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                                                         EXHIBIT 10.12

                         ARCH COMMUNICATIONS GROUP, INC.
                           DEFERRED COMPENSATION PLAN
                            FOR NONEMPLOYEE DIRECTORS

                                    ARTICLE I
                             PURPOSE; EFFECTIVE DATE

     1.1 PURPOSE.  The purpose of the Arch  Communications  Group,Inc.  Deferred
Compensation  Plan for Nonemployee  Directors is to provide current tax planning
opportunities as well as supplemental funds for retirement or death.

     1.2 EFFECTIVE DATE. The Plan is effective as of December 29, 1997 (the
"Effective Date").

                                   ARTICLE II
                                   DEFINITIONS

            For the purposes of this Plan,  the  following  terms shall have the
meanings set forth below, unless the context clearly indicates otherwise:

     2.1 ACCOUNT.  "Account"  means the mechanism used by the Company to measure
and determine the amounts to be paid to a Participant under the Plan.

     2.2  BENEFICIARY.   "Beneficiary"  means  the  person,  persons  or  entity
designated by the Participant  under Article V to receive Plan benefits payable,
if any, after a Participant's death.

     2.3 BOARD. "Board" means the Board of Directors of the Company.

     2.4  COMMITTEE.  "Committee"  means the  Executive  Compensation  and Stock
Option Committee of the Board or any future committees  performing the functions
of such committee.

     2.5 COMPANY. "Company" means Arch Communications Group, Inc., a
Delaware corporation.

     2.6 COMPENSATION. "Compensation" means the annual and meeting fees
payable by the Company to a Nonemployee Director.

     2.7 DEFERRAL COMMITMENT. "Deferral Commitment" means a commitment
made by a Participant to defer Compensation pursuant to Article III.

     2.8 DEFERRAL PERIOD. "Deferral Period" means each calendar year.


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     2.9 DETERMINATION DATE. "Determination Date" means the last day of each
calendar quarter occurring after the Effective Date.

     2.10 NONEMPLOYEE DIRECTOR. "Nonemployee Director" means a Director of the
Company who is not employed by the Company or a subsidiary of the Company.

     2.11  PARTICIPANT.  "Participant"  means any  Nonemployee  Director who has
elected deferral of Compensation under this Plan.

     2.12 PARTICIPATION AGREEMENT. "Participation Agreement" means the agreement
submitted by a Participant to the Plan Administrator prior to the beginning of a
Deferral  Period with respect to a Deferral  Commitment or a designation of form
of benefits, or both, made for such Deferral Period.

     2.13 PAYMENT COMMENCEMENT DATE. "Payment Commencement Date" has
the meaning specified in Section 3.6.

     2.14 PLAN.  "Plan" means this Deferred  Compensation  Plan for  Nonemployee
Directors, as amended from time to time.

     2.15 PLAN ADMINISTRATOR. "Plan Administrator" means the employee
designated by the Committee to administer the Plan.

     2.16 STOCK. "Stock" means the common stock of the Company, $.01 par
value, of the Company.

                                   ARTICLE III
                       PARTICIPATION; DEFERRAL COMMITMENTS

     3.1 ELIGIBILITY AND PARTICIPATION.

          (a) PARTICIPATION.  Nonemployee  Directors may elect to participate in
the Plan with  respect to any  Deferral  Period by  submitting  a  Participation
Agreement to the Plan  Administrator  by the last day of the preceding  Deferral
Period.

          (b)  MID-YEAR  ELECTION.  An  individual  who  becomes  a  Nonemployee
Director during the first, second or third calendar quarter of a Deferral Period
may elect to  participate in the Plan effective on the first day of the calendar
quarter  next  following  the date on which  such new  eligibility  occurred  by
submitting a  Participation  Agreement for the balance of the Deferral Period no
later than the last day of the calendar  quarter  during  which the  Participant
first became eligible.

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     3.2 DEFERRAL  COMMITMENT.  A Deferral  Commitment shall be the Compensation
deferred  by  the  Participant  pursuant  to  the  Participation  Agreement  but
otherwise payable by the Company to the Participant during the Deferral Period.

     3.3 PERIOD OF COMMITMENT.  Except as provided in Sections 3.4 and 3.5, once
a Participant has made a Deferral  Commitment,  that Deferral  Commitment  shall
remain in effect for that Deferral Period;  provided,  however,  that a Deferral
Commitment  for a  Deferral  Period  may be  amended  at any  time  prior to the
beginning of such Deferral Period. Such Deferral Commitment shall also remain in
effect for subsequent  Deferral Periods unless revoked or amended by delivery of
a new Participation  Agreement to the Plan  Administrator  before the end of the
Deferral Period preceding the new Deferral Period.

     3.4  COMMITMENT  LIMITED BY  TERMINATION.  If a Participant  ceases to be a
Nonemployee  Director  prior to the end of the  Deferral  Period,  the  Deferral
Period for that Participant shall end.

     3.5 NO  MODIFICATION  OF DEFERRAL  COMMITMENT.  Deferral  Commitments for a
Deferral  Period shall become  irrevocable at the end of the preceding  Deferral
Period.

     3.6 LENGTH OF DEFERRAL.  Each Deferral Commitment shall specify the date on
which   payment  of  the   Participant's   Account  shall  begin  (the  "Payment
Commencement  Date").  The Payment  Commencement Date may be a specific calendar
date or a date on which a certain event occurs, such as the date the Participant
ceases to be a Nonemployee Director.

     3.7 STOCK OR CASH  ELECTION.  Each  Deferral  Commitment  shall specify the
percentage  of the  Compensation  deferred  which  is to be  added  to the  Cash
Subaccount (as described in Section 4.1,  below) and the percentage  which is to
be added to the Stock  Subaccount  (as described in Section 4.1,  below).  If no
such  specification is made, the deferred  Compensation shall be credited to the
Cash Subaccount.

                                   ARTICLE IV
                          DEFERRED COMPENSATION ACCOUNT

     4.1  ACCOUNT.  The  amounts  deferred by a  Participant  under the Plan and
earnings  thereon shall be credited to the  Participant's  Account.  The Account
shall be a bookkeeping  device  utilized for the sole purpose of determining the
benefits  payable  under the Plan and shall not  constitute  a separate  fund of
assets.  The Account shall have the following  subaccounts:  The Cash Subaccount
shall consist of the Participant's  cash deferrals and shall be accounted for in
monetary units and the Stock Subaccount which shall consist of the Participant's
stock deferrals and shall be accounted for in stock units. If different Deferral
Commitments specify different

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Payment  Commencement Dates or forms of benefit, a separate  subaccount shall be
established  for  each  combination  of  Payment  Commencement  Date and form of
benefit.

     4.2 TIMING OF CREDITS;  WITHHOLDING.  A Participant's deferred Compensation
shall be  deferred  prorata  from  each  payment  of  Compensation  and shall be
credited to his or her Account as of the date on which such  Compensation  would
have been paid.  Credits to the Cash Subaccount  shall be the amount deferred in
cash.  Credits to the Stock  Subaccount shall be made in stock units. The number
of stock  units to be credited  shall be  determined  by dividing  the amount of
Compensation  to be deferred into the Stock  Subaccount by the fair market value
of the  Stock of the  Company  as  determined  by the  Board as of the date such
Compensation  would otherwise have been paid. Each stock unit shall have a value
equal to the fair market value of one share of Stock.  Any  withholding of taxes
or other  amounts  with  respect to  deferred  Compensation  that is required by
local,   state,  or  federal  law  shall  be  withheld  from  the  Participant's
corresponding   non-deferred   Compensation  or  other  funds  provided  by  the
Participant  to the maximum  extent  possible,  and any  remaining  amount shall
reduce the amount credited to the Participant's Account.

     4.3  DETERMINATION  OF  ACCOUNTS.  Each  Participant's  Account  as of each
Determination  Date  shall  consist  of the  balance  of the  Account  as of the
immediately preceding Determination Date, adjusted as follows:

     (a)  New  Deferrals.  The  Account  shall  be  increased  by  any  deferred
Compensation credited since the immediately preceding Determination Date.

     (b) DISTRIBUTIONS. The Account shall be reduced by any benefits distributed
to  the  Participant  since  the  immediately   preceding   Determination  Date.
Distributions shall be made from the Cash Subaccount and the Stock Subaccount on
a prorata  basis  except  to the  extent  that the  Participant  has  designated
otherwise.

     (c) EARNINGS.  The Cash Subaccount shall be increased by crediting interest
at a rate equal to the Prime Rate for the period  since the prior  Determination
Date.  Interest  shall be  compounded  daily  based on a 360 day  year.  For the
purposes  of this Plan the "Prime  Rate" to be applied on a  Determination  Date
shall  be the  prime  rate  as in  effect  on the  prior  Determination  Date as
published in the Wall Street Journal. The Stock Subaccount shall not be credited
with any interest or other earnings.

     (d) ADJUSTMENT TO STOCK SUBACCOUNT.  In the event of any stock split, stock
dividend, recapitalization,  reorganization, merger, consolidation, combination,
exchange  of  shares,   liquidation,   spin-off  or  other  similar   change  in
capitalization  or event,  or any  distribution to holders of Stock other than a
normal cash dividend, the number of stock units credited to the Stock Subaccount
of a Participant shall be

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appropriately  adjusted by the Company to the extent the Board shall  determine,
in good faith, that such an adjustment is necessary and appropriate.

     4.4 VESTING OF  ACCOUNTS.  Except as provided in Section 5.5,  below,  each
Participant  shall be 100% vested in the amounts credited to such  Participant's
Account and earnings thereon.

     4.5 STATEMENT OF ACCOUNTS.  The Company shall give to each Participant,  on
an annual or more  frequent  basis,  a  statement  showing  the  balance  in the
Participant's Account.

                                    ARTICLE V
                               PAYMENT OF BENEFITS

     5.1 PAYMENT OF BENEFITS.  Upon the Payment Commencement Date for an Account
(or subaccount) the Company shall pay the balance in the Account (or subaccount)
to the  Participant in the form elected by the  Participant  pursuant to Section
5.3. The Company shall pay to the  Participant  benefits equal to the balance in
the  Participant's  Account.  All  payments  shall  be  in  the  form  of  cash.
Distributions  from the Stock  Subaccount  shall be made by converting the stock
units  being  distributed  to cash,  valuing  each stock unit at the fair market
value of a share of the Stock on the date of distribution.

     5.2 DEATH BENEFIT.  Upon the death of a Participant,  the Company shall pay
to the  Participant's  Beneficiary an amount equal to the balance at the time of
death in the  Participant's  Account  in the  form  elected  by the  Participant
pursuant to Section 5.3.

     5.3 FORM OF BENEFITS. Plan benefits shall be paid in the form of a lump sum
or  installments  over a  period  of 10 or  fewer  years,  as  specified  by the
Participant in the Participation  Agreement.  If no form of payment  designation
has been made in the Participation Agreement, benefits shall be paid in the form
of a lump sum. The form of payment  designation shall be made by the Participant
at the time of completing the Participation Agreement. A Participant may amend a
form of payment  designation at any time,  but such  amendment  shall not become
effective  until the Deferral  Period which begins after the date of  amendment.
The form of  payment  designation  shall also  remain in effect  for  subsequent
Deferral Periods until changed.

     Upon the death of a  Participant,  benefits  shall be paid  pursuant to the
form of  benefit  selected  by the  Participant  as soon  as  practicable  after
delivery of a death  certificate to the Plan  Administrator.  If the Participant
dies  after  a  Payment   Commencement  Date,   benefits  with  respect  to  the
Participant's remaining Account

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balance, if any, shall continue to be paid in the same manner as in effect prior
to death.

     5.4  INSTALLMENTS.  If benefits are paid in the form of  installments,  the
amount of the  installments  shall be  redetermined  as of  January of each year
based upon the remaining Account balance,  the remaining number of installments,
and earnings on the remaining Account balance.

     5.5 ACCELERATED  DISTRIBUTION.  Notwithstanding  any other provision of the
Plan, a Participant  shall be entitled to receive,  upon written  request to the
Plan  Administrator,  a lump sum distribution equal to any part or all of his or
her Account balance as of the Determination Date immediately  preceding the date
on which the Plan  Administrator  receives his written  request (the  "Requested
Amount").  The  balance in such  Participant's  Account  shall be reduced by the
Requested  Amount at the date of such  distribution and shall be further reduced
by an amount equal to the Prime Rate  multiplied  by the Requested  Amount.  The
amount  payable  under  this  section  shall be paid  within  thirty  (30)  days
following  receipt of the  written  request by the Plan  Administrator  from the
Participant.  A Participant  who receives an accelerated  distribution  shall be
ineligible to make further  deferrals  until the Deferral Period which begins at
least 12 months after such accelerated distribution is paid to the Participant.

     5.6  PAYMENT  TO  GUARDIAN.  If a  distribution  is payable to a minor or a
person declared incompetent or to a person incapable of handling the disposition
of  property,   the  Committee  may  direct  payment  to  the  guardian,   legal
representative  or person  having the care and custody of such minor,  person or
incompetent.

                                   ARTICLE VI
                                  BENEFICIARIES

     6.1 BENEFICIARY DESIGNATION.  Each Participant shall have the right, at any
time, to designate one or more persons or an entity as Beneficiary (both primary
as well as secondary or  contingent)  to whom benefits  under this Plan shall be
paid in the event of Participant's  death prior to complete  distribution of the
Participant's  Account. Each Beneficiary  designation shall be in a written form
prescribed by the Plan Administrator, will be effective only when filed with the
Plan  Administrator  during the  Participant's  lifetime  and shall apply to the
entire balance in the  Participant's  account.  The filing of a new  designation
shall cancel all designations previously filed. A Participant may make or change
a  beneficiary  designation  at any time  without  obtaining  the consent of any
person.

     6.2 NO BENEFICIARY DESIGNATION. If any Participant fails to designate a
Beneficiary in the manner provided above, or if the Beneficiary designated by a

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deceased Participant dies before the Participant or before complete distribution
of the Participant's benefits, the Participant's Beneficiary shall be the person
or persons in the first of the following classes in which there is a survivor:

          (a) The Participant's surviving spouse;

          (b) The Participant's  children in equal shares, except that if any of
     the children  predeceases  the Participant but leaves issue then surviving,
     such issue shall take by right of representation the share the parent would
     have taken if living; and

          (c) The Participant's estate.

                                   ARTICLE VII
                                 ADMINISTRATION

     7.1 PLAN ADMINISTRATOR;  COMMITTEE; DUTIES. This Plan shall be administered
by the Plan  Administrator  appointed by the Committee.  The Plan  Administrator
shall have the complete  discretion and authority to make, amend,  interpret and
enforce all appropriate rules and regulations for the administration of the Plan
and decide or resolve any and all questions,  including  interpretations  of the
Plan, as may arise in such  administration.  The Plan Administrator shall report
to the  Committee  regarding  Plan  activity at such times as  requested  by the
Committee. The Plan Administrator may be a Participant under this Plan.

     7.2 AGENTS.  The Plan  Administrator  and Committee may, from time to time,
employ agents and delegate to them such  administrative  duties as they see fit,
and may  from  time to time  consult  with  counsel  who may be  counsel  to the
Company.

     7.3  BINDING  EFFECT  OF  DECISIONS.  The  decision  or  action of the Plan
Administrator  in respect to any question  arising out of or in connection  with
the administration, interpretation and application of the Plan and the rules and
regulations promulgated hereunder may be reviewed or altered by the Committee. A
majority vote of the Committee  members  shall control any final  decision.  The
decisions of the Committee  shall be final and  conclusive  and binding upon all
persons having any interest in the Plan.

     7.4 INDEMNITY OF PLAN ADMINISTRATOR; COMMITTEE. The Company shall indemnify
and hold harmless the Plan  Administrator  and members of the Committee  against
any and all claims,  loss, damage,  expense or liability arising from any action
or  failure  to act  with  respect  to this  Plan,  except  in the case of gross
negligence or willful misconduct.

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                                  ARTICLE VIII
                        AMENDMENT AND TERMINATION OF PLAN

     8.1  AMENDMENT.  The  Board  may at any  time  amend  the  Plan by  written
instrument,  notice of which is given to all  Participants  and to Beneficiaries
receiving installment  payments,  subject to the following;  provided,  however,
that no  amendment  shall  reduce the amount  accrued in any Account to the date
such notice of the amendment is given.

     8.2 COMPANY'S  RIGHT TO TERMINATE.  The Board may at any time  partially or
completely terminate the Plan if, in its judgment,  the tax, accounting or other
effects of the continuance of the Plan, or potential payments thereunder,  would
not be in the best interests of the Company.

          (a) PARTIAL TERMINATION. The Board may partially terminate the Plan by
     instructing the Plan  Administrator  not to accept any additional  Deferral
     Commitments  beyond the  current  Deferral  Period.  In the event of such a
     partial  termination,  the Plan shall  continue to operate and be effective
     with regard to Deferral  Commitments  entered  into prior to the  effective
     date of such partial termination.

          (b) COMPLETE TERMINATION.  The Board may completely terminate the Plan
     by instructing the Plan Administrator not to accept any additional Deferral
     Commitments,  and by terminating all current ongoing Deferral  Commitments.
     In the event of complete  termination,  the Plan shall cease to operate and
     the  Company  shall pay out each  Account in a lump sum within  thirty (30)
     days of the date of termination of the Plan.

                                   ARTICLE IX
                                  MISCELLANEOUS

     9.1 UNSECURED  GENERAL  CREDITOR.  The Company's  obligation under the Plan
shall  be an  unfunded  and  unsecured  promise  to pay  money  in  the  future.
Participants and their Beneficiaries shall have no secured or preferential right
to any assets of the Company or any other  party for  payment of benefits  under
this Plan  greater  than the  rights of an  unsecured  general  creditor  of the
Company.  Any and all of the Company's assets which the Company may set aside or
earmark for the payment of benefits hereunder shall be, and remain, the general,
unpledged,  unrestricted assets of the Company and no Participant or Beneficiary
shall have any interest in any such assets.

     9.2 NONASSIGNABILITY. Neither a Participant nor any other person shall have
any right to sell, assign,  transfer,  pledge,  mortgage or otherwise  encumber,
transfer,  hypothecate  or convey in advance of actual  receipt the amounts,  if
any, payable

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hereunder,  or any part  thereof,  which  are,  and all  rights  to  which  are,
expressly  declared  to be  unassignable  and  non-transferable.  No part of the
amounts  payable  shall,  prior to actual  payment,  be  subject  to  seizure or
sequestration  for the  payment of any  debts,  judgments,  alimony or  separate
maintenance  owed by a Participant or any other person,  nor be  transferable by
operation  of  law  in the  event  of a  Participant's  or  any  other  person's
bankruptcy or insolvency.

     9.3 PROTECTIVE PROVISIONS. A Participant will cooperate with the Company by
furnishing  any and  all  information  requested  by the  Company  in  order  to
facilitate the payment of benefits hereunder and taking such other action as may
be requested by the Company.

     9.4  GOVERNING  LAW. The  provisions  of this Plan shall be  construed  and
interpreted  according to the laws of the Commonwealth of Massachusetts,  except
as preempted by federal law.

     9.5  VALIDITY.  In case any provision of this Plan shall be held illegal or
invalid for any  reason,  said  illegality  or  invalidity  shall not affect the
remaining parts hereof, but this Plan shall be construed and enforced as if such
illegal and invalid provision had never been inserted herein.

     9.6  NOTICE.  Any  notice  required  or  permitted  under the Plan shall be
sufficient  if in writing and hand  delivered or sent by registered or certified
mail.  Such notice  shall be deemed as given as of the date of  delivery  or, if
delivery  is made by mail,  as of the date shown on the  postmark on the receipt
for  registration  or  certification.  Mailed notice to the  Committee  shall be
directed to the Company's address. Mailed notice to a Participant or Beneficiary
shall be directed to the Participant or Beneficiary's  last known address in the
Company's records, as applicable.

     9.7  SUCCESSORS.  The  provisions  of this Plan shall bind and inure to the
benefit of the Company and its  successors and assigns.  The term  successors as
used herein shall  include any corporate or other  business  entity which shall,
whether  by  merger,  consolidation,   purchase  or  otherwise  acquire  all  or
substantially  all of the business and assets of the Company,  and successors of
any such corporation or other business entity.

     Adopted on December 29, 1997.

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