Exhibit 10.7
                                  SAUCONY, INC.
                               13 Centennial Drive
                                Peabody, MA 01960

                                                              September 9, 2004

Mr. Michael Umana
C/O Saucony, Inc.
13 Centennial Drive
Peabody, MA  01960

         Re:      Severance Plan; and 2004 Fiscal Year Bonus

Dear Mike:

     This letter confirms our mutual  understanding  as to certain  payments for
which you may be  eligible  (i)  under the  Saucony,  Inc.  Executive  Severance
Benefit  Plan (the  "Severance  Plan") and (ii) as your total  annual bonus with
respect to the 2004 fiscal year of Saucony, Inc. (the "Company").

Severance Plan

     We have  agreed  that in the event that you become  entitled  to  severance
under the Severance  Plan,  your Severance  Payment (as defined in the Severance
Plan) will be equal to $300,000.  You will be entitled to the Severance  Payment
in  accordance   with  the  terms  and   provisions   of  the  Severance   Plan,
notwithstanding  the formula for  calculating  Severance  Payments  set forth in
Section  III of the  Severance  Plan,  but subject to all of the other terms and
provisions of the Severance Plan (including,  without limitation,  the terms and
provisions of Section IV thereof).

2004 Fiscal Year Bonus

     You will be  eligible  to  receive  an annual  bonus  with  respect  to the
Company's  2004  fiscal year of up to  $300,000.  You will be entitled to 75% of
this  bonus,  or  $225,000,  if the  Company's  earnings  per share  (calculated
assuming all  outstanding  shares of the  Company's  capital stock were a single
class of capital stock and  disregarding any  non-recurring  charges incurred in
connection with the Company's (i)  consideration  of its strategic  alternatives
announced by the Company on August 2, 2004 and (ii) implementation  thereof) for
its 2004 fiscal year are equal to or greater  than the  estimated  earnings  per
share amount  specified for the Company's 2004 fiscal year on page 2 of tab 2 of
the materials  provided to the Company's Board of Directors for its meeting held
on February 19, 2004. You will be entitled to some, all or none of the remaining
25% of this bonus,  up to a maximum of $75,000,  in the sole  discretion  of the
Compensation  Committee of the  Company's  Board of  Directors.  You will not be
eligible for any other bonus  payments from the Company for the  Company's  2004
fiscal year.

     You will receive  payment of your annual bonus, to the extent it is payable
by the Company,  in a single lump sum in accordance with the Company's customary
practices  for  payment  of annual  bonuses  to its  executives  and  subject to
reduction  for  applicable  withholding  taxes.  In no event will the Company be
required  to pay you any  portion of your annual  bonus for the  Company's  2004
fiscal  year (to the extent  such bonus is  payable by the  Company)  unless you
remain continuously employed on a full time basis by the Company through the day
following  the public  release of the Company's  financial  results for its 2004
fiscal year.

     If you accept  the terms set forth in this  letter,  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 9, 2004.

                                 Very truly yours,

                                 SAUCONY, INC.


                                 By:  /s/ John H. Fisher
                                     John H. Fisher
                                     President and Chief Executive Officer



I accept and agree to the terms set forth in the above letter:


/s/ Michael Umana                          Dated:  September 9, 2004
Michael Umana