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                                                                    Exhibit 10.4

                                SERVICE AGREEMENT

THIS AGREEMENT is made _________, _____

BETWEEN

(1)      PEARSON plc whose registered office is at 3 Burlington Gardens, London,
         W1X 1LE ("Pearson"); and

(2)      PEARSON INC., a Delaware Corporation whose executive office is at 30
         Rockefeller Plaza, 50th Floor, New York, NY 10112-5095 ("the Company");
         and

(3)      _______________________________________________________________________

         ____________.


IT IS AGREED as follows:-

1.       DEFINITIONS

         In this Agreement:

         (a)      "Group Company"           means any of (i) Pearson and (ii)
                                            any subsidiary or associate for the
                                            time being of Pearson and these
                                            shall have the meanings attributed
                                            to them under the Companies Act 1985
                                            or any amending legislation
                                            thereafter;

        (b)       "Effective Date"          means ______________;

        (c)       "the Board"               means the board of directors of
                                            Pearson;

        (d)       "the Employment"          means the employment established by
                                            this Agreement;

        (e)       "the Remuneration         means the  Remuneration  Committee
                  Committee"                of the board of  directors of
                                            Pearson.

2.       EMPLOYMENT

         2.1      The Company shall employ the Executive and the Executive shall
                  serve Pearson with the title of

         2.2      The Employment may be terminated by the Executive giving to
                  the Company not less than 6 months' written notice and by the
                  Company giving to the Executive not less than 12 months'
                  written notice.


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3.       DUTIES

         3.1      The Executive shall report to _______________ of Pearson on
                  his conduct of the business or affairs of Pearson providing
                  such explanations as may be required in connection therewith.

         3.2      The Executive shall perform such duties as may from time to
                  time be assigned to him by or under the authority of the Board
                  and shall comply with all reasonable directions made by or
                  under the authority of the Board. The Executive may be
                  required in pursuance of his Employment to be engaged not only
                  on work on behalf of Pearson but also on work on behalf of any
                  other Group Company.

         3.3      During the Employment the Executive shall well and faithfully
                  serve Pearson and use his utmost endeavours to promote its
                  interests, and shall devote such of his time, attention and
                  abilities to the affairs of any Group Company on behalf of
                  which he may be required to be engaged hereunder, as shall be
                  necessary.

         3.4      The Executive shall at all times conduct business in an
                  ethical manner as approved by Pearson and shall abide by all
                  internal rules and regulations which Pearson may issue from
                  time to time to its employees.

         3.5      The Executive shall, if called upon to do so and without any
                  further remuneration other than is herein mentioned, perform
                  his duties hereunder either at the offices of Pearson plc or
                  at the offices of any other Group Company inside the United
                  Kingdom as Pearson may in its reasonable discretion from time
                  to time require.

4.       SALARY

         4.1      The Executive's salary during the Employment shall be
                  (pound)_______ per annum payable monthly in arrears by credit
                  transfer directly into the Executive's bank account on the
                  27th day of each month or the last preceding working day. This
                  salary shall be inclusive of any fees payable to the Executive
                  either as a director of a Group Company or any other company
                  or otherwise arising by virtue of the Employment and shall be
                  deemed to accrue from day to day.

         4.2      The Executive's salary will be reviewed by the Remuneration
                  Committee annually on 1st January, commencing 1st January,
                  _____.

5.       BONUS

         5.1      The Executive shall participate in the Pearson executive bonus
                  plan in its present form or as subsequently amended and
                  approved by the Remuneration Committee from time to time. As
                  at the Effective Date, the maximum bonus payable is 50% of
                  salary.

6.       LONG-TERM INCENTIVE PLANS

         6.1      The Executive shall be eligible to participate in such
                  long-term incentive plans as Pearson may establish subject to
                  the rules applicable to such plans or as


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                  amended or varied from time to time at the direction of the
                  Remuneration Committee.

7.       EXPENSES

         7.1      Pearson (or another Group Company) shall reimburse the
                  Executive any reasonable travelling, hotel, entertainment and
                  other out-of-pocket expenses properly and necessarily incurred
                  by him on or about the performance of his duties under this
                  Agreement in accordance with the relevant rules of Pearson
                  from the time being in force and provided that he provides
                  reasonable evidence of his expenditure to Pearson.

8.       HOLIDAYS

         8.1      The Executive shall be entitled in each calendar year to 26
                  working days holiday with full salary (in addition to
                  statutory holidays) to be taken at such reasonable time or
                  times as may be approved by the Managing Director of Pearson.
                  The entitlement to holiday and, on termination of the
                  Employment, holiday pay in lieu of holiday shall accrue pro
                  rata throughout each calendar year of the Employment.

9.       TERMINATION

         9.1      The Employment may be terminated by either party by notice
                  given in accordance with clause 2.2 or the Company may, at its
                  sole discretion, terminate the Employment forthwith at any
                  time by paying salary and any other entitlements accruing to
                  the Executive in lieu of any required period of notice or part
                  thereof.

         9.2      Notwithstanding the other provisions of this Agreement, the
                  Company shall be entitled to terminate the Employment
                  forthwith (but without prejudice to the rights and remedies of
                  the Company for any breach of this Agreement and to the
                  Executive's continuing obligations under sub-clause 9.5 and
                  clause 10) in any of the following cases, namely:-

                  (a)      if the Executive is guilty of dishonesty or serious
                           or persistent misconduct, in all cases whether or not
                           in connection with or referable to the Employment; or

                  (b)      if the Executive becomes bankrupt or has a receiving
                           order made against him or makes any general
                           composition with his creditors.

                  In the event of the Employment being terminated by the Company
                  pursuant to this sub-clause 9.2, the Executive shall not be
                  entitled to receive any payment from the Company in respect of
                  any part of his annual holiday entitlement hereunder which he
                  may not have taken prior to the date of such termination, nor
                  to receive any other payment from the Company except in
                  respect of salary and bonus accrued to the date of such
                  termination.

         9.3      Without prejudice to any rights or remedies available to the
                  Executive under the general law in relation to any breach by
                  the Company of this Agreement it is


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                  understood and agreed that if the Company commits any material
                  breach of the provisions of this Agreement, the Executive
                  shall be entitled to treat himself as discharged from further
                  performance of the Agreement. For the purposes of this clause
                  9.3, material breach shall include:-

                  (a)      the termination by the Company of the Agreement other
                           than in accordance with clause 9.2 or 9.4;

                  (b)      the failure by the Company to provide work for the
                           Executive which is consistent with the duties
                           described in clause 3.1.

         9.4      If the Executive (owing to illness or otherwise) becomes
                  unable to perform his duties hereunder for a period or periods
                  totalling six calendar months in any period of twelve
                  consecutive calendar months, the Company shall (without
                  prejudice to any other provisions hereof) be entitled by
                  written notice to the Executive (given at the expiry of such
                  period or periods or at any time thereafter during such
                  inability):-

                  (a)      to terminate the Employment forthwith; or

                  (b)      to suspend or reduce any bonus payable under clause 5
                           with effect from the date of such notice (or such
                           later date as may be specified in such notice) and
                           for so long as such illness or disability shall
                           continue.

         9.5      Upon termination of the Employment the Executive shall deliver
                  to Pearson all books, documents, papers, materials, credit
                  cards and other property relating to the business of or
                  belonging to Pearson (or any other Group Company) which may
                  then be in his possession or under his power or control.

         9.6      If the Company terminates this Agreement forthwith or by
                  notice otherwise than in accordance with clause 9.1 or 9.4 and
                  in circumstances where the Executive has grounds for making a
                  contractual claim for damages against the Company the Company
                  shall reimburse any reasonable legal costs incurred by the
                  Executive in connection either with the pursuit of a
                  successful claim against the Company in respect of such action
                  by the Company or with any negotiation and settlement of such
                  a claim, subject to the Company's maximum liability under this
                  clause 9.6 not exceeding (pound)15,000.

10.      RESTRAINT ON ACTIVITIES OF EXECUTIVE

         10.1     During the period of Employment, the Executive shall not
                  (without Pearson's prior written consent, which will not be
                  unreasonably withheld in the case of an engagement, concern or
                  interest which is not of a similar nature to nor competitive
                  with the business of Pearson or any Group Company and which
                  does not require the Executive's time or attention during
                  Pearson's normal working hours) be directly or indirectly
                  engaged or interested in any capacity in any other business,
                  trade or occupation whatsoever otherwise than in the
                  performance of his duties hereunder.


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         10.2     The Executive shall keep secret and shall not at any time
                  (whether during the Employment or after the termination of the
                  Employment) use for his own or another's advantage, or reveal
                  to any person, firm, company or organisation, and shall use
                  his best endeavours to prevent the publication or disclosure
                  of, any of the trade secrets, business methods, computer
                  systems or information which the Executive knew or ought
                  reasonably to have known to be confidential concerning the
                  business or affairs of (i) Pearson, or (ii) any other Group
                  Company, (iii) any joint venture in which it or they may
                  participate or (iv) any of its or their customers, so far as
                  they shall have come to his knowledge during the Employment.
                  The restrictions contained in this clause shall not apply:-

                  (a)      to any disclosure or use authorised by the Board or
                           required by law or by the Employment; or

                  (b)      so as to prevent the Executive from using his own
                           personal skill in any business in which he may be
                           lawfully engaged (subject to sub-clause 10.6 below)
                           after the Employment is ended.

         10.3     None of the restrictions in this clause 10 shall prevent the
                  Executive from having an interest (as defined by the
                  provisions of the Companies Act 1985) in any securities (such
                  term to include any stocks, shares and debentures) unless they
                  are securities to which both conditions (a) and (b) below
                  apply, namely:-

                  (a)      the company which issued the securities carries on,
                           or is the holding company of a company carrying on, a
                           business which is similar to or competitive with any
                           business for the time being carried on by the Company
                           or any Group Company; and

                  (b)      the securities were acquired at a cost greater than
                           (pound)50,000 and are not listed or quoted on a Stock
                           Exchange (excluding, for the avoidance of doubt, the
                           Unlisted Securities Market or any over-the-counter
                           market) or, if they are so listed or quoted, they
                           exceed 3 per cent in nominal value or (in the case of
                           securities not having a nominal value) in number of a
                           class of securities which are so listed or quoted.

         10.4     For a period of 6 months after termination of the Employment,
                  the Executive shall not endeavour (whether on his own account
                  or for any other person, firm, company or organisation) to
                  entice away from Pearson or any other Group Company situated
                  in the United Kingdom or elsewhere, any employee employed in
                  an executive capacity at the date of termination of the
                  Employment or at any time within a period of six months prior
                  to that date and with whom the Executive has worked or with
                  whom he has had personal contact as part of the Employment.

         10.5     For a period of 6 months after termination of the Employment,
                  the Executive shall not directly or indirectly (and whether on
                  his own account or for any other person, firm, company or
                  organisation) solicit or endeavour to entice away from
                  Pearson, or any other Group Company any person, firm, company
                  or organisation who or which in the preceding 12 months shall
                  have been a customer of or in the habit


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                  of dealing with (i) Pearson, or (ii) any other Group Company,
                  and with whom the Executive has had direct dealings or
                  personal contact as part of the Employment, so as to harm the
                  goodwill of Pearson or any other Group Company or so as to
                  compete with Pearson or any other Group Company.

         10.6     For a period of 6 months after termination of the Employment,
                  the Executive shall not be engaged or interested (whether as
                  principal, servant, agent, consultant or otherwise) in any
                  trade or business in which the Executive has been involved or
                  with which the Executive has been concerned as part of the
                  Employment and which is similar to, and by virtue of its
                  location competes with, any trade or business being carried on
                  at the date of termination of the Employment by (i) Pearson or
                  (ii) any other Group Company.

         10.7     The covenants given by the Executive in this clause 10 are
                  given by the Executive to Pearson on its own behalf and as
                  agent for each of the other Group Companies.

         10.8     The Executive shall not, at any time after termination of the
                  Employment for whatever reason, represent himself as being in
                  any way connected with the business of the Company or that of
                  any other Group Company.

11.      INTELLECTUAL PROPERTY

         11.1     The Executive shall not, during the Employment use
                  intellectual property to which any former employer or third
                  party has or may have an interest and the Executive agrees to
                  indemnify Pearson in respect of any breach of this provision.

         11.2     Any discovery, invention, improvement, design or other
                  copyright work discovered, invented, developed or devised by
                  the Executive during the Employment (and whether or not in
                  conjunction with a third party) relating to the business of
                  Pearson or any other Group Company, or capable of being used
                  or adapted for use by Pearson (or any other Group Company),
                  shall be disclosed to Pearson and, subject to such rights as
                  the Executive may have under the Patents Act 1977, shall
                  belong to and be the absolute property of Pearson or the
                  relevant Group Company.

         11.3     The Executive hereby assigns to Pearson or the relevant Group
                  Company all rights in the works referred to in 11.1 above free
                  of charge.

         11.4     The Executive will at the expense of Pearson (whether during
                  or after cessation of the Employment) apply for and execute
                  all such documents as may be necessary to vest all rights,
                  title and interest in the works referred to in 11.2 above in
                  Pearson or the relevant Group Company absolutely.

         11.5     The Executive irrevocably appoints Pearson to nominate an
                  attorney in the Executive's name and on his behalf, to execute
                  any documents and generally to act and use the Executive's
                  name for the purpose of giving the Company or any other Group
                  Company the full benefit of the provisions of this clause 11.


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12.      MISCELLANEOUS

         12.1     This Agreement and the Schedule hereto constitute the entire
                  agreement and understanding between the parties as to its
                  subject matter and the Executive acknowledges that he has not
                  entered into this Agreement in reliance upon any
                  representation, warranty or undertaking which is not set out
                  in this Agreement or referred to in this Agreement as forming
                  part of the contract of employment of the Executive.

         12.2     The various provisions of this Agreement are severable and if
                  any provision is held to be invalid or unenforceable by any
                  court of competent jurisdiction then such invalidity or
                  unenforceability shall not affect the remaining provisions of
                  this Agreement.

         12.3     Notices by either party shall be given in writing and may be
                  delivered personally or sent by letter addressed to the other
                  party at its registered office for the time being or the last
                  known address. Any such notice given by letter shall be deemed
                  to have been given at the time at which the letter would be
                  delivered in the ordinary course of post if sent by post and
                  on the date of delivery if delivered personally.

         12.4     Any reference in this Agreement to an Act of Parliament shall
                  be deemed to include any statutory modification or
                  re-enactment thereof whenever made. The headings shall be
                  disregarded in construing this Agreement.

         12.5     The Schedule hereto forms an integral part of this Agreement.

AS WITNESS whereof the parties have hereunto set their hands the day and year
first before written.

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                                  THE SCHEDULE

                       Particulars of Terms of Employment

In accordance with the Employment Protection (Consolidation) Act 1978 the
following terms of the Employment apply from the Effective Date as provided in
the Agreement:-

(a)      JOB TITLE

         See clause 2.1

(b)      SALARY

         See clause 4.

(c)      HOURS OF WORK

         The Executive shall work such hours as may be necessary or appropriate
         from time to time to carry out his duties properly and effectively.

(d)      HOLIDAYS

         See clause 8.

(e)      COMPANY CAR

         The Company will provide the Executive with a company car, the type and
         model to be agreed by the Managing Director of Pearson, within limits
         established by the Remuneration Committee.

(f)      SICKNESS OR INJURY

         If the Executive is absent from work because of illness or injury his
         salary will continue to be paid for at least 180 days in any one
         calendar year subject to submission of a doctor's or self-certification
         certificate for each period of absence. The Company reserves the right
         to seek a separate medical report from the Company's doctor at any
         time. If absence exceeds 180 days (or if shorter periods of absence in
         total exceed 180 days) within any period of a calendar year, the
         Company will consider whether or not circumstances justify the
         continued payment of salary in whole or in part. If the Executive is
         totally incapacitated, his salary will continue to be paid by the
         Company for the first six months of his absence. All the foregoing is
         subject to clause 9.4.

(g)      MEDICAL INSURANCE

         The Company will provide free family coverage for the Executive under
         the Pearson Group Health Care Scheme. Coverage will be continued into
         retirement.

(h)      PENSION AND LIFE ASSURANCE

         The Executive will be eligible to join the Pearson Group Pension Plan,
         details of which

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         will be advised separately, together with any special arrangements
         which may apply.

(i)      NOTICE

         See clauses 2.2 and 9.1.

(j)      DISCIPLINARY PROCEDURES

         The Executive will be subject to the disciplinary procedures of the
         Company in force from time to time, save in so far as they are modified
         by clause 9.2.

         The attention of the Executive is drawn to the fact that as a director
         of Pearson he is subject to such terms and conditions contained in the
         articles of association of Pearson as are applicable to directors and
         to the duties and obligations placed on him by the UK Companies Acts
         and other legislation and also, where appropriate, Stock Exchange
         regulations, including rules governing share dealings by directors and
         other employees adopted by the Board (the "Rules"), a copy of which has
         been handed to the Executive. The Executive may neither buy nor sell
         shares or loan stock of Pearson without first receiving clearance from
         another director in accordance with the Rules. The Executive may also
         neither buy nor sell securities of any other company the market price
         of which, as a result of unpublished information obtained by him by
         virtue of his employment with Pearson or the Company, he believes may
         be affected by action of Pearson or any of its subsidiaries. These
         restrictions are equally applicable to dealings by the Executive's
         spouse, children under the age of eighteen and other connected persons.
         The attention of the Executive is drawn to the further restrictions on
         "insider dealing" contained in the Criminal Justice Act 1993 in
         relation to the shares and loan stock of Pearson which apply throughout
         his employment and six months thereafter.

(k)      GRIEVANCE PROCEDURE

         If the Executive has a grievance in connection with his employment he
         should raise the matter in the first instance with the Managing
         Director of Pearson.


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SIGNED by                                   )
for and on behalf of Pearson                )
plc, in the presence of:-                   )







SIGNED by                                   )
for and on behalf of Pearson Inc.           )
in the presence of:-                        )








SIGNED by                                   )
in the presence of:-                        )


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