SAUCONY INC
EXHIBIT 10.1
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex101.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>

                                                                    EXHIBIT 10.1


                                  SAUCONY, INC.

                        Incentive Stock Option Agreement
                     Granted Under 2003 Stock Incentive Plan

1.   Grant of Option.

     This  agreement  evidences  the grant by  Saucony,  Inc.,  a  Massachusetts
corporation  (the  "Company"),  on  December  22,  2003  (the  "Grant  Date") to
____________,  an employee of the Company (the  "Participant"),  of an option to
purchase, in whole or in part, on the terms provided herein and in the Company's
2003 Stock Incentive Plan (the "Plan"), a total of 100,000 shares (the "Shares")
of Class B Common Stock,  $.331/3 par value per share ("Common  Stock"),  of the
Company at $16.25 per Share. Unless earlier terminated, this option shall expire
at 5:00 p.m., Eastern time, on December 21, 2013 (the "Final Exercise Date").

     It is intended  that the option  evidenced  by this  agreement  shall be an
incentive stock option as defined in Section 422 of the Internal Revenue Code of
1986,  as amended,  and any  regulations  promulgated  thereunder  (the "Code").
Except as otherwise indicated by the context, the term "Participant", as used in
this  option,  shall be deemed to include any person who  acquires  the right to
exercise this option validly under its terms.

2.   Vesting Schedule.

     This  option  will become  exercisable  ("vest") as to 20% of the  original
number  of  Shares  on the  first  anniversary  of the  Grant  Date and as to an
additional  20% of the original  number of Shares at the end of each  successive
one year  period  following  the first  anniversary  of the Grant Date until the
fifth anniversary of the Grant Date.

     The right of exercise  shall be cumulative so that to the extent the option
is not  exercised  in any  period to the  maximum  extent  permissible  it shall
continue to be exercisable,  in whole or in part, with respect to all Shares for
which  it is  vested  until  the  earlier  of the  Final  Exercise  Date  or the
termination of this option under Section 3 hereof or the Plan.

     Notwithstanding  the foregoing,  upon the occurrence of a Change in Control
(as defined  below),  this option will  automatically  vest as to all previously
unvested Shares.

     As used herein,  "Change in Control" means an event or occurrence set forth
in any one or more of subsections  (a) through (c) below  (including an event or
occurrence  that  constitutes a Change in Control under one of such  subsections
but is specifically exempted from another such subsection).

     (a) the  acquisition by an individual,  entity or group (within the meaning
of Section  13(d)(3) or  14(d)(2) of the  Securities  Exchange  Act of 1934,  as
amended  (the  "Exchange  Act")) (a  "Person")  of  beneficial  ownership of any
capital  stock  of  the  Company  if,  after  such   acquisition,   such  Person
beneficially  owns  (within  the  meaning  of Rule 13d-3  promulgated  under the
Exchange  Act) 50% or more of either (i) the  then-outstanding  shares of common
stock of the  Company  (the  "Outstanding  Company  Common  Stock")  or (ii) the
combined voting power of the then-outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding  Company Voting
Securities");  provided,  however, that for purposes of this subsection (a), the
following  acquisitions  shall  not  constitute  a Change  in  Control:  (i) any
acquisition  directly from the Company (excluding an acquisition pursuant to the
exercise,  conversion or exchange of any security  exercisable for,  convertible
into or  exchangeable  for common  stock or voting  securities  of the  Company,
unless the Person  exercising,  converting or exchanging such security  acquired
such  security  directly  from the  Company  or an  underwriter  or agent of the
Company),  (ii) any  acquisition  by the Company,  (iii) any  acquisition by any
employee  benefit plan (or related trust) sponsored or maintained by the Company
or any  corporation  controlled  by the  Company,  (iv) any  acquisition  by any
corporation  pursuant to a transaction  which complies with clauses (i) and (ii)
of subsection  (c) of this Section 2, or (v) any  acquisition of common stock of
the Company by 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 (each such individual or entity is referred to
hereunder as an "Exempt Person"); or

     (b)  such  time as the  Continuing  Directors  (as  defined  below)  do not
constitute a majority of the Board (or, if applicable, the Board of Directors of
a successor  corporation to the Company),  where the term "Continuing  Director"
means at any date a member of the Board (i) who was a member of the Board on the
date of the  execution of this  Agreement  or (ii) who was  nominated or elected
subsequent  to such  date by at  least a  majority  of the  directors  who  were
Continuing  Directors  at the  time of such  nomination  or  election  or  whose
election to the Board was  recommended or endorsed by at least a majority of the
directors  who  were  Continuing  Directors  at the time of such  nomination  or
election;  provided, however, that there shall be excluded from this clause (ii)
any  individual  whose initial  assumption of office  occurred as a result of an
actual or threatened election contest with respect to the election or removal of
directors or other actual or threatened  solicitation of proxies or consents, by
or on behalf of a person other than the Board; or

     (c)  the   consummation   of  a  merger,   consolidation,   reorganization,
recapitalization  or statutory share exchange involving the Company or a sale or
other  disposition of all or  substantially  all of the assets of the Company in
one or a series of transactions (a "Business Combination"),  unless, immediately
following  such Business  Combination,  each of the following two  conditions is
satisfied: (i) all or substantially all of the individuals and entities who were
the beneficial  owners of the  Outstanding  Company Common Stock and Outstanding
Company  Voting  Securities  immediately  prior  to  such  Business  Combination
beneficially own, directly or indirectly,  more than 50% of the then-outstanding
shares of common  stock and the combined  voting  power of the  then-outstanding
securities   entitled  to  vote   generally  in  the   election  of   directors,
respectively,  of the  resulting  or  acquiring  corporation  in  such  Business
Combination (which shall include,  without limitation,  a corporation which as a
result  of  such  transaction  owns  the  Company  or  substantially  all of the
Company's  assets  either  directly or through one or more  subsidiaries)  (such
resulting  or  acquiring  corporation  is referred  to herein as the  "Acquiring
Corporation")  in  substantially   the  same  proportions  as  their  ownership,
immediately  prior to such  Business  Combination,  of the  Outstanding  Company
Common Stock and Outstanding Company Voting Securities,  respectively;  and (ii)
no Person  (excluding  the  Acquiring  Corporation,  any Exempt  Person,  or any
employee benefit plan (or related trust)  maintained or sponsored by the Company
or by the Acquiring Corporation) beneficially owns, directly or indirectly,  50%
or  more of the  then  outstanding  shares  of  common  stock  of the  Acquiring
Corporation,  or of the combined voting power of the then-outstanding securities
of such  corporation  entitled to vote  generally  in the  election of directors
(except  to the  extent  that  such  ownership  existed  prior  to the  Business
Combination).

3.   Exercise of Option.

     (a) Form of  Exercise.  Each  election to exercise  this option shall be in
writing, signed by the Participant, and received by the Company at its principal
office, accompanied by this agreement, payment in full in the manner provided in
the Plan and a fully completed and executed notice of exercise  substantially in
the form appended  hereto as Annex A. The Participant may purchase less than the
number of shares  covered  hereby,  provided  that no partial  exercise  of this
option may be for any fractional share or for fewer than ten whole shares.

     (b) Continuous Relationship with the Company Required.  Except as otherwise
provided  in this  Section  3,  this  option  may not be  exercised  unless  the
Participant,  at the time he or she exercises  this option,  is, and has been at
all times since the Grant Date,  an  employee  or officer of, or  consultant  or
advisor to, the Company or any parent or subsidiary of the Company as defined in
Section 424(e) or (f) of the Code (an "Eligible Participant").

     (c) Termination of Relationship with the Company. If the Participant ceases
to be an  Eligible  Participant  for any  reason,  then,  except as  provided in
paragraphs (d) and (e) below,  the right to exercise this option shall terminate
three  months  after such  cessation  (but in no event after the Final  Exercise
Date),  provided that this option shall be  exercisable  only to the extent that
the  Participant  was  entitled  to  exercise  this  option  on the date of such
cessation. Notwithstanding the foregoing, if the Participant, prior to the Final
Exercise Date, violates the non-competition or confidentiality provisions of any
employment  contract,  confidentiality  and  nondisclosure  agreement  or  other
agreement  between the Participant  and the Company,  the right to exercise this
option shall terminate immediately upon such violation.

     (d) Exercise Period Upon Death or Disability.  If the  Participant  dies or
becomes  disabled  (within the meaning of Section 22(e)(3) of the Code) prior to
the Final  Exercise  Date  while he or she is an  Eligible  Participant  and the
Company  has not  terminated  such  relationship  for  "cause" as  specified  in
paragraph (e) below, this option shall be exercisable,  within the period of one
year  following  the date of  death or  disability  of the  Participant,  by the
Participant (or in the case of death by an authorized transferee), provided that
this  option  shall be  exercisable  only to the  extent  that this  option  was
exercisable  by the  Participant  on the date of his or her death or disability,
and further  provided that this option shall not be exercisable  after the Final
Exercise Date.

     (e) Discharge for Cause.  If the  Participant,  prior to the Final Exercise
Date,  ceases  his or her  employment  with  the  Company  because  he or she is
discharged  for "cause" (as defined  below),  the right to exercise  this option
shall  terminate  immediately  upon such cessation of employment.  "Cause" shall
mean willful  misconduct by the Participant in connection with the Participant's
employment  or  willful  failure  by  the  Participant  to  perform  his  or her
employment  responsibilities  in the best  interests of the Company  (including,
without  limitation,   breach  by  the  Participant  of  any  provision  of  any
employment,  consulting,  advisory,  nondisclosure,   non-competition  or  other
similar agreement between the Participant and the Company), as determined by the
Company, which determination shall be conclusive. If the Participant resigns and
within 30 days thereafter the Company determines that the Participant's  conduct
prior  to his  or her  resignation  warranted  a  discharge  for  "cause",  such
resignation shall be deemed a discharge for "cause".

4.   Tax Matters.

     (a) Withholding.  No Shares will be issued pursuant to the exercise of this
option unless and until the Participant pays to the Company,  or makes provision
satisfactory  to the  Company  for  payment  of,  any  federal,  state  or local
withholding taxes required by law to be withheld in respect of this option.

     (b)  Disqualifying  Disposition.  If the  Participant  disposes  of  Shares
acquired  upon  exercise of this option  within two years from the Grant Date or
one year after such Shares were  acquired  pursuant to exercise of this  option,
the Participant shall notify the Company in writing of such disposition.

5.   Nontransferability of Option.

     This option may not be sold,  assigned,  transferred,  pledged or otherwise
encumbered by the Participant, either voluntarily or by operation of law, except
by will or the laws of descent and distribution, and, during the lifetime of the
Participant, this option shall be exercisable only by the Participant.

6.   Provisions of the Plan.

     This option is subject to the  provisions  of the Plan,  a copy of which is
furnished to the Participant with this option.

     IN WITNESS WHEREOF, the Company has caused this option to be executed under
its corporate seal by its duly authorized officer. This option shall take effect
as a sealed instrument.

                                          SAUCONY, INC.
Dated: _________                             By:
                                             Name:
                                             Title:

                            PARTICIPANT'S ACCEPTANCE

     The undersigned hereby accepts the foregoing option and agrees to the terms
and conditions thereof. The undersigned hereby acknowledges receipt of a copy of
the Company's 2003 Stock Incentive Plan.

                                 PARTICIPANT:
                                 ____________________________
                  Address:       ___________________
                                 ___________________

                                                                         Annex A

                         NOTICE OF STOCK OPTION EXERCISE

                                                     Date: ____________1

Saucony, Inc.
13 Centennial Drive
Peabody, MA  01960

Attention:  Treasurer

Dear Sir or Madam:

     I am the  holder  of an  Incentive  Stock  Option  granted  to me under the
Saucony, Inc. (the "Company") 2003 Stock Incentive Plan on December 22, 2003 for
the purchase of  __________2  shares of Class B Common Stock of the Company at a
purchase price of $__________3 per share.

     I hereby exercise my option to purchase  _________4  shares of Common Stock
(the  "Shares"),  for  which  I  have  enclosed  __________5  in the  amount  of
________6. Please register my stock certificate as follows:

        Name(s):            _______________________7
                            _______________________
        Address:            _______________________
        Tax I.D. #:         _______________________8

Very truly yours,


(Signature)


--------
1        Enter the date of exercise.

2        Enter the total number of shares for which the option was granted.

3        Enter the option exercise price per share.

4        Enter the number of shares to be purchased upon exercise of all or part
         of the option.

5        Enter "cash" or  "personal check".

6        Enter the dollar amount (price per share times the number of shares to
         be purchased).

7        Enter name(s) to appear on stock certificate: (a) your name only or
         (b) your name and other name (i.e., John Doe and Jane Doe, Joint
         Tenants With Right of Survivorship).

8        Social Security Number(s) of person(s) listed in response to note 8
         above.


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