
<PAGE>   1
                                                                   EXHIBIT 10(g)




                                   EMPLOYMENT
                                      AND
                        DEFERRED COMPENSATION AGREEMENT



         AGREEMENT made as of February 15, 1995, by and between BELL
INDUSTRIES, INC., a Delaware corporation (hereinafter referred to as
"COMPANY"), and BRUCE M. JAFFE (hereinafter referred to as "EMPLOYEE").

         WHEREAS, EMPLOYEE is employed by the COMPANY as its President and
Chief Operating Officer and has managed such office in a capable and efficient
manner resulting in substantial profits to the COMPANY, and

         WHEREAS, it is anticipated that EMPLOYEE will be elected to, and will
assume, the office of Chief Executive Officer within the near future, and

         WHEREAS, the COMPANY desires to retain the services of EMPLOYEE and
EMPLOYEE is willing to remain in the employ of the COMPANY in accordance with
the provisions hereinafter set forth.



         IT IS THEREFORE AGREED:

1.       CONTINUATION OF EMPLOYMENT.

         EMPLOYEE shall continue in the employ of the COMPANY, and the COMPANY
shall continue to employ EMPLOYEE, as its President and either its Chief
Operating or Executive Officer until EMPLOYEE reaches age sixty-five (65), or
such later date as shall
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be mutually agreed upon; provided, however, EMPLOYEE may elect early retirement
at age sixty-two (62) pursuant to Section 3 hereof.  Without first obtaining
EMPLOYEE's written consent, the COMPANY shall not require EMPLOYEE to undertake
responsibilities not commensurate with his position as President and Chief
Operating or Executive Officer, as the case may be, nor shall he be required to
perform his duties hereunder if the performance thereof would require his
maintenance of a residence outside of the Greater Los Angeles area.  In the
event the COMPANY should violate the foregoing provisions and by reason thereof
EMPLOYEE should terminate his employment under this Agreement, such termination
shall be deemed a termination of EMPLOYEE'S employment by the COMPANY.

         EMPLOYEE agrees to devote his full business time, attention, and
energies to the performance of the business of the COMPANY, and EMPLOYEE shall
not, directly or indirectly, alone or as a member of any partnership, or as an
officer, director or employee of any other corporation, partnership or other
organization, be engaged in any other duties which interfere with the
performance of his duties hereunder, or which, even if non-interfering, are
contrary to the best interests of the COMPANY.  EMPLOYEE agrees that in the
performance of his duties hereunder he will comply with the policies and
directives of the COMPANY's Board of Directors.

2.       REGULAR COMPENSATION.
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         The COMPANY shall pay to EMPLOYEE as compensation for his services
hereunder a salary to be fixed annually by the Board of Directors, but not less
than Two Hundred Eighty-five Thousand Dollars ($285,000) per year, payable in
equal bi-weekly installments.  Additionally, EMPLOYEE shall participate in the
COMPANY's bonus program which, at the time, is made available to its principal
corporate officers.

3.       ADDITIONAL COMPENSATION.

(a)  Early Termination of Employment. 

                 (i)  In the event that employment is, or is deemed, terminated
by the COMPANY, whether or not such termination was for "cause" (as hereafter
defined), or EMPLOYEE becomes totally disabled (as hereinafter defined) and
such termination is prior to age sixty-two (62) and not pursuant to clause (v)
hereof, EMPLOYEE shall receive an amount, as termination pay, equivalent to 75%
of the amount payable to EMPLOYEE in salary and bonus (if any) during the
twelve (12) month period immediately preceding the month of termination for a
further twelve (12) month period, payable in equal bi-weekly installments,
commencing on the date of termination.  Unless employment was terminated for
"cause" after said twelve (12) month period, EMPLOYEE shall be entitled to
receive the same pay and retirement benefits, as hereinafter provided, as if
EMPLOYEE had elected early retirement at age sixty-two (62), irrespective of
EMPLOYEE'S age at the end of said twelve (12) month period, such payments to
commence immediately
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following the last of the bi-weekly installments payable pursuant to the
immediately preceding sentence.

                 (ii)  In the event that employment is, or is deemed,
terminated, whether or not for "cause", by the COMPANY or EMPLOYEE becomes
totally disabled and if such termination occurs between ages sixty-two (62) and
sixty-five (65), EMPLOYEE shall be entitled to receive the same pay and
retirement benefits, as hereinafter provided, as if EMPLOYEE had elected early
retirement at age sixty-two (62); provided, however, that the pay and
retirement benefits shall be increased upward by adding to 33-1/3% (the
percentage of average annual income EMPLOYEE is entitled to receive pursuant to
subsection (c) hereof) a number (expressed as a percentage) determined by
dividing 16-2/3 by a fraction the numerator of which is 36 and the denominator
of which is the number of months employed after age sixty-two (62).

                 (iii)  In the event that EMPLOYEE voluntarily terminates his
employment under this Agreement or his employment is terminated by the COMPANY
for "cause", before he reaches age sixty-two (62), then EMPLOYEE shall receive
no benefits until such time as he does reach age sixty-two (62); however,
thereafter, he shall receive the same pay and benefits as if he elected early
retirement at age sixty-two (62); provided however, that if employment was
terminated by the COMPANY for "cause", EMPLOYEE shall be entitled to receive
the termination payment
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described in the first sentence of paragraph (i) of this subsection (a).

                 (iv)  In the event that EMPLOYEE voluntarily terminates his
employment under this Agreement between ages sixty-two (62) and sixty-five
(65), he shall receive the same pay and benefits as if he elected early
retirement at age sixty-two (62).

                 (v)  In the event that following a Change in Control (as
hereafter defined), the COMPANY terminates EMPLOYEE'S  employment under this
Agreement other than for "cause" or EMPLOYEE terminates his employment under
this Agreement for Good Reason (as hereafter defined) and EMPLOYEE is under age
sixty-five (65), then EMPLOYEE shall receive the same benefits as if he retired
at age sixty-five (65). Such payments shall commence immediately following the
date of such termination.

                 (vi)  If EMPLOYEE'S employment is terminated under this
Agreement pursuant to clause (i), (ii) or (v), any unvested stock options held
by EMPLOYEE at the time shall become fully vested as of the date of
termination.
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         (a)  Regular Retirement.  If EMPLOYEE elects to retire at age
sixty-five (65) or at any time thereafter, the COMPANY shall pay to EMPLOYEE an
amount equivalent to fifty percent (50%) of the average of the highest three
(3) years of salary and bonus paid to EMPLOYEE during the last ten (10) years
of his employment, for the balance of EMPLOYEE'S lifetime, in equal bi-weekly
installments. A termination of EMPLOYEE'S employment by the COMPANY at any time
whether or not for "cause" after EMPLOYEE has reached age sixty-five (65) shall
be deemed an election by EMPLOYEE to retire. For all purposes of calculating
payments to EMPLOYEE under this Agreement, only years during which he was
employed will be used to determine the ten (10) year period.

         (b)  Early Retirement.  If EMPLOYEE elects to retire at age sixty-two
(62), then the COMPANY shall pay EMPLOYEE 33-1/3% of the average of the highest
three (3) years of salary and bonus paid to EMPLOYEE during the last ten (10)
years of his employment for the balance of EMPLOYEE'S lifetime in bi-weekly
installments.

         (c)  Change of Control.   For purposes of this Agreement,  a Change of
Control of the COMPANY shall be deemed to have occurred if (i) there shall be
consummated (x) any consolidation or merger of the COMPANY, other than a merger
of the COMPANY in which the holders of the COMPANY's Common Stock immediately
prior to the merger have at least seventy-five percent (75%) ownership of the
voting capital stock of the surviving corporation immediately after the merger,
or (y) any sale, lease, exchange or other
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transfer (in one transaction or a series of related transactions) of all, or
substantially all, of the assets of the COMPANY, or (ii) the stockholders of
the COMPANY approve any plan or proposal for the liquidation or dissolution of
the COMPANY, or (iii) any person (as such term is used in Section 13(d) and
14(d)(2) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of thirty percent (30%) or more of the COMPANY's
outstanding Common Stock, or (iv) during any period of two consecutive years,
individuals who at the beginning of such period constitute the entire Board of
Directors shall cease for any reason (except death) to constitute a majority
thereof unless the election, or the nomination for election by the COMPANY's
stockholders, of each new directors was approved by a vote of at least
two-thirds of the directors then still in office who were directors at the
beginning of the period.
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         (e)  Cause. For purposes of this Agreement, "cause" shall exist if any
one or more of the following should occur: EMPLOYEE'S (A) failure to perform
his duties under, or breach of, this Agreement after first having received a
written notice of such failure or breach signed by at least a majority of the
COMPANY'S Board of Directors and EMPLOYEE having not taken reasonable steps to
cure such failure or breach within thirty (30) days of his receipt of such
notice, (B) willful and knowing breach of his fiduciary duty to the Company, or
(C) conviction by a court of competent jurisdiction of a felony or other
serious crime.

         (f)  Good Reason.  For purposes of this Agreement, "Good Reason" shall
mean any of the following (done without EMPLOYEE'S express written consent):

                 (i)  the assignment to EMPLOYEE of duties inconsistent with
EMPLOYEE'S duties, responsibilities and status with the COMPANY immediately
prior to the Change in Control, or a change in EMPLOYEE'S title or office as in
effect immediately prior to the Change in Control; or

                 (ii)  a change in EMPLOYEE'S base salary, bonus participation,
benefit plans and other compensation, taken as a whole, with the result that
such compensation package is less favorable to EMPLOYEE, on an after tax basis,
than that provided to EMPLOYEE immediately prior to the Change in Control.
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Following a Change in Control, at any time after the occurrence of an event
which EMPLOYEE believes, in good faith, constitutes Good Reason, EMPLOYEE may
(but is not obligated to) give written notice to the COMPANY setting forth in
reasonable detail the facts and circumstances claimed to be a basis for
termination for Good Reason. If the COMPANY disagrees that such facts and
circumstances exist and/or do not constitute Good Reason, the COMPANY shall so
notify EMPLOYEE within thirty (30) days of the giving of such notice of Good
Reason. The COMPANY'S response shall be in writing and shall set forth in
reasonable detail the reasons why it denies EMPLOYEE'S Good Reason claim.
Failure by the COMPANY to give EMPLOYEE a responsive notice within such thirty
(30) day period shall constitute an irrevocable admission by the COMPANY that
Good Reason does exist.  If the COMPANY gives a responsive notice within such
thirty (30) day period, then the parties disagreement shall be determined by
legal proceedings, or, at the election of either party, by using the procedure
set forth in Section 9 hereof.



         (g)  Other Definitions and Assumptions.  For purposes of this
Agreement, the term "years" upon which EMPLOYEE'S retirement benefits will be
based shall mean a calendar year running from January 1 through December 31.
For purposes of this Agreement, the term "total disability" shall mean the
inability of EMPLOYEE, due to illness, accident or other physical or mental
incapacity,
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to perform his duties in a normal manner for a period of six (6) consecutive
months or for a total of twelve (12) months (whether or not consecutive) in any
twenty-four (24) month period.

4.       TERM.

         The term of employment shall be for the period beginning January 1,
1995 and ending upon EMPLOYEE attaining age sixty-five (65), or until such
later date as shall be mutually agreed upon.  Either party may terminate
EMPLOYEE'S employment under this Agreement upon thirty (30) days' written
notice. Notwithstanding the foregoing, nothing shall prevent EMPLOYEE from
electing early retirement and being entitled to receive the benefits set forth
in Section 3 hereof.

5.       RESTRICTIVE COVENANTS.

         During the term of this Agreement and thereafter so long as EMPLOYEE
is receiving the retirement benefits provided for hereunder, EMPLOYEE will not,
except as a shareholder, officer, employee or representative of the COMPANY or
any subsidiary thereof, directly or indirectly, own, manage, operate, join,
control or participate in the ownership, management, operation or control of
any business (either as a proprietor, partner, shareholder, officer, director,
agent, employee, consultant, trustee, affiliate .or otherwise), which business
shall be engaged in the manufacture, distribution and/or sale of any products
that are competitive with products presently manufactured or sold or offered
for sale by the COMPANY;
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provided, however, nothing contained herein shall be construed to prohibit
EMPLOYEE from owning, as a passive investment, up to five percent (5%) of the
outstanding stock of a publicly held company engaged in any of the
above-mentioned activities.

         Additionally, EMPLOYEE acknowledges that his employment by the COMPANY
has brought and shall continue to bring him into close contact with many
confidential affairs of the COMPANY, including information about costs,
profits, markets, sales, products, key personnel, pricing policies, operational
methods, technical processes, and other business affairs and methods and other
information not readily available to the public, as well as plans for future
development.  EMPLOYEE further acknowledges that the services to be performed
under this Agreement are of a special, unique, unusual, extraordinary and
intellectual character.  In recognition of the foregoing, EMPLOYEE hereby
agrees: (i) that he will keep secret all material confidential matters of the
COMPANY which are not otherwise in the public domain, and will not
intentionally disclose them to anyone outside of the COMPANY, either during or
after the term of this Agreement, except with the COMPANY'S prior written
consent; and (ii) that he will deliver promptly to the COMPANY upon termination
of this Agreement or at any other time as the COMPANY may so request, at its
expense, all memoranda, notes, records, reports, and other documents (and all
copies thereof) relating to
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the COMPANY'S business, however or whenever obtained, which he may then possess
or have under his control.

         If it is determined judicially or pursuant to Section 9 hereof that
EMPLOYEE has breached any provision of this Section 5 and such breach has
caused, or will likely cause, material monetary harm to the COMPANY, the
COMPANY shall have no further obligations to provide EMPLOYEE any pay or other
benefits then or thereafter due him under this Agreement, effective as of the
date of any such breach and all monies paid to EMPLOYEE pursuant to this
Agreement between the date of such breach and the date of determination shall
be returned to the COMPANY within thirty (30) days of the date of
determination.

6.       INSURANCE AND HEALTH BENEFITS.

         The COMPANY shall maintain during the term of employment and for the
period in which EMPLOYEE is entitled to receive pay and benefits pursuant to
this Agreement the life insurance and health benefits currently provided to
EMPLOYEE at a cost to EMPLOYEE not exceeding such cost as of the date of
termination of his employment.

7.       REIMBURSEMENT FOR EXPENSES.

         During the employment term of this Agreement, EMPLOYEE shall be
allowed reasonable traveling expenses and shall be furnished with an office and
accommodations suitable to the character of his position and adequate for the
performance of his duties.

8.       LEGAL FEES.
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         Promptly upon demand by EMPLOYEE, the COMPANY shall pay all legal fees
(including any reasonable retainer), costs of litigation and other expenses
incurred in good faith by EMPLOYEE as a result of the COMPANY's refusal to make
any payment to which EMPLOYEE becomes entitled under this Agreement, or as a
result of the COMPANY's contesting the validity, enforceability or
interpretation of this Agreement or of EMPLOYEE's right to benefits hereunder;
provided, however, that if the COMPANY is the prevailing party, it shall be
obligated to pay only its own attorneys' fees and costs, witness expenses and
related costs.

9.       ALTERNATIVE DISPUTE RESOLUTION. 

         Either party shall have the right and option to elect (in lieu of
litigation) to have any dispute or controversy arising under or in connection
with this Agreement settled by utilizing the procedure hereafter set forth:

         (a)  the parties shall have discussions designed to reconcile their
dispute and any resolution by them shall be final, binding and conclusive on
the parties, and

         (b)  if the parties are unable to reach a mutually satisfactory
resolution within ten (10) days following written notice by one party to the
other asserting the existence of a dispute hereunder ("Notice of Dispute"), the
parties shall within ten (10) days thereafter mutually select a retired judge
of the Superior Court for the State of California to whom they shall submit for
resolution the disputed matter(s).   If the parties do
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not agree upon such selection within such ten (10) day period, then and in such
event, EMPLOYEE, on the one hand, and the COMPANY, on the other, shall each
within ten (10) days thereafter select a retired judge of the Superior Court
for the State of California (the "Appointing Judge"). The Appointing Judges so
selected shall thereafter meet within fifteen (15) days and they in turn shall
within five (5) days thereafter mutually select a retired judge of the Superior
Court for the State of California (the "Deciding Judge") to decide such
dispute; provided that if either EMPLOYEE or the COMPANY fail to so select an
Appointing Judge, then the Appointing Judge selected by the other party shall
be and act as the Deciding Judge.  Upon such selection of the Deciding Judge,
the obligations and duties of the Appointing Judges selected by the parties
hereto shall terminate and such Deciding Judge, in a proceeding held in Los
Angeles, California, shall act to resolve the disputed item(s).  Such Deciding
Judge may resolve the disputed item(s) in any manner which he or she deems
appropriate and such determination shall be final and binding, may be entered
in any court having jurisdiction and shall not be appealable in any way.

10.      APPLICABLE LAW.

         This Agreement shall be governed by and construed in accordance with
the laws of the State of California (other than any laws of the State of
California which would require that the laws of any other jurisdiction be the
governing law).
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11.      BENEFIT.

         This Agreement shall be binding upon and shall inure to the benefit of
EMPLOYEE and his respective heirs, executors, administrators and assigns and of
the COMPANY and its successors and assigns.

12.      SEPARABILITY.

         If any term or provision of this Agreement, or the application thereof
to any person or circumstance, shall to any extent be held invalid or
unenforceable by a court of competent jurisdiction, the remainder of the
Agreement, or the application of such term or provision to persons or
circumstances other than those as to which it is held invalid or unenforceable,
shall not be affected thereby, and each term and provision of the Agreement
shall be valid and enforced to the fullest extent permitted by law.

13.      TERMINATION OF SEVERANCE COMPENSATION AGREEMENT.

         As of the date of this Agreement, the parties hereto agree that
certain Severance Compensation Agreement between the COMPANY and EMPLOYEE dated
as of October 24, 1991, as amended May 3, 1993, is terminated and of no further
force or effect.
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         IN WITNESS WHEREOF, the COMPANY has caused this Agreement to be
executed in its corporate name by its corporate officers thereunto duly
authorized and EMPLOYEE has executed this Agreement as of the day and year
first above written.



                                       BELL INDUSTRIES, INC.



                                       By:  /s/ Theodore Williams        
                                          -------------------------------------
                                          Chairman and Chief Executive
                                          Officer




                                       By:  /s/ John J. Cost             
                                          -------------------------------------
                                          Secretary



                                                                      "COMPANY"



                                           /s/ Bruce M. Jaffe            
                                         -------------------------------------- 
                                         BRUCE M. JAFFE



                                                                     "EMPLOYEE"


