<PAGE>
Exhibit 10: Employment Agreement between and James J. Peoples, dated June 30,
2003.

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated effective on June
30, 2003, by and between The Peoples Publishing Group, Inc., a Delaware
corporation (the "Company"), and James J. Peoples, an individual resident of the
State of New Jersey (the "Executive").

                                   WITNESSETH:

         WHEREAS, the Company and the Executive previously entered into an
Employment Agreement, dated February 23, 1990 (the "1990 Agreement"), and now
desire to amend and restate the 1990 Agreement in its entirety as set forth in
this Agreement; and

         WHEREAS, the Company desires to continue the employment of the
Executive and the Executive wishes to continue his employment with the Company
upon the terms and conditions set forth in this Agreement.

         NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein contained, the Company and the Executive agree as follows:

         1. Employment. The Executive shall serve as a senior advisor to the
Company and the Parent (as defined below), and as such senior advisor, shall
advise the Company and the Parent on matters related to their business strategy
and growth, and shall have such additional titles as the Executive and the Board
of Directors of the Company or the Parent shall from time to time agree; and the
Executive accepts such employment and agrees to perform services for the Company
and its Affiliates in accordance with the requirements of such positions, for
the period and upon the other terms and conditions set forth in this Agreement.
The Executive shall be nominated for election as a director of the Company and
the Parent by the Company's and the Parent's stockholders at each annual or
special meeting where directors are elected during the term of this Agreement.
Subject to the provisions of a certain Voting Agreement between the Executive,
the Parent and School Power Limited Partnership, dated on or about the date
hereof, as long as the Executive continues to serve as a director of the Company
and the Parent from the date hereof through August 1, 2005, the Executive shall
also be elected as the Chairman of the Board during such period. The term
"Affiliate" as used in this Agreement shall mean any subsidiary or parent
corporation of the Company and any other corporation under common control with
the Company, including Peoples Educational Holdings, Inc., a Delaware
corporation (hereinafter referred to as the "Parent").

         2. Term. Unless terminated at an earlier date in accordance with
Section 8, the term of the Executive's employment hereunder shall commence on
the date hereof and continue through July 31, 2008. Each period from August 1
through the July 31 of the immediately succeeding year shall be referred to as a
"Contract Year" in this Agreement. Thereafter, the term of this Agreement may be
extended upon the mutual written agreement of the Executive and the Company.
Notwithstanding the foregoing, the terms of Sections 3.03 (Indemnification),
4.04 (Registration Rights), 5 (Confidential Information), 7 (Non-Competition), 8
(Termination) and 9 (Miscellaneous) shall survive the expiration or termination
of this Agreement (whether such expiration or termination occurs as a result of
the expiration of the term as provided herein, by mutual agreement, as a result
of the Executive's resignation, termination by the Company with or without
cause, or any other reason), and continue in full force and effect in accordance
with their terms.

          3. Position and Duties.

                  3.01 Service with Company. During the term of this Agreement,
the Executive shall perform such duties for the Company and its Affiliates as
are consistent with Section 1.

                  3.02 Performance of Duties. The Executive shall serve the
Company and its Affiliates faithfully and to the best of his ability, and devote
such percentage of his time, attention and efforts to the business and affairs
of the Company and its Affiliates as is set forth in Section 4.01 during normal
business hours (and outside normal business hours as reasonably required) during
the term of this Agreement, provided, however, that subject to the Executive's
compliance with Section 7(a), the Executive may serve as a member of the board
of

<PAGE>



directors of a corporation or other organization, including an educational
company, upon the approval of the Company, which approval shall not be
unreasonably withheld.

                  3.03 Indemnification. Each of the Parent and the Company
shall, to the fullest extent permitted under the applicable provisions of
Delaware law, the Company's or the Parent's certificate of incorporation and
by-laws, and terms of any directors and officers liability insurance policy
maintained by the Company or the Parent, indemnify and hold harmless the
Executive against any costs or expenses, judgments, fines, losses, claims,
damages, liabilities and amounts paid in settlement in connection with any
actual or threatened claim, action, suit, proceeding or investigation, whether
civil, criminal, administrative or investigative, arising out of, relating to or
in connection with any action or omission occurring or alleged to occur during
the period of the Executive's employment under this Agreement or otherwise
(including, without limitation, acts or omissions in connection with the
Executive serving as an officer, director or other fiduciary in any entity if
such service was at the request or for the benefit of the Company).

                  4. Compensation.

                  4.01 Base Salary and Vacation. As compensation for all
services to be rendered by the Executive under this Agreement, for each Contract
Year during the term of this Agreement, the Company shall pay to the Executive
such salary as is set in the table below, which salary shall be paid in
accordance with the Company's normal payroll procedures and policies. In each
such Contract Year, the Executive shall devote such minimum weekly hours of his
time, attention and efforts as is set forth in the table below to the business
and affairs of the Company and its Affiliates during normal business hours (and
outside normal business hours as reasonably required). In addition, in each such
Contract Year, the Executive shall be entitled to take such maximum number of
weeks in vacation time as is set forth in the table below.

<TABLE>
<CAPTION>
CONTRACT YEAR ENDING         SALARY         HOURS PER WEEK**  VACATION WEEKS
TIME

<S>                       <C>               <C>               <C>
7/31/03*                   $140,000               35                10
7/31/04                    $120,000               30                10
7/31/05                    $100,000               30                12
7/31/06                    $ 30,000               10                12
7/31/07                    $ 30,000               10                12
7/31/08                    $ 30,000               10                12
</TABLE>

* Pro rated based on the partial year from the date hereof through 7/31/03.
** If the Executive would be required to work more hours per week than what is
listed in this column in order for the Executive to be eligible to participate
in the Company's medical plans, the Executive has the option, but not the
obligation, to work for such increased number of hours hereunder to retain his
eligibility. If the Executive chooses to do so, however, the amount of salary
and the number of vacation weeks listed in this table shall not be increased.

                  Alternatively, at any time, and from time to time, during the
last three Contract Years of this Agreement, the Board of Directors of the
Company or Parent may ask the Executive to take a substantial, more focused
senior advisor role (the "AP Senior Advisor") in the development and business of
the Company's Advanced Placement Division in addition to the general senior
advisor duties described in Section 1 of this Agreement. If the Executive agrees
to take on such AP senior Advisor role, the Executive shall devote such minimum
weekly hours of his time, attention and efforts as is set forth in the table
below to the business and affairs of the Company and its Affiliates, including
the AP senior Advisor role, during normal business hours (and outside normal
business hours as reasonably required). In addition, in each such Contract Year,
the Executive shall be entitled to take such maximum number of weeks in vacation
time as is set forth in the table below. The Board shall, in its discretion,
determine the period or periods of time during which the Executive will be asked
to serve in the AP Senior Advisor role during the last three Contract Years.
During periods in which the Executive does not so serve, the Executive's salary,
hours per week and vacation time shall be as set forth in the table immediately
above.

<PAGE>


<TABLE>
<CAPTION>
CONTRACT YEAR ENDING         SALARY           HOURS PER WEEK             VACATION WEEKS
TIME

<S>                       <C>                 <C>                        <C>
7/31/06                    $  90,000                 30                         12
7/31/07                    $  90,000                 30                         12
7/31/08                    $  90,000                 30                         12
</TABLE>

                  4.02 Incentive Compensation. In addition to the base salary
and vacation described in Section 4.01, the Executive shall be eligible to
receive a fixed percentage, as indicated in the table below, of the cash
incentive compensation payable to the Company's Chief Executive Officer
("CEO")for each calendar year during the term of this Agreement pursuant to the
then current CEO Incentive Plan (the "CEO Plan").

                  If the Executive's employment is terminated pursuant to
Sections 8.01(a)(iii) or 8.01(a)(iv) hereof, or if the Executive voluntarily
resigns, no bonus shall be payable for any annual or quarterly periods which
have not ended prior to such termination or resignation occurred. If the
Executive's employment is terminated pursuant to Sections 8.01(a)(i) or
8.01(a)(ii), the Company shall pay the Executive a pro rated bonus, calculated
based on the number of days worked during the applicable period up through the
date of termination, for the year or quarter (if applicable) in which such
termination occurred, payable promptly after the Company's and its Affiliates'
financial statements (audited in the case of an annual bonus) for the year or
quarter, as applicable, in which the termination occurred become available. If
the Executive's employment is terminated pursuant to Section 8.01(b), the
Company shall pay the Executive all bonuses payable under this Agreement through
July 31, 2008 as if the termination had not occurred, payable promptly after the
Company's and its Affiliates' financial statements (audited in the case of an
annual bonus) for the year or quarter, as applicable, in which the termination
occurred become available.

<TABLE>
<CAPTION>
                                PERCENTAGE OF
CALENDAR YEAR                   CEO BONUS

<S>                             <C>
2003                                40%
2004                                30%
2005                                10%
2006                                10%
2007                                10%
2008 (stub)                          5%
</TABLE>

         In the event that the position of the CEO is vacant for any reason, the
most recent CEO Plan that was in effect shall continue to be in effect for the
sole purpose of determining the Executive's incentive compensation under this
Section 4.02 until a new CEO incentive plan shall have been approved by the
Board of Directors of the Company for a new CEO.

                  4.03 Participation in Benefit Plans. The Executive shall also
be entitled to participate in all employee benefit plans or programs (except
vacation plans or programs which are governed specifically under Section 4.01 of
this Agreement) established by the Company's or the Parent's Boards of Directors
from time to time to the extent that his position, title, tenure, salary, age,
health and other qualifications make him eligible to participate, and at all
times at a level which is commensurate with the Company's and the Parent's other
senior executives similarly situated. The Executive's participation in any such
plan or program shall be subject to the provisions, rules and regulations
applicable thereto. Without limiting the generality of the foregoing, the
Executive shall be provided with medical, disability, dental, and life insurance
coverage to the extent it is available at a reasonable cost from reputable
insurers. The Company shall pay 100% of the Executive's individual and family
medical insurance coverage. In addition, the Company shall continue to pay for
the current $180,000 term life insurance policy on the Executive.

                  4.04 Registration Rights. The Company and the Parent
acknowledge that the Executive is entitled to certain registration rights with
respect to the shares of common stock of Parent owed by the Executive, all in
accordance with the terms and conditions of the Stock Purchase Agreement, dated
August 24, 1993, by and among the Company, Cherry Tree Ventures III, the
Executive, Diane M. Miller and John C. Bergstrom.


<PAGE>


                  4.05 Expenses; Auto Allowance. The Company shall pay or
reimburse the Executive for all reasonable and necessary out-of-pocket expenses
(including tolls and parking, but specifically excluding purchases of gas,
repairs, maintenance and insurance) incurred by him in the performance of his
duties under this Agreement, subject to the Company's normal policies for
expense verification, and shall also pay the Executive an auto allowance of $600
per month.

                  4.06 Payments Through Term of the Agreement. Except as
otherwise provided in this Agreement, the Executive's base, incentive
compensation, and benefits pursuant to Sections 4.01, 4.02, 4.03 and 4.05 above
shall not be decreased by the Company for any reason during the term of this
Agreement.

         5. Confidential Information. Except as permitted or directed by the
Company's Board of Directors, during the term of this Agreement and for a period
of one year thereafter the Executive shall not divulge, furnish or make
accessible to anyone or use in any way (other than in the ordinary course of the
business of the Company or any of its Affiliates) any confidential or secret
knowledge or information of the Company or any of its Affiliates which the
Executive has acquired or become acquainted with or shall acquire or become
acquainted with prior to the termination of the period of his employment by the
Company (including employment by the Company or any of its Affiliates), whether
developed by himself or by others, concerning any trade secrets, confidential or
secret designs, processes, formulae, plans, devices or material (whether or not
patented or patentable), financial results or condition, business plans or
projections directly or indirectly useful in any aspect of the business of the
Company or any of its Affiliates, any confidential customer lists or printer or
supplier lists of the Company or any of its Affiliates, any author or freelance
employee lists of the Company or any of its Affiliates, any confidential or
secret development or research work of the Company or any of its Affiliates, any
lists of potential investors or acquisitions contemplated by the Company or any
of its Affiliates, any plans, proposals or strategies of the Company or its
Affiliates to expand, merge or engage in a business combination or relationship,
or any other confidential or secret aspects of the business of the Company or
any of its Affiliates. The Executive acknowledges that the above-described
knowledge or information constitutes a unique and valuable asset of the Company
and its Affiliates, as the case may be, acquired at great time and expense by
the Company, its predecessors and its Affiliates, as the case may be, and that
any disclosures or other use of such knowledge or information other than for the
sole benefit of the Company or any of its Affiliates would be wrongful and would
cause irreparable harm to the Company and its Affiliates, as the case may be.
The foregoing obligations of confidentiality, however, shall not apply to any
knowledge or information which is now public or which subsequently becomes
publicly known, other than as a direct or indirect result of the breach of this
Agreement by the Executive, and to any disclosures required by law.

         6. Ventures. If, during the term of this Agreement, the Executive is
engaged in or associated with the planning or implementing of any project,
program or venture involving the Company or any of its Affiliates and a third
party or parties, all rights in the project, program or venture, to the extent
that such rights may be claimed by the Executive or the Company or any of its
Affiliates, shall belong to the Company or its Affiliates, as the case may be.
Except as approved by the Company's Board of Directors, the Executive shall not
be entitled to any interest in such project, program or venture or to any
commission, finder's fee or other compensation in connection therewith other
than the compensation to be paid to the Executive as provided in this Agreement.

         7. Non-Competition.

                  (a) During the term of the Executive's employment by the
Company pursuant to this Agreement, and for twelve (12) months following
termination, he shall not, directly or indirectly, engage in competition with
the Company or any of its Affiliates in any manner or capacity (e.g., as an
adviser, consultant, principal, agent, partner, officer, director, stockholder,
employee, or otherwise) in, or involving, the Test Preparation Market (as
defined below), the Advanced Placement Market (as defined below), the
Supplemental Market (as defined below), or any other significant new line of
business which the Company or its Affiliates may pursue during the term of this
Agreement.

                  "Test Preparation Market" shall mean the market consisting of
the following test preparation materials intended for public and private
elementary and secondary school students, whether such materials are in written,
electronic, or any other media now existing or hereafter developed, including
the Internet (but excluding all magazines; whether in written, electronic or any
other media):



<PAGE>

                    (i)  generic test-taking training and materials, including
                         practice tests, teaching to standardized national and
                         state tests;

                    (ii) drill and practice materials on state-specific tests,
                         including practice tests; and

                    (iii) instructional material lessons for students on the new
                         state curriculum standards with practice on
                         state-mandated tests as an integral part of the
                         lessons.

         In addition, the Test Preparation Market shall also include teacher
training for the materials and tests set forth in subsections (i) -- (iii) above
in any form, including, but not limited to, consulting, instruction, or teacher
training materials.

         The "Advanced Placement Market" shall mean the market consisting of
high school and post-secondary instructional products, whether such products are
in written, electronic, or any other media now existing or hereafter developed
(including the Internet; but excluding all magazines, whether in written,
electronic or any other media), that are used in an Advanced Placement or
college prep instructional environment, through grade 12, and that are designed
to help students and teachers meet the requirements for the various Advanced
Placement course of studies as prescribed by the College Board. In addition, the
Advance Placement Market shall also include teacher training for the materials
set forth above in any form, including, but not limited to, consulting,
instruction, or teacher training materials.

         The "Supplemental Market" shall mean the market consisting of pre-K-12
instructional products that contain lessons, practice or examples intended to
teach or promote the learning of national or state curriculum standards, whether
such materials are in written, electronic, or any other media now existing or
hereafter developed (including the Internet; but excluding all magazines,
whether in written, electronic or any other media), that are used in private or
public schools and intended for student or teacher use with students and
consisting of a wide array of educational materials that support or supplement
basal textbooks and other core curriculum areas. These materials include, but
are not limited to, workbooks and worktexts in paper or case, manipulatives,
CD's, videos, film, software, and products designed to provide web-based
instruction using the internet. In addition, the Supplemental Market shall also
include teacher training for the materials set forth above in any form,
including, but not limited to, consulting, instruction, or teacher training
materials.

         Notwithstanding the foregoing, if the Executive voluntarily resigns
prior to the end of the term of this Agreement, the Executive shall be bound by
this noncompetition covenant until July 31, 2008 and the Company shall be
obligated to pay the Executive, in lieu of the amounts provided in Section 7(f),
the amount of $15,000 per year. The Company may, upon 30 days' written notice to
the Executive, terminate its obligation to make such payments to the Executive
and, in such event, this noncompetition covenant shall terminate as of the end
of such 30-day period. The Executive shall not be entitled to any of the
payments or benefits set forth in Sections 4.01, 4.02, 4.03 and 4.05 during the
period during which the Company pays the Executive as provided in this
paragraph.

                  (b) The obligations of the Executive under Section 7(a) shall
apply to a territory consisting of the entire United States.

                  (c) During the term of this Agreement and for a period of
twelve (12) months following the termination of the Executive's employment
hereunder, the Executive will not, on behalf of himself or on behalf of any
other person, firm or corporation, (i) call on any of the customers or
identified customer prospects of the Company or any of its Affiliates, for the
purpose of soliciting or providing to any said customers or prospective
customers any products or services competitive to the products and services of
the Company or any of its Affiliates, nor will he in any way divert or take away
any customer of the Company or its Affiliates; or (ii) call on any investor or
acquisition/merger candidate identified by the Company or its Affiliates,
whether pursuant to this Agreement or otherwise.

                  (d) During the term of this Agreement, the Executive shall
not, directly or indirectly, assist or encourage any other person in carrying
out, directly or indirectly, any activity that would be prohibited by the above
provisions of this Section 7 if such activity were carried out by the Executive,
either directly or indirectly; and in particular the Executive shall not,
directly or indirectly, induce any employee of the Company or any of its
Affiliates to carry out, directly or indirectly, any such activity.



<PAGE>



                  (e) During the term of this Agreement and for a period of
twelve (12) months following the termination of the Executive's employment
hereunder, the Executive will not, directly or indirectly, employ, solicit for
employment, or advise or recommend to any other person, firm or corporation that
they employ or solicit for employment or contract/consulting relationship any
employee, consultant, independent contractor or sales representative of the
Company or any of its Affiliates.

                  (f) Except as expressly set forth in this Section 7(f) or
Article 8, during the term of this noncompetition covenant which follows the
termination of the Executive's employment by the Company, the Company shall pay
to the Executive, as consideration for such covenant, an amount equal to 60% of
the Executive's average annual base salary in the Contract Year of termination
and the immediately preceding Contract Year, which amount shall be payable to
the Executive on a monthly basis in advance. However, if the Executive becomes
employed with another corporation or entity or as a sole proprietor during the
term of his noncompetition covenant which follows the termination of the
Executive's employment by the Company, the Company shall only be obligated to
pay to the Executive, as consideration for such covenant, an amount equal to 30%
of the Executive's annual base salary at the time of termination of employment,
which amount shall be payable to the Executive on a monthly basis. In either
case, the Company may, upon 30 days' written notice to the Executive, terminate
its obligation to make such payments to the Executive and, in such event, this
noncompetition covenant shall terminate as of the end of such 30-day period. The
Executive shall not be entitled to any of the payments or benefits set forth in
Sections 4.01, 4.02, 4.03 and 4.05 during the period during which the Company
pays the Executive as provided in this Section 7(f).

                  (g) Ownership by the Executive, as a passive investment, of
less than five percent (5%) of the outstanding shares of capital stock of any
corporation listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this Section 7.

         8. Termination.

                  8.01  Termination.

                  (a) This Agreement shall terminate prior to the expiration of
the initial term set forth in Section 2 or of any extension thereof and neither
the Company nor any of its Affiliates shall be obligated to make any further
payments or to provide any benefits (except up to the date of termination) to
the Executive in the event that at any time during such initial term or any
extension thereof:

                    (i)  Executive shall die, or

                    (ii) Executive shall become disabled in accordance with
                         Section 8.02, or

                    (iii) Executive has breached the provisions of Sections 5 or
                         7 of this Agreement in any material respect, or

                    (iv) Executive is terminated for "cause," which means (A)
                         the Executive's violation of a specific written
                         reasonable direction from the Board of Directors of the
                         Company or the Parent which is in the scope of the
                         Executive's position as set forth in Section 1 of this
                         Agreement; (B) the Executive's failure or refusal to
                         perform duties in accordance with this Agreement;
                         provided, however, no termination shall be for cause
                         under subsection (A) or (B) unless the Executive shall
                         have first received written notice from the Board of
                         Directors of the Company or the Parent advising the
                         Executive of the act or omission that constitutes cause
                         and such act or omission continues after the
                         Executive's receipt of such notice for at least a
                         period of time that would have allowed the Executive to
                         correct such act or omission; (C) an act or acts of
                         personal dishonesty taken by the Executive and intended
                         to result in substantial personal enrichment of the
                         Executive at the expense of the Company or its
                         Affiliates; or (D) the willful engaging by the



<PAGE>

                         Executive in illegal conduct that is materially and
                         demonstrably injurious to the Company or its
                         Affiliates. For the purposes of this section, no act,
                         or failure to act, on the Executive's part shall be
                         considered "dishonest," "willful" or "deliberate"
                         unless done, or omitted to be done, by the Executive in
                         bad faith and without reasonable belief that the
                         Executive's action or omission was in, or not opposed
                         to, the best interest of the Company or its Affiliates.
                         Any act, or failure to act, based upon authority given
                         pursuant to a resolution duly adopted by the Board of
                         the Company shall be conclusively presumed to be done,
                         or omitted to be done, by Executive in good faith and
                         in the best interest of the Company and its Affiliates.

Notwithstanding any termination of this Agreement pursuant to this Section 8.01,
the Executive and the Company, in consideration of their respective rights and
obligations as set forth in this Agreement, shall remain bound by the provisions
of this Agreement which specifically relate to periods, activities or
obligations upon or subsequent to the termination of the Executive's employment.
No act or omission shall be used as a basis for an allegation of "cause" for
termination if such act or omission is not specified as "cause" for termination
in a written notice by the Company within two hundred (200) days of the date the
Company first has knowledge of such act or omission (excluding for this purpose
knowledge of the Company existing solely as a result of attribution to the
Company of knowledge of the Executive and also excluding any on-going and
continuous course of conduct by the Executive).

                  (b) The Company shall not have the right to terminate this
Agreement prior to the expiration of the initial or an extension term of this
Agreement for reasons other than set forth in Sections 8.01(a)(i)-(iv). If the
Company, in violation of the previous sentence, terminates the Executive prior
to the expiration of the initial or an extension term of this Agreement for
reasons other than set forth in Sections 8.01(a)(i)-(iv), or if the Executive
terminates this Agreement for Good Reason (as defined below), the Company shall
pay the Executive his salary, benefits and incentive compensation through July
31, 2008 as set forth in this Agreement as if the termination had not occurred.
The Executive shall remain bound by the provisions of Section 7 in accordance
with the terms thereof through July 31, 2008, and the Company shall not be
obligated to pay the Executive the amounts set forth in 7(f) in consideration
therefore.

                  For purposes of this Agreement, "Good Reason" shall mean (A)
the Company's material breach of its obligations or undertakings as set forth in
this Agreement, (B) the assignment to the Executive of duties materially
inconsistent with the Executive's status or position with the Company, or (C)
the relocation of the Company's principal executive offices to a location more
than seventy miles from Saddle Brook, New Jersey, or the Company requiring the
Executive to be based anywhere other than the Company's principal executive
offices (except for required travel on the Company's business), provided,
however, in each case, that no termination shall be for Good Reason unless the
Company shall have first received written notice from the Executive advising the
Company of the specific nature of the breach or action that constitutes the
basis for the termination for Good Reason by the Executive and such breach or
action continues after the Company's receipt of such notice for at least a
period of time that would have allowed the Company to correct such breach or
action.

                  (c) The Executive may terminate this Agreement and his
employment hereunder other than for Good Reason upon 90 days' prior written
notice to the Company. If the Executive so resigns prior to the expiration of
the term of this Agreement, the Company shall be obligated to pay the Executive
his salary and benefits through the date of resignation. Thereafter, no salary,
bonus or any other benefits or amounts shall be payable by the Company to the
Executive. In the event the Executive resigns, the provisions of Section 7 shall
continue to apply.

                  (d) Notwithstanding any other provision of this Agreement, a
leave of absence or failure to perform duties due to a physical or mental
condition which would, with the passage of time, constitute a "Disability" as
defined below shall not constitute a basis for a termination for "cause."

                  8.02 "Disability" Defined. The Board of Directors of the
Company may determine that the Executive has become disabled, for the purpose of
this Agreement, in the event that the Executive shall fail, because of illness
or incapacity, to render services of the character contemplated by this
Agreement for a period of 180 consecutive days and on the date of determination
continues to be so disabled. The existence or nonexistence of grounds for
termination of this Agreement for any reason under Section 8.01(a)(ii) shall be
determined in good faith by the Board of Directors after notice in writing given
to the Executive at least 30 days prior to such determination. During such
30-day period, the Executive shall be permitted to make a presentation to the
Board of Directors for its consideration.


<PAGE>


                  8.03 Surrender of Records and Property. Upon termination of
his employment with the Company, the Executive shall deliver promptly to the
Company all records, manuals, books, blank forms, documents, letters,
manuscripts, publishing proposals from authors or employees, memoranda, notes,
notebooks, reports, data, tables, calculations, lists of investors or
acquisition/merger candidates, computer files, financial statements or records,
budgets or business plans or copies thereof, which are the property of the
Company or any of its Affiliates or which relate in any way to the business,
products, practices or techniques of the Company or any of its Affiliates, and
all other property, trade secrets and confidential information of the Company or
any of its Affiliates, including, but not limited to, all documents which in
whole or in part contain any trade secrets or confidential information of the
Company or any of its Affiliates, which in any of these cases are in his
possession or under his control.

9.       Miscellaneous.

                  9.01 Governing Law.  This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of New
Jersey, without regard to New Jersey's conflicts of law rules.

                  9.02 Prior Agreements. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
all prior agreements and understandings with respect to such subject matter,
including the 1990 Agreement, and the parties hereto have made no agreements,
representations or warranties relating to the subject matter of this Agreement
which are not set forth herein.

                  9.03     Withholding Taxes.  The Company may withhold from any
benefits payable under this Agreement all federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.

                  9.04 Amendments. No amendment or modification of this
Agreement shall be deemed effective unless made in writing signed and delivered
by the parties hereto.

                  9.05 Assignment. This Agreement shall not be assignable, in
whole or in part, by either party without the written consent of the other
party. Notwithstanding the foregoing, and subject to the Executive's right to
terminate this Agreement pursuant to Section 8.01(b) above, if, during the term
of this Agreement, there is a change in control of the Company or the Company is
acquired by or merges with another person or entity, this Agreement shall remain
in full force and effect and the acquiring person or entity shall, prior to the
consummation of such a change in control, acquisition or merger, execute an
agreement to continue this Agreement in full force and effect and to be bound by
this Agreement or, if the Company shall not be the surviving entity in such
change in control, acquisition or merger, the surviving entity shall execute
such an agreement

                  9.06 No Waiver. No term or condition of this Agreement shall
be deemed to have been waived, nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waive and shall not constitute
a waiver of such term of condition for the future or as to any act other than
that specifically waived.

                  9.07 Injunctive Relief. The Executive agrees that it would be
difficult to compensate the Company or the Parent fully for damages for any
violation of the provisions of this Agreement, including without limitation the
provisions of Sections 5, 7, and 8.03. Accordingly, the Executive specifically
agrees that the Company and the Parent shall be entitled to temporary and
permanent injunctive relief to enforce the provisions of this Agreement. This
provision with respect to injunctive relief shall not, however, diminish the
right of the Company and the Parent to claim and recover damages in addition to
injunctive relief.

                 9.08 Severability. To the extent any provision of this
Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remainder of such provision and of this Agreement shall be


<PAGE>


unaffected and shall continue in full force and effect. In furtherance and not
in limitation of the foregoing, should the duration or geographical extent of,
or business activities covered by, any provision of this Agreement be in excess
of that which is valid and enforceable under applicable law, then such provision
shall be construed to cover only that duration, extent or activities which may
validly and enforceably be covered. The Executive acknowledges the uncertainty
of the law in this respect and expressly stipulates that this Agreement be given
the construction which renders its provisions valid and enforceable to the
maximum extent (not exceeding its express terms) possible under applicable law.

                  9.09 Notices. All notices required or permitted to be made
hereunder shall be in writing and either hand-delivered to the party at the
addresses hereafter set forth (until and unless changed in accordance with this
Section) or sent by Certified or Registered U.S. Mail, return receipt requested,
with a copy by ordinary U.S. mail, postage prepaid, to the parties at the
addresses hereafter set forth (until and unless changed in accordance with this
Section):

                           (a)      if to the Executive:
                                    James J. Peoples
                                    248 Lynn Drive
                                    Franklin Lakes, NJ 07417

                                    with a copy to:
                                    Joseph P. Scorese, Esq.
                                    Harwood Lloyd, LLC
                                    130 Main Street
                                    Hackensack, New Jersey  07601

                           (b)      if to the Company or the Parent:
                                    299 Market Street
                                    Saddle Brook, NJ 07663
                                    Attention:  Brian T. Beckwith

                                    with a copy to:
                                    Robins, Kaplan, Miller & Ciresi L.L.P.
                                    2800 LaSalle Plaza, 800 LaSalle Avenue
                                    Minneapolis, Minnesota  55402
                                    Attention:  Sari KM Laitinen, Esq.

         IN WITNESS WHEREOF, the parties have hereunto set their hands,
intending to be legally bound, as of the 30th day of June, 2003.

                                            THE PEOPLES PUBLISHING GROUP, INC.


                                            By:      /s/ Brian T. Beckwith
                                               ---------------------------------
                                               Its:  President and Chief
                                                     Executive Officer


                                                     /s/ James J. Peoples
                                               ---------------------------------
                                                     James J. Peoples

ACCEPTED AND AGREED
this 30th day of June, 2003.

PEOPLES EDUCATIONAL HOLDINGS, INC.



By:  /s/ Brian T. Beckwith
   ------------------------------------------------------
     Its: President and Chief Executive Officer