26 November 1997


Dear Bill,

This letter will  confirm our offer to you to become US Group  President  at our
San Jose facility effective January 5, 1998.

The following benefits are provided as a part of the overall benefits package:

1.   Your base  compensation  will be at an annual rate of $250,000 (pay periods
     bi-weekly).

2.   Bonus  opportunity  of up to 50% of your  annual  salary.  Bonus will be in
     accordance  with  current  Bell  Sports  policy  and is  based  on  meeting
     profitability  goals.  For FY 98 you are  eligible  for 50% payout of total
     bonus opportunity.

3.   A  one-time  bonus of  $50,000,  less  applicable  state  and  federal  tax
     withholdings,  will be paid 30 days following your date of hire. This bonus
     will fully vest within one year of employment.

4.   Use of a company leased car until you purchase your own. Upon  purchasing a
     car, an auto allowance of $400 per month will be paid through payroll.

5.   A  performance  review will be  completed  six (6) months from your date of
     hire. Salary reviews are normally conducted on an annual basis.

6.   You will accrue vacation at the rate of three weeks per year.

7.   You become eligible for the Bell Sports health and dental insurance program
     effective  immediately.  You have a choice of two programs.  The first is a
     group  health and dental  program  through  General  American  as a payroll
     deduction of $6.00 per week for individual coverage and $17.00 per week for
     family.  The second is a Point of Service plan (which is similar to an HMO)
     through  General  American at a cost for medical and dental to you of $7.42
     per week for individual, $27.74 for single plus one and $37.96 per week for
     family coverage.
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8.   You become  eligible for the Bell Sports 401(k)  Retirement  program on the
     next January 1st, April 1st, July 1st or October 1st,  following six months
     of service.  This plan features a rollover  provision which would allow you
     to  immediately  rollover  any 401(k) funds that you may have into the Bell
     Sports Plan.

9.   This offer is contingent  upon your agreeing to and signing the Bell Sports
     standard "Confidentiality and Non-Competition  Agreement" and "Statement of
     Company Policy Prohibiting Insider Trading in the Company's Stock".

10.  Bell Sports  will loan you up to  $150,000  to assist in the  purchase of a
     home in the San Jose area.  Interest  on the loan will be  computed at a 6%
     annual  rate and  reported as income on the W-2 for tax  purposes.  You are
     responsible for all taxes on imputed  interest.  A minimum of fifty percent
     (50%) of any bonus  awarded  shall be applied to the loan starting FY 1999.
     The entire  balance is due and payable upon the earliest of the  following:
     (a) the  termination,  for whatever  reason,  of your  employment with Bell
     Sports,  (b) the  dissolution  or  liquidation  of Bell Sports or (c) three
     years from the date of loan.

11.  Due  to  the  strategic   review  currently  being  managed  by  Montgomery
     Securities, it is quite possible our financial structure will change in the
     next  six  months.  If there is a change  of  control  and your  employment
     continues,  appropriate  performance  based incentive  arrangements will be
     established  following that time, consistent with your status and position.
     If no change in control  occurs,  we will grant you a total of 75,000 stock
     options at fair market value under our current  option  program  which vest
     over a three year period in equal  increments and provide an opportunity to
     share in the value you help to create.

12.  Taxes, by law, are required to be withheld on all forms of compensation and
     benefits  provided  to you  by  Bell  Sports.  If you  have  any  questions
     regarding your tax  implications,  you should consider  contacting your tax
     advisor/tax preparer.


Please  understand  that Bell Sports  reserves the right to employ at will,  and
therefore this letter does not  constitute a yearly  employment  contract.  This
letter constitutes our entire agreement.

As you know, I am extremely excited about the opportunities  here at Bell Sports
and sincerely hope that you will become a part of this dynamic organization.

I look forward to having the opportunity of working with you.

Sincerely,


Mary George
Chief Operating Officer

My signature confirms acceptance of the position.



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Bill Bracy                                        Date