of Lumen
who are providing services to the Company under the Management Services
Agreement were granted Bolle Options under the Plan in connection with the
Spinoff. As a result of the Spinoff, Bolle Options to purchase a total of
860,330 shares of Common Stock were issued by the Company.

CONVERTIBLE NOTES

On May 29, 1998 the Company completed the sale of $7,000,000 aggregate
principal amount of its Convertible Notes to Och Ziff Fund, under an exemption
from registration under the Securities Act. Pursuant to the terms of the
Convertible Subordinated Note Purchase Agreement, the Convertible Notes are
convertible at any time at the option of the holder(s) thereof into a maximum
of 1,333,333 shares of Common Stock at a conversion price of $5.25 per share
(the "Conversion Price"). The Company may cause the conversion of the
Convertible Notes at the Conversion Price at any time after August 18, 1998 if
the closing price of the Common Stock is in excess of $7.0875 for 20
consecutive trading days and the Shares underlying the Convertible Notes have
been registered for resale under the Securities Act. Under certain
circumstances, including if the Company fails to convert or redeem any
Convertible Notes when due, the Company becomes obligated to repay the
principal amount of such Convertible Notes (up to a maximum of $7,000,000) in
cash and to issue up to a maximum of 360,000 Shares to the holder(s) of such
Convertible Notes. All the Shares issuable pursuant to the terms of the
Convertible Note Purchase Agreement will, if issued, be eligible for resale
upon issuance pursuant to this Prospectus. See "SELLING STOCKHOLDERS" and "PLAN
OF DISTRIBUTION." Unless otherwise provided by the terms of any indebtedness of
the Company, the Convertible Notes are subordinate to the rights of the Lenders
(as defined below) under the Credit Agreement and other ordinary creditors of
the Company for all purposes other than the issuance of the Shares. See
"DESCRIPTION OF CAPITAL STOCK--Convertible Notes."

CREDIT AGREEMENT

On March 11, 1998, the Company entered into the Credit Agreement,
pursuant to which the lenders party thereto (the "Lenders") and NationsBank,
N.A., as agent ("NationsBank" or the "Agent") have agreed to make available to
the Company (i) a term loan facility denominated in French Francs of
FF61,290,000 ($10,000,000 at the time of drawdown) for a term of five years,
(ii) a revolving credit facility denominated in U.S. Dollars or French Francs,
at the Company's option, of up to $18,000,000 for a term of three years and
(iii) a letter of credit facility of up to $5,000,000 for a term of three
years, provided that no letter of credit need be issued if the aggregate sum of
all drawdowns under the letter of credit facility and the revolving credit
facility exceeds $18,000,000. The Company may use borrowings under the Credit
Agreement for working capital, to finance capital expenditures permitted under
the Credit Agreement, to finance the acquisition of Bolle Australia, to
refinance certain existing indebtedness, and for other miscellaneous corporate
purposes. The Company, NationsBank and the Lenders entered into Amendment No. 1
to the Credit Agreement on May 29, 1998 for the purpose of amending the Credit
Agreement to permit the issuance of the Convertible Notes and the optional
redemption, repayment or conversion thereof, as contemplated by the Convertible
Note Purchase Agreement.

Interest accrues on borrowings outstanding under the term loan
facility and on French Franc borrowings outstanding under the revolving credit
facility at a fixed rate, which is based on the London Interbank Offered Rate
("LIBOR") for French Francs, currently approximately 6%. Interest accrues on
dollar borrowings outstanding under the revolving credit facility at either, at
the Company's option, (i) a variable rate based on the greater of (x)

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NationsBank's prime rate or (y) the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System or (ii) a
fixed rate, based on LIBOR for U.S. Dollars.

The Company, each domestic subsidiary of the Company and, in the case
of (i) and (ii) below, ORC Management Corporation (collectively, the
"Guarantors") executed, among other documents, (i) a Second Amended and
Restated Guaranty Agreement dated as of March 11, 1998 for the benefit of the
Lenders, guaranteeing the payment of the obligations of the Company to the
Lenders under the Credit Agreement (the "Obligations"); (ii) a Second Amended
and Restated Security Agreement dated as of March 11, 1998, granting to the
Lenders a security interest in, among other things, their inventory,
receivables, equipment, contracts and all general intangibles as security for
payment of the Obligations and (iii) a Second Amended and Restated Intellectual
Property Security Agreement dated as of March 11, 1998, granting to the
Lenders, among other things, a security interest in material intellectual
property, as security for payment of the Obligations. In addition, pursuant to
the terms of a Stock Pledge Agreement dated as of March 11, 1998, entered into
by the Company and certain of its subsidiaries, the Company pledged to the
Agent 100% of the capital stock of the Company's domestic subsidiaries owned by
the Company; 65% of the voting stock and 100% of the non-voting common stock
owned by the Company of any direct foreign subsidiaries of the Company acquired
or created after March 11, 1998 and 100% of the capital stock owned on March
11, 1998 by the Company of any foreign subsidiary of the Company, to the extent
that such pledge would not result in adverse material tax consequences for the
Company.

Pursuant to and subject to the terms of the Credit Agreement, the
Company may borrow under the revolving credit facility until March 11, 2001, at
which time the revolving credit facility terminates and all amounts outstanding
thereunder become due and payable. The term loan facility is subject to
repayment in accordance with the schedule set forth in the Credit Agreement,
with the final payment of all amounts outstanding, together with accrued
interest thereon, being due and payable on March 11, 2003. The Credit Agreement
also requires the Company to make certain mandatory prepayments and allows the
Company to make optional prepayments.

Pursuant to the Credit Agreement, the Company is subject to certain
covenants, including, without limitation, restrictions on: (i) the incurrence
of additional indebtedness; (ii) the creation of liens on the Company's
property or assets; (iii) future acquisitions and mergers, except for the
acquisition of Bolle Australia; (iv) the payment of dividends, redemptions or
distributions and (v) a change of control. The Company is also required to
maintain, among other things, certain minimum consolidated fixed charge ratios,
certain consolidated leverage ratios and consolidated net worth in accordance
with the provisions of the Credit Agreement.

As of March 31, 1998, the Company had debt outstanding under the
Credit Agreement of approximately $17,000,000, with additional borrowing
availability of approximately $11,000,000, and was in compliance with all
financial covenants. The Company has agreed to use the aggregate proceeds of
the sale of the Convertible Notes to repay a portion of its outstanding
indebtedness under the Credit Agreement.

ACQUISITIONS

Bolle Canada Acquisition. Consistent with its strategy of
consolidating certain of its distributors through acquisitions or other
arrangements, the Company acquired its Canadian distributor, Bolle Canada, in
March 1998. Pursuant to the terms of a Memorandum of Understanding dated
February 6, 1998 by and between the Company and the other shareholder of Bolle
Canada, the Company purchased from such shareholder for approximately $60,000,
49% of the outstanding capital shares of Bolle Canada, giving the Company 100%
ownership of Bolle Canada. The Company also agreed to provide the seller with
certain benefits to which he had been entitled as a director and officer of
Bolle Canada for a period of one year from the date of closing of the Bolle
Canada acquisition, and released the seller from all actual, pending or
potential obligations and liabilities in respect of the Company and Bolle
Canada, except for any such obligations and liabilities arising under the terms
of the Memorandum of Understanding. The acquisition of Bolle Canada by the
Company does not constitute a significant acquisition for purposes of financial
disclosure.

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<PAGE>

Bolle Australia Acquisition. In June 1998, the Company acquired,
pursuant to the Share Sale Agreement, 75% of Bolle Australia (after
reimbursement of certain outstanding indebtedness and excluding certain real
estate assets and other interests in unrelated businesses), 100% of Bolle Asia
and the 49% of Bolle Sunglasses not already owned by the Company. The purchase
price was approximately (i) $3,900,000 in cash and (ii) shares of Common Stock
with an agreed value of approximately $2,300,000 subject to adjustment, of
which (a) 248,388 Shares (or approximately 60%) are outstanding and may be
resold hereunder, and (b) the remainder, or 191,312 Shares, may be issued no
later than June 1999 and will then be eligible for resale hereunder. The
Company has agreed to indemnify the Bill Bass Trust against certain liabilities
which it may incur in connection with the transactions contemplated by the
Share Sale Agreement. The Bill Bass Trust has granted the Company a call option
to purchase the remaining 25% interest which it has not conveyed to the Company
pursuant to the Share Sale Agreement. The Bill Bass Trust has the right to put
such shares for purchase by the Company if none of Messrs. Franklin, Ashken or
Kiedaisch are members of the Board of Directors of the Company and in any event
after five years from the date of the Share Sale Agreement. The Company has
agreed, for so long as the foregoing options shall be outstanding, to maintain
the net tangible assets of Bolle Australia above $2,300,000 and not to sell any
shares of Bolle Asia. The acquisition of Bolle Australia does not constitute a
significant acquisition for purposes of financial disclosure.

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BUSINESS

INTRODUCTION

The Company designs, manufactures and markets premium sunglasses and
sport shields, goggles and safety and tactical eyewear under the Bolle(R)
brand. Bolle(R) products enjoy worldwide recognition and a high quality image
in the sport and active lifestyle markets, particularly skiing, golf and
cycling as well as a growing reputation in the larger, fashion driven
recreational sunglass market. The Company's safety and tactical business, which
accounts for approximately half of the Company's aggregate unit sales, serves
the specialty segment of the safety eyewear market, including laser protection
products and military applications.

The recent creation of Bolle Inc. through the combination of Bolle
America and Bolle France consolidates the Company's ownership of the worldwide
rights to the Bolle(R) trademark for the Company's products with its
international manufacturing and distribution capabilities into one
organization. For the first time, the Company is positioned to develop and
execute a unified marketing strategy targeted at promoting the Company's
competitive advantages. The Company believes that these advantages include its
strong brand name, integrated design, production and marketing capabilities,
superior technology, specialized product offerings, established international
distributors in over 40 countries and a one-hundred year long heritage of
producing quality products. The Company intends to integrate its international
distributors into a cohesive worldwide network and add new distributors through
acquisitions or distributorship agreements. See "--Business Strategy."

In recent years, the retail sunglass market has experienced the
emergence of a specific premium market, reflected by increased sales of
higher-priced and quality-oriented products. The Company competes in the
premium sunglass market. Based on available industry data, the Company believes
that sales of premium sunglasses grew from $825 million in 1989 to $1.6 billion
in 1996. The factors which contribute to the growth of this market include
advancements in product technology, growing demand for specialized sunglasses,
increased health concerns and greater fashion and image consciousness, all of
which encourage multiple purchases. The Company also competes in the special
purpose safety and tactical eyewear market. Safety and tactical eyewear
products may be designed for general or special purpose. The factors which may
contribute to the potential growth of this market include increasing regulation
of safety eyewear, new special purpose applications, advancements in product
technology and growing demand for more style-oriented products. The Company
believes that both its sunglass and safety and tactical eyewear products, with
their increased user-specific characteristics and proven long-standing
reputation for style and high performance, are suited to today's consumer
preferences in their respective markets.

The Company has recently announced the following corporate
developments, which constitute a significant start to its growth strategy:

Worldwide Marketing Initiative. The Company has launched a worldwide
marketing initiative to promote a consistent brand image through (i)
coordinated advertising campaigns in major international and local media and at
retail locations; (ii) focused sponsorship of athletes attracting international
interest; and (iii) for the first time, a single marketing and product brochure
for distributors worldwide. Through a sport-specific approach the Company plans
to emphasize the technological, style and performance characteristics of
Bolle(R) products. In March 1998, Sunglass Hut identified Bolle as one of a
select number of preferred vendors. The Company intends to grow its business
with Sunglass Hut through prime store locations, cooperative marketing and
chain wide distribution of products.

Significant Endorsement Advertising. As part of its strategy of
building a unified global marketing program, the Company has entered into
agreements with several world-famous athletes to endorse Bolle products. Such
athletes include Martina Hingis, the youngest number one-ranked player in the
history of women's tennis; Jacques Villeneuve, the current formula one racing
world champion; Picabo Street and Jean-Luc Cretier, 1998 Olympic Super G and
downhill gold medalists, respectively; and Steve Jones, winner of the 1996 golf
U.S. Open. In addition, Bolle has sponsorship programs with over a thousand
athletes worldwide who wear Bolle(R) products in competition.

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Focused Product Offerings. The market for premium sunglasses has shown
a trend towards consumer preference for sport-specific eyewear. In 1992, the
Company was the first to introduce a line of sunglasses specifically designed
for golfers. The Company is in the process of focusing its sunglasses and sport
glasses based on their use rather than their design, style or other defining
criteria. For instance, the Company recently introduced its Competivision(TM)
sunglasses, a new model of sunglasses specifically suited to the needs of
tennis players with a high performance selective light filtration system
designed to enhance the clarity of yellow tennis balls. The Company has a
tradition of designing and manufacturing sport-specific eyewear in consultation
with its sponsored athletes. The Company believes that its experience in
designing sport specific eyewear products makes it particularly well positioned
to respond to current trends in consumer preferences.

Alyn Supply Agreement. Consistent with its traditional focus on
technological innovation, in October 1997, the Company entered into the
three-year exclusive Alyn Supply Agreement with Alyn, a manufacturer of
specialized metal frames, to create premium sunglass frames using Boralyn(R), a
special patented metal matrix providing greater strength and stiffness to
weight ratios than titanium, which is currently considered the leading metal
for advanced metal eyewear. Development work on the Boralyn(R) line is in
progress, with a launch planned for 1999.

Acquisition of Distributors. As part of its strategy of consolidating
its distributors, the Company acquired, in March 1998, its Canadian
distributor, Bolle Canada, and in June 1998, 75% of Bolle Australia, which is
the largest independent distributor of the Company's products and the sole
distributor of the Company's products in Australia, where the Company believes
it commands a leading market share. The Company purchased 75% of Bolle
Australia, 100% of Bolle Asia (the distributor of the Company's sunglasses in
Southeast Asia), and the 49% of the shares of Bolle Sunglasses (the distributor
of the Company's sunglasses in the U.K.) not already owned by the Company for
an aggregate price of approximately U.S.$6,250,000, consisting of
U.S.$3,900,000 in cash and U.S.$2,300,000 in Common Stock, or 439,700 Shares,
which will be eligible for resale hereunder. For a period of five years
following the closing of the transaction and subject to certain options to
purchase or sell the same, the Bill Bass Trust would retain a 25% ownership
interest in Bolle Australia providing it with a 25% share in the profits
generated by Bill Bass Australia and a pro rata share of any distributions
therefrom. See "RECENT DEVELOPMENTS."

INDUSTRY OVERVIEW

The Premium Sunglass Market

The sunglass market consists of two main segments, premium and
value-priced. The premium market is defined by products with retail price
points of $30 and over and the value-priced segment is defined by products with
retail price points below $30. The Company competes in the premium, and not the
value-priced, sunglass market. The Company's premium sunglass business accounts
for approximately half of the Company's aggregate unit sales and 70% of the
Company's total sales. The Company's main competitors are Bausch & Lomb
Incorporated ("Bausch & Lomb"), the marketer of the Ray Ban, Killer Loop,
Arnette and Revo brands, Luxottica Spa ("Luxottica"), and Oakley, Inc.
("Oakley"), which together control approximately 60% of the premium market
segment and several other companies with smaller market shares. The Company
focuses on the $60 to $90 price point range, which the Company believes
differentiates it from its major competitors in the sport segment whose average
price is in excess of $100. Approximately 19 million pairs of premium
sunglasses were sold in 1996 for a total value of $1.7 billion. Based on
available industry data, the Company believes that sales of premium sunglasses
grew from $825 million in 1989 to $1.7 billion in 1996.

The key factors contributing to the continuing growth in the premium
sunglass market include the following:

Advancements in Product Technology. New products and technologies are
continually being introduced in the industry to improve the quality and
durability of frames and lenses. Advances include (i) lightweight, virtually
unbreakable, polycarbonate lenses for better comfort and safety; (ii)
interchangeable lenses offering

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multiple styles and functions for a particular frame; (iii) scratch resistant
coatings for longer lasting lenses; and (iv) anti-reflective coatings to reduce
glare and eyestrain, improve visual clarity and cosmetic appeal. These
innovations are increasing the overall range of products in the market as well
as, in many cases, profit margins.

Growing Demand for Specialized Sunglasses Leading to Multiple
Purchases. In addition to consumer concern for quality eye protection and the
growing importance of sunglasses as a fashion accessory, demand for specialized
sunglasses to be used as equipment in different sports and activities has
grown. This additional customer demand has resulted in more product offerings,
greater frequency of purchases by consumers and increased brand awareness.

Increased Health Concerns. Consumer awareness of the harmful effects
of ultraviolet rays on the eyes and the overall importance of health concerns
have increased. This has resulted in greater willingness by consumers to pay
more for premium sunglasses believed to provide greater eye protection. In
addition, as the proportion of the population who require corrective eyewear
increases, the demand for prescription sunglasses is expected to rise.
Non-prescription sunwear sales are likely to be driven by the growing number of
people opting to have their vision surgically corrected.

Increased Fashion and Image Content. Sunglasses are increasingly being
used as fashion accessories for dress, casual and recreational activities. A
number of leading designers, such as Giorgio Armani, Calvin Klein, Guess,
Nautica and Polo Ralph Lauren, among others, are leveraging the appeal of their
brand names by offering lines of sunglasses. As the emphasis shifts to include
function and fashion, the offerings of shapes and colors have been expanded,
creating more sunglass choices and resulting in more frequent purchases by
customers.

The Safety and Tactical Eyewear Market

Safety and tactical eyewear products may be designed for general or
special purpose. General purpose safety and tactical eyewear products provide
undifferentiated protection against hazards such as flying objects, glare and
liquid. Special purpose safety and tactical eyewear products are designed to
fit the needs of a particular category of customers in addition to providing
the same protection features as general purpose safety and tactical eyewear
products. The Company competes in the special purpose segment of the safety and
tactical eyewear market. The Company's main competitors are Bacou USA, Inc.,
the marketer of Titmus(R) and Uvex(R) products, WGM Safety Corp. (a subsidiary
of French manufacturer Christian Dalloz S.A.) which distributes its products
under the Willson Safety Products trade name, and Crews, Inc., which
distributes its products under the Crews Safety Products trade name. The
Company's safety and tactical business accounts for approximately half of the
Company's aggregate unit sales and 30% of the Company's total sales. The
Company focuses on the $3 to $25 price point range.

The key factors which may contribute to the potential growth of the
safety and tactical eyewear market include the following:

Increased Regulation of Safety Eyewear. Demand for safety eyewear
products is driven by government regulations promulgated by agencies such as
the Occupational Safety and Health Administration, the Mine Safety and Health
Administration and the National Institute of Occupational Safety and Health
mandating the use of personal protective eyewear for certain job
classifications and work-site environments. Other factors creating requirements
for personal safety eyewear products at the workplace include the rising cost
of insurance, costs and liabilities relating to worker injury and increased
safety awareness.

New Special Purpose Applications. Demand for laser eye protection
equipment has risen as a result of the generalized use of lasers in
manufacturing processes, military operations and for medical treatment. Other
special purpose applications which have developed in recent years include
protective eyewear for firefighters, sky divers and paratroopers.

Advancements in Product Technology. Technological trends in the
industry include a move toward lighter-weight and thinner polycarbonate lenses,
special applications lenses, such as infrared lenses, and increased

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<PAGE>

use of coatings, such as scratch resistant and anti-fog coatings. Consumer
preferences include lighter and more sophisticated products as more demand for
protective eyewear products arises from service industries, schools and
hospitals. In 1989, the American National Standards Institute changed the
standard pertaining to eye and face protection products. Under the new
standard, the evaluation of safety and tactical eyewear products shifted from
design to performance based criteria. As a result, producers moved to
incorporate more technology in their manufacturing processes to improve product
performance.

Demand for Style-Oriented Products. Style and comfort have led to
better user acceptance and even desirability. Product users prefer fashionable
and comfortable safety and tactical eyewear products. Therefore, the Company
believes that industrial purchasers are inclined to select functional products
which combine the characteristics of fashion and comfort whenever available
because product users are more likely to wear such products regularly, thereby
increasing regulatory compliance and reducing the risk of injury. As a result,
more spectacles and wrap around styles are being developed, as opposed to
heavier and bulkier goggles and face shields. Rising demand for a broader
variety of lens options, styles and colors is also expected.

Private Placement. On June 1, 1998 the Company completed the sale of
$7,000,000 aggregate principal amount of its Convertible Notes to Och Ziff Fund
pursuant to an exemption from registration under the Securities Act. See
"RECENT DEVELOPMENTS" and "DESCRIPTION OF CAPITAL STOCK--Convertible Notes."
The Convertible Notes are convertible at any time at the option of the
holder(s) thereof and, under certain circumstances, of the Company into a
maximum of 1,333,333 Shares of Common Stock. Under certain circumstances,
including if the Company fails to convert or redeem any Convertible Notes when
due, the Company becomes obligated to repay the principal amount of such
Convertible Notes (up to a maximum of $7,000,000) in cash and to issue up to
360,000 Shares to the holder(s) of such Convertible Notes. All the Shares
issuable pursuant to the terms of the Convertible Note Purchase Agreement will,
if issued, be eligible for resale hereunder. See "SELLING STOCKHOLDERS" and
"PLAN OF DISTRIBUTION."

BUSINESS STRATEGY

Building on its technological heritage and its other competitive
advantages, the Company intends to leverage its established international
distributors in over 40 countries through a worldwide marketing initiative to
expand the Bolle(R) brand aggressively.

Competitive Advantages

The Company believes that it has the following competitive advantages:

Strong Brand Name. Bolle(R) products enjoy a strong reputation for
high performance and style. This reputation is based on the superior technical
characteristics of the Bolle(R) frames and lenses. Because famous brand names
are known to trigger instant appeal among consumers, the Company continuously
seeks to strengthen consumer perception of the Bolle(R) brand name as
representing high quality, technologically advanced and fashionable eyewear
products. The Company believes that the Bolle(R) brand ranks among the five
best known brands in the premium sport sunglass market and is especially strong
among consumers having an active lifestyle, such as skiers, cyclists, surfers
and other sports enthusiasts. As a result, the Company has the ability to lead
the market for certain of its products. For example, Bolle(R) ski goggles
collections such as Chrono(TM) and Future(TM) have been recognized as setting
standards for quality products in their market by numerous ski champions. The
Company will continue to pursue its constant search for superior lens
technology as well as improved frame quality and design with the objective of
achieving increased brand recognition and greater differentiation from its
competitors.

Integrated Design, Production and Marketing. As a result of its July
1997 acquisition of Bolle France, the Company owns the production and design
capabilities of Bolle France and the worldwide rights to the Bolle(R) brand for
its products. The Company believes that this organization enables the Company
to develop and execute a unified worldwide marketing and distribution strategy
focused on expanding the Bolle(R) brand with a consistent

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brand image and design innovation. The Company's design team, which is
supervised by Mr. Maurice Bolle, oversees the entire design process from mold
creation to the final lens development stage. The Company enjoys flexible
manufacturing in Oyonnax, France through the use of local subcontractors, while
retaining control over manufacturing and all its proprietary processes.

Superior Technology. Bolle(R) eyewear products incorporate several
unique technological features, thus enabling the Company to better
differentiate itself from its competitors. The best known of these features is
Bolle(R) hydrated "memory" nylon, a virtually unbreakable material obtained
through a proprietary process owned by the Company. The Company uses this
special process to saturate the nylon material so that it retains moisture.
Bolle nylon frames return to their original shape after mistreatment, which
significantly improves product life. In addition, unlike most of its
competitors, the Company manufactures its own polycarbonate lenses. The
Company's primary lens material is polycarbonate, a lighter and more impact
resistant material than glass which provides 100% protection from damaging
ultraviolet light. Bolle(R) proprietary lenses provide each eye with a separate
optical center of focus, which permits the use of wraparound designs with wide
coverage without sacrificing overall optical clarity or introducing distortion.
The Company also offers an interchangeable lens system (marketed under the
Breakaway(TM) brand), which enables consumers to customize the look and
function of certain Bolle(R) products by offering different lenses that fit in
the same frame. Consistent with its traditional focus on technological
innovation, the Company continues to search for new technologies. The Company
has entered into a six-year exclusive Supply Agreement with Alyn to create
premium sunglass frames using Boralyn(R), a special patented metal matrix
providing greater strength and stiffness to weight ratios than titanium, which
is currently considered the leading metal for advanced metal eyewear. As a
result of its superior technological characteristics, Bolle(R) eyewear is known
for its durability, resiliency and light weight, all characteristics that are
important to customers engaged in sports and leisure activities. It is the
Company's objective to continue to develop, manufacture and sell products with
these superior quality and durability characteristics.

Specialized Product Offerings. The market for premium sunglasses has
shown a trend toward consumer preference for sport-specific eyewear. The
Company is in the process of focusing its sunglasses and sport glasses based on
their use rather than their design, style or other defining criteria. The
Company has a tradition of designing and manufacturing sport-specific eyewear
products in cooperation with its sponsored athletes. For example, the Company
has worked with French Olympic ski champions Jean-Claude Killy and, more
recently, Luc Alphand to design and continuously improve its ski goggles. The
Company also has worked closely with U.S. cycling champion Greg LeMond, a three
time winner of the Tour de France, to design its current line of cycling
glasses, including the signature Greg LeMond Attack(TM) line. In 1992, the
Company was the first to introduce sunglasses with features specifically
designed for golf, such as distortion free vision and wraparound design to
prevent wind and glare interference. Other examples of lines of sport glasses
include Aquashield(R) for water sports and Varsity for squash and racquetball.
The Company recently introduced its Competivision(TM) sunglasses, a model of
sunglasses specifically suited to the needs of tennis players with a high
performance selective light filtration system designed to enhance the clarity
of yellow tennis balls. These sunglasses are used by Martina Hingis in
competition.

Growth Strategy Targeted at Expanding Aggressively the Bolle(R) Brand

Worldwide Marketing Initiative. The Company intends to enhance and
unify its marketing efforts with the objective of achieving increased
recognition of the Bolle(R) brand name around the world. The Company's
worldwide marketing initiative includes a single marketing and product brochure
for distributors worldwide, coordinated advertising campaigns in major
international and local media and at retail locations, more focused sponsoring
of athletes attracting international interest and the unification of the
Company's sport celebrities endorsement program. The Company's marketing
initiative will seek to emphasize through a unified sport-specific approach the
technological, style and performance characteristics of Bolle(R) products. The
Company's marketing strategy also includes training retail salespersons to
fully understand the specifics of Bolle(R) products and in-store education
highlighting the Bolle(R) style and technical features. In March 1998, Sunglass
Hut identified Bolle as one of a select number of preferred vendors. The
Company intends to grow its business with Sunglass Hut through prime store
locations, cooperative marketing, and chainwide distribution of products. The
Company expects to

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coordinate with its international distributors future introductions of new
Bolle(R) products, such as new motorsports and fishing lines, so as to maximize
the benefits which the Company may derive from its worldwide rights to the
Bolle(R) brand and enhance global sales. The Company also expects to maximize
the impact of its worldwide marketing initiative by also building a cohesive
distribution network.

Create and Leverage a Cohesive Distribution Network. The Company will
seek to ascertain greater control over the distribution of its products by
creating and expanding an integrated network of Bolle(R) distributors around
the world through acquisitions and distributorship agreements. The Company has
purchased 75% of Bolle Australia, its largest independent distributor, and
certain of its affiliates, including Bolle Sunglasses and Bolle Asia, the
distributor of the Company's sunglasses in the U.K. and Southeast Asia,
respectively. The Company expects the integration and expansion of its
distribution channels to result in new accounts and a larger customer base. In
addition, the Company expects the improved efficiencies that could result from
this strategy to lead to additional distribution capacity, which, when combined
with actual increased production, could also contribute to increased sales.

Increased Use of Flexible Manufacturing. The Company enjoys flexible
manufacturing in Oyonnax, France through the use of local subcontractors, while
retaining control over manufacturing and all proprietary processes. The use of
a number of small local subcontractors enables the Company to maintain a
variable cost structure and minimal inventory levels, as well as to respond
quickly to shifting trends in the industry. The Company will seek to improve
the efficiency of this flexible manufacturing process by reducing lead time
from design to distribution. The Company expects improved efficiency to result
in increased manufacturing capacity and faster product launches.

Develop Product Line Extensions. The Company has plans to develop
product line extensions bearing the Bolle(R) brand. Once the reputation of the
Bolle(R) brand as a worldwide leader is established in a particular sport and
active lifestyle market, brand extensions have been successful, as shown by the
Company's experience with Bolle Australia, which has developed and carries a
successful line of Bolle(R) accessories, representing approximately 25% of
Australian sales.

Safety and Tactical Business Strategy

The first range of Bolle safety spectacles and goggles were
manufactured in Oyonnax, France in 1950 and the first tactical eyewear products
sold by Bolle were motorcycle goggles for the French Ministry of Defense in
1982. Since this time Bolle has established a reputation for high quality,
stylish safety eyewear. Style is a key element in the marketing of safety
products because it induces personnel to wear the safety eyewear.

Bolle's safety business has grown at a compound growth rate of
approximately 10% since 1980. The Company's strategy is to build on the success
it has experienced in its strongest safety markets (Australia, France and the
UK) to introduce the safety collection in other markets, particularly in the
rest of Europe and North America. The product has a proven track record of
customer acceptance which management believes can be developed in these new
markets. The Company is continually introducing new models into the market and
has introduced a prescription line in the UK.

Tactical products have been sold to military establishments in over 10
countries. A separate tactical and military sales force was established by the
Company in 1998 and initial responses at trade shows has been encouraging. The
nature of the business is that orders tend to be relatively large, but are
infrequent.

PRODUCTS

General

The Company designs, manufactures and markets premium sunglasses and
sport shields ranging in retail price from $30 to $165 and ski goggles at most
price points. The Company currently offers approximately 180 models of
sunglasses, sport shields and goggles in 15 collections for a total of
approximately 400 separate product

34
<PAGE>

offerings. Each year, the Company attempts to introduce a number of new models
and collections and retire slower moving product offerings. Recently introduced
Bolle(R) products include the Breakaway(TM) and Snakes(TM) collections. The
Company believes that the continued introduction of new and innovative products
will be important to its success and that it must continue to respond to
changing consumer preferences in the areas of style, function and technological
innovation.

Active Lifestyle Focus

Bolle(R) sunglasses are particularly suited to most athletic
endeavors, from recreational activities to hard-core competition, such as
skiing, snowboarding, triathlon, surfing, golf and other outdoor pursuits and
generally to the needs of customers having an active lifestyle. Bolle(R) sport
shields and goggles are offered for a broad range of sports activities,
including road and high-speed sports, squash, racquetball and other high impact
sports, golf, surfing and windsurfing, rock and ice sports as well as sky
diving. Bolle(R) ski goggles are designed to provide performance and protection
to persons facing the elements encountered in skiing, snowboarding and other
winter sports. Sales in the ski goggle market are dependent to a significant
extent on weather conditions and the quality and duration of the ski season.
Bolle(R) safety and tactical eyewear includes safety glasses and goggles, face
shields, laser eye protection devices and other specialized safety and tactical
eyewear products.

Technological Characteristics

Bolle(R) Frames. Bolle(R) nylon frames are lightweight and virtually
unbreakable. The Company uses a hydrated "memory" nylon, a virtually
unbreakable material obtained through a proprietary process owned by the
Company. The Company uses this special process to saturate the nylon material
so that it retains moisture. Bolle nylon frames return to their original shape
after a mistreatment, which significantly improves product life. Pigments are
incorporated during the manufacturing process and are therefore unalterable.
Grylamid frames are used for their transparent properties and light weight
while metal frames employ state-of-the-art alloys which provide durability and
resiliency while offering modern styling. Frames are offered in a variety of
monochromatic versions from black to fluorescent pink to white as well as in
exotic versions from patterns in the "Graffiti(TM)" line to various sparkling
colors in the "Crystal(TM)" line and most recently "Cyber(TM)" colors. Bolle
also sells metal frames primarily through its optical distribution network.

Bolle(R) Polycarbonate Lenses. The Company's primary lens material is
polycarbonate, a lighter and more impact resistant material than glass, which
provides high protection from damaging sun light. The Company was among the
first to incorporate lightweight polycarbonate lenses for use in recreational
eyewear, including sunglasses and sport glasses. The Company has since
developed its own polycarbonate lens, the Bolle(R) 100, which is capable of
stopping 100% of ultraviolet rays, 100% of infrared rays and 56% of blue light.
This lens can achieve this high performance without any surface coating. Its
filtering power is due exclusively to absorbers included in the material and
its applications are sun protection, computer work, welding and lasers.
Approximately 85% of the Company's total current production features
polycarbonate lenses. The Company believes the use of polycarbonate lenses has
played an important role in its ability to manufacture high performance
technologically-advanced eyewear products. Although polycarbonate is three
times lighter than glass and maintains perfect optical quality, it is twenty
times more impact resistant than glass and can be pierced without creasing,
cracking or splitting. Optically correct polycarbonate lenses are quartz coated
for scratch resistance. Polycarbonate lenses are available in a variety of
colors including smoke, vermilion, amber, emerald and clear, each adapted to
particular weather conditions.

Acrylic, Acetate and Glass Lenses. Other lens materials in the
Company's product lines include acrylic, acetate and glass. Acrylic is a
durable yet inexpensive material used in the Company's medium-priced
collections that allows the Company to offer products at an economical price
point. Acrylic lenses are lighter than glass, pass tests adopted by the U.S.
Food and Drug Administration for impact resistance and offer scratch resistance
through quartz coating. Cr 39(R) plastic lenses are available in clear, yellow,
vermilion, smoke and all-weather designs. Spectra lens coatings that are
available include blue, green, orange, rose, gold and silver. The Polarized
lens

35
<PAGE>

collection features glass lenses, offering light smoke, dark smoke and
light brown polarization. Polarized lenses reduce surface glare. Multilayer
coatings include blue, violet, green, red, gun and infrared.

Optional Features

The Company offers an interchangeable lens system (marketed under the
Breakaway(TM) brand), which enables consumers to customize the style and
functions of certain Bolle(R) products by adapting different lenses to the same
frame. Also offered with many Bolle(R) products is a patented Sport Optical
System(TM), which the Company has designed to satisfy the needs of an
increasing number of its customers requiring sport glasses with corrective
lenses. Along with anti-scratch coating and polarization, most Bolle(R) sport
and protective eyewear products offer anti-fog coating, which the Company was
the first to develop for its ski goggles in 1973.

Safety and Tactical Products

The Company carries a line of approximately 50 safety and tactical
styles and produces customer specific designs for special purpose applications.
The products feature the Company's proprietary "memory" nylon frames and
carboglass lenses, which are high impact and scratch resistant material based
on polycarbonate, but sprayed with quartz crystal coating. The Bolle(R) safety
spectacle range provides style, function and comfort using advanced technology
and materials. As well as manufacturing safety glasses for standard industrial
requirements, the Company specializes in specific application eyewear such as
laser glasses, chemical splash protection and military approved products. A
number of the designs are based on the sunglass collection; similarly a number
of the technological features used on Bolle sunglasses are developed from the
Company's in-house research and development efforts undertaken in connection
with its safety and tactical eyewear products.

ADVERTISING AND MARKETING

As a result of its recent acquisition of Bolle France, the Company
owns the production and design capabilities of Bolle France and the worldwide
rights to the Bolle(R) brand for its products. This organization enables the
Company to create and execute a unified worldwide marketing and distribution
strategy. This strategy is focused on leveraging the Bolle(R) superior
technology and established distributors in over 40 countries to aggressively
expand the Bolle(R) brand with consistency of brand image and design
innovation. The Company's worldwide marketing initiative includes a single
marketing and product brochure for distributors worldwide, coordinated
advertising campaigns in major international and local media and at retail
locations, increased sponsoring of significant sport competitions and athletes
attracting international interest and the unification of the Company's sport
celebrities endorsement program. The Company's marketing strategy also includes
training retail salespersons to understand fully the specifics of Bolle(R)
products and in-store education highlighting the Bolle(R) style and technical
features. The Company expects that the impact of its worldwide marketing
initiative will be maximized by its parallel efforts to build a cohesive
distribution network. The Company expects to coordinate future introductions of
new Bolle(R) products, such as a new motorsports line, with its international
distributors so as to maximize the benefits which the Company may derive from
its worldwide rights to the Bolle(R) brand and enhance global sales. The
Company's marketing initiative will seek to emphasize, through a sport-specific
approach, the technological frame and lens characteristics and proven
reputation for style and performance of Bolle(R) products.

The Company intends to unify and expand its sponsoring program through
the use of endorsement arrangements with sports celebrities and professional
athletes. Endorsement contracts typically have a two-to three-year term,
providing the Company with flexibility to renew such contracts. The Company has
sponsored athletes in a number of venues including the Tour de France, the
Olympic Games and the Pro Golf Tour. French Olympic gold medal ski champions
Luc Alphand and Jean-Luc Cretier use and endorse the Company's Chrono(R) line
of ski goggles. Martina Hingis, the youngest number one-ranked player in the
history of women's tennis, wears exclusively Bolle(R) sunglasses, sport glasses
and ski goggles at all public events and for recreation, and has agreed to
appear in advertisements and promotions for Bolle(R) products worldwide.
Jacques Villeneuve, the current formula one racing world champion, and Picabo
Street, winner of the gold medal in the Super G competition in the

36
<PAGE>

1998 Winter Olympic Games, also wear exclusively Bolle(R) sunglasses, sport
glasses and ski goggles at all public events for recreation, and have agreed to
appear in advertisements and promotions for Bolle(R) products worldwide. The
Company also sponsors a variety of teams and organizations including sports
federations, the Professional Golfers Association and the U.S. ski team. These
sponsorships are a cost-effective means of publicizing the Bolle(R) brand name
while demonstrating the Company's ability to deliver quality products that
satisfy the performance needs of a broad array of sports.

The Company intends to capitalize on the opportunity to consolidate
globally the brand management and marketing of the Bolle(R) brand for its
products. This will enable the coordination of new product releases worldwide
and promote a consistent brand image and an international, focused athlete
sponsorship program.

DESIGN AND PRODUCTION

Design. The Company employs a four person design team in Oyonnax and
maintains relationships with outside design agencies under the supervision of
Mr. Maurice Bolle. Mr. Maurice Bolle designed the famous cat eye sunglass in
the 1950's. The Bolle design team oversees the entire design process, from
carving the actual frame out of acetate to mold creation, forming, polishing
and the final lens development stage. Approximately 20 new molds are designed
each year. The Company currently houses a library of approximately 700 molds.
The molds for each Bolle(R) design have been inventoried in a warehouse at the
Company's facilities in Oyonnax, France and the Company believes it maintains
the capability to produce over 97% of the products represented by its mold
inventory.

Production. Although the Company has outsourced the completion of a
substantial number of steps in the process it uses to manufacture its products,
the Company still closely oversees the activities of its subcontractors. This
enables the Company to retain control over the entire assembly process that
leads to any finished Bolle(R) product, including the production of eyeglass
frames through injection molding and of foam cushioning and straps for the
Company's sport products as well as the creation of design applications added
to eyeglass frames. The majority of the subcontractors of the Company are
located in the immediate vicinity of the Company's facilities in Oyonnax,
France and the manufacturing of Bolle(R) products is their primary activity.
The Company has not entered into binding agreements with its subcontractors and
has not outsourced the production of items involving proprietary processes.
However, the Company believes that its history of good relations with such
subcontractors and the close proximity of these subcontractors to its
operations provides a conducive environment for continued good business
relations. The Company believes its arrangements with subcontractors enable it
to maintain a variable cost structure and minimal inventory levels, as well as
to respond quickly to shifting trends in the industry.

Products manufactured entirely by the Company include those made
pursuant to orders that are not large enough to warrant subcontractor
production, or which require the utilization of certain molds which do not fit
the machine specifications of subcontractors or which correspond to new or
specific design requirements, such as hard eyewear cases or certain eyeglass
frames which feature a wire-reinforced temple. The Company also participates in
original equipment manufacturing for other manufacturers of premium-priced
eyewear at its manufacturing facility. Although such arrangements do not
represent a significant portion of its business, the Company believes the
manufacturing of these products is evidence of its continued reputation as a
quality producer of high performance eyewear.

SUPPLIERS

Raw Materials

The Company generally obtains the raw materials required for use in
eyewear production, such as polycarbonate and nylon, from distributors of such
materials and occasionally directly from suppliers. The Company is not
dependent on any one source for the supply of such materials and has not in the
past had, and does not expect in the future to have, difficulty in obtaining
these materials. These materials are generally available from a number of U.S.
and international suppliers.

37
<PAGE>

Metal Frames

Pursuant to the Alyn Supply Agreement, Alyn, the exclusive
manufacturer of Boralyn(R), a special proprietary metal matrix providing
greater strength and stiffness to weight ratios than titanium, has agreed to
provide the Company exclusively with sunglass frames using Boralyn(R), which is
currently considered the leading metal for advanced metal eyewear. Alyn has
retained the right to provide certain prescription eyeglass frames to other
customers. In order to retain exclusivity, the Company must maintain certain
specified minimum purchase amounts, starting at 100,000 units for the first
year and increasing by 50,000 units per year through the fourth year and by
25,000 units per year for the two remaining years. The Alyn Supply Agreement is
for a term of three years beginning with the first shipment of frames from Alyn
to the Company and will extend for an additional three years if the Company
meets its contractual requirements and agrees to certain specified purchase
levels.

COMPETITION

The Company faces intense competition in the premium sunglasses and
ski goggle business. The premium sunglasses industry is dominated by three
large competitors, Bausch & Lomb, Luxottica and Oakley, with a combined share
of the U.S. premium sunglass market estimated at approximately 60%. The rest of
the market is fragmented, with numerous small competitors. The Company competes
with a number of manufacturers, importers and distributors whose brand names
may enjoy greater brand recognition than that of Bolle(R). The principal
methods of competition are style, product performance, price and brand
recognition. Most competitors of the Company offer a portfolio of brands, as
opposed to focusing exclusively on one brand, as do the Company and Oakley. In
addition, the Company faces intense competition in the safety and tactical
eyewear market, including competition from Bacou, Uvex, Dalloz, Karsurg and a
number of Far East manufacturers who have introduced styles similar to those of
the Company. Competition in safety and tactical eyewear is based on quality,
price, reputation and technological features.

Companies active in Bolle's industry must respond simultaneously to
changes in fashion and technology, yet maintain inexpensive and rapid
production in order to remain competitive. Moreover, changing economic
conditions and regulatory policies complicate such companies' ability to
address all factors effectively. Consequently, these companies attempt to
reduce the impact of these variables through reliance on name brands and
images. Consumers' purchasing decisions are often the result of highly
subjective preferences which can be influenced by many factors, including,
among others, advertising, media, promotions and product endorsements. The
Bolle(R) name has been recognized for decades and the Company believes that it
is well positioned to retain such strong recognition in the future. The Company
believes that its competitive advantages include its strong brand name; product
quality; product performance; leading edge styling; integrated design,
production and marketing; superior technology and technological innovation;
specialized product offerings; price; and international distribution networks.
The Company also believes that the competitive advantage constituted by the
Company's right to market Bolle(R) products in the United States through
multiple retail distribution channels, including general and specialty sporting
goods stores and optometrists, ophthalmologists and opticians, is important to
its competitive position.

The Company believes its continued success will depend upon its
ability to remain competitive in its product areas. With several of its
competitors having greater financial, research and development, manufacturing
and marketing experience and resources than the Company, the Company faces
substantial long-term competition. The failure to compete successfully in the
future could result in a material deterioration of customer loyalty and the
Company's image and could have a material adverse effect on the Company's
business.

CUSTOMERS

The distributors owned by the Company are not dependent upon a single
customer or a few customers. None of the Company's customers accounted for more
than 10% of the Company's consolidated revenues in 1997. Bolle America's top 25
customers represent approximately half of its total net sales. In addition to
its relationships with large chains, Bolle America has an established
distribution network to thousands of smaller customers.

38
<PAGE>

QUALITY CONTROL AND PRODUCT IMPROVEMENT

Bolle(R) products are subject to stringent quality control
requirements. At every step of the production process, each piece of a product
is inspected by hand before moving to the next level of production. The Company
estimates that each unit of eyewear undergoes a minimum of four quality control
inspections before it leaves the facility. Technicians test random samples from
the manufacturing facility and from subcontractors to check for durability and
other production specifications. Product improvements are continually developed
in the Company's testing laboratory. For instance, the Company tests the fit of
its sport and safety goggles by using a machine which agitates particles in the
air and measures the amount of particles which pass through the edges of the
product. The Company's testing laboratory meets all British, German and U.S.
national standards for testing. High velocity and radiation testing are
conducted regularly. Laser coating units and spectrophotometers add to the
Company's ability to produce superior products.

SALES AND DISTRIBUTION

The Company sells its products through a worldwide network of both
affiliated and independent wholesale distributors in over 40 countries, which
in turn distribute Bolle(R) products to retail outlets. Information regarding
the sales, operating profit or loss and identifiable assets attributable to the
Company's U.S. and foreign operations for the year ended December 31, 1997 is
set forth in Note 16 to the Company's Consolidated Financial Statements
included in this Prospectus. During 1997, 42% of total sales were to North
American distributors, 36% of sales were in Europe, 14% of sales were in
Australia and Asia and 8% of sales were made to customers in the rest of the
world. Prior to the acquisition of Bolle France by the Company in July 1997,
the Company had no foreign operations and the information regarding the sales,
operating profit or loss and identifiable assets of the Company for the years
ended December 31, 1996 and 1995, which is provided in Note 16 to the Company's
Consolidated Financial Statements, is only attributable to Bolle America's U.S.
operations.

In the United States, the Company sells its products through a
nationwide network of approximately 200 independent sales representatives and
distributors to over 10,000 accounts, which include general and specialty
sporting good stores, opticians, ophthalmologists and optometrists, golf pro
shops, retail sunglass stores and mail order catalog companies.

The Company's retail products distribution operations are designed to
meet the individual inventory and service requirements of its customers.
Products are shipped in a variety of volumes, ranging from full truck loads to
small orders to pre-stocked displays. Most orders are shipped by ground service
via common carriers to either a customer's distribution center or directly to
the customer's retail location. The Company believes that its operations are
capable of meeting a customer's individual service needs.

The Company plans to consolidate certain of its distributors through
acquisitions or other arrangements over the next three years. As part of this
strategy, the Company purchased 75% of Bolle Australia, the largest independent
distributor of the Company's products and the principal distributor of the
Company's products in Australia, whose sales of Bolle(R) products in Australia
exceeded $10 million in 1997. The Company believes that this will provide the
potential for increases in the efficiency and utilization of its distribution
channels.

SEASONALITY

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<PAGE>

REGULATION

The Company has been specifically certified by appropriate industry
and governmental authorities to manufacture sunglasses, sport products and
industrial protection products as well as laser protection products and eyewear
produced for specific military orders.

INTELLECTUAL PROPERTY

The Company, directly or indirectly, owns the exclusive right to a
number of registered trademarks in the United States and other countries,
including Bolle(R); Bolle PC(R); ACRYLEX(R); ALIEN(R); CONTOUR(R);
CHRONOSHIELD(R); MICRO EDGE(R); GEOMETRIC(R); TIGER SNAKE(R); SUNSPENDER(R);
Bolle EYEZONE(R); EYEZONE DESIGN(R); NORTHERN LIGHTS(R); PUT 'EM ON YOUR
FACE(R); EAGLE VISION(R); TACTICAL(R); AVANT EDGE(R); bf(R); MAURICE BOLLE(R);
CARBO GLAS(R); AQUASHIELD(R); and the Snakes design. In addition, Bolle America
has applications pending to register a number of additional trademarks,
including BREAKAWAY(TM); SEE BETTER, PLAY BETTER(TM); Bolle MADNESS(TM); Bolle
ATTACK(TM); Bolle ESCAPE(TM); Bolle CARBONEX(TM); VAPOR TRAIL(TM); and TOUR
ELITE(TM).

The Company has a number of design and utility patents registered in
the United States and other countries. The Company's United States patents have
expiration dates ranging from 2001 to 2015; certain of these patents are
subject to the payment of maintenance fees to maintain their registration.
These patents are intended to protect the unique design and functional
characteristics of certain Bolle(R) products from duplication by competitors.
There can be no assurance that any individual patent will provide substantial
protection or be of commercial value. The loss of any one patent would not have
a material adverse effect on the business of the Company.

EMPLOYEES

As of July 30, 1998, the Company had approximately 160 employees,
approximately half of which were assigned to the Company's design, production
and distribution operations in France with the remainder assigned to its
distribution operations in the United States and other parts of the world. None
of the Company's employees working in the United States is subject to a
collective bargaining agreement. Employees of the Company working in France are
subject to the provisions of the French Labor Code and a collective bargaining
agreement. The Company considers its relations with its employees in the United
States and France to be satisfactory.

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<PAGE>

FACILITIES

As of July 30, 1998, the locations of the Company's principal
facilities are as follows:
<TABLE>
<CAPTION>

APPROXIMATE
LOCATION PRINCIPAL USE/USER(S) SQUARE FOOTAGE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Oyonnax, France............. Manufacturing plant, design center, warehouse 90,000
and office space

Denver, Colorado............ Warehouse and office space 30,000
</TABLE>

The Company's main manufacturing facility in France is approximately
90,000 square feet, located just outside Oyonnax, France. This facility houses
the majority of the manufacturing activities of the Company as well as the
quality control aspects, management, accounting and design. The Company
recently relocated its warehouse and office space in the U.S. in Denver,
Colorado. The new facilities have an approximate square footage of 30,000.

The Company owns all of its manufacturing facilities in France and
will lease its Wheat Ridge facilities, which are located in the Denver
metropolitan area, under a lease which expires in 2005, with an option to
extend for an additional three year term.

ENVIRONMENTAL REGULATION

Manufacturing operations managed by corporations in which the Company
has an interest are subject to regulation by various federal, state and local
agencies concerned with environmental control. The Company believes that its
facilities are in substantial compliance with all existing federal, state and
local U.S. and non U.S. environmental regulations.

LEGAL PROCEEDINGS

While the Company is engaged in routine litigation incidental to its
business, 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 the
subject. In connection with the Spinoff, the Company has agreed to indemnify
Lumen against liabilities which may arise from certain pending litigation. See
"RECENT DEVELOPMENTS--Spinoff." The Company does not believe that any of such
pending litigation constitutes material legal proceedings for the Company.

41
<PAGE>

MANAGEMENT

The following table sets forth the names, ages and positions of the
executive officers and members of the Company's Board of Directors. Their
respective backgrounds are described following the table.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Martin E. Franklin(1)(2)............... 33 Chairman of the Board of Directors
Gary A. Kiedaisch(1)................... 51 President, Chief Executive Officer and Director
Ian G. H. Ashken(1)(2)................. 37 Executive Vice President of Finance and Administration,
Chief Financial Officer, Assistant Secretary and Director

Nora A. Bailey(3)(4)................... 57 Director
Franck Bolle(1)........................ 41 Director
Patricia Bolle Passaquay(1)............ 41 Director
David L. Moore(2)(3)(4)................ 40 Director
David S. Moross(3)(4).................. 40 Director
</TABLE>
- ---------------------
(1) Member of Executive Committee
(2) Member of Nominating Committee
(3) Member of Audit Committee
(4) Member of Compensation/Stock Option Committee

Directors of the Company are elected at each annual meeting of
stockholders. The Company's By-laws provide that the annual meeting of
stockholders shall be held on June 30 of each year or as soon as practicable
thereafter. All of the officers identified above serve at the discretion of the
Board of Directors of the Company. Other than Franck Bolle and Patricia Bolle
Passaquay, who are cousins, there are no family relationships between any
persons identified above.

The Company has established (i) an Audit Committee which reviews the
services provided by the Company's independent auditors, consults with the
independent auditors on audits and proposed audits of the Company and reviews
the need for internal auditing procedures and the adequacy of internal
controls; (ii) a Compensation Committee which determines executive compensation
and stock option awards; (iii) an Executive Committee which exercises, to the
maximum extent permitted by law, all powers of the Board of Directors between
board meetings, except those functions assigned to specific committees; and
(iv) a Nominating Committee which selects nominees for election as members of
the Board of Directors of the Company. The Board of Directors may establish
additional committees from time to time.

The following are brief biographies of persons identified above.

Martin E. Franklin was elected Chairman of the Board of Directors of
the Company in February 1997 and acted as Chief Executive Officer until July
1997. Mr. Franklin has served as Chairman of the Board of Lumen since its
formation and served as its Chief Executive Officer until March 1998. Mr.
Franklin was Chairman of the Board and Chief Executive Officer of Benson from
October 1992 to May 1996 and President from November 1993 to May 1996. 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 is non-executive Chairman and a director of Eyecare Products and also
serves on the board of Specialty Catalog Corp. Mr. Franklin received his B.A.
in Political Science from the University of Pennsylvania.

Gary A. Kiedaisch was appointed President, Chief Executive Officer and
a member of the Board of Directors of the Company in July 1997. From 1989 until
his appointment as the Chief Executive Officer of the Company, Mr. Kiedaisch
had been President and Chief Executive Officer of the Mt. Mansfield Company
d/b/a

42
<PAGE>

Stowe Mountain Resort, a wholly owned subsidiary of multi-national insurance
and financial services conglomerate American International Group. Prior to his
tenure in Stowe, he held executive positions with several high visibility
companies in the winter sports industry including AMF Head Ski Worldwide,
Raichle Monitor USA, Blizzard North America and Hart Ski Manufacturing Company,
where he had responsibility for worldwide marketing, coordinating and
consolidating distributor networks and unifying worldwide brand identification.

Ian G.H. Ashken, A.C.A. was elected Executive Vice President, Chief
Financial Officer, Assistant Secretary and a member of the Board of Directors
of the Company in February 1997. Mr. Ashken was elected Executive Vice
President, Chief Financial Officer, Assistant Secretary and a Director of Lumen
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. Since October 1996, Mr. Ashken has been Vice Chairman of Marlin
Holdings, Inc., the general partner of Marlin Capital, L.P. Mr. Ashken is a
director of Eyecare Products. Mr. Ashken received his B.A. (Hons) in Economics
and Accounting from the University of Newcastle in England.

Nora A. Bailey, Esq. became a member of the Company's Board of
Directors in March 1998. 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 is also a director of
Lumen. Ms. Bailey received her J.D. from the University of Michigan Law School.

Franck Bolle has been a member of the Board of Directors of the
Company since July 1997. Mr. Bolle was appointed President and Director of
International Operations of Bolle France in July 1997. Mr. Bolle has been a
member of the executive management of Bolle France since 1984 and as such has
shared responsibility with Ms. Passaquay for the day-to-day operations of Bolle
France. Prior to joining Bolle France, Mr. Bolle served as Sales Manager of a
home improvement supplies manufacturer. Mr. Bolle holds a degree in business
administration with a concentration in marketing from Ecole Libre des Sciences
Commerciales Appliquees of Paris, France.

Patricia Bolle Passaquay has been a member of the Board of Directors
of the Company and Director of Export Sales since July 1997. Ms. Passaquay has
been a member of the executive management of Bolle France since 1981 and as
such has shared responsibility with Mr. Franck Bolle for the day-to-day
operations of Bolle France. Ms. Passaquay holds a degree in business
administration with a concentration in marketing from Ecole Libre des Sciences
Commerciales Appliquees of Paris, France.

David L. 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 received his B.A. in Economics from Amherst College and his M.B.A.
from Harvard University.

David S. Moross became a member of the Company's Board of Directors in
March 1998. Mr. Moross is presently active with the Whitehall Financial Group,
a holding company that invests throughout the world, and is a member of its
Board of Directors. Mr. Moross recently was appointed Managing Director of the
newly created IMG/Chase Sports Capital Fund, a private equity venture formed by
International Management Group ("IMG") and Chase Capital Partners to invest in
the sports industry. Mr. Moross has also served as a consultant to IMG for the
past eight years. He also served as President and Chief Executive Officer of
Kalvin-Miller International, Inc., a national insurance broker. Mr. Moross
received his B.A. in economics from the University of Texas at Austin.

43
<PAGE>

EXECUTIVE COMPENSATION

From the Company's inception in February 1997 until December 31, 1997,
the executive officers of the Company, other than Gary A. Kiedaisch, its Chief
Executive Officer, were officers of Lumen, and the compensation of such
executive officers was paid by Lumen. Although such compensation was in part
for services rendered to the Company, the full amounts thereof are provided
below because, prior to the Spinoff, the Company was a subsidiary of Lumen and
no apportionment between Lumen and the Company was made on an ongoing basis.

SUMMARY OF COMPENSATION

The following Summary Compensation Table sets forth information
concerning compensation earned by the Company's Chief Executive Officer and its
other executive officers in the fiscal year ended December 31, 1997.

SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
-----------
ANNUAL COMPENSATION(1) AWARDS
------------------------------- -----------
NUMBER OF
SECURITIES
UNDERLYING ALL OTHER
SALARY BONUS OPTION/ COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($)(5) ($) SARS(3) ($)
- --------------------------- ---- ------ -------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Gary A. Kiedaisch
Chief Executive Officer.......... 1997 103,846(6) 37,500 166,667 0
Martin E. Franklin(2)
Executive Chairman............... 1997 257,500 300,000 183,333 34,541(4)
Ian G. H. Ashken(2)
Executive Vice President of
Finance and Administration,
Chief Financial Officer and
Assistant Secretary............ 1997 206,000 168,750 33,333 27,546(4)
</TABLE>

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

(1) The compensation of the Company's executive officers was paid entirely
by Lumen in 1997.

(2) This information reflects the aggregate compensation paid by Lumen for the
services of Messrs. Franklin and Ashken as officers of both Lumen and the
Company. The part of this compensation relating to services provided to
the Company cannot be determined separately.

(3) All awards reflected in this column represent Bolle options held by the
Company's executive officers which were received in 1998, pursuant to the
Spinoff, equivalent to Lumen options granted in 1997.

(4) Includes (i) $5 million and $3 million "split dollar" life insurance
policies maintained by Lumen for Messrs. Franklin and Ashken,
respectively, for which Messrs. Franklin and Ashken reported $28,877 and
$21,882, respectively, as income in 1997 and (ii) employer matching
contributions under Lumen's 401(k) savings plan of $5,664 for each of
Messrs. Franklin and Ashken in 1997.

(5) The allocation of the portion of Messrs. Franklin and Ashken's salaries
and bonus paid for services rendered to the Company is included in the
$719,000 selling, general and administrative allocation from Lumen
reflected in the Company's 1997 financial statements included herein.

(6) From July 1997.

44
<PAGE>

OPTION GRANTS IN 1997

The following table sets forth information regarding Bolle Options
currently held by the Company's executive officers which were granted by the
Company in 1998, pursuant to the Spinoff, based on the number of Lumen options
granted in 1997. In accordance with the rules of the Commission, the table sets
forth the hypothetical gains or "option spreads" that would exist for the
options at the end of their terms. These gains are based on assumed rates of
annual compound stock price appreciation of Lumen common stock of 5% and 10%
from the date the options were granted to the end of the option terms.

OPTION GRANTS IN FISCAL 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
------------------------------
POTENTIAL REALIZABLE
VALUE AT
ASSUMED ANNUAL RATES OF
NUMBER OF PERCENT OF TOTAL STOCK PRICE APPRECIATION
SECURITIES OPTIONS GRANTED TO FOR
UNDERLYING EMPLOYEES IN EXERCISE OPTION TERM (4)(5)
OPTIONS PRICE EXPIRATION ------------------
NAME GRANTED FISCAL 1997(1) PER SHARE DATE 5% 10%
- ---- ------- -------------- --------- ---- -- ---
<S> <C> <C> <C> <C> <C> <C>
Gary A. Kiedaisch......... 166,667 19% $0.76 July 7, 2004(2) $877,810 $2,045,671
Martin E. Franklin........ 183,333 21% 0.57 March 25, $951,597 $2,217,626
2007(3)

Ian G.H. Ashken........... 33,333 4% 0.57 March 25, $173,018 $403,205
2007(3)
</TABLE>

- ---------------
(1) Based on the total number of Bolle Options issued pursuant to the Spinoff
equivalent to Lumen options granted in 1997.

(2) 41,666 of Mr. Kiedaisch's total options will vest on each of July 7,
1998, 1999, 2000, and 2001.

(3) These options will 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 $8 per share for a twenty (20) consecutive trading day period
or (b) March 25, 2005.

(4) The assumed annual compound rates of stock price appreciation are mandated
by the rules of the Commission and do not represent the Company's estimate
or projection of future stock prices.

(5) Since the Company's executive officers were granted only Lumen options in
1997, and since there was no public market for the Company's Common Stock
on December 31, 1997, the information provided in this column is based on
the 500,000, 550,000 and 100,000 Lumen options granted to Messrs.
Kiedaisch, Franklin and Ashken, respectively, in 1997, with an exercise
price of $4.3125, $4.25 and $4.25 per share, respectively.

LUMEN OPTIONS EXERCISED IN LAST FISCAL YEAR; FISCAL YEAR ENDED OPTION VALUES

The following table summarizes certain information regarding certain
year end option values of Bolle Options currently held by the Company's
executive officers which were granted by the Company in 1998 pursuant to the
Spinoff based on the number of Lumen options granted in 1997.

45
<PAGE>
<TABLE>
<CAPTION>
NUMBER OF
UNEXERCISED VALUE OF UNEXERCISED
OPTIONS IN-THE-MONEY OPTIONS AT F-Y END
AT FY-END (1) ($)(1)
------------- -------------------------------
EXERCISABLE/ EXERCISABLE/
NAME UNEXERCISABLE UNEXERCISABLE
- ---- ------------- -------------------------------
<S> <C> <C>
Gary A. Kiedaisch......................... 0/166,667 0/843,750(2)
Martin E. Franklin........................ 45,833/320,833 1,131,656/1,352,844(3)
Ian G. H. Ashken.......................... 31,250/93,750 124,453/356,484(4)
</TABLE>

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

(1) Since the Company's executive officers held only Lumen options as of
December 31, 1997, and since there was no public market for the Company's
Common Stock on that date, the information provided in this column is
based on information regarding such Lumen options and on the December 31,
1997 closing price of Lumen common stock of $5.937 per share.

(2) Based on a total of 0 exercisable and 500,000 unexercisable Lumen options
held by Mr. Kiedaisch on December 31, 1997 with an exercise price of $4.25
per share.

(3) Based on a total of 137,500 exercisable and 962,500 unexercisable Lumen
options held by Mr. Franklin on December 31, 1997 with an average exercise
price of $4.98 and $4.56 per share for exercisable and unexercisable
options, respectively.

(4) Based on a total of 93,750 exercisable and 281,250 unexercisable Lumen
options held by Mr. Ashken on December 31, 1997 with an average exercise
price of $4.61 and $4.67 per share for exercisable and unexercisable
options, respectively.

DIRECTORS' COMPENSATION

Members of the Company's Board of Directors other than those who are
officers or employees of the Company and the Chairman of the Board, will
receive for 1998 an annual fee of $15,000 for their services as directors and
as members of any committees of the Company's Board of Directors on which they
serve. Thereafter, members of the Company's Board of Directors other than those
who are officers or employees of the Company and the Chairman of the Board,
will receive an annual retainer fee in an amount to be determined. Directors
who are not officers or employees of the Company ("Non-Employee Directors")
also receive automatic stock option grants under the Plan. See "--Bolle 1998
Stock Incentive Plan" below. Mr. Kiedaisch is compensated pursuant to an
employment agreement with the Company. See "--Employment Agreement" below.

EMPLOYMENT AGREEMENT

Mr. Kiedaisch is employed full time pursuant to an employment
agreement with the Company for a term ending on August 4, 2000, unless earlier
terminated by either party. At that time, the agreement will automatically
extend for additional one year terms unless either party gives six months
written notice prior to the end of the initial term or 90 days written notice
prior to the end of any renewal term. Mr. Kiedaisch's employment agreement
provides for annual base compensation of $250,000 and entitles Mr. Kiedaisch to
a bonus for the year 1997 and each full year thereafter which varies based on
the Company's annual earnings reaching certain milestones. Mr. Kiedaisch also
received a grant of Lumen options which were exchanged upon the completion of
the Spinoff for 166,667 options to purchase shares of Common Stock. Pursuant to
a separate Memorandum of Understanding, Mr. Kiedaisch will be entitled to a
cash payment from the Company if the value of the nominal gains on the options
(the "Nominal Gain") at the close of business on July 6, 2001 falls below
certain levels as follows: if Mr. Kiedaisch is still employed on July 6, 2001
or his employment has been terminated prior to that date without cause, and the
Nominal Gain is less than $500,000, the Company shall pay to Mr. Kiedaisch the
difference between $500,000 and the Nominal Gain. If Mr. Kiedaisch's employment
has been terminated prior to July 6, 2001 other than without cause, and the
Nominal Gain is less than $338,000, the Company shall pay to Mr. Kiedaisch the
difference

46
<PAGE>

between $338,000 and the Nominal Gain. The employment agreement restricts Mr.
Kiedaisch from competing against the Company and its affiliates in the United
States or any other territory where the Company does business or in which the
Company's products are marketed for a period of one year following the
expiration of the employment agreement and further contains certain
anti-solicitation and confidentiality provisions. The Company may terminate the
employment agreement without compensation in the event Mr. Kiedaisch commits a
material breach not cured after receiving notice thereof, is grossly or
willfully negligent or commits fraud or a misappropriation. The Company may
terminate the employment agreement without cause upon paying Mr. Kiedaisch a
severance indemnity equal to one year's base compensation or all remaining base
compensation due thereunder for the remainder of the term, whichever is
greater, plus the pro rata portion of his bonus for the then current year. In
the event of any termination without cause, all options granted to Mr.
Kiedaisch which are not then vested will vest automatically.

BOLLE 1998 STOCK INCENTIVE PLAN

In January 1998, the Company's Board of Directors adopted the 1998
Stock Incentive Plan (the "Plan") under which 2,500,000 shares of Common Stock
are reserved for issuance pursuant to the grant of stock-based awards under the
Plan. Pursuant to the Plan, employees, officers, directors and consultants of
the Company and its subsidiaries and affiliates (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, restricted stock awards, performance share unit
awards and phantom stock unit awards, and awards consisting of any combination
of such equity-based incentives as set forth below.

The Plan is administered by the full Board of Directors of the Company
or a committee thereof, including the Compensation Committee (the entity
administering the Plan, hereafter referred to as the "Committee"). The
Committee, in its sole discretion, will determine which eligible officers,
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 Committee who are Non-Employee Directors will
receive automatic non-discretionary annual grants of stock options pursuant to
the Plan.

Each Non-Employee Director has been granted an option to purchase
3,333 shares of Common Stock in connection with the Spinoff. On the date that a
person first becomes a Non-Employee Director, he or she will automatically be
granted an option to purchase 3,333 shares of Common Stock. Thereafter,
beginning in 1999, on the date of each annual meeting of stockholders of the
Company, each Non-Employee Director will automatically be granted an option to
purchase 1,000 shares of 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 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. All Director Options will be NQSO's
(as defined below).

Also in connection with the Spinoff, salaried employees, sponsored
athletes and other consultants of Bolle who previously had been awarded options
to purchase Lumen shares under Lumen's stock option plan were granted
substitute options under the Plan; their Lumen options were canceled. Such
substitute options were granted at in-the-money exercise prices determined to
provide the optionee with the same unrealized economic gain (if any) that he or
she enjoyed in his or her Lumen options at the time of the Spinoff and were
granted on proportionate vesting schedules based on the vesting schedules of
their Lumen options. In addition, management employees of Lumen who are
providing services to the Company as non-salaried officers and consultants of
the Company under the Management Services Agreement were granted options under
the Plan on the same basis as the options noted above. However, these options
are new options rather than substitute options (as the recipients retained
their original options in Lumen). Some of these in-the-money grants are
immediately taxable to the recipients, with the balance of the grants taxable
upon vesting or exercise. The actual gain (if any) to the recipients of the new
options will be realized immediately, upon vesting or upon exercise of the
options. These grants, which were designed to reward and incentivize the
recipients as non-salaried officers and consultants to the Company, are
otherwise

47
<PAGE>

equivalent to the salaried employee, sponsored athlete and consultant grants.
The actual gain (if any) to the recipients of the substitute options will be
realized only upon exercise of any such options. Total options granted in
connection with the Spinoff as described above were 860,330, at an average
exercise price of $1.64 per share. All such options are NQSOs (as defined
below).

Stock options granted by the Committee under the Plan may be
"incentive stock options" ("ISOs"), within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended, or "non qualified stock options"
("NQSO's"). The exercise price of the options will be determined by the
Committee when the options are granted, subject to a minimum price of the fair
market value of the Common Stock on the date of grant in the case of ISOs and
the par value in the case of NQSOs. The option exercise price for all options
granted under the Plan may be paid in cash or in shares of Common Stock having
a fair market value on the date of exercise equal to the exercise price or, in
the discretion of the 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.

A stock appreciation right (a "SAR"), may be granted by the Committee
as a supplement to a related stock option or may be granted independently 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 independently of any
option will vest and lapse according to the terms and conditions set by the
Committee. A SAR will entitle its holder to be paid an amount equal to the
excess of the fair market value of the Common Stock subject to the SAR on the
date of exercise over the exercise price of the related stock options, in the
case of a SAR granted in connection with an option, or the fair market value of
Common Stock on the date of grant in the case of a SAR granted independently of
an option.

Shares of Common Stock covered by a restricted stock award may, in the
discretion of the Committee, be issued to the recipient at the time the award
is granted or may be deposited with an escrow agent until the end of the
restricted period set by the 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 Committee at the time the award
is granted.

A phantom stock unit award will provide for the future payment of cash
or the issuance of shares Common Stock to the recipient if continued employment
or other conditions established by the 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 Common Stock to the recipient upon the
attainment of certain corporate performance goals established by the Committee
over performance award periods. At the end of each performance award period,
the Committee decides the extent to which the corporate performance goals have
been attained and the amount of cash or Common Stock to be distributed to the
participant.

OTHER

The Company does not maintain a pension plan or other actuarial
retirement plan for its named executive officers. The Company does not maintain
any long term incentive plans. The Company's named executive officers are
eligible to participate in benefit plans maintained by Lumen which are
generally available to the Company's employees, including a 401(k) savings plan
and the health and life insurance programs.

DIRECTOR AND OFFICER INDEMNIFICATION AND LIMITATION OF LIABILITY

The Company's Certificate of Incorporation contains provisions
permitted under the Delaware General Corporation Law (the "DGCL") relating to
the liability of directors. The provisions eliminate a director's liability for
monetary damages for a breach of fiduciary duty as a director, except for
liability in certain circumstances involving wrongful acts, such as the breach
of a director's duty of loyalty or acts or omissions which involve

48
<PAGE>

intentional misconduct or a knowing violation of law. Further, the Company's
Certificate of Incorporation and Bylaws contain provisions to indemnify the
Company's directors and officers to the fullest extent permitted by the DGCL
including payment in advance of a final disposition of a director's or
officer's expenses and attorneys' fees incurred in defending any action, suit
or proceeding.

The Company has entered into indemnification agreements with each of
its directors and officers. These agreements provide for the indemnification by
the Company of such directors and officers for liability for acts and omissions
as directors and executive officers of the Company.

The Company believes that its Certificate of Incorporation and Bylaws
provisions and indemnification agreements are necessary to attract and retain
qualified persons as directors and officers.

The Company has in effect an executive liability insurance policy
which provides coverage for its directors and officers similar to the coverage
provided with respect to Lumen's directors and officers. Under this policy, the
insurer agrees to pay, subject to certain exclusions (including violations of
securities laws), for any claim made against a director or officer of the
Company for a wrongful act by such director or officer, but only if and to the
extent such director or officer becomes legally obligated to pay such claim or
the Company is required to indemnify the director or officer for such claim.

49
<PAGE>

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

MANAGEMENT SERVICES AGREEMENT

In connection with the Spinoff, the Company entered into a Management
Services Agreement with Lumen, pursuant to which Lumen provides certain
management services to the Company, including services relating to overall
management and strategic planning and direction, banking negotiations, treasury
functions, investor relations, securities regulatory compliance, employee and
general business insurance programs and asset acquisitions and sales. Pursuant
to the Management Services Agreement, Lumen also makes available to the Company
the services of Mr. Martin E. Franklin and Mr. Ian G. H. Ashken. As
compensation for its services, Lumen is entitled to receive a monthly fee of
$60,000 and reimbursement for its identifiable reasonable out-of-pocket
expenses incurred in connection with the performance of services under the
Management Services Agreement. The Management Services Agreement has an initial
term of three years, and will thereafter be automatically renewed for
successive one-year periods until terminated by either party upon 90 days'
written notice. The Company plans to renegotiate the Management Services
Agreement to reduce its reliance on Lumen and to reduce the monthly fee payable
for Lumen's services to $50,000. See "RISK FACTORS--Reliance on Management
Services Agreement" and "RECENT DEVELOPMENTS--Spinoff".

CONTRIBUTION AGREEMENT AND INDEMNIFICATION AGREEMENT

In connection with the Spinoff, Lumen assigned to the Company all of
Lumen's assets other than those related to the ORC Business (as defined in the
Contribution Agreement) and certain other specified assets retained by Lumen,
and the Company assumed all of Lumen's liabilities prior to the Spinoff other
than those related to the ORC Business. In addition, the Company is required to
indemnify Lumen against all of Lumen's liabilities prior to the Spinoff other
than substantially all liabilities related to the ORC Business. See "RECENT
DEVELOPMENTS--Spinoff".

RELATIONSHIPS WITH DIRECTORS

Employment Agreements. Each of Mr. Franck Bolle and Ms. Patricia Bolle
Passaquay, both directors of the Company, is employed full-time by Societe
Bolle SNC ("Bolle SNC"), an indirectly wholly owned subsidiary of the Company,
as Director of International Operations and Director of Export Sales,
respectively, pursuant to employment agreements with Bolle SNC. Under each
agreement, the Company is committed to pay basic annual gross base remuneration
in the French Franc equivalent of approximately $280,000, to be increased by a
minimum of 3% annually after the first year. In addition, each of Mr. Franck
Bolle and Ms. Patricia Bolle Passaquay is entitled to bonuses for the years
1997, 1998 and 1999 of 25% to 50% of his or her annual salary if Bolle SNC
meets or exceeds its annual budgetary objectives. Each agreement shall continue
until terminated by either party upon three-months prior written notice,
provided, however, that if Bolle SNC terminates either agreement before July 9,
2000 for any reason other than gross or willful misconduct, the employee will
be entitled to compensation equal to the salary that he or she would have
received from the date of termination to July 9, 2000. Each agreement provides
that if the employee terminates his or her employment, he or she will be
restricted from competing against Bolle SNC for a period of up to three years
following such termination and will be entitled to an additional monthly
compensation equal to eight to ten percent of his or her last monthly salary
during such period. Mr. Kiedaisch, the Chief Executive Officer and a director
of the Company, is employed full time pursuant to an employment agreement with
the Company. See "EXECUTIVE COMPENSATION--Employment Agreement."

Counsel. Ms. Nora A. Bailey, a member of the Company's Board of
Directors since March 1998, 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 Lumen. 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 will be engaged from time to time in the future to
provide similar legal services to the Company. All fees paid to Ms. Bailey in
connection with such services have been agreed in arm's 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

50
<PAGE>

in consideration of her services as a director. Aggregate fees billed by Ms.
Bailey for services rendered to Lumen and the Company and paid by Lumen during
1997 were approximately $93,000.

Bolle Preferred Stock and Warrants. Each of Mr. Franck Bolle and Ms.
Patricia Bolle Passaquay holds 12,614 shares of Series A Preferred Stock and
1,975 shares of Series B Preferred Stock, and Bolle Warrants for the purchase
of up to 132,724 shares of Common Stock. Mr. Bolle and Ms. Bolle Passaquay may
not sell their Series B Preferred Stock without the prior written consent of at
least 90% of the then outstanding shares of the Series B Preferred Stock until
the Company has redeemed all the shares of the Series B Preferred Stock or the
Subordinated Debt (as defined below). For a description of the rights and
preferences of the Bolle Series A and Series B Preferred Stock and a
description of the Bolle Warrants, see "DESCRIPTION OF CAPITAL STOCK--Preferred
Stock" and "-Warrants."

CERTAIN TRANSACTIONS

Bolle France Acquisition. On July 10, 1997, Lumen acquired and
contributed to the Company all of the issued and outstanding share capital of
Bolle France, pursuant to the terms of the Share Purchase Agreement. Pursuant
to the terms of the Share Purchase Agreement, Bolle acquired from the Sellers
all of the issued and outstanding share capital of Bolle France, Bolle
Diffusion Sarl and the related land, in exchange for approximately $54,700,000
consisting of the following, not including transaction expenses of
approximately $3,600,000: (a) $31,000,000 in cash (the "Cash Consideration");
(b) warrants to the Sellers to purchase Lumen common stock which have since
been exchanged for Bolle Warrants to purchase an aggregate of 663,618 shares of
Common Stock with an exercise price of $9.95 per share; (c) ten thousand
(10,000) shares of Lumen Series A Preferred Stock having an aggregate
liquidation preference of approximately $9,300,000 issued pursuant to the terms
of the Certificate of Designations of Lumen Series A Preferred Stock; (d) one
hundred (100) shares of Common Stock valued at approximately $3,300,000, being
the minimum value of the Common Stock to be issued to the Sellers pursuant to
the Share Purchase Agreement; and (e) sixty-four thousand one hundred twenty
(64,120) shares of Series A Preferred Stock having an aggregate liquidation
preference of approximately $11,100,000 issued pursuant to the terms of the
Certificate of Designations of the Series A Preferred Stock of the Company. On
July 10, 1997, Lumen borrowed approximately $32,000,000, for the purpose of
paying the Cash Consideration and certain transaction expenses in connection
with the purchase of Bolle France, pursuant to the terms of the Credit
Agreement.

The Share Purchase Agreement provides that none of the Sellers may
dispose of their shares of Common Stock until July 9, 2000. If, on that date,
the closing market price of the total number of shares then held by the Sellers
is less than $3,301,500 (the "Minimum Value"), the Company shall pay on such
date in cash or freely tradable stock the difference between the actual value
of the shares and the Minimum Value. In addition, pursuant to letters dated
July 9, 1997 and December 4, 1997 from Martin Franklin to the Sellers,
including Mr. Franck Bolle and Ms. Patricia Bolle Passaquay, Mr. Franklin will
refrain from selling any shares of Common Stock which he received pursuant to
the Spinoff for so long as the Series B Preferred Stock shall not have been
redeemed in full by the Company. In connection with the Spinoff, each of Mr.
Franck Bolle, Ms. Patricia Bolle Passaquay, Ms. Christelle Roche and Ms.
Brigitte Bolle were issued approximately 55,000 shares of Common Stock and each
of Mr. Robert Bolle and Mr. Maurice Bolle were issued approximately 27,500
shares of Common Stock. All of the shares of Common Stock received by the
Sellers, including Mr. Franck Bolle and Ms. Patricia Bolle Passaquay, pursuant
to the Share Purchase Agreement and this dividend will bear the rights and
obligations described above.

Under the Share Purchase Agreement, each of the Sellers on the one
hand, and the Company and Lumen on the other hand, are liable to fully
reimburse and indemnify the other for any expense, damage, loss or liability
arising from any breach of the terms of the Share Purchase Agreement by the
indemnifying party, subject to certain minimum claim amounts which must be met
for the indemnification provisions to take effect. In connection with the
Spinoff, the Company agreed to assume all obligations and liabilities of Lumen
to each Seller, including Mr. Franck Bolle and Ms. Patricia Bolle Passaquay,
incurred by Lumen in connection with the purchase of Bolle France and Lumen
shall then be released from all such obligations and liabilities. As a result,
the Company became solely responsible for Lumen's indemnification obligations
for breach of its representations and warranties

51
<PAGE>

made to the Sellers, including Mr. Franck Bolle and Ms. Patricia Bolle
Passaquay, in the Share Purchase Agreement.

Intercompany Financings. During the year ended December 31, 1997,
Bolle America was party to a revolving intercompany credit arrangement with
Lumen whereby interest on outstanding balances was charged to Bolle America at
a rate of 8% per annum. Conversely, interest on cash sent to Lumen was earned
at a rate of 5% per annum. In addition, in July 1997, Lumen entered into a
$40,000,000 intercompany revolving credit agreement with the Company, for a
term of up to three years, pursuant to which the Company paid interest to Lumen
at a rate of 5.5% per annum. In connection with the Spinoff, the Company pushed
down its acquisition indebtedness to Bolle France and charges interest on
existing balances at 5% per annum. In connection with the Spinoff, Lumen
repurchased all the shares of Lumen preferred stock held by the Company in
exchange for the cancellation of an equivalent amount in intercompany debt owed
by the Company to Lumen. At the time of the Spinoff the Company entered into
the Credit Agreement and there are no further intercompany credit arrangements
between Lumen and the Company.

Consulting and Non-Compete Agreement. In connection with the Spinoff,
pursuant to the transfers made from Lumen to the Company under the Contribution
Agreement, the Company became party to the consulting and non-compete agreement
entered into with Steve N. Haber, the former Chairman of the Board, Chief
Executive Officer and President of Bolle America in November 1995. The
following description refers to the parties' respective duties giving effect to
the assignment of the consulting agreement to the Company. Pursuant to the
agreement, as of January 1, 1997, Mr. Haber was hired as a consultant to the
Company for annual compensation of $155,000 plus health and life insurance
benefits for a period ending on December 31, 2000, extendible for an additional
five years by mutual agreement of the parties. In addition to employment as a
consultant, Mr. Haber agreed, commencing on the effective date of the
consulting agreement and continuing through December 31, 2005, not to compete
against the Company in the eyewear or optical, opthalmic or optometric
businesses in any geographic area in which the Company does business. As
compensation for this noncompete agreement, Mr. Haber received an initial
payment of $800,000 and will receive a payment of $100,000 per year commencing
January 1, 1997 through December 31, 2005. Mr. Haber furthermore agreed not to
disclose any of the Company's confidential information.

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<PAGE>

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information with regard to the
beneficial ownership of the Common Stock as of July 30, 1998 and as adjusted to
reflect the sale of the shares of Common Stock offered hereby, by (i) each
person known by the Company to own beneficially more than 5% of the outstanding
shares of the Common Stock, (ii) each director and executive officer and (iii)
all directors and officers of the Company as a group.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
NAME AND ADDRESS OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) PERCENTAGE OF CLASS OWNED
- ------------------------------------ ---------------------------------- ---------------------------------
SERIES A SERIES B SERIES A SERIES B
COMMON PREFERRED PREFERRED COMMON PREFERRED PREFERRED
STOCK STOCK STOCK STOCK STOCK STOCK
------ --------- --------- ------ --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Martin E. Franklin
555 Theodore Fremd Avenue
Suite B-302
Rye, New York 10580............. 712,003(2) 0 0 10.0% 0% 0%
Gary A. Kiedaisch................. 2,000 0 0 * 0 0
Ian G.H. Ashken................... 143,749 (3) 0 0 2.1 0 0
Nora A. Bailey.................... 10,833 0 0 * 0 0
Franck Bolle...................... 64,080 12,614 1,975 * 20 20
Patricia Bolle Passaquay.......... 64,080 12,614 1,975 * 20 20
David L. Moore.................... 5,116 0 0 * 0 0
David S. Moross................... 0 0 0 0 0 0
All Executive Officers and
Directors as a
group (7 persons)............... 1,043,527 25,228 3,950 14.3 40 40
Millbrook Partners, L.P.(4)
2102 Sawgrass Village Drive
Ponte Vedra Beach, Florida 32082 1,020,865 N/A N/A 15.4 N/A N/A
Marvin Schwartz(5)
605 Third Avenue
New York, New York 10158........ 463,157 N/A N/A 7.0 N/A N/A
OZ Management, L.L.C. (6)
153 East 53rd Street
New York, New York 10022........ 1,583,333 N/A N/A 19.0 N/A N/A
</TABLE>

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

* Less than 1%.

(1) Shares not outstanding but deemed beneficially owned by virtue of the
right of an individual to acquire them within sixty (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) Excludes 5,127 shares of Common Stock held in trust for Mr. Franklin's
minor children as to which shares Mr. Franklin disclaims beneficial
ownership.

(3) Excludes 8,333 shares of Common Stock held in trust for Mr. Ashken's minor
children, as to which shares Mr. Ashken disclaims beneficial ownership.

(4) Based on Schedule 13D filing, dated June 1, 1998. 859,066 of these shares,
or 8.7% of the Common Stock to be outstanding after the Offering, are
beneficially held by Millbrook Partners, L.P. ("Millbrook"), and the
remaining 26,000 shares are beneficially held by Millbrook's general
partner, Mark M. Mathes.

(5) In a Schedule 13D filing dated March 26, 1998, Marvin Schwartz, acting in
his personal capacity and not as a principal of Neuberger & Berman,
reported beneficial ownership of such shares.

(6) Includes 1,333,333 shares issuable at any time at the option of OZ Master
Fund, Ltd. upon conversion of $7,000,000 aggregate principal amount of the
Convertible Notes, subject to the provisions of the Convertible Note
Purchase Agreement, 10,000 additional shares held by OZ Master Fund, Ltd.
and 240,000 shares held by its affiliate Och-Ziff Capital Management,
L.P., over which OZ Management, L.L.C., the investment manager

53
<PAGE>

to the foregoing entities, may be deemed to have investment power. In
addition, 36,000 shares are held by Och-Ziff Associates, L.L.C., an
affiliate of OZ Management, L.L.C.

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<PAGE>

DESCRIPTION OF CAPITAL STOCK

The authorized capital stock of the Company consists of 30,000,000
shares of Common Stock of which 6,892,826 shares were issued and outstanding as
of July 30, 1998, and 200,000 shares of preferred stock, $.01 par value per
share, of which 64,120 shares of Series A Preferred Stock and 10,000 shares of
Series B Preferred Stock were issued and outstanding as of July 30, 1998.

The following summary of certain terms of the Company's capital stock
describes material provisions of, but is not necessarily a summary and is
subject to, and qualified in its entirety by, the Company's Certificate of
Incorporation, the Certificate of Designations of the Series B Preferred Stock,
the Company's Bylaws, and applicable provisions of Delaware corporate law
(including but not limited to the DGCL).

COMMON STOCK

Holders of Common Stock are entitled to one vote for each share held
on all matters submitted to a vote of stockholders and do not have cumulative
voting rights. Accordingly, holders of a majority of the shares of Common Stock
entitled to vote in any election of directors may elect all of the directors
standing for election. Holders of Common Stock are entitled to receive ratably
such dividends, if any, as may be declared by the Board of Directors out of
funds legally available therefor, subject to any preferential dividend rights
of outstanding Preferred Stock. Upon the liquidation, dissolution or winding up
of the Company, the holders of Common Stock are entitled to receive ratably the
net assets of the Company available after the payment of all debts and other
liabilities and after provision has been made for the payment of the
liquidation preference on the Series A Preferred Stock, the liquidation
preference and any accrued dividends on the Series B Preferred Stock and the
payment obligations on any other outstanding shares of preferred stock of the
Company. Holders of the Common Stock have no preemptive, subscription,
redemption or conversion rights. All the outstanding shares of Common Stock
are, and the shares of Common Stock to be issued pursuant to the Spinoff when
issued and paid for will be, fully paid and non-assessable. The rights,
preferences and privileges of holders of Common Stock are subject to, and may
be adversely affected by, the rights of the holders of shares of any series of
Preferred Stock that the Company may designate and issue in the future.

PREFERRED STOCK

General

Under the terms of the Company's Certificate of Incorporation, the
Board is authorized, subject to any limitations prescribed by law, without
stockholder approval, to issue up to 200,000 shares of preferred stock in one
or more series. Each such series of preferred stock shall have such rights,
preferences, privileges and restrictions, including voting rights, dividend
rights, conversion rights, redemption privileges and liquidation privileges, as
shall be determined by the Board of Directors.

The purpose of authorizing the Board of Directors to issue preferred
stock and determine its rights and preferences is to eliminate delays
associated with a stockholder vote on specific issuances. The issuance of
preferred stock, while providing desirable flexibility in connection with
possible acquisitions and other corporate purposes, could have the effect of
making it more difficult for a third party to acquire, or of discouraging a
third party from acquiring, a majority of the outstanding voting stock of the
Company.

Series A Preferred Stock

Holders of the Series A Preferred Stock are not entitled to receive
dividends. Upon any voluntary or involuntary liquidation, dissolution or
winding up of the Company before any distribution of assets of the Company
shall be made to or set apart for the holders of Common Stock, the holders of
the Series A Preferred Stock will be entitled to receive from the Company's
assets legally available for distribution to stockholders, a payment in an
amount equal to the greater of (i) 1,000 French Francs per share or (ii) the
French Franc equivalent of U.S. $172.41 per share of Series A Preferred Stock.
After payment of the full amount of the liquidation distributions to

55
<PAGE>

which they are entitled, the holders of the Series A Preferred Stock will have
no right or claim to any of the remaining assets of the Company. In the event
that upon any such voluntary or involuntary liquidation, dissolution or winding
up, the available assets of the Company are insufficient to pay the amount of
the liquidation distributions on all outstanding shares of Series A Preferred
Stock, then the holders of the Series A Preferred Stock shall share ratably in
any such distribution of assets in proportion to the full liquidating
distributions to which they would otherwise be respectively entitled. The
Series A Preferred Stock is not convertible or exchangeable for any other
securities of the Company.

Shares of the Series A Preferred Stock will be redeemed by the Company
upon 10 days' prior written notice on the third anniversary of their issuance,
subject to the provisions of the Company's senior indebtedness in effect at the
effective time of the Spinoff (which includes indebtedness under the Credit
Agreement)(the "Senior Indebtedness"). Prior to that, the Company may redeem
any shares of Series A Preferred Stock at any time upon 10 days' prior written
notice. In addition, in the event the Company's EBITDA exceeds U.S. $18,400,000
for the fiscal year 1998 or U.S. $24,700,000 for the fiscal year 1999, the
Company shall be obligated to redeem, upon 10 days' prior written notice, and
within 110 days after the close of the relevant fiscal year, any shares of
Series A Preferred Stock then outstanding, provided in each case that Bolle
remains in compliance with the financial covenants contained in the Senior
Indebtedness after giving effect to such redemption and U.S. $2,000,000 million
is available for borrowing by Bolle under such Senior Indebtedness. In the
event that the Series A Preferred Stock is not redeemed in full by its due
date, it will begin accruing interest from July 2000 on the same terms as the
Series B Preferred Stock, as described below.

Generally, the shares of Series A Preferred Stock have no voting
rights. If the Company fails to give notice of a redemption within three years
of the date of issuance of any shares of Preferred Stock, the holders of more
than 90% of such shares shall have the right to cause the Company to use
commercially reasonable efforts to either obtain cash in order to redeem in
full such shares or to effect without delay a commercially reasonable sale of
the Company's assets or the merger, consolidation or other reorganization of
the Company. So long as any shares of Series A Preferred Stock are outstanding,
the Company shall not, without the consent of holders of at least 90% of such
shares, (i) alter or change the rights, preferences or privileges of such
shares or (ii) issue any class or series of preferred stock ranking senior or
pari passu with the Series A Preferred Stock with respect to dividend,
redemption or liquidation rights. Shares of Series A Preferred Stock may only
be transferred to persons who are already holders of such shares and in
accordance with applicable law.

Series B Preferred Stock

Under the terms of the Series B Preferred Stock, holders of Series B
Preferred Stock will be entitled to accrue cumulative cash dividends, whether
or not declared by the Company's Board of Directors, payable semi-annually at a
rate of 5% of the liquidation preference, as described below, for 1997 and
increasing annually up to 10% of the liquidation preference beginning on
January 1, 2000 and continuing until the Series B preferred stock has been
redeemed. Upon any voluntary or involuntary liquidation, dissolution or winding
up of the Company, the holders of Series B Preferred Stock will be entitled to
receive from the Company's assets legally available for distribution to
stockholders, a payment in an amount equal to the 5,500 French Franc
liquidation preference per share ($9,294,000 in the aggregate at the exchange
rate used in the Company's Pro Forma Balance Sheet as of December 31, 1997),
plus any accrued dividends to the date of redemption. After payment of the full
amount of the liquidation distributions to which they are entitled, the holders
of Series B Preferred Stock will have no right or claim to any of the remaining
assets of the Company. In the event that upon any such voluntary or involuntary
liquidation, dissolution or winding up, the available assets of the Company are
insufficient to pay the amount of the liquidation distributions on all
outstanding shares of Series B Preferred Stock, then the holders of Series B
Preferred Stock shall share ratably in any such distribution of assets in
proportion to the full liquidating distributions to which they would otherwise
be respectively entitled. The Series B Preferred Stock is not convertible or
exchangeable for any other securities of the Company.

The Company may redeem the shares of Series B Preferred Stock, in
whole or in part, for cash or, beginning on January 1, 1998, by issuing to the
holders of the Series B Preferred Stock a subordinated debt instrument with
substantially the same powers, designations, preferences and relative,
participating, or other

56
<PAGE>

rights, and qualifications, limitations and restrictions as the Series B
Preferred Stock, upon 10 days' prior written notice. In addition, the Company
must, upon 10 days' prior written notice, redeem, out of funds legally
available therefor, the Series B Preferred Stock (if not previously redeemed),
upon the earlier occurrence of (i) the earlier of (A) the third anniversary
date from the issuance of the Series B Preferred Stock, if redemption is then
permitted under the terms and conditions of the Company's Senior Indebtedness,
(B) such later date as redemption is first permitted under the terms of the
Company's Senior Indebtedness; (ii) the closing of any equity financing by the
Company (including the Offering), but only to the extent of the net cash
proceeds of such financing by the Company and no more than the redemption price
of the then outstanding shares of Series B Preferred Stock, and provided
further, that such redemption would not violate any of the terms and conditions
of the Company's Senior Indebtedness; or (iii) a change of control resulting in
the Company's payment in full of all amounts due with respect to its Senior
Indebtedness.

Generally, the shares of Series B Preferred Stock have no voting
rights. So long as any shares of Series B Preferred Stock are outstanding, the
Company shall not, without the consent of the holders of at least 90% of such
shares, (i) alter or change the rights, preferences or privileges of such
shares; (ii) declare or pay a dividend or otherwise make a distribution on any
security issued by the Company which is junior to the Series B Preferred Stock
with respect to dividends or upon liquidation, including the Series A Preferred
Stock; (iii) enter into any agreements that prohibit the Company from declaring
or paying dividends on the Series B Preferred Stock or redeeming the Series B
Preferred Stock or the subordinated debt instrument, as the case may be; or
(iv) issue any class or series of Preferred Stock ranking senior or pari passu
with the Series B Preferred Stock with respect to dividend, redemption or
liquidation rights. Shares of Series B Preferred Stock may only be transferred
in strict accordance with applicable law.

WARRANTS

Pursuant to the terms of the Warrant Agreement between the Company and
each of the Sellers, the Company has issued Bolle Warrants for the purchase of
663,618 shares of Common Stock. The Bolle Warrants will be exercisable between
July 9, 1999 and July 9, 2001 (the "Exercise Period") at an exercise price per
share equal to $9.95, subject to certain other adjustments (the "Exercise
Price"). The Bolle Warrants may only be transferred during the Exercise Period,
and may not be transferred in the absence of registration of the Bolle Warrants
under the Securities Act and state securities laws, or an exemption therefrom.

The Bolle Warrants may only be exercised for the purchase of a minimum
of 17,000 shares of Common Stock or for the remaining amount of shares that the
warrantholder is then able to purchase upon exercise thereof. Upon the
surrender of a Bolle Warrant and payment of the Exercise Price, the Company
shall issue, no later than 10 business days from the date of such surrender and
payment, certificates for the number of shares so purchased together with cash
for any fractional shares.

In addition, at any time during the Exercise Period, any number of
Bolle Warrants may be exchanged without payment of the Exercise Price into a
number of shares of Common Stock having a value equal to that of the number of
shares which would be issued by the Company upon receipt of the Exercise Price,
less the Exercise Price.

The Company must at all times keep reserved, so long as the Bolle
Warrants remain outstanding, sufficient shares of its Common Stock to cover the
exercise of the Bolle Warrants. Furthermore, the Company must notify the
holders of the Bolle Warrants no less than 20 days prior to the date on which
the Company (i) shall pay any dividend upon its Common Stock or make any
distribution to the holders of its Common Stock; (ii) offers pro rata
subscription rights to the holders of its Common Stock; (iii) offers any other
rights to the holders of its Common Stock; (iv) engages in any capital
reorganization, reclassification, consolidation, merger, or disposition of all
or substantially all of the Company's assets; or (v) engages in a voluntary or
involuntary dissolution, liquidation or winding up of the Company.

At any time during the Exercise Period, the holders of at least a
majority of the shares issued or issuable pursuant to the exercise of the Bolle
Warrants and any securities issued or issuable with respect to those shares

57
<PAGE>

("Registrable Securities") may cause the Company to register those shares under
the Securities Act within a commercially reasonable time. If such registration
is requested, the holders of the Bolle Warrants must pay all registration
expenses, whether or not the registration is ever deemed effective.
Furthermore, if at any time after July 9, 1999 the Company intends to file a
registration statement for the registration of an offering of equity securities
with the Commission, the holders of Registrable Securities must be given at
least 30 days' prior notice and may have their Registrable Securities included
in such registration statement. In such case, the Company shall pay all
registration expenses.

CONVERTIBLE NOTES

Pursuant to the terms of the Convertible Note Purchase Agreement, the
Company completed on June 1, 1998 the sale of $7,000,000 aggregate principal
amount of its Convertible Notes to Och Ziff Fund, under an exemption from
registration under the Securities Act. The Convertible Notes are convertible at
any time at the option of the holder(s) thereof into a maximum of 1,333,333
shares of Common Stock at a conversion price of $5.25 per share (the
"Conversion Price"). The Conversion Price must be adjusted in the event the
Company pays a dividend or distribution in shares of its capital stock or
subdivides, combines or reclassifies its outstanding shares of Common Stock, so
as to provide the holder of any Convertible Notes upon conversion with an
equivalent number of shares of capital stock which such holder would have owned
if such holder had converted its Convertible Notes prior completion of any of
foregoing transactions. Upon any consolidation or merger of the Company with
and into any other corporation, a holder of Convertible Notes is entitled to
receive upon the conversion thereof the securities or property to which a
holder of the number of shares then deliverable upon such conversion would have
been entitled upon such consolidation or merger. The Company may cause the
conversion of the Convertible Notes at the Conversion Price at any time after
August 18, 1998 if the closing price of the Common Stock is in excess of
$7.0875 for 20 consecutive trading days and the Shares underlying the
Convertible Notes have been registered for resale under the Securities Act. In
addition, any holder of Convertible Notes who engages in an arbitrage
transaction with respect to shares of Common Stock underlying its Convertible
Notes shall be required to convert the principal amount of Convertible Notes
which when so converted shall be equal to the same number of shares of Common
Stock subject to such arbitrage transaction. All the shares issuable upon
conversion of the Convertible Notes will be eligible for resale upon issuance
pursuant to this Prospectus. See "SELLING STOCKHOLDERS" and "PLAN OF
DISTRIBUTION." The Company has agreed to repay the principal amount of any
Convertible Notes outstanding no later than May 29, 2002 or within twenty days
after the date the Common Stock shall cease to be listed on Nasdaq, the Nasdaq
Small Cap Market, the New York Stock Exchange or the American Stock Exchange.

The Company has agreed that it shall not without the written consent
of 50% in principal amount of the Convertible Notes take any of the following
actions: (i) create, incur or assume any indebtedness (as this term is defined
in the Convertible Note Purchase Agreement) unless following the creation of
such indebtedness, the Company's consolidated leverage ratio (as this term is
defined in the Convertible Note Purchase Agreement) is less or equal to 3.50 to
1.00; (ii) (a) declare any dividends (other than payable in shares of capital
stock of the Company) on any shares of its capital stock, other than the Series
A Preferred Stock or the Series B Preferred Stock, or (b) except in connection
with the Series A Preferred Stock or Series B Preferred Stock, apply its
property or assets to the purchase, redemption or other retirement of, or set
apart any sum for the payment of dividends on, or make any distribution in
respect of, any class of capital stock of the Company; (iii) consummate a
merger or consolidation (except with a subsidiary) without first offering the
holder(s) of the Convertible Notes the option to have their Convertible Notes
(a) redeemed in full in connection with such merger or consolidation, or (b)
assumed by the successor to the Company; and (iv) register any shares of Common
Stock, except as described in this Prospectus, or issue securities in reliance
upon an exemption from registration under Regulation S of the Securities Act,
in each case for the earlier of (x) 75 days following the date that this
Registration Statement has been declared effective by the Commission or (y)
until January 11, 1999.

In the event that the rules then in effect of any over-the-counter
market or stock exchange on which the Common Stock is traded require the
Company to obtain shareholder approval prior to issuing shares in excess of 20%
of the aggregate number of then outstanding shares of Common Stock, the Company
shall not be obligated to issue any Shares upon request for conversion of
Convertible Notes if, following such issuance, the total number of

58
<PAGE>

shares of Common Stock issued upon such conversion would exceed 20% of the
total number of shares of Common Stock then outstanding.

The Company is required to (i) repay the principal amount of any
Convertible Notes outstanding and all amounts payable under the Convertible
Note Purchase Agreement and (ii) issue 360,000 Shares or, in case less than
$7,000,000 aggregate principal amount of Convertible Notes shall thus be
repaid, the number of shares of Common Stock obtained by multiplying 360,000 by
a quotient, of which the numerator shall be the amount of Convertible Notes
being repaid and the denominator shall be the aggregate principal amount of
Convertible Notes issued under the Convertible Note Purchase Agreement
($7,000,000), whenever (1) the Company has failed, for a period of ten days, to
pay the principal amount of any Convertible Notes when due, at maturity, upon
redemption, acceleration or otherwise, or has failed to pay any installment of
interest or other payment due upon the failure by the Company to issue any
Shares; (2) the Company fails to issue Shares upon request for conversion of
Convertible Notes; (3) any voluntary or involuntary proceeding is commenced in
respect of the Company seeking liquidation, reorganization or other relief
under any bankruptcy, insolvency or other similar law, or the Company makes a
general assignment for the benefit of its creditors or fails to pay its debts
when they become due; and (4) the Company is in breach of any of its covenants
as described below or representations contained in the Note Purchase Agreement.
If any Convertible Notes are not converted before maturity, the Company is
obligated to repay their aggregate principal amount (up to a maximum of
$7,000,000) in cash and issue 360,000 Shares (or, in case of a partial
repayment, a number of Shares prorated as described above) to the holder(s) of
such Convertible Notes.

Unless otherwise provided by the terms of any indebtedness of the
Company, the Convertible Notes are subordinate to the rights of the Lenders
under the Credit Agreement and other ordinary creditors of the Company for all
purposes other than the issuance of Shares. Accordingly, upon any acceleration
of the Convertible Notes or any indebtedness, or any payment or distribution of
assets of the Company of any kind, to creditors upon any dissolution, winding
up or liquidation of the Company, no payment shall be made to holder(s) of
Convertible Notes until all amounts payable in respect of the Company's
outstanding indebtedness (including under the Credit Agreement) have been paid
in full. If, and for so long as, the Company shall be in default under the
terms of any its indebtedness, including the Credit Agreement but excluding any
intercompany indebtedness, it shall not make, and no holder(s) of Convertible
Notes shall accept, any payment on, or apply any assets to the purchase or
retirement of, the Convertible Notes, or make any other payment pursuant to the
Convertible Note Purchase Agreement (other than upon conversion into Shares),
and the holder(s) of the Convertible Note shall not enforce any judgment or
seek remedy against the Company, provided, however, that any such payment may
be made, if required, to the extent possible without causing an event of
default under the Company's indebtedness. The Lenders have agreed that the
Convertible Notes shall not be deemed "equity securities" for the purpose of
assessing compliance by the Company with the minimum equity ratios set forth in
the Credit Agreement until the Convertible Notes are actually converted.

The Convertible Notes may not be transferred without the prior written
consent of the Company which shall not be unreasonably withheld. The Company
has agreed to indemnify Och Ziff Fund, each underwriter, broker or dealer, if
any, and their respective directors, officers, employees or controlling persons
against certain liabilities, including liabilities under the Securities Act
arising from the sale of the Shares issued upon conversion of the Convertible
Notes.

DIRECTOR AND OFFICER INDEMNIFICATION

The Certificate of Incorporation contains certain provisions permitted
under the DGCL relating to the liability of directors. The provisions eliminate
a director's liability for monetary damages for a breach of fiduciary duty,
except in certain circumstances involving wrongful acts, such as the breach of
a director's duty of loyalty or acts or omissions which involve intentional
misconduct or a knowing violation of law. Further, the Certificate of
Incorporation and the Company's By-laws contain provisions to indemnify the
Company's directors and officers to the fullest extent permitted by the DGCL,
including payment in advance of a final disposition of a director's or
officer's expenses and attorneys' fees incurred in defending any action, suit
or proceeding. The Company believes that these provisions will assist the
Company in attracting and retaining qualified individuals to serve as
directors. See "EXECUTIVE COMPENSATION--Director and Officer Indemnification
and Limitation of Liability."

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<PAGE>

TRANSFER AGENT AND REGISTRAR

The Transfer Agent and Registrar for the Common Stock is National City
Bank.

60
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

In addition to the 1,850,000 Shares which may be sold hereunder by the
Selling Stockholders, of the 6,636,261 shares of Common Stock distributed
pursuant to the Spinoff, approximately 5,843,261 shares are freely tradable
without restriction or the requirement of future registration under the
Securities Act. All of the remaining 793,000 outstanding shares are eligible
for resale subject to manner of sale, volume, notice and information
requirements and applicable contractual restrictions.

In general, under Rule 144 as currently in effect, a person (or
persons whose shares are aggregated) who has beneficially owned his or her
restricted securities (as that term is defined in Rule 144) for at least one
year from the date such securities were acquired from the Company or an
affiliate of the Company would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of (i) one percent
of the then outstanding shares of the Common Stock (approximately 68,928 shares
of Common Stock at the time of this Prospectus) and (ii) the average weekly
trading volume of the Common Stock during the four calendar weeks preceding a
sale by such person. Sales under Rule 144 are also subject to certain
manner-of-sale provisions, notice requirements and the availability of current
public information about the Company. Under Rule 144, however, a person who has
held shares for a minimum of two years from the later of the date such
securities were acquired from the Company or an affiliate of the Company and
who is not, and for the three months prior to the sale of such shares has not
been, an affiliate of the Company, is free to sell such shares without regard
to the volume, manner-of-sale and certain other limitations contained in Rule
144.

Following the expiration in July 2000 of certain contractual
restrictions on resale, all the shares of Bolle Common Stock held by the
Sellers, or approximately 4% of the Bolle Common Stock outstanding will be
eligible for sale by the Sellers pursuant to the provisions of Rule 144 under
the Securities Act. Upon the redemption in full of all the shares outstanding
of the Bolle Series B Preferred Stock, all the shares of Bolle Common Stock
received by Mr. Franklin pursuant to the Spinoff, or approximately 10% of the
total number of shares of Bolle Common Stock outstanding, will be eligible for
sale by Mr. Franklin in accordance with applicable law. No assurance can be
given that the holders of such shares, including the Sellers or Mr. Franklin
will not decide, based upon prevailing market conditions, to dispose of all or
a portion of their investment in the Company after the expiration of applicable
restrictions. The future sale of a substantial number of shares of Common Stock
may have an adverse impact on the market price of the Common Stock. See "RISK
FACTORS--Shares Eligible for Future Sales; Future Sales by Significant
Stockholders" and "CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS --Certain
Transactions."

A total of 2,500,000 shares of Common Stock are reserved for issuance
upon the exercise of options that may be granted under the Plan, of which
options to purchase approximately 869,450 shares have been granted and are
outstanding. The Company has filed a registration statement on Form S-8 to
register the Common Stock reserved for issuance under the Plan. Shares of
Common Stock issued under the Plan after the effective date of such
registration statement and the shares of Common Stock outstanding on the date
of such registration statement as a result of option exercises, other than
shares held by affiliate of the Company, will be eligible for resale in the
public market without restriction. See "EXECUTIVE COMPENSATION--Bolle 1998
Stock Incentive Plan." The Board of Directors may consider the granting of
additional stock options to various employees of the Company, the amount, terms
and timing of which have not yet been determined. Any such options will be
granted at an exercise price not less than the fair market value of the Common
Stock on the date the options are granted. In addition, under the Warrant
Agreement, 663,618 shares of Common Stock issuable upon exercise of the Bolle
Warrants are subject to demand registration rights vesting on the date a
Warrant is first exercised, which may be as early as July 1999.

61
<PAGE>

SELLING STOCKHOLDERS

The following table provides certain information with respect to the
shares of Common Stock which may be offered for sale hereunder by each Selling
Stockholder. Each Selling Stockholder may offer all the shares which such
Stockholder will be issued pursuant to the transactions described herein.
Because the Selling Stockholders may offer some or all of the Shares in an
offering which is not underwritten on a firm commitment basis, no estimate can
be given as to the amount of securities that will be held by the Selling
Stockholders after completion of the registration of the Shares offered hereby.
See "PLAN OF DISTRIBUTION." To the extent required, the specific securities to
be sold, the names of the Selling Stockholders effecting such sale, the names
of any agent, dealer or underwriter participating in such sale, and any
applicable commission or discount with respect to the sale will be set forth in
a supplement to this Prospectus. The nature of the positions, offices or other
material relationships which certain Stockholders have had with the Company or
any of its predecessors or affiliates within the past three years are set forth
below. The securities offered by means of this Prospectus may be offered from
time to time by the Selling Stockholders named below:
<TABLE>
<CAPTION>
Shares Owned by the Selling Shares to be Offered for the
Stockholder prior to resale Selling Stockholder's
Selling Stockholder hereunder (1) Account (2)
- ------------------------------------------------- --------------------------------- ---------------------------------
<S> <C> <C>
OZ Master Fund, Ltd. (3).................... Up to 1,343,333 Up to 1,333,333
Bill Bass Trust (4)......................... 248,388 439,700
</TABLE>

- ------------------
(1) Shares not outstanding but deemed beneficially owned by virtue of the
right of an individual to acquire them within sixty (60) days upon the
exercise of an option are treated as outstanding for purposes of
determining beneficial ownership.

(2) The number of Shares offered hereunder by each Selling Stockholder may be
increased by such number of shares as the Company may be required to issue
to such Selling Stockholder to prevent dilution resulting from stock
splits, stock dividends or similar transactions under the terms of its
arrangement with such Selling Stockholder.

(3) All the Shares offered by Och Ziff Fund hereunder are issuable upon
conversion of $7,000,000 aggregate principal amount of the Convertible
Notes. Included in this amount are up to a maximum of 360,000 Shares which
are issuable by the Company under certain circumstances, including if the
Company fails to issue Shares upon a request for conversion of outstanding
Convertible Notes. In such instances, the Company is required to issue
such Shares in proportion to the principal amount of Convertible Notes
which it failed to convert or redeem, up to a maximum of 360,000. See
"DESCRIPTION OF CAPITAL STOCK--Convertible Notes." Excludes 210,000 shares
held by Och-Ziff Capital Management L.P., an affiliate of Och Ziff Fund.

(4) Of the Shares offered by the Bill Bass Trust hereunder, an aggregate of
248,388 Shares were issued by the Company in connection with the closing
of the Share Sale Agreement, and the remainder, or 191,312 Shares, are
issuable by the Company under certain conditions contained in the Share
Sale Agreement as described elsewhere in this Prospectus.

62
<PAGE>

PLAN OF DISTRIBUTION

The Shares offered hereby may, upon compliance with applicable "Blue
Sky" law, be sold from time to time to purchasers directly by the Selling
Stockholders or by pledgees, donees, transferees or other successors in
interest, or in negotiated transactions and through Nasdaq. The Shares may be
sold through one or more of the following: (a) a block trade in which the
broker or dealer so engaged will attempt to sell the Shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a broker or dealer as principal and resale by
such broker or dealer for its account pursuant to this Prospectus; (c) ordinary
brokerage transactions in which the broker solicits purchasers; and (d)
directly to one or more purchasers. In addition, any securities covered by this
Prospectus which qualify for sale pursuant to Rule 144 may be sold under Rule
144 rather than pursuant to this Prospectus.

Alternatively, the Selling Stockholders may from time to time offer
the securities offered hereby through underwriters, dealers or agents, who may
receive compensation in the form of underwriting discounts, concessions of
commissions from the Selling Stockholders and/or the purchasers of securities
for whom they may act as agents.

The Selling Stockholders and any underwriters, dealers or agents that
participate in the distribution of securities offered hereby may be deemed to
be underwriters, and any profit on the sale of such securities by them and any
discounts, commissions or concessions received by any such underwriters,
dealers or agents might be deemed to be underwriting discounts and commissions
under the Securities Act. At the time a particular underwritten offer of
securities is made, to the extent required, a supplement to this Prospectus
will be distributed which will set forth the aggregate amount of securities
being offered and the terms of the offering, including the name or names of any
underwriters, dealers or agents, and discounts, commissions and other items
constituting compensation from the Selling Stockholders and any discounts,
commissions or concessions allowed or reallowed or paid to dealers.

The securities offered hereby may be sold from time to time in one or
more transactions at market prices prevailing at the time of sale, at a fixed
offering price, which may be changed, at varying prices determined at the time
of sale or at negotiated prices.

In connection with distributions of the Shares, any Selling
Stockholder may enter into hedging transactions with broker-dealers and the
broker-dealers may engage in short sales of the Shares in the course of hedging
the positions they assume with such Selling Stockholder. Any Selling
Stockholder also may sell the Shares short and deliver the Shares to close out
such short positions. Any Selling Stockholder also may enter into option or
other transactions with broker-dealers that involve the delivery of the Shares
to the broker-dealers, which may then resell or otherwise transfer such Shares.
Any Selling Stockholder also may loan or pledge the Shares to a broker-dealer
and the broker-dealer may sell the Shares so loaned or upon a default may sell
or otherwise transfer the pledged Shares.

The Selling Stockholders will pay the commissions and discounts of
underwriters, dealers or agents, if any, incurred in connection with the sale
of the Shares. Pursuant to the terms of the agreements entered into between the
Company and the Selling Stockholders, the Company has agreed to pay all
expenses incident to the registration of the Shares. These agreements provide
for reciprocal indemnification between the Company on the one hand, and the
Selling Stockholder on the other hand, against certain liabilities in
connection with the Registration Statement, of which this Prospectus is a part,
including liabilities under the Securities Act.

VALIDITY OF SHARES

Certain legal matters in connection with the securities offered hereby
are being passed upon for the Company by Willkie Farr & Gallagher, New York,
New York.

63
<PAGE>

EXPERTS

The consolidated financial statements of Bolle Inc. as of December 31,
1997 and 1996 and for each of the three years in the period ended December 31,
1997 and the combined financial statements of Holding BF SA as of September 30,
1997 and for the three-month period then ended, as of June 30, 1997 and for the
six-month period then ended and as of December 31, 1996 and for the year then
ended, included in this Prospectus have been so included in reliance on the
reports of Price Waterhouse LLP (Bolle Inc.) and Befec-Price Waterhouse
(Holding BF SA), independent accountants, given on authority of said firms as
experts in auditing and accounting.

AVAILABLE INFORMATION

The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C. 20549, a Registration Statement on Form S-1
under the Securities Act with respect to the shares of Common Stock. This
Prospectus, which is part of the Registration Statement, does not contain all
of the information set forth in the Registration Statement and the exhibits and
schedules thereto. For further information with respect to the Company and the
Common Stock, reference is made to the Registration Statement and the exhibits
and schedules filed therewith. Statements contained in this Prospectus as to
the contents of any contract or any other document to which reference is made
are necessarily summaries thereof, and in each instance reference is made to
the copy of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all respects by
such reference. Any interested party may inspect the Registration Statement,
without charge, and copied at prescribed rates, at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549, or at its regional offices located at Northwestern
Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and
Seven World Trade Center, Suite 1300, New York, New York 10048. In addition,
the Commission maintains a website that contains the Registration Statement.
This website can be accessed at www.sec.gov. Copies of such material can also
be obtained from the Company upon request by contacting the Company at its
principal executive office.

The Company is subject to the informational requirements of the
Exchange Act and, in accordance therewith, files reports, proxy statements and
other information with the Commission. The reports, proxy statements and other
information filed by the Company with the Commission are available for
inspection and copying at the Commission's public reference facilities referred
to above. Copies of such material are obtainable by mail at prescribed rates by
writing the Public Reference Branch of the Commission at the address referred
to above. In addition, reports, proxy statements and other information
concerning the Company are available for inspection at the offices of Nasdaq
located at 1735 K Street, N.W., Washington, D.C. 20006.

64
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Bolle Inc.

Unaudited Pro Forma Combined Financial Data
-------------------------------------------
Unaudited Pro Forma Balance Sheet as of March 31, 1998............................................ F-3
Unaudited Pro Forma Statement of Operations for the quarter ended
March 31, 1998.................................................................................. F-4
Unaudited Pro Forma Statement of Operations for the year ended
December 31, 1997............................................................................... F-5
Notes to Unaudited Pro Forma Combined Financial Statements........................................ F-6
Unaudited Interim Financial Data
--------------------------------
Unaudited Consolidated Statement of Operations for the quarters ended
June 30, 1998 and 1997 and for the six months ended June 30, 1998 and 1997...................... F-8
Unaudited Condensed Consolidated Balance Sheets as of June 30, 1998 and December 31, 1997......... F-9
Unaudited Interim Condensed Financial Statements
------------------------------------------------
Unaudited Balance Sheet as of March 31, 1998...................................................... F-10
Unaudited Statements of Operations for the quarters ended March 31, 1998 and 1997................. F-11
Unaudited Statements of Cash Flows for the quarters ended March 31, 1998 and 1997................. F-12
Notes to Condensed Financial Statements........................................................... F-13
Annual Financial Statements
---------------------------
Independent Auditors' Report...................................................................... F-15
Consolidated Balance Sheets as of December 31, 1997, 1996 and 1995................................ F-16
Consolidated Statements of Operations for the years ended December 31, 1997,
1996 and 1995................................................................................... F-17
Consolidated Statements of Comprehensive Income for the years ended
December 31, 1997, 1996 and 1995................................................................ F-18
Consolidated Statements of Stockholders' Equity for the years ended December 31, 1997,
1996 and 1995................................................................................... F-19
Consolidated Statements of Cash Flows for the years ended December 31, 1997,
1996 and 1995................................................................................... F-20
Notes to Consolidated Financial Statements........................................................ F-22

Holding B.F. SA
Annual and Interim Financial Statements
---------------------------------------
Report of Independent Accountants................................................................. F-37
Combined Balance Sheets as of December 31, 1996, June 30, 1997 and September
30, 1997........................................................................................ F-38
Combined Statement of Operations for the year ended December 31, 1996, the six
months ended June 30, 1997 and the three months ended September 30, 1997........................ F-39
Combined Statement of Stockholders' Equity for the year ended December 31, 1996, the six
months ended June 30, 1997 and the three months ended September 30, 1997........................ F-40
Combined Statement of Cash Flows for the year ended December 31, 1996,
the six months ended June 30, 1997 and the three months ended September 30, 1997................ F-41
Notes to Combined Financial Statements............................................................ F-42

</TABLE>

F-1
<PAGE>

BOLLE INC.
PRO FORMA COMBINED FINANCIAL STATEMENTS

The following unaudited pro forma combined statements of operations

(i) give effect to the July 10, 1997 acquisition of Holding BF SA
and related assets ("Bolle France") under the purchase method of
accounting;

(ii) reflect the Bill of Sale and Assignment Agreement (the
"Contribution Agreement") and the Indemnification Agreement
between the Company and its prior parent company Lumen
Technologies, Inc. ("Lumen") described in the audited and
interim financial statements included herein;

(iii) reflect the acquisition of 75% of both Bill Bass Optical Pty.
Ltd. and Parkhurst Oaks Pty. Ltd. (collectively "Bolle
Australia") under the purchase method of accounting; and

(iv) give effect to the issuance of the Convertible Notes and use of
its proceeds.

The unaudited pro forma combined balance sheet as of March 31, 1998
only gives effect to the acquisition of Bolle Australia and the issuance of the
Convertible Notes as the acquisition of Bolle France and the Contribution
Agreement and Indemnification Agreement are already included in the historical
balance sheet as of March 31, 1998.

The accompanying pro forma combined statements of operations give
effect to the Contribution Agreement and the acquisitions of Bolle France and
Bolle Australia as though they had occurred as of the beginning of the periods
presented. The pro forma combined financial statements are derived from (i) the
audited and unaudited financial statements of the Company; (ii) the Bolle
France historical audited financial statements as of and for the six months
ended June 30, 1997; (iii) the Bolle Australia historical audited financial
statements as of and for the six months ended December 31, 1997 and the year
ended June 30, 1997; and (iv) the adjustments set forth in the notes to the pro
forma combined financial statements.

Pro forma adjustments are based upon preliminary estimates, available
information and certain assumptions that management deems appropriate.
Management does not expect material changes to purchase accounting and other
pro forma adjustments upon final allocation of the purchase price. The
unaudited pro forma combined financial information presented herein is not
necessarily indicative of the results of operations or financial position that
the Company would have obtained had such events occurred at the beginning of
the periods presented, as assumed, or of the future results of the Company.

F-2
<PAGE>

BOLLE INC.
PRO FORMA BALANCE SHEET
AS OF MARCH 31, 1998
(Amounts in thousands)
<TABLE>
<CAPTION>
CONVERTIBLE
(2) ACQUISITION SUBORDINATED
BOLLE BOLLE PRO FORMA NOTE PRO FORMA
INC AUSTRALIA ADJUSTMENTS ADJUSTMENTS COMBINED
------------- ----------- -------------- --------------- ----------------
<S> <C> <C> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents .............. $ 1,210 $ 711 $ (161)(a) $ 1,760
Trade receivables, net ................. 10,975 4,229 (1,051)(b) 12,416
(1,737)(a)
Inventories ............................ 11,235 2,085 13,320
Other current assets ................... 6,528 468 (3)(a) 6,993
--------- --------- --------- --------- ---------
Total current assets ................. 29,948 7,493 (2,952) 34,489
Investment in affiliates .................. 5,403 5,403
Property and equipment, net (1) ........... 10,086 264 10,350
Trademark, net ............................ 37,542 37,542
Goodwill and other intangibles, net ....... 22,399 1 4,758 (c) 27,158
Other assets .............................. 1,451 87 400 (h) 1,938
========= ========= ========= ========= =========
Total assets ......................... $ 106,829 $ 7,845 $ 1,806 $ 400 $ 116,880
========= ========= ========= ========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Short term debt and current maturities
of long-term debt (1) ............... $ 8,705 $ 1,301 $ 3,850 (d) $ (5,100)(h) $ 8,756
Accounts payable ....................... 4,825 2,556 (1,051)(b) 5,599
(731)(a)
Other accrued expenses ................. 7,281 703 294 (a) 8,278

--------- --------- --------- --------- ---------
Total current liabilities ............ 20,811 4,560 2,362 (5,100) 22,633
Long-term debt (1) ..................... 12,042 (1,500)(h) 10,542
Convertible subordinated notes ......... $ 7,000 (i) 7,000
Deferred tax liability ................. 14,000 14,000
Long-term liabilities .................. 2,919 98 3,017
--------- --------- --------- --------- ---------
Total liabilities ...................... 49,772 4,658 2,362 400 57,192
--------- --------- --------- --------- ---------
Mandatorily redeemable preferred stock .... 20,709 20,709
Minority interests ........................ 431 (e) 431
Stockholders' equity ...................... 36,348 3,187 (1,723)(f) 38,548
(1,464)(a)
2,200 (g)
--------- --------- --------- --------- ---------
Total liabilities, mandatorily redeemable
preferred stock, minority interests and
stockholders' equity ................... $ 106,829 $ 7,845 $ 1,806 $ 400 $ 116,880
========= ========= ========= ========= =========
</TABLE>

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

(1) In May 1998, the Company sold its real estate investment for $5.8 million.
The net book value of the property at March 31, 1998 was $5.7 million and
the related mortgage was $3.5 million. Using the net proceeds after
repayment of the mortgage and expenses, the Company repaid approximately
$2 million of its term loan.

(2) Represents the balance sheet of Bolle Australia as of December 31, 1997
translated at 0.6503 US Dollars per Australian Dollar, the exchange rate
at December 31, 1997.

F-3
<PAGE>

BOLLE INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE QUARTER ENDED MARCH 31, 1998
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
CONTRIBUTION
AGREEMENT
AND CONVERTIBLE
(1) ACQUISITION SUBORDINATED
BOLLE PRO FORMA NOTE PRO FORMA
BOLLE INC. AUSTRALIA ADJUSTMENTS ADJUSTMENTS COMBINED
-------------- -------------- -------------- --------------- -------------
<S> <C> <C> <C> <C> <C>
REVENUES:
Net sales......................... $10,728 $4,267 $ (739) (u) $14,256
COSTS AND EXPENSES:
Cost of sales..................... 5,288 2,286 (739) (u) 6,835
Selling, general and
administrative expenses......... 5,430 1,390 30 (j) (25) (q) 6,825
Interest expense.................. 484 39 (222) (k) (107) (r) 371
72 (l) 105 (s)
Other income...................... (515) (47) (562)
-------------- -------------- -------------- --------------- -------------
Total costs and expenses.......... 10,687 3,668 (859) (27) 13,469
-------------- -------------- -------------- --------------- -------------
Income (loss) before income taxes
and minority interests........... 41 599 120 27 787
Provision for income taxes........ 16 216 44 (m) 10 (m) 286
-------------- -------------- -------------- --------------- -------------
Net income (loss) before minority
interests......................... 25 383 76 17 501
Minority interests................ 96 96
Preferred stock dividends......... 29 110 (n) 139
============== ============== ============== =============== =============
Net income (loss) attributable to
common stock.................... $ (4) $287 $ (34) $ 17 $ 266
============== ============== ============== =============== =============
Basic and diluted weighted 248 (o)
average shares outstanding...... 1,476 5,160 (p) 6,884
Basic and diluted EPS (4)......... $(0.00) $ 0.04
</TABLE>

- ----------------
(1) Represents the results of operations of Bolle Australia for the three
months ended December 31, 1997, translated at the average exchange rate
for the period of 0.6918 US Dollars per Australian Dollar.

F-4
<PAGE>

BOLLE INC.
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
CONTRIBUTION
AGREEMENT
AND CONVERTIBLE
(2) (3) ACQUISITION SUBORDINATED
(1) BOLLE BOLLE PRO FORMA NOTE PRO FORMA
BOLLE INC. FRANCE AUSTRALIA ADJUSTMENTS ADJUSTMENTS COMBINED
-------------- ------------- -------------- -------------- -------------- --------------
<S> <C> <C> <C> <C> <C> <C>
REVENUES:
Net sales................ $32,160 $18,656 $12,650 $(3,060) (t) $56,080
(4,326) (u)
COSTS AND EXPENSES:
Cost of sales............ 15,354 11,577 6,891 (3,060) (t) 26,436
(4,326) (u)
Selling, general and 16,342 5,258 4,127 (179) (v) 26,378
administrative expenses 811 (w) (100) (q)
119 (j)
Merger and acquisition
integration related
expenses............... 3,750 (3,750) (x)
Interest expense......... 963 175 171 (91) (k) (429) (r) 1,498
289 (l) 420 (s)
Other income............. (693) (359) (592) (1,644)
-------------- ------------- -------------- -------------- -------------- --------------
Total costs and expenses. 35,716 16,651 10,597 (10,187) (109) 52,668
-------------- ------------- -------------- -------------- -------------- --------------
Income (loss) before
income taxes and
minority interests...... (3,556) 2,005 2,053 2,801 109 3,412
Provision for income
taxes................... 1,099 1,193 779 1,036 (m) 40 (m) 4,147
-------------- ------------- -------------- -------------- -------------- --------------
Net income (loss) before
minority interests...... (4,655) 812 1,274 1,765 69 (735)
Minority interests....... 319 319
Preferred stock dividends 511 (n) 511
============== ============= ============== ============== ============== ==============
Net income (loss)
attributable to common
stock.................. $(4,655) 812 $955 $1,254 $ 69 $ (1,565)
============== ============= ============== ============== ============== ==============
Basic and diluted
weighted average 248 (o)
shares outstanding..... 1.8 6,634 (p) 6,884
Basic and diluted $(2,586.11) $ (0.23)
EPS (4)...............

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

(1) Represents the results of operations of Bolle Inc. for the year ended
December 31, 1997, including the results of operations of Bolle France for
the six months ended December 31, 1997.

(2) Represents the results of operations of Bolle France for the six months
ended June 30, 1997 (not included in (1)) translated using the average
rate of 5.6835 French Francs per US dollar for such period.

(3) Represents the results of operations of Bolle Australia for the year ended
September 30, 1997, translated at the average exchange rate for the period
of 0.7673 US Dollars per Australian Dollar.

(4) Despite the loss before tax of $3,556, the Company recorded a tax charge
of $1,099 primarily due to the creation of a valuation allowance against
the entire net tax benefit arising from domestic operations, resulting in
a net loss of $4,655. If the 1997 statutory tax rate of 37% had been
applied to pro forma combined income before income taxes, pro forma EPS
would have been $0.19.

F-5
<PAGE>

NOTES TO THE PRO FORMA COMBINED FINANCIAL STATEMENTS
(UNAUDITED)

(IN THOUSANDS, EXCEPT PER SHARE DATA)

PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS

(a) Adjustments to reflect agreed upon dividend to prior Bolle Australia
shareholders which occurred after December 31, 1997, in connection with,
but before the acquisition of Bolle Australia.

(b) Adjustment to reflect the elimination of receivables from Bolle Australia
to Bolle France.

(c) Adjustment to reflect the allocation to goodwill of the excess of the
purchase price of Bolle Australia over the book value to be amortized over
an estimated useful life of forty years.

(d) Adjustment to reflect the borrowings used to finance the cash portion of
the purchase price of Bolle Australia.

(e) Adjustment to reflect the 25% minority interest in Bolle Australia which
continues to be held by the prior majority shareholders of Bolle
Australia.

(f) Adjustment to reflect the elimination of Bolle Australia equity in pro
forma consolidation. (g) Adjustment to reflect the issuance of stock for
the stock portion of the purchase price. (h) Adjustment to reflect the use
of net proceeds from the issuance of the Convertible Subordinated Notes to
repay a portion of the Company's term loan and revolving credit facility.

(i) Adjustment to reflect the issuance of the Convertible Notes (net of a
total of $400 of transaction expenses), which are convertible into the
underlying securities in this Offering.

PRO FORMA COMBINED STATEMENTS OF OPERATIONS ADJUSTMENTS

(j) Adjustment to reflect the amortization of the goodwill recorded in
conjunction with the acquisition of Bolle Australia over an estimated
useful life of forty years. See adjustment (c).

(k) Adjustment to reflect the reduction of interest related to the reduced
indebtedness resulting from the Contribution Agreement. Such reduction is
calculated as: the $16,104 debt outstanding on the date of the Spinoff,
multiplied by the effective interest rate of 6.5%, less the actual
interest expensed by the Company and Bolle France during the period.

(l) Adjustment to reflect interest on the cash portion of the Bolle Australia
purchase price of $3,700 plus direct acquisition expenses of $150 at a
rate of 7.5%.

(m) Adjustment to reflect the statutory rate of 37% applied to the pro forma
adjustments.

(n) Adjustment to reflect the preferred dividends as if the Series B Preferred
Stock issued in conjunction with the Contribution Agreement had been
outstanding since the beginning of the period.

(o) Adjustment to reflect the issuance of shares to satisfy a portion of the
purchase price of Bolle Australia. (p) Adjustment to reflect the Spinoff
of the Company to its shareholders as if it had occurred as of the
beginning of the period.

(q) Adjustment to reflect amortization of the direct transaction expenses of
the Convertible Notes issuance over the 4 year term. See note (i).

(r) Adjustment to reflect reduced interest expense as a result of repayment of
indebtedness by the use of proceeds from the Convertible Notes.

(s) Adjustment to reflect effective interest on the Convertible Notes, based
on the current market price of the Company's shares, at an interest rate
of 6%. The effect of a $0.25 change in the market value of Company Common
Stock would be $350 per annum. This effective interest rate will fluctuate
during the term of the Convertible Notes based on the Company's then
current market price per share, as the instrument will be marked to market
at each balance sheet date.

(t) Adjustment to reflect elimination of sales from Bolle France to Bolle
America for the unconsolidated six months ended June 30, 1997, translated
at the same exchange rate used to translate the statement of operations.

F-6
<PAGE>

(u) Adjustment to reflect the elimination of sales from Bolle France to Bolle
Australia translated at the French Franc to US Dollar exchange rates of
5.84 for the year ended December 31, 1997 and 6.10 for the three months
ended March 31, 1998.

(v) Adjustment to reflect the elimination of Bolle France acquisition related
expenses incurred and charged at Bolle France prior to the acquisition.
Such expenses do not have a recurring effect on the results of the
Company.

(w) Adjustment to reflect the amortization of goodwill and trademark value
($62,502) recorded over an estimated useful life of 40 years ($1,563 per
annum) and the adjustment to the value of the buildings ($1,824) over an
estimated useful life of 30 years ($60 per annum).

(x) Adjustment to reflect the elimination of acquisition integration related
expenses described as follows:

(i) a reserve for the return of product from the Company's owned and
non-owned distributors in conjunction with the redefining and
streamlining of the Company's new product line, and

(ii) the legal, production and marketing expenses related to the set up of
a new logo for Bolle(R) worldwide and the creation of the first
worldwide catalog.

F-7
<PAGE>

BOLLE INC.
UNAUDITED INTERIM FINANCIAL DATA
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter ended Six months ended
June 30, June 30,
-------------------------- --------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES
Net sales ..................... $ 13,748 $ 5,420 $ 24,476 $ 10,478

COST AND EXPENSES
Cost of sales ................. 5,931 2,160 11,218 4,938
Selling, general &
administrative ............. 10,914 5,754
6,241 2,813
Depreciation and amortization . 745 92 1,502 184
Interest expense .............. 311 47 794 68
Other income .................. (405) (298) (919) (586)
----------- ----------- ----------- -----------
Total costs and expenses ...... 12,823 4,814 23,509 10,358
----------- ----------- ----------- -----------
925 606 967 120
Income before income taxes.....
Provision for income taxes .... 351 194 368 38
Minority interests ............ 10 _ 10 _

----------- ----------- ----------- -----------
Net income .................... 564 412 589 82

Preferred dividend ............ 141 _ 170 _
=========== =========== =========== ===========
Net income attributable to
common stock .................. $ 423 $ 412 $ 419 $ 82
=========== =========== =========== ===========

Weighted average shares
outstanding:

Basic ......................... 6,746,069 100 4,111,210 100
Diluted ....................... 7,234,068 100 4,407,503 100

Earnings per share:

Basic ......................... $ 0.06 $ 4,121.40 $ 0.10 $ 813.70
Diluted ....................... $ 0.06 $ 4,121.40 $ 0.10 $ 813.70

</TABLE>

F-8
<PAGE>

BOLLE INC.
UNAUDITED INTERIM FINANCIAL DATA
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1998 1997
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents
$ 2,060 $ 1,204
Trade receivables from related parties -- 1,120
Trade receivables, net
12,191 11,332
Inventories .......................... 11,734
15,099
Other current assets ................. 1,617
2,964
-------- --------
Total current assets .................... 32,314 27,007
Investment in and notes receivable from
affiliates ........................... 5,728 --
Property and equipment, net ............. 4,469 4,687
Trademark, net .......................... 38,081 39,029
Goodwill and other intangible assets, net 27,002 23,447
Other assets ............................ 5,991 527
-------- --------
Total assets ........................ $113,585 $ 94,697
======== ========

LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:

Short term debt and current portion of
long term debt .................... $ 9,036 $ --
Accounts payable ..................... 4,957 6,247
Indebtedness to related parties ...... -- 35,782
Other accrued expenses ............... 8,585 5,914
-------- --------
Total current liabilities ............... 22,578 47,943
Long term debt .......................... 6,677 --
Convertible subordinated notes .......... 7,000 --
Deferred tax liability .................. 14,000 14,000
Other long-term liabilities ............. 3,235 2,856
-------- --------
Total liabilities ....................... 53,490 64,799
Minority interests ...................... 10 --
Mandatory redeemable preferred stock .... 20,850 11,055
Stockholders' equity .................... 39,235 18,843
======== ========
Total liabilities, mandatorily
redeemable preferred stock and
stockholder's equity .............. $113,585 $ 94,697
======== ========

</TABLE>

F-9
<PAGE>

BOLLE INC.
CONDENSED INTERIM FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
MARCH 31, 1998
--------------
<S> <C>
ASSETS
Current assets:
Cash and cash equivalents ............................................... $ 1,210
Trade receivables from related parties .................................. 487
Trade receivables, less allowances of $754 and $857 ..................... 10,488
Inventories ............................................................. 11,235
Prepaid and other current assets ........................................ 1,165
Deferred tax asset ...................................................... 5,363
---------
Total current assets ....................................................... 29,948
Note receivable and investment in affiliates ............................... 5,403
Property and equipment, net ................................................ 10,086
Trademark, net ............................................................. 37,542
Goodwill and other intangible assets, net .................................. 22,399
Other assets ............................................................... 1,451
---------
Total assets ........................................................... $ 106,829
=========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short term debt and current portion of long term debt ................... $ 8,705
Accounts payable ........................................................ 4,825
Accrued compensation .................................................... 962
Other accrued expenses .................................................. 6,319
---------
Total current liabilities .................................................. 20,811
Long term debt, net of current portion ..................................... 12,042
Deferred tax liability ..................................................... 14,000
Other long-term liabilities ................................................ 2,919
---------
Total liabilities .......................................................... 49,772
---------
Mandatorily redeemable preferred stock - redemption value $11,055; par value
$.01; 64 shares authorized, issued and outstanding ...................... 11,055
Mandatorily redeemable cumulative preferred stock - redemption value
$9,625; par value $0.01; 10 shares authorized, issued and outstanding ... 9,654
Stockholders' equity:
Common stock - par value $.01; 25,000 shares authorized, 6,636 shares
issued and outstanding ............................................... 66
Additional paid-in capital .............................................. 43,285
Cumulative translation adjustment ....................................... (2,344)
Accumulated deficit ..................................................... (4,659)
---------
Total stockholders' equity ........................................ 36,348
---------
Total liabilities, mandatorily redeemable preferred stock
and stockholders' equity ....................................... $ 106,829
=========
</TABLE>

See accompanying notes to condensed financial statements.

F-10
<PAGE>

BOLLE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except share and per share data)
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED
MARCH 31,
---------------------------
1998 1997
----------- ------------
<S> <C> <C>
REVENUES:
Net sales .................................. $ 10,728 $ 5,058

COSTS AND EXPENSES
Cost of sales .............................. 5,288 2,778
Selling, general and administrative expenses 5,430 3,034
Interest expense ........................... 484 21
Other (income) expense ..................... (515) (288)
----------- -----------
Total costs and expenses ................... 10,687 5,545
----------- -----------
Income (loss) before income taxes .......... 41 (487)
Provision for (benefit from) income taxes .. 16 (156)
----------- -----------
Net income (loss) .......................... 25 (331)

Preferred dividend ......................... 29
----------- -----------
Net loss attributable to common stock ...... $ (4) $ (331)
=========== ===========

Comprehensive loss ......................... $ (1,123) $ (331)
=========== ===========

Weighted average shares outstanding:

Basic ...................................... 1,476,351 100
Diluted .................................... 1,566,124 100

Loss per share:

Basic ...................................... $ (0.00) $ (3,310)
Diluted .................................... $ (0.00) $ (3,310)
</TABLE>

See accompanying notes to condensed financial statements.

F-11
<PAGE>

BOLLE INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31,
------------------------------------
1998 1997
------- -------
<S> <C> <C>
Net cash provided (used) by operating activities .......... $ 2,018 $ (554)
------- -------

Cash flows from investing activities:
Non compete agreement .................................. (25) (25)
Capital expenditures ................................... (78) (29)
Proceeds from sale of assets ........................... 7
------- -------
Net cash used by investing activities ............ (103) (47)
------- -------

Cash flows from financing activities:
Proceeds from (payments on) revolving credit line ...... (1,982) 355
Proceeds from long term obligations .................... 102
-------
Net cash provided (used) by financing activities . (1,880) 355
------- -------

Effect of change in exchange rate on cash ................. (29)

Net increase (decrease) in cash ........................... 6 (246)
Cash and cash equivalents at beginning of period .......... 1,204 311
------- -------
Cash and cash equivalents at end of period ................ $ 1,210 $ 65
======= =======
</TABLE>

See accompanying notes to condensed financial statements.

F-12
<PAGE>

NOTES TO CONDENSED FINANCIAL STATEMENTS

NOTE 1 - SPINOFF AND BASIS OF PRESENTATION

At December 31, 1997 Bolle Inc. (the "Company") was a subsidiary of Lumen
Technologies, Inc. (formerly known as BEC Group, Inc.) ("Lumen"). On March 11,
1998, Lumen distributed the stock of Bolle Inc. to Lumen's stockholders (the
"Spinoff") and the Company began trading on the NASDAQ National Market under
the symbol "BEYE" on March 12, 1998.

In connection with the Spinoff, pursuant to a Bill of Sale and Assignment
Agreement entered into between Lumen and the Company immediately prior to the
consummation of the Spinoff (the "Contribution Agreement"), (i) Lumen assigned
to the Company all of Lumen's assets other than assets related to the ORC
Business (as defined in the Contribution Agreement) and certain other specified
assets retained by Lumen; and (ii) the Company assumed all of Lumen's
liabilities prior to the Spinoff other than those related to the ORC Business.
Pursuant to this agreement, approximately $17 million of the Company's
indebtedness to related parties was contributed to the capital of the Company
and the remaining balance was refinanced via a bank credit facility.

In connection with the Spinoff, the Company assumed all obligations and
liabilities of Lumen to each of Maurice Bolle, Robert Bolle, Franck Bolle,
Patricia Bolle Passaquay, Brigitte Bolle and Christelle Roche (collectively,
the "Sellers," and each a "Seller") incurred by Lumen in connection with the
purchase of Bolle France, and Lumen was released from all such obligations or
liabilities. In addition, each Seller conveyed to the Company all shares of the
Series A Preferred Stock of Lumen (the "Lumen Preferred Stock") held by such
Seller and the Company issued in exchange to each Seller, shares of its Series
B Preferred Stock (the "Bolle Series B Preferred Stock") in proportion to the
number of shares of Lumen Preferred Stock conveyed by such Seller to the
Company. No shares of Bolle Common Stock were issued to the holders of
outstanding shares of Bolle Series B Preferred Stock pursuant to the Spinoff.
Lumen canceled all warrants (the "Lumen Warrants") and the Company issued in
exchange to each holder of canceled Lumen Warrants, warrants to purchase Bolle
Common Stock (the "Bolle Warrants") in proportion to the number of Lumen
Warrants held by such holder prior to the cancellation. No shares of Bolle
Common Stock were issued to holders of outstanding Bolle Warrants pursuant to
the Spinoff.

Due to the acquisition of Bolle France on July 10, 1997, the results of
operations of Bolle France are included only in the results of operations for
the quarter ended March 31, 1998.

The accompanying unaudited condensed financial statements have been
prepared in accordance with generally accepted accounting principles,
Regulation S-X and the instructions for Form 10-Q and Regulation S-X. These
statements contain all adjustments, consisting of only normal recurring
adjustments, other than those related to the Spinoff and Contribution
Agreement, which in the opinion of management are necessary to fairly present
the consolidated financial position of the Company as of March 31, 1998 and its
results of operations and cash flows for the three months ended March 31, 1998
and 1997. The results of operations for the interim periods presented are not
necessarily indicative of the results to be expected for the full fiscal year.
These condensed financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997.

NOTE 2 - INDEBTEDNESS TO RELATED PARTIES

In connection with the Contribution Agreement between Lumen and the
Company, approximately $17 million of indebtedness to related parties incurred
to finance the acquisition of Bolle France was capitalized and the remaining
debt was refinanced with bank debt.

F-13
<PAGE>

NOTE 3 - MANDATORILY REDEEMABLE CUMULATIVE PREFERRED STOCK

In connection with the Spinoff described in Note 1, the Company issued
10,000 shares of Bolle Series B Preferred Stock (the "Series B Stock") with a
redemption value of $9.6 million. Shares of the Series B Stock will be redeemed
by the Company on the third anniversary of their issuance, subject to the
provisions of the Company's senior indebtedness. The Series B Stock bears
dividends at 6% through June 30, 1998; 7% through December 31, 1998; and
increases by 1% every six months thereafter through January 1, 2000 at which
time the dividend is 10% until redemption. Dividends accumulate and bear
interest at the applicable dividend rate. The Series B Stock does not
participate in any other dividends declared by the Company.

F-14
<PAGE>

INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Stockholders of Bolle 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 Bolle 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 Notes 1 and 2, on March 11, 1998, the Company's
parent, Lumen Technologies, Inc. (formerly BEC Group, Inc.), distributed the
Company's stock to Lumen stockholders via a Spinoff. Contemporaneously with the
Spinoff, certain assets and liabilities were transferred from Lumen to the
Company and a portion of the Company's indebtedness to related parties was
contributed to the capital of the Company, resulting in a decrease in current
liabilities of approximately $28 million and an increase in stockholders'
equity of approximately $14 million.

PRICE WATERHOUSE LLP
Dallas, Texas
April 15, 1998

F-15
<PAGE>

BOLLE INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1997 1996
--------- --------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents .......................................................... $ 1,204 $ 311
Trade receivables from related parties (Note 14) ................................... 1,120
Trade receivables, less allowances of $857 and $445 ................................ 11,332 4,895
Inventories ........................................................................ 11,734 8,388
Prepaid and other current assets ................................................... 1,617 822
-------- --------
Total current assets ........................................................... 27,007 14,416
Property and equipment, net ........................................................... 4,687 534
Trademark, net ........................................................................ 39,029
Goodwill and other intangible assets, net ............................................. 23,447 646
Other assets .......................................................................... 527 28
-------- --------
Total assets ................................................................... $ 94,697 $ 15,624
======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable ................................................................... $ 6,247 $ 3,488
Indebtedness to related parties (Note 10) .......................................... 35,782 1,420
Accrued compensation ............................................................... 1,111 146
Other accrued expenses ............................................................. 4,803 827
-------- --------
Total current liabilities ...................................................... 47,943 5,881
Deferred tax liability ................................................................ 14,000
Other long-term liabilities ........................................................... 2,856
--------
Total liabilities .............................................................. 64,799 5,881
-------- --------

Mandatorily redeemable preferred stock--redemption value $11,055; par value
$.01; 64,120 shares authorized, issued
and outstanding .................................................................... 11,055
Stockholders' equity:
Investment by stockholder ............................................................. 9,743
Common stock--par value $.01; 25,000 shares authorized, 2,000
shares issued and outstanding.......................................................
Additional paid-in capital ............................................................ 23,960
Cumulative translation adjustment ..................................................... (462)
Accumulated deficit ................................................................... (4,655)
-------- --------
Total stockholders' equity ..................................................... 18,843 9,743
-------- --------

Total liabilities, mandatorily redeemable preferred stock
and stockholders' equity ..................................................... $ 94,697 $ 15,624
======== ========
</TABLE>
See accompanying notes to consolidated financial statements

F-16
<PAGE>

BOLLE INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>

For the Year Ended December 31,
-----------------------------------------
1997 1996 1995
----------- ----------- -----------
<S> <C> <C> <C>
Net sales ............................................ $ 32,160 $ 24,425 $ 24,829
Costs and expenses:
Costs of sales .................................... 15,354 12,130 12,181
Selling, general and administrative expenses ...... 12,584 8,105 7,610
Advertising and sponsoring expenses ............... 3,758 3,269 2,665
Merger and acquisition integration related expenses 3,750 3,050
Interest (income) expense ......................... 963 (256) (302)
Other (income) expense ............................ (693) (450) 48
----------- ----------- -----------

Total costs and expenses ................... 35,716 22,798 25,252
----------- ----------- -----------

Income (loss) before income taxes ................. (3,556) 1,627 (423)
Provision for income taxes ........................ 1,099 635 364
----------- ----------- -----------

Net income (loss) ................................. $ (4,655) 992 (787)
=========== =========== ===========

Basic and diluted earnings (loss) per share ....... $ (2,586.11) $ 9,920.00 $ (0.22)
=========== =========== ===========

Weighted average shares outstanding ............... 1,800 100 3,510,624
=========== =========== ===========
</TABLE>

See accompanying notes to consolidated financial statements.

F-17
<PAGE>

BOLLE INC.
STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
For the Year Ended December 31,
-----------------------------
1997 1996 1995
--------- -------- --------
<S> <C> <C> <C>
Net income (loss) .............................. $(4,655) $ 992 $ (787)
Foreign currency translation adjustments .. (462)
Reclassification adjustment--(before taxes)
------- ------- -------
Comprehensive income (loss) before tax .... (5,117) 992 (787)
Other comprehensive income tax effect ..... 142
------- ------- -------
Comprehensive income (loss) .................... $(4,975) $ 992 $ (787)
======= ======= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-18
<PAGE>

BOLLE INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1997, 1996 AND 1995
(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>

Common Stock
-----------------
Additional Cumulative
Par Paid-in Accumulated Translation Total Equity
Shares Value Capital Deficit Adjustment
------- -------- ----------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance--December 31, 1994 $13,433

1995:
Net Loss.................. (787)
Compensation expense accrued
for stock options......... 124
Balance--December 31, 1995 12,770

1996:

Net income................ 992
Dividend to Lumen......... (4,019)
Balance--December 31, 1996 $9,743
========
1997:
Beginning balance--
January 1, 1997.......... $9,743 $9,743
Capitalization of Bolle Inc.--
February 3, 1997............ 1,900 -- 10,915 10,915
===== ======= ====== ======== ======== ======
Common stock issued in 100 -- 3,302 3,302
connection with Bolle France
acquisition..................
Net income (loss)............ $(4,655) (4,655)
Cumulative translation
adjustment.................. $(462) (462)
------- ------- -------- --------- --------- ---------
Balance--December 31, 1997 $2,000 -- $23,960 $(4,655) $(462) $18,843
====== ======= ======= ======== ========= =======
</TABLE>

See accompanying notes to consolidated financial statements.

F-19
<PAGE>

BOLLE 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:
Net income (loss) ...................................................... $ (4,655) $ 992 $ (787)
Adjustments to reconcile income (loss) to net cash provided
(used) by operating activities:
Merger and acquisition integration related
expenses, net of payments ...................................... 1,823 99
Depreciation and amortization ...................................... 1,477 386 254
Bad debt expense ................................................... 489 73 183
Loss (gain) on sale of property and equipment ...................... 19 1
Changes in current assets and liabilities (net of effect of companies
acquired):
Accounts receivable .................................................... 2,515 821 (203)
Receivables from related parties ....................................... (1,120) (736) 736
Inventories ............................................................ 2,821 (1,470) (2,063)
Other assets ........................................................... (726) 291 (528)
Accounts payable ....................................................... 2,584 1,135 (323)
Accrued expenses and other ............................................. (4,128) (191) (176)
-------- -------- --------
Net cash provided (used) by operating activities ..................... 1,099 1,302 (2,808)
-------- -------- --------
Cash flows from investing activities:
Cash expended in acquisitions, net of cash received .................... (33,290)
Capital expenditures ................................................... (665) (319) (131)
Proceeds from sale of fixed assets ..................................... 65 2
Non-compete agreement and intangible assets ............................ (100) (2) (815)
-------- --------
Net cash used by investing activities ................................ (33,990) (319) (946)
-------- -------- --------
Cash flows from financing activities:
Proceeds (payments) from long-term obligations ......................... (18) (21) (78)
Proceeds (payments) on indebtedness to related parties ................. 34,362 (1,000) (1,600)
Proceeds from issuance of common stock ................................. (21)
-------- --------
Net cash provided (used) by financing activities ..................... 34,344 (1,021) (1,699)
-------- -------- --------
Effect on cash of changes in foreign exchange rates ....................... (560)
Net increase (decrease) in cash ........................................... 893 (38) (5,453)
Cash and cash equivalents at beginning of period .......................... 311 349 5,802
-------- -------- --------
Cash and cash equivalents at end of period ................................ $ 1,204 $ 311 $ 349
======== ======== ========
Interest paid .......................................................... $ 46 $ 5 $ 42
Income taxes paid ...................................................... 2,635 * *

</TABLE>
See accompanying notes to consolidated financial statements.

F-20
<PAGE>

0 Income taxes were paid by the Company's parent for the years ended
December 31, 1995 and 1996 as it has been part of a U.S. tax group since 1995.
In 1997, only the Company's domestic income taxes were paid by the Parent on
behalf of the Company. Accordingly, the income taxes paid by the Company in
1997 represent foreign income taxes.

NONCASH TRANSACTIONS:

1997

0 The acquisition of Bolle France discussed in Note 3 was funded through a
combination of cash, equity and debt. The fair values of the assets and
liabilities at the dates of acquisition are presented 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)
Deferred tax liability................................. (14,000)
Other long-term liabilities............................ (1,896)

1996 AND 1995

0 During the fourth quarter of 1996, Bolle America forgave the repayment
of a $4,019 advance made to Lumen during the year. The forgiveness of the
advance was characterized as a dividend in 1996.

0 There were no non-cash transactions during the year ended December 31,
1995.

See accompanying notes to consolidated financial statements.

F-21
<PAGE>

BOLLE INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA, UNLESS OTHERWISE NOTED)

NOTE 1--SPINOFF SUBSEQUENT TO YEAR END

At December 31, 1997 Bolle Inc. (the "Company") was a subsidiary of
Lumen Technologies, Inc. (formerly known as BEC Group, Inc.) ("Lumen"). On
March 11, 1998, Lumen distributed the stock of Bolle Inc. to Lumen's
shareholders (the "Spinoff") and the Company began trading on the NASDAQ
National Market under the symbol "BEYE" on March 12, 1998.

In connection with the Spinoff, pursuant to a Bill of Sale and
Assignment Agreement entered into between Lumen and the Company immediately
prior to the consummation of the Spinoff (the "Contribution Agreement"), (i)
Lumen assigned to the Company all of Lumen's assets other than assets related
to the ORC Business (as defined in the Contribution Agreement) and certain
other specified assets retained by Lumen; and (ii) the Company assumed all of
Lumen's liabilities prior to the Spinoff other than those related to the ORC
Business. Pursuant to this agreement, approximately $17 million of the
Company's indebtedness to related parties was contributed to the capital of the
Company and the remaining balance was refinanced via a bank credit facility.

In connection with the Spinoff, the Company assumed all obligations
and liabilities of Lumen to each of Maurice Bolle, Robert Bolle, Franck Bolle,
Patricia Bolle Passaquay, Brigitte Bolle and Christelle Roche (collectively,
the "Sellers," and each a "Seller") incurred by Lumen in connection with the
purchase of Bolle France, and Lumen was released from all such obligations or
liabilities. In addition, each Seller conveyed to the Company all shares of
Series A Preferred Stock of Lumen (the "Lumen Preferred Stock") held by such
Seller and the Company issued in exchange to each Seller, shares of its Series
B Preferred Stock (the "Bolle Series B Preferred Stock") in proportion to the
number of shares of Lumen Preferred Stock conveyed by such Seller to the
Company. No shares of Bolle Common Stock were issued to the holders of
outstanding shares of Bolle Series B Preferred Stock pursuant to the Spinoff.
Lumen canceled all warrants (the "Lumen Warrants") and the Company issued in
exchange to each holder of canceled Lumen Warrants, warrants to purchase Bolle
Common Stock (the "Bolle Warrants") in proportion to the number of Lumen
Warrants held by such holder prior to the cancellation. No shares of Bolle
Common Stock were issued to holders of outstanding Bolle Warrants pursuant to
the Spinoff.

NOTE 2--GENERAL INFORMATION, BUSINESS AND BASIS OF PRESENTATION

GENERAL INFORMATION

The Company was organized on February 3, 1997 to effect the July 1997
acquisition by Lumen of Holding B.F. (hereinafter referred to as "Bolle
France"), the French holding company that owned the Bolle design, manufacturing
and certain distribution interests, including the worldwide rights to the
Bolle(Registered Trademark) brand. The Company is a holding company, the
principal subsidiaries of which are Bolle America, Inc. ("Bolle America") and
Bolle France. Bolle America was acquired by Lumen in November 1995 in a
transaction accounted for as a pooling of interests.

The Company and Lumen entered into a management services agreement
(the "Management Agreement") contemporaneously with the Spinoff pursuant to
which certain executives of Lumen will provide key management services to the
Company for an initial term of three years. The agreement is thereafter
automatically renewed for successive one-year periods until terminated by
either party upon at least 90 days written notice prior to the expiration of
the initial, or any renewal, term then in effect.

BUSINESS

Bolle Inc. is a vertically integrated, designer, manufacturer and
marketer of Bolle(Registered Trademark) premium sunglasses, goggles, and
tactical and safety eyewear. Products are manufactured by Bolle France in
Oyonnax, France and through subcontractors and sold to distributors or direct
customers primarily located in the United States, Europe, Australia and Canada.

F-22
<PAGE>

BASIS OF PRESENTATION

Bolle America was a wholly owned subsidiary of Lumen at the time the
Company was formed. The net assets of Bolle America were contributed to the
Company by Lumen as of July 1, 1997. At that time, the net book value of Bolle
America was $11,038 including retained earnings of $359. Accordingly, the
financial position and results of operations of Bolle Inc. presented herein are
those of the Company's predecessor for accounting purposes, Bolle America,
prior to the acquisition of Bolle France. The results of operations of Bolle
France are included beginning on July 10, 1997, (the closing date of the Bolle
France acquisition described in Note 3 below).

For the periods subsequent to the acquisition of Bolle America by
Lumen, certain revenues and expenses reflected in the financial statements
include allocations of certain corporate expenses from Lumen. These allocations
include income from Lumen's investment in Eyecare Products Plc, as well as
expenses for general management, treasury, legal, tax, financial reporting,
auditing, insurance, investor and public relations and information management.
Allocations were primarily based on relative sales. These financial statements
also reflect the allocation of certain corporate assets including those
relating to taxes.

Management believes that the foregoing allocations were made on a
reasonable basis; however, the allocations of costs and expenses do not
necessarily indicate the costs that would have been or will be incurred by the
Company on a stand-alone basis. Also, the financial information included in the
financial statements may not necessarily reflect the financial position,
results of operations and cash flows of the Company in the future or what the
financial position and results of operations would have been if it had been a
separate, stand-alone company during the periods covered.

The accompanying financial statements do not give effect to the
Contribution Agreement, which was executed subsequent to year end. On a
proforma basis, had the Contribution Agreement been effective at December 31,
1997, the effect would have been to increase assets by $10,680 (unaudited),
decrease liabilities by $13,457 (unaudited), increase mandatorily redeemable
preferred stock by $9,579 (unaudited), and increase equity by $14,378
(unaudited).

For periods prior to 1997, equity is presented in the accompanying
consolidated balance sheets and statements of stockholders' equity on one line.
Presentation of traditional equity categories is not considered meaningful.
Effective January 1, 1997, equity is presented in the traditional manner.

NOTE 3--ACQUISITIONS

On July 10, 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 affiliates, for a total purchase
price of approximately $58,235, comprised of cash of $31,000, Lumen Series A
mandatorily redeemable preferred stock of $9,294, Company mandatorily
redeemable preferred stock of $11,055 and Company common stock of $3,302, as
well as direct acquisition costs of $3,585. Where such consideration was
denominated in French Francs, the July 10, 1997 exchange rate of 5.9197 was
used to translate to US Dollars. A summary of the allocation of purchase price
is as follows:

Current assets................... $17,290
Property and equipment........... 3,949
Goodwill......................... 22,642
Trademarks....................... 40,000
Other assets..................... 181
Current liabilities.............. (9,931)
Long term liabilities............ (15,896)
-----------
$58,235

The land included in property and equipment was purchased from the
Sellers as part of a separate contract, therefore its specific purchase price
of $422 is included as its fair value in property and equipment. The building
was revalued based on management estimates resulting in a step up of $1,824 in
value. This amount is

F-23
<PAGE>

also included in property and equipment. For all other property and equipment
purchased, book value was assumed to approximate fair value.

Based upon an independent appraisal obtained by the Company, the
Bolle(Registered Trademark) was valued at $40,000. The remainder of the excess
of purchase price over book value of $22,642 was allocated to goodwill.

The trademark and goodwill are being amortized over 40 years (Note 5).

Management does not expect material changes to the purchase
accounting.

NOTE 4--MERGER AND ACQUISITION INTEGRATION RELATED EXPENSES

Acquisition integration related expenses of $3.75 million in 1997
represent the following expenses incurred in connection with the integration of
Bolle France and creation of Bolle Inc.: (i) a reserve for the return of
product from the Company's owned and non-owned distributors in conjunction with
the redefining and streamlining of Bolle Inc.'s new product line, and (ii) the
legal, production and marketing expenses related to the set up of a new logo
for Bolle(Registered Trademark) worldwide and the creation of the first
worldwide catalog.

Merger related expenses in 1995 represent $3.1 million of transaction
costs associated with the pooling of interests between Lumen and Bolle America
discussed in Note 1.

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. Investments in less than 50% owned
entities and certain greater than 50% owned entities are accounted for by the
equity method. Investments in less than 20% owned entities are accounted for by
the cost method (Note 9). All significant intercompany transactions, profits
and accounts are 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 at the time of shipment with estimates
provided for returns based on historical experience.

Concentration of Credit Risk and Major Customers

In the opinion of management, concentration of credit risk varies
significantly on a country-by-country basis. With the acquisition of Bolle
France, the Company now sells to customers throughout the world, with the
majority of sales to customers in the United States, Europe, Australia and
Canada.

Credit is generally extended based on an evaluation of the customer's
financial condition and its relationship with the Company, and collateral is
generally not required. Credit risk is affected by conditions or occurrences in
the local economies and relative strength of the local environment in each of
the countries where the Company's customers operate. The Company establishes an
allowance for doubtful accounts based on factors surrounding the credit risk of
specific customers, historical trends and other information.

For the years ended December 31, 1996 and 1995, the Company had sales
to a specific customer located in the United States that represented 14% and
11% of net sales. For the year ended December 31, 1997, no single customer
contributed more than 10% of the Company's net sales.

F-24
<PAGE>

Foreign Currency Translation

For subsidiaries which operate in a local currency environment, assets
and liabilities are translated into U.S. dollars at year end exchange rates in
effect at the balance sheet date. Income and expense items are translated at
average rates prevailing during the year. Translation adjustments for these
subsidiaries are accumulated in a separate component of equity.

Foreign Currency Transactions

Prior to July 1997, the Company had entered into a series of
agreements with Bolle France providing a series of fixed exchange rates on the
French franc/U.S. dollar exchange rate for inventory purchases from them. From
time to time, the Company may also enter into foreign currency forward
contracts to hedge against the effects of foreign currency fluctuations on
inventory purchases and the settlement of trade accounts payable. There were no
such contracts in effect subsequent to July 1, 1997. Foreign currency
transaction gains and losses are recorded in other income when the underlying
transactions are settled.

Inventories

Inventories, which consist primarily of raw materials and finished
goods held for resale, are stated at the lower of cost or market value. Costs
include materials, direct labor, and overhead. The Company determines inventory
value on an average cost basis.

Warranties

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

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 or accelerated 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 7 years for office
equipment, fixtures and molds and up 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.

Trademark, Goodwill and Other Intangible Assets

Trademark represents the Bolle(R) brand. Goodwill represents the
excess cost over the fair value of net assets acquired in business combinations
accounted for under the purchase method. Other intangible assets consist
principally of a non-compete agreement.

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

Impairment of Long-Lived Assets

F-25
<PAGE>

At each balance sheet date, the Company evaluates the realizability of
long-lived assets based on expectations of undiscounted cash flows. Should this
review indicate that the cost of long-lived assets may be impaired, an
evaluation of recoverability would be performed. If an evaluation is required,
the estimated future undiscounted cash flows associated with the asset would be
compared to the carrying amount of the asset to determine whether a write-down
to market value is required.

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.

Earnings Per Share

Basic earnings per share is computed pursuant to SFAS No. 128
"Earnings Per Share," 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 antidilutive. 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. Bolle America was a public company from January 1, 1995 to
November 2, 1995 with 4,212,729 shares outstanding at the date of acquisition
by Lumen. Lumen cancelled all but 100 shares upon acquisition. Such shares
remained unchanged until the capitalization of Bolle Inc. in February 1997 when
1,900 additional shares were issued. As a wholly owned subsidiary, the Company
had no common stock equivalents. The historical actual shares issued are used
to calculate weighted average shares outstanding during 1995 and 1996. Since
the Company has no dilutive securities outstanding at December 31, 1997, basic
earnings per share is equivalent to diluted earnings per share.

In accordance with the Securities and Exchange Commission Staff
Accounting Bulletin No. 98, the weighted average number of outstanding common
shares is calculated based on the historical timing of the common stock
transactions.

Pension and post retirement indemnity

The Employees of Bolle America currently participate in a 401(k)
Savings plan administered by Lumen. No pension, post-retirement or other
benefit arrangements have been established by Bolle, Inc.

A provision of $150 is recorded for the termination indemnity of the
legal employees of Bolle France and its subsidiaries. These indemnities are due
to employees who leave Bolle France or its subsidiaries at retirement age (65)
and depend upon the length of the employee's service and salary level. The
obligation, which is not funded, is calculated using an actuarial method
(discount rate of 6.19%, salary increase of 2.5%) and considers staff turnover
and mortality statistics until retirement age. There are no other pensions,
post-retirement or post-employment obligations to Bolle France as such employee
benefits are provided by the French Social Security System.

Reclassifications

Certain amounts in 1995 and 1996 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

F-26
<PAGE>

and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during
the reported period. Actual results could differ from these estimates.

Fair Value

At December 31, 1997, the carrying value of financial instruments such
as trade receivables, accounts payable and short term debt approximated their
fair values based on the short term maturities of these instruments.

New Accounting Pronouncements

SFAS No. 129, "Disclosure of Information about Capital Structure"
reiterates the disclosure requirements set forth in existing pronouncements as
they relate to an entity's capital structure and contains no changes in
disclosure requirements other than making them applicable to all entities.
Because the Company complies with the disclosure requirements of existing
pronouncements, there was no impact of the adoption of SFAS No. 129 in the
Company's financial statements.

SFAS No. 130, "Reporting Comprehensive Income", establishes guidelines
for all items that are to be recognized under accounting standards as
components of comprehensive income to be reported in the financial statements.
The statement is effective for all periods beginning after December 15, 1997
and reclassification of financial statements for earlier periods presented will
be required for comparative purposes. The Company has adopted SFAS No. 130 in
its financial statements for the year ended December 31, 1997.

SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information", establishes standards for reporting of operating segment
information in annual financial statements and requires that those enterprises
report selected information about operating segments in interim financial
statements issued to shareholders. The statement is effective for all periods
beginning after December 15, 1997. The Company presently reports as one
operating segment and two geographical segments, and expects to continue to do
so. The Company plans to adopt SFAS No. 131 in its financial statements for the
year ended December 31, 1998.

F-27
<PAGE>

NOTE 6--INVENTORIES

Inventories consist of the following at:
<TABLE>
<CAPTION>
December 31,
---------------------
1997 1996
--------- ---------
<S> <C> <C>
Raw materials ..... $ 1,362 $
Work in progress... 2,595
Finished goods .... 9,595 8,635
Reserves .......... (1,818) (247)
-------- --------
$ 11,734 $ 8,388
======== ========
</TABLE>

NOTE 7--PROPERTY AND EQUIPMENT

Property and equipment consists of the following at:
<TABLE>
<CAPTION>
December 31,
-----------------
1997 1996
------- --------
<S> <C> <C>
Land.................................. $417 $
Buildings............................. 2,169 5
Machinery and equipment............... 2,197 369
Computer hardware and software........ 847 593
Furniture and fixtures................ 202 98
------- --------
5,832 1,065
Less: accumulated depreciation........ (1,145 (531)
======= ========
$4,687 $534
======= ========
</TABLE>

Depreciation expense for the years ended December 31, 1997, 1996 and
1995 was $705, $216 and $172, respectively.

The minimum future rental expense for property and buildings under
operating lease is as follows:
<TABLE>
<CAPTION>
<S> <C>
1998................................ $146
1999................................ 73
2000................................ 73
2001................................ 73
2002................................ 73
Thereafter.......................... 20
----
$458
====
</TABLE>

F-28
<PAGE>

NOTE 8--TRADEMARK, GOODWILL AND OTHER INTANGIBLE ASSETS

Trademark, goodwill and other intangible assets and related
accumulated amortization consist of the following:
<TABLE>
<CAPTION>
December 31,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Goodwill ........................... $ 22,979 $
Non compete agreement .............. 900 800
Other identifiable intangible assets 16 16
-------- --------
23,895 816
Less Accumulated amortization ...... (448) (170)
-------- --------
$ 23,447 $ 646
======== ========
Trademark .......................... $ 39,523 $
Less: Accumulated amortization ..... (494)
-------- --------
$ 39,029 $
======== ========
</TABLE>

The Company entered into a non-compete agreement with the former
president of Bolle America for the period November 2, 1995 through December 31,
2005. The Company paid $800 at November 2, 1995, $100 in 1997 and will pay $100
per year from January 1, 1998 to 2005.

Amortization expense for the years ended December 31, 1997, 1996 and
1995 was $772, $170 and $82, respectively.

NOTE 9--EQUITY IN AFFILIATED COMPANIES

The Company sells its products to three related party distributors,
Bolle Sunglasses UK, Bolle Japan and Bolle Canada. All investments are
accounted for under the equity method of accounting. The Company's equity in
the net assets of these entities is approximately $75. No equity income or loss
was recognized during 1997. Subsequent to year end the Company has acquired
100% of Bolle Canada and entered into a letter of intent to acquire 100% of
Bolle Sunglasses U.K.

NOTE 10--CREDIT FACILITIES

During the years ended December 31, 1997, 1996 and 1995, the Company
was party to a revolving intercompany credit arrangement with Lumen whereby
interest was earned at a rate of 5% on excess cash and interest was charged at
a rate of 8% on outstanding borrowings. Since the acquisition of Bolle France,
the revolving intercompany credit arrangement was adjusted to allow for French
Franc denominated borrowings by Bolle France at a French market rate of 5.5%.
This rate will be reset annually. The debt incurred to finance the cash portion
of the consideration has been pushed down to Bolle Inc. under this arrangement.

On March 11, 1998, in connection with the Spinoff described in Note 1,
the Company entered into a $28 million credit facility (the "New Agreement")
with a syndicate of lenders led by NationsBank N.A. The New Agreement provides
for a $10 million Term Loan denominated in French Francs, payments due
quarterly over five years, and a revolving line of credit of $18 million,
including a letter of credit subfacility of $5 million. The interest rate
applicable to the facilities will equal the Base Rate or the Eurodollar Rate or
the French Franc Libor Rate (each as defined in the New 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 form 0% to 1.0% 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 1.0% to 2.5%, depending upon the Company's
satisfaction of certain financial criteria. The terms of the New Agreement
require the Company to maintain certain financial ratios.

F-29
<PAGE>

NOTE 11--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. The Company has reorganized the structure of
various entities comprising Bolle France so that Bolle France will file one
consolidated tax return for 1998 and subsequent thereto. Following the March
1998 Spinoff of the Company, the Company will file its consolidated tax return
separately from Lumen.

Income (loss) before provision for income taxes consists of the
following for the periods ended:
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
U.S. ........... $(4,713) $ 1,627 $ (423)
Foreign ........ 1,157
------- ------- -------
$(3,556) $ 1,627 $ (423)
======= ======= =======
</TABLE>

The provision for income taxes, prepared as if Bolle were a stand
alone company, consists of the following for the periods ended:
<TABLE>
<CAPTION>
December 31,
--------------------------
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
UNITED STATES:
Current:
Federal...................... $ $542 $616
State and local.............. 81 103
Deferred........................ 445 12 (355)
------ ---- ----
445 635 364
------ ---- ----
FOREIGN:
Current...................... 1,803
Deferred........................ (1,149)
------ ---- ----
654
------ ---- ----
Total provision for income
taxes...................... $1,099 $635 $364
====== ==== ====
</TABLE>

F-30
<PAGE>

The Company's effective tax rates differ from the Federal statutory
rate as follows:
<TABLE>
<CAPTION>
December 31,
----------------------
1997 1996 1995
------ ------ -----
<S> <C> <C> <C>
Expected tax (benefit) at statutory rate (34.0)% 34.0% (34.0)%
State income taxes (benefit) ........... (3.0)% 3.5% 16.1%
Non-deductible and merger related ...... 7.9% 104.0%
expenses
Valuation allowance .................... 60.0%
Other, net ............................. 1.5%
---- ---- ----
30.9% 39.0% 86.1%
==== ==== ====
</TABLE>

Significant components of deferred income taxes are as follows for the
periods ended:
<TABLE>
<CAPTION>
December 31,
--------------------
1997 1996
-------- --------
<S> <C> <C>
Current deferred tax assets:
Net operating loss carry forward ........ $ 828
Accounts receivable ..................... 61 $ 168
Non qualified stock options ............. 54 54
Inventories ............................. 1,186 129
Accrued expenses ........................ 362 83
-------- --------
Total gross current deferred tax assets 2,491 434
Non-current deferred tax assets:
Intangibles ............................. 12
Accrued expenses ........................ 440
Fixed assets ............................ 23 6
-------- --------
Total non-current deferred tax assets . 463 18
-------- --------
Gross deferred tax asset .............. 2,954 452
Valuation allowance ................ (2,132)
-------- --------
Deferred tax asset ................. 822 452
-------- --------
Current deferred tax liability:
Other liabilities ....................... (155)
Non current deferred tax liability:
Intangibles ............................. (14,000)
-------- --------
Gross deferred tax liability .......... (14,155)
======== ========
Net deferred tax asset (liability) .... $(13,333) $ 452
======== ========
</TABLE>

The Company recorded gross deferred tax assets of $2,954 and $452 for
the years ended December 31, 1997 and 1996, respectively. A valuation allowance
has been established for the entire net tax benefit associated with
substantially all carryforwards and temporary differences at December 31, 1997,
for the domestic operations, as their realization was not assured. The effect
on the income tax provision related to the valuation allowance was a charge of
$2,132 for 1997. Net operating loss carryforwards amount to approximately $2.2
million and $0 at December 31, 1997 and 1996, respectively. The net operating
loss carryforwards begin to expire in the year 2011.

F-31
<PAGE>

NOTE 12--MANDATORILY REDEEMABLE PREFERRED STOCK

In connection with the acquisition of Bolle France described in Note
3, the Company issued 64,120 shares of Bolle Series A Preferred Stock with a
redemption value of $11,055. Shares of the Bolle Series A Preferred Stock will
be redeemed by the Company on the third anniversary of their issuance, subject
to the provisions of the New Agreement. Prior to that, the Company may redeem
any shares of Bolle Series A Preferred Stock at any time. Further, in the event
that the Company's EBITDA exceeds $18,400 for the fiscal year 1998 or $24,700
for the fiscal year 1999, the Company will be obligated to redeem any shares of
the Bolle Series A Preferred Stock then outstanding, provided that in each case
the Company remains in compliance with the financial covenants contained in any
senior indebtedness in effect as of June 4, 1997 as amended after giving effect
to such redemption and $2,000 is available for borrowing by the Company under
the New Agreement. The carrying value of the Bolle Series A Preferred Stock
approximates its fair value.

NOTE 13--STOCK OPTION PLANS

Until the Spinoff, the Company participated in the Lumen stock
incentive plan. Such options were exercisable into common stock of Lumen.
Accordingly, Lumen disclosures for the Company employees included in the Lumen
stock incentive plan are shown below. All option information has been restated
to give effect to the May 3, 1996 and March 12, 1998 reverse stock splits.
Following the March 1998 Spinoff, the Company adopted its own separate stock
option and incentive plan similar to the Lumen plan.

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 to Company employees 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 follows:
<TABLE>
<CAPTION>
December 31,
1997 1996 1995
------------ ------------ --------------
<S> <C> <C> <C>
Net income (loss):
As reported .............................. $ (4,655) $ 992 $ (787)
Pro forma ................................ $ (4,884) $ 706 $ (1,398)
Basic and diluted earnings (loss) per share:
As reported .............................. $ (2,586.11) $ 9,920.00 $ (0.22)
Pro forma ................................ $ (2,713.33) $ 7,060.00 $ (0.40)
</TABLE>

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:
<TABLE>
<CAPTION>
1997 1996 1995
------ ------ ------
<S> <C> <C> <C>
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
</TABLE>

The weighted average fair values of all Benson Eyecare Corporation
(Lumen's predecessor, "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 all Lumen options granted during 1997 and 1996 was $8.98 and
$9.96, respectively.

F-32
<PAGE>

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

As a result of a merger and asset sale on May 3, 1996, all Benson
options were canceled. Option holders received consideration (including new
Lumen options) for their Benson options. Accordingly, all options were issued
under the Lumen Stock Compensation Plan, on or after May 3, 1996.

F-33
<PAGE>

A summary of the transactions for Benson options held by Company
employees is as follows:
<TABLE>
<CAPTION>
Option Price Range Per Number of Benson Shares
Benson Share Expiration Date
------------------------- ----------------------- ---------------
<S> <C> <C> <C>
Outstanding at 12//31/94........... $12.26-$18.00 126
Granted............................ --
Exercised.......................... $18.00-$18.00 (2)
Cancelled..........................
Outstanding at 12/31/95............ $12.26-$18.00 124 1996-2000
Granted............................ --
Exercised.......................... -- --
Cancelled.......................... -- --
Cancelled in connection with
merger and asset sale............. $12.26-$18.00 (124)
Outstanding at 12/3/196............ --
</TABLE>

A summary of the transactions for Lumen options held by Company
employees is as follows:
<TABLE>
<CAPTION>
Weighted Average
Exercise
Price Per Lumen Number of
Share Lumen Options
----------------- --------------
<S> <C> <C>
Outstanding at 12/31/95 --
Granted............................ 9.96 99
Exercised.......................... --
Cancelled.......................... 9.96 (15)
----
Outstanding at 12/31/96............ 9.96 84
Granted............................ 8.98 439
Exercised.......................... 10.34 (2)
Forfeited.......................... 10.12 (27)
====
Outstanding at 12/31/97............ 9.08 494
====
</TABLE>

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 34 exercisable Lumen options held by Company employees at
December 31, 1997 had an option price range of $6.78-$10.25 and a weighted
average exercise price of $9.42 per Lumen share. The weighted average remaining
contractual life of the 494 Lumen options held by Company employees outstanding
at December 31, 1997 was approximately 6.2 years.

NOTE 14--RELATED PARTY TRANSACTIONS

On March 11, 1998, in conjunction with the Spinoff, (see Note 1) the
Company executed a Management Services Agreement with certain executives of
Lumen pursuant to which certain executives of Lumen will provide key management
services to the Company. The Management Services Agreement has an initial term
of three years. The agreement thereafter automatically renews for successive
one-year periods until terminated by either party upon at least ninety days
written notice. During the initial term of the Management Services Agreement,
the Company will pay Lumen $720 per year for such services.

With the acquisition of Bolle France, the Company has transactions
with related parties (Lumen, Bolle Sunglasses UK, Bolle Japan and Bolle
Canada), for which transactions and balances have been disclosed under the

F-34
<PAGE>

captions "Trade receivables from related parties" and "Indebtedness to related
parties." Such transactions are realized at conditions equivalent to those
prevailing for unrelated parties.

NOTE 15--COMMITMENTS AND CONTINGENCIES

The Company is subject to various litigation incidental to its
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 financial position, results of operations or cash flows of the
Company.

NOTE 16--GEOGRAPHIC INFORMATION

The Company operates in one principal industry segment: the design,
manufacture and marketing of premium sunglasses, goggles and safety and
tactical eyewear. Products are manufactured by Bolle France in Oyonnax, France
and through subcontractors and sold to distributors or direct customers
primarily located in the United States, Europe, Australia and Canada. The
Company had no international sales until the acquisition of Bolle France in the
third quarter of 1997.

Geographic information is as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------------
1997 1996 1995
-------------- ------------- -------------
<S> <C> <C> <C>
Net sales to unaffiliated customers:
North America .................................................. $ 19,769 $24,425 $ 24,829
Europe ......................................................... 9,207
Other .......................................................... 3,184
======== ======= ========
Total net sales ................................................. $ 32,160 $24,425 $ 24,829
======== ======= ========
(Transfers between geographic areas eliminated in consolidation):
North America .................................................. $ 4,976
Europe ......................................................... 2,941
======== ======= ========
Total transfers ................................................. $ 7,917 -- --
======== ======= ========
Income (loss) before income taxes

North America .................................................. $ 285 $ 921 $ 2,373
Europe ......................................................... 133
Other .......................................................... 46
Interest, merger and acquisition integration related expenses and (4,020) 706 (2,796)
other income, net
======== ======= ========
Total income (loss) before income taxes ........................ $ (3,556) $ 1,627 $ (423)
======== ======= ========
Identifiable assets:

North America .................................................. $ 12,049 $15,624 $ 16,309
Europe ......................................................... 82,648
Corporate assets

======== ======= ========
Total identifiable assets ....................................... $ 94,697 $15,624 $ 16,309
======== ======= ========
</TABLE>

Net sales to unaffiliated customers are classified based on the
location of the customers. Transfers between geographic areas are recorded at
amounts generally above cost and in accordance with the rules and regulations
of the respective governing tax authorities. Income (loss) before income taxes
consists of total net sales less operating

F-35
<PAGE>

expenses and does not include merger and acquisition integration related
expenses, interest and other income, net. Identifiable assets of geographic
areas are those assets used in the Company's operations in each area.

F-36
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

November 26, 1997, except for Note 10, as to which the date is March 11, 1998

To the Board of Directors and
Shareholders of Holding BF SA

In our opinion, the accompanying combined balance sheets and the related
combined statements of operations and stockholders' equity and of cash flows
present fairly, in all material respects, the financial position of Holding BF
SA and its subsidiaries at December 31, 1996, June 30, 1997 and September 30,
1997 and the results of their operations and their cash flows for the year, six
months and three months then ended in conformity with accounting principles
generally accepted in the United States of America. 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 auditing standards
generally accepted in the United States of America 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.

Befec-Price Waterhouse
Lyon, France

/s/ Olivier Auscher
- -------------------------------
Olivier Auscher

F-37
<PAGE>

HOLDING BF S.A. AND SUBSIDIARIES
COMBINED BALANCE SHEET
DECEMBER 31, 1996, JUNE 30, 1997 AND SEPTEMBER 30, 1997
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS, EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, SEPTEMBER 30,
ASSETS 1996 1997 1997
---------------- ----------------- --------------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents.............. FF 17,884 FF 7,610 FF 8,115
Trade receivables, less allowance for
doubtful accounts of FF 1,556, FF 2,414
and FF 3,094......................... 64,185 55,524 46,382
Inventories............................ 29,697 36,268 32,756
Other current assets................... 2,918 2,282 8,629
------------------- ------------------ -----------------
Total current assets.................. 114,684 101,684 95,882
Investments............................ 191 690 570
Property and equipment, net............ 11,038 12,498 26,180
Trademark, net......................... -- -- 235,308
Goodwill, net.......................... -- -- 50,753
Other assets........................... 545 375 403
=================== ================== =================
Total assets.......................... FF 126,458 FF 115,247 FF 409,096
=================== ================== =================

LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities:

Short term debt........................ FF 11,886 FF 1,032 FF 991
Indebtedness to Bolle Inc.............. -- -- 212,138
Accounts payable....................... 25,312 32,422 22,053
Accrued liabilities.................... 24,085 20,560 25,580
------------------- ------------------ -----------------
Total current liabilities............. 61,283 54,014 260,762
Long term liabilities................... 949 1,084 5,415
Accrued reorganization liabilities 5,050 5,650 6,050
------------------- ------------------ -----------------
Total liabilities..................... 67,282 60,748 272,227
------------------- ------------------ -----------------
Minority interests...................... 11,820 395 --
Commitments and
contingencies........................
Stockholders' equity:

Common stock--par value FF 1,000........ 16,500 53,600 53,600
Capital surplus........................ -- -- 81,058
Cumulative translation adjustment...... (78) (78) 259
Retained earnings...................... 30,934 582 1,952
------
------------------- ------------------ -----------------
Total stockholders' equity 47,356 54,104 136,869
=================== ================== =================
Total liabilities and stockholders' equity FF 126,458 FF 115,247 FF 409,096
=================== ================== --=================
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-38
<PAGE>

HOLDING BF S.A. AND SUBSIDIARIES
COMBINED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996, THE SIX MONTHS ENDED JUNE 30, 1997
AND THE THREE MONTHS ENDED SEPTEMBER 30, 1997
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)

<TABLE>
<CAPTION>
YEAR ENDED SIX MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, JUNE 30, SEPTEMBER 30,
1996 1997 1997
---------------------------------------------------------------
<S> <C> <C> <C>
Net sales:

Sales to Bolle America.................... FF 66,251 FF 17,391 FF 17,461
Third party sales......................... 183,442 88,641 35,124
--------------- ------------- --------------------
Total net sales:.......................... 249,693 106,032 52,585
--------------- ------------- --------------------
Costs and expenses:

Costs of sales............................ 153,233 65,798 34,411
Selling, general and administrative expenses 57,716 29,885 12,238
Interest expense.......................... 2,417 993 2,349
Other expenses, net....................... 1,281 (2,043) (493)
--------------- ------------- --------------------
Total costs and expenses................ 214,647 94,633 48,505
--------------- ------------- --------------------
Income before income taxes
and 35,046 11,399 4,080
minority interests....................
Provision for income taxes................ 9,133 6,783 2,523
--------------- ------------- --------------------
Net income before minority interests...... 25,913 4,616 1,557
Minority interests........................ (8,250) (265) 395
--------------- ------------- --------------------
Net income................................ FF 17,663 FF 4,351 FF 1,952
=============== ============= ================
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-39
<PAGE>

HOLDING BF S.A. AND SUBSIDIARIES
COMBINED STATEMENT OF STOCKHOLDERS' EQUITY
DECEMBER 31, 1996, JUNE 30, 1997 AND SEPTEMBER 30, 1997
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)

<TABLE>
<CAPTION>
COMMON STOCK
------------------------
RETAINED TRANSLATION CAPITAL
SHARES PAR VALUE EARNINGS ADJUSTMENT SURPLUS TOTAL
--------- ------------ --------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
1996

Balance--beginning of year........ 100 FF 16,500 FF 14,568 FF FF FF 31,068
Translation adjustments.......... (78) (78)
Dividend to stockholders......... (1,297) (1,297)
Net income....................... 17,663 17,663
--------- ------------ --------- ----------- ---------- -----------
Balance--December 31, 1996........ 100 16,500 30,934 (78) 47,356

1997
Acquisition of minority interests 37,100 (23,100) 14,000
Dividend to stockholders......... (9,972) (9,972)
Investment in new subsidiary..... (1,631) (1,631)
Net income....................... 4,351 4,351
--------- ------------ --------- ----------- ---------- -----------
Balance--June 30, 1997............ 100 FF 53,600 FF 582 (78) FF 54,104
Adjustments to reflect purchase
by Bolle Inc. (582) 337 81,058 80,813
Net income....................... 1,952 1,952
--------- ------------ --------- ----------- ---------- -----------
Balance--September 30, 1997....... 100 FF 53,600 FF 1,952 FF 259 FF 81,058 FF 136,869
========= ============ ========= =========== ========== ===========

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-40
<PAGE>

HOLDING BF S.A. AND SUBSIDIARIES
COMBINED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED DECEMBER 31, 1996, SIX MONTHS ENDED JUNE 30, 1997
AND THREE MONTHS ENDED SEPTEMBER 30, 1997
(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)

<TABLE>
<CAPTION>
THREE MONTHS
YEAR ENDED SIX MONTHS ENDED
DECEMBER 31, ENDED SEPTEMBER 30,
1996 JUNE 30, 1997 1997
------------- ----------------- ----------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income..................................... FF 17,663 FF 4,351 FF 1,952
Adjustments to reconcile net income to cash
provided by operating activities:
Minority interests............................. 8,250 265 (395)
Depreciation and amortization.................. 4,486 2,275 3,403
Bad debt expense............................... 1,241 858 680
Loss on sale of property and equipment......... 69 -- 262
Changes in current assets and liabilities:
Accounts receivable............................ (158) 7,798 8,462
Other current assets........................... (392) 170 (6,347)
Inventories.................................... (8,603) (6,571) 3,512
Other assets................................... (1,888) 641 (403)
Accounts payable............................... 387 5,543 (9,560)
Accrued expenses and other..................... 12,102 (1,359) 1,065
---------- ---------- ----------
Net cash provided by operating activities.. 33,157 13,971 2,631
---------- ---------- ----------
Cash flows from investing activities:
Capital expenditures.......................... (4,640) (3,734) (2,272)
Proceeds from sale of fixed assets............ 91 -- 105
Investment in unconsolidated subsidiaries..... (89) (474) 120
Net cash (used) by investing activities.... (4,638) (4,208) (2,047)
---------- ---------- ----------
Cash flows from financing activities:
Payments on short term debt................... (17,514) (10,065) (79)
Cash dividends to stockholders................ (11,120) (9,972) --
---------- ---------- ----------
Net cash (used) by financing activities.... (28,634) (20,037) (79)
---------- ---------- ----------
Net increase (decrease) in cash..................... (115) (10,274) 505
Cash and cash equivalents at beginning of period.... 17,999 17,884 7,610
---------- ---------- ----------
Cash and cash equivalents at end of period.......... FF 17,884 FF 7,610 FF 8,115
========== ========== ==========

</TABLE>

The accompanying notes are an integral part of these financial statements.

F-41
<PAGE>

HOLDING BF S.A. AND SUBSIDIARIES

FOR THE YEAR ENDED DECEMBER 31, 1996, THE SIX
MONTHS ENDED JUNE 30, 1997, AND THE THREE MONTHS ENDED
SEPTEMBER 30, 1997

NOTES TO COMBINED FINANCIAL STATEMENTS

(AMOUNTS IN THOUSANDS OF FRENCH FRANCS)

NOTE 1 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

The combined financial statements of Holding BF SA and subsidiaries
(the "Group") have been prepared in accordance with accounting principles
generally accepted in the United States of America. The combined financial
statements of the Group include the subsidiaries and equity investments owned
by Holding BF SA in addition to certain entities held by the owners of Holding
BF SA. Accordingly, the combined financial statements include the consolidated
accounts of Holding BF SA and its wholly owned and majority-owned subsidiaries
(SNC Bolle 76%, Bolle Protection Sarl 88%, Bolle Production Sarl 68.75%), and
the accounts of RM Plastiques Sarl and Bolle Diffusion Sarl at December 31,
1996.

On July 10, 1997, Bolle Inc., a wholly-owned subsidiary of BEC Group
Inc. acquired from the Bolle family, shareholders of Holding BF SA, all of the
shares of Holding BF SA and subsidiaries. Further, in connection with the
purchase agreement, Holding BF SA acquired the minority interests in SNC Bolle
and all of the outstanding stock of RM Plastiques Sarl, Bolle Protection Sarl
and Bolle Production Sarl prior to closing of the transaction as part of the
legal and tax reorganization of the Group. Accordingly the combined accounts of
the Company at June 30, 1997 include Holding BF SA and its wholly-owned
subsidiaries (SNC Bolle 100%, Bolle Protection Sarl 100%, Bolle Production Sarl
100%, RM Plastiques Sarl 100%) and the accounts of Bolle Diffusion Sarl, all on
a pre-acquisition basis.

Bolle Inc. acquired Bolle Diffusion Sarl separately on July 10, 1997.
Bolle Diffusion Sarl was accounted for outside the consolidation of Holding BF
SA at September 30, 1997. Accordingly, the financial statements of Holding BF
SA at September 30, 1997 are presented on a combined basis and include the
accounts of Bolle Diffusion Sarl.

Further, the combined financial statements at September 30, 1997
reflect the application of push down accounting of Bolle Inc. debt used to fund
the acquisition of the Group and related purchase accounting adjustments.

Business

Holding BF SA and subsidiaries operates in one business segment and
manufactures and sells sunglasses and sport shields, safety and tactical
eyewear and ski goggles. These products are manufactured in the Group's plant
in Oyonnax, France and through subcontractors and are sold to distributors or
direct customers located around the world.

Principles of Consolidation

All significant intercompany transactions, profits and accounts have
been eliminated in consolidation. Investments in companies in which the Group
does not have control, but has the ability to exercise significant influence
are accounted for by the equity method. Bolle Sunglasses Ltd. and Bolle Canada
Inc. are held by majority-owned subsidiaries of Holding BF SA, and therefore
the Group's ownership of each of these entities is 38%, respectively at
December 31, 1996. Subsequent to the Company's acquisition of the minority
interests described above, Holding BF SA's ownership of Bolle Sunglasses Ltd.
and Bolle Canada Inc. increased to 51%, respectively and continue to be
accounted for under the equity method of accounting in the financial statements
of Holding BF SA at June 30, 1997 and September 30, 1997, as the Group did not
have effective control of these entities.

F-42

<PAGE>

Revenue Recognition

Revenue is recognized upon shipment or delivery of products with
estimates provided for returns based on management estimates.

Concentration of Credit Risk and Major Customers

In the opinion of management, concentration of credit risk varies
significantly on a country-by-country basis. The Group sells to customers in
twenty countries, with the majority of sales to customers in the United States,
Europe, Australia and Canada.

Credit is generally extended based on an evaluation of the customer's
financial condition and on-going relationship with the Group, and collateral is
generally not required. Credit risk is affected by conditions or occurrences in
the local economies and relative strength of the retail environment in each of
the countries where the Group's customers operate. The Group establishes an
allowance for doubtful accounts based on factors surrounding the credit risk of
specific customers, historical trends and other information.

The Group sells its products to three related party distributors,
Bolle Sunglasses UK Ltd. and Bolle Canada, Inc., which were both 51% owned by
SNC Bolle as of June 30, 1997, and Bolle America, Inc. which is a sister
company owned 100% by Bolle Inc. For the year ended December 31, 1996, and the
six months and three months ended June 30, 1997 and September 30, 1997,
respectively, Bolle America, Inc. represented 27%, 16% and 33% of the Group's
net sales, respectively. Specific cost of sales related to Bolle America or any
other single customer cannot be calculated. Sales to Bolle Sunglasses UK Ltd.
and Bolle Canada did not exceed 10%, respectively in any of the periods
presented.

Foreign Currency Translation

For non-French subsidiaries which operate in a local currency
environment, assets and liabilities are translated into French Francs at
period-end exchange rates. Income and expense items are translated at average
rates prevailing during the year. Translation adjustments for these
subsidiaries are accumulated in a separate component of stockholders' equity.

In the normal course of business, operations (mainly sales) of the
Group is not exposed to fluctuations in currency values. Accordingly, the Group
does not enter into any type of financial instrument with respect to balance
sheet exposure arising from foreign exchange risk.

Up until July 10, 1997, the Group, however, had entered into a series
of agreements with Bolle America, Inc. providing a series of fixed exchange
rates on the French franc/U.S. dollar exchange rate for sales to that customer.
Therefore, foreign currency transaction losses amounting to FF 114 for the year
ended December 31, 1996 and FF 0 for the six months June 30, 1997 are included
in other income.

Cash and Cash Equivalents

Cash and cash equivalents represent investments with maturities of
three months or less from the time of purchase, and are carried at cost which
approximates fair value because of the short maturity of those instruments.
Cash paid for interest and income taxes was FF 1,232 and FF 7,852 for the year
ended December 31, 1996; FF 290 and FF 3,966 for the six months ended June 30,
1997, and FF 73 and FF 9,840 for the three months ended September 30, 1997,
respectively.

Property and Equipment

Buildings are valued at cost and depreciated over 30 years on a
straight-line basis.

F-43

<PAGE>

Other property and equipment are recorded at fair value and
depreciated over their estimated useful life calculated, on a straight-line
method (see below):

Fittings and fixtures......................... 5 years
Machinery and equipment....................... 7-10 years
Motor vehicles................................ 5 years
Office furniture.............................. 3-5 years

Impairment of Long-Lived Assets

At each balance sheet date, the Group evaluates the realizability of
long-lived assets based on expectations of undiscounted cash flows. Should this
review indicate that the cost of long-lived assets may be impaired, an
evaluation of recoverability would be performed. If an evaluation is required,
the estimated future undiscounted cash flows associated with the asset would be
compared to the asset's carrying amount to determine whether a write-down to
market value is required.

Warranties

Certain sales are subject to warranty against material defects.
Potential future warranty costs are provided on the balance sheet.

Pensions and Post Retirement Indemnity

A provision is recorded for legal employees' lump sum termination
indemnities. These indemnities are due to all employees which leave the Group
at retirement age (65) and depend upon the length of employees' service and
salary level. The obligation, which is not funded, is calculated using an
actuarial method (weighted-average discount rate of 6.19%, salary increase of
2.5%) and takes into account staff turnover and mortality statistics until
retirement age. There are no other pensions, post-retirement or post employment
obligations to the Company as such employee benefits are provided by the French
social security system.

Research and Development

Research, development and engineering expenditures which amounted to
FF 3,045, FF 1,752, and FF 931 for the year ended December 31, 1996, the six
months ended June 30, 1997 and the three months ended September 30, 1997,
respectively, are expensed as incurred. Substantially all engineering and
development costs are related to developing new products or designing
significant improvements to existing products.

Income Taxes

Taxable income/loss of the various companies comprising the Group was
included in the tax returns of the appropriate taxable entity. Accordingly,
consolidated income tax returns were not prepared for the Group. 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.

Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires Group management to make estimates and
assumptions that effect 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.

F-44

<PAGE>

Fair value

At December 31, 1996, June 30, 1997 and September 30, 1997, the
carrying value of financial instruments such as trade receivables, accounts
payable and short term debt approximated their fair values based on the short
term maturities of these instruments.

Trademark and Goodwill

The fair value of the worldwide Bolle(R) trademark of the Group (FF
236,788) has been established by an independent appraisal and is reflected in
the Group's combined balance sheet as a result of the revaluation of assets
recorded in connection with the acquisition of the Group by Bolle Inc. Both the
trademark and goodwill are being amortized over 40 years.

NOTE 2 -- RELATED PARTY TRANSACTIONS

As disclosed in Note 1, the Group sells to related parties (Bolle UK,
Bolle Japan). Such transactions are realized at conditions equivalent to those
prevailing for unrelated parties.

As disclosed in Note 5, prior to July 10, 1997 the Group borrowed from
certain stockholders (Bolle family). Interest expense and balances are
disclosed in the statement of operations and on the balance sheet,
respectively.

Certain stockholders of the Group owned 100% of RM Plastique Sarl
prior to July 10, 1997, a company with which the Group subcontracts certain
assembly tasks. Services rendered by RM Plastique Sarl, amounting to FF 1,385,
FF 1,053 and FF 165 for the year ended December 31, 1996, the six months ended
June 30, 1997 and the three months ended September 30, 1997, are invoiced at
cost on an arm's length basis.

The minority stockholders in SNC Bolle referred to in Note 8 were
also the majority stockholders of the Group before July 10, 1997.

The Indebtedness to Bolle Inc., as of September 30, 1997 consists
primarily of debt incurred in conjunction with the purchase of the Group by
Bolle Inc. and short term working capital financing provided by Bolle Inc.
During the three months ended September 30, 1997, Bolle Inc. charged an average
annualized interest rate of 5.5% on the balance.

NOTE 3 -- INVENTORIES

Inventories consist of the following at:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, SEPTEMBER 30,
1996 1997 1997
--------------- ------------------ ------------------
<S> <C> <C> <C>
Raw materials...................................... FF 13,076 FF 12,047 FF 10,402
Work in progress................................... 10,580 23,341 20,153
Finished goods..................................... 10,741 5,580 6,901
Reserves........................................... (4,700) (4,700) (4,700)
---------- ---------- ----------
FF29,697 FF 36,268 FF 32,756
======== ========== ==========
</TABLE>

F-45
<PAGE>

NOTE 4 -- PROPERTY AND EQUIPMENT

Property and equipment consists of the following at:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, SEPTEMBER 30,
1996 1997 1997
--------------- ------------- ----------------
<S> <C> <C> <C>
Land............................................... FF -- FF -- FF 2,500
Buildings and fixtures............................. 11,193 11,625 13,205
Machinery and equipment............................ 56,257 58,142 8,356
Motor vehicles..................................... 2,579 2,637 406
Office furniture................................... 3,827 5,187 2,855
Less: accumulated depreciation..................... (62,818) (65,093) (1,142)
-------- -------- --------
FF 11,038 FF 12,498 FF 26,180
============ ============ ============
</TABLE>

Depreciation expense for the year ended December 31, 1996 amounted to
FF 4,486 and FF 2,275 and FF 1,519 for the six and three months ended June 30,
and September 30, 1997, respectively.

NOTE 5 -- SHORT TERM DEBT AND INDEBTEDNESS TO BOLLE INC.

DECEMBER 31, JUNE 30, SEPTEMBER 30,
1996 1997 1997
----------------- ----------------- --------------------
<S> <C> <C> <C>
Short term debt....................................
Bank debt...................................... FF 559 FF 509 FF 431
Bank overdraft................................. 5,704 158
Other.......................................... 5,623 523 402
--------- --------- ---------
Total short term debt.............................. FF 11,886 FF 1,032 FF 991
========= ========= =========
</TABLE>

The Group benefits from bank overdraft facilities which extend through
October 31, 1997 totaling FF 8,200 at an interest of Pibor + 1.5. The rate of
interest for the year ended December 31, 1996 and the six and three months
ended June 30, and September 30, 1997 averaged 4.9%.

Short term related party debt represents dividends declared by the
Group payable to the Bolle family and interest accrued on such undistributed
dividends at a variable rate of interest, which averaged 6.4% during the year
ended December 31, 1996 and 6.0% for the six months ended June 30, 1997.

Indebtedness to Bolle Inc. represents debt incurred by Bolle Inc.
to acquire the Group and interest accrued on the balance at an average
annualized rate of 5.5% for the three months ended September 30, 1997.

F-46
<PAGE>

NOTE 6 -- ACCRUED LIABILITIES

Accrued liabilities consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30, SEPTEMBER 30,
1996 1997 1997
--------------- ------------ -----------------
<S> <C> <C> <C>
Salaries, wages and other
employee benefits.............................. FF 5,632 FF 4,543 FF 4,591
Fringe benefits accruals........................... 2,667 2,328 1,743
Other taxes........................................ 632 993 1,623
Interest payable................................... 2,190 -- --
Income taxes....................................... 7,117 7,925 6,994
Deferred taxes..................................... 1,154 3,271 3,105
Warranty........................................... 3,400 1,500 1,421
Reorganization of the Group........................ -- -- 5,624
Other.............................................. 1,293 -- 479
--------- --------- ---------
FF 24,085 FF 20,560 FF 25,580
========= ========= =========
</TABLE>

NOTE 7 -- INCOME TAXES

The provision (benefit) from income taxes consists of the following:
<TABLE>
<CAPTION>

SIX MONTHS THREE MONTHS
YEAR ENDED ENDED ENDED
DECEMBER 31, JUNE 30, SEPTEMBER 30,
1996 1997 1997
------------- --------------- -----------------
<S> <C> <C> <C>
Current............................................ FF 12,588 FF 4,741 FF 2,690
Deferred........................................... (3,455) 2,042 (167)
--------- --------- ---------
Total.............................................. FF 9,133 FF 6,783 FF 2,523
========= ========= =========
</TABLE>

The Company's effective tax rate differs from the statutory rate as
follows:

SIX MONTHS THREE MONTHS
YEAR ENDED ENDED ENDED
DECEMBER 31, JUNE 30, SEPTEMBER 30,
1996 1997 1997
-------------- -------------- -----------------
<S> <C> <C> <C>
French statutory rate............................. 36.7% 41.7% 41.7%
Non-taxable income attributable to minority
stockholders (see Note 8)...................... (10.5)% -- --
Impact of new statutory rate...................... -- 19.6% --
Non-deductible expenses........................... -- -- 20.1%
Other............................................. (0.2)% (1.7)% --
-------- ------- -----
Effective income tax rate......................... 26.0% 59.6% 61.8%
======== ======= =======

</TABLE>
F-47
<PAGE>

Significant components of deferred income taxes are as follows:

SIX MONTHS THREE MONTHS
YEAR ENDED ENDED ENDED
DECEMBER 31, JUNE 30, SEPTEMBER 30,
1996 1997 1997
-------------- ------------------ -----------------
<S> <C> <C> <C>
Pension liability.................................. FF (467) FF (375) FF (375)
Accrued liabilities................................ 697 -- --
Inventory and other................................ 624 3,271 3,105
--------- --------- ---------
Net deferred tax liability........................ FF 854 FF 2,896 FF 2,730
========= ========= =========
</TABLE>
At December 31, 1996, June 30, 1997 and September 30, 1997,
other assets include FF 300, FF 375 and FF 375 of deferred tax assets.

Historically, the Company consisted of a number of different tax
entities with different ownership interests. Prior to its acquisition by Bolle
Inc., such entities' tax returns were prepared and filed on an unconsolidated
basis. The Company's structure is currently being revised in order to allow it
to prospectively file one consolidated tax return in France.

NOTE 8 -- MINORITY INTERESTS

<TABLE>
<CAPTION>
<S> <C>
Minority interests at December 31, 1995................................................ FF 13,393
Minority interest in net income of consolidated subsidiaries........................... 8,250
Dividends paid to minority shareholders................................................ (9,823)
-----------
Minority interests at December 31, 1996................................................ FF 11,820
===========
Minority interest in net income of consolidated subsidiaries........................... 265
Acquisition of minority interests by the Group......................................... (11,690)
-----------
Minority interests at June 30, 1997.................................................... FF 395
===========
Minority interest in losses of consolidated subsidiaries............................... (395)
-----------
Minority interests at September 30, 1997............................................... FF --
===========
</TABLE>

At December 31, 1996, minority shareholders had a 24% interest in SNC
Bolle, a Group consolidated subsidiary which form of incorporation provides for
an allocation of pre-tax income to minority shareholders in the period earnings
are generated. Minority interests in the statement of operations for the year
ended December 31, 1996 include FF 8,011 relating to SNC Bolle. This amount is
on a pre-tax basis as the related income tax is born directly by the minority
stockholders.

As described in Note 1, in connection with the acquisition of the
Group by Bolle Inc., Holding BF SA acquired the minority interests in SNC Bolle
and all of the outstanding stock of RM Plastiques Sarl, Bolle Protection Sarl
and Bolle Production Sarl prior to closing of the transaction. Accordingly, the
only remaining minority interests at June 30, 1997 and September 30, 1997
relate to Bolle Diffusion Sarl. For the three months ended September 30, 1997,
Bolle Diffusion Sarl incurred a net loss of FF 1,325, FF 930 of which was
included in the Group's results.

NOTE 9 -- COMMITMENTS AND CONTINGENCIES

The Group has various commitments to purchase materials and supplies
as part of the ordinary conduct of business. In the aggregate, such commitments
are not at prices in excess of current market. Management believes that the
settlement of such commitments will not materially affect the financial
position, results of operations or cashflows of the Group. The Group is also
subject to various litigation incidental to its business. The Group does not
believe that exposure on any matter will result in a significant impact on its
financial position, results of operations or cash flows.

F-48

<PAGE>

NOTE 10 -- SUBSEQUENT EVENTS (UNAUDITED)

Subsequent to September 30, 1997, certain adjustments and
reclassifications have been made to the original purchase price allocation
(including the recording of deferred taxes of FF 82,775 relating to the
trademark valuation) described in Note 3 and have been included in the
financial statements of Bolle Inc. for the year ended December 31, 1997.

In addition, in connection with the reorganization of the Group
described in Note 1, certain provisions and investments have been transferred
to Bolle Inc. subsequent to September 30, 1997. Further, the borrowings used to
fund the acquisition of the Group referred to in Note 1 is also reflected in
the consolidated financial statements of Bolle Inc. for the year ended December
31, 1997.

On March 11, 1998, Lumen Technologies, Inc. (formerly known as
BEC Group, Inc.) ("Lumen") distributed the stock of Bolle Inc. to
Lumen stockholders (the "Spinoff").

F-49
<PAGE>

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No dealer, salesperson or any other person has been
authorized to give any information or to make any
representations other than those contained in this BOLLE INC.
Prospectus in connection with the offer made by this
Prospectus and, if given or made, such information or
representations must not be relied upon as having been
authorized by the Company or by any of the Underwriters.
This Prospectus does not constitute an offer to sell or
the solicitation of any offer to buy any security other
than the shares of Common Stock offered by this
Prospectus, nor does it constitute an offer to sell or a
solicitation of any offer to buy the shares of Common Common Stock
Stock by anyone in any jurisdiction in which such an
offer or solicitation is not authorized, or in which the
person making such offer or solicitation is not
qualified to do so, or to any person to whom it is
unlawful to make such offer or solicitation. Neither the
delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication
that the information contained herein is correct as of
any time subsequent to the date hereof.

TABLE OF CONTENTS

Prospectus Summary.....................................2
Risk Factors...........................................7
Use of Proceeds.......................................15
Price Range of Common Stock...........................16

Dividend Policy.......................................16 ---------------
Selected Financial Data...............................17 PROSPECTUS
Management's Discussion and Analysis of Financial ---------------

Condition and Results of Operations................19
Recent Developments...................................24
Business..............................................29
Management............................................42
Executive Compensation................................44
Certain Relationships and Related Transactions........50
Security Ownership of Certain Beneficial Owners

and Management.....................................53
Description of Capital Stock..........................55
Shares Eligible for Future Sale.......................61

Selling Stockholders..................................62 July 31, 1998
Plan of Distribution..................................63
Validity of Shares....................................63
Experts...............................................64
Available Information.................................64
Index to Financial Statements........................F-1

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