NONCOMPETITION AGREEMENT


                  THIS  AGREEMENT is entered into as of the 8th day of December,
1997 among Bell Sports  Corp.,  a Delaware  corporation  (the  "Company"),  Bell
Sports,  Inc., a California  corporation  and a  wholly-owned  subsidiary of the
Company (the "Subsidiary"), and Terry G. Lee (the "Executive").

                  WHEREAS,  the Company and the Subsidiary are engaged primarily
in the business of designing, manufacturing, producing, distributing, marketing,
advertising  and  selling  auto  racing  helmets,   bicycle   helmets,   bicycle
accessories and related products;

                  WHEREAS, the Executive serves as the Chairman of the Board and
Chief  Executive  Officer of the Company  pursuant to the terms of an Employment
Agreement dated as of June 13, 1995;

                  WHEREAS, the Executive's abilities and services are unique and
essential to the prospects of the Company; and

                  WHEREAS,  the Company and the  Executive  desire to enter into
this Agreement upon the terms and subject to the conditions set forth herein.

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
mutual covenants and agreements  herein contained,  the Company,  the Subsidiary
and the Executive hereby agree as follows:

                  1. Definitions. As used in this Agreement, the following terms
shall have the respective meanings set forth below:

                  (a) "Board" means the Board of Directors of the Company.

                  (b) "Cause"  means (1) a material  breach by the  Executive of
those duties and  responsibilities  of the Executive  which do not differ in any
material  respect from the duties and  responsibilities  of the Executive during
the 90-day  period  immediately  prior to a Change in Control  (other  than as a
result of incapacity due to physical or mental  illness)  which is  demonstrably
willful and deliberate on the Executive's  part, which is committed in bad faith
or without  reasonable  belief that such breach is in the best  interests of the
Company and which is not remedied in a reasonable  period of time after  receipt
of written notice from the Company  specifying such breach or (2) the commission
by the Executive of a felony involving moral turpitude.
<PAGE>
                  (c) "Change in Control" means:

                  (1) the  acquisition  by any  individual,  entity  or group (a
"Person"),  including  any  "person"  within the meaning of Section  13(d)(3) or
14(d)(2) of the  Securities  Exchange  Act of 1934,  as amended  (the  "Exchange
Act"),  of  beneficial  ownership  within the meaning of Rule 13d-3  promulgated
under the Exchange Act, of 20% or more of either (i) the then outstanding shares
of common stock of the Company (the "Outstanding  Company Common Stock") or (ii)
the combined  voting  power of the then  outstanding  securities  of the Company
entitled to vote  generally  in the  election  of  directors  (the  "Outstanding
Company Voting Securities");  provided, however, that the following acquisitions
shall not constitute a Change in Control:  (A) any acquisition directly from the
Company  (excluding any acquisition  resulting from the exercise of a conversion
or exchange  privilege in respect of  outstanding  convertible  or  exchangeable
securities),  (B) any  acquisition  by the Company,  (C) any  acquisition  by an
employee  benefit plan (or related trust) sponsored or maintained by the Company
or any  corporation  controlled  by the  Company,  (D)  any  acquisition  by any
corporation pursuant to a reorganization,  merger or consolidation involving the
Company,  if,  immediately after such  reorganization,  merger or consolidation,
each of the  conditions  described in clauses (i),  (ii) and (iii) of subsection
(3) of this Section  (1)(c) shall be satisfied;  and provided  further that, for
purposes of clause (B),  if any Person  (other than the Company or any  employee
benefit plan (or related  trust)  sponsored or  maintained by the Company or any
corporation  controlled by the Company) shall become the beneficial owner of 20%
or  more  of  the  Outstanding  Company  Common  Stock  or 20%  or  more  of the
Outstanding Company Voting Securities by reason of an acquisition by the Company
and such  Person  shall,  after  such  acquisition  by the  Company,  become the
beneficial  owner of any  additional  shares of the  Outstanding  Company Common
Stock or any  additional  Outstanding  Voting  Securities  and  such  beneficial
ownership is publicly  announced,  such  additional  beneficial  ownership shall
constitute a Change in Control;

                  (2)  individuals  who, as of the date hereof,  constitute  the
Board  (the  "Incumbent  Board")  cease for any  reason to  constitute  at least
66-2/3% of such Board;  provided,  however,  that any  individual  who becomes a
director  of the  Company  subsequent  to the date  hereof  whose  election,  or
nomination for election by the Company's stockholders,  was approved by the vote
of at least 66-2/3% of the directors then  comprising the Incumbent  Board shall
be deemed to have been a member of the Incumbent  Board;  and provided  further,
that no individual  who was initially  elected as a director of the Company as a
result of an actual or threatened  election  contest,  as such terms are used in
Rule 14a-11 of Regulation 14A  promulgated  under the Exchange Act, or any other
actual or threatened  solicitation of proxies or consents by or on behalf of any
Person  other  than the  Board  shall be  deemed  to have  been a member  of the
Incumbent Board;

                  (3)  approval  by  the   stockholders  of  the  Company  of  a
reorganization,  merger or consolidation  unless, in any such case,  immediately
after such  reorganization,  merger or  consolidation,  (i) more than 60% of the
then outstanding  shares of common stock of the corporation  resulting from such
reorganization, merger or consolidation and more than 60% of the combined voting
power of the then outstanding securities of such corporation entitled to vote
                                      -2-
<PAGE>
generally in the election of directors is then beneficially  owned,  directly or
indirectly,  by all or substantially all of the individuals or entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
the   Outstanding   Company  Voting   Securities   immediately   prior  to  such
reorganization,   merger  or  consolidation   and  in  substantially   the  same
proportions relative to each other as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company Common Stock
and the  Outstanding  Company  Voting  Securities,  as the case may be,  (ii) no
Person  (other than the Company,  any employee  benefit plan (or related  trust)
sponsored or maintained by the Company or the  corporation  resulting  from such
reorganization,  merger or consolidation  (or any corporation  controlled by the
Company)  and any Person which  beneficially  owned,  immediately  prior to such
reorganization,  merger or consolidation, directly or indirectly, 20% or more of
the  Outstanding   Company  Common  Stock  or  the  Outstanding  Company  Voting
Securities,  as the case may be) beneficially owns, directly or indirectly,  20%
or more of the then  outstanding  shares of common stock of such  corporation or
20% or more of the combined voting power of the then  outstanding  securities of
such  corporation  entitled to vote  generally in the election of directors  and
(iii)  at  least  66-2/3%  of the  members  of the  board  of  directors  of the
corporation  resulting from such  reorganization,  merger or consolidation  were
members  of the  Incumbent  Board at the time of the  execution  of the  initial
agreement or action of the Board  providing for such  reorganization,  merger or
consolidation; or

                  (4) approval by the  stockholders of the Company of (i) a plan
of complete  liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially  all of the assets of the Company other than
to a  corporation  with respect to which,  immediately  after such sale or other
disposition,  (A) more than 60% of the then  outstanding  shares of common stock
thereof and more than 60% of the combined  voting power of the then  outstanding
securities  thereof  entitled to vote  generally in the election of directors is
then beneficially owned, directly or indirectly,  by all or substantially all of
the individuals and entities who were the beneficial  owners,  respectively,  of
the  Outstanding  Company  Common  Stock  and  the  Outstanding  Company  Voting
Securities   immediately  prior  to  such  sale  or  other  disposition  and  in
substantially  the same  proportions  relative to each other as their ownership,
immediately prior to such sale or other disposition,  of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities,  as the case may be,
(B) no Person  (other than the Company,  any  employee  benefit plan (or related
trust)  sponsored  or  maintained  by the  Company or such  corporation  (or any
corporation  controlled by the Company) and any Person which beneficially owned,
immediately prior to such sale or other disposition, directly or indirectly, 20%
or more of the  Outstanding  Company  Common  Stock or the  Outstanding  Company
Voting  Securities,   as  the  case  may  be)  beneficially  owns,  directly  or
indirectly,  20% or more of the then outstanding  shares of common stock thereof
or 20% or more of the combined voting power of the then  outstanding  securities
thereof entitled to vote generally in the election of directors and (C) at least
66-2/3% of the members of the board of  directors  thereof  were  members of the
Incumbent Board at the time of the execution of the initial  agreement or action
of the Board providing for such sale or other disposition.

                  (d) "Exchange Act" means the Securities  Exchange Act of 1934,
as amended.
                                      -3-
<PAGE>
                  (e) "Good  Reason"  means,  without  the  Executive's  express
written consent, the occurrence of any of the following events after a Change in
Control:

                  (1) any of (i) the  assignment  to the Executive of any duties
inconsistent in any material respect with the Executive's  position(s),  duties,
responsibilities or status with the Company or the Subsidiary  immediately prior
to  such  Change  in  Control,  (ii)  a  change  in  the  Executive's  reporting
responsibilities,  titles or offices  with the Company or the  Subsidiary  as in
effect  immediately  prior to such  Change  in  Control,  (iii) any  removal  or
involuntary  termination  of the  Executive  from the Company or the  Subsidiary
otherwise  than as  expressly  permitted  by this  Agreement  or any  failure to
re-elect the Executive to any position with the Company or the  Subsidiary  held
by the Executive  immediately prior to such Change in Control or (iv) any breach
by the Company or the Subsidiary of the Employment  Agreement among the Company,
the Subsidiary and the Executive, as amended, or any successor agreement thereto
(the "Employment Agreement");

                  (2) a  reduction  by  the  Company  or the  Subsidiary  in the
Executive's  rate of annual base salary as in effect  immediately  prior to such
Change in Control or as the same may be increased  from time to time  thereafter
or the  failure by the  Company to  increase  such rate of base salary each year
after such Change in Control by an amount which at least equals, on a percentage
basis, the mean average percentage  increase in the rates of base salary for all
officers (within the meaning of Rule 3b-2 promulgated under the Exchange Act) of
the  Company  during  the two  full  fiscal  years  of the  Company  immediately
preceding such Change in Control;

                  (3) any  requirement of the Company or the Subsidiary that the
Executive (i) be based  anywhere  other than at the facility where the Executive
is located at the time of the Change in Control or (ii) travel on business to an
extent  substantially  more  burdensome  than  the  travel  obligations  of  the
Executive immediately prior to such Change in Control;

                  (4)  the  failure  of the  Company  or the  Subsidiary  to (i)
continue in effect any employee  benefit plan or compensation  plan in which the
Executive is participating  immediately prior to such Change in Control,  unless
the Executive is permitted to participate in other plans providing the Executive
with  substantially  comparable  benefits,  or the  taking of any  action by the
Company  or  the  Subsidiary   which  would  adversely  affect  the  Executive's
participation  in or materially  reduce the Executive's  benefits under any such
plan, (ii) provide the Executive and the Executive's dependents welfare benefits
(including,  without  limitation,  medical,  prescription,  dental,  disability,
salary  continuance,  employee  life,  group life,  accidental  death and travel
accident  insurance  plans and programs) in accordance  with the most  favorable
plans,  practices,  programs  and  policies of the  Company  and its  affiliated
companies  in  effect  for the  Executive  immediately  prior to such  Change in
Control or, if more  favorable to the Executive,  as in effect  generally at any
time  thereafter  with respect to other peer  executives  of the Company and its
affiliated companies,  (iii) provide fringe benefits in accordance with the most
favorable  plans,  practices,  programs  and  policies  of the  Company  and its
affiliated  companies  in effect  for the  Executive  immediately  prior to such
Change in Control or, if more favorable to the Executive, as
                                      -4-
<PAGE>
in effect generally at any time thereafter with respect to other peer executives
of the Company and its affiliated  companies,  (iv) provide an office or offices
of a size and with furnishings and other  appointments,  together with exclusive
personal secretarial and other assistance,  at least equal to the most favorable
of the  foregoing  provided to the  Executive by the Company and its  affiliated
companies  immediately  prior to such Change in Control or, if more favorable to
the  Executive,  as provided  generally at any time  thereafter  with respect to
other peer executives of the Company and its affiliated  companies,  (v) provide
the Executive with paid vacation in accordance  with the most  favorable  plans,
policies,  programs and practices of the Company and its affiliated companies as
in effect for the Executive  immediately  prior to such Change in Control or, if
more favorable to the Executive,  as in effect  generally at any time thereafter
with  respect  to  other  peer  executives  of the  Company  and its  affiliated
companies,   or  (vi)  reimburse  the  Executive  promptly  for  all  reasonable
employment  expenses  incurred  by the  Executive  in  accordance  with the most
favorable  policies,  practices and procedures of the Company and its affiliated
companies  in  effect  for the  Executive  immediately  prior to such  Change in
Control,  or if more favorable to the Executive,  as in effect  generally at any
time  thereafter  with respect to other peer  executives  of the Company and its
affiliated companies; or

                  (5) the  failure  of the  Company  to  obtain  the  assumption
agreement from any successor as contemplated in Section 8(b).

                  For purposes of this Agreement,  any good faith  determination
of Good Reason made by the Executive  shall be  conclusive;  provided,  however,
that an isolated,  insubstantial and inadvertent  action taken in good faith and
which is remedied by the Company  promptly after receipt of notice thereof given
by the Executive shall not constitute Good Reason.

                  (f)  "Nonqualifying  Termination"  means a termination  of the
Executive's  employment (1) by the Company or the  Subsidiary for Cause,  (2) by
the  Executive  for any reason other than a Good Reason,  (3) as a result of the
Executive's  death  or  (4)  by  the  Company  and  the  Subsidiary  due  to the
Executive's  absence  from his duties with the Company and the  Subsidiary  on a
full-time basis for at least 180 consecutive days as a result of the Executive's
incapacity  due  to  physical  or  mental  illness;  provided,  however,  that a
termination  of the  Executive's  employment  by the  Executive  for any  reason
whatsoever during the "Window Period" (hereinafter defined) shall not constitute
a Nonqualifying Termination.

                  (g)  "Termination  Period" means the period of time  beginning
with a  Change  in  Control  and  ending  on the  earliest  to  occur of (1) the
Executive's  70th  birthday,  (2) the  Executive's  death,  and  (3)  two  years
following such Change in Control.

                  (h) "Window Period" means the 30-day period commencing 90 days
after the date of a Change in Control.
                                      -5-
<PAGE>
                  2. Noncompetition.

                  If  during  the  Termination  Period  the  employment  of  the
Executive shall terminate,  other than by reason of a Nonqualifying Termination,
then the Executive shall be bound by the following noncompetition covenants:

                  (a)  Commencing on the date of such  termination of employment
and continuing for a period of two years (the "Noncompetition Period"),  neither
the  Executive  nor any person or  enterprise  controlled  by him will  become a
stockholder,  lender,  director,  officer, agent or employee of a corporation or
member  of or  lender  to a  partnership,  engage  as a sole  proprietor  in any
business,  act as a  consultant  to any of the  foregoing  or  otherwise  engage
directly or indirectly in any business, that is in competition with the business
then  conducted  by the  Company,  the  Subsidiary  or any of  their  controlled
affiliates  in any state in the United  States or any other country in which the
Company,  the  Subsidiary of any of their  controlled  affiliates has engaged in
such business during the term of the Executive's employment;  provided, however,
that the foregoing  shall not prohibit the  Executive  from owning less than two
percent  of the  outstanding  securities  of any  class  of  capital  stock of a
corporation the securities of which are regularly traded or quoted on a national
securities exchange or on an inter-dealer quotation system.

                  (b) The  Executive  acknowledges  that  there  is no  adequate
remedy  at law for a breach of this  Section 2 and that,  in the event of such a
breach or attempted breach, the Company shall be entitled to injunctive or other
equitable  relief to prevent any such  breach,  attempted  breach or  continuing
breach,  without  prejudice to any other remedies for damages or otherwise.  The
Executive agrees that the covenants contained in this Section 2 are separate and
are  reasonable  in their scope and  duration and that the  Executive  shall not
raise any issue of  reasonableness as a defense in any proceeding to enforce any
of such covenants.  Notwithstanding the foregoing,  in the event that a covenant
contained  in this  Section 2 shall be  deemed  by any court to be  unreasonably
broad in any respect,  the parties agree that the court may modify such covenant
for the purpose of making such covenant  reasonable  in scope and duration.  The
validity,  legality or  enforceability of the other provisions of this Agreement
shall not be affected by any such modification.

                  (c) The  Executive  acknowledges  that any material  breach of
this Section 2 will cause  irreparable harm to the Company,  that such harm will
be difficult  if not  impossible  to  ascertain,  and that the Company  shall be
entitled  to  equitable  relief,  including  injunction,  against  any actual or
threatened breach hereof,  without bond and without liability should such relief
be denied, modified or vacated.  Neither the right to obtain such relief nor the
obtaining  of such relief shall be exclusive of or preclude the Company from any
other remedy.
                                      -6-
<PAGE>
                  3. Compensation.  As compensation for the covenants  contained
in Section 2 of this Agreement, the Company shall pay to the Executive, within 5
days following the date of the  commencement  of the  Noncompetition  Period,  a
lump-sum cash amount equal to (i) three (3) times the Executive's highest annual
base salary from the Company,  the Subsidiary and their affiliated  companies in
effect  during  the  12-month  period  prior to the date of  termination  of the
Executive's employment, plus (ii) three (3) times the Executive's average annual
bonus paid or payable,  including by reason of deferral,  from the Company,  the
Subsidiary  and their  affiliated  companies  over the five fiscal  years of the
Company (or such portion thereof during which the Executive  performed  services
for the  Company if the  Executive  shall have been  employed by the Company for
less than such five fiscal year period) immediately preceding the fiscal year in
which the Change in Control occurs.

                  4. Reimbursement of Expenses.  If any contest or dispute shall
arise under this Agreement involving  termination of the Executive's  employment
with the Company or the  Subsidiary  or involving  the failure or refusal of the
Company or the Subsidiary to perform fully in accordance  with the terms hereof,
the Company shall reimburse the Executive on a current basis, for all legal fees
and expenses,  if any, incurred by the Executive in connection with such contest
or  dispute,  together  with  interest  at a rate  equal  to the  Prime  Rate as
published in the "Money  Rates"  section of The Wall Street  Journal,  but in no
event higher than the maximum legal rate permissible  under applicable law, such
interest to accrue from the date the Company receives the Executive's  statement
for such  fees and  expenses  through  the date of  payment  thereof;  provided,
however,  that in the  event  the  resolution  of any such  contest  or  dispute
includes a finding denying,  in total, the Executive's claims in such contest or
dispute, the Executive shall be required to reimburse the Company, over a period
of 12 months  from the date of such  resolution,  for all sums  advanced  to the
Executive pursuant to this Section 4.

                  5. Operative  Event.  Notwithstanding  any provision herein to
the contrary,  no amounts shall be payable hereunder unless and until there is a
Change in Control.

                  6. Termination of Agreement.

                  (a) This  Agreement  shall be effective on the date hereof and
shall continue  until  terminated by the Company as provided in paragraph (b) of
this Section 6; provided,  however,  that this Agreement  shall terminate in any
event upon the termination of the Executive's  employment with the Company prior
to a Change in Control.
                                      -7-
<PAGE>
                  (b) The  Company  shall  have the  right  prior to a Change in
Control, in its sole discretion, pursuant to action by the Board, to approve the
termination of this  Agreement,  which  termination  shall not become  effective
until the date fixed by the Board for such  termination,  which date shall be at
least 180 days after notice  thereof is given by the Company to the Executive in
accordance with Section 9; provided, however, that no such action shall be taken
by the Board  during  any period of time when the Board has  knowledge  that any
person  has taken  steps  reasonably  calculated  to effect a Change in  Control
until, in the opinion of the Board,  such person has abandoned or terminated its
efforts to effect a Change in Control;  and provided  further,  that in no event
shall this Agreement be terminated in the event of a Change in Control.

                  7.  Scope of  Agreement.  Nothing in this  Agreement  shall be
deemed to entitle the Executive to continued  employment with the Company or its
subsidiaries, and if the Executive's employment with the Company shall terminate
prior to a Change in Control,  then the Executive  shall have no further  rights
under this Agreement; provided, however, that any termination of the Executive's
employment  following  a  Change  in  Control  shall  be  subject  to all of the
provisions of this Agreement.

                  8. Successors; Binding Agreement.

                  (a) This  Agreement  shall not be  terminated by any merger or
consolidation  of the Company  whereby the Company is or is not the surviving or
resulting corporation or as a result of any transfer of all or substantially all
of the assets of the Company. In the event of any such merger,  consolidation or
transfer of assets,  the provisions of this Agreement  shall be binding upon the
surviving or resulting  corporation or the person or entity to which such assets
are transferred.

                  (b) The  Company  agrees  that  concurrently  with any merger,
consolidation or transfer of assets referred to in paragraph (a) of this Section
8, it will cause any  successor  or  transferee  unconditionally  to assume,  by
written  instrument  delivered to the Executive,  all of the  obligations of the
Company hereunder.

                  (c)  This  Agreement  shall  inure  to the  benefit  of and be
enforceable by the  Executive's  personal or legal  representatives,  executors,
administrators, successors, heirs, distributees, devisees and legatees.

                  9. Notices.

                  (a) For  purposes  of this  Agreement,  all  notices and other
communications  required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when  delivered or five days after deposit in the
United States mail,  certified and return receipt  requested,  postage  prepaid,
addressed  (1) if to the  Executive,  to Terry G. Lee, 6416 E.  Horseshoe  Road,
Paradise Valley, Arizona 85253, and if to the Company or the Subsidiary, to Bell
Sports Corp., 6350 San Ignacio Avenue,  San Jose,  California  95119,  attention
President  with copies to the  Secretary  and the  Chairman of the  Compensation
Committee of the Board of Directors of
                                      -8-
<PAGE>
Bell Sports Corp., or (2) to such other address as a party may have furnished to
the others in writing in accordance  herewith,  except that notices of change of
address shall be effective only upon receipt.

                  (b) A written notice of the Executive's date of termination of
employment  by the Company or the  Executive,  as the case may be, to the other,
shall (i) indicate the specific  termination  provision in this Agreement relied
upon, (ii) to the extent  applicable,  set forth in reasonable  detail the facts
and circumstances  claimed to provide a basis for termination of the Executive's
employment  under the provision so indicated  and (iii) specify the  termination
date  (which  date  shall be not less than  three  days after the giving of such
notice by the Executive of  termination  during the Window Period and which date
shall not be less than 15 days  after the  giving  of such  notice  under  other
circumstances). The failure by the Executive or the Company to set forth in such
notice any fact or circumstance which contributes to a showing of Good Reason or
Cause shall not waive any right of the  Executive  or the Company  hereunder  or
preclude the Executive or the Company from asserting  such fact or  circumstance
in enforcing the Executive's or the Company's rights hereunder.

                  10. Full Settlement; Resolution of Disputes.

                  (a) The Company's obligation to make any payments provided for
in this Agreement and otherwise to perform its  obligations  hereunder shall not
be affected by any set-off,  counterclaim,  recoupment,  defense or other claim,
right or action which the Company may have against the Executive or others.

                  (b) If there shall be any dispute  between the Company and the
Executive in the event of any termination of the Executive's  employment,  then,
unless  and  until  there  is a  final,  nonappealable  judgment  by a court  of
competent  jurisdiction  declaring that such termination was for Cause, that the
determination  by the  Executive of the existence of Good Reason was not made in
good faith, or that the Company is not otherwise  obligated to pay any amount or
provide any benefit to the Executive  under Section 3, the Company shall pay all
amounts to the  Executive  that the Company  would be required to pay or provide
pursuant to Section 3 as though  such  termination  were by the Company  without
Cause or by the Executive with Good Reason; provided,  however, that the Company
shall not be required to pay any  disputed  amounts  pursuant to this  paragraph
except upon receipt of an  undertaking by or on behalf of the Executive to repay
all such amounts to which the Executive is ultimately adjudged by such court not
to be entitled.

                  11. Employment with Subsidiaries.  Employment with the Company
for purposes of this Agreement shall include  employment with any corporation or
other entity in which the Company has a direct or indirect ownership interest of
50% or  more  of the  total  combined  voting  power  of  the  then  outstanding
securities of such corporation or other entity entitled to vote generally in the
election of directors.
                                      -9-
<PAGE>
                  12. Governing Law; Validity. The interpretation,  construction
and  performance  of this  Agreement  shall be  governed  by and  construed  and
enforced in accordance  with the internal laws of the State of Illinois  without
regard to the principle of conflicts of laws. The invalidity or unenforceability
of  any  provision  of  this   Agreement   shall  not  affect  the  validity  or
enforceability of any other provision of this Agreement,  which other provisions
shall remain in full force and effect.

                  13.  Counterparts.  This  Agreement  may be executed in two or
more  counterparts,  each of which shall be deemed to be an original  and all of
which together shall constitute one and the same instrument.

                  14. Joint and Several Obligation.  Each duty and obligation of
the Company  hereunder shall be the joint and several duty and obligation of the
Company and the Subsidiary.

                  15.  Miscellaneous.  No  provision  of this  Agreement  may be
modified or waived  unless such  modification  or waiver is agreed to in writing
and signed by the Executive,  by a duly authorized officer of the Company and by
a duly authorized officer of the Subsidiary.  No waiver by a party hereto at any
time of any breach by another party hereto of, or compliance with, any condition
or  provision  of this  Agreement  to be  performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or
at any prior or subsequent  time.  Failure by the Executive,  the Company or the
Subsidiary to insist upon strict compliance with any provision of this Agreement
or to assert any right the  Executive,  the Company or the  Subsidiary  may have
hereunder,  including,  without  limitation,  the  right  of  the  Executive  to
terminate employment for Good Reason, shall not be deemed to be a waiver of such
provision or right or any other provision or right of this Agreement.
                                      -10-
<PAGE>
                  IN WITNESS  WHEREOF,  the Company and the Subsidiary have each
caused this Agreement to be executed by a duly authorized officer of the Company
or the  Subsidiary,  as the case may be, and the  Executive  has  executed  this
Agreement as of the day and year first above written.

                                           BELL SPORTS CORP.


                                           By:___________________________
                                             Linda K. Bounds
                                             Senior Vice President and
                                               Chief Financial Officer


                                           By:__________________________
                                             Phillip D. Matthews
                                             Chairman, Compensation Committee

                                           BELL SPORTS, INC.


                                           By:___________________________
                                             Linda K. Bounds
                                             Senior Vice President and
                                               Chief Financial Officer


                                           EXECUTIVE:


                                           ______________________________
                                           Terry G. Lee
                                      -11-