SAUCONY INC
EXHIBIT 10.5 UMANA RETENTION AGREEMENT
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>7
<FILENAME>exh105.txt
<DESCRIPTION>EXHIBIT 10.5 UMANA RETENTION AGREEMENT
<TEXT>






                                  SAUCONY, INC.
                               13 Centennial Drive
                                Peabody, MA 01960



                                                 September 9, 2004



Dear Michael Umana:

     On August 2, 2004 Saucony, Inc., a Massachusetts  corporation  ("Saucony"),
announced  publicly  that it has retained  the services of Chestnut  Securities,
Inc. to advise it as to its strategic alternatives. These strategic alternatives
may include a Change in Control (as defined below) of Saucony.

     Saucony  desires to assure itself as to the continued  availability of your
services  while it assesses and, in its  discretion,  negotiates  and implements
these  strategic  alternatives.  In addition,  should Saucony decide to pursue a
Change in Control,  Saucony desires to provide you with additional  incentive to
assist with and facilitate such a transaction.  Therefore,  subject to the terms
of, and as further  provided for in, this letter  agreement (this  "Agreement"),
Saucony  desires  to offer  and pay to you  retention  bonuses  in the  event it
completes a Change in Control on or prior to December 31, 2005.

Duties

     As part of this  Agreement,  you agree to (1) perform  all of your  current
duties,  as well as any other  duties  assigned to you  pursuant to your role at
Saucony,  in a  professional  and  businesslike  manner and (2) assist  with and
facilitate  in a  constructive  manner  Saucony's  assessment,  negotiation  and
implementation of various strategic alternatives Saucony may, in its discretion,
choose to pursue, including,  without limitation, a Change in Control. You agree
that you will not interfere,  directly or  indirectly,  by any act or failure to
act, with any Change in Control or any other strategic alternative.

Change in Control

     If Saucony  completes a Change in Control on or prior to December  31, 2005
and you have remained  continuously  employed  full-time by Saucony at all times
from the date of this  Agreement  through the date of such Change in Control and
have  performed  your duties as  described  above,  (i)  Saucony  will pay you a
retention bonus of $150,000 in a lump sum (reduced by any applicable withholding
taxes)  within 30 days after it  completes  such  Change in Control and (ii) all
options to purchase  Saucony's  capital  stock  granted to you with the specific
approval of Saucony's  Board of Directors  (which  options by their terms do not
automatically  vest  upon  the  occurrence  of  such  Change  in  Control)  will
automatically vest as to 50% of the unvested shares subject thereto at such time
(with such 50%  acceleration  applied pro rata to all future vesting dates under
each such  option).  If, in addition  to such  continuous  full-time  employment
through  the date of such Change in Control,  you remain  continuously  employed
full-time by Saucony during the period ending six months after Saucony completes
such  Change in Control  (the  "Post-Closing  Period"),  or your  employment  at
Saucony is terminated  during the  Post-Closing  Period by Saucony without Cause
(as defined  below) or by you for Good Reason (as defined  below),  Saucony will
pay you an additional  retention bonus of $150,000 in a lump sum (reduced by any
applicable  withholding  taxes) within 30 days after the end of the Post-Closing
Period (or, if earlier, the date of your termination).

     Nothing in this  Agreement  imposes any  requirement  on Saucony to assess,
negotiate,  enter into or  complete  a Change in Control or any other  strategic
alternative.

     As used herein:

     (a)  "Cause"  means (i) your willful  misconduct  in  connection  with your
          employment  or  your  failure  to  perform  your  material  employment
          responsibilities,  which is not cured  after  notice and a  reasonable
          opportunity  (not to exceed 20 days) to cure, or (ii) your  conviction
          of, or your entry of a pleading of guilty or nolo  contendere  to, any
          crime involving moral turpitude or any felony.
<PAGE>

     (b)  "Change in Control" means the  acquisition by any person,  corporation
          or other entity  (other than an Exempt  Person (as defined  below)) of
          (i)  beneficial  ownership of capital stock of Saucony  representing a
          greater than 50.0%  interest in the shares of Saucony's  capital stock
          entitled to vote  generally in the election of directors,  by means of
          stock  purchase,  merger or other business  combination  (other than a
          merger or other  business  combination  with the  primary  purpose  of
          changing Saucony's jurisdiction of organization or a reorganization or
          restructuring  with the  primary  purpose  of  implementing  a holding
          company or other  structure),  or (ii) all or substantially all of the
          assets of Saucony;  provided,  that, such an acquisition of beneficial
          ownership of capital stock, or all or substantially all of the assets,
          of  Saucony  by  the   resulting,   surviving  or  acquiring   person,
          corporation or other entity in a merger or other business  combination
          (including,  without  limitation,  an acquirer of all or substantially
          all of the assets of Saucony)  with Saucony (or an affiliate of such a
          resulting, surviving or acquiring person, corporation or other entity)
          pursuant to which the  stockholders  of Saucony  immediately  prior to
          such merger or other business combination  beneficially own at least a
          majority  of  the  capital  stock  of  such  resulting,  surviving  or
          acquiring person, corporation or other entity (or an affiliate of such
          resulting, surviving or acquiring person, corporation or other entity)
          immediately following such merger or business combination shall not be
          deemed to be a Change in Control.

     (c)  "Exempt Person" means John H. Fisher,  Charles A. Gottesman or Merrill
          F.  Gottesman  (each, a  "Significant  Stockholder")  or any ancestor,
          descendent,  spouse,  sibling or spouse of a sibling of a  Significant
          Stockholder or any entity affiliated with any Significant Stockholder.

     (d)  "Good  Reason"  means (i) a reduction in your annual base salary as in
          effect on the date Saucony  completed the relevant  Change in Control,
          (ii) a change in the  location  at which you  perform  your  principal
          duties  for  Saucony  to a new  location  more than 30 miles  from the
          location at which you performed your  principal  duties for Saucony on
          the date Saucony  completed the relevant  Change in Control or (iii) a
          material diminution of your overall authority or responsibilities from
          those customarily  assigned to [a/an] [For M.U.:  executive;  for S.W.
          and M.J.:  senior]  vice  president  of Saucony.  Notwithstanding  the
          occurrence of any event described in clauses (i), (ii) or (iii) of the
          immediately preceding sentence, such occurrence shall not be deemed to
          constitute  Good Reason if,  within 20 days of your written  notice to
          Saucony  describing in reasonable  detail the occurrence of such event
          (the "Good Reason  Notice"),  such event has been  corrected  (and any
          termination  of  your  employment  for  Good  Reason  based  upon  the
          occurrence of such event shall not be effective until the date 21 days
          after your delivery to Saucony of the Good Reason Notice).

Taxes

     Any payments under this  Agreement  shall be made without regard to whether
the  deductibility  of such payments (or any other  payments  contingent  upon a
change in  control as such  terms are  defined  for  purposes  of  Section  280G
("Section  280G") of the Internal  Revenue Code of 1986, as amended (the "Code")
to or for your benefit  (collectively,  "Change in Control  Payments")) would be
limited or precluded by Section 280G and without regard to whether such payments
(or any other  Change in Control  Payments)  would  subject  you to the  federal
excise tax levied on certain "excess  parachute  payments" under Section 4999 of
the Code;  provided,  that, if the total of all Change in Control Payments to or
for your  benefit,  after  reduction  for all  federal,  state and  local  taxes
(including  the tax described in Section 4999 of the Code, if  applicable)  with
respect to such payments (the "Total After-Tax Payments"), would be increased by
the limitation or elimination of any payments under this Agreement or any Change
in Control  Payments  under other  agreements  or  arrangements  between you and
Saucony, then the amounts payable under this Agreement (or the Change in Control
Payments under such other  agreements or  arrangements  as Saucony and you shall
mutually  determine)  shall be reduced to the  extent,  and only to the  extent,
necessary to maximize the Total  After-Tax  Payments.  The  determination  as to
whether and to what extent the payments  under this  Agreement (or the Change in
Control Payments under such other agreements or arrangements) are required to be
reduced in  accordance  with the preceding  sentence  shall be made at Saucony's
expense by a certified  public  accounting firm designated by Saucony's Board of
Directors  prior to a Change in  Control.  In the event of any  underpayment  or
overpayment  under this Agreement (or such other  agreements or arrangements) as
determined by the firm designated in accordance with the preceding sentence, the
amount of such  underpayment  or  overpayment  shall  promptly be paid to you or
refunded to Saucony, as the case may be, with interest at the applicable federal
rate provided for in Section 7872(f)(2) of the Code.
<PAGE>

     At Saucony's request,  direction and expense,  Wilmer Cutler Pickering Hale
and Dorr LLP is performing an analysis of the effects under Section 280G of this
Agreement and other  arrangements  between you and Saucony to identify  possible
tax planning and other  alternatives  for you and Saucony;  it being  understood
that this process may not result in the reduction of your  potential  liability,
if any,  under Section 280G and that Saucony is not committing to enter into any
additional arrangements for the purpose of limiting your 280G liability.

Assignment

     This Agreement binds Saucony, its successors or assigns, and your heirs and
the personal  representatives  of your estate.  Without  Saucony's prior written
consent,  you may not assign or delegate  this  Agreement  or any or all rights,
duties,  obligations,  or interests  under it.  References in this  Agreement to
Saucony  applicable  to any time  following  a Change  in  Control  include,  if
applicable in the context, Saucony's successor, assign or acquirer in connection
with such Change in Control.

At-Will Employment

     Nothing in this Agreement  changes the at-will nature of your employment by
Saucony.   Without  limiting  the  foregoing,  if  your  employment  by  Saucony
terminates  prior to the  completion  of a Change in Control  for which  Saucony
would  otherwise  be obligated to pay you a retention  bonus or  accelerate  the
vesting of any stock  options  pursuant to this  Agreement,  Saucony will not be
required to pay you any retention  bonus or accelerate  the vesting of any stock
options,  regardless of the circumstances of the termination of your employment,
whether the  termination was with Cause  (including,  without  limitation,  your
failure  to  perform  your  obligations  set forth in this  Agreement  under the
heading  "Duties" or otherwise) or without Cause or whether the  termination was
at your or  Saucony's  election.  In  addition,  if your  employment  by Saucony
terminates  following  a  Change  in  Control  and  prior  to  the  end  of  any
Post-Closing  Period for which Saucony would otherwise be obligated to pay you a
retention bonus pursuant to this Agreement,  Saucony will not be required to pay
you such retention bonus if your employment at Saucony is terminated  during the
Post-Closing Period by Saucony for Cause or by you without Good Reason.

Release and Non-Disparagement

     (a)  In  partial  consideration  of  Saucony's  agreement  to  pay  to  you
          retention bonuses subject to and on the terms and conditions set forth
          in this Agreement:

          (i)  You  hereby  fully,  forever,   irrevocably  and  unconditionally
               release  and  discharge   Saucony,   its   directors,   officers,
               stockholders,   affiliated   entities,   agents,   employees  and
               representatives  (the  "Released  Parties"),  from  any  and  all
               claims,  causes of  action,  agreements,  promises,  liabilities,
               obligations  and expenses  ("Claims"),  of every kind and nature,
               whether  arising  from any act,  omission,  misrepresentation  or
               otherwise,  and whether based on any federal,  state or other law
               or right of action at law or in equity,  and whether  foreseen or
               unforeseen, matured or unmatured, known or unknown, that you ever
               had or now  have  against  any and all of the  Released  Parties,
               including,  without limitation, any and all Claims arising out of
               or relating to your  employment  with  Saucony;  provided,  that,
               nothing in this  paragraph  (i) shall  release or  discharge  any
               Claim (w) for salary,  personal,  sick or vacation  time or other
               benefits  accrued and unpaid through the date of this  Agreement,
               (x) for stock options  granted to you with the specific  approval
               of  Saucony's  Board of  Directors,  (y)  arising out of facts or
               circumstances  occurring after the date of this Agreement, or (z)
               relating to the enforcement of this Agreement.
<PAGE>

          (ii) You  understand  and  agree  that you  will  not make any  false,
               disparaging  or  derogatory  statements  to any  person or entity
               regarding   Saucony   or   any  of   its   directors,   officers,
               stockholders,   affiliated   entities,   agents,   employees   or
               representatives  or about Saucony's business affairs or financial
               condition;  provided,  that,  nothing  in this  clause  (ii) will
               preclude  you,  if  requested  by Saucony to speak  candidly to a
               prospective party to a strategic  alternative under consideration
               by Saucony,  from making truthful  statements to such prospective
               party responsive to questions from such prospective party.

     (b)  As a condition to your receipt of the first retention  payment and the
          accelerated  vesting  of stock  options  described  under the  caption
          "Change in Control" above,  you agree to execute a release in the form
          attached as Annex A hereto  reaffirming  the release that you provided
          to Saucony in paragraph (a) above  through the  effective  date of the
          Change in Control.

General

     All notices under this Agreement  must be in writing and  delivered,  if to
Saucony, to its Chief Executive Officer at its principal place of business,  and
if to you, at the most recent  address for you set forth in Saucony's  personnel
records. This Agreement sets forth the entire agreement of the parties hereto in
respect of the  subject  matter  contained  herein  and,  except for  agreements
evidencing  options to purchase  Saucony's capital stock granted to you with the
specific  approval of Saucony's  Board of Directors  (the  "Existing  Options"),
supersedes   all   prior   agreements,   promises,   covenants,    arrangements,
communications,  representations or warranties,  whether oral or written, by any
officer,  employee  or  representative  of any party  hereto in  respect  of the
subject matter contained  herein;  and any prior agreement of the parties hereto
in respect of the subject  matter  contained  herein  (other  than the  Existing
Options),  including,  without limitation,  any prior retention agreement or any
prior  agreement  providing for bonus  payments in  connection  with a change in
control,  is hereby  terminated and cancelled.  The laws of the  Commonwealth of
Massachusetts   (other  than  its  conflict  of  laws  provisions)  govern  this
Agreement.  Each of Saucony and you hereby  waives any right to trial by jury in
any proceeding arising out of or relating to this Agreement.

     If you accept the terms of this  Agreement,  please sign below and return a
copy to Hal J. Leibowitz,  Esq.,  Wilmer Cutler  Pickering Hale and Dorr LLP, 60
State Street,  Boston,  MA 02109,  by no later than 5:00 p.m.  (Eastern Time) on
September 10, 2004. We encourage you to consult with any advisors you choose.

                                                     Very truly yours,

                                                     SAUCONY, INC.


                                                     By:  /s/ John H. Fisher
                                                          Name: John H. Fisher
                                                          Title: CEO



I accept and agree to the terms set forth in this Agreement:


/s/ Michael Umana                                    Dated:  September 9, 2004
Michael Umana
<PAGE>



                                     Annex A


                                     Release


     The undersigned and Saucony, Inc., a Massachusetts corporation ("Saucony"),
have entered into a retention  agreement dated September 9, 2004 (the "Retention
Agreement").  Pursuant to the Retention  Agreement,  the undersigned is entitled
under certain  circumstances  to a retention  payment and to the acceleration of
stock  options in the event of a Change in Control of Saucony (as defined in the
Retention  Agreement)  on or prior to December  31, 2005. A Change in Control of
Saucony  has  occurred  and  the   undersigned   has  otherwise   satisfied  the
requirements  to receive the first  retention  payment and the  acceleration  of
stock options described in the Retention  Agreement under the caption "Change in
Control." However,  as a condition to the undersigned's  receipt of such payment
and to the acceleration of stock options, the undersigned is required to deliver
this release (the  "Release") to Saucony.  The undersigned  therefore  agrees as
follows:

     (i)  The undersigned hereby fully, forever, irrevocably and unconditionally
          releases   and   discharges   Saucony,   its   directors,    officers,
          stockholders,    affiliated    entities,    agents,    employees   and
          representatives  (the  "Released  Parties"),  from any and all claims,
          causes of action, agreements,  promises, liabilities,  obligations and
          expenses  ("Claims"),  of every kind and nature,  whether arising from
          any act, omission,  misrepresentation or otherwise,  and whether based
          on any  federal,  state or other  law or right of  action at law or in
          equity,  and whether  foreseen or  unforeseen,  matured or  unmatured,
          known or unknown, that the undersigned ever had or now has against any
          and all of the Released Parties,  including,  without limitation,  any
          and  all  Claims  arising  out of or  relating  to  the  undersigned's
          employment with Saucony; provided, that, nothing in this paragraph (i)
          shall release or discharge any Claim (w) for salary, personal, sick or
          vacation time or other benefits accrued and unpaid through the date of
          this Release,  (x) for stock options granted to the  undersigned  with
          the specific approval of Saucony's Board of Directors, (y) arising out
          of facts or circumstances occurring after the date of this Release, or
          (z) relating to the enforcement of the Retention Agreement.

     (ii) The  undersigned  understands  and  agrees  that he will  not make any
          false,  disparaging  or derogatory  statements to any person or entity
          regarding  Saucony or any of its  directors,  officers,  stockholders,
          affiliated  entities,  agents,  employees or  representatives or about
          Saucony's business affairs or financial condition.

     The laws of the Commonwealth of  Massachusetts  (other than its conflict of
laws provisions) govern this Release. The undersigned hereby waives any right to
trial by jury in any proceeding arising out of or relating to this Release.

     The undersigned accepts and agrees to the terms set forth in this Release:


                                               Dated:  _________ ____, 200_
____________________________
Michael Umana



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