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                                                                  Exhibit 10.1

                       PEGASUS COMMUNICATIONS CORPORATION
                            EXECUTIVE INCENTIVE PLAN

1. PURPOSE

         The purpose of the Pegasus Communications Corporation Executive
Incentive Plan (the "Plan") is to provide an incentive for corporate officers
and other key employees who are in a position to contribute materially to the
success of the Corporation and its subsidiaries.

2. DEFINITIONS

         The following terms, as used herein, will have the meaning specified:

        (a) "Award" means an incentive payment made pursuant to the Plan.

        (b) "Award Year" means the nine-month period beginning April 1, 2001
            and ending December 31, 2001, and calendar years thereafter.

        (c) "Board" means the Board of Directors of the Corporation as it may be
            comprised from time to time.

        (d) "Cause" means (i) a felony conviction of a Participant; (ii) the
            commission by a Participant of an act of fraud or embezzlement
            against the Corporation and/or a Subsidiary; (iii) willful
            misconduct or gross negligence materially detrimental to the
            Corporation and/or a Subsidiary; (iv) the Participant's continued
            failure to implement reasonable requests or directions arising from
            actions of the Board after thirty (30) days' written notice to the
            Participant; (v) the Participant's wrongful dissemination or use of
            confidential or proprietary information; (vi) the intentional and
            habitual neglect by the Participant of his or her duties to the
            Corporation and/or a Subsidiary; or (vii) any other reasons
            consistent with the Corporation's and/or a Subsidiary's policies and
            procedures regarding dismissals as they are adopted and implemented
            from time to time.

        (e) "Code" means the Internal Revenue Code of 1986, as amended, and any
            successor statute, and the regulations promulgated thereunder.

        (f) "Committee" means the committee appointed to administer the Plan, as
            provided in Section 4.

        (g) "Corporation" means Pegasus Communications Corporation, or any
            successor corporation.

        (h) "Covered Employee" means a covered employee within the meaning of
            Code Section 162(m)(3).

        (i) "Employee" means executives and other key employees of the
            Corporation and its Subsidiaries.

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        (j) "Financial Objectives" means the Performance Criteria described in
            Section 3(b)(i) herein.

        (k) "Individual Objectives" means the Performance Criteria described in
            Section 3(b)(ii) herein, with respect to a Participant who is not a
            Covered Employee.

        (l) "Participant" means an Employee selected from time to time by the
            Committee to participate in the Plan.

        (m) "Performance Adjustment" means a factor (or factors), as determined
            by a schedule established by the Committee, that will, when
            multiplied by a Participant's Target Award, determine the amount of
            a Participant's Award.

        (n) "Performance Criterion or Criteria" means the Financial Objectives
            and/or Individual Objectives selected by the Committee, as set forth
            in Section 3(b) herein.

        (o) "Performance Target" means the target established by the Committee
            for each Performance Criterion pursuant to Section 3(c) herein.

        (p) "Subsidiary" means any direct or indirect subsidiary of the
            Corporation, whether in corporate, partnership or any other form.

        (q) "Target Award" means, with respect to a Participant in any Award
            Year, the Participant's highest annual base salary during such year
            multiplied by the percentage of salary established by the Committee
            for that Participant.

3. AWARDS

        (a) TARGET AWARD. A Target Award will be established by the Committee
            for each Participant for each Award Year.

        (b) PERFORMANCE CRITERIA. One or more Performance Criteria will be
            established by the Committee for the Corporation and for each group,
            division or Subsidiary for each Award Year. The Committee may use
            the same Performance Criteria each Award Year or may use different
            Performance Criteria from year to year. With respect to a
            Participant who is a Covered Employee, Performance Criteria shall
            consist of Financial Objectives. With respect to a Participant who
            is not a Covered Employee, Performance Criteria may consist of
            Financial Objectives, Individual Objectives or a combination of
            Financial and Individual Objectives. Financial and Individual
            Objectives are defined as follows:

            (i)    FINANCIAL OBJECTIVES -- Financial Objectives shall be
                   expressed in terms of one or more of the following
                   performance measures established by the Committee for each
                   Award Year: earnings per share, net income, net operating
                   income, pre-tax profit, revenue growth, return on sales,
                   return on equity, return on assets, return on investment,
                   total return to stockholders, pre-marketing cash flow, cash
                   flow, EBITDA and subscriber growth. The Committee shall have
                   the authority to alter or adjust Financial Objectives during
                   the course of an Award Year, or to alter or adjust the

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                   financial results otherwise reported or achieved by the
                   Corporation during such Award Year, if it is deemed
                   appropriate to do so, except with respect to Covered
                   Employees, the Committee shall have no discretion to
                   increase, but may decrease, the amount of an Award payable
                   based upon the range of achievement of the Financial
                   Objectives established under Section 3 hereof.

            (ii)   INDIVIDUAL OBJECTIVES -- Individual Objectives, if
                   appropriate for a Participant, shall be expressed in terms of
                   significant qualitative or quantitative individual goals to
                   be achieved during the Award Year for which the Award
                   relates. Individual Objectives usually shall be established
                   jointly by the Participant and the Participant's immediate
                   superior, subject to approval by the Chief Executive Officer
                   of the Corporation, or his delegate. A Participant's
                   Individual Objectives may be altered or amended during an
                   Award Year, if necessary, to properly reflect changed
                   business conditions and priorities, subject to approval by
                   the Committee or the Chief Executive Officer or his delegate,
                   as applicable.

        (c) PERFORMANCE TARGET. One or more Performance Targets will be
            established by the Committee for each Performance Criterion selected
            for each Award Year.

        (d) PERFORMANCE ADJUSTMENT. The Award payable to any Participant with
            respect to an Award Year will vary from the Target Award depending
            upon whether, or the extent to which, Performance Targets have been
            achieved with respect to such Award Year. All such determinations
            regarding the achievement of any Performance Target will be made by
            the Committee in its sole and absolute discretion. The Committee may
            not increase the amount of compensation that would otherwise be
            payable upon achievement of the Performance Target or Targets, but
            it may reduce a Participant's Award if it believes such action would
            be in the best interest of the Corporation and its stockholders.

            (i)    Schedules. At the beginning of each Award Year, the Committee
                   will establish a range for each Performance Criterion that
                   correlates the percentage of Target Award to specified levels
                   of performance.

            (ii)   Award Determination. The Award for a Participant for a given
                   Award Year will be calculated by multiplying the
                   Participant's Target Award by the applicable Performance
                   Adjustments with respect to such Award Year.

            (iii)  Maximum Award. The maximum award payable to any Participant
                   with respect to any Award Year is $5.0 million, anything in
                   this Plan to the contrary notwithstanding.

        (e) PAYMENT OF AWARDS. Awards will be paid in cash after the Committee
            has certified the extent to which the Performance Target or Targets
            have been met and as soon as practicable after the close of the

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            Award Year for which they are made. No Award will be payable to any
            Participant who is not an Employee on the date the Award is
            scheduled to be paid, except as follows:

            (i)    If the Participant dies or becomes disabled prior to the date
                   the Award is scheduled to be paid, the Participant may be
                   granted an Award as and to the extent determined by the
                   Committee;

            (ii)   If the Participant retires or is involuntarily terminated
                   other than for Cause prior to the date the Award is scheduled
                   to be paid, the Participant may be granted an Award as and to
                   the extent determined by the Committee, provided that
                   Performance Targets have been met; and

            (iii)  Pursuant to Section 5(n) regarding change of control.

4. ADMINISTRATION

        (a) COMMITTEE. The Plan and all Awards will be administered by the
            Compensation Committee of the Board or a subcommittee thereof (the
            "Committee"), which Committee shall consist solely of two or more
            "outside directors" as defined in the regulations under Code Section
            162(m).

        (b) AUTHORITY. The Committee will have full and complete authority, in
            its sole and absolute discretion, (i) to exercise all of the powers
            granted to it under the Plan, (ii) to construe, interpret and
            implement the Plan and any related document, (iii) to prescribe,
            amend and rescind rules relating to the Plan, (iv) to make all
            determinations necessary or advisable in administering the Plan, and
            (v) to correct any defect, supply any omission and reconcile any
            inconsistency in the Plan.

         The Committee may delegate to the officers or employees of the
Corporation and/or a Subsidiary the authority to execute and deliver such
instruments and documents, to do all such acts and things, and to take all such
other steps deemed necessary, advisable or convenient for the effective
administration of the Plan in accordance with its terms and purpose, except that
the Committee may not delegate any authority for which the action of a committee
of outside directors is required under Code Section 162(m) (e.g., decisions
regarding timing, eligibility, amount or other material terms of any Awards).

        (c) DETERMINATIONS. The actions and determinations of the Committee on
            all matters relating to the Plan and any Awards will be final and
            conclusive. With respect to Covered Employees, the Committee shall
            determine the Target Award, Performance Criteria, Performance Target
            and Performance Adjustment not later than 90 days after the
            beginning of the Award Year to which such measure relates; provided,
            however, that the outcome is substantially uncertain at the time the
            measure is established and that no such determination shall be made
            after 25 percent of the Award Year has elapsed. Notwithstanding the
            foregoing, the Committee may decrease the amount of the Award
            payable in accordance with Section 3(b) or Section 3(c) herein at
            any time prior to the payment of the Award.

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        (d) LIABILITY. No member of the Committee or the Board will be liable
            for any action taken or determination made in good faith with
            respect to the Plan or any Award thereunder, and the Corporation
            will defend Committee and Board members for any actions taken or
            decisions made in good faith under the Plan.

        (e) PARTICIPANTS. The Committee will designate the corporate officers
            who shall be Participants in the Plan with respect to an Award Year,
            and it may designate group, division or Subsidiary key employees to
            be Participants.

        (f) AWARDS. Subject to the terms of the Plan, the Committee will have
            full and complete authority to determine, among other things, the
            Employees to whom, and the time or times at which, Awards will be
            made and the requisite conditions thereof.

        (g) CODE SECTION 162(m). It is the intent of the Corporation that this
            Plan and Awards hereunder satisfy, and be interpreted in a manner
            that, in the case of Participants who are or may be Covered
            Employees, satisfies the applicable requirements of Code Section
            162(m) so that the Corporation's tax deduction for remuneration in
            respect of this Plan for services performed by such Covered
            Employees is not disallowed in whole or in part by the operation of
            such Code Section. If any provision of this Plan or if any Award
            would otherwise frustrate or conflict with the intent expressed in
            this Section 4(g), that provision shall be interpreted and deemed
            amended so as to avoid such conflict. To the extent of any remaining
            irreconcilable conflict with such intent, such provision shall be
            deemed void as applicable to Covered Employees.

5. MISCELLANEOUS

        (a) NONASSIGNABILITY. No Award will be assignable or transferable
            (including pursuant to a pledge or security interest) other than by
            will or by the laws of descent and distribution.

        (b) WITHHOLDING TAXES. Whenever payments under the Plan are to be made,
            the Corporation and/ or the Subsidiary will withhold therefrom an
            amount sufficient to satisfy any applicable governmental withholding
            tax requirements related thereto.

        (c) AMENDMENT OR TERMINATION OF THE PLAN. The Board or the Compensation
            Committee of the Board may, from time to time, suspend or
            discontinue the Plan or revise, amend or terminate the Plan;
            provided, however, that without the approval of stockholders (in the
            manner described in regulations under Code Section 162(m)), the
            Board or the Committee may not change (i) the Performance Criteria,
            (ii) the individuals or class of individuals eligible to participate
            in the Plan, or (iii) the maximum amount payable with respect to any
            Award Year to a Covered Employee under the Plan. Continuation of the
            Plan shall be subject to stockholder approval to the extent required
            by regulations under Code Section 162(m) (e.g., no later than the
            first stockholder meeting that occurs in the fifth year following
            the year in which stockholders previously approved the performance
            goal).

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        (d) NON-UNIFORM DETERMINATIONS. The Committee's determinations under the
            Plan need not be uniform and may be made by it selectively among
            persons who receive, or are eligible to receive, Awards under the
            Plan, whether or not such persons are similarly situated. Without
            limiting the generality of the foregoing, the Committee will be
            entitled, among other things, to make non-uniform and selective
            determinations and to establish non-uniform and selective Target
            Awards; provided, however, that after the period set forth in
            Section 4(c) herein, the Committee may not increase the amount of
            compensation that would otherwise be payable to a Covered Employee
            upon achievement of the Performance Target or Targets with respect
            to an Award Year.

        (e) OTHER PAYMENTS OR AWARDS. Nothing contained in the Plan will be
            deemed in any way to limit or restrict the Corporation, its
            Subsidiaries, or the Committee from making any award or payment to
            any person under any other plan, arrangement or understanding,
            whether now existing or hereafter in effect.

        (f) PAYMENTS TO OTHER PERSONS. If payments are legally required to be
            made to any person other than the person to whom any amount is
            available under the Plan, payments will be made to the person to
            whom the Committee, or its delegate, believes to be legally entitled
            to the payment. Any such payment will be a complete discharge of the
            liability of the Committee.

        (g) UNFUNDED PLAN. No provision of the Plan will require the Corporation
            or its Subsidiaries, for the purpose of satisfying any obligations
            under the Plan, to purchase assets or place any assets in a trust or
            other entity to which contributions are made or otherwise to
            segregate any assets; nor will the Corporation or its Subsidiaries
            maintain separate bank accounts, books, records or other evidence of
            the existence of a segregated or separately maintained or
            administered fund for such purposes. Participants will have no
            rights under the Plan other than as unsecured general creditors of
            the Corporation and its Subsidiaries, except that insofar as they
            may have become entitled to payment of additional compensation by
            performance of services, they will have the same rights as other
            employees under generally applicable law.

        (h) LIMITS OF LIABILITY. Neither the Corporation or a Subsidiary, nor
            any member of the Board, the Committee, or any other person
            participating in the interpretation, administration or application
            of the Plan shall have any liability to any party for any action
            taken, or not taken, in good faith under the Plan.

        (i) RIGHTS OF EMPLOYEES. Nothing contained in this Plan will confer upon
            any Employee or Participant any right to continue in the employ or
            other service of the Corporation or a Subsidiary, or constitute any
            contract or limit in any way the right of the Corporation or a
            Subsidiary to change such person's compensation or other benefits,
            or to terminate the employment or other service of such person with
            or without Cause.

        (j) SECTION HEADINGS. The section headings contained herein are for
            convenience only, and in the event of any conflict, the text of the
            Plan, rather than the section headings, will control.

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        (k) INVALIDITY. If any term or provision contained herein will to any
            extent be invalid or unenforceable, such invalidity or
            unenforceability will not affect any other provision or part hereof.

        (l) APPLICABLE LAW. The Plan will be governed by the laws of the
            jurisdiction in which the Corporation is incorporated as determined
            without regard to the conflict of law principles thereof.

        (m) EFFECTIVE DATE. The Plan shall be effective as of April 1, 2001, and
            as amended from time to time thereafter; provided, however, that if
            the Plan is not approved by stockholders, in the manner described in
            regulations under Code Section 162(m), no Award shall be paid to any
            Covered Employee pursuant to the Plan.

        (n) CHANGE OF CONTROL. In the event of a Change of Control of the
            Corporation, then immediately after such event becomes effective
            (the "Effective Date"), the Corporation shall pay to each
            Participant the pro rata amount of said Participant's Target Award
            for said Award Year, determined solely by the ratio which the number
            of calendar quarters in the Award Year which have elapsed as of the
            Effective Date (including the calendar quarter in which the Change
            of Control occurred) bears to four (4).

            The following definitions shall apply for purposes of this
            subsection:

            (i)    "Change of Control" means the occurrence of any of the
                   following: (A) the sale, lease, transfer, conveyance or other
                   disposition (other than by way of merger or consolidation),
                   in one or a series of related transactions, of all or
                   substantially all of the assets of the Corporation to any
                   "person" (as such term is used in Section 13(d)(3) of the
                   Securities Exchange Act of 1934, as amended (the "Exchange
                   Act")) other than the Principal or his Related Parties, (B)
                   the adoption of a plan relating to the liquidation or
                   dissolution of the Corporation, (C) the consummation of any
                   transaction (including, without limitation, any merger or
                   consolidation) the result of which is that any "person" (as
                   defined above) becomes the "beneficial owner" (as such term
                   is defined in Rule 13d-3 and Rule 13d-5 under the Exchange
                   Act, except that a Person shall be deemed to have "beneficial
                   ownership" of all securities that such Person has the right
                   to acquire, whether such right is exercisable immediately or
                   only after the passage of time, upon the happening of an
                   event or otherwise directly or indirectly), of more of the
                   voting stock of the Corporation (measured by voting power
                   rather than number of shares) than is "beneficially owned"
                   (as defined above) at such time by the Principal and his
                   Related Parties in the aggregate, or (D) the first day on
                   which a majority of the members of the Board are not
                   Continuing Directors.

            (ii)   "Continuing Directors" means, as of any date of
                   determination, any member of the Board who (A) was a member
                   of the Board on April 1, 2001, or (B) was nominated for
                   election or elected to the Board with approval of a majority

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                   of the Continuing Directors who were members of the Board at
                   the time of such nomination or election.

            (iii)  "Principal" means Marshall W. Pagon.

            (iv)   "Related Party" means (A) any immediate family member of the
                   Principal or (B) any trust, corporation, partnership or other
                   entity, more than 50% of the voting equity interests of which
                   are owned directly or indirectly by, and which is controlled
                   by, the Principal and/or such other persons referred to in
                   the immediately preceding clause (A). For purposes of this
                   definition, (I) "immediate family member" means spouse,
                   parent, step-parent, child, sibling or step-sibling, and (II)
                   "control," as used with respect to any person, means the
                   possession, directly or indirectly, of the power to direct or
                   cause the direction of the management or policies of such
                   person, whether through the ownership of voting securities,
                   by agreement or otherwise; provided that beneficial ownership
                   of 10% or more of the voting securities of a Person shall be
                   deemed to be control. In addition, the Principal's estate
                   shall be deemed to be a Related Party until such time as such
                   estate is distributed in accordance with the Principal's will
                   or applicable state law.