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                                                                    EXHIBIT 10.4

                AMENDED AND RESTATED COLLATERAL PLEDGE AGREEMENT

         THIS AMENDED AND RESTATED COLLATERAL PLEDGE AGREEMENT ("Agreement") is
made this 11th day of August 2000, by and among Mary George, a resident of the
State of California ("Pledgor"), and BELL SPORTS, INC., a California corporation
("BELL").

         1.       Pledge

         As security for Pledgor's amended and restated promissory note ("Note")
to BELL of even date herewith, which Note evidences the indebtedness of Pledgor
to BELL, Pledgor hereby pledges, mortgages, hypothecates, assigns, transfers,
delivers, sets over and confirms unto BELL, its success and assigns, the
following property, to wit:

                  5,608 shares of Common Stock of BELL SPORTS CORP., a Delaware
                  corporation ("BSC"), together with all proceeds thereof,
                  additions thereto and substitutions therefor, including
                  without limitation any other securities, cash, or other
                  properties distributed with respect to the foregoing
                  securities subject to this Agreement, whether as a result of
                  merger, consolidation, dissolution, reorganization,
                  recapitalization, interest payment, stock split, stock
                  dividend, reclassification or redemption or any other change
                  declared or made in the capital structure of BELL, BSC, or
                  otherwise,

as collateral security for the payment in full when due of any and all
obligations and indebtedness of Pledgor to BELL, whether direct, indirect or
contingent, whether now existing or hereafter incurred and whether or not
otherwise secured (hereinafter collectively referred to as the "Obligations"),
including without limitation, all obligations and indebtedness of Pledgor under
the Note and any extensions, amendments and renewals thereto. In the event of a
conflict or inconsistency between the terms hereof and the terms of the Note,
the terms of the Note shall control. Pledgor warrants and represents that
Pledgor has the right to pledge, mortgage, hypothecate, assign, transfer,
deliver, set over and confirm unto BELL all of the foregoing shares free of any
encumbrance.

         Pledgor hereby agrees promptly to pledge and deposit hereunder with
BELL any stock, securities, or other property with respect to any of the
securities represented thereby, whether taken in substitution for or in addition
to the above described property. Such stock, other securities and property shall
stand pledged and assigned for the Obligations in the same manner as the
property described in the first paragraph hereof. All of the property described
in this Section 1 and in the first and second paragraphs hereof is hereinafter
called the "Pledged Property."

         2.       Voting Power, Dividends, Etc.

                  (a)      Unless and until an Event of Default (as hereinafter
defined) or an event which, with the passage of time or giving of notice or both
would constitute an Event of Default, has occurred, Pledgor shall have the right
to exercise all voting, consensual and other powers of ownership pertaining to
the Pledged Property, and Pledgor shall be entitled to receive and retain

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any dividends on the Pledged Property paid in cash out of earned surplus on BSC
to the extent such dividends are reasonable in amount and paid in the ordinary
course of business. To the extent not so permitted, such sums shall be applied
to the amount owing under the Note.

                  (b)      Pledgor hereby irrevocably appoints the Chief
Executive Officer of BELL as Pledgor's proxy holder with respect to the Pledged
Property with full power and authority to vote such Pledged Property and
otherwise act with respect to such Pledged Property on behalf of Pledgor,
provided that this proxy shall be operative only upon an Event of Default. This
Proxy shall be irrevocable for so long as any of the Obligations remain in
existence, and shall be coupled with an interest. If any Event of Default shall
have occurred, then whether or not any holder of the Note, or the Obligations,
exercises any available options to declare the Note or the Obligations due and
payable or seeks or pursues any other relief or remedy available to such holder
under this pledge Agreement or Obligations:

                           (i)     The Chief Executive Officer of BELL, or his
nominee or nominees, shall forthwith, without further action on the part of any
person, have the sole and exclusive right to exercise the proxy granted above
and all voting, consensual and other powers of ownership pertaining to the
Pledged Property and shall exercise such powers in such manner as such person,
in his sole reasonable discretion, shall determine to be necessary, appropriate
or advisable, and, if BELL shall so request in writing, Pledgor agrees to
execute and deliver to BELL such other and additional powers, authorizations,
proxies, dividends and such other documents as BELL may reasonably request to
secure to BELL the rights, powers and authorities intended to be conferred upon
BELL by this Subsection (b); and

                           (ii)    All dividends and other distribution on the
Pledged Property shall be deposited in a sinking fund to be established for the
benefit of BELL, and, if BELL shall so request in writing, Pledgor agrees to
execute and deliver to BELL appropriate additional dividend, distribution and
other orders and documents to that end.

         3.       Sale of Pledged Property After an Event of Default.

         If any Event of Default shall have occurred, then, unless the Note and
the Obligations shall have been paid in full at or before the time BELL gives
Pledgor the notice provided for in Subsection (a) of this Section 3 or at or
before the time the suit provided for in Subsection (b) of this Section 3 shall
be begun, BELL may, in its sole discretion, without further demand,
advertisement or notice, except as expressly provided for in Subsection (a) of
this Section 3, (i) apply the cash, if any, then held by it as collateral
hereunder, for the purposes and in the manner provided in Section 4 hereof, and
(ii) if there shall be no such cash or the cash so applied shall be insufficient
to make in full all payments provided in Subsections (a) and (b) of Sections 4
hereof:

                           (a)     Sell the Pledged Property, or any part
thereof, in one or more sales, at public or private sale, conducted by an
officer or agent or auctioneer or attorney for, BELL, at BELL's place of
business or elsewhere, for cash, upon credit or future deliver, and at such
price or prices as BELL shall, in its sole discretion, determine, and BELL may
be the purchaser of any or all of the pledged Property so sold and shall hold
the same thereafter in its own right, free from any claims of Pledgor or any
right of redemption of Pledgor. Upon any such sale BELL shall have the right to
deliver, assign and transfer to the purchaser thereof the Pledged Property

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so sold. Each purchaser (including BELL) at any such sale shall hold the Pledged
Property so sold including, without limitation, any equity or right of
redemption of the Pledgor, which the Pledgor hereby specifically waives, to the
extent he may lawfully do so, and all rights of redemption, stay or appraisal
which he has or may have under any rule of law of statute now existing or
hereafter adopted. BELL shall give the Pledgor at least five (5) days written
notice, in case of public or private sale. Any such public sale shall be held at
such time or times within ordinary business hours as BELL shall fix in the
notice of such sale. At any such sale the Pledged Property may be sold in one
lot as an entity or in separate parcels. BELL shall not be obligated to make any
sale pursuant to any notice. BELL may, without notice or publication, adjourn
any public or private sale from time to time by announcement at the time and
place fixed for such sale, or any adjournment thereof, and any such sale may be
made at any time or place to which the same may be so adjourned without further
notice or publication. In case of any sale of all or any part of the Pledged
Property for credit or for future delivery, the Pledged Property so sold may be
retained by BELL until the selling price is paid by the purchaser thereof, but
BELL shall not incur any liability in case of the failure of such purchaser to
take up and pay for the Pledged Property so sold, and in case of any such
failure, such Pledged Property may again be sold under and pursuant tot he
provisions hereof, or

                           (b)     Proceed by a suit or suits at law or in
equity to foreclose upon this Agreement and sell the Pledged Property, or any
portion therefor, under a judgment or decree of a court or courts of competent
jurisdiction.

         This Chief Executive Officer of BELL, as attorney-in-fact pursuant to
Section 5 hereof may, in the name and stead of Pledgor, make and execute all
conveyances, assignments and transfers of the Pledged Property sold pursuant to
Subsection (a) or (b) of this Section 3. Pledgor shall, if so requested by BELL,
ratify and confirm any sale or sales by executing and delivery to BELL or to
such purchaser or purchasers all such instruments as may, in the sole judgment
of BELL, be advisable.

         4.       Application of Proceeds.

         If an Event of Default exists, the proceeds of any sale, or of
collection, of all or any party of the Pledged Property shall be applied by
BELL, without any marshaling of assets, in the following order:

                  (a)      first, the payment of all of the costs and expenses
of such sale, including, without limitation, reasonable compensation to BELL and
its agents, attorneys and counsel, and all other reasonable expenses,
liabilities and advances made or incurred by BELL in connection therewith; and

                  (b)      second to the payment of the principal of and
premium, if any, and interest on the Note, and all obligations of the Pledgor
under the Note and this Agreement and then to pay any other Obligations; and

                  (c)      finally, to the payment of Pledgor, her successors or
assigns, or their respective heirs, executors or administrators, or to
whomsoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, or any surplus remaining

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from such proceeds after payments of the character referred to in Subsections
(a) and (b) of this Section 4 shall have been made.

         5.       Chief Executive Officer of BELL Appointed Attorney-in-Fact;
Indemnity.

         Upon an Event of Default, the Chief Executive Officer of BELL, his
successors and assigns, is hereby appointed attorney-in-fact, with full power of
substitution, of Pledgor for the purpose of carrying out the provisions of the
Pledge Agreement and taking any action and executing any instruments which such
attorney-in-fact may deem necessary or advisable to accomplish the purposes
hereof, which appointment as attorney-in-fact is irrevocable and coupled with an
interest. Pledgor will indemnify and save harmless such person from and against
any liability or damage which he may incur, in good faith and without gross
negligence, in the exercise and performance of any of its or his powers and
duties specifically set forth herein.

         6.       No Waiver.

         No failure on the part of BELL to exercise, and no delay on the part of
BELL in exercising, any right, power or remedy hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise by BELL of any right,
power or remedy hereunder preclude any other or further right, power or remedy.
The remedies herein provided are cumulative and are not exclusive of any
remedies provided by law or equity.

         7.       Termination of Pledge.

         When all of the Obligations, including, without limitation, the
indebtedness evidenced or secured by the Note or this Agreement, shall have been
paid in full, this Agreement shall terminate. BELL shall forthwith assign,
transfer and deliver to Pledgor or her assignees, without representation,
warranty or recourse, against appropriate receipts, all the Pledged Property, if
any, then held by him in pledge hereunder.

         8.       Representations and Warranties.

         Pledgor hereby represents and warrantees that, when the Pledged
Property is pledged hereunder:

                  (a)      Ownership of Pledged Property. Pledgor is the legal
and equitable owner of the Pledged Property free and clear of all liens,
charges, encumbrances and security interests of every kind and nature, other
than those created hereunder.

                  (b)      Authority to Pledge. Pledgor has taken all action
necessary to make this Pledge and all obligations hereunder fully enforceable
against Pledgor.

                  (c)      Continuous Security Interest. Pledgor hereby agrees
that until payment of principal, interest, and all other sums owing pursuant to
the Note in accordance with the terms thereof and performance in full of all of
the Obligations and the covenants, conditions and

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agreements to Pledgor hereunder, all rights, powers and remedies granted to BELL
hereunder shall continue to exist and may be exercised by BELL.

                  (d)      Right to Transfer. Pledgor hereby represents and
warrants that on the date of this Agreement he has the absolute right and
authority to enter into this Agreement and thereby to create in favor of BELL a
valid and binding security interest in the Pledged Property, subject to no
liens, charges, encumbrances or rights of others.

                  (e)      No Transfer, Further Encumbering, Etc. Pledgor hereby
agrees not to directly or indirectly assign, transfer, or convey or further
encumber the Pledged Property or any part thereof or interest therein without
the prior written consent of BELL.

         9.       Governing Law.

         This Agreement shall in all respects be construed and interpreted in
accordance with and governed by the laws of the State of California applicable
to agreements made and to be performed entirely in California by California
residents.

         10.      Successor and Assigns.

         This Agreement shall be binding upon and insure to the benefit of the
respective successor and assign of Pledgor and BELL, and any subsequent holder
of the Note or the Obligations.

         11.      Additional Instruments and Assurance.

         Pledgor hereby agrees, at her own expense, to execute and deliver, from
time to time, any and all further or other instruments, and to perform such acts
as BELL may reasonably request for purposes of this Agreement and to secure to
BELL, and to all persons who may from time to time be the holder of the Note or
the Obligations, the benefits of all rights, authorities and remedies conferred
upon BELL by the terms of this Agreement.

         12.      Notices.

         All notices or other communications provided for hereunder shall be in
writing (including telegraphic communication) and mailed or telegraphed or
delivered, if to Pledgor, at her address at 33822 Bridgehampton, Dana Point, CA
92629, or if to BELL at 6350 San Ignacio, San Jose, CA 95119, ATTN: Chief
Financial Officer, or, as to each party, at such other address as shall be
designated by such party in a written notice to the other party, complying with
the foregoing terms. All such notices and communications shall, when mailed or
telegraphed, be effective when deposited in the United States mail, postage
prepaid, certified, registered or express, return receipt requested, or
delivered to the telegraph company or overnight courier, charges prepaid,
respectively, addressed as aforesaid.

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         13.      Entire Agreement.

         This Amended and Restated Collateral Pledge Agreement amends and
restates in its entirety Collateral Pledge Agreement dated April 17, 2000.

         14.      Severability.

         In case any one or more of the provisions of this Agreement shall for
any reason be held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had not been included.

         15.      Events of Default.

         Pledgor shall be in default under this Agreement upon the occurrence of
any one of the following events (herein referred to as an "Event of Default"):

                  (a)      Default by Pledgor in the due observance or
performance of any covenant or agreement contained herein or breach by Pledgor
of any representation or warranty herein contained; or

                  (b)      any default by Pledgor in the payment or performance
when due of any of the Obligations, including, without limitation, the payment
of the principal of, or interest on, any indebtedness of Pledgor to BELL, as set
forth in the Note; or

                  (c)      The occurrence of any Event of Default under the
provisions of the Note, and any other instrument, document or agreement security
the indebtedness evidenced by the Note.

         16.      Heading.

         The headings of the Sections of this Agreement have been inserted for
convenience of reference only and shall in no way affect the construction or
interpretation of this Agreement.

                            [SIGNATURE PAGE FOLLOWS]

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         IN WITNESS WHEREOF, the parties have entered into this Amended and
Restated Collateral Pledge Agreement as of the date first above written.

                                               PLEDGOR:

                                               /s/ Mary George
                                               ---------------------------------
                                               Mary George

                                               BELL SPORTS, INC.

                                               By:   /s/ Richard S Willis
                                                   -----------------------------
                                               Name:     Richard S Willis
                                               Title:    President & CEO<PAGE>   1

                                                                    EXHIBIT 10.5

                              EMPLOYMENT AGREEMENT

        THIS EMPLOYMENT AGREEMENT, dated as of August 11, 2000 and effective as
of and simultaneous with the Merger (the "Effective Date"), is among RICHARD S.
WILLIS (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,
producing, distributing, marketing, advertising and selling bicycle helmets,
bicycle accessories and related products;

        WHEREAS, pursuant to an Agreement and Plan of Recapitalization (the
"Recapitalization Agreement") among the Company, Bell Sports Holdings, LL.C., a
Delaware limited liability company and Andsonica Acquisition Corp., a Delaware
corporation ("Newco"), Newco will merge with and into the Company and the
Company will continue as the surviving corporation (the "Merger");

        WHEREAS, the Executive currently serves as the Executive Vice President
and Chief Operating Officer of the Company pursuant to the terms of a letter
agreement dated May 25, 1999, as amended (the "Prior Employment Letter");

        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 terminate the Prior
Employment Letter and enter into this Agreement in substitution thereof 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 the Effective Date and shall continue until the fourth
anniversary of the Effective Date (the "Term"), unless earlier terminated
pursuant to Section 4 hereof, provided, that, this Agreement shall automatically
be renewed for successive additional one year terms unless terminated by either
party on not less than 180 days written notice prior to such next renewal date.
As used herein, the term "Employment Period" shall mean the period from the
Effective Date until the earlier to occur of (i) the expiration of the Term or
(ii) the earlier termination of the Executive's employment hereunder pursuant to
Section 4 hereof. Notwithstanding any other provision contained herein, this
Agreement shall not become effective and will have no force or effect unless the
Merger shall occur as contemplated by the Recapitalization Agreement.

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        2.  Position; Duties; Responsibilities.

            2.1    Position; Duties. The Company shall employ the Executive as
the President and Chief Executive Officer of the Company. The Executive shall
faithfully and loyally perform to the best of his abilities all the duties
reasonably assigned to him by the Chairman and the Board of Directors of the
Company (the "Board"), 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 his 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
Sections 7 and 8 hereof and do not interfere with his duties hereunder. Current
activities of the Executive are listed on Schedule 2.1 hereto.

            2.2    Responsibilities.  The Executive shall have such
responsibilities as are consistent and customary with his position.

            2.3    Directorship. The Company shall take all actions reasonably
necessary to elect the Executive to the Board and to maintain the Executive's
position as a director during the Employment Period. At the request of the
Board, upon his termination of employment with the Company for any reason, the
Executive shall resign as a member of the Board and as an officer of the Company
and shall resign from any other position he may have with the Company or any of
its affiliates.

            2.4    Relocation. The Executive acknowledges that the Company
intends to relocate its headquarters operations to Dallas, Texas; that the
Executive will accordingly relocate his principal residence to Dallas and that
the Executive will assist in the relocation process.

        3.  Compensation.

            3.1    Base Salary. During the Employment Period, the Company shall
pay to the Executive an annual base salary at the rate of $400,000 per annum,
payable in accordance with the Company's executive payroll policy. Such base
salary shall be reviewed annually at the beginning of each Fiscal Year (as
defined below) and may be increased (but shall not be decreased), in the sole
discretion of the Board. The Executive's base salary, as such base salary may be
increased annually hereunder, is referred to herein as the "Base Salary."

            3.2    Annual Performance Bonus.

                   (a)    Beginning on July 1, 2000, for each fiscal year (July
1 through June 30) during the Employment Period (each, a "Fiscal Year"), the
Executive shall be eligible to receive, in addition to Base Salary, a bonus (the
"Bonus") for services rendered during each such Fiscal Year in accordance with
this Section 3.2. The Bonus shall be paid as a percent of Base Salary, based
upon the achievements of Target EBITDA, as provided in accordance with the
following table:

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<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
                  PERCENTAGE                        PERCENTAGE OF
               OF TARGET EBITDA                SALARY BONUS ELIGIBILITY
--------------------------------------------------------------------------------

<S>            <C>                             <C>
                      90%                                 50%
--------------------------------------------------------------------------------
                     100%                                100%
--------------------------------------------------------------------------------
                 110% or More                            150%
--------------------------------------------------------------------------------

</TABLE>

In accordance with the above table, if EBITDA achieved for any calendar year
exceeds 90% Target EBITDA, but is less than 100% Target EBITDA, the Bonus shall
be such percentage of Base Salary between 50% and 100%, calculated on a
straight-line basis, as corresponds to the relative achievement of EBITDA, with
50% corresponding to 90% Target EBITDA and 100% corresponding to 100% Target
EBITDA. If EBITDA achieved for any calendar year exceeds 100% Target EBITDA, but
is less than 110% Target EBITDA, the Bonus shall be such percentage of Base
Salary between 100% and 150%, calculated on a straight-line basis, as
corresponds to the relative achievement of EBITDA, with 100% corresponding to
100% Target EBITDA and 150% corresponding to 110% Target EBITDA.

                   (b)    Notwithstanding anything in this Agreement to the
contrary, for the Fiscal Year ending on June 30, 2000, the Executive shall be
paid a bonus in accordance with the Fiscal Year 2000 Plan. The Fiscal Year 2000
Bonus shall be paid to the Executive at such time as bonuses are paid to
executives of the Company generally for Fiscal Year 2000, but in no event later
than August 31, 2000.

                   (c)    Target EBITDA for the Fiscal Year ending June 30, 2001
shall be $50,000,000. Target EBITDA for Fiscal Years after Fiscal Year 2001
shall be established annually by the Board. In the event of an acquisition,
disposition or other similar extraordinary corporate event which would
significantly alter the Target EBITDA established for such Fiscal Year, the
parties shall negotiate in good faith to set new levels of Target EBITDA.

                   (d)    "EBITDA" shall be calculated in accordance with
generally accepted accounting principles.

                   (e)    Each Bonus to which the Executive becomes entitled
other than the Fiscal Year 2000 Bonus, shall be paid 30 days following the
rendering of audited financial statements for the relevant Fiscal Year (the
"Payment Date"). For the avoidance of doubt, the Executive shall only be
entitled to receive the Bonus for any Fiscal Year if he was employed by the
Company on the last day of such Fiscal Year.

            3.3    Stock Options. Upon the Effective Date or as soon as
administratively feasible thereafter, the Company shall grant the Executive
options to purchase a number of shares of common equity of the Company equal to
20% of the Management Option Pool, which Management Option Pool the Company
represents and warrants shall equal not less than 15% of

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the issued and outstanding shares of common equity as of the Effective Date (the
"Awarded Options").

            3.4    Perquisites. During the Employment Period, the Company shall
pay for the Executive's entire monthly or annual car payment (whether pursuant
to a lease or otherwise) and insurance for one automobile. Such payments shall
be made directly by the Company to the applicable payee. In addition, the
Executive shall be entitled to the use of such automobile and reimbursement by
the Company for all expenses arising in connection with the use thereof
(including without limitation gas and required maintenance) relating to the
operation thereof in the performance of his duties for the Company.

            3.5    Reimbursement of Expenses. During the Employment Period, the
Company shall reimburse the Executive for all expenses reasonably incurred by
him 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.

            3.6    Vacation. During the Employment Period, the Executive shall
be entitled to six weeks of paid vacation and sick leave in accordance with
Company policy.

            3.7    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, in
accordance with the general eligibility criteria therein. In addition, the
Executive shall be reimbursed for all medical and dental expenses (including the
payment of any premiums and any taxes incurred by the Executive as a result of
receiving the foregoing benefits) that are not covered under the medical and
dental plans otherwise covering the Executive.

        4.  Termination.

            4.1    Death. Upon the death of the Executive, the Employment Period
shall automatically terminate and all rights of the Executive and his heirs,
executors and administrators to compensation and other benefits hereunder shall
cease, except for (i) Base Salary accrued to the date of death, (ii) all of the
Bonus to which the Executive would have been entitled under Section 3.2 hereof
for the year in which such termination occurred as though the Executive were
still employed on the Payment Date with respect to such year, pro-rated to the
date of termination ("Prorated Bonus") (iii) any rights the Executive may have
with respect to Holding Company equity, whether under compensation plans or
otherwise, and (iv) rights to indemnification under Section 6 hereof (clauses
(i) through (iv), collectively, the "Accrued Benefits").

            4.2    Disability. The Company may, at its option, terminate the
Employment Period 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 him 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 for the

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Accrued Benefits. 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 Board and the third to be selected by such two designated
physicians. For this purpose, the Executive shall submit to appropriate medical
examinations reasonably necessary to determine his capacity to perform the
services required to be performed by him hereunder.

            4.3    Cause.

                   (a)    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 4.3(a). The Executive shall be given written
notice by the Board of the intention to terminate his 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 (or such longer period not to exceed 30 days as would be
reasonably required for the Executive to cure such action or inaction) 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.

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

                          (i)    the Executive's refusal to perform specific
            directives of the Board which are consistent with the scope and
            nature of the Executive's duties and responsibilities as set forth
            herein or his continued failure to substantially perform his
            duties hereunder;

                          (ii)   the Executive's admission, plea of no contest
            or conviction of a felony or of any crime involving fraud,
            embezzlement, theft or misrepresentation or material dishonesty in
            the performance of his duties;

                          (iii)  any gross or willful misconduct of the
            Executive resulting in substantial economic loss to the Company or
            substantial damage to the Company's reputation;

                         (iv)    any material breach by the Executive of any one
            or more of the covenants contained in Section 7 or 8 hereof, other
            than an inadvertent and unintentional breach of a covenant
            contained in Section 7 or 8 having an immaterial effect upon the
            Company or any of its controlled affiliates; or

                         (v)     any material breach by the Executive of any
            other material terms of this Agreement.

                   (c)    The exercise of the right of the Company to terminate
this Agreement pursuant to this Section 4.3 shall not abrogate the rights or
remedies of the Company in respect of the breach giving rise to such
termination.

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

                         (i)     accrued Base Salary through the date of the
termination of his employment;

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

                         (iii)   any amounts owing but not yet paid pursuant to
            Sections 3.4, 3.5, 3.6 and 3.7; and

                         (iv)    other or additional benefits in accordance with
applicable plans and programs of the Company and his rights to indemnification
under Section 6 hereof.

                   (e)   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 he would have received had his employment been
terminated by the Company without Cause.

            4.4    Termination Without Cause. If the Board terminates the
employment of the Executive hereunder for any reason other than a reason set
forth in Section 4.1, 4.2 or 4.3 or the Company notifies the Executive of
non-renewal of this Agreement with respect to any period prior to the fifth
anniversary of the Effective Date hereof:

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

                   (b)   concurrent with such termination, the Company shall pay
to the Executive an amount equal to any Base Salary accrued but unpaid through
the termination date, and when Bonuses are otherwise payable, the Prorated
Bonus;

                   (c)   the Company shall continue to pay the Executive his
Base Salary for a period of 18 months following the date of termination;

                   (d)   the Company shall maintain in full force and effect,
for the continued benefit of the Executive for a period of 18 months following
the date of termination, the medical, hospitalization, dental, and life
insurance programs in which the Executive was participating immediately prior to
the date of termination at the level in effect and upon substantially the same
terms and conditions (including without limitation contributions required by the
Executive for such benefits) as existed immediately prior to the date of
termination; provided, that, if the Executive cannot continue to participate in
the Company programs providing such benefits, the Company shall arrange to
provide the Executive with the economic equivalent of such benefits which he
otherwise would have been entitled to receive under such plans and programs
("Continued Benefits"); provided, that, such Continued Benefits shall

                                       6
<PAGE>   7

terminate on the date or dates the Executive receives substantially similar
coverage and benefits, without waiting period or pre-existing condition
limitations, under the plans and programs of a subsequent employer.

                   (e)   the Executive shall be entitled to any amounts owing
but not yet paid pursuant to Section 3.4 or 3.5; and

                   (f)   the Executive shall be entitled to his rights to
indemnification under Section 6 hereof.

            4.5    Voluntary Termination or Expiration of the Term. The
Employment Period shall terminate upon expiration of the Term or if, during the
Employment Period, the Executive voluntarily terminates his employment hereunder
for any reason whatsoever (such termination shall be effective 60 days following
written notice thereof by the Executive to the Company) and the Executive shall
be entitled to the payments specified in Section 4.3(d), it being agreed and
understood that the Executive shall be entitled to his Base Salary during the
period between the date the Executive provides such written notice to the
Company and the date on which the Executive ceases to be employed by the
Company.

            4.6    Termination for Good Reason. The Executive may terminate his
employment under this Agreement for Good Reason (as hereinafter defined) within
20 days following the occurrence of an event giving rise to Good Reason, upon
notice to the Company setting forth in reasonable detail the nature of such Good
Reason. In the event the Executive terminates this Agreement for Good Reason,
the Executive shall be entitled to the payments and benefits specified by
Sections 4.4(a) through 4.4(f). For purposes of this Agreement, "Good Reason"
shall mean, without the Executive's express written consent, the occurrence of
any one or more of the following events:

                   (a)    the material breach of this Agreement by the Company
which is not cured, if curable, within 20 days after written notice to the
Company of such breach by the Executive;

                   (b)    a material diminution of any of the Executive's
significant duties or the assignment to the Executive of any duties inconsistent
with his duties or the material impairment of the Executive's ability to
function in the positions described in Section 2.1 hereof, in each case only
after the Company shall have had an opportunity to cure (any cure to be effected
within 20 days after appropriate written notice of the basis for Good Reason is
given to the Company by the Executive);

                   (c)   any reduction in or failure to pay the Base Salary or a
material reduction of any benefit or perquisite enjoyed by the Executive or the
failure to continue the Executive's participation in any incentive compensation
plan, unless a plan providing a substantially similar economic opportunity is
substituted or all senior executives suffer a substantially similar reduction or
failure, in either case, only after the Company has been given an opportunity to
cure any such event within 20 days following the Executive's written notice to
the Company.

                                       7
<PAGE>   8

        5.  Options to Purchase.

            5.1    Call Option. Upon any termination of the employment of the
Executive other than a termination under Section 4.4 or Section 4.6, the Company
(or its designee) shall have the right to purchase and upon exercise of such
right the Executive shall have the obligation to sell, any equity interests in
the Company held by the Executive and exercisable at the time of such
termination on the following terms (the "Call Option"); it being understood that
all options and other restricted securities not exercisable at the time of such
termination of employment (in accordance with this Agreement or the attached
Option Agreement) will be terminated. Upon written notice delivered within 90
days of termination, the Company (or its designee) may purchase all or any
portion of any such equity interests in the Company then held by the applicable
the Executive at a price equal to the Fair Market Value of such securities;
provided, that, if the Executive is terminated for Cause, the price per share
shall be equal to (i) in the case of shares acquired upon exercise of stock
options, the per share exercise price and (ii) in the case of all other stock of
the Company held by the Executive, for its Fair Market Value as determined in
good faith.

            5.2    Put Right. Upon the termination of the employment of the
Executive other than a termination of employment under Section 4.3, the
Executive shall have the right to sell to the Company, and upon exercise of such
right the Company (or its designee) shall have the obligation to purchase, all
or any portion of the equity interests in the Company held by the Executive
(including without limitation equity interest acquired pursuant to Awarded
Options and equity interests of the Company purchased by the Executive), it
being understood that all options and other restricted securities not
exercisable at the time of such termination of employment (in accordance with
this Agreement or the attached Option Agreement) will be terminated at a price
equal to the Fair Market Value of such securities (the "Put Option"). Notice of
an intention to sell securities pursuant to the Put Option must be delivered to
the Company within one year of the termination of the Executive's employment.
The Company shall have no obligation to purchase any securities pursuant to this
Section 5.2 if such purchase is prohibited by or would give rise to any default
or event of default under the Company's financing documents; provided, however,
that in such circumstances the obligation to purchase securities pursuant to the
Put Option shall be extended until such time as such circumstances no longer
exist. In the event that Executive exercises his Put Option, the Company shall
not thereafter make any cash payments to repurchase equity from other employees
until Executive has received in cash in respect of the Put Option and any
promissory notes issued with respect thereto the lesser of (a) $500,000 and (b)
the full amount Executive is entitled to receive in respect of the Put Option.
In the event Executive is still owed part of the Put Option purchase price in
cash in respect of the Put Option and any promissory notes issued with respect
thereto after having received the $500,000 in cash referred to in the previous
sentence, Executive agrees that any further cash payments in respect of the Put
Option purchase price or promissory notes issued in respect thereto shall be
made pro rata with any cash payments the Company is then obligated to pay to
repurchase equity from other employees.

            5.3    Determination of Fair Market Value. For purposes of this
Section 5, the term "Fair Market Value" of any of the Company's equity
securities shall mean, as of any date, a proportionate interest in the fair
value of all of the Company's equity securities determined as of the applicable
date on the basis of a sale of all of the Company's equity securities in an arms

                                       8
<PAGE>   9

length private sale between a willing buyer and a willing seller, neither acting
under compulsion (or, in the case of an option, the fair value of the shares of
capital stock that may then be purchased upon exercise thereof minus the
exercise price applicable thereto), as initially determined by the Board in its
reasonable good faith judgment (which determination shall take into account all
relevant factors determinative of value but without any discount for lack of
liquidity, minority status or absence of control), provided that in the event
that the Executive reasonably disagrees with such determination, the Executive
shall deliver to the Board a written notice of objection within ten days after
the Board notifies the Executive of its determination of Fair Market Value, and
the Board and the Executive will negotiate in good faith to agree on such Fair
Market Value. If such agreement is not reached within 30 days after the
Executive's written notice of objection, Fair Market Value shall be determined
by an investment banker jointly selected by the Board and the Executive, which
investment banker shall submit to the Board and the Executive a report within 30
days of its engagement setting forth such determination (which determination
shall take into account all relevant factors determinative of value but without
any discount for lack of liquidity, minority status or absence of control). If
the parties are unable to agree on an investment banker within 45 days after the
Executive's written notice of objection, the investment banker shall be a
nationally recognized investment banking firm selected jointly by the investment
banker that was proposed by the Board and the investment banker that was
proposed by the Executive . The expenses of such investment banker shall be
allocated between the Company and the Executive so that the Executive's share of
such expenses shall be in the same proportion that the aggregate amount of the
amount disputed by the Executive that is unsuccessfully disputed bears to the
total amount of the amount originally disputed by the Executive and the Company
shall bear the balance of such expenses. The determination of such investment
banker as to Fair Market Value shall be final and binding upon the Company and
the Executive.

            5.4    Termination.  The provisions of this Section 5 will terminate
upon an initial public offering of the Company's equity securities.

            5.5    Payment. Payment of the purchase price in connection with any
such purchase of the stock under this Section 5 shall be in the form of cash, or
to the extent the Company is not permitted to pay cash under, or such payment
would give rise to any default or event of default under the Company's financing
documents, in the form of a promissory note. Such promissory note shall (i) be
subordinate to and consistent with provisions of any obligations of the Company
for debt for borrowed money, (ii) have a maturity of no more than five years
from the date of issuance, (iii) be payable in no more than five substantially
equal annual installments of principal and interest, with the first installment
of principal and interest to be paid no later than 12 months from the date of
issuance, and (iv) bear interest at a rate equal to the applicable federal rate
as provided for in Section 1274(d) of the Code having a maturity comparable to
that of such promissory note, plus 200 basis points (i.e. increase in annual
rate of two percentage points). In the event that the Executive is not
reasonably satisfied with the terms and conditions of such promissory note, the
Executive shall not be required to sell such Stock pursuant to this Section 5.

        6.  Indemnification. To the fullest extent permitted by applicable law,
the Executive (and his heirs, executors and administrators) shall be indemnified
by the Company and its successors and assigns for acts or failures to act which
occurred during his employment. The

                                       9
<PAGE>   10

Executive's right to indemnification shall include the right to be paid by the
Company the expenses incurred in defending any proceeding in advance of its
final disposition, provided that the Executive shall repay any advanced amounts
if it shall be ultimately determined that the Executive is not entitled to be
indemnified for such expenses under this Agreement or otherwise. The obligations
of the Company pursuant to this Section 6 shall survive the termination of the
Employment Period.

        7.  Confidentiality. The Executive acknowledges and agrees that the
unauthorized disclosure or misuse of Confidential Information (as hereinafter
defined) will cause substantial damage to the Company. The Executive shall
during the Employment Period and for two years commencing upon termination hold
in confidence any and all Confidential Information that may have come or may
come into his possession or within his knowledge concerning the products,
services, processes, businesses, suppliers, customers and clients of the Company
or its controlled affiliates. The Executive agrees that neither he nor any
person or enterprise controlled by him will for any reason directly or
indirectly, for himself or any other person, use or disclose any Confidential
Information other than in the furtherance of his duties hereunder, 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 or otherwise as required by law
or legal process. Upon termination of his employment under this Agreement, the
Executive shall promptly surrender to the Company all documents he believes
contain Confidential Information and that are within his 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 his employment was
terminated. For purposes of this Agreement, the term "Confidential Information"
shall mean any trade secrets, proprietary or confidential information,
inventions, manufacturing or industrial processes or procedures, patents,
trademarks, trade names, customer lists, service marks, service names, business
models and plans, copyrights, applications for any of the foregoing, or licenses
of other rights in respect thereof, owned or used by, or licensed to, the
Company or any of its controlled affiliates.

        8   Restricted Activities.

            8.1    Noncompetition. The Executive agrees that for two years
following the end of the Employment Period (the "Noncompete Period"), he shall
not directly engage in any manner in any activity that is directly or indirectly
competitive with the Company or any of its subsidiaries on the date of
termination of employment, and neither the Executive nor any enterprise
controlled by him will become a stockholder, co-venturer, 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 in any business then conducted
by the Company, that is in competition with the business then conducted by the
Company or any of its subsidiaries in any state in the United States or any
other country in which the Company or any of its subsidiaries has significantly
engaged in the business then conducted by the Company during the Employment
Period; 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

                                       10
<PAGE>   11

regularly traded or quoted on a national securities exchange or on an
inter-dealer quotation system.

            8.2    Non-solicitation. The Executive agrees that while he is
employed by the Company and during the Noncompete Period, neither he nor any
person or enterprise controlled by him will, directly or indirectly (i) solicit
for employment or employ any employee of the Company or any of its affiliates or
any person who was employed by the Company or any of its affiliates at any time
within one year prior to the time of the act of solicitation, (ii) in any way
cause, influence, induce, encourage or attempt to persuade any employee of the
Company or any of its affiliates or any person who was employed by the Company
or any of its affiliates at any time within one year prior to the time of such
act to terminate his employment relationship with the Company or any of its
affiliates or (iii) in any way, cause, influence, induce, encourage or attempt
to persuade any customer or vendor of the Company or any of its affiliates to
terminate or diminish its relationship or violate any agreement with any of
them.

            8.3    Relief, Reformation; Severability. The Executive acknowledges
that he has carefully read and considered all terms and conditions of this
Agreement, including the restraints imposed by Section 8 hereof. The Executive
acknowledges that there is no adequate remedy at law for a breach of this
Section 8 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 nature,
subject matter, geographic limitation, 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.

        9.  Inventions. The Executive hereby assigns to the Company his 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 him prior to
and during the term of the Employment Period (but only while employed by the
Company), which directly pertain to the Company's business (the "Intellectual
Property"). 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 and
at the Company's sole expense, 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 in respect of
the Intellectual Property.

       10.  Remedies. Each of the Company and the Executive acknowledges that
any material breach of this Agreement will cause irreparable harm to the other,
that such harm will be difficult if not impossible to ascertain, and that the
such party shall be entitled to equitable relief, including injunction, against
any actual or threatened breach hereof, without bond and

                                       11
<PAGE>   12

without liability should such relief be denied, modified or vacated. Neither the
right to obtain such relief nor the obtaining of any such relief shall be
exclusive of or preclude the Company or the Executive (as the case may be) from
any other remedy.

       11.  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 reasonably required in connection therewith.

       12.  Expenses.

           12.1    Legal. The Company will reimburse the Executive for his
reasonable out of pocket costs and expenses of obtaining independent legal
advice relating to the negotiation of this Agreement, any disputes or issues
which may arise with respect to this Agreement (including in connection with the
Executive's termination for any reason) and the Executive's related equity
participation in Holding Company, provided, that, the maximum payment under this
Section 12 shall not exceed $20,000.

           12.2    Moving. In the event that the Executive is required to
relocate in order to perform his duties hereunder, the Company shall reimburse
the Executive for all out of pocket costs and expenses of moving (including
without limitation all closing costs and expenses incurred by the Executive, the
entire cost of a full pack and a full unpack, temporary housing and any taxes
incurred by the Executive as a result of receiving the foregoing benefits), if
any are required to facilitate such relocation.

       13.  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 Company, whether by
merger, consolidation, sale of assets or similar transactions.

       14.  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 his 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 Financial Officer, or to any other address designated by any party hereto
by notice similarly given.

       15.  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.

       16.  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.

                                       12
<PAGE>   13

       17.  Validity.  The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.

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

       19.  Withholding.  All payments hereunder shall be subject to any
required withholding of Federal, state and local taxes pursuant to any
applicable law or regulation.

       20.  Section Headings.  The section headings in this Agreement are for
convenience of reference only, and they form no part of this Agreement and shall
not affect its interpretation.

       21.  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 Delaware.

       22.  Prior Agreements.  This Agreement supersedes all prior agreements
between the Executive and the Company concerning the Executive's employment with
the Company, including, without limitation, the Prior Employment Letter, and
none of such agreements shall be of any further force or effect whatsoever.

       23.  Survival. The respective rights and obligations of the parties under
this Agreement shall survive the Executive's termination of employment and the
termination of this Agreement to the extent necessary for the preservation of
such rights and obligations, including, without limitations, the rights and
obligations under Sections 5, 7, 8, 9, 10 and 23 of this Agreement.

                                    * * * * *

                                       13
<PAGE>   14

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

                                 BELL SPORTS CORP.

                                 By:   /s/  Mary J. George
                                    ------------------------------------------
                                 Name:      Mary J. George
                                 Title:     Chairman

                                 BELL SPORTS, INC.

                                 By:   /s/  Mary J. George
                                    ------------------------------------------
                                 Name:      Mary J. George
                                 Title:     Chairman

                                 EXECUTIVE:

                                            /s/  Richard S Willis
                                 ---------------------------------------------
                                             Richard S Willis

                                       14

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