UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549



                                    FORM 8-K

                                 CURRENT REPORT


                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

      Date of Report (Date of Earliest Event Reported): September 28, 2004

                                -----------------

                       PEGASUS COMMMUNICATIONS CORPORATION
               (Exact Name of Registrant as Specified in Charter)



          Delaware                       0-32383                 23-3070336
(State or Other Jurisdiction    (Commission File Number)       (IRS Employer
      of Incorporation)                                     Identification No.)

        c/o Pegasus Communications Management Company
                     225 City Line Avenue
                  Bala Cynwyd, Pennsylvania                           19004
           (Address of Principal Executive Offices)                 (Zip Code)


       Registrant's Telephone Number, Including Area Code: (800) 376-0022


                                 Not Applicable
          (Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

     |_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)

     |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)

     |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

     |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))


<PAGE>


Item 1.01.        Entry into a Material Definitive Agreement.

         On September 28, 2004, Pegasus Communications Corporation (the
"Company") entered into an Amended and Restated Employment Agreement with Ted S.
Lodge, its President, Chief Operating Officer and Counsel. The Amended and
Restated Employment Agreement amends and restates in its entirety an Employment
Agreement dated July 21, 2002 between the Company and Mr. Lodge.

     The Amended and Restated Employment Agreement formalizes the effect that
the bankruptcy proceedings of the principal operating subsidiaries of the
Company and the subsequent sale of the satellite television assets of those
operating subsidiaries had upon the terms of Mr. Lodge's original employment
agreement. The Amended and Restated Employment Agreement does not substantively
change the original economic terms of his employment agreement, except that
amounts otherwise payable by the Company are reduced by retention and severance
amounts paid or to be paid directly by the Company's principal operating
subsidiaries pursuant to an order of the bankruptcy court. Under the Amended
and Restated Employment Agreement, Mr. Lodge's employment with the Company will
terminate at the earlier of (a) March 31, 2005 or (b) no later than 30 days
after the effective date of a plan of reorganization filed in the bankruptcy
court proceeding, subject to the Company's right to accelerate the termination
date. The Amended and Restated Employment Agreement provides for Mr. Lodge's
resignation as a director of the Company effective with his termination.

     The Amended and Restated Employment Agreement also (i) contains
non-competition and non-solicitation covenants that otherwise would not apply in
these circumstances and (ii) obligates Mr. Lodge to provide consulting services
to the Company for a period of up to two years following his termination of
employment in consideration for certain consulting fees.

         A copy of the Amended and Restated Employment Agreement is attached
hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 9.01     Financial Statements and Exhibits.

(a) - (b) Not applicable.

(c) Exhibits.

Exhibit
Number   Description of Exhibit

10.1          Amended and Restated Employment Agreement for Ted S. Lodge dated
September 28, 2004.

(exhibits to the agreement have been omitted but will be furnished to the SEC
upon request)


                                       2
<PAGE>


                                   SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.


                       PEGASUS COMMUNICATIONS CORPORATION


                       By      /s/ Scott A. Blank
                          --------------------------------------------
                              Scott A. Blank,
                              Senior Vice President


Date:  October 4, 2004


                                       3
<PAGE>


                                  EXHIBIT INDEX

Exhibit No.   Description
10.1          Amended and Restated Employment Agreement for Ted S. Lodge dated
              September 28, 2004.


                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         This Amended and Restated Employment Agreement ("Amendment") dated as
of September 28, 2004 is between Pegasus Communications Corporation, a Delaware
corporation ("Pegasus" or the "Company" or the "Corporation"), and Ted S. Lodge
(the "Executive"), a resident of Pennsylvania. The Amendment amends and restates
in its entirety the Employment Agreement (the "Agreement") dated July 21, 2002
between the Company and the Executive. A copy of the Agreement is attached
hereto as Exhibit A.

         WHEREAS the Company employs the Executive and the Executive serves as
President, Chief Operating Officer and Counsel for the Company pursuant to the
Agreement;

         WHEREAS, on June 2, 2004, the principal operating subsidiaries of the
Company (the "Bankruptcy Estate") filed a voluntary petition for relief under
chapter 11 of title 11 of the United States Code in United States Bankruptcy
Court, District of Maine ("Bankruptcy Court");

         WHEREAS, on August 27, 2004, pursuant to an order of the Bankruptcy
Court, subsidiaries of the Company sold assets relating to the subsidiaries'
DIRECTV DBS business to The DIRECTV Group, Inc.;

         WHEREAS, on August 27, 2004, the debtors in bankruptcy filed a
Supplemental Motion for Order Pursuant to 11 U.S.C. ss.ss. 363 (b) and 105(a)
Authorizing and Approving Implementation of Supplemental Management Retention
Plan (the "Motion") seeking approval for the following payments and benefits by
the debtors in bankruptcy to the Executive: (i) the Closing Payment (as this
term is defined in the Motion), (ii) the Plan Payment (as this term is defined
in the Motion), and (iii) the COBRA Benefits (as this term is defined in the
Motion);

         WHEREAS, on September 23, 2004, the Bankruptcy Court approved the
Motion; and

         WHEREAS, the Executive and the Company have mutually agreed that it
would be in their mutual best interests to terminate the Executive's employment
with the Company and to set forth their agreement as to the Executive's
entitlements in connection therewith.

         NOW, THEREFORE, in consideration of the promises and mutual covenants
contained in this Amendment and intending to be legally bound, Pegasus and the
Executive agree that the Agreement shall be amended in its entirety to reflect
the following terms and conditions:

         1.    Definitions. Unless otherwise defined herein in this Amendment,
terms when used in this Amendment and initially capitalized, have the meanings
setforth in the Agreement.

         2.    July 21, 2002 Employment Agreement. From the date of this
Amendment, this Amendment supersedes the Agreement in its entirety. The
Executive acknowledges that the Executive shall only be entitled to receive the
compensation and benefits set forth in this Amendment and shall not be entitled
to receive any compensation or benefits that the Executive may otherwise have
been entitled to receive under the Agreement.

                                       4
<PAGE>

         3.    Term, Position and Duties. During the term of this Agreement, (i)
the Executive shall remain an employee of the Company until a period of time no
later than thirty (30) days after the effective date of a plan of reorganization
filed in the Bankruptcy Court proceeding ("Plan"), provided the Executive shall
not be required to remain in the employ of the Company any later than March 31,
2005 (it being expressly understood that the Company may, in its discretion,
accelerate the termination date of the Executive's employment with the Company
any time prior to the period specified in this clause (i)); (ii) the Executive
shall continue to serve as the Company's President, Chief Operating Officer and
Counsel, with his primary responsibilities consisting of winding up matters
relating to the Bankruptcy Estate; and (iii) the Executive shall be required to
devote such time, energies and skills to his employment in support of the
successful consummation of the Plan and such other responsibilities that may be
delegated to him from time to time by the Board of Directors that are reasonably
consistent with his existing responsibilities. During the term of his
employment with the Company, the Executive shall comply with all applicable
employment policies and procedures of the Company as in effect from time to
time.

         4.    Consulting Services. During the one year following the
Executive's termination from the Company, the Executive shall use his reasonable
efforts to make himself available, from time to time, as may be reasonably
requested by the Company to provide advice, counsel, transition or other
services to the Company (it being understood that following the termination of
the Executive's employment, the Executive's availability is not intended to
materially interfere with his then existing employment opportunities); provided,
the Executive shall not be required to provide during the year more than five
hours on average of his time per week (it being understood that, as matters
arise, that some weeks may exceed five hours). The Executive has been
instrumental in the Company's pursuit of certain patent infringement matters
relating to licenses acquired by the Company from Personalized Media
Communications, LLC ("PMC"). Due to the reexamination process taking place in
the United States Patent and Trademark Office, it is possible that proceedings
with respect to the Company's patent infringement litigation may not resume, or
transactions relating to such patent licenses may not arise, until after the one
year consulting period has expired. Given the uncertain nature of the timing of
developments or transactions that may arise relating to the patent licenses, the
Executive agrees to use his reasonable efforts, consistent with his then
existing employment responsibilities, to continue to provide consulting services
to the Company relating to these licenses, whether such matters relate to the
patent infringement litigation itself, PMC's patent portfolio, the Company's
relationship with PMC, and any transactions that may relate to any of the
foregoing, for an additional year following the one year consulting period
described in the first sentence of this section; provided, however, during such
additional year, the Executive shall not be required to provide more than 100
hours of time to these matters. The Company may terminate these consulting
services at any time upon 30 days advance written notice to the Executive,
provided that the Company shall be obligated to pay Executive amounts owed under
Section 6.4.5 through the effective date of termination.

         5.    Noncompetition; Nonsolicitation. For one calendar year following
termination of the Executive's employment, the Executive agrees that he will
not, without the prior written consent of the CEO, directly or indirectly,
whether as a principal, agent, employee, consultant, contractor, advisor,
representative, stockholder (other than as a holder of an interest of five
percent (5%) or less in the equity of a publicly traded corporation), or in any
other capacity: own, have any interest in, or

                                       5
<PAGE>

provide services, advice or assistance to, (i) The DIRECTV Group, Inc., (ii)
EchoStar Communications Corporation, (iii) Rainbow DBS, (iv) PMC, or (v) any of
their respective affiliates (1). In addition, in light of the positions held by
the Executive with the Company, including his position as Counsel, Executive
acknowledges that it would be a conflict and unethical for him to provide
services, advice, assistance to, or otherwise represent, any party in any matter
relating to the PMC patents and the Company's licenses of the PMC patents at any
time without the express written consent of the Company, which may be granted or
denied in the Company's sole discretion and agrees not to do any of the
foregoing. During the period of time following termination of employment with
the Company but while the Executive is required to provide consulting services
to the Company, the Executive agrees not to (i) offer employment to or hire any
employee of the Company or its subsidiaries; or (ii) intentionally entice,
induce or solicit any individual or entity having a business relationship with
the Company or its subsidiaries, whether as an employee, consultant, customer or
otherwise, to terminate or cease such relationship.

By entering into this Agreement, the Executive acknowledges that these
prohibitions are reasonable as to time, geographical area and scope of activity
and do not impose a restriction greater than is necessary to protect the Company
and its subsidiaries' goodwill, proprietary information and business interests.
The Executive agrees that this Amendment provides valuable consideration
sufficient to support the non-competition and non-solicitation obligations
described above.


----------------------
(1) For purposes of this clause (v), "affiliate" means, with respect to any
natural person, corporation, partnership, trust, unincorporated organization,
association, limited liability company, or other entity. (hereinafter
collectively referred to as "Person"): (i) any Person directly or indirectly
owning, controlling, or holding with power to vote 10% or more of the
outstanding voting securities of such other Person; (ii) any Person 10% or more
of whose outstanding voting securities are directly or indirectly owned,
controlled, or held with power to vote, by such other Person; and (iii) any
Person directly or indirectly controlling, controlled by, or under common
control with such other Person. "Control" for the foregoing purposes shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities or voting interests, by contract or otherwise.


         6.    Compensation and Benefits. The Executive shall be entitled to the
following compensation and benefits:

               6.1    Base Salary. During the period that the Executive
         continues to be employed by the Company, Pegasus shall continue to pay
         to the Executive a Base Salary at an annual rate of $350,000, payable
         in accordance with the Company's policies applicable to the Company's
         officers from time to time.

               6.2    Incentive Compensation. During the period that the
         Executive continues to be employed by the Company that falls within
         calendar year 2004, the Executive shall continue to receive STIP in
         accordance with the Company's current practices in effect on the date
         of this Amendment, except that the Executive shall only be eligible to
         receive STIP to the extent it is paid to

                                       6
<PAGE>

         other executive officers of the Company. From the date of this
         Amendment, the Executive shall not be eligible to participate in any
         LTIP.

               6.3    Employee Benefits; Reimbursement of Expenses. Until the
         Executive's termination is effective, the Executive shall be entitled
         to receive employee benefits and reimbursement of expenses in
         accordance with Section 4.3 and Section 4.4 of the Agreement,
         respectively.

               6.4    Additional Payments. Subject to Section 5.8 and Section
         6.3 of the Agreement, the following payments shall be made to the
         Executive:

                      6.4.1  The Company agrees that the Bankruptcy Estate may
               pay to the Executive the Closing Payment in the amount of
               $1,000,000 within one business day of execution of this
               Agreement, pursuant to the order of the Bankruptcy Court
               approving the Motion.

                      6.4.2  The Company agrees that the Bankruptcy Estate may
               pay to the Executive the Plan Payment in the amount of $400,000
               within one business day of the effective date of the Plan,
               pursuant to the order of the Bankruptcy Court approving the
               Motion.

                      6.4.3  After the earlier of (i) termination of the
               Executive's employment with the Company and its subsidiaries
               or (ii) a Change of Control of the Company (excluding any
               resulting from a disposition involving the Bankruptcy Estate),
               if the Executive signs a Waiver and Release Agreement in the
               form of Exhibit B hereto and returns it within the time specified
               by the Company after termination of employment (but in no event
               less than twenty one (21) days) and the Executive does not revoke
               or attempt to revoke such Waiver and Release Agreement, the
               Company shall pay to the Executive, within thirty (30) days after
               the effective date of the Waiver and Release Agreement, a single
               lump sum payment equal to $2,304,273, which is the amount that
               the Company and Executive agree would be due to the Executive
               pursuant to Section 6.1.2 and Section 6.1.3 of the Agreement
               ("Agreement Severance"). If prior to such payment, the Executive
               has been paid any amounts on account of a Closing Payment and
               Plan Payment (or any other cash payment approved to be paid to
               the Executive pursuant to the Motion, other than the COBRA
               Benefits), the aggregate amount of such payments shall be
               credited against the amounts owed to the Executive pursuant to
               the first sentence of this Section 6.4.3 ("Offsets"). In the
               event that Executive's employment terminates as a result of
               death or disability during the term of this Amendment, the
               Company shall pay to the Executive's estate or to the Executive,
               as the case may be, the Agreement Severance less any Offsets
               upon the execution by the Estate, the Executive's personal
               representative or any other person legally empowered to handle
               the affairs of the Executive, a Waiver and Release Agreement in
               the form of Exhibit B amended solely to take into account the
               need for execution by a new signatory because of the Executive's
               death or disability.

                                       7
<PAGE>

                      6.4.4  Subject to the receipt of the Waiver and Release
               Agreement as specified in Section 6.4.3 of this Amendment, upon
               the termination of the Executive's employment with the Company,
               the Executive shall be entitled to receive (i) the medical
               benefits coverage as described in Section 6.1.4 of the Agreement,
               subject to a payment in cash for each month of coverage equal to
               the aggregate taxable cost of coverage for the such month divided
               by sixty five hundredths (0.65) and (ii) to extent requested by
               the Executive, the assistance described in Section 6.1.6 of the
               Agreement.

                      6.4.5  In addition to the other consideration stated
               herein, as additional consideration for consulting services to be
               provided by the Executive to the Company pursuant to Section 4 of
               this Amendment, the Executive will be paid, subject to the
               Company's right to terminate these services pursuant to the last
               sentence of Section 4 of this Amendment, $5,417 per month,
               payable at the end of each month, for each of the 24 months
               constituting the period of time that the Executive may be asked
               to provide consulting services herein.

         7.    Surviving Provisions from Agreement. The following sections of
the Agreement are expressly incorporated by reference herein: Section 5.8
(Withholding); Section 6.2 (Employee Benefits); Section 6.3 (Limitation on
Parachute Payments); Section 7 (Confidential Information); Section 8 (Return of
Documents and Property); Section 10 (Intellectual Property); Section 11
(Disparagement), except that a new third sentence shall be added stating
"Pegasus agrees that it will not make any derogatory, unfavorable, negative or
disparaging statements concerning the Executive, providing this restriction
shall not be construed to limit the Company's ability to give non-malicious and
truthful statements as required by governmental and other authorities"; Section
12 (Enforcement) (except that the references to Section 9 therein shall be
substituted with a reference to Section 5 of this Amendment) (it being
understand that the reference to Section 11 is a reference to Section 11 as
modified by the additional sentence set forth in the prior clause); Section 13
(Indemnity), except that (i) the Company shall indemnify the Executive against
any claim, loss, or cause of action (including advancement of expenses) arising
from or out of the Executive's provision of consulting services pursuant to
Section 4 of this Amendment, (ii) the Company acknowledges that Executive shall
be entitled to receive, in his capacity as a director, officer, former director
or former officer of the Company and/or its subsidiaries, the benefits of the
Company's directors and officers liability insurance policies to the extent
permitted therein, and (iii) Section 13 of the Agreement survives termination of
Executive's employment under this Amendment; Section 14 (Notices) (except that
the notice to Pegasus should be directed to the attention of Pegasus' General
Counsel); Section 15 (No Mitigation); and Section 18 (Assignability).

         8.    Amendments. This Amendment may be amended, modified or superseded
only by a written instrument executed by both of the parties hereto.

         9.    Binding Effect. This Amendment shall inure to the benefit of and
shall be binding upon Pegasus and the Executive and their respective heirs,
executors, personal representatives, successors and permitted assigns.

                                       8
<PAGE>

         10.   Assignability. This Amendment will be binding upon and inure to
the benefit of the Corporation and any successor to the Corporation, including
without limitation any persons acquiring directly or indirectly all or
substantially all of the business or assets of the Corporation whether by
purchase, merger, consolidation, reorganization or otherwise (and such successor
will thereafter be deemed the "Corporation" for the purposes of this Amendment),
but will not otherwise be assignable or delegable by the Corporation. The
Corporation will require any such successor, by agreement in form and substance
identical hereto, expressly to assume and agree to perform this Amendment in the
same manner and to the same extent the Corporation would be required to perform
if no such succession had taken place. This Amendment will inure to the benefit
of and be enforceable by, if then applicable, Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees and
legatees, but shall not otherwise be assignable by the Executive, whether by
pledge, creation of a security interest or otherwise.

         11.   Directorship. The Executive currently serves as a director of the
Company and certain of its subsidiaries. The Executive agrees to resign from all
such directorships at the time that the Executive's employment with the Company
is terminated.

         12.   Governing Law. This Amendment shall be governed by the laws of
the Commonwealth of Pennsylvania.

         13.   Entire Agreement. The parties hereto acknowledge that each has
read this Amendment, understands it, and agrees to be bound by its terms. The
parties further agree that this Amendment constitutes the complete and exclusive
statement of the agreement between the parties and supersedes all proposals
(oral or written), understandings, representations, conditions, covenants, and
all other communications between the parties relating to the subject matter
hereof. The parties further acknowledge that the provisions of this Amendment
supersedes the terms of the Agreement except as expressly incorporated herein.

         14.   Waiver. Any term or provision of this Amendment may be waived in
writing at any time by the party entitled to the benefit thereof. The failure of
either party at any time to require performance of any provision of this
Amendment shall not affect such party's right at a later time to enforce such
provision. No consent or waiver by either party to any default or to any breach
of a condition or term in this Amendment shall be deemed or construed to be a
consent or waiver to any other breach or default.

         15.   Invalidity of Portion of Agreement. If any provision of this
Amendment or the application thereof to either party shall be invalid or
unenforceable to any extent, the remainder of this Agreement shall not be
affected thereby and shall be enforceable to the fullest extent of the law.

                                        9
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment on the date stated below effective as stated herein.



PEGASUS COMMUNICATIONS CORPORATION



By: /s/ Scott A. Blank                      Date:  September 28, 2004

     Name: Scott A. Blank

     Title: Senior Vice President



EXECUTIVE



By: Ted S. Lodge                            Date:  September 28, 2004


                                       10
<PAGE>


Exhibit A

(Copy of Executive Employment Agreement dated July 21, 2002 by and among Pegasus
Communications Corporation and Ted S. Lodge)


                                       11
<PAGE>


Exhibit B

(Form of Waiver and Release Agreement)


                                       12
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UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934

      Date of Report (Date of Earliest Event Reported): September 28, 2004

                                -----------------

                       PEGASUS COMMMUNICATIONS CORPORATION
               (Exact Name of Registrant as Specified in Charter)

          Delaware                       0-32383                 23-3070336
(State or Other Jurisdiction    (Commission File Number)       (IRS Employer
      of Incorporation)                                     Identification No.)

        c/o Pegasus Communications Management Company
                     225 City Line Avenue
                  Bala Cynwyd, Pennsylvania                           19004
           (Address of Principal Executive Offices)                 (Zip Code)

       Registrant's Telephone Number, Including Area Code: (800) 376-0022

                                 Not Applicable
          (Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):

     |_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)

     |_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)

     |_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))

     |_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01.        Entry into a Material Definitive Agreement.

         On September 28, 2004, Pegasus Communications Corporation (the
"Company") entered into an Amended and Restated Employment Agreement with Ted S.
Lodge, its President, Chief Operating Officer and Counsel. The Amended and
Restated Employment Agreement amends and restates in its entirety an Employment
Agreement dated July 21, 2002 between the Company and Mr. Lodge.

     The Amended and Restated Employment Agreement formalizes the effect that
the bankruptcy proceedings of the principal operating subsidiaries of the
Company and the subsequent sale of the satellite television assets of those
operating subsidiaries had upon the terms of Mr. Lodge's original employment
agreement. The Amended and Restated Employment Agreement does not substantively
change the original economic terms of his employment agreement, except that
amounts otherwise payable by the Company are reduced by retention and severance
amounts paid or to be paid directly by the Company's principal operating
subsidiaries pursuant to an order of the bankruptcy court. Under the Amended
and Restated Employment Agreement, Mr. Lodge's employment with the Company will
terminate at the earlier of (a) March 31, 2005 or (b) no later than 30 days
after the effective date of a plan of reorganization filed in the bankruptcy
court proceeding, subject to the Company's right to accelerate the termination
date. The Amended and Restated Employment Agreement provides for Mr. Lodge's
resignation as a director of the Company effective with his termination.

     The Amended and Restated Employment Agreement also (i) contains
non-competition and non-solicitation covenants that otherwise would not apply in
these circumstances and (ii) obligates Mr. Lodge to provide consulting services
to the Company for a period of up to two years following his termination of
employment in consideration for certain consulting fees.

         A copy of the Amended and Restated Employment Agreement is attached
hereto as Exhibit 10.1 and is incorporated herein by reference.

Item 9.01     Financial Statements and Exhibits.

(a) - (b) Not applicable.

(c) Exhibits.

Exhibit
Number   Description of Exhibit

10.1          Amended and Restated Employment Agreement for Ted S. Lodge dated
September 28, 2004.

(exhibits to the agreement have been omitted but will be furnished to the SEC
upon request)

                                       2
SIGNATURES

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                       PEGASUS COMMUNICATIONS CORPORATION

                       By      /s/ Scott A. Blank
                          --------------------------------------------
                              Scott A. Blank,
                              Senior Vice President

Date:  October 4, 2004

                                       3
EXHIBIT INDEX

Exhibit No.   Description
10.1          Amended and Restated Employment Agreement for Ted S. Lodge dated
              September 28, 2004.

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         This Amended and Restated Employment Agreement ("Amendment") dated as
of September 28, 2004 is between Pegasus Communications Corporation, a Delaware
corporation ("Pegasus" or the "Company" or the "Corporation"), and Ted S. Lodge
(the "Executive"), a resident of Pennsylvania. The Amendment amends and restates
in its entirety the Employment Agreement (the "Agreement") dated July 21, 2002
between the Company and the Executive. A copy of the Agreement is attached
hereto as Exhibit A.

         WHEREAS the Company employs the Executive and the Executive serves as
President, Chief Operating Officer and Counsel for the Company pursuant to the
Agreement;

         WHEREAS, on June 2, 2004, the principal operating subsidiaries of the
Company (the "Bankruptcy Estate") filed a voluntary petition for relief under
chapter 11 of title 11 of the United States Code in United States Bankruptcy
Court, District of Maine ("Bankruptcy Court");

         WHEREAS, on August 27, 2004, pursuant to an order of the Bankruptcy
Court, subsidiaries of the Company sold assets relating to the subsidiaries'
DIRECTV DBS business to The DIRECTV Group, Inc.;

         WHEREAS, on August 27, 2004, the debtors in bankruptcy filed a
Supplemental Motion for Order Pursuant to 11 U.S.C. ss.ss. 363 (b) and 105(a)
Authorizing and Approving Implementation of Supplemental Management Retention
Plan (the "Motion") seeking approval for the following payments and benefits by
the debtors in bankruptcy to the Executive: (i) the Closing Payment (as this
term is defined in the Motion), (ii) the Plan Payment (as this term is defined
in the Motion), and (iii) the COBRA Benefits (as this term is defined in the
Motion);

         WHEREAS, on September 23, 2004, the Bankruptcy Court approved the
Motion; and

         WHEREAS, the Executive and the Company have mutually agreed that it
would be in their mutual best interests to terminate the Executive's employment
with the Company and to set forth their agreement as to the Executive's
entitlements in connection therewith.

         NOW, THEREFORE, in consideration of the promises and mutual covenants
contained in this Amendment and intending to be legally bound, Pegasus and the
Executive agree that the Agreement shall be amended in its entirety to reflect
the following terms and conditions:

         1.    Definitions. Unless otherwise defined herein in this Amendment,
terms when used in this Amendment and initially capitalized, have the meanings
setforth in the Agreement.

         2.    July 21, 2002 Employment Agreement. From the date of this
Amendment, this Amendment supersedes the Agreement in its entirety. The
Executive acknowledges that the Executive shall only be entitled to receive the
compensation and benefits set forth in this Amendment and shall not be entitled
to receive any compensation or benefits that the Executive may otherwise have
been entitled to receive under the Agreement.

                                       4
3.    Term, Position and Duties. During the term of this Agreement, (i)
the Executive shall remain an employee of the Company until a period of time no
later than thirty (30) days after the effective date of a plan of reorganization
filed in the Bankruptcy Court proceeding ("Plan"), provided the Executive shall
not be required to remain in the employ of the Company any later than March 31,
2005 (it being expressly understood that the Company may, in its discretion,
accelerate the termination date of the Executive's employment with the Company
any time prior to the period specified in this clause (i)); (ii) the Executive
shall continue to serve as the Company's President, Chief Operating Officer and
Counsel, with his primary responsibilities consisting of winding up matters
relating to the Bankruptcy Estate; and (iii) the Executive shall be required to
devote such time, energies and skills to his employment in support of the
successful consummation of the Plan and such other responsibilities that may be
delegated to him from time to time by the Board of Directors that are reasonably
consistent with his existing responsibilities. During the term of his
employment with the Company, the Executive shall comply with all applicable
employment policies and procedures of the Company as in effect from time to
time.

         4.    Consulting Services. During the one year following the
Executive's termination from the Company, the Executive shall use his reasonable
efforts to make himself available, from time to time, as may be reasonably
requested by the Company to provide advice, counsel, transition or other
services to the Company (it being understood that following the termination of
the Executive's employment, the Executive's availability is not intended to
materially interfere with his then existing employment opportunities); provided,
the Executive shall not be required to provide during the year more than five
hours on average of his time per week (it being understood that, as matters
arise, that some weeks may exceed five hours). The Executive has been
instrumental in the Company's pursuit of certain patent infringement matters
relating to licenses acquired by the Company from Personalized Media
Communications, LLC ("PMC"). Due to the reexamination process taking place in
the United States Patent and Trademark Office, it is possible that proceedings
with respect to the Company's patent infringement litigation may not resume, or
transactions relating to such patent licenses may not arise, until after the one
year consulting period has expired. Given the uncertain nature of the timing of
developments or transactions that may arise relating to the patent licenses, the
Executive agrees to use his reasonable efforts, consistent with his then
existing employment responsibilities, to continue to provide consulting services
to the Company relating to these licenses, whether such matters relate to the
patent infringement litigation itself, PMC's patent portfolio, the Company's
relationship with PMC, and any transactions that may relate to any of the
foregoing, for an additional year following the one year consulting period
described in the first sentence of this section; provided, however, during such
additional year, the Executive shall not be required to provide more than 100
hours of time to these matters. The Company may terminate these consulting
services at any time upon 30 days advance written notice to the Executive,
provided that the Company shall be obligated to pay Executive amounts owed under
Section 6.4.5 through the effective date of termination.

         5.    Noncompetition; Nonsolicitation. For one calendar year following
termination of the Executive's employment, the Executive agrees that he will
not, without the prior written consent of the CEO, directly or indirectly,
whether as a principal, agent, employee, consultant, contractor, advisor,
representative, stockholder (other than as a holder of an interest of five
percent (5%) or less in the equity of a publicly traded corporation), or in any
other capacity: own, have any interest in, or

                                       5
provide services, advice or assistance to, (i) The DIRECTV Group, Inc., (ii)
EchoStar Communications Corporation, (iii) Rainbow DBS, (iv) PMC, or (v) any of
their respective affiliates (1). In addition, in light of the positions held by
the Executive with the Company, including his position as Counsel, Executive
acknowledges that it would be a conflict and unethical for him to provide
services, advice, assistance to, or otherwise represent, any party in any matter
relating to the PMC patents and the Company's licenses of the PMC patents at any
time without the express written consent of the Company, which may be granted or
denied in the Company's sole discretion and agrees not to do any of the
foregoing. During the period of time following termination of employment with
the Company but while the Executive is required to provide consulting services
to the Company, the Executive agrees not to (i) offer employment to or hire any
employee of the Company or its subsidiaries; or (ii) intentionally entice,
induce or solicit any individual or entity having a business relationship with
the Company or its subsidiaries, whether as an employee, consultant, customer or
otherwise, to terminate or cease such relationship.

By entering into this Agreement, the Executive acknowledges that these
prohibitions are reasonable as to time, geographical area and scope of activity
and do not impose a restriction greater than is necessary to protect the Company
and its subsidiaries' goodwill, proprietary information and business interests.
The Executive agrees that this Amendment provides valuable consideration
sufficient to support the non-competition and non-solicitation obligations
described above.

----------------------
(1) For purposes of this clause (v), "affiliate" means, with respect to any
natural person, corporation, partnership, trust, unincorporated organization,
association, limited liability company, or other entity. (hereinafter
collectively referred to as "Person"): (i) any Person directly or indirectly
owning, controlling, or holding with power to vote 10% or more of the
outstanding voting securities of such other Person; (ii) any Person 10% or more
of whose outstanding voting securities are directly or indirectly owned,
controlled, or held with power to vote, by such other Person; and (iii) any
Person directly or indirectly controlling, controlled by, or under common
control with such other Person. "Control" for the foregoing purposes shall mean
the possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of voting securities or voting interests, by contract or otherwise.

         6.    Compensation and Benefits. The Executive shall be entitled to the
following compensation and benefits:

               6.1    Base Salary. During the period that the Executive
         continues to be employed by the Company, Pegasus shall continue to pay
         to the Executive a Base Salary at an annual rate of $350,000, payable
         in accordance with the Company's policies applicable to the Company's
         officers from time to time.

               6.2    Incentive Compensation. During the period that the
         Executive continues to be employed by the Company that falls within
         calendar year 2004, the Executive shall continue to receive STIP in
         accordance with the Company's current practices in effect on the date
         of this Amendment, except that the Executive shall only be eligible to
         receive STIP to the extent it is paid to

                                       6
other executive officers of the Company. From the date of this
         Amendment, the Executive shall not be eligible to participate in any
         LTIP.

               6.3    Employee Benefits; Reimbursement of Expenses. Until the
         Executive's termination is effective, the Executive shall be entitled
         to receive employee benefits and reimbursement of expenses in
         accordance with Section 4.3 and Section 4.4 of the Agreement,
         respectively.

               6.4    Additional Payments. Subject to Section 5.8 and Section
         6.3 of the Agreement, the following payments shall be made to the
         Executive:

                      6.4.1  The Company agrees that the Bankruptcy Estate may
               pay to the Executive the Closing Payment in the amount of
               $1,000,000 within one business day of execution of this
               Agreement, pursuant to the order of the Bankruptcy Court
               approving the Motion.

                      6.4.2  The Company agrees that the Bankruptcy Estate may
               pay to the Executive the Plan Payment in the amount of $400,000
               within one business day of the effective date of the Plan,
               pursuant to the order of the Bankruptcy Court approving the
               Motion.

                      6.4.3  After the earlier of (i) termination of the
               Executive's employment with the Company and its subsidiaries
               or (ii) a Change of Control of the Company (excluding any
               resulting from a disposition involving the Bankruptcy Estate),
               if the Executive signs a Waiver and Release Agreement in the
               form of Exhibit B hereto and returns it within the time specified
               by the Company after termination of employment (but in no event
               less than twenty one (21) days) and the Executive does not revoke
               or attempt to revoke such Waiver and Release Agreement, the
               Company shall pay to the Executive, within thirty (30) days after
               the effective date of the Waiver and Release Agreement, a single
               lump sum payment equal to $2,304,273, which is the amount that
               the Company and Executive agree would be due to the Executive
               pursuant to Section 6.1.2 and Section 6.1.3 of the Agreement
               ("Agreement Severance"). If prior to such payment, the Executive
               has been paid any amounts on account of a Closing Payment and
               Plan Payment (or any other cash payment approved to be paid to
               the Executive pursuant to the Motion, other than the COBRA
               Benefits), the aggregate amount of such payments shall be
               credited against the amounts owed to the Executive pursuant to
               the first sentence of this Section 6.4.3 ("Offsets"). In the
               event that Executive's employment terminates as a result of
               death or disability during the term of this Amendment, the
               Company shall pay to the Executive's estate or to the Executive,
               as the case may be, the Agreement Severance less any Offsets
               upon the execution by the Estate, the Executive's personal
               representative or any other person legally empowered to handle
               the affairs of the Executive, a Waiver and Release Agreement in
               the form of Exhibit B amended solely to take into account the
               need for execution by a new signatory because of the Executive's
               death or disability.

                                       7
6.4.4  Subject to the receipt of the Waiver and Release
               Agreement as specified in Section 6.4.3 of this Amendment, upon
               the termination of the Executive's employment with the Company,
               the Executive shall be entitled to receive (i) the medical
               benefits coverage as described in Section 6.1.4 of the Agreement,
               subject to a payment in cash for each month of coverage equal to
               the aggregate taxable cost of coverage for the such month divided
               by sixty five hundredths (0.65) and (ii) to extent requested by
               the Executive, the assistance described in Section 6.1.6 of the
               Agreement.

                      6.4.5  In addition to the other consideration stated
               herein, as additional consideration for consulting services to be
               provided by the Executive to the Company pursuant to Section 4 of
               this Amendment, the Executive will be paid, subject to the
               Company's right to terminate these services pursuant to the last
               sentence of Section 4 of this Amendment, $5,417 per month,
               payable at the end of each month, for each of the 24 months
               constituting the period of time that the Executive may be asked
               to provide consulting services herein.

         7.    Surviving Provisions from Agreement. The following sections of
the Agreement are expressly incorporated by reference herein: Section 5.8
(Withholding); Section 6.2 (Employee Benefits); Section 6.3 (Limitation on
Parachute Payments); Section 7 (Confidential Information); Section 8 (Return of
Documents and Property); Section 10 (Intellectual Property); Section 11
(Disparagement), except that a new third sentence shall be added stating
"Pegasus agrees that it will not make any derogatory, unfavorable, negative or
disparaging statements concerning the Executive, providing this restriction
shall not be construed to limit the Company's ability to give non-malicious and
truthful statements as required by governmental and other authorities"; Section
12 (Enforcement) (except that the references to Section 9 therein shall be
substituted with a reference to Section 5 of this Amendment) (it being
understand that the reference to Section 11 is a reference to Section 11 as
modified by the additional sentence set forth in the prior clause); Section 13
(Indemnity), except that (i) the Company shall indemnify the Executive against
any claim, loss, or cause of action (including advancement of expenses) arising
from or out of the Executive's provision of consulting services pursuant to
Section 4 of this Amendment, (ii) the Company acknowledges that Executive shall
be entitled to receive, in his capacity as a director, officer, former director
or former officer of the Company and/or its subsidiaries, the benefits of the
Company's directors and officers liability insurance policies to the extent
permitted therein, and (iii) Section 13 of the Agreement survives termination of
Executive's employment under this Amendment; Section 14 (Notices) (except that
the notice to Pegasus should be directed to the attention of Pegasus' General
Counsel); Section 15 (No Mitigation); and Section 18 (Assignability).

         8.    Amendments. This Amendment may be amended, modified or superseded
only by a written instrument executed by both of the parties hereto.

         9.    Binding Effect. This Amendment shall inure to the benefit of and
shall be binding upon Pegasus and the Executive and their respective heirs,
executors, personal representatives, successors and permitted assigns.

                                       8
10.   Assignability. This Amendment will be binding upon and inure to
the benefit of the Corporation and any successor to the Corporation, including
without limitation any persons acquiring directly or indirectly all or
substantially all of the business or assets of the Corporation whether by
purchase, merger, consolidation, reorganization or otherwise (and such successor
will thereafter be deemed the "Corporation" for the purposes of this Amendment),
but will not otherwise be assignable or delegable by the Corporation. The
Corporation will require any such successor, by agreement in form and substance
identical hereto, expressly to assume and agree to perform this Amendment in the
same manner and to the same extent the Corporation would be required to perform
if no such succession had taken place. This Amendment will inure to the benefit
of and be enforceable by, if then applicable, Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees and
legatees, but shall not otherwise be assignable by the Executive, whether by
pledge, creation of a security interest or otherwise.

         11.   Directorship. The Executive currently serves as a director of the
Company and certain of its subsidiaries. The Executive agrees to resign from all
such directorships at the time that the Executive's employment with the Company
is terminated.

         12.   Governing Law. This Amendment shall be governed by the laws of
the Commonwealth of Pennsylvania.

         13.   Entire Agreement. The parties hereto acknowledge that each has
read this Amendment, understands it, and agrees to be bound by its terms. The
parties further agree that this Amendment constitutes the complete and exclusive
statement of the agreement between the parties and supersedes all proposals
(oral or written), understandings, representations, conditions, covenants, and
all other communications between the parties relating to the subject matter
hereof. The parties further acknowledge that the provisions of this Amendment
supersedes the terms of the Agreement except as expressly incorporated herein.

         14.   Waiver. Any term or provision of this Amendment may be waived in
writing at any time by the party entitled to the benefit thereof. The failure of
either party at any time to require performance of any provision of this
Amendment shall not affect such party's right at a later time to enforce such
provision. No consent or waiver by either party to any default or to any breach
of a condition or term in this Amendment shall be deemed or construed to be a
consent or waiver to any other breach or default.

         15.   Invalidity of Portion of Agreement. If any provision of this
Amendment or the application thereof to either party shall be invalid or
unenforceable to any extent, the remainder of this Agreement shall not be
affected thereby and shall be enforceable to the fullest extent of the law.

                                        9
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment on the date stated below effective as stated herein.

PEGASUS COMMUNICATIONS CORPORATION

By: /s/ Scott A. Blank                      Date:  September 28, 2004

     Name: Scott A. Blank

     Title: Senior Vice President

EXECUTIVE

By: Ted S. Lodge                            Date:  September 28, 2004

                                       10
Exhibit A

(Copy of Executive Employment Agreement dated July 21, 2002 by and among Pegasus
Communications Corporation and Ted S. Lodge)

                                       11
Exhibit B

(Form of Waiver and Release Agreement)

                                       12