Document:

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                                                                   EXHIBIT 10.58

                              EMPLOYMENT AGREEMENT
                           THE PRINCETON REVIEW, INC.

         This employment Agreement is between Robert Cohen ("Exec") and The
Princeton Review, Inc. ("TPR"), and is subject to the terms of the Executive
Compensation Policy Statement, the current form of which is attached as Exhibit
A (the "Policy Statement"). Terms may be defined in The Princeton Review
Glossary. This Agreement supersedes any previous employment agreement.

1.       Job Description: Exec shall serve as the EVP/General Manager of the
         Homeroom Division. Exec will work part-time starting March 5, 2001 and
         fulltime starting May 7, 2001.

2.       Compensation: TPR shall pay Exec $200,000 per year, increasing annually
         by 3%. Exec shall receive a signing bonus in an amount equal to his
         salary at this rate from the period from January 1, 2001 to the first
         day of his full-time employment. He shall also receive a bonus of 20%
         to 50% of base salary.

3.       Moving Allowance: Should Exec move closer to the Homeroom Division
         office, TPR shall reimburse Exec for the actual amount of moving
         expenses and brokers fees paid in obtaining a new residence, but not
         more than $16,000

4.       Term of Service and Waiting Period: For all purposes where length of
         employment is computed or considered by TPR, Exec shall be credited for
         his prior employment with The Princeton Review New Jersey as though he
         worked for TPR. TPR also waives any waiting periods for benefits that
         are generally waived for former employees of The Princeton Review of
         New Jersey that were hired as part of the Asset Purchase Agreement
         dated January 18, 2001. TPR will pay the cost of Cobra until they can
         provide health insurance.

5.       Full Business Time: Exec agrees to devote full business time and
         energies to his job as specified in Section 2.1 of the Policy
         Statement. TPR agrees that service to outside boards and other
         activities, totaling less than an average of 5 hours per week, in
         connection with personal investments that are not competitive with the
         business of TPR as well as work performed for The Princeton Review of
         New Jersey or The Princeton Review of Boston, or these companies as
         renamed, shall not violate Section 2.1. or any other agreement to which
         Exec and TPR are parties.

6.       Executive Education: TPR agrees that at Exec's request, Exec may attend
         up to one week of educational programs generally intended to help him
         perform his job better with no charge to his vacation days. In addition
         to the Educational Reimbursement generally provided to employees, TPR
         shall pay up to $10,000 for educational programs at accredited
         educational institutions

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7.       Term: This Agreement has an 18 month term, which will automatically be
         extended for additional two-year periods on each anniversary of the
         effective date until (i) Exec voluntarily terminates employment or (ii)
         TPR gives contrary written notice to Exec at least 6 months prior to
         the anniversary date.

8.       Severance Payments and Benefits: If TPR terminates Exec's employment
         without cause under Section 4.1 of the Policy Statement or if TPR does
         not renew the Agreement under Section 3.1 of the Policy Statement, then
         in addition to the payments provided under Section 5.1 of the Policy
         Statement, but in lieu of the payments provided under Section 5.3 of
         the Policy Statement, TPR will pay Exec an amount equal to his annual
         base salary.

Agreed to this March 2, 2001

/s/ March Chernis                            /s/ Robert Cohen
---------------------------                  -----------------------------
Mark Chernis                                 Robert Cohen
President, TPR<PAGE>   1
MOODYS CORP /DE/ - 10-K405

EX 10.17
    1
                             CAREER TRANSITION PLAN

                                                                   EXHIBIT 10.17

                   MOODY'S CORPORATION CAREER TRANSITION PLAN
                    (AS IN EFFECT AS OF OCTOBER 1, 2000 WITH
                        CERTAIN EARLIER EFFECTIVE DATES)

                  MOODY'S CORPORATION (the "Company") wishes to define those
circumstances under which it will provide assistance to an Eligible Employee in
the event of his or her Eligible Termination (as such terms are defined herein).
Accordingly, the Company hereby establishes Moody's Corporation Career
Transition Plan (the "Plan").

                  SECTION 1   -   DEFINITIONS

                  1.1 "Cause" shall mean (a) willful malfeasance or willful
misconduct by the Eligible Employee in connection with his or her employment,
(b) continuing failure to perform such duties as are requested by any employee
to whom the Eligible Employee reports or the Participating Company's board of
directors, (c) failure by the Eligible Employee to observe material policies of
the Participating Company applicable to the Eligible Employee or (d) the
commission by an Eligible Employee of (i) any felony or (ii) any misdemeanor
involving moral turpitude.

1.2 "Committee" shall mean the Compensation and Benefits Committee of the Board
of Directors of the Company.

                  1.3 "Eligible Employee" shall mean a full-time salaried
employee or regular part-time salaried employee of any Participating Company who
is:

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MOODYS CORP /DE/ - 10-K405

                  (a) on the United States payroll of a Participating Company
and earning a Salary of less than $100,000 at the time of an Eligible
Termination, in which case Schedule A hereto shall apply; or

                  (b) on the United States payroll of a Participating Company
and earning a Salary equal to or greater than $100,000 at the time of an
Eligible Termination, in which case Schedule B hereto shall apply.

                  1.4 "Eligible Termination" shall mean (a) an involuntary
termination of employment with a Participating Company by reason of a reduction
in force program, job elimination or unsatisfactory performance in the execution
of an Eligible Employee's duties or (b) a resignation mutually agreed to in
writing by the Participating Company and the Eligible Employee. Notwithstanding
the foregoing, an Eligible Termination shall not include (w) a unilateral
resignation, (x) a termination by a Participating Company for Cause, (y) a
termination as a result of a sale (whether in whole or in part, of stock or
assets), merger or other combination, spinoff, reorganization or liquidation,
dissolution or other winding up or other similar transaction involving a
Participating Company; or (z) any termination where an offer of employment is
made to the Eligible Employee of a comparable position at a Participating
Company concurrently with his or her Eligible Termination.

                  1.5 "Participating Company" shall mean the Company or any
other affiliated entity more than 50% of the voting interests of which are
owned, directly or indirectly, by the Company and which has elected to
participate in the Plan by action of its board of directors.

                  1.6 "Salary" shall mean an Eligible Employee's annual base
salary at the time his or her employment terminates.

                  1.7 "Severance and Release Agreement" shall mean an agreement
signed by the Eligible Employee substantially in the form attached hereto as
Exhibit 1. Notwithstanding the foregoing, a Participating Company may, by action
of its chief human resources officer or chief legal counsel, modify the form of
Severance and Release Agreement to be signed by any Eligible Employee in a
manner approved by the Committee (or its delegee).

                  1.8 "Years of Service" shall mean one-twelfth (1/12th) of an
Eligible Employee's total number of full months of regular employment (whether
full-time or part-time) with a Participating Company (beginning with his or her
initial date of hire*); provided that such number of Years of Service shall be
rounded up to the next whole number. (*If following the initial date of hire,
the employee terminated employment with the Company and at a later date became
re-employed by the Company, years of service will be calculated using the
initial date of hire and deducting the time during which the employee was not
employed by the Company.)

                  SECTION 2   -   SEVERANCE BENEFITS

                  2.1 Subject to the provisions of this Section 2, in the event
of an Eligible Termination, an Eligible Employee shall be entitled to receive
from the Participating Company the benefits set forth on Schedule A or B hereto,
as applicable.

                  2.2 The grant of severance benefits pursuant to Section 2.1
hereof is conditioned upon an Eligible Employee's signing a Severance and
Release Agreement and the expiration of any revocation period set forth therein.

                  2.3 Notwithstanding any other provision contained herein, the
Chief Executive Officer of the Company may, at any time, take such action as
such officer, in such officer's sole discretion, deems appropriate to reduce or
increase by any amount the benefits otherwise payable to an Eligible Employee
pursuant to the applicable Schedule or otherwise modify the terms and conditions
applicable to an Eligible

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MOODYS CORP /DE/ - 10-K405

Employee under this Plan. Benefits granted hereunder may not exceed an amount
nor be paid over a period which would cause the Plan to be other than a "welfare
benefit plan" under section 3 (1) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA").

                  2.4 In the event a Participating Company, in its sole
discretion, grants an Eligible Employee a period of inactive employee status,
then, in such event, any amounts paid to such Eligible Employee during any such
period shall offset the benefits payable under this Plan. For this purpose, a
period of inactive employee status shall mean the period beginning on the date
such status commences (of which the Eligible Employee shall be notified) and
ending on the date of such Eligible Employee's termination of employment.

                  SECTION 3   -   AMENDMENT AND TERMINATION

                  3.1 The Company reserves the right to terminate the Plan on
behalf of any or all Participating Companies at any time and without any further
obligation by action of its board of directors or such other person or persons
to whom the board properly delegates such authority. Any other Participating
Company may cease participation in the Plan by action of its board of directors
or such other person or persons to whom such board properly delegates such
authority.

                  3.2 The Company shall have the right to modify or amend the
terms of the Plan at any time, or from time to time, to any extent that it may
deem advisable by action of its board of directors, the Committee or such other
person or persons to whom the board or the Committee properly delegates such
authority.

                  3.3 All modifications of or amendments to the Plan shall be in
writing.

                  SECTION 4   -   ADMINISTRATION OF THE PLAN

                  4.1 The Board of Directors and the Compensation and Benefits
Committee shall be the named fiduciaries (the "Named Fiduciaries") who severally
and not jointly shall have authority to control and manage the operation and
administration of the Plan and to manage and control its assets. The
Compensation and Benefits Committee shall consist of not less than three (3) nor
more than seven (7) members, as may be appointed by the Board of Directors from
time to time. Any member of the Compensation and Benefits Committee may resign
at will by notice to the Board of Directors or be removed at any time (with or
without cause) by the Board of Directors.

                  4.2 The Named Fiduciaries may from time to time allocate
fiduciary responsibilities among themselves and may designate persons other than
Named Fiduciaries to carry out fiduciary responsibilities under the Plan, and
such persons shall be deemed to be fiduciaries under the Plan with respect to
such delegated responsibilities. Fiduciaries may employ one or more persons to
render advice with regard to any responsibility such fiduciary has under the
Plan.

                  4.3 The Named Fiduciaries (and their delegees) shall have the
exclusive right to interpret any and all of the provisions of the Plan and to
determine any questions arising thereunder or in connection with the
administration of the Plan. Any decision or action by the Named Fiduciaries (and
their delegees) shall be conclusive and binding upon all Employees, Members and
Beneficiaries. In all instances the Named Fiduciaries (and their delegees) shall
have complete discretionary authority to determine eligibility for participation
and benefits under the Plan, and to construe and interpret all provisions of the
Plan and all documents relating thereto including, without limitation, all
disputed and uncertain terms. All deference permitted by law shall be given to
such constructions, interpretations and determinations

                  4.4 Any action to be taken by the Named Fiduciaries shall be
taken by a majority of its members either at a meeting or by written instrument
approved by such majority in the absence of a meeting.

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MOODYS CORP /DE/ - 10-K405

A written resolution or memorandum signed by one Committee member and the
secretary of the Compensation and Benefits Committee shall be sufficient
evidence to any person of any action taken pursuant to the Plan.

                  4.5 Any person, corporation or other entity may serve in more
than one fiduciary capacity under the Plan.

                  4.6 The Company shall indemnify any individual who is a
director, officer or employee of a Participating Company, or his or her heirs
and legal representatives, against all liability and reasonable expense,
including counsel fees, amounts paid in settlement and amounts of judgments,
fines or penalties, incurred or imposed upon him or her in connection with any
claim, action, suit or proceeding, whether civil, criminal, administrative or
investigative, in connection with his or her duties with respect to the Plan,
provided that any act or omission giving rise to such claim, action, suit or
proceeding does not constitute willful misconduct or is not performed or omitted
in bad faith.

                  SECTION 5   -   MISCELLANEOUS

                  5.1 Neither the establishment of the Plan nor any action of a
Participating Company, the Committee, or any fiduciary shall be held or
construed to confer upon any person any legal right to continue employment with
a Participating Company. Each Participating Company expressly reserves the right
to discharge any employee whenever the interest of such Participating Company,
in its sole judgment, may so require, without any liability on the part of such
Participating Company, the Committee, or any fiduciary.

                  5.2 Benefits payable under the Plan shall be paid out of the
general assets of a Participating Company. No Participating Company need fund
the benefits payable under this Plan; however, nothing in this Section 5.2 shall
be interpreted as precluding any Participating Company from funding or setting
aside amounts in anticipation of paying such benefits. Any benefits payable to
an Eligible Employee under this Plan shall represent an unsecured claim by such
Eligible Employee against the general assets of the Participating Company that
employed such Eligible Employee.

                  5.3 A Participating Company shall deduct from the amount of
any severance benefits payable hereunder the amount required by law to be
withheld for the payment of any taxes and any other amounts properly to be
withheld.

                  5.4 Benefits payable under the Plan shall not be subject to
assignment, alienation, transfer, pledge, encumbrance, commutation or
anticipation by the Eligible Employee. Any attempt to assign, alienate,
transfer, pledge, encumber, commute or anticipate Plan benefits shall be void.

                  5.5 The Committee shall, in its sole discretion, convert all
references to dollar amounts in the Plan to foreign currency of the country in
which a Participating Company is located or the Eligible Employee is employed.

                  5.6 This Plan shall be interpreted and applied in accordance
with the laws of the State of New York, except to the extent superseded by
applicable federal law.

                  5.7 This Plan will be of no force or effect to the extent
superseded by foreign law.

                  5.8 This Plan supersedes any and all prior severance
arrangements, policies, plans or practices of the Company and of any
Participating Company (whether written or unwritten). Notwithstanding the
preceding sentence, the Plan does not affect the severance provisions of any
written individual employment contracts or written agreements between an
Eligible Employee and a Participating Company. Benefits payable under the Plan
shall be offset by any other severance or termination payment made by a
Participating Company including, but not limited to, amounts paid pursuant to
any agreement or law.

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MOODYS CORP /DE/ - 10-K405

                                   SCHEDULE A

                  This Schedule A is applicable to Eligible Employees covered by
Section 1.3 (a) of the Plan. An Eligible Employee entitled to benefits hereunder
shall, subject to Section 2 of the Plan, receive the following:

                  1.       Salary Continuation

                  If the Eligible Employee incurs an Eligible Termination for
any reason other than unsatisfactory performance, he or she shall receive the
higher of (i) four weeks of Salary continuation or (ii) 1.5 weeks of Salary
continuation for each Year of Service. If the Eligible Employee incurs an
Eligible Termination by reason of unsatisfactory performance, he or she shall
receive the higher of (i) two weeks of Salary continuation or (ii) one week of
Salary continuation for each Year of Service. In any event, such amounts shall
be payable at the times the Eligible Employee's Salary would have been paid if
employment had not terminated, over a period equal to the number of weeks of
Salary continuation (the "Salary Continuation Period"). The maximum amount of
Salary continuation hereunder shall be 52 weeks. All Salary continuation
payments shall cease upon reemployment by a Participating Company.

                  2.       Welfare Benefit Continuation

                  Medical, dental and life insurance benefits shall be provided
throughout the Salary Continuation Period at the levels in effect for the
Eligible Employee immediately prior to termination of employment but in no event
greater than the levels in effect for active employees generally during the
Salary Continuation Period, provided that the Eligible Employee shall pay the
employee portion of any required premium payments at the level in effect for
employees generally of the Participating Company for such benefits. For purposes
of determining an Eligible Employee's entitlement to continuation coverage as
required by Title I, Subtitle B, Part 6 of ERISA, such employee's 18-month or
other period of coverage shall commence on his or her termination of employment.

                  3.       Annual Bonus Payment

                  Subject to the provisions of this paragraph 3, a cash bonus
for the calendar year of termination may be paid in the event the Eligible
Employee was employed by a Participating Company for at least six full months
during such year and the Eligible Employee participated in an annual bonus plan
(the "Annual Incentive Plan") immediately prior to termination of employment. In
such event, the Eligible Employee shall receive a bonus in an amount equal to
the actual bonus which would have been payable under the Annual Incentive Plan
had such employee remained employed through the end of the year of such
termination multiplied by a fraction the numerator of which is the number of
full months of employment during the calendar year of termination and the
denominator of which is 12. Such bonus shall be payable at the time otherwise
payable under the Annual Incentive Plan had employment not terminated.
Notwithstanding the foregoing, no amount shall be paid under this paragraph in
the event the Eligible Employee incurred an Eligible Termination by reason of
unsatisfactory performance. The foregoing provisions of this paragraph 3 shall
be appropriately modified in the case of any plan not on a calendar year basis.

                  4.       Long-Term Awards

                  Cash payments shall be made to an Eligible Employee as set
forth in this paragraph in respect of "Performance-Based Awards" as such term is
defined in the 1998 Moody's Corporation Key Employees' Stock Incentive Plan
(formerly known as the 1998 Dun & Bradstreet Key Employees' Stock Incentive
Plan) (the "Stock Incentive Plan") otherwise payable under the Stock Incentive
Plan had the Eligible Employee remained employed through the end of the
applicable performance period in the event the Eligible

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MOODYS CORP /DE/ - 10-K405

Employee was employed by a Participating Company for at least half the
applicable performance period. In such event, cash payments shall be made to an
Eligible Employee in amounts equal to the value of the Performance Based Awards,
as earned, otherwise payable under the Stock Incentive Plan had the employee
remained employed through the end of the applicable performance period
multiplied by a fraction the numerator of which is the number of full months of
employment with a Participating Company from the beginning of the performance
period to termination of employment, and the denominator of which is the number
of full months in the performance period. Such payments shall be made at the
times the Performance Based Awards in respect of which such payments are made
would otherwise be payable under the Stock Incentive Plan had employment not
terminated. Notwithstanding the foregoing, no amount shall be paid under this
paragraph in the event the Eligible Employee incurred an Eligible Termination by
reason of unsatisfactory performance. Nothing contained herein shall reduce any
amounts otherwise required to be paid under the Stock Incentive Plan except to
the extent such amounts are paid hereunder.

                  5.       Death

                  Upon the death of an Eligible Employee during the Salary
Continuation Period, the benefits described in paragraphs 1, 3 and 4 of this
Schedule shall continue to be paid to his or her estate, as applicable, at the
time or times otherwise provided for herein.

                  6.       Cash Equivalency Payment

                  The Eligible Employee shall receive, as soon as practicable
following the date of termination, an amount in cash equal to the fair market
value on such date of termination of the number of shares of restricted Company
common stock then held by such employee. For purposes of this paragraph 6, the
fair market value of the Company common stock shall equal the closing price of
such stock on the New York Stock Exchange composite tape on the date of
termination, or if such date is not a trading day, on the trading day
immediately prior thereto. Notwithstanding the foregoing, no amounts shall be
paid under this paragraph in the event the Eligible Employee incurred an
Eligible Termination by reason of unsatisfactory performance.

                  7.       Other Benefits

                  The Eligible Employee shall be entitled to such group
outplacement services during the Salary Continuation Period as shall be provided
by the Participating Company.

                  8.       No Further Grants, Etc.

                  Following an Eligible Employee's termination of employment, no
further grants, awards, contributions, accruals or continued participation
(except as otherwise provided for herein) shall be made to or on behalf of such
employee under any plan or program maintained by a Participating Company
including, but not limited to, any Annual Incentive Plan, the Stock Incentive
Plan or any qualified or nonqualified retirement, profit sharing, stock option
or restricted stock plan of a Participating Company. Any unvested or unexercised
options, unvested restricted stock and all other benefits under any plan or
program maintained by a Participating Company (including, but not limited to,
any Annual Incentive Plan, the Stock Incentive Plan or any qualified or
nonqualified retirement, profit sharing, stock option or restricted stock plan)
which are held or accrued by an Eligible Employee at the time of his or her
termination of employment, shall be treated in accordance with the terms of such
plans and programs under which such options, restricted stock or other benefits
were granted or accrued.

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MOODYS CORP /DE/ - 10-K405

                                   SCHEDULE B

                  This Schedule B is applicable to Eligible Employees covered by
Section 1.3 (b) of the Plan, provided, however that an Eligible Employee who
incurs an Eligible Termination for any reason other than unsatisfactory
performance with more than 17 Years of Service, may elect to have Schedule A
apply in its entirety in lieu of this Schedule B. An Eligible Employee entitled
to benefits hereunder shall, subject to Section 2 of the Plan, receive the
following:

1.        Salary Continuation

                  (a) If the Eligible Employee incurs an Eligible Termination
         for any reason other than unsatisfactory performance and his or her
         Salary at the time employment terminates is equal to or greater than
         $100,000 but less than $150,000, the Eligible Employee shall receive 26
         weeks of Salary continuation. If an Eligible Employee incurs an
         Eligible Termination by reason of unsatisfactory performance and his or
         her Salary at the time employment terminates is equal to or greater
         than $100,000 but less than $150,000, the Eligible Employee shall
         receive 13 weeks of Salary continuation.

                  (b) If the Eligible Employee incurs an Eligible Termination
         for any reason other than unsatisfactory performance and his or her
         Salary at the time employment terminates is between $150,000 and
         $200,000 inclusive, the Eligible Employee shall receive 39 weeks of
         Salary continuation. If an Eligible Employee incurs an Eligible
         Termination by reason of unsatisfactory performance and his or her
         Salary at the time employment terminates is between $150,000 and
         $200,000 inclusive, the Eligible Employee shall receive 20 weeks of
         Salary continuation.

                  (c) If the Eligible Employee incurs an Eligible Termination
         for any reason other than unsatisfactory performance and his or her
         Salary at the time employment terminates is greater than $200,000, the
         Eligible Employee shall receive 52 weeks of Salary continuation. If an
         Eligible Employee incurs an Eligible Termination by reason of
         unsatisfactory performance and his or her Salary at the time employment
         terminates is greater than $200,000, the Eligible Employee shall
         receive 26 weeks of Salary continuation.

                  The amounts set forth in this paragraph 1 shall be payable at
the times the Eligible Employee's Salary would have been paid if employment had
not terminated, over a period equal to the number of weeks of Salary
continuation (the "Salary Continuation Period"). In the event the Eligible
Employee performs services for an entity other than a Participating Company
during the Salary Continuation Period, such employee shall notify the
Participating Company on or prior to the commencement thereof. For purposes of
this Schedule B, to "perform services" shall mean employment or services as a
full-time employee, consultant, owner, partner, associate, agent or otherwise on
behalf of any person, principal, partnership, firm or corporation (other than a
Participating Company). All Salary continuation payments shall cease upon
re-employment by a Participating Company.

                  2.       Welfare Benefit Continuation

                  Medical, dental and life insurance benefits shall be provided
throughout the Salary Continuation Period at the levels in effect for the
Eligible Employee immediately prior to termination of employment but in no event
greater than the levels in effect for active employees generally during the
Salary Continuation Period, provided that the Eligible Employee shall pay the
employee portion of any required premium payments at the level in effect for
employees generally of the Participating Company for such benefits. For purposes
of determining an Eligible Employee's entitlement to continuation coverage as
required by Title I, Subtitle B, Part 6 of ERISA, such employee's 18-month or
other period of coverage shall commence on his or her termination of employment.

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MOODYS CORP /DE/ - 10-K405

                  3.       Annual Bonus Payment

                  Subject to the provisions of this paragraph 3, a cash bonus
for the calendar year of termination may be paid in the event the Eligible
Employee was employed by a Participating Company for at least six full months
during such year and the Eligible Employee participated in an annual bonus plan
(the "Annual Incentive Plan") immediately prior to termination of employment. In
such event, the Eligible Employee shall receive a bonus in an amount equal to
the actual bonus which would have been payable under the Annual Incentive Plan
had such employee remained employed through the end of the year of such
termination multiplied by a fraction the numerator of which is the number of
full months of employment during the calendar year of termination and the
denominator of which is 12. Such bonus shall be payable at the time otherwise
payable under the Annual Incentive Plan had employment not terminated.
Notwithstanding the foregoing, no amount shall be paid under this paragraph in
the event the Eligible Employee incurred an Eligible Termination by reason of
unsatisfactory performance. The foregoing provisions of this paragraph 3 shall
be appropriately modified in the case of any plan not on a calendar year basis.

                  4.       Long-Term Awards

                  Cash payments shall be made to an Eligible Employee as set
forth in this paragraph in respect of "Performance-Based Awards" as such term is
defined in the 1998 Moody's Corporation Key Employees' Stock Incentive Plan
(formerly known as the 1998 Dun & Bradstreet Key Employees' Stock Incentive
Plan) (the "Stock Incentive Plan") otherwise payable under the Stock Incentive
Plan had the Eligible Employee remained employed through the end of the
applicable performance period in the event the Eligible Employee was employed by
a Participating Company for at least half the applicable performance period. In
such event, cash payments shall be made to an Eligible Employee in amounts equal
to the value of the Performance Based Awards, as earned, otherwise payable under
the Stock Incentive Plan had the employee remained employed through the end of
the applicable performance period multiplied by a fraction the numerator of
which is the number of full months of employment with a Participating Company
from the beginning of the performance period to termination of employment, and
the denominator of which is the number of full months in the performance period.
Such payments shall be made at the times the Performance Based Awards in respect
of which such payments are made would otherwise be payable under the Stock
Incentive Plan had employment not terminated. Notwithstanding the foregoing, no
amount shall be paid under this paragraph in the event the Eligible Employee
incurred an Eligible Termination by reason of unsatisfactory performance.
Nothing contained herein shall reduce any amounts otherwise required to be paid
under the Stock Incentive Plan except to the extent such amounts are paid
hereunder.

                  5.       Death

                  Upon the death of an Eligible Employee during the Salary
Continuation Period, the benefits described in paragraphs 1, 3 and 4 of this
Schedule shall continue to be paid to his or her estate, as applicable, at the
time or times otherwise provided for herein.

                  6.       Cash Equivalency Payment

                  The Eligible Employee shall receive, as soon as practicable
following the date of termination, an amount in cash equal to the fair market
value on such date of termination of the number of shares of restricted Company
common stock then held by such employee. For purposes of this paragraph 6, the
fair market value of the Company common stock shall equal the closing price of
such stock on the New York Stock Exchange composite tape on the date of
termination, or if such date is not a trading day, on the trading day
immediately prior thereto. Notwithstanding the foregoing, no amounts shall be
paid under this paragraph in the event the Eligible Employee incurred an
Eligible Termination by reason of unsatisfactory performance.

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                  7.       Other Benefits

                  The Eligible Employee shall be entitled to such individual
outplacement services during the Salary Continuation Period as shall be provided
by the Participating Company. During the Salary Continuation Period, financial
planning/counseling shall be afforded to the Eligible Employee to the same
extent afforded immediately prior to termination of employment in the event the
Eligible Employee incurred an Eligible Termination other than by reason of
unsatisfactory performance.

                  8.       No Further Grants, Etc.

                  Following an Eligible Employee's termination of employment, no
further grants, awards, contributions, accruals or continued participation
(except as otherwise provided for herein) shall be made to or on behalf of such
employee under any plan or program maintained by a Participating Company
including, but not limited to, any Annual Incentive Plan, the Stock Incentive
Plan or any qualified or nonqualified retirement, profit sharing, stock option
or restricted stock plan of a Participating Company. Any unvested or unexercised
options, unvested restricted stock and all other benefits under any plan or
program maintained by a Participating Company (including, but not limited to,
any Annual Incentive Plan, the Stock Incentive Plan or any qualified or
nonqualified retirement, profit sharing, stock option or restricted stock plan)
which are held or accrued by an Eligible Employee at the time of his or her
termination of employment shall be treated in accordance with the terms of such
plans and programs under which such options, restricted stock or other benefits
were granted or accrued.

                                    EXHIBIT 1

                         SEVERANCE AGREEMENT AND RELEASE

         THIS SEVERANCE AGREEMENT AND RELEASE, made by and between [NAME OF
EMPLOYEE] (hereinafter referred to as "Employee"), and Moody's Corporation
(hereinafter deemed to include its worldwide subsidiaries and affiliates and
referred to the "Company").

         In consideration of the mutual covenants and promises hereinafter
provided and of the actions taken pursuant thereto, the parties agree as
follows:

       1. (a) Employee's employment with the Company, and Employee's membership
on any committees, is terminated effective on the date specified in Appendix A
(the "Termination Date"), and Employee agrees not to apply for or seek
re-employment with the Company after that date. Employee agrees to continue
working through the Termination Date, unless released from employment earlier by
the Company, and Employee will continue to receive Employee's regular salary and
benefits through the Termination Date.

                (b) Effective as of the Termination Date, Employee will incur an
"Eligible Termination" under the Moody's Corporation Career Transition Plan (the
"Plan"), a summary plan description of which Employee hereby acknowledges
receipt, and subject to the terms and conditions of such Plan, will be eligible
for the benefits set forth therein, provided that Employee re-executes this
Agreement on or after the Termination Date. A summary of the benefits for which
Employee is eligible under the Plan is set forth in Appendix A.

                (c) Employee acknowledges that the severance benefits set forth
in the Plan include compensation and/or benefits in addition to what Employee
would otherwise be entitled to receive.

       2. During the period of salary continuation, as set forth in Appendix A
(the "Salary Continuation Period"), Employee will be reasonably available to
consult on matters, and will continue to cooperate fully

                                      -62-
<PAGE>   10
MOODYS CORP /DE/ - 10-K405

with respect to any claim, litigation or investigation relating to the Company
(including investigations which relate directly or indirectly to Employee's
activities at the Company) by providing truthful and complete information. No
reimbursement for expenses incurred by Employee after the Termination Date shall
be made to Employee unless authorized in advance by the Company.

       3 (a) Employee agrees that through the last day of salary continuation,
as set forth in Appendix A (the "Last Day of Salary Continuation"), Employee
will not become a stockholder (unless such stock is listed on a national
securities exchange or traded on a daily basis in the over-the-counter market
and the Employee's ownership interest is not in excess of 2% of the company
whose shares are being purchased), employee, officer, director or consultant of
or to a corporation, or a member or an employee of or a consultant to a
partnership or any other business or firm, which competes with any of the
businesses owned or operated by the Company; nor if Employee becomes associated
with a company, partnership or individual which company, partnership or
individual acts as a consultant to businesses in competition with the Company
will Employee provide services to such competing businesses.

                (b) The restrictions contained in this Paragraph 3 shall apply
whether or not Employee accepts any form of compensation from such competing
entity or consultant. Employee also agrees that until the Last Day of Salary
Continuation, Employee will not recruit or solicit any customers of the Company
to become customers of any business entity which competes with any of the
businesses owned or operated by the Company. In addition, Employee agrees that
until the Last Day of Salary Continuation neither Employee nor any company or
entity Employee controls or manages, shall recruit or solicit any employee of
the Company to become an employee of any business entity.

                (c) If Employee performs services for an entity other than the
Company at any time prior to the Last Day of Salary Continuation (whether or not
such entity is in competition with the Company), Employee shall notify the
Company on or prior to the commencement thereof. To "perform services" shall
mean employment or services as an employee, consultant, owner, partner,
associate, agent or otherwise on behalf of any person, principal, partnership,
firm or corporation.

       4. (a) Employee agrees that Employee will not directly or indirectly
disclose any proprietary or confidential information, records, data, formulae,
specifications and other trade secrets owned by the Company, whether oral or
written, to any person or use any such information, except pursuant to court
order (in which case Employee will first provide the Company with written notice
of such). All records, files, drawings, documents, models, disks, equipment and
the like relating to the businesses of the Company shall remain the sole
property of the Company and shall not be removed from the premises of the
Company. Employee further agrees to return to the Company any property of the
Company which Employee may have, no matter where located, and not to keep any
copies or portions thereof.

                 (b) Employee shall keep the terms of this Agreement
confidential. Employee agrees not at any time to talk about, write about,
discuss or otherwise publicize the terms or existence of this Agreement to
anyone other than Employee's legal, tax or other financial advisors or immediate
family members, except in response to a subpoena, court directive or otherwise
as required by law. Employee shall not disparage, denigrate or defame the
Company or any other affiliated entity, or any of their business products or
services and shall not make any written or oral statement, news release or other
announcement relating to Employee's employment by the Company or relating to the
Company, its subsidiaries, customers or personnel, which is designed to
embarrass or criticize any of the foregoing.

                 (c) Because of the difficulties in determining damages to the
Company in the event that Employee breaches the terms of paragraph 4(b),
Employee shall pay the Company $______ if Employee fails to comply.

       5. Employee agrees that in the event of any breach of the covenants
contained in Paragraphs 3 and 4, in addition to any remedies that may be
available to the Company, the obligations of the Company to

                                      -63-
<PAGE>   11
MOODYS CORP /DE/ - 10-K405

make any payments otherwise required to be made to Employee under the Plan shall
immediately cease, without notice, and the Company shall be entitled to recover
from Employee all such payments previously made to Employee pursuant to the Plan
or this Agreement. The parties further agree that any such breach would cause
injury to the Company which cannot reasonably or adequately be quantified and
that such relief does not constitute in any way a penalty or a forfeiture.

       6. (a) In exchange for the benefits under the Plan set forth in Appendix
A and promised to Employee in this Agreement, and as a material inducement for
that promise, Employee hereby WAIVES, RELEASES and FOREVER DISCHARGES the
Company and/or related persons from any and all claims, rights and liabilities
of every kind, whether or not Employee now knows them to exist, which Employee
ever had or may have arising out of Employee's employment with the Company or
termination of that employment. This WAIVER and RELEASE includes, but is not
limited to, any claim for unlawful discrimination under Title VII of the Civil
Rights Act of 1964, as amended, the Americans with Disabilities Act of 1990, 42
U.S.C. Section 1981, the Worker Adjustment and Retraining Notification Act, and
the Family and Medical Leave Act of 1993, and any violation of any other
federal, state or local constitution, statute, rule, regulation or ordinance, or
for breach of contract, wrongful discharge, tort or other civil wrong. To the
fullest extent permitted by law, Employee PROMISES NOT TO SUE or bring any
charges, complaints or lawsuits related to the claims Employee is waiving by
this Agreement against the Company and/or related persons in the future,
individually or as a member of a class, and Employee will immediately withdraw
with prejudice any such charges, complaints and lawsuits that Employee began
before signing this Agreement.

                 (b) If Employee violates this Agreement by bringing or
maintaining any charges, claims, grievances, or lawsuits contrary to this
Paragraph 6, Employee will pay all costs and expenses of the Company and/or
related persons in defending against such charges, claims, grievances or
lawsuits brought by Employee or on Employee's behalf, including reasonable
attorney's fees, and will be required to give back, at the Company's sole
discretion, the value of anything paid by the Company in exchange for this
Agreement.

                 (c) As referred to in this Agreement, "the Company and/or
related persons" includes the Company, its past and present parents,
subsidiaries, affiliates and divisions, their respective successors and assigns,
and all of their respective past and present directors, officers,
representatives, agents, employees, attorneys, agents and trustees or
administrators of any Company plan, whether as individuals or in their official
capacity, and the respective heirs and personal representatives of any of them.

                 (d) This WAIVER, RELEASE and PROMISE NOT TO SUE is binding on
Employee, Employee's heirs, legal representatives and assigns.

       7. This Agreement does not constitute an admission of any unlawful
discriminatory acts or liability of any kind by the Company and/or related
persons, or anyone acting under their supervision or on their behalf. This
Agreement may not be used or introduced as evidence in any legal proceeding,
except to enforce its terms.

       8. Employee acknowledges that in deciding to sign this Agreement Employee
has not relied on any promises or commitments, whether spoken or in writing,
made to Employee by any Company representative, except for what is expressly
stated in this Agreement. This Agreement constitutes the entire understanding
and agreement between Employee and the Company, and replaces and cancels all
previous agreements and commitments, whether spoken or written, in connection
with the matters described.

       9. If one or more terms of this Agreement shall be ruled by a court to be
void or unenforceable, the Company may choose to cancel any or all of the
remaining terms of this Agreement and get back from Employee (or Employee's
successors or assigns) the value of anything paid by the Company in exchange for
this Agreement. Terms of this Agreement that are not canceled (if any) shall
continue in full force and effect.

                                      -64-
<PAGE>   12
MOODYS CORP /DE/ - 10-K405

       10. This Agreement shall be construed, governed by and enforced in
accordance with the laws of the State of New York without regard to its
conflicts of law principles. Any action arising out of or relating to this
Agreement may, at the election of the Company, be brought and prosecuted only in
that State, and in the event of such election, Employee consents to the
jurisdiction and venue of any courts of or in such jurisdiction and waives trial
by jury.

       11. This Agreement cannot be changed or modified except by written
agreement signed by both Employee and an authorized Company representative.

         PLEASE READ the following declaration and sign this Agreement only if
it is true:

                  I ACKNOWLEDGE THAT I HAVE CAREFULLY READ AND CONSIDERED THIS
                  AGREEMENT; THAT I HAVE BEEN GIVEN THE OPPORTUNITY TO REVIEW
                  THIS AGREEMENT WITH LEGAL OR OTHER ADVISORS OF MY CHOICE; THAT
                  I UNDERSTAND THAT BY SIGNING THIS AGREEMENT I RELEASE LEGAL
                  CLAIMS AND WAIVE CERTAIN RIGHTS; AND THAT I FREELY AND
                  VOLUNTARILY CONSENT TO ALL TERMS OF THIS AGREEMENT WITH FULL
                  UNDERSTANDING OF WHAT THEY MEAN.

                  IN WITNESS WHEREOF, Employee and the Company, by its duly
authorized agent, have hereunder executed this Agreement.

  [NAME OF EMPLOYEE]                              MOODY'S CORPORATION

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

  -----------------------------               ----------------------------------
  Date signed by [NAME OF EMPLOYEE]           Date signed by Moody's Corporation

                                   APPENDIX A

                         SUMMARY OF BENEFIT ENTITLEMENTS
                            UNDER MOODY'S CORPORATION
                             CAREER TRANSITION PLAN
                                       FOR
                               [NAME OF EMPLOYEE]

Employment with Company Since:

Termination Date:

Salary Continuation Period:

Position Terminated:

                                      -65-
<PAGE>   13
MOODYS CORP /DE/ - 10-K405

Date of Birth:

Salary Continuation:

Last Day of Salary Continuation:

Welfare Benefit Continuation:
Unused Vacation:

Outplacement Services:

THE DESCRIPTION OF BENEFITS CONTAINED IN THIS APPENDIX A IS ONLY A SUMMARY AND
IS SUBJECT TO THE TERMS AND CONDITIONS OF THE PLAN AND THIS AGREEMENT. REFER TO
YOUR SUMMARY PLAN DESCRIPTION FOR MORE DETAIL.

                                      -66-

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