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                                                                    EXHIBIT 10.7

                              EMPLOYMENT AGREEMENT

         THIS EMPLOYMENT AGREEMENT (the "Agreement:), dated effective as of
December 18, 2001, by and between The Peoples Publishing Group, Inc., a Delaware
corporation (the "Company"), and Brian T. Beckwith, an individual resident of
the State of New Jersey (the "Executive").

                                   WITNESSETH:

         WHEREAS, the Company desires to employ the Executive and the Executive
wishes to accept such 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 the President and Chief
Executive Officer of the Company and the Parent (as defined below), with such
additional titles as the Board of Directors of the Company or the Parent shall
from time to time approve, 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 also be appointed a
member of the Company's and the Parent's Boards of Directors and nominated for
election 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.
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 Holding, Inc., a Delaware
corporation (hereinafter referred to as the "Parent").

         2. Term. Unless terminated at an earlier date in accordance with
Section 8, the initial term of the Executive's employment hereunder shall be for
a period of three (3) years, commencing on the date hereof. Thereafter, the term
of this Agreement shall be automatically extended for successive one-year
periods unless either party objects to such extension by written notice to the
other party at least 180 days prior to the end of the initial term or any
extension term (the "Non-Renewal Notice"). Notwithstanding the foregoing, the
terms of Sections 3.03 (Indemnification), 4.05 (Registration Rights), 5
(Confidential Information), 7 (Non-Competition), 8 (Termination), 9 (Restriction
on Transfer of Shares; Right of First Refusal; Legend), 10 (Executive and Parent
Stock Purchase Rights) and 11 (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
the Board of Directors of the Company or the Parent shall assign to him from
time to time, consistent with the positions set forth in 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
his full time, attention and efforts to the business and affairs of the Company
and its Affiliates during normal business hours (and outside normal business
hours as reasonably required) during the term of this Agreement, except that
following any Non-Renewal Notice the Executive may devote a reasonable amount of
his time and efforts during normal business hours to the pursuit of new
employment opportunities. The Executive hereby confirms that he is under no
contractual commitments inconsistent with his

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obligations set forth in this Agreement, and that during the term of this
Agreement he shall not render or perform services for any other corporation,
firm, entity or person; provided, however, that the Executive may serve as a
member of the board of directors of a corporation or other organization 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. As compensation for all services to be
rendered by the Executive under this Agreement during the first 12 months during
the term of this Agreement, the Company shall pay to the Executive a base salary
of $250,000, which salary shall be paid in accordance with the Company's normal
payroll procedures and policies. The compensation payable to the Executive for
each 12-month period following the expiration of the first 12-month period
during the term of this Agreement shall be mutually agreed upon by the Company
and the Executive prior to the commencement of each such year based on the
Executive's performance, provided, however, that the base salary shall not be
reduced. The Executive understands that all executive salary increases are
subject to the approval of the Parent's Board of Directors.

                  4.02 Stock Option. On the first day of the Executive's
employment with the Company under this Agreement, the Executive shall be granted
a stock option award of 125,000 shares of the Parent's common stock, par value
of $.02 per share, under the Parent's 1998 Stock Plan (the "Plan") with
restrictions on vesting of ownership and other matters more particularly
described in the form of Incentive Stock Option Agreement attached as Exhibit A
and in the Plan. The Board of Directors of the Parent will grant the Executive a
further stock option award as of January 1, 2002 of 125,000 shares of the
Parent's common stock, par value $0.02 per share, under the Plan at an exercise
price equaling the then current fair market value per share, with restrictions
on vesting of ownership and other terms and conditions particularly described in
the form of Incentive Stock Option Agreement attached as Exhibit A-1 and in the
Plan.

                  4.03 Incentive Compensation. In addition to the base salary
and options described in Section 4.01 and 4.02, the Executive shall be eligible
to receive incentive compensation as set forth in the CEO Incentive Plan
attached hereto as Exhibit B and made part hereof. 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 other than for Good Reason, 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), 8.01(a)(ii) or 8.01(b) hereof, 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.

                  4.04 Participation in Benefit Plans. The Executive shall also
be entitled to participate in all employee benefit plans or programs (including
vacation time of not less than four weeks annually) established by

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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, 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.

                  4.05   Registration Rights.

                  (a) Whenever the Parent proposes to file a Registration
Statement at any time and from time to time, it will, prior to such filing, give
written notice to the Executive of its intention to do so and, upon the written
request of the Executive, given within 10 business days after the Parent
provides such notice (which request shall state the intended method of
disposition of the Registrable Shares), the Parent shall use its best efforts to
cause all shares purchased by the Executive pursuant to the stock options
referred to in Section 4.02 hereof (the "Registrable Shares") which the Parent
has been requested by the Executive to register, to be registered under the
Securities Act to the extent necessary to permit their sale or other disposition
in accordance with the intended methods of distribution specified in the request
of the Executive; provided, however, that the Parent shall have the right to
postpone or withdraw any registration effected pursuant to this Section without
obligation to the Executive. The Executive shall promptly provide to the Parent
such information and representations as may be requested by the Parent for
purposes of the Registration Statement, and agrees that the Parent does not have
to honor the piggy-back registration rights granted in this Section if, at the
time the Registration Statement becomes effective or shortly thereafter, there
is in effect a Registration Statement on Form S-8 or on another Form allowing
the Executive to sell the Registrable Shares.

         (b) In connection with any registration under this Section involving an
underwriting, the Parent shall not be required to include any Registrable Shares
in such registration unless the Executive accept the terms of the underwriting
as agreed upon between the Parent and the underwriters selected by it. If in the
opinion of the managing underwriter it is desirable because of marketing factors
to limit the number of Registrable Shares to be included in the registration,
then the Parent shall be required to include in the registration only that
number of Registrable Shares, if any, which the managing underwriter believes
should be included therein. For purposes of the underwriter cut-back provided
herein, the shares held by the Executive and proposed to be included in the
registration shall be cut back in the same proportion as any shares proposed to
be included in the registration by Cherry Tree Ventures III, James J. Peoples,
Diane M. Miller and John C. Bergstrom.

                  4.06 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.

         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

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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):

                           (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

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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.

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

                  (c) 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.

                  (e) 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 set forth in Section 8.01, 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
highest annual base salary during his employment, 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

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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, 4.03, 4.04 and 4.06 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; (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 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," "willfull" 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).

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                  (b) If the Company 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 and benefits through the date of termination, and:

                           (i) the Company shall be obligated to pay to the
         Executive his monthly base salary (as calculated below) for an
         aggregate period of eighteen (18) months from the date of termination.
         Such amount shall be payable by the Company on a monthly basis. The
         Executive shall not be entitled to any of the payments or benefits set
         forth in Sections 4.01, 4.03, 4.04 and 4.06 during the period during
         which the Company pays the Executive as provided in this Subsection
         (b)(i). For purposes of this subsection only, the Executive's monthly
         base salary shall be calculated by dividing (A) an amount equal to the
         higher of the Executive's annual salary in the year of termination or
         the immediately preceding year, by (B) twelve (12); and

                  (ii) the Executive shall remain bound by the provisions of
         Section 7 in accordance with the terms thereof during the payment
         period set forth in Subsection (b)(i) immediately above, and the
         Company shall not be obligated to pay the Executive the amounts set
         forth in 7(f) in consideration therefor; and

                  (iii) if the Executive becomes employed with another
         corporation or entity during the payment period set forth in Subsection
         (b)(i) above, the Company shall only be obligated to pay to the
         Executive pursuant to such Subsection an amount equal to the excess of
         the Executive's monthly salary payable pursuant to Subsection (b)(i)
         over the monthly salary that the Executive is entitled to receive from
         the other corporation or entity.

                           (c) If the Company terminates the Executive pursuant
         to a Non-Renewal Notice under Section 2 hereof , the Company shall pay
         the Executive his salary and benefits through the date of termination,
         and:

                           (i) the Company shall be obligated to pay to the
         Executive his monthly base salary (as calculated below) for an
         aggregate period of twelve (12) months from the date of termination.
         Such amount shall be payable by the Company on a monthly basis. The
         Executive shall not be entitled to any of the payments or benefits set
         forth in Sections 4.01, 4.03, 4.04 and 4.06 during the period during
         which the Company pays the Executive as provided in this Subsection
         (c)(i). For purposes of this subsection only, the Executive's monthly
         base salary shall be calculated by dividing (A) an amount equal to the
         higher of the Executive's annual salary in the year of termination or
         the immediately preceding year, by (B) twelve (12); and

                  (ii) the Executive shall remain bound by the provisions of
         Section 7 in accordance with the terms thereof during the payment
         period set forth in Subsection (b)(i) immediately above, and the
         Company shall not be obligated to pay the Executive the amounts set
         forth in 7(f) in consideration therefore; and

                  (iii) if the Executive becomes employed with another
         corporation or entity during the payment period set forth in Subsection
         (c)(i) above, the Company shall only be obligated to pay to the
         Executive pursuant to such Subsection an amount equal to the excess of
         the Executive's monthly salary payable pursuant to Subsection (c)(i)
         over the monthly salary that the Executive is entitled to receive from
         the other corporation or entity.

                           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,

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         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.

                  (d) If the Executive resigns prior to the expiration of the
initial or an extension term of this Agreement other than for Good Reason, 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.

                  (e) The Company shall not terminate the Executive prior to the
expiration of the first eighteen (18) months of the initial term of this
Agreement for reasons other than set forth in Sections 8.01(a)(i)-(iv).
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."

                  (f) The Executive shall have no obligation to seek employment
in the event of termination in order to receive the benefits of any payments
provided for under this Agreement in the event of termination.

                  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.

                  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. Restriction on Transfer of Shares; Right of First Refusal; Legend.

                  (a) The Executive shall not voluntarily or involuntarily sell,
transfer, exchange or otherwise dispose of any of the shares of Parent stock
that he may now own or hereafter acquire to any person or entity that is engaged
in any activity that is competitive with the business of the Company or any of
its Affiliates, unless he shall first offer to sell such shares to the Parent in
accordance with the terms of this Section 9.

                  (b) If the Executive wishes to transfer or otherwise dispose
of any shares of the Parent he owns to any person or entity that is engaged in
any activity that is competitive with the business of the Company or any of its
Affiliates, he shall deliver a written notice to the Parent, which notice shall
specify the person or entity to whom

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the shares are to be transferred or disposed of, the purchase price or other
consideration to be received by the Executive for such shares and the terms upon
which such purchase price or other consideration is to be paid. The delivery of
such written notice to the Parent shall constitute an irrevocable offer by the
Executive to sell the shares to the Parent upon the same terms and conditions as
are specified in the notice. The Parent may accept such offer by delivering a
written acceptance to the Executive within 30 days after receipt of the written
notice from the Executive. If the Parent elects to accept such offer, the
purchase of such shares shall be closed within 30 days upon the same terms as
are specified in the Executive's written notice. If the Parent elects not to
exercise such offer or if the Parent allows such offer to expire without being
accepted, the Executive shall be permitted to transfer or encumber such shares
on the terms specified in the written notice to the Parent to the person or
entity identified therein. If such transaction is not consummated within 90
days, such shares shall again be subject to the restrictions and the purchase
option described in this Section 9.

                  (c) Each certificate representing the shares of the Parent's
capital stock that the Executive may now own or hereafter acquire shall be
endorsed with the following legend:

                  "The transferability of this certificate and the shares of
                  stock represented hereby is subject to the restrictions, terms
                  and conditions contained in the Employment Agreement, dated
                  December 18, 2001 entered into between the registered owner of
                  such shares and The Peoples Publishing Group, Inc. A copy of
                  such Agreement is on file in the office of the Secretary of
                  the company."

                  (d) The provisions of this Section 9 shall continue in full
force and effect throughout the initial and any extended term of this Agreement
and until the period of the non-competition obligation of the Executive provided
for in Section 7(a) or 8(b)(ii) expires or terminates. In the event that prior
to the end of such period, the Executives sells, or has the right to sell, his
shares of Parent stock in a registered underwritten public offering or by other
means (including, without limitation, under Rule 144 as promulgated by the
Securities and Exchange Commission) or otherwise where the Executive does not
control the distribution of the shares, the Executive shall be released from the
restrictions of this Section 9 with respect to the shares so registered and
sold.

    10.  Executive and Parent Stock Purchase Rights.

                  10.01 Executive's Option. In the event that the Executive's
employment hereunder is terminated or terminates for any reason, the Executive
may, for a period of 475 days after such termination, deliver written notice to
the Parent that he desires to sell to the Parent his shares of common stock of
the Parent which he has acquired upon exercise of stock options and held for at
least one year. The Parent agrees that it shall purchase all such common stock
as set forth in such notice at the fair market value thereof as determined
pursuant to the procedure set forth below in Section 10.03.

                  10.02 Parent's Option. In the event that the Executive's
employment hereunder is terminated or terminates for any reason, the Parent may,
for a period of 475 days after such termination, deliver written notice to the
Executive, or his successors, heirs or assigns, as applicable, that it desires
to purchase from the Executive, or Executive's successors or assigns, that
number of shares of the Parent's common stock which he has acquired upon
exercise of stock options and held for at least one year. The purchase price for
the shares of the Parent's common stock repurchased by the Parent pursuant this
Section shall be the fair market value of such shares as determined pursuant to
the procedure set forth below in Section 10.03.

                  10.03 Fair Market Value. The "fair market value" of the shares
of Parent's common stock subject to Section 10.01 or 10.02 above shall be
determined as follows:

                  (a) if the Parent's common stock is traded on a securities
         exchange or over-the-counter (including The Nasdaq Stock Market), the
         value shall be deemed to be the average of the closing prices of the
         securities on such exchange over the 14-day period ending three (3)
         days prior to the date of the written

                                       9
<PAGE>

         notice provided under Sections 10.01 or 10.02 above, as applicable;

                  (b) if there is no active public market, the value shall be
         the fair market value thereof, as mutually determined in good faith by
         the Board of Directors and consented to by the Executive, which consent
         shall not be unreasonably withheld; or

                  (c) if the fair market value cannot be determined pursuant to
         clause 10.03(b) above, the value shall be determined by an appraiser
         chosen by the Board of Directors and the Executive or, if no such
         appraiser is so chosen prior to the 120th day after termination of the
         Executive's employment, then by an appraiser chosen by a nationally
         recognized investment banking firm experienced in the valuation of
         corporations engaged in the publishing business and acceptable to the
         Board of Directors and the Executive. The services of the appraiser
         shall be paid for one-half by Executive, his successors or assigns, as
         the case may be, and one-half by the Parent. In making such appraisal,
         the appraiser shall appraise the value of the Parent and the fair
         market value of the stock shall be determined by multiplying the value
         of the Parent by a percentage equal to the percentage of the total
         outstanding stock in the Parent represented by the stock of the
         Executive which is being appraised (no minority discount or discount
         based on the restrictions imposed by this Agreement shall be taken into
         account).

                  10.04 Payment. The purchase price determined under Section
10.03 above shall be payable by the Parent in cash within 30 days of the final
determination of the amount of the purchase price, provided, however, that if
the aggregate purchase price is more than $200,000, the amount in excess of
$200,000 (the "Excess Amount") shall be payable by the Parent by executing and
delivering to the Executive a promissory note (the "Note") in the principal
amount equaling the Excess Amount, payable interest only over a period of five
years from the date of the Note with the principal due in full at the end of
such five-year period. Interest shall accrue on the unpaid principal balance
(computed on the basis of the actual number of days in the payment period on a
360-day year) commencing on the date of the Note at the rate of prime adjusted
annually on the anniversary date of the Note (as reported in The Wall Street
Journal on the last business day prior to the date of the Note or the
anniversary date of the Note, as applicable). The Parent may prepay all or a
portion of the principal and interest on the Note, without premium or penalty.
Prior to and effective (and to be dated as of) the stock redemption by the
Parent pursuant to Sections 10.01 or 10.02 hereof, the Executive and the Parent
shall execute the Note for the Excess Amount, if any, reflecting the foregoing
terms and such other terms as mutually agreed and a Stock Pledge Agreement under
which the Parent shall pledge the stock acquired from the Executive as security
for the Note and any other documents required to effect the purposes of this
Section. Further the Note shall contain provision for acceleration of the
balance due in the event of a "Change of Control" as defined in Section 5 of the
Stock Option Agreement annexed as Exhibit A hereto and in the event of a sale of
all or substantially all of the assets of the Company or the Parent.

                  10.05 Exceptions. The provisions of this Section 10 shall not
be applicable if at any time after December 18, 2001 and prior to the later of
the time of the termination of Executive's employment under this Agreement or
the time of the proposed sale or purchase of shares pursuant to this Section 10,
there has been an initial public offering of the Parent's stock; the Parent's
stock becomes regularly traded on The Nasdaq Stock Market or on any other
national securities exchange; the Parent's stock becomes actively traded over
the counter; or the Parent's stock becomes actively traded on any other national
securities exchange.

    11. Miscellaneous.

                  11.01 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.

                  11.02 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

                                       10
<PAGE>

matter, 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.

                  11.03 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.

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

                  11.05 Assignment. This Agreement shall not be assignable, in
whole or in part, by either party without the written consent of the other
party.

                  11.06 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.

                  11.07 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.

                  11.08 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
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.

                  11.09 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:

                                    Brian T. Beckwith
                                    136 Bellevue Avenue
                                    Upper Montclair, New Jersey 07043

                                    with a copy to:

                                       11
<PAGE>

                                    Rabner, Allcorn, Baumgart & Ben-Asher, P.C.
                                    52 Upper Montclair Plaza
                                    Upper Montclair, NJ 07043
                                    Attention: Harold Rabner, Esq.

                           (b)  if to the Company or the Parent:

                                    299 Market Street
                                    Saddle Brook, NJ 07663
                                    Attention:  James J. Peoples

                                    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.

                                       12
<PAGE>

         IN WITNESS WHEREOF, the parties have hereunto set their hands,
intending to be legally bound, as of the date first above written.

                                 THE PEOPLES PUBLISHING GROUP, INC.

                                 By: /s/ James J. Peoples
                                    --------------------------------------------
                                     Its:  Chairman and Chief Executive Officer

                                     /s/ Brian T. Beckwith
                                    -------------------------------------------
                                     Brian T. Beckwith

ACCEPTED AND AGREED
this 18th day of December, 2001

PEOPLES EDUCATIONAL HOLDINGS, INC.

By: /s/ James J. Peoples
   ----------------------------------------
   Its: Chairman and Chief Executive Officer

                                       13<PAGE>
                                                                    EXHIBIT 10.8

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

         THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), dated
effective as of July 1, 2001, by and between The Peoples Publishing Group, Inc.,
a Delaware corporation (the "Company"), and Diane M. Miller, an individual
resident of the State of New York (the "Executive").

                                   WITNESSETH:

         WHEREAS, the Company and the Executive previously entered into an
Employment Agreement, dated February 23, 1998 (the "1998 Agreement"), and now
desire to amend and restate the 1998 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 her 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 the Executive Vice
President of the Company and the Parent (as defined below), with such additional
titles as the Chief Executive Officer of the Company (the "CEO") or the Parent
or the Board of Directors of the Company or the Parent shall from time to time
approve, and the Executive accepts such employment and agrees to perform
services for the Company and its Affiliates in accordance with the requirements
of the position, for the period and upon the other terms and conditions set
forth in this Agreement. 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
Holding, Inc., a Minnesota corporation (hereinafter referred to as the
"Parent").

         2. Term. Unless terminated at an earlier date in accordance with
Section 8, the initial term of the Executive's employment hereunder shall be for
a period of three (3) years, commencing on the date hereof. Thereafter, the term
of this Agreement shall be automatically extended for successive one-year
periods unless either party objects to such extension by written notice to the
other party at least 60 days prior to the end of the initial term or any
extension term. Notwithstanding the foregoing, the terms of Sections 4.05
(Registration Rights), 5 (Confidential Information), 7 (Non-Competition), 8
(Termination), 9 (Restriction on Transfer of Shares; Right of First Refusal;
Legend), and 10 (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
the CEO or Board of Directors of the Company or the Parent shall assign to her
from time to time, consistent with the position set forth in Section 1.

                  3.02 Performance of Duties. The Executive shall serve the
Company and its Affiliates faithfully and to the best of her ability, and devote
her full time, attention and efforts to the business and affairs of the Company
and its Affiliates during normal business hours (and outside normal business
hours consistent with prior practices and as reasonably required) during the
term of this Agreement. The Executive hereby confirms that she is under no
contractual commitments inconsistent with her obligations set forth in this
Agreement, and that during the term of this Agreement she shall not render or
perform services for any other corporation, firm, entity or person; provided,
however, that the

                                       1
<PAGE>

Executive may serve as a member of the board of directors of a corporation or
other organization upon the approval of the Company, which approval shall not be
unreasonably withheld.

         4.    Compensation.

                  4.01 Base Salary. As compensation for all services to be
rendered by the Executive under this Agreement during the first calendar year
during the term of this Agreement, the Company shall pay to the Executive a base
salary of $140,000, which salary shall be paid in accordance with the Company's
normal payroll procedures and policies. The compensation payable to the
Executive for each year following the expiration of the first calendar year
during the term of this Agreement shall be mutually agreed upon by the Company
and the Executive prior to the commencement of each such year based on the
Executive's performance, provided, however, that the base salary shall not be
reduced unless there is a downward adjustment in all executive salaries of the
Company. Each annual increase shall equal at least five percent (5%) of the
immediately preceding calendar year's base salary, except for years when there
is a reduction in executive salaries in general, in which case the decrease will
be no greater than the average decrease in the senior executive salaries. The
Executive understands that executive salaries are subject to the approval of the
Parent's Board of Directors.

                  4.02 Stock Option. On October 26, 2001, the Executive shall be
granted an incentive stock option award of up to 75,000 shares of the Parent's
common stock, par value of $.01 per share, under the Parent's 1998 Stock Plan
(the "Plan") with restrictions on vesting of ownership and other matters more
particularly described in the Incentive Stock Option Agreement attached as
Exhibit A and in the Plan (the "Option").

                  4.03 Incentive Compensation. In addition to the base salary
and options described in Section 4.01 and 4.02, the Executive shall be eligible
to participate in any corporate performance based incentive compensation and
bonus plans which are established by the Board of Directors of the Company or
the Parent, at all times at a level which is commensurate with the Company's and
the Parent's other senior executives similarly situated. 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 other than for Good Reason, no
bonus shall be payable for the year in which such termination or resignation
occurred. If the Executive's employment is terminated pursuant to Sections
8.01(a)(i), 8.01(a)(ii) or 8.01(b) hereof, the Company shall pay the Executive a
pro rated bonus up through the date of termination for the year in which such
termination occurred, payable promptly after the Company's and its Affiliates'
audited financial statements for the year in which the termination occurred
become available.

                  4.04 Participation in Benefit Plans. The Executive shall also
be entitled to participate in all employee benefit plans or programs (including
vacation time of not less than five weeks annually) established by the Company's
or the Parent's Boards of Directors from time to time to the extent that her
position, title, tenure, salary, age, health and other qualifications make her
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, and life insurance coverage to the extent it is available at a
reasonable cost from reputable insurers. In addition, the Company shall provide
the Executive with sufficient after-tax funds to cover reasonable premiums for a
life insurance policy on the Executive providing benefits to the Executive's
beneficiaries at the Executive's death equaling one times the Executive's then
current annual base salary.

                  4.05 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, James J. Peoples and John C. Bergstrom.

                  4.06 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)
incurred by her in the performance of her duties under this Agreement, and shall
also pay the Executive an auto allowance for up to $600 net per month, subject
to the Company's normal policies for expense verification.

                                       2
<PAGE>

         5. Confidential Information. Except as permitted or directed by the
Company's CEO or 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 her employment by the
Company (including employment by the Company or any of its Affiliates), whether
developed by herself 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
generally 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 or otherwise, and for twelve (12) months
following termination, she 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) or
the Supplemental Market (as defined below). "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:

                           (i)      generic test-taking training and materials,
                                    including practice tests, teaching to
                                    standardized national tests, including, but
                                    not limited to SAT-9 and CAT;

                           (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,
that

                                       3
<PAGE>

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.

    The "Supplemental Market" shall mean the market consisting of pre-K-12
instructional materials, whether such materials are in written, electronic, or
any other media now existing or hereafter developed, 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.

                  (b) (i) The obligations of the Executive under Section 7(a)
                  with respect to the Test Preparation Market shall apply to the
                  following geographic area: Alabama, Arizona, California,
                  Colorado, Connecticut, Florida, Georgia, Illinois, Indiana,
                  Iowa, Kansas, Kentucky, Louisiana, Maryland, Massachusetts,
                  Michigan, Minnesota, Missouri, New Jersey, New York, North
                  Carolina, Oregon, Ohio, Oklahoma, Pennsylvania, South
                  Carolina, Tennessee, Texas, Virginia, Washington and
                  Wisconsin; and any other state in which the Company or its
                  Affiliates has engaged in business during the term of this
                  Agreement through production, promotional, sales or marketing
                  activity, or otherwise, or has otherwise established its
                  goodwill, business reputation, or any customer relations in
                  the Test Preparation Market.

                           (ii) The obligations of the Executive under Section
                  7(a) with respect to the Advanced Placement Market and the
                  Supplemental Market shall apply to the entire United States.

                  (c) For a period of twelve (12) months following the
termination of the Executive's employment hereunder, the Executive will not, on
behalf of herself 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 (that became customers or were identified as customer
prospects during the term of the Executive's employment with the Company or its
Affiliates, whether pursuant to this Agreement or otherwise), 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 in the Test Preparation Market, the Advanced Placement
Market or the Supplemental Market, nor will she in any way divert or take away
any customer of the Company or its Affiliates in the Test Preparation Market,
the Advanced Placement Market or the Supplemental Market; or (ii) call on any
investor or acquisition/merger candidate identified by the Company or its
Affiliates during the term of the Executive's employment with the Company or its
Affiliates, whether pursuant to this Agreement or otherwise, in the Test
Preparation Market, the Advanced Placement Market or the Supplemental Market.

                  (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.

                  (e) 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 any employee of the Company or any of its Affiliates.

                  (f) Except as set forth in Section 8.01, 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
highest annual base salary during her employment, which amount shall be payable
to the Executive on a monthly basis in advance. 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

                                       4
<PAGE>

of the payments or benefits set forth in Sections 4.01, 4.03, 4.04 and 4.06
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 CEO or the Board of Directors of the Company or the
         Parent or (B) the Executive's failure or refusal to perform duties in
         accordance with this Agreement consistent with prior practices;
         provided, however, no termination shall be for cause under subsection
         (A) or (B) unless the Executive shall have first received written
         notice from the CEO or 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 or (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 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," "willfull" 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.

                  (b) If the Company 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 her salary and benefits through the date of termination, and:

                           (i) the Company shall be obligated to pay to the
         Executive her monthly base salary (as calculated below) for an
         aggregate period of twelve (12) months from the date of termination or
         the remainder of the term of this Agreement, whichever is shorter. Such
         amount shall be payable by the Company on a monthly basis. The
         Executive shall not be entitled to any of the payments or benefits set
         forth in Sections 4.01, 4.03, 4.04 and 4.06

                                       5
<PAGE>

         during the period during which the Company pays the Executive as
         provided in this Subsection (b)(i). For purposes of this subsection
         only, the Executive's monthly base salary shall be calculated by
         dividing (A) an amount equal to the higher of the Executive's annual
         salary in the year of termination or the immediately preceding year, by
         (B) twelve (12); and

                           (ii) the Executive shall remain bound by the
         provisions of Section 7 in accordance with the terms thereof during the
         payment period set forth in Subsection (b)(i) immediately above, and
         the Company shall not be obligated to pay the Executive the amounts set
         forth in 7(f) in consideration therefor. Notwithstanding the foregoing,
         if the period of the required payments under Subsection 8.01(b)(i)
         above is less than twelve (12) months, the Executive shall be bound by
         the provisions of Section 7 of this Agreement for such additional
         number of months which, when added to the number of months the Company
         is required to pay the Executive under Subsection 8.01(b)(i) above,
         equals an aggregate of twelve (12) months, provided that the Company
         pays the Executive the amounts set forth in Section 7(f) of this
         Agreement for such additional months.

                  "Good Reason" shall mean the Company's material breach of its
         obligations or undertakings as set forth in this Agreement, provided,
         however, 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 that
         constitutes the basis for the termination for Good Reason by the
         Executive and such material breach 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 material breach.

                  (c) If the Executive resigns prior to the expiration of the
initial or an extension term of this Agreement other than for Good Reason, the
Company shall be obligated to pay the Executive her 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.

                  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.

                  8.03 Surrender of Records and Property. Upon termination of
her 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 her
possession or under her control.

         9. Restriction on Transfer of Shares; Right of First Refusal; Legend.

                  (a) The Executive shall not voluntarily or involuntarily sell,
transfer, exchange or otherwise dispose of any of the shares of Parent stock
that she may now own or hereafter acquire to any person or entity that is
engaged in any activity that is competitive with the business of the Company or
any of its Affiliates, unless she shall first offer to sell such shares to the
Parent in accordance with the terms of this Section 9.

                  (b) If the Executive wishes to transfer or otherwise dispose
of any shares of the Parent she owns in violation of Section 9(a) above, she
shall deliver a written notice to the Parent, which notice shall specify the
person or entity to whom the shares are to be transferred or disposed of, the
purchase price or other consideration to be received by

                                       6
<PAGE>

the Executive for such shares and the terms upon which such purchase price or
other consideration is to be paid. The delivery of such written notice to the
Parent shall constitute an irrevocable offer by the Executive to sell the shares
to the Parent upon the same terms and conditions as are specified in the notice.
The Parent may accept such offer by delivering a written acceptance to the
Executive within 30 days after receipt of the written notice from the Executive.
If the Parent elects to accept such offer, the purchase of such shares shall be
closed within 30 days upon the same terms as are specified in the Executive's
written notice. If the Parent elects not to exercise such offer or if the Parent
allows such offer to expire without being accepted, the Executive shall be
permitted to transfer or encumber such shares on the terms specified in the
written notice to the Parent to the person or entity identified therein. If such
transaction is not consummated within 90 days, such shares shall again be
subject to the restrictions and the purchase option described in this Section 9.

                  (c) Each certificate representing the shares of the Parent's
capital stock that the Executive may now own or hereafter acquire shall be
endorsed with the following legend:

                  "The transferability of this certificate and the shares of
                  stock represented hereby is subject to the restrictions, terms
                  and conditions contained in the Amended and Restated
                  Employment Agreement, dated July 1, 2001 entered into between
                  the registered owner of such shares and The Peoples Publishing
                  Group, Inc. A copy of such Agreement is on file in the office
                  of the Secretary of the company."

                  (d) The provisions of this Section 9 shall continue in full
force and effect throughout the initial and any extended term of this Agreement
and until the period of the non-competition obligation of the Executive provided
for in Section 7(a) or 8(b)(ii) expires or terminates. In the event that prior
to the end of such period, the Executives sells her shares of Parent stock in a
registered underwritten public offering where the distribution of the shares is
controlled by the underwriter, the Executive shall be released from the
restrictions of this Section 9 with respect to the shares so registered and
sold.

         10.   Miscellaneous.

                  10.01 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.

                  10.02 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 1998 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.

                  10.03 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.

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

                  10.05 Assignment. This Agreement shall not be assignable, in
whole or in part, by either party without the written consent of the other
party.

                  10.06 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.

                  10.07 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

                                       7
<PAGE>
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.

                  10.08 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
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.

                                       8
<PAGE>

         IN WITNESS WHEREOF, the parties have hereunto set their hands,
intending to be legally bound, as of the date first above written.

                                       THE PEOPLES PUBLISHING GROUP, INC.

                                       By:   /s/ James J. Peoples
                                          ------------------------------------
                                                Its:  Chief Executive Officer

                                             /s/ Diane M. Miller
                                          ------------------------------------
                                                Diane M. Miller

ACCEPTED AND AGREED
this 1st day of July, 2001

PEOPLES EDUCATIONAL HOLDINGS, INC.

By: /s/ James J. Peoples
   ----------------------------------------
      Its: Chief Executive Officer

                                       9

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