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                                                                    EXHIBIT 10.8

                        BEACON EDUCATION MANAGEMENT, INC.

                            2000 STOCK INCENTIVE PLAN

SECTION 1. PURPOSE; DEFINITIONS.

         The purpose of this Plan is to enable the Company to attract, retain
and reward directors, officers and key employees of and consultants to the
Company and its Subsidiaries, and to strengthen the mutuality of interests
between such directors, officers, key employees and consultants by awarding such
directors, officers, key employees and consultants stock options, other equity
interests or equity-based incentives in the Company. The creation of the Plan
shall not diminish or prejudice other compensation programs approved from time
to time by the Board.

         For purposes of the Plan, the following terms are defined as set forth
below:

         A.       "Board" means the Board of Directors of the Company.

         B.       "Book Value" of the Common Stock means book value of the
issued and outstanding shares of Common Stock as determined by the Company's
certified public accountants on the basis of the Company's most recent audited
consolidated balance sheet if the relevant date of determination of Book Value
is June 30, or, if the relevant date of determination of Book Value is September
30, December 31 or March 31, as determined by the Company's accountants in
accordance with generally accepted accounting principles and practices applied
on a consistent basis.

         C.       "Cause" means the Optionee's fraud, embezzlement, defalcation,
gross negligence in performance or nonperformance of the Optionee's duties, or
failure or refusal to perform the Optionee's duties (other than as a result of
Disability) at any time;

         D.       "Change in Control" has the meaning provided in Section 9(b)
of the Plan.

         E.       "Change in Control Price" has the meaning provided in Section
9(d) of the Plan.

         F.       "Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any successor thereto.

         G.       "Committee" means the Committee referred to in Section 2 of
this Plan.

         H.       "Common Stock" means the Company's common stock, no par value
per share.

         I.       "Company" means Beacon Education Management, Inc., a
corporation organized under the laws of the State of Delaware, or any successor
corporation.

         J.       "Disability" means, at the discretion of the Committee, (i) a
condition in which an individual shall, as a result of bodily injury or disease,
be prevented thereby from engaging in any business or occupation and from
performing any and all work for compensation or profit, as

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determined by the Committee or (ii) disability as defined in the Company's
disability insurance policy as in effect from time to time.

         K.       "Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto.

         L.       "Fair Value" with respect to Common Stock means the fair
market value of the Common Stock as determined by the Committee in good faith
taking into account as appropriate recent sales of the Common Stock, recent
valuations of the Common Stock, the lack of liquidity of the Common Stock, the
fact that the Common Stock may represent a minority interest and such other
factors as the Committee shall in its discretion deem relevant or appropriate;
provided, however, that, in the absence of any recent valuations or recent sales
of the Common Stock, the Committee may treat the Book Value of the Common Stock
as the Fair Value.

         M.       "Immediate Family" means any child, stepchild, grandchild,
parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law, and shall include
adoptive relationships.

         N.       "Incentive Stock Option" means any Stock Option intended to be
and designated as an "Incentive Stock Option" within the meaning of Section 422
of the Code.

         O.       "Non-Qualified Stock Option" means any Stock Option that is
not an Incentive Stock Option.

         P.       "Optionee" means a director, officer or key employee of, or a
consultant to, the Company or any of its Subsidiaries who has received an award
of an Incentive Stock Option or a Nonqualified Stock Option pursuant to the
Plan.

         Q.       "Other Stock-Based Award" means an award under Section 8 that
is valued in whole or in part by reference to, or is otherwise based on, the
Common Stock.

         R.       "Plan" means this Beacon Education Management, Inc. 2000 Stock
Incentive Plan, as amended from time to time.

         S.       "Public Offering" means an offering to the general public in
the United States through a syndicate of professional investment bankers acting
as underwriters on a firm commitment basis of shares of Common Stock, which
offering was then made the subject of an effective registration statement filed
by the Company with the United States Securities and Exchange Commission
pursuant to the Securities Act of 1933, as amended.

         T.       "Restricted Stock" means an award of shares of Common Stock
that is subject to restrictions under Section 7 below.

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         U.       "Retirement" means retirement (i) after five years of active
service and otherwise in accordance with the Company's tax-qualified retirement
plans or (ii) with the consent of the Committee.

         V.       "Stock Appreciation Right" means an award granted under
Section 6 below.

         W.       "Stock Option" or "Option" means any option to purchase shares
of Common Stock (including Restricted Stock, if the Committee so determines)
granted under Section 5 below.

         X.       "Subsidiary" means any corporation (other than the Company) in
an unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns stock
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.

SECTION 2. ADMINISTRATION.

         The Plan shall be administered by a Committee of not less than two
members of the Board who shall be appointed by the Board and who shall serve at
the pleasure of the Board. The functions of the Committee specified in the Plan
may be exercised by an existing Committee of the Board. If the Common Stock
becomes the subject of a Public Offering, each member of the Committee shall be
a "nonemployee director" within the meaning of Rule 16b-3 of the Exchange Act,
or any successor rules or regulations. In the absence of a Committee, the Plan
may be administered by the Board, which shall be considered the Committee for
purposes of the Plan.

         The Committee shall have authority to grant, pursuant to the terms of
the Plan, to directors, officers, key employees, and consultants eligible under
Section 4: (i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted
Stock and/or (iv) Other Stock-Based Awards.

         In particular, the Committee shall have the authority, consistent with
the terms of the Plan:

                  (a)      to select the directors, officers and key employees
         of and consultants to the Corporation and its Subsidiaries to whom
         Stock Options, Stock Appreciation Rights, Restricted Stock and/or Other
         Stock-Based Awards may from time to time be granted hereunder;

                  (b)      to determine whether and to what extent Incentive
         Stock Options, Non-Qualified Stock Options, Stock Appreciation Rights,
         Restricted Stock and/or Other Stock-Based Awards, or any combination
         thereof, are to be granted hereunder to one or more eligible persons;

                  (c)      to determine the number of shares to be covered by
         each such award granted hereunder;

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                  (d)      to determine the terms and conditions, not
         inconsistent with the terms of the Plan, of any award granted hereunder
         (including, but not limited to, the share price and any restriction or
         limitation, or any vesting, acceleration or waiver of forfeiture
         restrictions regarding any Stock Option or other award and/or the
         shares of Common Stock relating thereto, based in each case on such
         factors as the Committee shall determine, in its sole discretion); and
         to amend or waive any such terms and conditions;

                  (e)      to determine whether and under what circumstances a
         Stock Option may be settled in cash or Restricted Stock under Section
         5(h) or (i), as applicable, instead of Common Stock;

                  (f)      to determine whether, to what extent, and under what
         circumstances Option grants and/or other awards under the Plan are to
         be made, and operate, on a tandem basis vis-a-vis other awards under
         the Plan;

                  (g)      to determine whether to require payment withholding
         requirements in shares of Common Stock;

                  (h)      to adopt, alter, and repeal such rules, guidelines,
         and practices governing the Plan as it shall, from time to time, deem
         advisable;

                  (i)      to determine whether any award is to be canceled
         pursuant to Section 8 of the Plan;

                  (j)      to determine whether to repurchase Common Stock
         pursuant to Section 13 of the Plan;

                  (k)      to interpret the terms and provisions of the Plan and
         any award issued under the Plan (and any agreements relating thereto);
         and

                  (l)      to otherwise supervise the administration of the
         Plan.

         The Committee shall have the authority to adopt, alter, and repeal such
rules, guidelines, and practices governing the Plan as it shall, from time to
time, deem advisable; to interpret the terms and provisions of the Plan and any
award issued under the Plan (and any agreements relating thereto); and to
otherwise supervise the administration of the Plan.

         All decisions made by the Committee pursuant to the provisions of the
Plan shall be made in the Committee's sole discretion and shall be final and
binding on all persons, including the Company and Plan participants.

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SECTION 3. SHARES OF COMMON STOCK SUBJECT TO PLAN; ADJUSTMENT OF SHARES AND
AWARDS.

         The aggregate number of shares of Common Stock reserved and available
for distribution under the Plan shall not exceed 313,440 shares. Such shares of
Common Stock may consist, in whole or in part, of authorized and unissued shares
or treasury shares.

         If any shares of Common Stock that have been optioned cease to be
subject to a Stock Option, or if any shares of Common Stock that are subject to
any award of Restricted Stock or Other Stock-Based Award granted hereunder are
forfeited prior to the payment of any dividends, if applicable, with respect to
such shares of Common Stock, or any such award otherwise terminates without a
payment being made to the participant in the form of Common Stock, such shares
shall again be available for distribution in connection with future awards under
the Plan.

         In the event of any merger, reorganization, consolidation,
recapitalization, extraordinary cash dividend, stock dividend, stock split or
other change in corporate structure affecting the Common Stock, an appropriate
substitution or adjustment shall be made in the maximum number of shares that
may be awarded under the Plan, in the number and price of shares subject to
outstanding Options and Stock Appreciation Rights or other awards granted under
the Plan as may be determined to be appropriate by the Committee, in its sole
discretion, provided that the number of shares subject to any award shall always
be a whole number.

SECTION 4. ELIGIBILITY.

         Directors, officers and key employees of and consultants to the Company
and its Subsidiaries who are responsible for or contribute to the management,
growth or profitability of the business of the Company and its Subsidiaries are
eligible to be granted awards under the Plan.

SECTION 5. STOCK OPTIONS.

         Stock Options may be granted alone, in addition to, or in tandem with
other awards granted under the Plan. Any Stock Option granted under the Plan
shall be in such form as the Committee may from time to time approve.

         Stock Options granted under the Plan may be of two types: (i) Incentive
Stock Options and (ii) Non-Qualified Stock Options. Incentive Stock Options may
be granted only to individuals who are employees of the Company or any
Subsidiary of the Company.

         The Committee shall have the authority to grant Incentive Stock
Options, Non-Qualified Stock Options, or both types of Stock Options to any
participant; provided, however, that Incentive Stock Options may not be granted
to any person who is not an employee of the Company or any Subsidiary.

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         Options granted under the Plan shall be subject to the following terms
and conditions and shall contain such additional terms and conditions, not
inconsistent with the terms of the Plan, as the Committee shall deem desirable.

                  (a)      Option Price. The option price per share of Common
         Stock purchasable under a Stock Option shall be determined by the
         Committee at the time of grant but shall be not less than 100% (or, in
         the case of any employee who owns stock possessing more than 10% of the
         total combined voting power of all classes of stock of the Company or
         of any of its Subsidiaries, not less than 110%) of the Fair Value of
         the Common Stock at grant, in the case of Incentive Stock Options, and
         not less than 50% of the Fair Value of the Common Stock at grant, in
         the case of Non-Qualified Stock Options.

                  (b)      Option Term. The term of each Stock Option shall be
         fixed by the Committee, but no Incentive Stock Option shall be
         exercisable more than ten years (or, in the case of an employee who
         owns stock possessing more than 10% of the total combined voting power
         of all classes of stock of the Company or any of its Subsidiaries or
         parent Companies, more than five years) after the date the Option is
         granted.

                  (c)      Exercisability. Stock Options shall be exercisable at
         such time or times and subject to such terms and conditions as shall be
         determined by the Committee at or after grant. The Committee may
         provide that a Stock Option shall vest over a period of future service
         at a rate specified at the time of grant, or that the Stock Option is
         exercisable only in installments. If the Committee provides, in its
         sole discretion, that any Stock Option is exercisable only in
         installments, the Committee may waive such installment exercise
         provisions at any time at or after grant, in whole or in part, based on
         such factors as the Committee shall determine in its sole discretion.
         The Committee may establish performance conditions or other conditions
         to the exercisability of any Stock Options, as determined by the
         Committee in its sole discretion, which conditions may be waived by the
         Committee in its sole discretion.

                  (d)      Method of Exercise. Subject to whatever installment
         exercise restrictions apply under Section 5(c), Stock Options may be
         exercised in whole or in part at any time during the option period, by
         giving written notice of exercise to the Company specifying the number
         of shares to be purchased. Such notice shall be accompanied by payment
         in full of the purchase price, either by check, note, or such other
         instrument as the Committee may accept. As determined by the Committee,
         in its sole discretion, at or (except in the case of an Incentive Stock
         Option) after grant, payment in full or in part may also be made in the
         form of unrestricted shares of Common Stock already owned by the
         optionee. If payment of the exercise price is made in part or in full
         with Common Stock, the Committee may award to the employee a new Stock
         Option to replace the Common Stock which was surrendered. If payment of
         the option exercise price of a Non-Qualified Stock Option is made in
         whole or in part in the form of Restricted Stock, such Restricted Stock
         (and any replacement shares relating thereto) shall remain (or be)
         restricted in accordance with the

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         original terms of the Restricted Stock award in question, and any
         additional shares of Common Stock received upon the exercise shall be
         subject to the same forfeiture or other restrictions, unless otherwise
         determined by the Committee, in its sole discretion, at or after grant.
         No shares of Common Stock shall be issued until full payment therefor
         has been made. An Optionee shall generally have the rights to dividends
         or other rights of a stockholder with respect to shares subject to the
         Option when the Optionee has given written notice of exercise, has paid
         in full for such shares, has entered into an Option Agreement as
         provided in Section 9 and, if requested, has given the representation
         described in Section 11(a).

                  (e)      Non-Transferability of Options. No Stock Option shall
         be transferable by the Optionee other than (i) by will or by the laws
         of descent and distribution or (ii) with the prior written consent of
         the Committee, and all Stock Options shall be exercisable, during the
         Optionee's lifetime, only by the Optionee; provided, however, that no
         Incentive Stock Option shall be transferable by the Optionee other than
         by will or by the laws of descent and distribution.

                  (f)      Termination of Employment or Services.

                  (1)      Termination by Death. Subject to Section 5(g), if an
                  Optionee's employment by the Company and any Subsidiary
                  terminates by reason of death, any Stock Option held by such
                  Optionee may thereafter be exercised, to the extent such
                  Option was exercisable at the time of death or (except in the
                  case of an Incentive Stock Option) on such accelerated basis
                  as the Committee may determine at or after grant (or except in
                  the case of an Incentive Stock Option, as may be determined in
                  accordance with procedures established by the Committee) by
                  the legal representative of the estate or by the legatee of
                  the Optionee under the will of the Optionee, for a period of
                  one year (or such other period as the Committee may specify at
                  or after grant) from the date of such death or until the
                  expiration of the stated term of such Stock Option, whichever
                  period is the shorter.

                  (2)      Termination by Reason of Disability. Subject to
                  Section 5(g), if an Optionee's employment by the Company and
                  any Subsidiary terminates by reason of Disability, any Stock
                  Option held by such optionee may thereafter be exercised by
                  the optionee, to the extent it was exercisable at the time of
                  termination or (except in the case of an Incentive Stock
                  Option) on such accelerated basis as the Committee may
                  determine at or after grant (or, except in the case of an
                  Incentive Stock Option, as may be determined in accordance
                  with procedures established by the Committee), for a period of
                  (i) two years (or such other period as the Committee may
                  specify at or after grant) from the date of such termination
                  of employment or until the expiration of the stated term of
                  such Stock Option, whichever period is the shorter, in the
                  case of a Non-Qualified Stock Option and (ii) one year from
                  the date of termination of employment or until the expiration
                  of the stated term of such Stock Option,

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                  whichever period is shorter, in the case of an Incentive Stock
                  Option; provided however, that, if the Optionee dies within
                  the period specified in (i) above (or other such period as the
                  committee shall specify at or after grant), any unexercised
                  Non-Qualified Stock Option held by such Optionee shall
                  thereafter be exercisable to the extent to which it was
                  exercisable at the time of death for a period of one year from
                  the date of such death or until the expiration of the stated
                  term of such Stock Option, whichever period is shorter. In the
                  event of termination of employment by reason of Disability, if
                  an Incentive Stock Option is exercised after the expiration of
                  the exercise period applicable to Incentive Stock Options, but
                  before the expiration of any period that would apply if such
                  Stock Option were a Non-Qualified Stock Option, such Stock
                  Option will thereafter be treated as a Non-Qualified Stock
                  Option.

                  (3)      Termination by Reason of Retirement. Subject to
                  Section 5(g), if an Optionee's employment by the Company and
                  any Subsidiary or (except in the case of an Incentive Stock
                  Option) Affiliate terminates by reason of Retirement, any
                  Stock Option held by such Optionee may thereafter be exercised
                  by the Optionee, to the extent it was exercisable at the time
                  of such Retirement or (except in the case of an Incentive
                  Stock Option) on such accelerated basis as the Committee may
                  determine at or after grant (or, except in the case of an
                  Incentive Stock Option, as may be determined in accordance
                  with procedures established by the Committee), for a period of
                  (i) one year (or such other period as the Committee may
                  specify at or after grant) from the date of such termination
                  of employment or the expiration of the stated term of such
                  Stock Option, whichever period is the shorter, in the case of
                  a Non-Qualified Stock Option and (ii) three months from the
                  date of such termination of employment or the expiration of
                  the stated term of such Stock Option, whichever period is the
                  shorter, in the event of an Incentive Stock Option; provided
                  however, that, if the Optionee dies within the period
                  specified in (i) above (or other such period as the Committee
                  shall specify at or after grant), any unexercised
                  Non-Qualified Stock Option held by such Optionee shall
                  thereafter be exercisable to the extent to which it was
                  exercisable at the time of death for a period of one year from
                  the date of such death or until the expiration of the stated
                  term of such Stock Option, whichever period is shorter. In the
                  event of termination of employment by reason of Retirement, if
                  an Incentive Stock Option is exercised after the expiration of
                  the exercise period applicable to Incentive Stock Options, but
                  before the expiration of the period that would apply if such
                  Stock Option were a Non-Qualified Stock Option, the option
                  will thereafter be treated as a Non-Qualified Stock Option.

                  (4)      Other Termination. Subject to Section 5(g), unless
                  otherwise determined by the Committee (or pursuant to
                  procedures established by the Committee) at or (except in the
                  case of an Incentive Stock Option) after grant, (a) if an
                  Optionee's employment by the Company and any Subsidiary is
                  involuntarily terminated for any reason other than death,
                  Disability or Retirement, or (b) if an Optionee voluntarily

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                  terminates employment (except for Disability or Retirement)
                  with the Company and any Subsidiary, the Stock Option shall
                  thereupon terminate, except that such Stock Option may be
                  exercised, to the extent otherwise then exercisable, for the
                  lesser of three months or the balance of such Stock Option's
                  term, but with respect to an involuntary termination, only if
                  the involuntary termination is without Cause.

                  (g)      Incentive Stock Options. Except in connection with
         the exercise of the Company's rights under any applicable Option
         Agreement, no term of this Plan relating to Incentive Stock Options
         shall be interpreted, amended, or altered, nor shall any discretion or
         authority granted under the Plan be so exercised, so as to disqualify
         the Plan under Section 422 of the Code, or, without the consent of the
         Optionee(s) affected, to disqualify any Incentive Stock Option under
         such Section 422. No Incentive Stock Option shall be granted to any
         participant under the Plan if such grant would cause the aggregate Fair
         Value (as of the date the Incentive Stock Option is granted) of the
         Common Stock with respect to which all Incentive Stock Options are
         exercisable for the first time by such participant during any calendar
         year (under all such plans of the Company and any Subsidiary) to exceed
         $100,000. To the extent permitted under Section 422 of the Code or the
         applicable regulations thereunder or any applicable Internal Revenue
         Service pronouncement:

                  (1)      if (x) a participant's employment is terminated by
                  reason of death, Disability, or Retirement and (y) the portion
                  of any Incentive Stock Option that is otherwise exercisable
                  during the post-termination period specified under Section
                  5(f), applied without regard to the $100,000 limitation
                  contained in Section 422(d) of the Code, is greater than the
                  portion of such Option that is immediately exercisable as an
                  "Incentive Stock Option" during such post-termination period
                  under Section 422, such excess shall be treated as a
                  Non-Qualified Stock Option; and

                  (2)      the Committee may, with the consent of the
                  participant or in connection with the exercise of the
                  Company's rights under any applicable Option Agreement, treat
                  any Incentive Stock Option as a Non-Qualified Stock Option.

                  (h)      Buyout Provisions. The Committee may at any time
         offer to buy out for a payment in cash, Common Stock or Restricted
         Stock an Option previously granted, based on such terms and conditions
         as the Committee shall establish and communicate to the Optionee at the
         time that such offer is made.

                  (i)      Settlement Provisions. If the Option Agreement so
         provides at grant or (except in the case of an Incentive Stock Option)
         is amended after grant and prior to exercise to so provide (with the
         Optionee's consent), the Committee may require that all or part of the
         shares to be issued with respect to the spread value of an exercised
         Option take the form of Restricted Stock, which shall be valued on the
         date of exercise on the basis of the Fair Value (as determined by the
         Committee) of such Restricted Stock determined without regard to the
         forfeiture restrictions involved.

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                  (j)      Performance and Other Conditions. The Committee may
         condition the exercise of any Option upon the attainment of specified
         performance goals or other factors as the Committee may determine, in
         its sole discretion. Unless specifically provided in the Option
         Agreement, any such conditional Option shall vest immediately prior to
         its expiration if the conditions to exercise have not theretofore been
         satisfied.

SECTION 6. STOCK APPRECIATION RIGHTS.

                  (a)      Grant of Rights. Subject to the following terms and
         conditions, the Committee may grant Stock Appreciation Rights in such
         form and upon such terms (including price, if any) and conditions,
         including the attainment of performance goals, as the Committee may
         from time to time determine.

                  (b)      Exercise or Maturity. Upon the exercise or maturity
         of a Stock Appreciation Right, the participant shall be entitled to
         receive an amount in cash and/or shares of Common Stock (as provided in
         the award agreement or as determined by the Committee in its sole
         discretion if the form of payment is not set forth in the award
         agreement) equal to the excess of the Fair Value of one share of Common
         Stock on the date of exercise or maturity over the specified price
         (which may be the Fair Value as of the date of grant), multiplied by
         the number of shares in respect of which the Stock Appreciation Right
         has been exercised or with respect to which the Stock Appreciation
         Right has matured. Depending on the terms of the award, payment may be
         made only on exercise, after the Stock Appreciation Right has vested
         and any conditions to the exercise of the Stock Appreciation Right have
         been satisfied, or payment may be made automatically on or after a
         specified maturity date. The participant shall be entitled to exercise
         Stock Appreciation Rights (regardless of separate grant dates), no more
         than once each calendar year, except to the extent additional exercises
         in any calendar year are permitted by the Committee in a particular
         situation.

                  (c)      Term. The term of each Stock Appreciation Right shall
         be fixed by the Committee, but no Stock Appreciation Right shall be
         exercisable or have a maturity date more than ten years after it is
         granted. Any Stock Appreciation Rights awarded pursuant to the Plan
         will terminate on the same terms as a Nonqualified Stock Option awarded
         pursuant to the Plan following the termination of the holder's
         employment or service.

SECTION 7. RESTRICTED STOCK.

                  (a)      Administration. Shares of Restricted Stock may be
         issued either alone, in addition to, or in tandem with other awards
         granted under the Plan. The Committee shall determine the eligible
         persons to whom, and the time or times at which, grants of Restricted
         Stock will be made, the number of shares of Restricted Stock to be
         awarded to any person, the price (if any) to be paid by the recipient
         of Restricted Stock (subject to Section 7(b)), the time or times within
         which such awards may be subject to forfeiture, and the other terms,
         restrictions and conditions of the awards as provided in Section 7(c).
         The Committee may

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         condition the grant of Restricted Stock upon the attainment of
         specified performance goals or such other factors as the Committee may
         determine, in its sole discretion. The provisions of Restricted Stock
         awards need not be the same with respect to each recipient.

                  (b)      Awards and Certificates.

                           (i)      The prospective recipient of a Restricted
                  Stock award shall not have any rights with respect to such
                  award, unless and until such recipient has executed an
                  agreement evidencing the award and has delivered a fully
                  executed copy thereof to the Company, and has otherwise
                  complied with the applicable terms and conditions of such
                  award.

                           (ii)     The purchase price for shares of Restricted
                  Stock shall be established by the Committee and may be zero.

                           (iii)    Awards of Restricted Stock must be accepted
                  within a period of 60 days (or such shorter period as the
                  Committee may specify at grant) after the award date, by
                  executing a Restricted Stock award agreement and paying
                  whatever price (if any) is required under Section 7(b)(i).

                           (iv)     Each participant receiving a Restricted
                  Stock award shall be issued a stock certificate in respect of
                  such shares of Restricted Stock. Such certificate shall be
                  registered in the name of such participant, and shall bear an
                  appropriate legend referring to the terms, conditions, and
                  restrictions applicable to such award.

                           (v)      The Committee may require that the stock
                  certificates evidencing such shares be held in custody by the
                  Company until the restrictions thereon shall have lapsed, and
                  that, as a condition of any Restricted Stock award, the
                  participant shall have delivered a stock power, endorsed in
                  blank, relating to the shares of Common Stock covered by such
                  award.

                  (c)      Restrictions and Conditions. Consistent with the
         terms of the Plan, including Section 10 of the Plan, the Committee may
         prescribe such other restrictions, conditions or terms of forfeiture
         with respect to an award of Restricted Stock as it deems appropriate,
         including but not limited to restrictions on transfer of Restricted
         Stock and terms providing for the purchase of such Restricted Stock by
         the Company. Any such restrictions, conditions or terms of forfeiture
         with respect to Restricted Stock will be set forth in a Restricted
         Stock award agreement.

SECTION 8. OTHER STOCK-BASED AWARDS.

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                  (a)      Administration. Other Stock-Based Awards, including,
         without limitation, performance shares, convertible preferred stock,
         convertible debentures, exchangeable securities and Common Stock awards
         or options valued by reference to earnings per share or Subsidiary
         performance, may be granted either alone, in addition to, or in tandem
         with Stock Options, Stock Appreciation Rights, or Restricted Stock
         granted under the Plan; provided that no such Other Stock-Based Awards
         may be granted in tandem with Incentive Stock Options if that would
         cause such Stock Options not to qualify as Incentive Stock Options
         pursuant to Section 422 of the Code. Subject to the provisions of the
         Plan, the Committee shall have authority to determine the persons to
         whom and the time or times at which such awards shall be made, the
         number of shares of Common Stock to be awarded pursuant to such awards,
         and all other conditions of the awards. The Committee may also provide
         for the grant of Common Stock upon the completion of a specified
         performance period. The provisions of Other Stock-Based Awards need not
         be the same with respect to each recipient.

                  (b)      Terms and Conditions. Other Stock-Based Awards made
         pursuant to this Section 8 shall be subject to the following terms and
         conditions:

                           (i)      Shares subject to awards under this Section
                  8 and the award agreement referred to in Section 8(b)(v)
                  below, may not be sold, assigned, transferred, pledged, or
                  otherwise encumbered prior to the date on which the shares are
                  issued, or, if later, the date on which any applicable
                  restriction, performance, or deferral period lapses.

                           (ii)     Subject to the provisions of this Plan and
                  the award agreement and unless otherwise determined by the
                  Committee at grant, the recipient of an award under this
                  Section 8 shall be entitled to receive, currently or on a
                  deferred basis, interest or dividends or interest or dividend
                  equivalents with respect to the number of shares covered by
                  the award, as determined at the time of the award by the
                  Committee, in its sole discretion, and the Committee may
                  provide that such amounts (if any) shall be deemed to have
                  been reinvested in additional shares of Common Stock or
                  otherwise reinvested.

                           (iii)    Any award under Section 8 and any shares of
                  Common Stock covered by any such award shall vest or be
                  forfeited to the extent so provided in the award agreement, as
                  determined by the Committee in its sole discretion.

                           (iv)     In the event of the participant's
                  Retirement, Disability, or death, or in cases of special
                  circumstances, the Committee may, in its sole discretion,
                  waive in whole or in part any or all of the remaining
                  limitations imposed hereunder (if any) with respect to any or
                  all of an award under this Section 8.

                                       12
<PAGE>   13

                           (v)      Each award under this Section 8 shall be
                  confirmed by, and subject to the terms of, an agreement or
                  other instrument by the Company and the participant.

                           (vi)     Common Stock (including securities
                  convertible into Common Stock) issued on a bonus basis under
                  this Section 8 may be issued for no cash consideration. Common
                  Stock (including securities convertible into Common Stock)
                  purchased pursuant to a purchase right awarded under this
                  Section 8 shall be priced at least 85% of the Fair Value of
                  the Common Stock on the date of grant.

SECTION 9. CHANGE IN CONTROL PROVISIONS.

                  (a)      Impact of Event. In the event of:

                           (1)      a "Change in Control" as defined in Section
                  9(b); or

                           (2)      a "Potential Change in Control" as defined
                  in Section 9(c), but only if and to the extent so determined
                  by the Committee or the Board at or after grant (subject to
                  any right of approval expressly reserved by the Committee or
                  the Board at the time of such determination),

                           (i)      Subject to the limitations set forth below
                  in this Section 9(a), the following acceleration provisions
                  shall apply:

                                    (a)      Any Stock Appreciation Rights or
                           any Stock Option awarded under the Plan not
                           previously exercisable and vested shall become fully
                           exercisable and vested.

                                    (b)      The restrictions applicable to any
                           Restricted Stock and Other Stock-Based Awards, in
                           each case to the extent not already vested under the
                           Plan, shall lapse and such shares and awards shall be
                           deemed fully vested.

                           (ii)     Subject to the limitations set forth below
                  in this Section 9(a), the value of all outstanding Stock
                  Options, Stock Appreciation Rights, Restricted Stock, and
                  Other Stock-Based Awards, in each case to the extent vested,
                  shall, unless otherwise determined Board or by the Committee
                  in its sole discretion prior to any Change in Control, be
                  cashed out on the basis of the "Change in Control Price" as
                  defined in Section 9(d) as of the date such Change in Control
                  or such Potential Change in Control is determined to have
                  occurred or such other date as the Board or Committee may
                  determine prior to the Change in Control.

                           (iii)    The Board or the Committee may impose
                  additional conditions on the acceleration or valuation of any
                  award in the award agreement.

                                       13
<PAGE>   14

                  (b)      Definition of Change in Control. For purposes of
         Section 9(a), a "Change in Control" means the happening of any of the
         following:

                           (i)      any person or entity, including a "group" as
                  defined in Section 13(d)(3) of the Exchange Act, other than
                  the Company or a wholly-owned subsidiary thereof or any
                  employee benefit plan of the Company or any of its
                  Subsidiaries, becomes the beneficial owner of the Company's
                  securities having 50% or more of the combined voting power of
                  the then outstanding securities of the Company that may be
                  cast for the election of directors of the Company (other than
                  as a result of an issuance of securities initiated by the
                  Company in the ordinary course of business); or

                           (ii)     as the result of, or in connection with, any
                  cash tender or exchange offer, merger or other business
                  combination, sales of assets or contested election, or any
                  combination of the foregoing transactions, less than a
                  majority of the combined voting power of the then outstanding
                  securities of the Company or any successor corporation or
                  entity entitled to vote generally in the election of the
                  directors of the Company or such other corporation or entity
                  after such transaction are held in the aggregate by the
                  holders of the Company's securities entitled to vote generally
                  in the election of directors of the Company immediately prior
                  to such transaction; or

                           (iii)    during any period of two consecutive years,
                  individuals who at the beginning of any such period constitute
                  the Board cease for any reason to constitute at least a
                  majority thereof, unless the election, or the nomination for
                  election by the Company's stockholders, of each director of
                  the Company first elected during such period was approved by a
                  vote of at least two-thirds of the directors of the Company
                  then still in office who were directors of the Company at the
                  beginning of any such period.

                  (c)      Definition of Potential Change in Control. For
         purposes of Section 9(a), a "Potential Change in Control" means the
         happening of any one of the following:

                           (i)      The approval by stockholders of an agreement
                  by the Company, the consummation of which would result in a
                  Change in Control of the Company as defined in Section 9(b);
                  or

                           (ii)     The acquisition of beneficial ownership,
                  directly or indirectly, by any entity, person or group (other
                  than the Company or a Subsidiary or any Company employee
                  benefit plan (including any trustee of such plan acting as
                  such trustee)) of securities of the Company representing 20%
                  or more of the combined voting power of the Company's
                  outstanding securities and the adoption by the

                                       14
<PAGE>   15

                  Committee of a resolution to the effect that a Potential
                  Change in Control of the Company has occurred for purposes of
                  this Plan.

                  (d)      Change in Control Price. For purposes of this Section
         9, "Change in Control Price" means the highest price per share paid in
         any transaction reported on a national securities exchange or market on
         which the Common Stock is traded, or paid or offered in any bona fide
         transaction related to a Potential or actual Change in Control of the
         Company at any time during the 60 day period immediately preceding the
         occurrence of the Change in Control (or, where applicable, the
         occurrence of the Potential Change in Control event), in each case as
         determined by the Committee except that, in the case of Incentive Stock
         Options and Stock Appreciation Rights relating to Incentive Stock
         Options, such price shall be based only on transactions reported for
         the date on which the optionee exercises such Stock Appreciation Rights
         or, where applicable, the date on which a cash out occurs under Section
         9(a)(ii).

SECTION 10. TERMS AND CONDITIONS OF AWARDS.

         The terms and conditions of each award shall be established and set
forth in an Option Agreement (in the case of an Option), a Stock Appreciation
Rights Award Letter (in the case of a Stock Appreciation Right), or a Restricted
Stock Award Agreement (in the case of an award of Restricted Stock), as the
Committee shall deem appropriate. The individual terms, conditions, restrictions
and limitations contained in any such agreements (and any modifications to any
such agreements that may be made from time to time) shall be in the sole
discretion of the Committee, subject only to the requirements of the Plan.

SECTION 11. AMENDMENTS AND TERMINATION.

         The Board may amend, alter, or discontinue the Plan, but (except as
provided in Section 3 and Section 10 above) no amendment, alteration, or
discontinuation shall be made which would impair the rights of an Optionee or
participant under a Stock Option, Stock Appreciation Right, Restricted Stock
award, or Other Stock-Based Award theretofore granted, without the Optionee's or
participant's consent.

         The Committee may amend the terms of any Stock Option or other award
theretofore granted, prospectively or retroactively, but, subject to Section 3
and Section 10 above, no such amendment shall impair the rights of any holder
without the holder's consent. The Committee may also substitute new Stock
Options for previously granted Stock Options (on a one for one or other basis),
including previously granted Stock Options having higher option exercise prices.

SECTION 12. GENERAL PROVISIONS.

                  (a)      The Committee may require each person purchasing
         shares pursuant to a Stock Option or other award under the Plan to
         represent to and agree with the Company in writing

                                       15
<PAGE>   16

         that such person is acquiring the shares without a view to distribution
         thereof. The certificates for such shares may include any legend which
         the Committee deems appropriate to reflect any restrictions on
         transfer. All certificates for shares of Common Stock or other
         securities delivered under the Plan shall be subject to such stop
         transfer orders and other restrictions as the Committee may deem
         advisable under the rules, regulations, and other requirements of the
         United States Securities and Exchange Commission, and any applicable
         Federal or state securities law, and the Committee may cause a legend
         or legends to be put on any such certificates to make appropriate
         reference to such restrictions.

                  (b)      The Plan is intended to constitute an "unfunded" plan
         for incentive and deferred compensation. With respect to any payments
         not yet made to a participant by the Company, nothing contained herein
         shall give any such participant any rights that are greater than those
         of a general creditor of the Company. In its sole discretion, the
         Committee may authorize the creation of trusts or other arrangements to
         meet the obligations created under the Plan to deliver shares of Common
         Stock or payments in lieu of or with respect to awards hereunder;
         provided, however, that, unless the Committee otherwise determines with
         the consent of the affected participant, the existence of such trusts
         or other arrangements is consistent with the "unfunded" status of the
         Plan.

                  (c)      Nothing contained in this Plan shall prevent the
         Board from adopting other or additional compensation arrangements,
         subject to stockholder approval if such approval is required; and such
         arrangements may be either generally applicable or applicable only in
         specific cases.

                  (d)      The adoption of the Plan shall not confer upon any
         employee of or director or consultant to the Company or any Subsidiary
         any right to continued employment with or rendering of services as a
         director or consultant to the Company or a Subsidiary or Affiliate, as
         the case may be, nor shall it interfere in any way with the right of
         the Company or a Subsidiary to terminate the employment of any of its
         employees or the services of any of its directors or consultants at any
         time.

                  (e)      No later than the date as of which an amount first
         becomes includable in the gross income of the participant for Federal
         income tax purposes with respect to any award under the Plan, the
         participant shall pay to the Company, or make arrangements satisfactory
         to the Committee regarding the payment of, any Federal, state, or local
         taxes of any kind required by law to be withheld with respect to such
         amount. The Committee may require withholding obligations to be settled
         with shares of Common Stock, including Common Stock that is part of the
         award that gives rise to the withholding requirement. The obligations
         of the Company under the Plan shall be conditional on the payment or
         making of satisfactory arrangements for the payment of withholding
         obligations and the Company and its Subsidiaries or Affiliates shall,
         to the extent permitted by law, have the right to deduct any such taxes
         from any payment of any kind otherwise due to the participant.

                                       16
<PAGE>   17

                  (f)      The Plan and all awards made and actions taken
         thereunder shall be governed by and construed in accordance with the
         laws of the State of Tennessee.

                  (g)      The members of the Committee and the Board shall not
         be liable to any employee or other person with respect to any
         determination made hereunder in a manner that is consistent with their
         legal obligations as members of the Board. In addition to such other
         rights of indemnification as they may have as directors or as members
         of the Committee, the members of the Committee shall be indemnified by
         the Company against the reasonable expenses, including attorneys' fees
         actually and necessarily incurred in connection with the defense of any
         action, suit or proceeding, or in connection with any appeal therein,
         to which they or any of them may be a party by reason of any action
         taken or failure to act under or in connection with the Plan or any
         option granted thereunder, and against all amounts paid by them in
         settlement thereof (provided such settlement is approved by independent
         legal counsel selected by the Company) or paid by them in satisfaction
         of a judgment in any such action, suit or proceeding, except in
         relation to matters as to which it shall be adjudged in such action,
         suit or proceeding that such Committee member is liable for negligence
         or misconduct in the performance of his or her duties; provided that
         within 60 days after institution of any such action, suit or
         proceeding, the Committee member shall in writing offer the Company the
         opportunity, at its own expense, to handle and defend the same.

                  (h)      In addition to any other restrictions on transfer
         that may be applicable under the terms of this Plan or the applicable
         award agreement, no Option, Stock Appreciation Right, Restricted Stock
         award or Other Stock-Based Award or other right issued under this Plan
         is transferable by the participant other than (i) by will or the laws
         of descent and distribution or (ii) with the prior written consent of
         the Committee; provided, however, that an Incentive Stock Option is
         only transferable pursuant to (i) above. The designation of a
         beneficiary will not constitute a transfer.

SECTION 13. REPURCHASE RESTRICTIONS.

         If an Optionee's employment by the Company and any Subsidiary is
terminated for any reason prior to a Public Offering, the Company shall have the
right to repurchase at Fair Value any shares of Common Stock held by Optionee
and purchased pursuant to the exercise of a Stock Option granted under the Plan.
The closing of the repurchase under this Section 13 shall occur within 60 days
of the termination of Optionee's employment.

SECTION 14. TERM OF PLAN; EFFECTIVE DATE.

         No Stock Option, Stock Appreciation Right, Restricted Stock Award,
Other Stock-Based Award shall be granted pursuant to the Plan on or after the
tenth anniversary of the date of adoption of the Plan by the Board, but awards
granted prior to such tenth anniversary may be extended beyond that date.

                                       17
<PAGE>   18

         This Plan was adopted by the Board and became effective on February 17,
2000 and was approved by the stockholders of the Company on February 17, 2000.

                                             BEACON EDUCATION MANAGEMENT,
                                             INC.

                                             By: /s/ William R. Deloache, Jr.
                                                 -------------------------------
                                             Title: Chairman
                                                    ----------------------------

                                       18<PAGE>   1

                                                                    EXHIBIT 10.9

[BEACON LOGO]

                                 March 9, 1999

Mr. James McGonigle
28 Meadow Lane
Westford, MA 01886

Dear Jim,

Beacon Education Management hereby extends an employment offer to you pending
the completion of a required background check, on the following terms and
conditions:

POSITION:  Chief Financial Officer

LOCATION:  Westborough, MA

DATE:      Effective March 15, 1999

PRIMARY INITIAL FUNCTIONS:

[ ]     Employee shall have the responsibility to manage the Company's financial
        operations, including but not limited to:

        --     Financial controls for the Company and the schools it manages.
        --     Compliance by the Company and the schools it manages with
               relevant laws and regulations that relate to the financial
               management of the school.
        --     Budgeting, cash flow management and investments.
        --     Real estate transactions and leases.
        --     Supervision of Accounting and Human Resources departments.
        --     Development of business plan.
        --     Liaison with banks and other financial institutions.
        --     All other aspects of the Company's daily financial operations.

[ ]     Together with the Chairman, Chief Operating Officer and the Managing
        Members, Employee shall establish the business strategy of the Company;

[ ]     Together with the Chairman, Chief Operating Officer and the Managing
        Members, Employee shall secure the financial resources to carry out the
        business plan of the Company;

[ ]     Development of financial systems and controls for JCR and Associates
        and other Beacon affiliates, partnerships or entities where Beacon
        has ownership.

<PAGE>   2

[ ]      Employee shall perform such other duties which are required or assigned
         and which are reasonably within the scope of the duties enumerated
         above.

Employee's duties shall be subject to the direction and control of the Chief
Operating Officer.

BASE SALARY: $115,000 per year

BONUS: Employee shall be eligible for a bonus of up to 5% of Employee's base
salary, to be based upon the evaluation of Employee's contribution to the
company by the Chief Operating Officer.

HEALTH INSURANCE Beacon will pay for 100% of Employee's health insurance
premiums under the Employer's standard plan in accordance with the Company's
standard policies.

401 K Company has established a 401(k) plan under which the company will
contribute an amount equal to 4% of the employee's salary and, in addition,
match any contribution by the employee up to 3% of the employee's salary. Thus,
if the employee contributes 3%, the contribution by the company will be 7%, for
a total of 10%. The 401(k) plan allows each employee to choose among several
mutual fund managers for the investment of these retirement funds. Employees
will accrue company retirement benefits from the date of employment and will be
fully vested immediately.

EXPENSE REIMBURSEMENT Beacon pays for auto mileage at IRS approved rate,
reasonable professional fees and subscriptions, reasonable out-of-pocket travel
expenses during overnight travel (including motel/hotel and meals). All
reimbursement are in accordance with Beacon's standard travel policies.

OWNERSHIP OPTIONS Employee will be granted 20,000 options on Points of Interest
in the Company, which options shall vest in over a three year period in
accordance with their terms of the company's option ownership plan.

SICK LEAVE: Twelve (12) paid days of sick leave per year will be provided to
Employee as needed for valid medical reasons. Unused sick leave days during a
year may be accumulated up to a maximum of 20 total days sick leave in any
year. Employer will consider individual circumstances that may warrant sick
leave in addition to the maximum provided hereunder.

DISABILITY INSURANCE Beacon will provide disability insurance that pays an
employee who becomes disabled 60% of the employee's salary beginning 90 days
after the disability and ending when the disability ends or at age 65,
whichever occurs first.

Beacon will pay 60% of the employee's salary from the last vested benefit day
up to the 90th day of disability.

                                      2
<PAGE>   3

OTHER COMPANY BENEFITS AND POLICIES Other Company benefits and policies are
outlined in the personnel manual, and all Company benefits and policies are
subject to modification in the future.

SEVERANCE: In the event that the Employee's employment is terminated without
cause then the Employer shall pay up to nine (9) months compensation and
benefits after the effective date of termination. This severance will be paid
on the Employer's regular pay schedule. Severance pay will end after eighteen
pay periods or sooner if Employee accepts another offer of employment at an
equal or higher rate of compensation.

In addition Employer will pay up to $10,000 in out placement services during
this same nine month period.

EMPLOYMENT STATUS: Employee will be an "employee at will."

OFFICE Employee will be based at the Company's headquarters in Westborough, MA.

CONFIDENTIALITY/OWNERSHIP OF WORK PRODUCT As consideration for employment,
Employee shall sign an agreement acknowledging the confidentiality of Beacon
information and specifying Beacon as the owner of employee's work product.
Employee will also need to sign an agreement acknowledging that Employee will
not, during the term of employment, be in breach of any other contract or
obligation that would affect Employee's ability to perform hereunder.

REPORTING: Employee will report to the Chief Operating Officer.

Sincerely

/s/ Michael B. Ronan
Michael B. Ronan
Chief Operating Officer

Please indicate your agreement by your signature below:

/s/ James W. McGonigle

                                      3
<PAGE>   4
                                   AGREEMENT

         This Agreement (the "Agreement") is made and entered into on the 17
day of March, 1999, by and between Beacon Education Management LLC ("Employer")
and James McGonigle ("Employee").

         In consideration of Employee's employment by Employer, the parties
agree as follows:

         1.  Confidentiality. Employee agrees not to disclose, either during
the time he/she is employed by Employer or following the termination of his/her
employment hereunder to any person, firm, corporation or other entity, or use
for Employee's own benefit whether or not for monetary gain, any confidential
information ("Confidential Information") concerning the conduct or the business
affairs of Employer, including, without limitation, trade secrets, now-how,
inventions, curricula, customer and supplier lists, business plans, operational
records, pricing policies, referral sources or organizations, marketing and
sales plans, financial information, names, addresses, positions, salaries and
other terms of employment of other employees of Employer. Employee acknowledges
that all records, data, communications and other property of Employer entrusted
or loaned to Employee or prepared by Employee during the term of this Agreement
(including, but not limited to, any inventions, data, creations or other work
product) are Employer's property and Employee agrees to return any material so
loaned to or so prepared by Employee or Employer immediately upon termination
of employment. For the purposes of this Agreement, Confidential Information
does not include information that is or becomes part of the public domain,
other than through Employee's action or inaction.

         2.  Ownership of Work Product. As it relates to the business of
Employer, Employer shall own, and Employee hereby transfers and assigns to
Employer (to the extent proprietary), all rights of, in and to any material
and/or ideas and all results and proceeds of employee's services to Employer,
or conceived of or produced during Employee's employment, including but not
limited to, any inventions, data, creations, copyrighted materials (which are
works-made-for-hire), software programs or other work product (collectively,
"Work Product"). Employee will execute and deliver to Employer such
assignments, certificates of authorship or other instruments as Employer may
require from time-to-time to evidence ownership of such Work Product.

         3.  Non-Competition Covenant. During Employee's employment, Employee
shall not engage in as a principal, agent, trustee, employee or stockholder or
through the agency of any person, corporation, partnership, association or
agent or agency, in any business in competition with the business conducted by
the Employer or any of its affiliates at the time. During such period, Employee
further agrees that he/she will not, either directly or indirectly, through any
person, firm association, or corporation with which he/she is now or may
hereafter become associated, cause or induce any present or future employee of
the Employer or any if its affiliates to leave the employ of the Employer or
any such affiliate to accept employment with Employee or with such person,

                                       4
<PAGE>   5

association or corporation. Notwithstanding the above, Employee shall not be
precluded from owning up to 5% of the outstanding capital stock of a competing
business whose stock is traded on a national securities exchange or over the
counter.

         4.       Non-Solicitation.  During Employee's employment and for one
(1) year thereafter, Employee shall not, directly or indirectly, individually
or on behalf of any other person or entity, do any of the following:

                  (a)      Call upon, solicit, or attempt to solicit Customers
                           to transfer their patronage from Employer to any
                           other business, firm or entity engaged in activities
                           which are directly or indirectly competitive with
                           those conducted by Employer;

                  (b)      Aid or agree to aid any competitor, Customer or
                           supplier of Employer in any attempt to hire any
                           employee of Employer; or

                  (c)      Induce or attempt to influence any person or business
                           entity who is or was a Customer or supplier of
                           Employer to transact business with a competitor of
                           Employer or cease to do business, in whole or in
                           part, with Employer.

         5.       Law.  The validity and construction of this Employment
Agreement shall be determined according to the laws of the State of
Massachusetts.

         6.       Definition of "Customer".  For the purposes of this Agreement,
"Customer" means any individual or entity (including, without limitation, any
school, educational board, or educational institution, Employee, or Employee
consulting group) to whom Employer directly or indirectly provides, either
currently or at any time during Employee's employment, any management services
(without regard as to whom is billed for such services). "Customer" shall also
include any individual or entity actively solicited by Employer during
Employee's employment.

         7.       Injunctive Relief.  Employee acknowledges and agrees that any
breach of this Agreement could be expected to cause irreparable harm and injury
to Employer's goodwill and competitive position and that the remedy at law for
any breach of the provisions in this Agreement shall be inadequate.
Accordingly, Employee covenants and agrees that Employer shall, in addition to
other rights or remedies which it may have, be entitled to such equitable and
temporary or permanent injunctive relief to restrain Employee from any
violation of such provisions. Such right to obtain equitable and injunctive
relief may be exercised, at the option of Employer, concurrently with, prior to,
after or in lieu of, the exercise of any other rights or remedies Employer may
have as a result of such breach or threatened breach. The pursuit of one of
such remedies at any time shall not be deemed an election of remedy or waiver
of the right to pursue any of the other of such remedies.

                                       5

<PAGE>   6

                                    James McGonigle, EMPLOYEE

                                    /s/ James McGonigle
                                    -------------------------------------------

                                    Date: 3/15/99
                                          -------------------------------------

                                    BEACON EDUCATION MANAGEMENT LLC

                                    By: /s/ Michael B. Ronan
                                       ----------------------------------------

                                    Date: 3/15/99
                                          -------------------------------------

                                       6
<PAGE>   7

            CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE OF
                                   ALL CLAIMS

         This Confidential Separation Agreement and General Release of All
Claims (the "Separation Agreement") is made as of the 9th day of October 2000,
by and between Beacon Education Management, Inc. (the "Company"), and James
McGonigle ("Employee"). This Separation Agreement supercedes in its entirety,
the Employment Agreement between the Company and the Employee dated March 9,
1999 (the "Employment Agreement").

                                    RECITALS

         WHEREAS, the Company and Employee entered into the Employment
Agreement, effective March 9, 1999 which provided Employee with certain benefits
and rights in exchange for serving in the position of Chief Financial Officer of
the Company;

         WHEREAS, the Employee acknowledges that the Company is desirous of
reaching a separation agreement covering the terms of the employee's voluntary
separation from the Company due to a change in the duties and responsibilities
of the position held by the employee; and

         WHEREAS, for sound business reasons and in the best interests of both
parties, the parties mutually agree that Employee shall resign his position
effective October 31, 2000, and terminate the Employment Agreement and in
connection therewith, the parties shall mutually release each other from all
obligations arising thereunder.

         THE PARTIES HEREBY AGREE, in consideration of the foregoing and for
mutual consideration, the sufficiency and receipt of which is hereby
acknowledged, to the following terms, conditions and obligations, as follows:

TERMINATION OF THE EMPLOYMENT AGREEMENT. The parties hereby terminate the
Employment Agreement effective as of October 31, 2000. Prior to October 31,
2000, Employee shall devote his full business time and attention to the duties
of the position, under the direction of the Company's Chief Operating Officer,
and shall perform his duties in a professional manner, with the skill and care
which would be exercised by comparable qualified professionals performing
similar services.

2.       CONSIDERATION. (a) In exchange for the Company's release and covenants
herein, Employee agrees to forego any benefits to which he may have been
entitled to receive under the Employment Agreement, including but not limited to
any severance pay or benefits. Employee further agrees to execute a letter of
resignation, as shown in Exhibit A.

         (b)      In exchange for Employee's release and covenants herein, the
                  Company agrees to pay and provide severance benefits as
                  follows:

<PAGE>   8

                  (i)      $86,250 paid in 18 equal installments on the l5th and
the last day of each month, beginning November 15, 2000 and ending August 15,
2001 (Amended on October 31, 2000 to read, ("July 31, 2001)) from which all
necessary deductions, to the extent and in the same manner as such deductions
(including medical, disability and dental) have been taken prior to this
Separation Agreement, will be taken. Subparagraph (iv) below details the
insurance payments, deductions, and benefits. Such payments shall be made in
accordance with the Company's regular payroll cycle and subject to the offset
provisions of the original employment agreement dated March 9, 1999. If Employee
accepts another offer of employment at a rate equal to or higher than
$115,000.00 per year, then payments from Company shall cease as of Employee's
first day of employment with another company. If Employee accepts another offer
of employment at a rate below $115,000 per year, then remaining payments shall
be appropriately pro-rated. Employee acknowledges that Employee has an
affirmative duty to notify Company if Employee accepts another offer of
employment. On or before November 30, 2000, Employee will also be paid for any
unused vacation days that have been accrued as of October 31, 2000.

                  (ii)     Contingent upon Employee achieving the objectives set
herein below, Beacon shall extend the date through which Employee is eligible to
exercise his stock options that are vested as of September 30, 2000 under the
Company's 1996 plan. Such date shall be extended from October 31, 2000 to
October 31, 2001.

                                Objectives: Obtaining by October 31, 2000 signed
                                agreements with qualified financial institutions
                                to provide financing on terms reasonably
                                acceptable to the Company, through its Chief
                                Operating Officer for all necessary facility
                                improvements, equipment, technology and
                                furniture for the following schools: Thurgood
                                Marshall Academy, St. Louis Charter School,
                                Ethel Hedgeman Lyle Academy, South Buffalo
                                Charter School, Lowell Community Charter School,
                                Central New York Math and Science Charter
                                School, Pontiac Academy of Excellence and Conner
                                Creek Academy - Warren. In addition the Employee
                                will provide a detailed roll out plan for the
                                new 401 K plan that insures that plan
                                consolidation will be completed by the date
                                required by the IRS.

Employee and Company acknowledge that, as of October 31, 2000, Employee has
vested options to purchase 26,667 shares at an exercise price of $2.64 per
share; and

                  (iii)    Up to $10,000 for out placement services payable to a
third party upon invoicing to Beacon for these services, if such services are
used within a 9 month period after the effective date of this termination.

                  (iv)     Employer will continue to provide the same health and
dental benefits as when Employee was regularly employed by Employer. Employer
will pay the same amount and portion of the cost of Employee's health and dental
insurance as was paid by Employer immediately prior to the termination of
Employee's employment with Employer. Upon Employee becoming eligible to receive
health and/or dental benefits, regardless of the cost to Employee, from any
other employer, then Employer's obligation to continue Employee's health

                                       2
<PAGE>   9

and/or dental benefits will immediately cease. Employee affirmatively promises
to notify Employer as soon as Employee knows of the date when Employee becomes
eligible under another health and/or dental plan. In no event shall Employer's
obligation under this subparagraph (iv) continue passed the time when Employer
is obligated to make payments to Employee under subparagraph (i) above. At such
time as Employer's obligations under this paragraph cease, Employee will be able
to continue Employee's health and/or dental coverage, at Employee's sole
expense, under the terms of the COBRA law.

         The severance payments provided as described in this Section 3(b) are
referred to collectively as the "Severance Benefits." Employee will not be
entitled to the payment or accrual of any additional compensation or benefits
from the Company, or its subsidiaries or affiliates, except as provided in this
Agreement. Employee acknowledges that these Severance Benefits are in
replacement of any pay or benefits to which he would otherwise be entitled.

3.       EMPLOYEE'S RELEASE.

         (a)      In consideration for the Severance Benefits as set forth in
this Agreement, Employee agrees to release the Company its affiliates and all of
their officers, directors, employees, shareholders and agents from all claims or
causes of action of whatever nature that Employee now may have or may arise at a
later date and that Employee either knows about or hereafter may learn about
arising from or during the Employee's employment, resulting from the termination
of Employee's employment, or occurring prior to the parties entering into the
Employment Agreement. This means that Employee cannot and will not file any
claim, charge, or lawsuit for the purpose of obtaining any monetary award above
and beyond the amounts provided for in this Agreement, reinstatement of his
employment, or any equitable relief. The Employee also agrees that he will make
no statement to any third party, orally, in writing, or electronically, which
might hurt the reputation of the Company or otherwise be considered a negative
remark or statement about the Company. The Employee will make no comments or
statements, which might be considered to be disparaging to the Company or any of
its employees, agents, or representatives. The Company will make no comments or
statements to any third party who might be considered to be disparaging to the
Employee or which would hurt the reputation of the Employee.

         (b)      Employee acknowledges that this General Release includes, but
is not limited to, all claims arising under federal, state or local laws
prohibiting employment discrimination and all claims growing out of any legal
restrictions on the Company's right to terminate its employees including any
breach of contract claims. This General Release also specifically encompasses
all claims of employment discrimination based on race, color, religion, sex, and
national origin, as provided under Title VII of the Civil Rights Act of 1964, as
amended, all claims of discrimination based on age, as provided under the Age
Discrimination in Employment Act of 1967, as amended, all claims under the
Employee Retirement Income Security Act (ERISA), all claims under the Family and
Medical Leave Act (FMLA), and all claims of employment discrimination under the
Americans with Disabilities Act (ADA) as well as claims under state law as
provided under the Massachusetts Fair Employment Practice Act and any other
applicable state laws concerning his employment. This General Release further
specifically encompasses all

                                       3
<PAGE>   10

claims related to compensation, benefits, incentive packages or any other form
of compensation Employee may or may not have received during his employment.

         (c)      Employee intends this Agreement to be binding upon himself,
his estate, his heirs and assignees. Employee understands and agrees that if
Employee breaches this Agreement or if he files any claim or lawsuit against the
Company seeking any equitable relief, all payments and benefits provided herein
shall cease, and Employee or such Employee's estate shall be required to
reimburse the Company for all payments and benefits Employee received under this
Agreement prior to such time, including attorneys' fees incurred by the Company.

         (d)      The Company agrees that the information provided as a result
of third party reference inquiries regarding employment with the Company shall
be consistent with Exhibit B. All calls will be referred to the President and
COO.

4.       CONFIDENTIALITY. (a) The Company and Employee agree to maintain
absolute confidentiality and secrecy concerning the terms of this Termination
Agreement and will not reveal, or disseminate by publication in any manner
whatsoever this document or any matters pertaining to it to any other person,
including but not limited to any past or present employee of the Company or any
media representative except as required by legal process. This confidentiality
provision does not apply to communications necessary between immediate family
members or legal and financial planners or tax preparers who are also bound by
this confidentiality agreement. The parties agree that should a party breach
this confidentiality provision, the other party is entitled to bring legal
action for all damages as well as attorneys? fees incurred in the bringing of
such an action.

         (b)      In further consideration of the Company's payments to
Employee, Employee agrees that from the date of the termination of the
Employment Agreement, Employee agrees to hold in strict confidence and not to
disclose to any third party any of the valuable, confidential, and proprietary
business, financial, technical, economic, sales, and/or other types of
proprietary business information relating to the Company and/or any other entity
owned by or affiliated with the Company (including all trade secrets), in
whatever form, whether oral, written, or electronic (collectively, the
"Confidential Information"), to which Employee has, or is given (or has had or
been given), access as a result of his employment by the Company. It is agreed
that the Confidential Information is confidential and proprietary to the Company
because such Confidential Information encompasses technical know-how, trade
secrets, or technical, financial, organizational, sales, or other valuable
aspects of the Company's business and trade, including, without limitation,
technologies, products, processes, plans, clients, personnel, operations, and
business activities. This restriction shall not apply to any Confidential
Information that (a) becomes known generally to the public through no fault of
the Employee; (b) is required by applicable law, legal process, or any order or
mandate of a court or other governmental authority to be disclosed; or (c) is
reasonably believed by Employee, based upon the advice of legal counsel, to be
required to be disclosed in defense of a lawsuit or other legal or
administrative action brought against Employee; provided, that in the case of
clauses (b) or (c), Employee shall give the Company reasonable advance written
notice of the Confidential Information intended to be disclosed and the reasons
and circumstances surrounding such disclosure, in order to permit

                                       4
<PAGE>   11

the Company to seek a protective order or other appropriate request for
confidential treatment of the applicable Confidential Information.

5.       RETURN OF COMPANY PROPERTY. Promptly upon termination of the Employment
Agreement. Employee or Employee's personal representative shall return to the
Company (a) all Confidential Information; (b) all other records, designs,
patents, business plans, financial statements, manuals, memoranda, lists,
correspondence, reports, records, charts, advertising materials, and other data
or property delivered to or compiled by Employee by or on behalf of the Company,
or its representatives, vendors, or customers that pertain to the business of
the Company, whether in paper, electronic, or other form; and (c) all keys,
credit cards, telephones, pagers, computers, vehicles, and other property of the
Company. Employee shall not retain or cause to be retained any copies of the
foregoing. Employee hereby agrees that all of the foregoing shall be and remain
the property of the Company, as the case may be, and be subject at all times to
their discretion and control.

6.       CHOICE OF LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts. This Agreement
and its subject matter have substantial contacts with Massachusetts and all
actions, suits, or other proceedings with respect to this Agreement shall be
brought in the United States District Court having jurisdiction in Worcester
County, Massachusetts, or in the Massachusetts Court having jurisdiction over
that County. In any such action, suit, or proceeding, such court shall have
personal jurisdiction of all the parties hereto, and service of process upon
them under any applicable statutes, laws and rules shall be deemed valid and
good.

7.       EMPLOYEE ACKNOWLEDGMENTS. Employee acknowledges that he has read the
terms of this Termination Agreement and that he understands the terms and
effects, including the fact that he has agreed to release and forever discharge
the Company from any legal action arising out of his employment relationship
with the Company, the terms and conditions of that employment relationship, and
the termination of that employment relationship. He further acknowledges that he
signed this Termination Agreement voluntarily and knowingly in exchange for the
consideration described herein, which he acknowledges as adequate and
satisfactory to him. EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED IN WRITING
TO CONSULT WITH AN ATTORNEY PRIOR TO SIGNING THIS AGREEMENT AND HAS BEEN GIVEN
SUFFICIENT TIME TO DO SO. Employee further acknowledges that he has had a period
of twenty-one (21) days within which to consider this Agreement. This Agreement
may be revoked by Employee at any time during the seven (7) day period beginning
on the date that he has signed it. This Agreement shall not become effective if
he revokes the Agreement during the seven-day period and will not become
effective otherwise until after expiration of the seven-day period.

8.       MARCH 17, 1999 AGREEMENT. The Company and the Employee agree that the
provisions of the March 17, 1999 Agreement between the Company and Employee,
concerning Confidentiality, Ownership of Work Product, Non-Competition Covenant,
and Non-Solicitation, remains in full force and effect. Employee acknowledges
that the terms of the March 17, 1999 Agreement are reasonable and that he will
not challenge the validity of the March 17, 1999 Agreement. Any terms of the
March 17, 1999 Agreement pertaining to compensation, benefits, and work
responsibilities are superceded by this Separation Agreement.

                                       5
<PAGE>   12

9.       WAIVER OF RIGHT OF RE-EMPLOYMENT. Employee agrees that he forever
waives and relinquishes any and all claim, right, or interest in reinstatement
or future employment that he presently has or might in the future have with the
Company. Employee agrees that he will not seek employment with the Company in
the future.

10.      EFFECTIVE DATE. This Termination Agreement shall not become effective
if revoked by Employee during the seven-day revocation period and will not
become effective until after expiration of the seven-day period.

      [Remainder of page left intentionally blank, signature page follows]

                                       6
<PAGE>   13

DATED THIS 10th day of October, 2000.

                                            BEACON EDUCATION MANAGEMENT, INC.

                                            By:      /s/ Michael B. Ronan
                                                -------------------------------
                                            Name:    Michael B. Ronan
                                                  -----------------------------
                                            Title:            COO
                                                   ----------------------------

                                            James McGonigle

                                               /s/ James McGonigle
                                            -----------------------------------

                                       7

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