**EXHIBIT 10.8****EMPLOYMENT AGREEMENT**          **THIS AGREEMENT**is entered into as of the 1st day of March, 2005 (the “Effective Date”), by andbetween Pegasus Solutions, Inc., a Delaware corporation (the “Company”) and Michael Kistner (the“Executive”).          **WHEREAS,**the Board of Directors of the Company (the “Board”) has determined that it isessential and in the best interest of the Company and its stockholders to enter into this Agreementto retain the services of the Executive and to ensure his continued dedication and efforts; and          **WHEREAS,**in order to induce the Executive to enter into and continue employment by theCompany, the Company desires to provide the Executive with certain benefits during the term of hisemployment and, in the event his employment is terminated, to provide the Executive with thebenefits and payments described herein.          **NOW, THEREFORE,**in consideration of the respective agreements of the parties contained herein,it is agreed as follows:**1.** **Employment Term.**          The initial term of employment shall commence on the Effective Date and shall expire on thethird anniversary of the Effective Date (the “Initial Term”) provided that in the event neitherparty provides Notice of Termination (as hereinafter defined) at least 30 days prior to theexpiration of the Initial Term, such term will be automatically renewed and extended for successive30 day periods thereafter until terminated as provided herein.**2.** **Employment.**          (a) While employed by the Company, Executive shall perform the duties, undertake theresponsibilities as assigned by the Company and exercise the authority customarily performed,undertaken and exercised by persons situated in a similar executive capacity and, excluding periodsof vacation and sick leave to which the Executive is entitled, the Executive agrees to devotereasonable attention and time during usual business hours to the business and affairs of theCompany to the extent necessary to discharge the responsibilities assigned to the Executive.**3.** **Compensation.**          (a) *Base Salary*. The Company agrees to pay or cause to be paid to the Executive an annualbase salary as mutually agreed, and as may be increased from time to time by mutual agreement(hereinafter referred to as the “Base Salary”). Such Base Salary shall be payable in accordancewith the Company’s customary practices applicable to its executives.          (b) *Annual Bonus*. In addition to Base Salary, the Executive may be awarded, for each fiscalyear ending during the Employment Term, an annual discretionary bonus (the “Annual Bonus”) inaccordance with the terms and conditions of the bonus plan approved by the Company. Any actualpayment or award under such Annual Bonus plan, and the size of any payment or award, will be inaccordance with the terms of the plan. Each such Annual Bonus
 

 
shall be paid no later than the end of the third (3rd) month of the fiscal yearnext following the fiscal year for which the Annual Bonus is awarded.**4.** **Employee Benefits.**          The Executive shall be entitled to participate in all employee benefit plans, practices andprograms maintained by the Company and made available to all employees generally, including,without limitation, all pension, retirement, profit sharing, savings, medical, hospitalization,disability, dental, life or travel accident insurance benefit plans. The Company may reducebenefit levels if such changes are part of broad-based changes in the Company’s benefit programsoffered generally to all employees. Notwithstanding the foregoing, except as otherwise set forthherein, nothing herein shall obligate the Company to adopt such plans, practices or programs.**5.** **Other Benefits.**          (a) *Fringe Benefits and Perquisites.*The Executive shall be entitled to participate in theExecutive Perquisite Plan of the Company as described in Attachment A hereto (the “PerquisitePlan”).          (b) *Expenses.*The Executive shall be entitled to receive reimbursement of all expensesreasonably incurred by him in connection with the performance of his duties hereunder includingpromoting, pursuing or otherwise furthering the business or interests of the Company in accordancewith the accounting procedures and expense reimbursement policies of the Company as it shall adoptfrom time to time.**6.** **Vacation and Sick Leave.**          During the Employment Term, at such reasonable times as the Chief Executive Officer shall inhis discretion permit, the Executive shall be entitled without loss of pay, to absent himselfvoluntarily from the performance of his employment under this Agreement, provided that:          (a) The Executive shall be entitled to twenty-two (22) days of annual vacation in accordancewith Company policies as in effect from time to time.          (b) The Executive shall be entitled to sick leave (without loss of pay) in accordance with theCompany’s policies as in effect from time to time.**7.** **Termination.**          In the event of a Change In Control (as hereinafter defined) resulting in Executive givingNotice of Termination occurring while this Agreement is in effect or in the event Executive isterminated by the Company for reasons other than “cause” (as hereinafter defined) prior to theexpiration of the Initial Term of this Agreement, the Company shall pay and provide the followingbenefits to Executive:(1) the Company shall continue to pay Executive as severance pay and in lieu of anyfurther compensation a monthly payment for a period of twelve (12) months followingthe Termination Date, but for no longer period than the expiration of the InitialTerm, an amount equal to Executive’s monthly Base
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Salary and Perquisite Plan in effect for the month immediately preceding theTermination Date,.(2) for the twelve (12) month period immediately following the Termination Date, butfor no longer period than the Initial Term, the Company shall reimburse Executivefor COBRA payments for the insurance coverage in effect immediately prior to theTermination Date. The Company’s obligation hereunder with respect to the foregoingbenefits shall terminate in the event the Executive obtains any such benefits(regardless of level and scope of coverage) pursuant to a subsequent employer’sbenefit plans.The Executive hereby acknowledges that full payment and/or performance by the Company of itsobligations as set forth in Section 7 hereof shall be in lieu of any other remedy or cause ofaction the Executive may have, either at law or in equity, as a result of the termination of theExecutive’s employment pursuant to such Section.**8.** **Definitions.**          (a) *Notice of Termination*. A Notice of Termination is a written notice given by the Companyto the Executive or by the Executive to the Company terminating this Agreement and the Executives’employment. The Notice of Termination must be given at least 30 in advance of the Termination Date(as hereinafter defined).          (b) *Termination Date.*For purposes of this Agreement, “Termination Date” shall mean the datespecified in the Notice of Termination provided that if the Executive’s employment is terminatedbecause of a Change In Control, the date specified in the Notice of Termination shall be not morethan thirty (30) days from the date the Notice of Termination is given to the Company.          (c) *Cause.*A termination of employment is for “cause” if the Executive: (1) has been convicted of or pleads guilty or no contest to a felony; or  (2) intentionally engaged in conduct which is demonstrably andmaterially injurious to the Company, monetarily or otherwise or from whichExecutive derives an improper material personal benefit; provided, however,that no termination of the Executive’s employment shall be for Cause as setforth in this clause (2) until; (i) there shall have been delivered to theExecutive a copy of a written not notice setting forth that theExecutive was guilty of the conduct set forth in this clause (2) andspecifying the particulars thereof in reasonable detail; and  (ii) the Executive shall have been provided anopportunity to be heard by the Board (with the assistance of theExecutive’s counsel if the Executive so desires). No act, nor failureto act, on the Executive’s part shall be considered “intentional”unless Executive has acted, or failed to act, with an absence of goodfaith and
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   without a reasonable belief that Executive’s action or failure to actwas in the best interest of the Company. (3) commits gross malfeasance or intentionally fails to perform theduties of the Executive’s position; provided, however, the Company shall firstnotify the Executive in writing stating with reasonable specificity the actionor inaction of the Executive which forms the basis for such notice and theExecutive fails to cure such malfeasance or failure within ten (10) days of thedate of such notice; or  (4) violates any valid non-competition or non-disclosure agreementor the Company’s insider trading policy, if any.          (d) *Change In Control*. For purposes of this Agreement, a “Change in Control” shall mean anyof the following events:(1) An acquisition of any voting securities of the Company (the “Voting Securities”) by any“Person” (as the term person is used for purposes of Section 12(d) or 13(d) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”)) other than any parent,subsidiary or affiliate of the Company immediately after which such Person has “BeneficialOwnership” (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of morethan fifty percent (50%) of the combined voting power of the Company’s then outstandingVoting Securities; provided, however, in determining whether a Change in Control hasoccurred, Voting Securities which are acquired in a “Non-Control Acquisition” (ashereinafter defined) shall not constitute an acquisition which would cause a Change inControl. A “Non-Control Acquisition” shall mean an acquisition by (i) an employee benefitplan (or a trust forming a part thereof) maintained by (A) the Company or (B) anycorporation or other Person of which a majority of its voting power or its voting equitysecurities or equity interest is owned, directly or indirectly, by the Company (for purposesof this definition, a “Subsidiary”) or (ii) the Company or its Subsidiaries,(2) The individuals who, as of the date of this Agreement is approved by the Board, aremembers of the Board (the “Incumbent Board”) cease for any reason to constitute at least onehalf (1/2) of the members of the Board; provided, however, that if the election, ornomination for election of any new director was approved by a vote of the members of theBoard as provided by the Company’s Bylaws, such new director shall, for purposes of thisAgreement, be considered as a member of the Incumbent Board; provided, however, that noindividual shall be considered a member of the Incumbent Board if such individual initiallyassumed office as a result of either an actual or threatened “Election Contest” (asdescribed in Rule 14a-11 promulgated under the Exchange Act) or other actual or threatenedsolicitation of proxies or consents by or on behalf of a Person other than the Board (a“Proxy Contest”) including by reason of any agreement intended to avoid or settle anyElection Contest or Proxy Contest, or(3) Approval by the stockholders of the Company of: (i) A complete liquidation or dissolution of the Company, or
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 (ii) An agreement for the sale or other disposition of all orsubstantially all of the assets of the Company to any Person (other than atransfer to a Subsidiary or a parent in a Non-Control Acquisition).**9.** **Successors and Assigns.**          (a) This Agreement shall be binding upon and shall inure to the benefit of the Company, itssuccessors and assigns and the Company shall require any successor or assign to expressly assumeand agree to perform this Agreement in the same manner and to the same extent that the Companywould be required to perform if no such succession or assignment had taken place. The term“Company” as used herein shall include such successors and assigns. The term “successors andassigns” as used herein shall mean a corporation or other entity acquiring all or substantially allthe assets and business of the Company (including this Agreement) whether by operation of law orotherwise.          (b) Neither this Agreement nor any right or interest hereunder shall be assignable ortransferable by the Executive, his beneficiaries or legal representatives, except by will or by thelaws of descent and distribution. This Agreement shall inure to the benefit of and be enforceableby the Executive’s legal personal representative.**10.** **Fees and Expenses.**          The Company shall pay all legal fees and related expenses (including the costs of experts,evidence and counsel) incurred by the Executive as a result of the breach or default by the Companyof the terms hereof.**11.** **Notice.**          For purposes of this Agreement, notice and all other communications provided for in theAgreement (including the Notice of Termination) shall be in writing and shall be deemed to havebeen duly given when personally delivered or sent by certified mail, return receipt requested,postage prepaid, addressed to the respective addresses last given by each party to the other,provided that all notices to the Company shall be directed to the attention of the Board with acopy to the Secretary of the Company. All notices and communications shall be deemed to have beenreceived on the date of delivery thereof or on the third (3rd) business day after themailing thereof, except that notice of change of address shall be effective only upon receipt.**12.** **Miscellaneous.**          No provision of this Agreement may be modified, waived or discharged unless such waiver,modification or discharge is agreed to in writing and signed by the Executive and the Company. Nowaiver by either party hereto at any time of any breach by the other party hereto of, or compliancewith, any condition or provision of this Agreement to be performed by such other party shall bedeemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior orsubsequent time. No agreements or representations, oral or otherwise, express or implied, withrespect to the subject matter hereof have been made by either party which are not expressly setforth in this Agreement.
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**13.** **Governing Law.**          This Agreement shall be governed by and construed and enforced in accordance with the laws ofthe State of Texas without giving effect to the conflict of law principles thereof. Subject toSection 16 of this Agreement, any action brought by any party to this Agreement shall be broughtand maintained in a court of competent jurisdiction in Dallas County, Texas.**14.** **Severability.**          The provisions of this Agreement shall be deemed severable and the invalidity orunenforceability of any provisions hereof shall not affect the validity or enforceability of theother provisions hereof.**15.** **Entire Agreement.**          This Agreement constitutes the entire agreement between the parties hereto and supersedes allprior agreements, if any, understandings and arrangements, oral or written, between the partieshereto with respect to the subject matter hereof.**16.** **Arbitration.**          Any dispute or controversy arising out of or relating to this Agreement, except the right toinjunctive relief, shall be determined and settled by arbitration in the City of Dallas, Texas, inaccordance with the Employment Dispute Resolution Rules of the American Arbitration Associationthen in effect, and judgment upon the award rendered by the arbitrator may be entered in any courtof competent jurisdiction, hereby expressly waiving the right to jury trial. Such arbitrator shallhave no power to modify any of the provisions of this Agreement, and his or her jurisdiction islimited accordingly. A party requesting arbitration hereunder shall give ten (10) days’ writtennotice to the other party to request such arbitration. Unless the arbitrator decides otherwise,the successful party in any such arbitration shall be entitled to reasonable attorneys’ fees andcosts associated with such arbitration. If the parties hereto cannot agree upon an arbitrator,then one shall be appointed by the governing office of the American Arbitration Association. Anyarbitrator so appointed shall have extensive experience in a profession connected with the subjectmatter of the dispute. Whenever any action is required to be taken under this Agreement within aspecified period of time and the taking of such action is materially affected by a matter submittedto arbitration, such period shall automatically be extended by the number of days plus ten (10)that are taken for the determination of that matter by the arbitrator.          **IN WITNESS WHEREOF,**the Company has caused this Agreement to be executed by its Chairman ofthe Board or Chairman of the Compensation Committee and the Executive has executed this Agreementas of the date and year first above written.       **PEGASUS SOLUTIONS, INC.** **EXECUTIVE:**              By:   By:               Michael KistnerPrint:                    Title:             
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