Document:

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                                                                   EXHIBIT 10.10

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT is entered into as of the 1st day of December, 2002, by
and between Pegasus Solutions, Inc., a Delaware corporation (the "Company") and
Gary Siegel (the "Executive").

         WHEREAS, the Board of Directors of the Company (the "Board") has
determined that it is essential and in the best interest of the Company and its
stockholders to enter into this Agreement to 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 the Company, the Company desires to provide the Executive with
certain benefits during the term of his employment and, in the event his
employment is terminated, to provide the Executive with the benefits 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 "Employment Term" commenced on August 14, 2000 (the "Effective
Date") and shall expire on the fourth anniversary of the Effective Date provided
that such term will be automatically renewed and extended indefinitely after the
fourth anniversary of the Effective Date until terminated as provided herein, in
the event Executive remains in the employ of the Company after the fourth
anniversary of the Effective Date.

2.       EMPLOYMENT.

         (a) Subject to the provisions of Section 7 hereof, the Company agrees
to continue to employ the Executive and the Executive agrees to remain in the
employ of the Company during the Employment Term. During the Employment Term,
the Executive shall be employed as the Executive Vice President-Human Resources
of the Company. The Executive shall perform the duties, undertake the
responsibilities and exercise the authority customarily performed, undertaken
and exercised by persons situated in a similar executive capacity. Executive
shall also promote, by entertainment or otherwise, the business of the Company.

         (b) During the Employment Term, excluding periods of vacation and sick
leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during usual business hours to the business and
affairs of the Company to the extent necessary to discharge the responsibilities
assigned to the Executive hereunder. The Executive may (1) serve on corporate,
civil or charitable boards or committees, (2) manage personal investments and
(3) deliver lectures and teach at educational institutions, so long as such
activities do not constitute a conflict of interest, create issues of
independence significantly interfere with the performance of the Executive's
responsibilities hereunder. It is expressly understood and agreed that to the
extent that any such activities have been conducted by the Executive prior to
the Effective Date, the continued conduct of such activities (or the conduct of
activities similar in nature and scope thereto) subsequent to the Effective Date
shall not thereafter be deemed to interfere with the performance of the
Executive's responsibilities to the Company.

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3.       COMPENSATION.

         (a) Base Salary. Beginning on the Effective Date, the Company agrees to
pay or cause to be paid to the Executive an annual base salary as mutually
agreed, and as may be increased from time to time by the Compensation Committee
of the Board (hereinafter referred to as the "Base Salary"). Such Base Salary
shall be payable in accordance with the Company's customary practices applicable
to its executives.

         (b) Annual Bonus. In addition to Base Salary, the Executive shall be
awarded, for each fiscal year ending during the Employment Term, an annual
discretionary bonus (the "Annual Bonus") in accordance with the terms and
conditions of the bonus plan approved by the Compensation Committee. Any actual
payment or award under such Annual Bonus plan, and the size of any payment or
award, will be in accordance 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 year
next following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus as may be
permitted by the Company's Executive Deferred Compensation Plan.

         (c) Car Allowance. Executive shall be entitled to a car allowance of
Seven Hundred Fifty Dollars ($750.00) per month for each month during the term
of this Agreement. This section 3(c) shall terminate and be of no effect as of
January 1, 2003.

4.       EMPLOYEE BENEFITS.

         During the Employment Term and beginning on the Effective Date, the
Executive shall be entitled to participate in all employee benefit plans,
practices and programs maintained by the Company and made available to employees
generally, including, without limitation, all pension, retirement, profit
sharing, savings, medical, hospitalization, disability, dental, life or travel
accident insurance benefit plans. Unless otherwise provided herein, the
compensation and benefits under, and the Executive's participation in, such
plans, practices and programs shall be on the same basis and terms as are
applicable to employees of the Company generally, but in no event on a basis
less favorable in terms of benefit levels and coverage than offered to other
similarly situated executives of the Company. The Company may reduce benefit
levels if such changes are part of broad-based changes in the Company's benefit
programs offered generally to all employees. Notwithstanding the foregoing,
except as otherwise set forth herein, nothing herein shall obligate the Company
to adopt such plans, practices or programs.

5.       EXECUTIVE BENEFITS.

         (a) Executive shall be entitled to participate in the Company's
Executive Deferred Compensation Plan, as approved and adopted by the Company's
Board of Directors September 10, 2002 (the "Executive Deferred Compensation
Plan") and all supplemental medical or life insurance or other bonus or
incentive compensation plans applicable to executives of the Company; provided,
however, the grant of a stock option or other form of stock compensation in any
year is not guaranteed and will be dependent on the Board's evaluation of the
Executive's performance. Unless otherwise provided herein, the compensation and
benefits under, and the Executive's participation in, such plans shall be on the
same basis and terms as other similarly situated executives of the Company. No
additional compensation provided under any of such

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plans shall be deemed to modify or otherwise affect the terms of this Agreement
or any of the Executive's entitlements hereunder. Notwithstanding the foregoing,
except as otherwise set forth herein, nothing herein shall obligate the Company
to adopt such plans, practices or programs.

         (b) Supplemental Executive Retirement Plan. The Executive shall be
entitled to participate in the Company's Supplemental Executive Retirement Plan,
as amended and approved by the Company's Board of Directors September 10, 2002,
and as hereafter amended provided that Executive has agreed in writing to such
amendment.

         (c) Stock Plans. Executive shall be entitled to participate in the
Company's stock incentive plans, employee stock purchase plans and such other
stock-related plans as may be applicable to executives of the Company.

         (d) Fringe Benefits and Perquisites. During the Employment Term, the
Executive shall be entitled to all fringe benefits and perquisites generally
made available by the Company to its executives. Effective January 1, 2003,
Executive shall be entitled to participate in the Executive Benefits and
Perquisite Plan approved and adopted by the Company's Board of Directors
September 10, 2002 and as hereafter amended provided that Executive has agreed
in writing to such amendment. Unless otherwise provided, the fringe benefits and
perquisites provided to Executive shall be on substantially the same basis and
terms as other similarly situated executives of the Company.

         (e) Expenses. The Executive shall be entitled to receive reimbursement
of all expenses reasonably incurred in connection with the performance of
Executive's duties hereunder or for promoting, pursuing or otherwise furthering
the business or interests of the Company in accordance with the accounting
procedures and expense reimbursement policies of the Company as it shall adopt
from time to time.

6.       VACATION AND SICK LEAVE.

         During the Employment Term, at such reasonable times as the Board shall
in its discretion permit, the Executive shall be entitled without loss of pay,
to absent himself voluntarily from the performance of his employment under this
Agreement, provided that:

         (a) The Executive shall be entitled to annual vacation in accordance
with the policies, if any, as periodically established by the Board.

         (b) The Executive shall be entitled to sick leave (without loss of pay)
in accordance with the Company's policies, if any, in effect from time to time.

7.       TERMINATION.

         During the Employment Term, the Executive's employment hereunder may be
terminated under the following circumstances:

         (a) Cause. The Company may terminate the Executive's employment for
"Cause". A termination of employment is for "Cause" if the Executive:

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         (1)      has been convicted of or plead guilty or no contest to a
                  felony; or

         (2)      intentionally engaged in conduct which is demonstrably and
                  materially injurious to the Company, monetarily or otherwise
                  or from which Executive derives an improper material personal
                  benefit; provided, however, that no termination of the
                  Executive's employment shall be for Cause as set forth in this
                  clause (2) until:

                  (i)      there shall have been delivered to the Executive a
                           copy of a written notice setting forth that the
                           Executive was guilty of the conduct set forth in this
                           clause (2) and specifying the particulars thereof in
                           reasonable detail; and

                  (ii)     the Executive shall have been provided an opportunity
                           to be heard by the Board (with the assistance of the
                           Executive's counsel if the Executive so desires). No
                           act, nor failure to act, on the Executive's part
                           shall be considered "intentional" unless Executive
                           has acted, or failed to act, with an absence of good
                           faith and without a reasonable belief that
                           Executive's action or failure to act was in the best
                           interest of the Company.

         (3)      commits gross malfeasance or intentionally fails to perform
                  the duties of the Executive's position; provided, however, the
                  Company shall first notify the Executive in writing stating
                  with reasonable specificity the action or inaction of the
                  Executive which forms the basis for such notice and the
                  Executive fails to cure such malfeasance or failure within ten
                  (10) days of the date of such notice; or

         (4)      violates any valid non-competition or non-disclosure agreement
                  or the Company's insider trading policy, if any.

         Notwithstanding anything contained in this Agreement to the contrary,
no failure to perform by the Executive after a Notice of Termination (as
hereinafter defined) is given by the Executive shall constitute Cause for
purposes of this Agreement.

         (b) Disability. The Company may terminate the Executive's employment
after having established the Executive's Disability. For purposes of this
Agreement, "Disability" means a physical or mental infirmity which impairs the
Executive's ability to substantially perform Executive's material duties under
this Agreement which continues for a period of at least ninety (90) consecutive
days. The Executive shall be entitled to the compensation and benefits provided
for under this Agreement for any period during the Employment Term and prior to
the Termination Date (as hereinafter defined) resulting from the Executive being
unable to work due to a physical or mental infirmity and as otherwise provided
in this Agreement in connection with Disability. Notwithstanding anything
contained in this Agreement to the contrary, until the Termination Date (as
hereinafter defined) specified in a Notice of Termination (relating to the
Executive's Disability, in the event the Executive is no longer under a
Disability, the Executive will be entitled to return to Executive's position
with the Company as set forth in this Agreement in which event no Disability of
the Executive will be deemed to have occurred.

         (c) Good Reason.

             (1)          The Executive may terminate his employment for "Good
                          Reason". For purposes of this Agreement, "Good Reason"
                          shall mean the occurrence of any of the events or
                          conditions described in subsections (i) through (vi)
                          hereof:

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                  (i)      If the Executive shall cease to be employed in the
                           capacity as set forth in Section 2(a) above or upon
                           the assignment to the Executive of any material
                           duties or responsibilities which are inconsistent
                           with Executive's position or responsibilities; or any
                           removal of the Executive from or failure to reappoint
                           or reelect Executive to any such offices or
                           positions, except during a period of Disability or in
                           connection with the termination of Executive's
                           employment for Disability, Cause, as a result of his
                           death, or by the Executive other than for Good
                           Reason;

                  (ii)     A reduction in the Executive's Base Salary or any
                           failure to pay the Executive any compensation or
                           benefits to which Executive is entitled within thirty
                           (30) days of the due date;

                  (iii)    A Change of Control as hereinafter defined;

                  (iv)     Any material breach by the Company of any provision
                           of this Agreement; provided, however, the Executive
                           shall first notify the Company in writing stating
                           with reasonable specificity the breach by the Company
                           and the Company fails to cure such breach within ten
                           (10) days of the date of such notice;

                  (v)      Any purported termination of the Executive's
                           employment for Cause by the Company which is found by
                           a court of competent jurisdiction or an arbitrator
                           not to comply with the terms of Section 7(a); or

                  (vi)     The failure of the Company to obtain an agreement,
                           reasonably satisfactory to the Executive, from any
                           successor or assign of the Company to assume and
                           agree to perform this Agreement, as contemplated in
                           Section 12 hereof.

                  (2) The Executive's right to terminate Executive's employment
         pursuant to this Section 7(c) shall not be affected by Executive's
         incapacity due to physical or mental illness.

         (d) Voluntary Termination. Upon thirty (30) days prior written notice,
either the Executive or the Company may voluntarily terminate the Executive's
employment hereunder at any time; provided, however, in the event of any such
termination by the Company, the Company shall pay to the Executive the amounts
set forth in Section 8(d) hereof.

8.       COMPENSATION UPON TERMINATION.

         Upon termination of the Executive's employment during the Employment
Term, the Executive shall be entitled to the following benefits:

         (a) If the Executive's employment with the Company shall be terminated
by the Company for Cause or by the Executive other than for Good Reason, the
Company shall pay the Executive all amounts earned and accrued through the
Termination Date but not paid as of the Termination Date, including:

                  (1) the Base Salary,

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                  (2) an amount equal to the Pro Rata Bonus. The "Pro Rata
         Bonus" is an amount equal to the maximum bonus amount the Executive
         would have been entitled to in the fiscal year of the Termination Date
         multiplied by a fraction, the numerator of which is the number of days
         in such fiscal year through the Termination Date and the denominator of
         which is 365,

                  (3) reimbursement for reasonable and necessary expenses
         incurred by the Executive on behalf of the Company during the period
         ending on the Termination Date,

                  (4) vacation pay, and

                  (5) sick leave (collectively, "Accrued Compensation").

         (b) If the Executive's employment with the Company shall be terminated
by the Company for Disability, the Company shall pay the Executive all amounts
earned or accrued through the Termination Date but not paid as of the
Termination Date, including the Accrued Compensation. In addition, the Executive
shall be entitled to the following:

                  (1) the Base Salary and all other benefits customarily
         received for a period of one (1) year from the Termination Date
         resulting from such Disability,

                  (2) an amount equal to the Pro Rata Bonus.

                  (3) payments as more specifically provided by the Supplemental
         Executive Retirement Plan and the Executive Deferred Compensation Plan,
         and

                  (4) one (1) additional year of vesting from the Termination
         Date of all stock option and restricted stock grants not then expired
         or terminated.

         (c) If the Executive's employment with the Company shall be terminated
by reason of the Executive's death, the Company shall pay the Executive all
amounts earned or accrued through the Termination Date but not paid as of the
Termination Date, including the Accrued Compensation. In addition, the Company
shall pay to the Executive's beneficiaries the following:

                  (1) the Base Salary and all other benefits customarily
         received for a period of one (1) year from the date of such death,

                  (2) an amount equal to the Pro Rata Bonus,

                  (3) payments as more specifically provided by the Supplemental
         Executive Retirement Plan and the Executive Deferred Compensation Plan,
         and

                  (4) one (1) additional year of vesting from the Termination
         Date of all stock option and restricted stock grants not then expired
         or terminated.

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         (d) If the Executive's employment with the Company shall be terminated
by the Company voluntarily, without Cause or by the Executive for Good Reason,
the Company shall pay to the Executive the following:

                  (1)      all Accrued Compensation and a Pro Rata Bonus,

                  (2)      the Company shall continue to pay the Executive as
                           severance pay and in lieu of any further compensation
                           (except as otherwise provided herein) a monthly
                           payment for a period of twelve (12) months following
                           the Termination Date equal to the sum of (A) the
                           Executive's monthly Base Salary in effect for the
                           month immediately preceding the Termination Date and
                           (B) one twelfth (1/12) of the Bonus. The "Bonus" is
                           an amount equal to the maximum bonus amount the
                           Executive would have been entitled to in the fiscal
                           year of the Termination Date,

                  (3)      during the twelve (12) month period immediately
                           following the Termination Date (the "Continuation
                           Period"), the Company shall at its expense continue
                           on behalf of the Executive and Executive's dependents
                           and beneficiaries the Executive Benefit and
                           Perquisites Plan (except life and disability
                           insurance, if any, will not be continued and
                           "bridged" healthcare benefits will not be provided
                           unless Executive has satisfied the requirement for
                           "retirement" as defined in the plan) and the medical,
                           dental and hospitalization benefits provided (A) to
                           the Executive immediately prior to the Notice of
                           Termination or (B) to other similarly situated
                           executives who continue in the employ of the Company
                           during the Continuation Period. Notwithstanding the
                           immediately preceding sentence, the coverage,
                           benefits and perquisites (including deductibles and
                           costs) provided in this Section 8(d)(3) during the
                           Continuation Period shall be no less favorable to the
                           Executive and Executive's dependents and
                           beneficiaries, than the coverages, benefits and
                           perquisites in effect as of the Termination Date. The
                           Company's obligation hereunder with respect to the
                           foregoing coverages, benefits and perquisites shall
                           terminate in the event the Executive obtains any such
                           benefits (regardless of level and scope of coverage)
                           pursuant to a subsequent employer's benefit plans.
                           This Section 8(d)(3) shall not be interpreted as to
                           limit any benefits to which the Executive,
                           Executive's dependents or beneficiaries may be
                           entitled under any of the Company's employee benefit
                           plans, programs or practices following the
                           Executive's termination of employment, including
                           without limitation, retiree medical and life
                           insurance benefits,

                  (4)      any outstanding stock options (including restricted
                           stock and granted performance shares or units)
                           granted to the Executive under any stock option plans
                           or under any other incentive plan or arrangement
                           shall become, as of the Termination Date, one hundred
                           percent (100%) vested, and all restrictions on such
                           grants shall be removed, and (5) the Company shall
                           reimburse Executive the costs of any outplacement
                           services incurred by Executive, up to a maximum
                           amount of Fifteen Thousand Dollars ($15,000.00).

         (e) The amounts provided for in Sections 8(a), 8(b)(2), 8(c)(2) and
8(d) (1) shall be paid within thirty (30) days after the Executive's Termination
Date. Expenses incurred by

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Executive under Section 8(d)(5) shall be paid within thirty (30) days of receipt
by the Company of a claim for reimbursement submitted by the Executive.

         (f) The Executive hereby acknowledges that full payment and/or
performance by the Company of its obligations as set forth in Sections 8(a),
(b), (c) or (d) hereof shall be in lieu of any other remedy or cause of action
the Executive may have, either at law or in equity, as a result of the
termination of the Executive's employment pursuant to such sections.

9.       DEFINITIONS.

         (a) Notice of Termination. For purposes of this Agreement, a "Notice of
Termination" shall mean a written notice which indicates the specific
termination provision in this Agreement, if any, relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated. Any
purported termination by the Company or by the Executive shall be communicated
by written Notice of Termination to the other. For purposes of this Agreement,
no such purported termination of employment shall be effective without such
Notice of Termination.

         (b) Termination Date. For purposes of this Agreement, "Termination
Date" shall mean, in the case of the Executive's death, his date of death, or in
all other cases, the date specified in the Notice of Termination subject to the
following:

         (1)      If the Executive's employment is terminated by the Company for
                  Cause, the date of the Notice of Termination,

         (2)      If the Executive's employment is terminated by the Company due
                  to Disability, the date specified in the Notice of Termination
                  shall be at least thirty (30) days from the date the Notice of
                  Termination is given to the Executive, provided that the
                  Executive shall not have returned to the full-time performance
                  of Executive's duties during such period of at least thirty
                  (30) days, and

         (3)      If the Executive's employment is terminated for Good Reason,
                  the date specified in the Notice of Termination shall be not
                  more than thirty (30) days from the date the Notice of
                  Termination is given to the Company.

         (c) Change of Control. For purposes of this Agreement, a "Change of
Control" shall mean any of 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 the Securities
                  Exchange Act of 1934, as amended (the "Exchange Act")) other
                  than any parent, subsidiary or affiliate of the Company
                  (provided such parent, subsidiary or affiliate was not created
                  to facilitate an acquisition transaction) immediately after
                  which such Person has "Beneficial Ownership" (within the
                  meaning of Rule 13d-3 promulgated under the Exchange Act) of
                  more than fifty percent (50%) of the combined voting power of
                  the Company's then outstanding Voting Securities; provided,
                  however, in determining whether a Change of Control has
                  occurred, Voting Securities which are acquired in a
                  "Non-Control Acquisition" (as hereinafter defined) shall not
                  constitute an acquisition which would cause a Change of
                  Control. A "Non-Control Acquisition" shall mean an acquisition
                  by (i) an employee benefit plan (or a trust forming a part
                  thereof) maintained by (A) the Company or (B) any corporation
                  or other Person of which a majority of its

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         voting power or its voting equity securities or equity interest is
         owned, directly or indirectly, by the Company (for purposes of 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, are members of the Board (the
                  "Incumbent Board") cease for any reason to constitute at least
                  one half (1/2) of the members of the Board; provided, however,
                  that if the election, or nomination for election of any new
                  director was approved by a vote of the members of the Board as
                  provided by the Company's Bylaws, such new director shall, for
                  purposes of this Agreement, be considered as a member of the
                  Incumbent Board; provided, however, that no individual shall
                  be considered a member of the Incumbent Board if such
                  individual initially assumed office as a result of either an
                  actual or threatened "Election Contest" (as described in Rule
                  14a-11 promulgated under the Exchange Act) or other actual or
                  threatened solicitation 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 any
                  Election Contest or Proxy Contest, or

         (3)      A complete liquidation or dissolution of the Company, or the
                  sale or other disposition of all or substantially all of the
                  assets of the Company to any Person (other than a transfer to
                  a Subsidiary or a parent in a Non-Control Acquisition).

10.      EXCISE TAX PAYMENTS.

         In the event of a determination that a portion of any payment or
benefit to the Executive or for his benefit payable or distributable pursuant to
the terms of this Agreement is or will be deemed to be an "excess parachute
payment" within the meaning of Section 280G(b)(1) of the Internal Revenue Code
of 1986, as amended (the "Code") (a "Payment" or "Payments"), the Company shall
be responsible for the payment of any excise or similar tax assessed in
connection therewith.

11.      NONCOMPETITION.

         (a) Except with the prior written consent of the Company authorized by
a resolution adopted by the Board, for the period beginning upon the date hereof
and ending on (i) in the event of the termination of the Executive's employment
by the Executive for Good Reason pursuant to Section 7(c) or by the Company
pursuant to Section 7(d) hereof and the Executive is receiving payments from the
Company pursuant to Section 8(d) hereof, the date on which the last such payment
is received; or (ii) in the event of the voluntary termination of the
Executive's employment by the Executive pursuant to Section 7(d) hereof or
termination by the Company for Cause, the date which is nine (9) months from the
Termination Date; Executive shall not directly or indirectly as owner, partner,
joint venturer, stockholder, employee, broker, agent, principal, trustee,
corporate officer, director, licensor, or in any capacity whatsoever engage in,
become substantially financially interested in, employed by or have any
connection with, any business engaged principally in the processing of
electronic hotel reservations or travel agent commissions or providing hotel
property system services or providing hotel representation or marketing services
in any country where the Company or any of its subsidiaries is then engaged in
such business; provided, however, that Executive may own any securities of any
corporation which is engaged in such business and is publicly traded stock or
securities of such corporation.

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         (b) Executive agrees that for a period of one (1) year following
termination of employment with the Company, Executive will not solicit or in any
manner encourage employees of the Company, its subsidiaries or parent to leave
its employ.

         (c) In case one or more of the terms contained in subsections (a) or
(b) of this Section 11 shall for any reason become invalid, illegal, or
unenforceable, such invalidity, illegality or unenforceability shall not affect
any other terms herein, but such terms shall be deemed deleted and such deletion
shall not affect the validity of the other terms of this section. In addition,
if any one or more of the terms contained in subsections (a) or (b) of this
Section 11 shall for any reason be held to be excessively broad with regard to
time, duration, geographic scope or activity that term shall be construed in a
manner to enable it to be enforced to the extent compatible with applicable law.

12.      SUCCESSORS AND ASSIGNS.

         (a) This Agreement shall be binding upon and shall inure to the benefit
of the Company, its successors and assigns and the Company shall require any
successor or assign to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would 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
and assigns" as used herein shall mean a corporation or other entity acquiring
all or substantially all the assets and business of the Company (including this
Agreement) whether by operation of law or otherwise.

         (b) Neither this Agreement nor any right or interest hereunder shall be
assignable or transferable by the Executive, his beneficiaries or legal
representatives, except by will or by the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal personal representative.

13.      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 Company of the terms hereof.

14.      NOTICE.

         For purposes of this Agreement, notice and all other communications
provided for in the Agreement (including the Notice of Termination) shall be in
writing and shall be deemed to have been 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
a copy to the Secretary of the Company. All notices and communications shall be
deemed to have been received on the date of delivery thereof or on the third
(3rd) business day after the mailing thereof, except that notice of change of
address shall be effective only upon receipt.

15.      NON-EXCLUSIVITY OF RIGHTS.

         Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any of its subsidiaries and for which
the Executive may qualify, nor shall anything herein limit

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or reduce such rights as the Executive may have under any other agreements with
the Company or any of its subsidiaries. Amounts which are vested benefits or
which the Executive is otherwise entitled to receive under any plan or program
of the Company or any of its subsidiaries shall be payable in accordance with
such plan or program, except as explicitly modified by this Agreement.

16.      SETTLEMENT OF CLAIMS.

         The Company's obligation to make the payments provided for in this
Agreement and otherwise to perform its obligations hereunder shall not be
affected by any circumstances, including, without limitation, any set-off
(except against amounts actually owed by the Executive to the Company as
evidenced by promissory notes, loan agreements and similar documents executed by
the Executive), counterclaim, defense, recoupment or other right which the
Company may have against the Executive or others.

17.      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. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement.

18.      GOVERNING LAW.

         This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Texas without giving effect to the
conflict of law principles thereof. Subject to Section 21 of this Agreement, any
action brought by any party to this Agreement shall be brought and maintained in
a court of competent jurisdiction in Dallas County, Texas.

19.      SEVERABILITY.

         The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provisions hereof shall not affect the
validity or enforceability of the other provisions hereof.

20.      ENTIRE AGREEMENT.

         This Agreement constitutes the entire agreement between the parties
hereto and supersedes all prior agreements, if any, understandings and
arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof.

21.      ARBITRATION.

         Any dispute or controversy arising out of or relating to this Agreement
shall be determined and settled by arbitration in the City of Dallas, Texas, in
accordance with the Employment Dispute Resolution Rules of the American
Arbitration Association then in effect,

                                      -11-
<PAGE>

and judgement upon the award rendered by the arbitrator may be entered in any
court of competent jurisdiction. Such arbitrator shall have no power to modify
any of the provisions of this Agreement, and his or her jurisdiction is limited
accordingly. A party requesting arbitration hereunder shall give ten (10) days'
written notice 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 and costs 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. Any arbitrator so appointed shall have extensive experience in a
profession connected with the subject matter of the dispute. Whenever any action
is required to be taken under this Agreement within a specified period of time
and the taking of such action is materially affected by a matter submitted to
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 of the Board or Chairman of the Compensation Committee
and the Executive has executed this Agreement as of the date and year first
above written.

PEGASUS SOLUTIONS, INC.                     EXECUTIVE:

By:                                         By:
   ------------------------------------        --------------------------------
                                               Gary Siegel
Print:
      --------------------------------

Title:
      --------------------------------

                                      -12-<PAGE>
                                                                   EXHIBIT 10.14

                             PEGASUS SOLUTIONS, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                   AMENDED AND RESTATED EFFECTIVE JULY 1, 2002

<PAGE>

                                TABLE OF CONTENTS

<Table>
<Caption>
                                                                                                PAGE
                                                                                                ----
<S>                                                                                             <C>
ARTICLE I     ESTABLISHMENT AND PURPOSE ......................................................    1

     1.1      Establishment ..................................................................    1
     1.2      Purpose ........................................................................    1

ARTICLE II    DEFINITIONS AND CONSTRUCTION ...................................................    1

     2.1      Definitions ....................................................................    1
     2.2      Construction ...................................................................    8

ARTICLE III   PARTICIPATION ..................................................................    8

     3.1      Selection of Participants ......................................................    8

ARTICLE IV    BENEFITS .......................................................................    8

     4.1      Eligibility for Benefits .......................................................    8
     4.2      Amount of Benefits .............................................................    9
     4.3      Form of Payment ................................................................    9
     4.4      Optional Forms of Payment ......................................................    9
     4.5      Termination of Employment for Good Reason following a Change of Control ........   10

ARTICLE V     FUNDING AND OTHER MATTERS ......................................................   10

     5.1      No Trust Required ..............................................................   10
     5.2      Funding of Obligation ..........................................................   11
     5.3      Continued Employment ...........................................................   11
     5.4      Restriction on Assignment ......................................................   11
     5.5      Binding on Company, Participants and Their Successors ..........................   11
     5.6      Governing Law ..................................................................   11
     5.7      Severability ...................................................................   11

ARTICLE VI    ADMINISTRATION .................................................................   11

     6.1      Administration .................................................................   11
     6.2      Finality of Determination ......................................................   12
     6.3      Expenses .......................................................................   12
     6.4      Indemnification and Exculpation ................................................   12
     6.5      Claims Procedure ...............................................................   12

ARTICLE VII   AMENDMENT AND TERMINATION ......................................................   13

     7.1      Amendment and Termination ......................................................   13
</Table>

                                       i
<PAGE>

                             PEGASUS SOLUTIONS, INC.

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                   ARTICLE I

                            ESTABLISHMENT AND PURPOSE

         1.1 Establishment. Pegasus Systems, Inc. established the PEGASUS
SYSTEMS, INC. SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN (the "Plan"), effective as
of January 1, 2000. Thereafter, Pegasus Systems, Inc. changed its name to
Pegasus Solutions, Inc. (the "Company"). The name of the Plan is hereby changed
to the PEGASUS SOLUTIONS, INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN, and the
Plan is amended and restated effective as of July 1, 2002 (the "Effective
Date").

         1.2 Purpose. The purpose of the Plan is to promote in a select group of
its management or highly compensated employees and those of its affiliates the
strongest interest in the successful operation of the business and increased
efficiency in their work, to align the financial interests of such employees
with those of Company shareholders, to ensure competitive pay and benefits for
those individuals and to provide an opportunity for accumulation of funds for
their retirement. It is intended that the Plan be "unfunded" for purposes of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") and not be
construed to provide income to any participant or beneficiary under the Internal
Revenue Code of 1986, as amended (the "Code") prior to actual receipt of
benefits hereunder.

                                   ARTICLE II

                          DEFINITIONS AND CONSTRUCTION

         2.1 Definitions. The following words and phrases shall have the meaning
set forth below unless a different meaning is plainly required by the context:

                  (a)      The term "ACCRUED BENEFIT" shall mean a Participant's
                           monthly retirement benefit equal to the greater of:

                           (i)      three percent (3%) of the Participant's
                                    Monthly Target Total Cash Compensation as of
                                    July 1, 2002 multiplied by the Participant's
                                    Years of Service as of July 1, 2002,
                                    increased by five percent (5%) compounded
                                    annually until the Participant's
                                    Determination Date, but not to exceed sixty
                                    percent (60%) of the greater of (A) the
                                    Participant's Monthly Target Total Cash
                                    Compensation as of July 1, 2002 or (B) the
                                    Participant's Final Average Compensation;
                                    provided that the maximum benefit for the
                                    Chief Executive Officer of the Company is
                                    seventy percent (70%) of the greater of (A)
                                    or (B); or

                                       1
<PAGE>

                           (ii)     one-half percent (1/2%) of the Participant's
                                    Final Average Compensation multiplied by
                                    Years of Service.

                  (b)      The term "ACTUARIALLY EQUIVALENT" shall mean a
                           benefit differing in time, period, and/or manner of
                           payment from a specified benefit provided under this
                           Plan, but having the same value at the date of
                           commencement of benefits when computed using the 1994
                           GAM Static Male Table and an interest rate equal to
                           the annual rate of interest on 30-year Treasury
                           securities in effect for the second calendar month
                           preceding the Plan Year of the distribution.

                  (c)      The term "ADMINISTRATIVE COMMITTEE" shall mean the
                           Compensation and Benefits Administrative Committee of
                           the Company; provided, however, that during any
                           period the Compensation and Benefits Administrative
                           Committee is not constituted, the term shall mean the
                           Compensation Committee.

                  (d)      The term "BENEFICIARY" shall mean the person or
                           persons designated by a Participant to receive
                           payment of all or a designated portion of the
                           Participant's benefit payable under this Plan in the
                           event of the Participant's death. Each Beneficiary
                           designation shall be in the form prescribed by the
                           Administrative Committee and will be effective only
                           when filed with the Administrative Committee during
                           the Participant's or former Participant's lifetime.
                           Each Beneficiary designation filed with the
                           Administrative Committee will cancel all Beneficiary
                           designations previously filed with the Administrative
                           Committee. If any Participant or former Participant
                           fails to designate a Beneficiary in the manner
                           provided above; or if the Beneficiary designated by a
                           Participant or former Participant dies before him and
                           the Participant or former Participant fails to
                           designate a new Beneficiary, or if the Beneficiary
                           designated by a deceased Participant or former
                           Participant dies before complete distribution of the
                           deceased Participant's or former Participant's
                           benefit, the Administrative Committee shall direct
                           that such Participant's or former Participant's
                           benefit be paid:

                           (i)      To the surviving spouse of such Participant
                                    or former Participant;

                           (ii)     To the surviving children, and the
                                    descendants of any deceased child, per
                                    stirpes, of the Participant or former
                                    Participant;

                           (iii)    To the Participant's surviving brothers and
                                    sisters; or

                           (iv)     To the Participant's estate (executor or
                                    administrator).

                           In the event of the Participant's death, the Company
                           shall make benefit payments payable under this Plan
                           to the Participant's Beneficiary. Any payment made by
                           the Company to the Participant's Beneficiary in good
                           faith shall fully discharge the Company from its
                           obligations with respect

                                       2
<PAGE>

                           to such payment, and the Company shall have no
                           further obligation to see to the application of any
                           money so paid.

                  (e)      The term "BENEFIT COMMENCEMENT DATE" shall mean the
                           first day a benefit is paid to a Participant under
                           this Plan.

                  (f)      The term "BOARD" shall mean the Board of Directors of
                           the Company.

                  (g)      The term "CAUSE" shall mean a Participant's
                           termination of employment due to:

                           (i)      His conviction or plea of guilty or no
                                    contest to a felony involving fraud or
                                    embezzlement with respect to his employment
                                    with the Company; or

                           (ii)     His violation of any non-competition or
                                    non-disclosure agreement with the Company,
                                    or his conviction or plea of guilty or no
                                    contest to an intentional and willful
                                    violation of federal securities laws
                                    involving his duties at the Company or
                                    Company securities.

                           Notwithstanding the preceding sentence, the
                           Compensation Committee may, in its discretion,
                           determine that a termination of employment following
                           an event described above shall not be deemed for
                           "Cause."

                  (h)      The term "CHANGE OF CONTROL" shall mean the
                           occurrence of any one of the following events:

                           (i)      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 the
                                    Securities 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
                                    "Beneficial Ownership" (within the meaning
                                    of Rule 13d-3 promulgated under the Exchange
                                    Act) of more than fifty percent (50%) of the
                                    combined voting power of the Company's then
                                    outstanding voting securities; provided,
                                    however, in determining whether a Change of
                                    Control has occurred, Voting Securities
                                    which are acquired in a Non-Control
                                    Acquisition (as hereinafter defined) shall
                                    not constitute an acquisition which would
                                    cause a Change of Control. A "Non-Control
                                    Acquisition" shall mean an acquisition by
                                    (A) an employee benefit plan (or a trust
                                    forming a part thereof) maintained by (1)
                                    the Company or (2) any corporation or other
                                    Person of which a majority of its voting
                                    power or its voting equity securities or
                                    equity interest is owned, directly or
                                    indirectly, by the Company (for purposes of
                                    this definition, a "Subsidiary") or (B) the
                                    Company or its Subsidiaries;

                                       3
<PAGE>

                           (ii)     The individuals who, as of the effective
                                    date of the amendment and restatement of the
                                    Plan, are members of the Board (the
                                    "Incumbent Board") cease for any reason to
                                    constitute at least one half (1/2) of the
                                    members of the Board; provided, however,
                                    that if the election, or nomination for
                                    election of any new director was approved by
                                    a vote of the members of the Board as
                                    provided by the Company's Bylaws, such new
                                    director shall, for purposes of this
                                    Agreement, be considered as a member of the
                                    Incumbent Board; provided, however, that no
                                    individual shall be considered a member of
                                    the Incumbent Board if such individual
                                    initially assumed office as a result of
                                    either an actual or threatened "Election
                                    Contest" (as described in Rule 14a-11
                                    promulgated under the Exchange Act) or other
                                    actual or threatened solicitation 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 any Election
                                    Contest or Proxy Contest; or

                           (iii)    A complete liquidation or dissolution of the
                                    Company, or

                           (iv)     The sale or other disposition of all or
                                    substantially all of the assets of the
                                    Company to any Person (other than a transfer
                                    to a Subsidiary or a parent in a Non-Control
                                    Acquisition).

                  (i)      The term "CODE" shall mean the Internal Revenue Code
                           of 1986, as amended.

                  (j)      The term "COMPANY" shall mean Pegasus Solutions,
                           Inc., a Delaware Corporation, its corporate
                           successors, and the surviving entity resulting from
                           any merger of Pegasus Solutions, Inc. with any
                           corporation or other entity.

                  (k)      The term "COMPENSATION" shall mean the Participant's
                           earned income, salary, bonus and other remuneration
                           from the Employer, including Savings Contributions to
                           the Pegasus Solutions, Inc. Executive Deferred
                           Compensation Plan and contributions to the Pegasus
                           Solutions, Inc. 401(k) Savings Plan or a cafeteria
                           plan pursuant to section 125 of the Code, but
                           excluding amounts realized from the exercise of a
                           non-qualified stock option or when restricted stock
                           or property held by the Participant either becomes
                           freely transferable or is no longer subject to a
                           substantial risk of forfeiture under section 83 of
                           the Code, "gross-up" payments of any kind,
                           reimbursements or other expense allowances, and
                           moving expenses, as determined in the discretion of
                           the Compensation Committee. Notwithstanding the
                           foregoing, Compensation shall also include severance
                           pay under the terms of an Employment Agreement during
                           the period described thereunder.

                                       4
<PAGE>

                  (l)      The term "COMPENSATION COMMITTEE" shall mean the
                           Compensation Committee of the Board; provided
                           however, that during any period the Compensation
                           Committee is not constituted, the term shall mean the
                           Board.

                  (m)      The term "DATE OF PARTICIPATION" shall mean the date
                           the Compensation Committee specifies as the first day
                           an Employee commences participation in the Plan.

                  (n)      The term "DETERMINATION DATE" shall mean the date on
                           which a Participant ceases to be an Employee for any
                           reason or, if a Participant's Employment Agreement
                           entitles him or her to continued benefits under the
                           Plan after termination of employment, the last day of
                           the month in which his or her continued benefits
                           cease.

                  (o)      The term "EARLY RETIREMENT" shall mean the
                           termination of the Participant's status as an
                           Employee after the Participant attains age fifty
                           (50), provided such termination is approved by the
                           Compensation Committee as a "retirement" for purposes
                           of this Plan.

                  (p)      The term "EMPLOYEE" shall mean an individual on the
                           payroll of an Employer whose wages from the Employer
                           are subject to withholding for purposes of Federal
                           income taxes and for purposes of the Federal
                           Insurance Contributions Act or any individual
                           designated by the Compensation Committee as an
                           Employee for purposes of the Plan.

                  (q)      The term "EMPLOYER" shall mean Pegasus Solutions,
                           Inc. and any other affiliate of the Company which
                           employs a Participant.

                  (r)      The term "EMPLOYMENT AGREEMENT" shall mean a written
                           employment agreement in effect between the Company
                           and a Participant.

                  (s)      The term "FINAL AVERAGE COMPENSATION" shall mean the
                           highest average monthly Compensation received by the
                           Participant from the Employer during any period of
                           thirty-six (36) consecutive calendar months within
                           the period of one hundred and twenty (120)
                           consecutive calendar months ending on the
                           Participant's Determination Date. If the Participant
                           is an Employee of the Employer for less than
                           thirty-six (36) consecutive calendar months, the
                           Participant's Final Average Compensation shall be the
                           average monthly Compensation received by the
                           Participant from the Employer during the
                           Participant's period as an Employee ending on the
                           Participant's Determination Date.

                  (t)      The term "GOOD REASON" means the occurrence of any of
                           the events or conditions described below:

                           (i)      Absent the Participant's consent, if the
                                    Participant shall cease to maintain his or
                                    her position specified in the Employment

                                       5
<PAGE>

                                    Agreement with the Company (or any successor
                                    or parent thereof) or upon the assignment to
                                    the Participant of any material duties or
                                    responsibilities which are inconsistent with
                                    his position or responsibilities; or any
                                    removal of the Participant from or failure
                                    to reappoint or reelect him to any such
                                    offices or positions, except during a period
                                    of Total and Permanent Disability or in
                                    connection with the termination of his
                                    employment for Total and Permanent
                                    Disability, Cause, as a result of his death,
                                    or by the Participant other than for Good
                                    Reason;

                           (ii)     Absent the Participant's consent, a
                                    reduction in the Participant's base salary
                                    or any failure to pay the Participant any
                                    compensation or benefits to which he is
                                    entitled within thirty (30) days of the due
                                    date;

                           (iii)    A Change of Control;

                           (iv)     Any material breach by the Company of any
                                    provision of the Participant's Employment
                                    Agreement; provided, however, the
                                    Participant shall first notify the Company
                                    in writing stating with reasonable
                                    specificity the breach by the Company and
                                    the Company fails to cure such breach within
                                    ten (10) days of the date of such notice;

                           (v)      Any purported termination of the
                                    Participant's employment for Cause by the
                                    Company which is found by a court of
                                    competent jurisdiction or an arbitrator not
                                    to comply with the terms of the
                                    Participant's Employment Agreement; or

                           (vi)     The failure of the Company to obtain an
                                    agreement, reasonably satisfactory to the
                                    Participant, from any successor or assign of
                                    the Company to assume and agree to perform
                                    the Participant's Employment Agreement, as
                                    contemplated thereunder.

                           The Participant's right to terminate his employment
                           for Good Reason shall not be affected by his
                           incapacity due to physical or mental illness.

                  (u)      The term "MONTHLY TARGET TOTAL CASH COMPENSATION"
                           shall mean one-twelfth (1/12) of the sum of a
                           Participant's annual base salary and annual target
                           bonus as approved by the Compensation Committee.

                  (v)      The terms "NORMAL RETIREMENT" and "LATE RETIREMENT"
                           shall each mean the termination of the Participant's
                           status as an Employee after the Participant attains
                           age sixty (60).

                  (w)      The term "PARTICIPANT" shall mean an Employee who is
                           selected to participate in the Plan pursuant to
                           Article III.

                                       6
<PAGE>

                  (x)      The term "PLAN" shall mean the Pegasus Solutions,
                           Inc. Supplemental Executive Retirement Plan as set
                           forth herein, as amended from time to time in
                           accordance with the Participants' consent as set
                           forth in Article VII.

                  (y)      The term "PLAN YEAR" shall mean the 12-month period
                           beginning on each January 1st and ending on the
                           subsequent December 31st.

                  (z)      The term "TOTAL AND PERMANENT DISABILITY" shall mean:

                           (i)      A mental or physical disability, either
                                    occupational or non-occupational in cause,
                                    which satisfies the definition of
                                    "Disability" (or any corresponding term) as
                                    set forth in an Employment Agreement; or

                           (ii)     If there is no Employment Agreement or if
                                    the Employment Agreement then in effect has
                                    no such defined term or concept, a mental or
                                    physical disability, either occupational or
                                    non-occupational in cause, which satisfies
                                    the definition of "total and permanent
                                    disability" (or any corresponding term) as
                                    set forth in the principal long-term
                                    disability policy or plan provided by the
                                    Company then covering the Participant; or

                           (iii)    If there is no such policy then covering the
                                    Participant, a mental or physical disability
                                    which, as determined by the Administrative
                                    Committee in good faith upon receipt of and
                                    in reliance on sufficient competent medical
                                    advice from one or more individuals selected
                                    by the Administrative Committee who are
                                    qualified to give professional medical
                                    advice, impairs or is expected to impair the
                                    Participant's ability to substantially
                                    perform the Participant's duties as an
                                    Employee of the Company for a period of at
                                    least ninety (90) consecutive days.

                  (aa)     The term "YEARS OF PARTICIPATION" shall mean the
                           period of time, computed to the nearest completed
                           month, commencing on the Participant's Date of
                           Participation in the Plan and ending on the
                           Participant's Determination Date. Notwithstanding the
                           preceding sentence, the Compensation Committee may,
                           in its discretion, credit a Participant with
                           additional full or partial Years of Participation.

                  (bb)     The term "YEARS OF SERVICE" shall mean the period of
                           time, computed to the nearest completed month,
                           commencing on the Participant's date of hire as an
                           Employee of the Employer and ending on the
                           Participant's Determination Date. Notwithstanding the
                           preceding sentence, the Compensation Committee may,
                           in its discretion, credit a Participant with
                           additional full or partial Years of Service.

                                       7
<PAGE>

         2.2 Construction. Except when otherwise indicated by the context, the
masculine shall also include the feminine gender and the singular shall also
mean the plural.

                                   ARTICLE III

                                  PARTICIPATION

         3.1 Selection of Participants. Participation in the Plan shall be
limited to those select management Employees of the Employer who are designated
as Participants by the Compensation Committee. No person shall have an automatic
right to be selected as a Participant. Notwithstanding the foregoing, a
Participant shall continue to participate in the Plan pursuant to the terms of
an Employment Agreement, where applicable.

                                   ARTICLE IV

                                    BENEFITS

         4.1 Eligibility for Benefits. A Participant shall be eligible for a
benefit determined in accordance with the provisions of Section 4.2 if the
Participant's Determination Date occurs due to one of the following reasons:

                  (a)      Normal Retirement or Late Retirement;

                  (b)      Early Retirement;

                  (c)      Death;

                  (d)      Total and Permanent Disability;

                  (e)      Termination of employment with the Employer for Good
                           Reason following a Change of Control;

                  (f)      Termination of employment after completion of four
                           (4) Years of Participation (i) by the Employer for
                           any reason other than Cause or (ii) by the
                           Participant; or

                  (g)      If a Participant's Employment Agreement provides that
                           the Participant shall be deemed to have satisfied the
                           requirements for eligibility for benefits under the
                           Plan if his or her employment is terminated by the
                           Company without Cause, or by the Participant for Good
                           Reason, the Determination Date following termination
                           by the Company without Cause, as defined in the Plan,
                           or by the Participant with Good Reason.

                                       8
<PAGE>

         4.2 Amount of Benefits. The benefit payable to the Participant or the
Participant's Beneficiary under the Plan pursuant to Section 4.1 shall be
determined as follows:

                  (a)      Normal Retirement or Late Retirement. A monthly
                           benefit equal to the Participant's Accrued Benefit,
                           commencing on the first day of the month following
                           the Participant's Determination Date.

                  (b)      Early Retirement. A monthly benefit equal to the
                           Participant's Accrued Benefit commencing on the first
                           day of the month coinciding with or next following
                           the Participant's sixtieth (60th) birthday.
                           Alternatively, the Participant may, no later than six
                           (6) months prior to the Participant's Determination
                           Date, elect to receive reduced monthly payments
                           commencing on the first day of any month after the
                           Participant's Determination Date. The reduced benefit
                           is equal to the Participant's Accrued Benefit reduced
                           by four percent (4%) for each year (pro-rated for
                           partial years) between the date of the Participant's
                           first benefit payment and the first month coinciding
                           with or next following the Participant's sixtieth
                           (60th) birthday.

                  (c)      Death. A single lump-sum payment that is Actuarially
                           Equivalent to the Participant's Accrued Benefit at
                           the Participant's death, payable to the Participant's
                           Beneficiary as soon as practicable following such
                           death.

                  (d)      Total and Permanent Disability. A monthly benefit
                           commencing on the first day of the month coinciding
                           with or next following the Participant's sixtieth
                           (60th) birthday. The amount of the benefit is the
                           Participant's Accrued Benefit determined using the
                           Years of Service the Participant would have at age
                           sixty (60) and the Participant's Final Average
                           Compensation at the time of the Participant's
                           termination as an Employee for Total and Permanent
                           Disability. Such benefit shall be reduced by any
                           benefit the Participant receives from the long-term
                           disability plan provided by the Company.

                  (e)      Termination. A monthly benefit equal to the
                           Participant's Accrued Benefit commencing on the first
                           day of the month coinciding with or next following
                           the Participant's sixtieth (60th) birthday.

         4.3 Form of Payment. Except as otherwise specifically provided, payment
of benefits from this Plan, if any, shall be payable as a single life annuity
during the Participant's lifetime with the last payment to be made for the month
in which the Participant's death occurs.

         4.4 Optional Forms of Payment. In lieu of the form and amount of
benefit payable under Section 4.3, a Participant may, no later than twelve (12)
months prior to the date benefits commence, elect a benefit of Actuarially
Equivalent value to the Accrued Benefit payment specified in Section 4.3 in one
of the following forms:

                  (a)      Monthly payments to the Participant during the
                           Participant's life and, if the Participant is
                           survived by a Beneficiary, continuing monthly
                           payments

                                       9
<PAGE>

                           in the amount of fifty percent (50%) or one hundred
                           percent (100%) of the amount payable to the
                           Participant to such Beneficiary for the Beneficiary's
                           lifetime;

                  (b)      Monthly payments to the Participant during the
                           Participant's life and, if the Participant dies
                           within one hundred twenty (120) months of the date
                           the Participant's benefits commenced, continuing
                           monthly payments of the same amount to the
                           Participant's Beneficiary for the balance of such one
                           hundred twenty (120) month period;

                  (c)      Monthly payments to the Participant or the
                           Participant's Beneficiary for a period of one hundred
                           twenty (120) months; or

                  (d)      A partial or full lump-sum payment, in the discretion
                           of the Compensation Committee.

         4.5 Distributions Following a Change of Control. Notwithstanding the
foregoing:

                  (a)      A Participant shall receive an immediate lump-sum
                           distribution of his Accrued Benefit if his
                           Determination Date follows termination of employment
                           with the Employer within twelve (12) months following
                           a Change of Control.

                  (b)      A Participant may elect, within twelve (12) months
                           following a Change of Control, to receive an
                           in-service distribution of his Accrued Benefit in a
                           lump sum, provided that such Participant must agree
                           irrevocably that he or she shall no longer
                           participate in the Plan. The Company's actuaries
                           shall provide the calculation of such Actuarially
                           Equivalent lump sum amount based on the actuarial
                           assumptions in the Plan. This election must be in
                           writing, and will be effective as soon as
                           administratively feasible following the date the
                           election is received by the Company, but in no event
                           later than thirty (30) days following the date the
                           election is received by the Company.

                                   ARTICLE V

                            FUNDING AND OTHER MATTERS

         5.1 No Trust Required.

         The adoption of this Plan and any setting aside of amounts by the
Employer with which to discharge its obligations hereunder shall not be deemed
to create a trust; legal and equitable title to any funds so set aside shall
remain in the Employer, and any recipient of benefits hereunder shall have no
security or other interest in such funds. Any and all funds so set aside shall
remain subject to the claims of the general creditors of the Employer. This
provision shall not require the Employer to set aside any funds, but the
Employer may set aside such funds if it chooses to do so.

                                       10
<PAGE>

         5.2 Funding of Obligation. Section 5.1 above to the contrary
notwithstanding, the Employer may elect to transfer assets to a trust, the
provisions of which may require the use of the trust's assets to satisfy claims
of an Employer's general unsecured creditors in the event of such Employer's
insolvency and direct that no Participant shall at any time have a prior claim
to such assets. The assets of the trust shall not be deemed to be assets of this
Plan. Upon a Change of Control, the Committee shall transfer assets to the trust
sufficient to pay for any benefits accrued under the Plan as of the date of such
action for Participants who are or have been employed by the Employer, where
such accrued benefits shall be the actuarially determined benefits as of such
Change of Control.

         5.3 Continued Employment. Nothing contained in the Plan shall be
construed as conferring upon the Participant the right to continue in the
employment of the Employer in any capacity or as otherwise affecting the
employment relationship.

         5.4 Restriction on Assignment. The benefits provided hereunder are
intended for the personal security of persons entitled to payment under the Plan
and are not subject in any manner to the debts or other obligations of the
persons to whom they are payable. The interest of any Participant or his
Beneficiary may not be sold, transferred, assigned, or encumbered in any manner,
either voluntarily or involuntarily, and any attempt to so anticipate, alienate,
sell, transfer, assign, pledge, encumber, or charge the same shall be null and
void; neither shall the benefits hereunder be liable for or subject to the
debts, contracts, liabilities, engagements, or torts of any person to whom such
benefits or funds are payable, nor shall they be subject to garnishment,
attachment, or other legal equitable process nor shall they be an asset in
bankruptcy.

         5.5 Binding on Company, Participants and Their Successors. The Plan
shall be binding upon the parties hereto, the successors and assigns of the
Company and the heirs, executors and administrators of the Participants.

         5.6 Governing Law. THE PLAN SHALL BE CONSTRUED AND ENFORCED UNDER THE
LAWS OF THE STATE OF TEXAS EXCEPT TO THE EXTENT PREEMPTED BY FEDERAL LAW.

         5.7 Severability. In the event any provision of the Plan shall be held
invalid or illegal for any reason, any illegality or invalidity shall not affect
the remaining parts of the Plan, but the Plan shall be construed and enforced as
if the illegal or invalid provision had never been inserted.

                                   ARTICLE VI

                                 ADMINISTRATION

         6.1 Administration. The Administrative Committee shall be responsible
for the general administration of the Plan. The Administrative Committee and/or
the Compensation Committee shall have the authority to make rules to administer
and interpret the Plan, to decide questions arising under the Plan, and to take
such other action as may be appropriate to carry out the purposes of the Plan.

                                       11
<PAGE>

         6.2 Finality of Determination. The determination of the Administrative
Committee and/or the Compensation Committee as to any disputed questions arising
under the Plan, including questions of construction and interpretation shall be
final, binding, and conclusive upon all persons with respect to each
determination assigned to either the Administrative Committee or the
Compensation Committee. These determinations include, but are not limited to,
the Compensation Committee's determinations as to which Employees shall be
Participants and the Administrative Committee's determinations regarding the
specific benefits which shall be paid to or on behalf of each such Participant.

         6.3 Expenses. The expenses of administering the Plan shall be borne by
the Company.

         6.4 Indemnification and Exculpation. The members of the Compensation
Committee, the Board, the Administrative Committee and the officers, directors,
and employees of the Company shall be indemnified and held harmless by the
Company against and from any and all loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by them in connection with or resulting
from any claim, action, suit, or proceeding to which they may be a party or in
which they may be involved by reason of any action taken or failure to act under
the Plan and against and from any and all amounts paid by them in settlement
(with the Company's written approval) or paid by them in satisfaction of a
judgment in any such action, suit, or proceeding. The foregoing provision shall
not be applicable to any person if the loss, cost, liability, or expense is due
to such person's fraud or willful misconduct.

         6.5 Claims Procedure. If any person (hereinafter called the "Claimant")
feels that he is being denied a benefit to which he is entitled under this Plan,
such Claimant may file a written claim for said benefit with the Administrative
Committee. Within ninety (90) days following the receipt of such claim the
Administrative Committee shall determine and notify the Claimant as to whether
he is entitled to such benefit. If an extension of time is required to process
the claim, this time period may be extended an additional ninety (90) days. If
the claim requires the Administrative Committee to make a determination of Total
and Permanent Disability, the time period in which the Administrative Committee
will review the claim is forty-five (45) days, with two possible extensions of
thirty (30) days each. In all cases, the Claimant will be notified in writing of
an extension and the reasons for the extension. If the claim is denied, the
written notice of denial to the Claimant will include the specific reasons for
the denial, references to the provisions of the Plan supporting the denial, a
description of any additional information necessary for the claim to be granted,
a description of the Plan's claims review procedures, and a statement regarding
the Claimant's legal rights to challenge a denial of his or her claim following
appeal.

If the Claimant still feels that he has a claim, the Claimant may file an appeal
with the Administrative Committee in writing within sixty (60) days of receiving
the notice of denial. If the Claimant requires the Administrative Committee to
make a determination of Total and Permanent Disability, the Claimant may file an
appeal with the Administrative Committee in writing within one hundred eighty
(180) days of receiving the notice of denial. The Claimant may submit documents,
records, and other information related to his or her appeal. Upon request, the
Claimant may review information relevant to the benefit claim or the
Administrative Committee will provide the Claimant with copies of information
relevant to the benefit claim without charge. Final determination on the claim
will be made no later than sixty (60) days after

                                       12
<PAGE>

the Administrative Committee's receipt of the Claimant's written request for an
appeal. If additional time is required for processing the Claimant's appeal,
this time period may be extended an additional sixty (60) days. If the claim
requires the Administrative Committee to make a determination of Total and
Permanent Disability, a final determination will be made within forty-five (45)
days of the Claimant's request for an appeal. If additional time is required for
processing the appeal, this time period may be extended an additional forty-five
(45) days. In all cases, the Claimant will be notified of an extension and the
reasons for the extension. If the Claimant's appeal is denied, the written
notice of denial will include the specific reasons for the denial, references to
the provisions of the Plan supporting the denial, and a statement regarding the
Claimant's legal rights to challenge the denial of the claim. Upon request, the
Claimant may review information relevant to the benefit claim or the
Administrative Committee will provide the Claimant with copies of information
relevant to the benefit claim without charge. The final decision of the
Administrative Committee shall be conclusive and binding upon all parties having
or claiming to have an interest in the matter being reviewed.

                                  ARTICLE VII

                            AMENDMENT AND TERMINATION

         7.1 Amendment and Termination. The Board may at any time amend or
terminate the Plan, provided that a Participant shall not be subject to any such
amendment or termination without his or her written consent. If the Plan should
be amended or terminated, the Company shall be liable for any benefits accrued
under the Plan as of the date of such action.

         IN TESTIMONY WHEREOF, PEGASUS SOLUTIONS, INC. has caused this
instrument to be executed in its name and on its behalf, by the officer
thereunto duly authorized this 28th day of February, 2003, effective as of
July 1, 2002.

                                   PEGASUS SOLUTIONS, INC.

                                   By:
                                      --------------------

                                   Title:
                                         -----------------

Attest:
       -----------------

                                       13

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