EMPLOYMENT AGREEMENT
                              --------------------


                  THIS  EMPLOYMENT  AGREEMENT is entered into on April 11, 1997,
effective as of February 15, 1997, among Mary J. George (the "Executive"),  Bell
Sports Corp., a Delaware  corporation (the "Holding Company"),  and Bell Sports,
Inc., a California  corporation (the "Operating  Company").  The Holding Company
and the Operating Company are collectively referred to herein as the "Company."

                  WHEREAS,  the Company is 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  currently  serves as the  President,
North America of the Operating Company;

                  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 to provide for the  employment  of the  Executive by the Company
upon the terms and subject to the conditions set forth herein.

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
mutual agreements contained herein, the parties hereby agree as follows:

                  1. Employment; Term.

                  The Company  hereby  employs the  Executive  and the Executive
hereby  agrees to be employed  by the Company  upon the terms and subject to the
conditions  contained  in this  Agreement.  The  term of  this  Agreement  shall
commence as of February  15, 1997 and shall end on  February  15,  2000,  unless
earlier  terminated  pursuant  to  Section 4 hereof.  As used  herein,  the term
"Employment  Period"  shall mean the period  from  February  15,  1997 until the
expiration of the term of this Agreement or the earlier  termination of the term
hereof pursuant to Section 4 hereof.

                  2.  Position;  Duties;  Responsibilities.  The  Company  shall
employ the Executive as the President and Chief Operating Officer of the Holding
Company and the Operating  Company.  The Executive shall  faithfully and loyally
perform to the best of her abilities all the duties  reasonably  assigned to her
hereunder,  shall devote such business time, attention and effort to the affairs
of the Company as is  reasonably  necessary for the proper  performance  of such
duties and shall use her reasonable best efforts to promote the interests of the
Company.  Notwithstanding the foregoing,  the Executive may serve as a director,
officer or paid  consultant of business  corporations  other than the Company or
civic or community  organizations or entities,  provided that such activities do
not violate the terms of any of the  covenants set forth in Section 7 hereof and
such activities are approved prior to the  commencement  thereof by the Chairman
of the  Board  and  Chief  Executive  Officer  of the  Holding  Company  and the
Operating Company (the "Company CEO").

                  3. Compensation.

                  (a) Base Salary.  During the  Employment  Period,  the Company
shall pay to the  Executive  an annual base  salary at the rate of $247,500  per
annum,  payable in accordance with the Company's  executive payroll policy. Such
base salary  shall be reviewed  annually,  commencing  July 1, 1997,  and may be
                                       20
<PAGE>
increased (but shall not be decreased)  annually,  in the sole discretion of the
Company.  The  Executive's  base  salary,  as such base salary may be  increased
annually hereunder, is referred to herein as the "Base Salary."

                  (b)  Annual  Performance  Bonus.  (i) The  Executive  shall be
entitled to receive an annual  performance  bonus  payable in cash for each full
fiscal year of the Company during the term of this Agreement in accordance  with
the Company's  management incentive program, as in effect from time to time. The
annual  performance  bonus to which the  Executive is entitled  pursuant to this
Section 3(b) is referred to herein as the "Bonus."

                  (ii) The  payment of each Bonus  shall be made  within 30 days
after the Company's  independent  accountants shall have certified the Company's
consolidated  financial  statements  for the  fiscal  year to which  such  Bonus
relates.

                  (iii) If the Company's  fiscal year changes,  the  Executive's
opportunity to earn the Bonus shall not be materially and adversely affected.

                  (c)  Restricted  Phantom  Stock  Units.  (i) If during  any 30
consecutive  calendar day period (each such period being referred to herein as a
"Measuring  Period")  within the  Employment  Period  after July 15,  1997,  the
average of the closing prices of Holding Company common stock ("Common  Stock"),
as reported in The Wall Street Journal NASDAQ National Market Issues,  equals or
exceeds for the first time during the  Employment  Period  after July 15, 1997 a
dollar  amount set forth below under  "Stock  Price," the  Company's  Management
Stock  Incentive  Committee  shall,  within  15 days  following  the end of such
Measuring  Period,  award the Executive  the number of restricted  phantom stock
units (rounded to the nearest whole unit) having a value equal to the number set
forth below under "Phantom Stock Award Multiple"  multiplied by a fraction,  the
numerator  of  which  is the  Executive's  Base  Salary  on the last day of such
Measuring Period and the denominator of which is the closing price of the Common
Stock (reported as described above) on the last day of such Measuring Period (or
if such day is not a day on which the Common  Stock is traded,  then on the next
preceding day on which the Common Stock was traded):

                                  Phantom Stock
                  Stock Price                    Award Multiple
                  -----------                    --------------

                    $ 8.00                                    one

                    $ 9.00                                    one

                    $11.00                                    one

                    $13.00                                    two

The Executive  shall be awarded  restricted  phantom stock units as described in
this Section  3(c)(i) for each dollar amount set forth above under "Stock Price"
which is exceeded as described  above,  notwithstanding  that more than one such
dollar amount is exceeded during a single Measuring Period. A restricted phantom
stock unit is an amount of cash equal to the closing  price of the Common  Stock
(reported as described  above) on the date of the  determination of the value of
such unit,  which unit is subject to the  restrictions  on vesting  described in
this Section 3(c)(i). The Executive shall have no right to receive the amount of
any  restricted  phantom  stock unit  awarded to the  Executive  until such unit
becomes fully vested.  All  restricted  phantom stock units awarded  pursuant to
this  Section  3(c)(i)  shall  become  fully  vested  upon  termination  of  the
Employment Period;  provided,  however,  that in the event of the termination of
the Executive's employment voluntarily 
                                       21
<PAGE>
by the  Executive  pursuant to Section 4(e) hereof or by the Company for "Cause"
pursuant to Section  4(c) hereof (as such term is defined in such  section),  no
such restricted  phantom stock units shall vest, and all such restricted phantom
stock units shall be forfeited.  No interest shall accrue on restricted  phantom
stock units awarded  pursuant to this Section  3(c)(i).  In the event of a stock
split, stock dividend, recapitalization,  reorganization, merger, consolidation,
combination,  exchange of shares, liquidation,  spin-off or other similar event,
each dollar  amount set forth above under "Stock  Price" shall be  appropriately
adjusted so that the Executive's  opportunity to be awarded  restricted  phantom
stock units shall not be materially and adversely affected.

                  (ii) If the  Board  of  Directors  of the  Company  adopts  an
incentive plan which provides for the award of shares of restricted Common Stock
and  such  plan is  approved  by the  stockholders  of the  Company,  shares  of
restricted  Common Stock issuable pursuant to such plan shall be substituted for
the  restricted  phantom stock units  described in Section  3(c)(i)  hereof,  as
provided in this  Section  3(c)(ii).  As of the date of approval of such plan by
the  stockholders  of the Company (the "Approval  Date") (A) the Executive shall
have no further right to be awarded  restricted  phantom stock units pursuant to
Section 3(c)(i) hereof and, in lieu of such right,  the Executive shall have the
right to be awarded one share of restricted  Common Stock  pursuant to such plan
for each  restricted  phantom stock unit to which the Executive  would otherwise
have been  entitled  pursuant to Section  3(c)(i)  hereof,  and (B) one share of
restricted  Common Stock issuable pursuant to such plan shall be substituted for
each restricted  phantom stock unit awarded to the Executive pursuant to Section
3(c)(i) hereof prior to the Approval Date. The shares of restricted Common Stock
issuable to the Executive  pursuant to this Section 3(c)(ii) shall be subject to
the same terms and  conditions  with respect to vesting as are applicable to the
restricted  phantom stock units which may be awarded pursuant to Section 3(c)(i)
hereof. Prior to the vesting of a share of restricted Common Stock issued to the
Executive pursuant to this Section 3(c)(ii),  the Executive shall have the right
to vote such share,  but shall have no right to any dividends  payable on shares
of Common Stock.

                  (d)  Stock  Options.   In  the  discretion  of  the  Company's
Management Stock Incentive Committee, the Executive shall be eligible to receive
options to  purchase  shares of Common  Stock  pursuant to the terms of the Bell
Sports Management Stock Incentive Plans.

                  (e) Perquisites.  During the Employment  Period, the Executive
shall be  entitled  to a cash  automobile  allowance  in the  amount of $400 per
month.

                  (f) Reimbursement of Expenses. The Company shall reimburse the
Executive  for  all  expenses  necessarily  and  reasonably  incurred  by her in
connection  with the  business  of the  Company,  upon  presentation  of  proper
receipts or other proof of expenditure and subject to such reasonable guidelines
or  limitations  provided  to  the  Executive  and  applied  prospectively,   as
established by the Company.

                  (g)  Vacation.  During the  Employment  Period,  the Executive
shall be entitled to paid  vacation  and sick leave in  accordance  with Company
policy.

                  (h)  Participation  in Benefit  Plans.  During the  Employment
Period,  the Executive  shall be entitled to  participate  in any profit sharing
plan,  retirement  plan,  group life insurance  plan or other  insurance plan or
medical  expense  plan  maintained  by the  Company  for its  senior  executives
generally,  which  plans  shall  not  differ in value in any  manner  materially
                                       22
<PAGE>
adverse  to  the  Executive   from  those  in  which  the  Executive   currently
participates.

                  4.  Termination.

                  (a) Death.  Upon the death of the  Executive,  this  Agreement
shall  automatically  terminate  and all rights of the  Executive and her heirs,
executors and  administrators to compensation and other benefits hereunder shall
cease, except (i) for Base Salary which shall have accrued to the date of death,
(ii) any  restricted  phantom  stock units awarded  pursuant to Section  3(c)(i)
hereof which have not been replaced by shares of restricted Common Stock, or any
shares of restricted  Common Stock issued pursuant to Section  3(c)(ii)  hereof,
shall be immediately 100% vested and (iii) for rights to  indemnification  under
Section 5 hereof.

                  (b) Disability. The Company may, at its option, terminate this
Agreement  upon written  notice to the  Executive if the  Executive,  because of
physical or mental  incapacity or disability,  fails in any material  respect to
perform the services  required of her hereunder  for a continuous  period of 120
days or any 180 days out of any  12-month  period.  Upon such  termination,  all
obligations  of the Company  hereunder  shall cease,  except (i) for Base Salary
which shall have accrued to the date of termination, (ii) any restricted phantom
stock units  awarded  pursuant  to Section  3(c)(i)  hereof  which have not been
replaced  by shares of  restricted  Common  Stock,  or any shares of  restricted
Common Stock issued pursuant to Section  3(c)(ii)  hereof,  shall be immediately
100% vested and (iii) for the rights to indemnification  under Section 5 hereof.
In  the  event  of any  dispute  regarding  the  existence  of  the  Executive's
incapacity  hereunder,  the matter shall be resolved by the  determination  of a
majority of three physicians  qualified to practice medicine in the state of the
Executive's  residence,  one to be  selected  by each of the  Executive  and the
Company and the third to be selected by such two designated physicians. For this
purpose, the Executive shall submit to appropriate medical examinations.

                  (c) Cause.  (i) The Company may, at its option,  terminate the
Executive's   employment  under  this  Agreement  for  "Cause"  (as  hereinafter
defined).  A  termination  for Cause shall not take effect  until and unless the
Company complies with this Section 4(c)(i). The Executive shall be given written
notice by the Company of the intention to terminate her employment hereunder for
Cause  (the  "Cause  Notice").  The Cause  Notice  shall  state  the  particular
action(s) or  inaction(s)  giving rise to termination  for Cause.  The Executive
shall  have 10 days  after  the  Cause  Notice  is given to cure the  particular
action(s) or inaction(s),  to the extent a cure is possible. If the Executive so
effects a cure,  the Cause Notice shall be deemed  rescinded  and of no force or
effect.

                  (ii) As used in this  Agreement,  the term "Cause"  shall mean
any one or more of the following:

                           (A)  the  Executive's  refusal  to  perform  specific
directives of the Company CEO, which  directives  are consistent  with the scope
and nature of the Executive's duties and responsibilities as set forth herein;

                           (B) the  Executive's  admission  or  conviction  of a
felony or of any crime involving moral turpitude, fraud, embezzlement,  theft or
misrepresentation;

                           (C) any gross or willful  misconduct of the Executive
resulting  in  substantial  loss to the  Company  or  substantial  damage to the
Company's reputation; or
                                       23
<PAGE>
                           (D) any breach by the Executive of any one or more of
the covenants contained in Section 6 or 7 hereof,  other than an inadvertent and
unintentional   breach  of  a  covenant   contained   in  Section  6  having  an
inconsequential effect upon the Company or any of its controlled affiliates.

                  (iii) The  exercise of the right of the  Company to  terminate
this  Agreement  pursuant to this  Section 4(c) shall not abrogate the rights or
remedies  of  the  Company  in  respect  of  the  breach  giving  rise  to  such
termination.

                  (iv) If the Company terminates the Executive's  employment for
Cause, she shall be entitled to:

                           (A)  accrued  Base  Salary  through  the  date of the
termination of her employment;

                           (B) any Bonus  owing but not yet paid for any  fiscal
year ended on or before the Executive's termination of employment for Cause;

                           (C) any  amounts  owing but not yet paid  pursuant to
Section 3(e); and

                           (D) other or additional  benefits in accordance  with
applicable plans and programs of the Company.

                  (v) Notwithstanding anything to the contrary contained in this
Agreement,  if, following a termination of the Executive's employment for Cause,
a court of competent jurisdiction, in a final determination, determines that the
Executive  was  not  guilty  of the  conduct  that  formed  the  basis  for  the
termination,  the  Executive  shall be entitled to the payments and the economic
equivalent  of the benefits  she would have  received  had her  employment  been
terminated by the Company without Cause.

                  (d)  Termination  Without  Cause.  If,  during the  Employment
Period, the Company terminates the employment of the Executive hereunder for any
reason other than a reason set forth in Section 4(a), 4(b) or 4(c):

                  (i) such  termination  shall be  effective  90 days  following
written notice thereof by the Company to the Executive;

                  (ii) concurrent with such  termination,  the Company shall pay
to the Executive an amount equal to her Base Salary accrued  through the date of
termination;

                  (iii) the Company shall continue to pay the Executive her Base
Salary and all other benefits (excluding Bonus) which would otherwise be payable
hereunder for a period of 18 months following the date of termination;

                  (iv) any  restricted  phantom stock units awarded  pursuant to
Section  3(c)(i)  hereof which have not been  replaced with shares of restricted
Common  Stock,  or any shares of  restricted  Common  Stock  issued  pursuant to
Section 3(c)(ii) hereof, shall be immediately 100% vested;

                  (v) all of the  Executive's  options to purchase  Common Stock
shall be immediately 100% exercisable;

                  (vi) the Executive  shall be entitled to any amounts owing but
not yet paid pursuant to Section 3(f); and
                                       24
<PAGE>
                  (vii)  the  Executive  shall  be  entitled  to her  rights  to
indemnification under Section 5 hereof.

                  (e) Voluntary  Termination.  If, during the Employment Period,
the Executive  voluntarily  terminates her  employment  hereunder for any reason
whatsoever, such termination shall be effective 90 days following written notice
thereof by the Executive to the Company and the  Executive  shall be entitled to
the payments and benefits specified by Sections 4(d)(ii),  (iii), (vi) and (vii)
hereof, inclusive.

                  5.  Indemnification.  To the fullest extent  permitted by law,
the  Restated  Certificate  of  Incorporation  of the  Holding  Company  and the
Articles of  Incorporation  of the Operating  Company,  the  Executive  (and her
heirs, executors and administrators) shall be indemnified by the Company and its
successors and assigns.  The obligations of the Company pursuant to this Section
5 shall survive the  termination of the Employment  Period,  except as otherwise
provided herein.

                  6.  Confidentiality.  The Executive  shall at all times during
the Employment Period and thereafter hold in confidence any and all Confidential
Information  (as  hereinafter  defined)  that may have come or may come into her
possession or within her knowledge concerning the products, services, processes,
businesses,  suppliers,  customers and clients of the Company or its  controlled
affiliates.  The Executive  agrees that neither she nor any person or enterprise
controlled by her will for any reason directly or indirectly, for herself or any
other person,  use or disclose any trade secrets,  proprietary  or  confidential
information,  inventions,  manufacturing or industrial  processes or procedures,
patents,  trademarks, trade names, customer lists, service marks, service names,
copyrights,  applications for any of the foregoing,  or licenses of other rights
in respect thereof (collectively, "Confidential Information"), owned or used by,
or licensed to, the Company or any of its controlled  affiliates,  provided that
the Executive may disclose  Confidential  Information which has become generally
available to the public other than as a result of a breach of this  Agreement by
the Executive or pursuant to an order of a court of competent jurisdiction or of
a  governmental  agency,  department  or  commission.  Upon  termination  of her
employment under this Agreement,  the Executive shall promptly  surrender to the
Company all documents she believes contain Confidential Information and that are
within her possession or control, other than documents to which the Executive is
or was a party or that relate to the Executive or the basis, or purported basis,
on which her employment was terminated.

                  7.  Noncompetition  and  Nonsolicitation.  (a)  Subject to the
following  sentence,  the  Executive  agrees  that  from  the  date  hereof  and
subsequent  to the  termination  of her  employment  under  this  Agreement  and
continuing for a period of two years (the "Noncompete Period"),  neither she nor
any person or enterprise  controlled by her 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
or any of its  controlled  affiliates  in any state in the United  States or any
other  country in which the  Company  or any of its  controlled  affiliates  has
engaged in such business  during the term of the  Executive's  employment  under
this  Agreement;  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.
                                       25
<PAGE>
                  (b) The Executive  agrees that during the  Noncompete  Period,
neither she nor any person or enterprise  controlled by her will (i) solicit for
employment  or employ any person who was  employed  by the Company or any of its
controlled  affiliates  at any time within one year prior to the time of the act
of  solicitation  or (ii) in any way  cause,  influence,  induce or  attempt  to
persuade  any person who was  employed by the  Company or any of its  controlled
affiliates  at any  time  within  one  year  prior  to the  time of such  act to
terminate her employment relationship with the Company or any of its affiliates.

                  (c)   Relief,   Reformation;   Severability.   The   Executive
acknowledges  that  there is no  adequate  remedy  at law for a  breach  of this
Section 7 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  Agreement 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  Agreement  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  remaining  provisions of this  Agreement  shall not be affected by any such
modification.

                  8. Inventions. The Executive hereby assigns to the Company her
entire right,  title and interest in and to all  discoveries  and  improvements,
patentable or otherwise,  trade  secrets and ideas,  writings and  copyrightable
material,  which may be conceived  by the  Executive or developed or acquired by
her during the term of her employment by the Company, which may pertain directly
or indirectly to the Company's business.  The Executive agrees to disclose fully
all such developments to the Company upon its request, which disclosure shall be
made in writing promptly  following any such request.  The Executive shall, upon
the  Company's  request,  execute,  acknowledge  and  deliver to the Company all
instruments and do all other acts which are necessary or desirable to enable the
Company to file and  prosecute  applications  for, and to acquire,  maintain and
enforce, all patents, trademarks and copyrights in all countries.

                  9.  Remedies.  The  Executive  acknowledges  that any material
breach of this Agreement 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.

                  10.  Insurance.  The Company  may, at its election and for its
benefit,  insure the Executive against disability,  accidental loss or death and
the  Executive  shall  submit to such  physical  examinations  and  supply  such
information as may be required in connection therewith.

                  11.  Assignment.  The rights  and  benefits  of the  Executive
hereunder  shall  not  be  assignable,   whether  by  voluntary  or  involuntary
assignment or transfer.  This Agreement  shall be binding upon, and inure to the
benefit of, the successors and assigns of the Company, and the heirs,  executors
and  administrators of the Executive,  and shall be assignable by the Company to
any entity acquiring substantially all of the assets of the 
                                       26
<PAGE>
Company,   whether  by  merger,   consolidation,   sale  of  assets  or  similar
transaction.

                  12.  Notices.  Any notice  required or  permitted  to be given
under this Agreement shall be sufficient if in writing and personally delivered,
sent by certified or  registered  mail or sent by overnight  courier  service as
follows: if to the Executive,  to her address as set forth in the records of the
Company,  and if to the  Company,  to the  address  of its  principal  executive
offices,  attention:  Chief Executive  Officer,  with a copy to Larry A. Barden,
Esq., Sidley & Austin, One First National Plaza, Chicago,  Illinois 60603, or to
any other address designated by any party hereto by notice similarly given.

                  13. Waiver of Breach. A waiver by the Company or the Executive
of any breach of any  provision  of this  Agreement by the other party shall not
operate or be  construed  as a waiver of any other or  subsequent  breach by the
other party.

                  14.  Entire  Agreement.  This  Agreement  contains  the entire
agreement  of the  parties  with  respect to the  subject  matter  hereof.  This
Agreement may be modified only by an agreement in writing  signed by the parties
hereto.

                  15. Costs. In the event that a dispute shall arise between the
parties   hereto  and  such   dispute  is  resolved  by  a  court  of  competent
jurisdiction,  all reasonable  attorneys'  fees and costs of the Company and the
Executive  and all other costs and  expenses  of the  Company and the  Executive
associated with such dispute shall be borne by the Company;  provided that if it
is determined  that the claims of the Executive were without  reasonable  basis,
each party shall bear her or its own attorneys' fees and costs.

                  16.  Applicable  Law.  The  terms of this  Agreement  shall be
governed by and  construed in  accordance  with the internal laws (as opposed to
the conflict of laws provisions) of the State of Illinois.

                  17. Prior  Agreements.  This  Agreement  supersedes  all prior
agreements  between the Executive  and the Company  concerning  the  Executive's
employment with the Company,  including the Employment Agreement effective as of
June 13, 1995 between the Executive and the Operating Company,  and none of such
agreements shall be of any further force or effect whatsoever.

                  IN WITNESS  WHEREOF,  the parties  hereto have  executed  this
Agreement as of the day and year first above written.


                                        BELL SPORTS CORP.


                                        By
                                          --------------------------------------
                                                       Terry G. Lee
                                                Chairman of the Board and
                                                 Chief Executive Officer



                                        BELL SPORTS, INC.


                                        By
                                          --------------------------------------
                                                       Terry G. Lee
                                       27
<PAGE>
                                                Chairman of the Board and
                                                 Chief Executive Officer


                                        EXECUTIVE:


                                          --------------------------------------
                                                       Mary J. George
                                       28