EXHIBIT 10.12


                   SAUCONY, INC. NON QUALIFIED RETIREMENT PLAN

                                2000 Restatement

                                    ARTICLE 1

                    NAME, PURPOSE AND EFFECTIVE DATE OF PLAN

1.01 Name of Plan. This Plan shall be known as the "Saucony,  Inc. Non Qualified
     Retirement Plan" (the "Plan").

1.02 Purpose.  This Plan is intended to provide retirement and death benefits to
     certain  management or highly compensated  employees of Saucony,  Inc. (the
     "Corporation"). This Plan is intended to be an unfunded Plan, maintained by
     the   Corporation   primarily   for  the  purpose  of  providing   deferred
     compensation  to a select  group of its  management  or highly  compensated
     employees described in 29 U.S.C.  Section 1051(2) and shall be operated and
     construed accordingly.

1.03 Plan Effective Date. The Effective Date of this Plan is April 12, 1996. The
     Effective Date of this 2000 Restatement is January 1, 2000.

                                   ARTICLE II

                                   DEFINITIONS

2.01 "Deferred  Compensation" shall mean compensation of a Participant which the
     Participant  shall have elected to defer in accordance with Section 3.01 of
     this Plan.

2.02 "Matching  Credits" means credits made by the Corporation that are based on
     the deferrals of Particpants.

2.03 "Non  Qualified  Plan  Committee"  shall mean the committee  established to
     administer this Plan in accordance with Article IV.

2.04 "Participant"  means any employee of the Corporation whose participation in
     this Plan is approved by the Board of  Directors  of the  Corporation.  The
     Plan  Participants  as of  December 1, 1995 are listed in Exhibit A. Others
     may be added when approved by the Board of Directors of the Corporation.

                                   ARTICLE III

                                    BENEFITS

3.01 Deferral Elections. Prior to the close of each calendar year, a Participant
     may elect to have up to 15% of the Participant's  regular  compensation and
     all or any portion of a bonus or other  nonregular  compensation  otherwise
     payable in the following calendar year deferred until after the termination
     of the Participant's  employment;  except,  that in the case of the initial
     Plan  year  or  the  first  Plan  year  in  which  an  employee  becomes  a
     Participant,  a Participant may make a deferral  election  pursuant to this
     Section 3.01 with respect to compensation earned in periods beginning after
     the election is made;  such special  elections  must be made within  thirty
     (30) days after the first day of the initial  Plan year or the first day of
     having been designated a Participant,  respectively. An election made under
     this Section 3.01 shall be irrevocable after the close of the calendar year
     in which such election is made,  except for  elections  made in the initial
     Plan year or the first Plan year in which an employee becomes a Participant
     which shall be  irrevocable  when made. An election made under this Section
     3.01 shall remain in effect until  modified or revoked by the  Participant.
     Any  modification  or revocation  shall only apply to  subsequent  calendar
     years.

3.02 Credits by Corporation. The Corporation may make credits including Matching
     Credits, to the Plan.

3.03 Accounts of  Participants.  Whenever a Participant  first makes an election
     pursuant to Section 3.01, there shall be established for such Participant a
     Deferred  Compensation Account to which there shall be credited the amounts
     of all Deferred Compensation, any Matching Credits and other credits by the
     Corporation,   and  the  amounts  of  all  investment  return   equivalents
     attributable  to such  Deferred  Compensation  and any Matching  Credits or
     other credits granted or credited to such Participant.

3.04 Method of Payment of Deferred  Compensation and Other Credits. That portion
     of the Deferred Compensation Account that is payable as provided in Section
     3.05 after termination of the  Participant's  employment shall be paid in a
     single payment.  Any election by a Participant as to the time of payment of
     his Deferred  Compensation  may be changed by such  Participant at any time
     prior to December 31 of the year preceding the calendar year of termination
     of the  Participant's  employment.  Each  Participant  who has at any  time
     elected to defer compensation under Section 3.01 shall at all times have on
     file with the Non Qualified Plan Committee the Participant's election as to
     the time of payment of his or her Deferred Compensation. If any Participant
     does  not  have  such an  election  on file  with  the Non  Qualified  Plan
     Committee, the Participant's Deferred Compensation Account shall be paid in
     one sum within 60 days of termination.  At its discretion,  the Corporation
     may direct that  payment of benefits  be made by any Trust  established  to
     provide a source for payments under this Plan.

3.05 Termination  of Employment  and Disability  Benefits.  Upon  termination of
     employment or earlier retirement due to total and permanent  disability,  a
     Participant shall receive his or her Deferred  Compensation Account balance
     in a lump sum within 60 days of  termination  unless he has elected a later
     payment.

3.06 Death  Benefits.  Upon the death of a Participant  who had not yet received
     any  payments  under this Plan,  the  unpaid  balance of the  Participant's
     Deferred  Compensation  Account  shall  be  paid  to  the  estate  of  such
     Participant,  or, if any such deceased  Participant shall have designated a
     beneficiary or beneficiaries  pursuant to Section 7.05, to such beneficiary
     or  beneficiaries,  as  promptly  as  practicable  after  the death of such
     Participant.

3.07 Acceleration of Payments. Notwithstanding any other provision in this Plan,
     if at  any  time  the  Non  Qualified  Plan  Committee  believes  that  any
     Participant  may not be considered by the Department of Labor or a court of
     competent   jurisdiction   to  be  a  member  of  a  select  group  of  the
     Corporation's  management or highly  compensated  employees (as those terms
     are used in 29 U.S.C.  Section 1051(2) and related  provisions),  or that a
     Participant  or  beneficiary  will  recognize  income  for state or federal
     income tax purposes with respect to Plan benefits not then payable, the Non
     Qualified Plan Committee shall  communicate  such belief to the Corporation
     and shall follow the Corporation's  direction as to whether the benefits of
     such a  Participant  or  beneficiary  should  be  paid in a  single  sum or
     otherwise prior to the time they would otherwise be payable.

3.08 Hardship Withdrawals. At the written request of a Participant, the Board of
     Directors  of the  Corporation  may permit the  Participant  to withdraw an
     amount from the Participant's  account only to the extent reasonably needed
     to  satisfy  an  unforeseeable  emergency.  The Board of  Directors  of the
     Corporation  shall  determine  a  Participant's   eligibility  for  such  a
     withdrawal on a case-by-case basis, but, in any case, no withdrawal will be
     permitted if the withdrawal  would cause the  undistributed  balance in the
     Participant's  account  to  become  currently  taxable.  An  "unforeseeable
     emergency"  means severe  financial  hardship to the Participant  resulting
     from a sudden and unexpected illness or accident of the Participant or of a
     dependent  (as defined in Section  152(a) of the  Internal  Revenue Code of
     1986)  of the  Participant,  loss  of  the  Participant's  property  due to
     casualty,  or other similar  extraordinary and unforeseeable  circumstances
     arising as a result of events  beyond the control of the  Participant.  The
     circumstances  that will constitute an unforeseeable  emergency will depend
     upon the facts of each case but in any case, payment may not be made to the
     extent that such hardship is or may be relieved:

     (i)  Through reimbursement or compensation by insurance or otherwise,

     (ii) By  liquidation  of  the  Participant's  assets,  to  the  extent  the
          liquidation  of such assets would not itself  cause  severe  financial
          hardship, or

     (iii) By cessation of deferrals under the Plan.

          Examples of what are not  considered to be  unforeseeable  emergencies
          include  the  need to send a  Participant's  child to  college  or the
          desire to purchase a home.

                                   ARTICLE IV

                               PLAN ADMINISTRATION

4.01 Plan Administrator: Power and Authority. This Plan shall be administered by
     the Saucony,  Inc.,  Non  Qualified  Retirement  Plan  Committee  (the "Non
     Qualified Plan Committee") as named by the Corporation.  Members of the Non
     Qualified  Plan  Committee  may not  include  employees  or officers of the
     Corporation  who are  covered by this Plan or family  members  thereof  (as
     defined in Code Section 4975(e)(6)). The Non Qualified Plan Committee shall
     have full power and authority to construe,  interpret and  administer  this
     Plan and shall have total discretion to fulfill their  responsibilities  as
     they see fit on a  uniform  and  consistent  basis  and as they  believe  a
     prudent  person  acting in a like  capacity and familiar  with such matters
     would  do. In the  administration  of this  Plan,  the Non  Qualified  Plan
     Committee  may, from time to time,  employ agents and delegate to them such
     administrative  duties  as it sees fit and from time to time  consult  with
     counsel who may be counsel to the Corporation.

4.02 Non  Qualified  Plan  Committee  to Act by  Majority  Vote,  etc.  The  Non
     Qualified  Plan  Committee  shall act by majority vote of all members.  All
     actions, determinations, interpretations and decisions of the Non Qualified
     Plan Committee with respect to any matter within its  jurisdiction  will be
     conclusive and binding on all persons.

4.03 Records and Reports of the Non Qualified Plan Committee.  The Non Qualified
     Plan Committee  shall keep a record of all of its proceedings and acts, and
     shall  keep all such  books of  account,  records  and other data as may be
     necessary for the proper administration of the Plan.

4.04 Costs  and   Expenses  of   Administration.   All  expenses  and  costs  of
     administering  the Plan shall be paid by the  Corporation,  unless deducted
     from any  assets  owned by any  Trust  described  in  Section  7.03,  which
     deductions  shall  be  limited  to  those  expenses  and  costs  reasonably
     necessary to administer the Plan.

                                    ARTICLE V

                                CLAIMS PROCEDURES

5.01 Claims for  Benefits.  Claims for  benefits  under the Plan must be made in
     writing  to  the  Non  Qualified  Plan  Committee.  For  purposes  of  this
     procedure, "claim" means a request for a Plan benefit by a Participant or a
     beneficiary  of  a  Participant.   If  the  basis  of  the  claim  includes
     documentation  not a part of the records of the Plan or of the Corporation,
     all such documentation must be included with the claim.

5.02 Notice of Denial of Claim.  If a claim is wholly or partially  denied,  the
     Non Qualified Plan Committee shall notify the claimant of the denial of the
     claim within a reasonable  period of time.  Such notice of denial (i) shall
     be  in  writing,  (ii)  shall  be  written  in a  manner  calculated  to be
     understood by the claimant, and (iii) shall contain (a) the specific reason
     or reasons  for the denial of the claim,  (b) a specific  reference  to the
     pertinent Plan provisions upon which the denial is based, (c) a description
     of any  additional  material or  information  necessary for the claimant to
     perfect  the claim,  along with the  explanation  of why such  material  or
     information is necessary,  and (d) an explanation of the Non Qualified Plan
     Committee's claim review procedure. Unless special circumstances require an
     extension  of  time  for  processing  the  claim,  the Non  Qualified  Plan
     Committee  shall  notify the  claimant of the claim denial no later than 90
     days after the Non Qualified Plan Committee's receipt of the claim. If such
     an  extension  is  required,  written  notice  of the  extension  shall  be
     furnished to the claimant  prior to the  termination  of the initial 90-day
     period.  In no event shall such  extension  exceed a period of 90 days from
     the end of such initial  period.  The extension  notice shall  indicate the
     special circumstances requiring the extension of time and the date by which
     the Non Qualified Plan Committee expects to render the final decision.

5.03 Request  for Review of Denial of Claim.  Within 120 days of the  receipt by
     the  claimant of the written  notice of denial of the claim or if the claim
     has not been granted  within a reasonable  period of time,  the claimant or
     his or her duly authorized  representative  may file a written request with
     the Non Qualified  Plan  Committee to conduct a full and fair review of the
     denial  of the  claimant's  claim  for  benefits.  In  connection  with the
     claimant's appeal of the denial of his or her benefits, the claimant or his
     or her duly authorized  representative  may review pertinent  documents and
     may submit issues and comments in writing.

5.04 Decision on Review of Denial of Claim.  The Non  Qualified  Plan  Committee
     shall deliver to the claimant a written decision on the claim promptly, but
     not later than 60 days  after the  receipt of the  claimant's  request  for
     review,  except that if there are special  circumstances  which  require an
     extension  of time for  processing,  the  aforesaid  60-day  period  may be
     extended to 120 days by written  notice  delivered to the claimant prior to
     the  expiration of the initial  60-day  period.  Such decision shall (i) be
     written in a manner  calculated  to be  understood  by the  claimant,  (ii)
     include  specific  reasons for the  decision,  and (iii)  contain  specific
     references  to the  pertinent  Plan  provisions  upon which the decision is
     based.  Notwithstanding any provisions  elsewhere to the contrary,  the Non
     Qualified Plan Committee  shall have total  discretion to make decisions as
     they see fit on a uniform and consistent  basis,  as they believe a prudent
     person acting in a like capacity and familiar with such matters would do.

5.05 Communication  of  Decisions.   The  Non  Qualified  Plan  Committee  shall
     communicate  all claims and benefit  decisions to the  Corporation  and any
     Trust established to provide a source for payments under this Plan.

                                   ARTICLE VI

                            AMENDMENT AND TERMINATION


6.01 Right to Amend,  Suspend or  Terminate  Plan.  The Saucony,  Inc.  Board of
     Directors reserves the right to amend, suspend or terminate the Plan at any
     time or from time to time, in whole or in part,  without the consent of any
     Participant,  Participant's spouse or other beneficiary. Provided, however,
     that no such amendment,  suspension or termination  shall affect the rights
     of Participants or their spouses or beneficiaries  whose Plan benefits were
     then in pay status,  nor shall such action  reduce or  otherwise  adversely
     affect the benefit accrued as of that date.


                                   ARTICLE VII

                                  MISCELLANEOUS

7.01 Protection of Employee Interest. To the extent permitted by law, the rights
     of any Participant or  beneficiary,  and such benefit or payment under this
     Plan shall not be subject to  attachment  or other  legal  process  for the
     debts of such Participant, or beneficiary and such benefit or payment shall
     not be subject to anticipation,  alienation, sale, transfer,  assignment or
     encumbrance.

7.02 Plan Does Not Create or Modify  Employment  Rights.  This plan shall not be
     constructed as creating or modifying any contract of employment between the
     Corporation  and any  Participant.  All  Participants  shall be  subject to
     discharge  to the same  extent  that they  would have been of this Plan had
     never been adopted.

7.03 Unfunded Plan; No Fiduciary  Relationship Created. This Plan is intended to
     be an unfunded  plan.  Nothing  contained in this Plan, and no action taken
     pursuant to the  provisions  of this Plan,  shall create or be construed to
     create  a trust  of any  kind,  or a  fiduciary  relationship  between  the
     Corporation and any Plan Participant,  beneficiary or any other person. Any
     funds which may be invested by the  Corporation to make  provisions for its
     obligations hereunder,  including any assets owned by any Trust established
     to provide a source of benefits  under this Plan,  shall  continue  for all
     purposes to be a part of the  general  funds of the  Corporation  until and
     except for amounts  actually  paid to  Participants  or  Beneficiaries.  No
     person other than the Corporation shall by virtue of the provisions of this
     Plan  have any  interest  in such  funds.  To the  extent  that any  person
     acquires a right to receive payments from the Corporation  under this Plan,
     such right  shall be no greater  than the rights of any  unsecured  general
     creditor of the Corporation.

7.04 Deemed Investment.  The Non Qualified Plan Committee shall designate one or
     more investments in which each Participant's  Deferred Compensation Account
     may be deemed to be invested.  A  Participant  may from time to time select
     one  or  more  such  investments  in  which  the   Participant's   Deferred
     Compensation  Account  shall  be  deemed  to  be  invested.   The  Deferred
     Compensation  Account of each Participant shall be credited with the amount
     the Deferred Compensation Account would have earned if it had actually been
     invested in the investment or investments selected by the Participant.  The
     deemed  investment  return  shall be credited to a  Participant's  Deferred
     Compensation Account at the close of each calendar year, until benefits are
     completed  under Section 3.05 of this Plan. Any amount(s)  withdrawn from a
     Participant's  Deferred  Compensation  Account  before the close of a given
     calendar year shall be credited with the deemed  investment  return for the
     amount of time during the calendar year that said the  amount(s)  have been
     credited to the Participant's  Deferred  Compensation  Account.  Nothing in
     this Section 7.04 shall be construed to require the  Corporation to acquire
     or  provide  any  of  the  investments  selected  by  a  Participant.   Any
     investments made by the Corporation shall be made solely in the name of the
     Corporation and shall remain the property of the Corporation.

7.05 Designation of Beneficiary. Each Participant may designate a beneficiary or
     beneficiaries and may change such designation from time to time by filing a
     written  designation  with the Non Qualified Plan Committee on a form to be
     prescribed  by it,  provided  that no such  designation  shall be effective
     unless so filed and accepted by the Non Qualified Plan  Committee  prior to
     the death of such Participant.

7.06 Payments to Minor or Disabled Persons.  If any person to whom any amount is
     payable  hereunder is a minor,  or if the Non Qualified  Plan  Committee is
     notified  that any person to whom such  amount is  payable  is  incompetent
     because of mental  disability,  the Non Qualified Plan Committee shall have
     the power to cause any such payment  becoming due to such person to be made
     to any other person or institution for his benefit  without  responsibility
     of the Non  Qualified  Plan  Committee  to see to the  application  of such
     payments.  Payments made pursuant to such power shall operate as a complete
     discharge of the Corporation.

7.07 Governing  Law.  All  rights  under  this  Plan  shall be  governed  by and
     construed in accordance with the laws of the  Commonwealth of Massachusetts
     to the extent they are not  preempted  by the laws of the United  States of
     America.