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Sample Business Contracts

Employment Agreement - Toys R Us Inc.

Employment Forms

  • Employment Agreement. Employers can customize an employment agreement that states the salary, benefits, working hours and other important provisions for their new or existing employee.
  • Consulting Agreement. Answer simple questions to build a contract with a consultant. Specify the services rendered, when payment is due, as well as IP rights.
  • Commission Agreement. Employers who compensate their sales employees based on commissions can prepare an agreement to reduce misunderstandings by specifying the base salary and how commissions are calculated.
  • Executive Employment Agreement. Companies may offer their business executives a contract that is different from the one provided to their regular employees. Executive employment agreements may be more complex because the compensation structure may include a combination of salary and commissions, provide for bonuses based on sales, stock or other financial targets, and include non-compete, confidentiality and severance provisions.
  • Sales Representative Contract. Independent sales representatives offer companies the potential to increase the sale of products or services without the burden of increasing headcount. Both parties should understand how commissions are calculated, when commissions will be paid, as well as how the representative will treat confidential information from the company and whether the representative may also sell a competing line of products or services.
  • More Employment Agreements

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                              EMPLOYMENT AGREEMENT

                                     BETWEEN

                                TOYS "R" US, INC.

                                       AND

                                   ----------

                                   DATED AS OF

                                   ----------



<PAGE>

                                TABLE OF CONTENTS

1. Employment Period.......................................................... 1

2. Terms of Employment........................................................ 1

      (a)   Position ......................................................... 1

      (b)   Compensation ..................................................... 1
            (i)      Base Salary.............................................. 1
            (ii)     Incentive Bonus.......................................... 1
            (iii)    Housing Allowance........................................ 2
            (iv)     Supplemental Executive Retirement Plan................... 2
            (v)      Stock Units.............................................. 2
            (vi)     Stock Options............................................ 2
            (vii)    Deferred Compensation Plan............................... 2
            (viii)   Participation in Other Plans............................. 2
            (ix)     Toys "R" Us Health Plan.................................. 2
            (x)      Life Insurance Plan...................................... 3
            (xi)     Long Term Disability Plan................................ 3
            (xii)    Savings and Profit Sharing Plan.......................... 3
            (xiii)   Stock Purchase Plan...................................... 3
            (xiv)    Vacation................................................. 3
            (xv)     Relocation............................................... 3
            (xvi)    Miscellaneous............................................ 3

3. Termination of Employment Upon Death, Disability or Retirement............. 4

4. Other Termination of Employment............................................ 4

      (a)   Company Termination............................................... 4

      (b)   Executive's Termination........................................... 4

      (c)   Notice of Termination............................................. 4

      (d)   Obligations of the Company Upon Termination Under Section 4....... 4


<PAGE>

      (e)   Contract Non-Renewal.............................................  6

      (f)   Cause............................................................  7

5. Release Agreement.........................................................  7

6. Offset....................................................................  7

7. Compensation and Benefits Following Change of Control.....................  7

8. Nonexclusivity of Rights..................................................  8

9. Full Settlement; Legal Fees...............................................  8

      (a)   No Obligation to Mitigate........................................  8

      (b)   Expenses of Contests.............................................  8

10.  Certain Additional Payments by the Company..............................  9

11.  Restrictions and Obligations of the Executive...........................  9

      (a)   Consideration for Restrictions and Covenants.....................  9

      (b)   Confidentiality..................................................  9

      (c)   Non-Solicitation or Hire......................................... 10

      (d)   Non-Competition and Consulting................................... 10

      (e)   Definitions For purposes of this Section 11...................... 11

      (f)   Relief........................................................... 11

12. Successors............................................................... 12

13. Miscellaneous............................................................ 12

      (a)   Governing Law.................................................... 12

      (b)   Captions......................................................... 12

      (c)   Amendment........................................................ 12

      (d)   Notices.......................................................... 12

      (e)   Assistance to Company............................................ 13


<PAGE>

      (f)   Severability of Provisions....................................... 13

      (g)   Withholding...................................................... 13

      (h)   Waiver........................................................... 13

      (i)   Arbitration...................................................... 13

EXHIBIT A   Separation and Release Agreement

EXHIBIT B   Definitions

EXHIBIT C   Change of Control

EXHIBIT D   Stock Unit Agreement


<PAGE>

                     TOYS "R" US, INC. EMPLOYMENT AGREEMENT

      AGREEMENT (this "Agreement"), by and between Toys "R" Us, Inc., a Delaware
corporation (the "Company"),  and ____________________ (the "Executive"),  dated
as of  __________________.  Capitalized  terms  used  in this  Agreement  and in
Exhibit A hereto that are not defined in the operative provisions shall have the
meanings ascribed to them on Exhibit B hereto.

      1. Employment Period The Company hereby agrees to employ the Executive and
the Executive  hereby agrees to be employed by the Company  subject to the terms
and  conditions  of  this  Agreement,   for  the  Employment  Period.  The  term
"Employment Period" means the period commencing on the date hereof and ending on
the second  anniversary  of such date as  automatically  extended for successive
additional  one-year periods unless,  at least six months prior to the scheduled
expiration  of the  Employment  Period,  the  Company  shall give  notice to the
Executive that the Employment Period shall not be so extended.

      2. Terms of Employment

            (a)   Position

                  (i) Commencing on the date hereof and for the remainder of the
            Employment     Period,     the    Executive     shall    serve    as
            __________________________   ("current  position"),  or  such  other
            Executive  position to which the  Executive  may be appointed by the
            Company. The Executive shall be based in ------------------.

                  (ii) During the Employment  Period,  and excluding any periods
            of vacation and sick leave to which the  Executive is entitled,  the
            Executive agrees to devote full time during normal business hours to
            the business  and affairs of the Company and to use the  Executive's
            best   efforts   to  perform   faithfully   and   efficiently   such
            responsibilities.

            (b) Compensation

                  (i) Base  Salary  The  Executive  will be paid an annual  base
            salary  of  $_______________  per  annum,  which  will  be  paid  in
            accordance  with  the  Company's  regular  payroll   policies.   The
            Executive  will receive a performance  and  compensation  evaluation
            annually, effective on or about April 1st of each year, the first of
            which will occur on or about ____________________.

                  (ii) Incentive Bonus The Executive shall also be eligible, for
            each fiscal year ending during the Employment  Period, to receive an
            annual   incentive  bonus  and  incentive  awards  pursuant  to  the
            Company's  Incentive  Plans and  subject  to the terms  thereof at a
            level  commensurate  with the  Executive's  current  grants  and the
            Executive's current position or any more senior position(s) to which
            the Executive may be appointed.  Each such incentive  bonus shall be
            paid in accordance with the Company's incentive


                                       1
<PAGE>

            Plans,  prorated for the number of months the  Executive is employed
            during  each such fiscal  year.  For the period  ending  January 31,
            2002,  the  Executive  will  be  eligible  for an  annual  incentive
            guaranteed  to be no less than _____% of base salary  regardless  of
            performance  with a target of  ______% of base  salary.  Thereafter,
            there will be no guarantee.  Instead, the Executive will be eligible
            for the incentive,  as are other Company executives,  based upon the
            following formula:  two-thirds (2/3) of the annual incentive will be
            based on  improvement  on  Economic  Value Added (EVA) or such other
            financial  measurement  as determined by the Company,  and one-third
            (1/3) will be based on individual  strategic,  non-financial  goals.
            The  Executive  shall  receive the first award under this plan on or
            about ___________________.

                  [(iii) Housing Allowance The Executive shall receive,  in lieu
            of a  $___________  sign  on  bonus,  a  temporary  monthly  housing
            allowance   for   mutually   acceptable    accommodations   in   the
            ___________________  area for a  period  not  exceeding  ___________
            months.]

                  (iv)  Supplemental  Executive  Retirement Plan Each year as of
            January 31st, a contribution will be made on the Executive's  behalf
            equal  to  11%  of  that  portion  of the  Executive's  actual  cash
            compensation  in the prior  calendar year that exceeds the IRS limit
            (currently  $170,000).  The first  contribution  on the  Executive's
            behalf  will be made as of  ___________________,  based  on  _______
            income.  This is a non-qualified plan, which has been secured to the
            extent allowed by law through the use of a rabbi trust. In addition,
            this Plan includes a pre-retirement  death benefit equal to five (5)
            times  Executive's  annual target cash  compensation.  The Executive
            insurance  coverage  will become  effective  as soon as the required
            underwriting can be completed.

                  (v) Stock Units As further  inducement  for the  Executive  to
            enter  into this  Agreement  and to  continue  in the  employ of the
            Company,  the Company has  granted to the  Executive  ______________
            shares of  Restricted  Stock,  pursuant to the Stock Unit  Agreement
            executed and delivered by the Company on the date hereof in the form
            attached  as Exhibit D hereto.  The  Restricted  Stock  will  become
            vested at the rate of fifty (50) percent  after (2) years  following
            the award date and one hundred  (100)  percent after (3) three years
            following the award date.

                  (vi) Stock Options The Executive  will receive a sign-on grant
            of  ______________  stock options,  which pending Board of Directors
            approval,  will be effective as of the date of this  agreement.  The
            option price will be the average of the high and low trading  prices
            on  the  date  of  the  grant.  Executive  options  are  exercisable
            beginning 6 months  following  the grant date.  These  options  will
            become  vested at the rate of fifty (50) percent after two (2) years
            following the grant date,  and one hundred (100) percent after three
            (3) years  following  the grant  date.  The  Executive  will also be
            eligible for an annual stock option grant of ____________  shares in
            _______________.

                  (vii) Deferred Compensation Plan A variety of investment funds
            are available for deferral.

                  (viii)  Participation  in Other  Plans  During the  Employment
            Period, the


                                       2
<PAGE>

            Executive  shall be eligible to  participate in all other Plans at a
            level commensurate with the Executive's position.

                  (ix) Toys "R" Us Health Plan The Executive will be eligible to
            enroll  in  the  Toys  "R" Us  Health  Plan  as of  the  Executive's
            employment date. In addition,  the Executive will participate in the
            Company's Executive Medical Plan, which will reimburse the Executive
            for  deductibles  and  co-payments  required  under the basic health
            plan. The Company's  health plans include a pre-existing  conditions
            limitation.  Any  health  condition  for  which the  Executive  or a
            dependent  has  been  diagnosed,   received  treatment  or  incurred
            expenses during the 90 days prior to the Executive's employment date
            may be excluded for a one-year period.

                  (x)  Life   Insurance  Plan  The  Company  will  provide  life
            insurance and accidental death and dismemberment  insurance equal to
            two times the Executive's total annual target cash compensation. The
            Executive will be covered from the Executive's  employment date. The
            Company  pays the full  cost of this  plan.  Please  note  that this
            insurance  is in  addition  to the 5x total cash  benefit  under the
            SERP.

                  (xi) Long Term Disability Plan The Company will pay 60% of the
            Executive's  base salary if the Executive  becomes totally  disabled
            for more than 90 days. The long term disability  coverage will begin
            90 days following the Executive's  employment date. The Company pays
            the full  cost of this  plan.  The  Executive  will  also be able to
            purchase  supplemental long term disability insurance to protect the
            Executive's bonus income.

                  (xii)  Savings  and  Profit  Sharing  Plan  This  Plan,  which
            includes  both a Company  funded  profit  sharing  contribution  and
            voluntary    401(k)   savings   vehicle   with   Company    matching
            contributions,  is  available  one year  following  the  Executive's
            employment date.

                  (xiii) Stock  Purchase Plan This Plan enables the Executive to
            purchase Toys "R" Us stock deductions  through payroll.  The Company
            will match 10% of your  contributions  and pay all  commissions  and
            fees on the  purchase of Company  stock.  This Plan is  available 90
            days following your employment date.

                  (xiv)  Vacation  The  Executive  will be eligible for four (4)
            weeks  vacation   beginning  with  the  Executive's  first  year  of
            employment.

                  (xv)   Relocation  The  Executive  will  be  provided  with  a
            relocation  package  upon  request  from the date of this  agreement
            until ________________ consisting of direct expenses for movement of
            Executive's    household    goods   from    ____________    to   the
            ______________________  area, closing costs on the purchase of a new
            home and third party home purchase of Executive's existing home.

                  (xvi)  Miscellaneous  The  Executive  will be provided  with a
            leased  automobile equal in value to a  _____________.  In addition,
            all insurance, gas, repairs, parking and


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<PAGE>

            tolls are paid by the Company. The Executive will be responsible for
            all other  costs  associated  with the use of the Company  car.  The
            Company will be responsible for _____________monthly  parking garage
            fees  incurred by the  Executive  for the  duration  of  Executive's
            current position.

      3.  Termination  of Employment  Upon Death,  Disability or Retirement  The
Executive's employment shall terminate upon the Executive's death, Disability or
Retirement  during the Employment Period and the obligations of the Company upon
such  termination  shall be limited to those benefits  provided by the Company's
Plans on the Date of Termination,  except as specifically set forth herein or in
the Stock Unit Agreement.

      4. Other Termination of Employment

            (a) Company's  Termination The Company may terminate the Executive's
      employment during the Employment Period with or without Cause.

            (b)  Executive's  Termination  The  Executive's  employment  may  be
      terminated during the Employment Period by the Executive for Good Reason.

            (c) Notice of Termination

                  (i)  Any  termination  by the  Company  for  Cause,  or by the
            Executive  for Good  Reason,  shall be  communicated  by  Notice  of
            Termination to the other party hereto given in accordance  with this
            Agreement.  The failure by the Executive or the Company to set forth
            in  the  Notice  of  Termination  any  fact  or  circumstance   that
            contributes to a showing of Good Reason or Cause shall not waive any
            right of the  Executive or the Company,  respectively,  hereunder or
            preclude the Executive or the Company, respectively,  from asserting
            such  fact or  circumstance  in  enforcing  the  Executive's  or the
            Company's rights hereunder.

                  (ii)  Resignation  Without  limiting  the  obligations  of the
            Executive,  or the rights of the Company,  in  connection  with,  or
            relating to, this Agreement,  the Executive agrees that in order for
            the Executive to resign his employment  without Good Reason with the
            Company or any of its Subsidiaries,  the Executive shall provide the
            Company with six (6) months notice of  resignation  (the  "Mandatory
            Notice  Period")  prior to the effective  date of such  resignation.
            During the Mandatory Notice Period,  the Executive shall continue to
            perform all of his duties in accordance, and in compliance, with the
            terms of this  Agreement.  Prior to and during the Mandatory  Notice
            Period, the Executive shall not disclose to any third parties, other
            than executive search firms,  prospective  employers  (collectively,
            the  "Permitted  Third  Parties") and the  Executive's  spouse,  his
            intention and/or decision to terminate  employment with the Company.
            The Executive shall,  prior to any disclosure of such information to
            any  Permitted  Third Party,  secure such  Permitted  Third  Party's
            written  agreement not to disclose such information  until after the
            Mandatory   Notice  Period  to  anyone  other  than  Executives  and
            directors of such Permitted Third Party who need to


                                       4
<PAGE>

            know such information.

            (d) Obligations of the Company Upon  Termination  Under Section 4 If
      the Executive's  employment shall have been terminated under Section 4(a),
      other than for Cause, or 4(b):

                  (i) The  Company  shall  make a lump sum cash  payment  to the
            Executive  within 30 days after the Date of Termination in an amount
            equal to the sum of: (l) the Executive's pro rata Annual Base Salary
            payable   through  the  Date  of   Termination  to  the  extent  not
            theretofore paid; (2) the targeted amount of the Executive's  annual
            bonus and  long-term  incentive  awards that would have been payable
            with  respect  to the fiscal  year in which the Date of  Termination
            occurs  in each  case  absent  the  termination  of the  Executive's
            employment  prorated for the portion of such fiscal year through the
            Date of  Termination  taking  into  account  the number of  complete
            months during such fiscal year through the Date of Termination, and;
            (3) the Executive's actual earned annual or incentive awards for any
            completed fiscal year or period not theretofore paid or deferred;

            (ii) The Company shall pay to the  Executive in equal  installments,
      made at least monthly,  over the twenty-four  months following the Date of
      Termination  an aggregate  amount equal to: (1) two times the  Executive's
      Annual Base Salary in effect on the Date of Termination; and (2) two times
      the  targeted  amount of the annual  incentive  bonus that would have been
      paid to the Executive  with respect to the Company's  fiscal year in which
      such Date of Termination occurred;

                  (iii) The Company shall continue to provide, in the manner and
            timing  provided  for in the Plans  (other  than stock  options  and
            except as set forth in this Section 4(d) and in Section  7(b)),  the
            benefits  provided under the Plans that the Executive  would receive
            on an after-tax  basis if the  Executive's  employment had continued
            for two  years  after  the  Date of  Termination  assuming  for this
            purpose that the Executive's  compensation  for each such year would
            have been one-half of the amount paid pursuant to clause (ii) above,
            and the Executive  shall be fully vested in any account  balance and
            all other benefits continuation under such Plans; provided,  however
            that the benefits  provided under this clause (iii) shall be limited
            to  the  coverage  permitted  by  law  or  as  would  otherwise  not
            potentially  adversely impact on the tax qualification of any Plans;
            provided,  further, that if such benefits may not be continued under
            the Plans, the Company shall pay to the Executive an amount equal to
            the Company's cost had such benefits been continued;

                  (iv) (1) All  unvested  options  held by the  Executive  shall
            continue to vest in accordance  with their terms for two years after
            the Date of Termination,  and all remaining unvested options held by
            the  Executive  shall vest on the two year  anniversary  date of the
            Date of  Termination;  (2) all  unvested  profit  shares held by the
            Executive or for the benefit of the Executive by a grantor trust


                                       5
<PAGE>

            established by the Company shall continue to vest in accordance with
            their  terms for two years  after  the Date of  Termination  and all
            remaining  profit shares shall vest on the two year anniversary date
            of the Date of Termination, provided that, if permitted by the terms
            of any such trust,  any unvested  profit shares shall continue to be
            held by such grantor trust until such profit shares vest pursuant to
            this clause (iv) and any such unvested profit share not permitted to
            be so held shall vest immediately and be delivered to the Executive;
            (3) any  other  unvested  equity  based  award  (including,  without
            limitation,  restricted stock and stock units) held by the Executive
            shall  vest  on  the  two  year  anniversary  date  of the  Date  of
            Termination  on a pro  rata  basis  determined  by a  fraction,  the
            numerator of which is the number of months elapsed from the grant of
            such  equity  award  through  the  Date  of  Termination   plus  the
            twenty-four months after the Date of Termination and the denominator
            of which is the total  number of months in the  vesting  period  for
            such award and shall be promptly delivered to the Executive entirely
            in the form of  Common  Stock,  $.10 par  value  per  share,  of the
            Company;  (4) any options held by the  Executive  that are vested on
            the Date of Termination or vest  thereafter  pursuant to this clause
            (iv) may be  exercised  until the  earlier  of (x) the  thirty-month
            anniversary  date of the Date of Termination  and (y) the expiration
            date of such options,  and; (5) the Executive  shall not be entitled
            to any  additional  grants of any stock options,  restricted  stock,
            other equity based or incentive awards; and

                  (v) The Executive will be entitled to  continuation  of health
            benefits  under  the  Plans  at  a  level   commensurate   with  the
            Executive's current position or more senior position(s) to which the
            Executive may be appointed,  and if the Executive  elects to receive
            such health  benefits,  the Company  shall pay the medical  premiums
            therefore  for  the  first  twenty-four  months  after  the  Date of
            Termination,  and  thereafter  the  Executive  shall pay the premium
            charged to former employees of the Company pursuant to Section 4980B
            of  the  Code  for  the  twenty-fifth  through  forty-second  months
            following the Date of Termination,  after which such health benefits
            shall terminate;  provided,  that the Company can amend or otherwise
            alter the Plans to provide  benefits  to the  Executive  that are no
            less than those  commensurate with the Executive's  current position
            or more senior  position(s) to which the Executive may be appointed;
            provided, that to the extent such benefits cannot be provided to the
            Executive  under the  terms of the  Plans or the Plans  cannot be so
            amended in any manner not adverse to the Company,  the Company shall
            pay the Executive,  on an after-tax  basis, an amount  necessary for
            the Executive to acquire such benefits from an independent insurance
            carrier; and provided,  further, that the obligations of the Company
            under this clause (v) shall be terminated  if, at any time after the
            Date of  Termination,  the  Executive is employed by or is otherwise
            affiliated  with a party that offers  comparable  health benefits to
            the Executive.

            (e) Contract  Non-Renewal If the Executive's  employment  terminates
      upon the expiration of the initial two-year  Employment  Period due to the
      decision not to renew or extend the Employment Period other than for Cause
      (as to the  Company's  decision)  or


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<PAGE>

      Good Reason (as to the Executive's decision):

                  (i) The  Company  shall  make a lump sum cash  payment  to the
            Executive  within 30 days after the Date of Termination in an amount
            equal to the sum of (l) the  Executive's pro rata Annual Base Salary
            payable   through  the  Date  of   Termination  to  the  extent  not
            theretofore paid; (2) the targeted amount of the Executive's  annual
            bonus and incentive awards that would have been payable with respect
            to the fiscal year in which the Date of  Termination  occurs in each
            case absent the termination of the Executive's  employment  prorated
            for the portion of such fiscal year through the Date of  Termination
            taking into account the number of complete months during such fiscal
            year through the Date of Termination and (3) the Executive's  actual
            earned annual or incentive  awards for any completed  fiscal year or
            period not theretofore paid or deferred; and

                  (ii) (1) All unvested options held by the Executive shall vest
            on the Date of  Termination;  (2) all unvested profit shares held by
            the Executive or for the benefit of the Executive by a grantor trust
            established by the Company shall vest on the Date of Termination and
            be delivered to the Executive;  (3) any other unvested  equity based
            award  (including,  without  limitation,  restricted stock and stock
            units) held by the Executive  shall vest on the Date of Termination;
            and (4) any  options  held by the  Executive  that are vested on the
            Date of Termination  or vest thereupon  pursuant to this clause (ii)
            may  be  exercised  until  the  earlier  of  (x)  the   thirty-month
            anniversary  date of the Date of Termination and the expiration date
            of such options.

            (f) Cause If the  Executive's  employment  shall be  terminated  for
      Cause  during  the  Employment  Period  or if  the  Executive  voluntarily
      terminates   employment   during  the  Employment   Period,   excluding  a
      termination  for  Good  Reason,  death,  Disability  or  Retirement,   the
      Employment  Period shall  terminate  without  further  obligations  to the
      Executive  other than the  obligation to pay to the Executive all payments
      and benefits due, in accordance  with the Company's Plans through the Date
      of Termination.

      5. Release  Agreement  The benefits  pursuant to Section 4 are  contingent
upon the  Executive  (i)  executing  a  Separation  and Release  Agreement  (the
"Release  Agreement") upon or after any Date of Termination,  a copy of which is
attached as Exhibit A to this Agreement and (ii) not revoking or challenging the
enforceability of the Release Agreement or this Agreement.

      6. Offset The Company shall have the right to offset the amounts  required
to be paid to the Executive under this Agreement against any amounts owed by the
Executive  to the  Company,  and  nothing in this  Agreement  shall  prevent the
Company from pursuing any other available remedies against the Executive.

      7. Compensation and Benefits Following Change of Control

            (a)  Notwithstanding  any provision of this Agreement or any I Plan,
      in no


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<PAGE>

      event  shall  any  compensation  or  benefits,   individually  or  in  the
      aggregate,  to which the Executive would be entitled be less favorable for
      the two years  following a Change of Control than the Executive would have
      been  entitled  based upon the most  favorable of the  Company's  Plans in
      effect for the Executive at any time during the 120-day period immediately
      preceding such Change of Control.

            (b) In the event of termination of the Executive's  employment under
      Section  4(a)  (other than for Cause) or 4(b),  whether  before or after a
      Change of  Control,  following  a Change  of  Control:  (i) any  remaining
      amounts payable under Sections 4(d)(i), (ii) and (iii) shall be payable in
      a lump sum  within 30 days after the later of the Date of  Termination  or
      the Change of Control; and (ii) in lieu of the Company's obligations under
      Section 4(d)(iv),  all unvested options and equity based awards shall vest
      immediately  on the  later of the Date of  Termination  or the  Change  of
      Control  and all such  options may be  exercised  until the earlier of the
      thirty-month   anniversary  date  of  the  Date  of  Termination  and  the
      expiration date of such options.

      8.  Nonexclusivity  of Rights Nothing in this  Agreement  shall prevent or
limit the Executive's  continuing or future  participation in any Plan for which
the Executive may qualify nor shall  anything  herein limit or otherwise  affect
such rights as the Executive  may have under any contract or agreement  with the
Company.  Amounts  that are vested  benefits or that the  Executive is otherwise
entitled to receive under any Plan, contract or agreement with the Company at or
subsequent to the Date of Termination  shall be payable in accordance  with such
Plan, or contract or agreement except as explicitly modified by this Agreement.

      9. Full Settlement; Legal Fees

            (a) No  Obligation  to Mitigate In no event shall the  Executive  be
      obligated  to seek  other  employment  or take any other  action by way of
      mitigation  of the  amounts  payable  to the  Executive  under  any of the
      provisions of this Agreement, and, except as specifically provided in this
      Agreement,  such amounts shall not be reduced whether or not the Executive
      obtains other employment.

            (b) Expenses of Contests

                  (i)  The  following   shall  apply  for  any  dispute  arising
            hereunder,  under the  Release  Agreement  or under  the Stock  Unit
            Agreement prior to a Change of Control:  In each case, solely to the
            extent that the Executive is successful  with respect  thereto,  the
            Company agrees to pay all reasonable legal and professional fees and
            expenses that the Executive may reasonably  incur as a result of any
            contest by the  Executive,  by the Company or others of the validity
            or  enforceability  of, or liability  under,  any  provision of this
            Agreement,  the  Release  Agreement  or  the  Stock  Unit  Agreement
            (including  as a result of any  contest by the  Executive  about the
            amount of any payment pursuant to this Agreement),  plus interest on
            any delayed  payment at the applicable  Federal rate provided for in
            Section 7872(f)(2)(A) of the Internal Revenue Code of 1986 ("Code"),
            as amended, or any successor Section of the Code.


                                       8
<PAGE>

                  (ii)  The  following  shall  apply  for  any  dispute  arising
            hereunder,  under the  Release  Agreement  or under  the Stock  Unit
            Agreement upon or following a Change of Control:  The Company agrees
            to advance to the Executive all  reasonable  legal and  professional
            fees and  expenses  that the  Executive  may  reasonably  incur as a
            result of any contest by the Executive,  by the Company or others of
            the validity or  enforceability of or liability under, any provision
            of this Agreement, the Release Agreement or the Stock Unit Agreement
            (including  as a result of any  contest by the  Executive  about the
            amount of any payment pursuant to this Agreement), plus in each case
            interest  on any  delayed  payment at the  applicable  Federal  rate
            provided for in Section  7872(f)(2)(A)  of the Code or any successor
            Section of the Code.

                  (iii)  The  Executive  shall  reimburse  the  Company  for its
            reasonable legal and professional fees and expenses, and in the case
            of advances made pursuant to paragraph (ii) above,  shall refund the
            Company the amount of such advances,  to the extent there is a final
            determination that such fees,  expenses or advances relate to claims
            brought by the  Executive  against,  or defenses by the Executive of
            any claim of,  the  Company  with  respect  to this  Agreement,  the
            Release  Agreement or the Stock Unit Agreement that were  determined
            to have  been  made or  asserted  by the  Executive  in bad faith or
            frivolously.

      10. Certain Additional  Payments by the Company Anything in this Agreement
to the contrary  notwithstanding,  in the event that any actual or  constructive
payment or  distribution  by the Company to or for the benefit of the  Executive
(whether paid or payable or distributed or  distributable  pursuant to the terms
of this  Agreement,  the Stock Unit  Agreement or  otherwise)  is subject to the
excise tax imposed by Section 4999 of the Code or any successor provision of the
Code (the "Excise Tax"),  then the Company shall make the payments  described on
Exhibit C hereto.

      11. Restrictions and Obligations of the Executive

            (a)  Consideration for Restrictions and Covenants The parties hereto
      acknowledge and agree that the principal  consideration  for the agreement
      to make the payments  provided in Sections 3 and 4 hereof from the Company
      to the  Executive and the grant to the Executive of the stock units of the
      Company  as set forth in  Section 2 hereof is the  Executive's  compliance
      with  the  undertakings  set  forth  in  this  Section  11.  Specifically,
      Executive  agrees  to  comply  with  the  provisions  of this  Section  11
      irrespective  of whether the Executive is entitled to receive any payments
      under Section 3 or 4 of this Agreement.

            (b) Confidentiality The confidential and proprietary information and
      in any material  respect  trade  secrets of the Company are among its most
      valuable  assets,  including  but not limited to, its  customer and vendor
      lists,  database,  computer  programs,  frameworks,  models, its marketing
      programs,  its  sales,  financial,   marketing,   training  and  technical
      information,  and any  other  information,  whether  communicated  orally,


                                       9
<PAGE>

      electronically,  in writing or in other tangible forms  concerning how the
      Company  creates,  develops,   acquires  or  maintains  its  products  and
      marketing plans,  targets its potential  customers and operates its retail
      and other businesses.  The Company has invested,  and continues to invest,
      considerable  amounts of time and money in obtaining  and  developing  the
      goodwill of its  customers,  its other  external  relationships,  its data
      systems  and  data  bases,   and  all  the  information   described  above
      (hereinafter collectively referred to as "Confidential Information"),  and
      any   misappropriation   or   unauthorized   disclosure  of   Confidential
      Information in any form would irreparably harm the Company.  The Executive
      shall hold in a  fiduciary  capacity  for the  benefit of the  Company all
      Confidential  Information relating to the Company and its business,  which
      shall  have  been  obtained  by  the  Executive   during  the  Executive's
      employment  by  the  Company  and  which  shall  not be or  become  public
      knowledge (other than by acts by the Executive or  representatives  of the
      Executive  in  violation  of this  Agreement).  After  termination  of the
      Executive's  employment with the Company, the Executive shall not, without
      the prior  written  consent of the Company or as may otherwise be required
      by law or legal process, communicate, divulge or use any such information,
      knowledge or data to anyone other than the Company and those designated by
      it.

            (c)  Non-Solicitation or Hire During the Employment Period and for a
      two-year period  following the  termination of the Executive's  employment
      for any reason,  the  Executive  shall not,  directly or  indirectly:  (i)
      employ or seek to employ any person who is at the Date of Termination,  or
      was at any  time  within  the  six-month  period  preceding  the  Date  of
      Termination,  an Executive,  general  manager or director or equivalent or
      more senior level  employee of the Company or any of its  subsidiaries  or
      otherwise  solicit,  encourage,  cause or induce any such  employee of the
      Company or any of its subsidiaries to terminate such employee's employment
      with the Company or such  subsidiary for the employment of another company
      (including  for this  purpose the  contracting  with any person who was an
      independent  contractor (excluding  consultant) of the Company during such
      period),   or;  (ii)  take  any  action  that  would  interfere  with  the
      relationship of the Company or its  subsidiaries  with their suppliers and
      franchisees  without,  in either case,  the prior  written  consent of the
      Company's  Board of  Directors,  or engage in any other action or business
      that would have a material adverse effect on the Company.

            (d) Non-Competition and Consulting

                  (i) During  the  Employment  Period and for a two-year  period
            (the   "Consulting   Period")   following  the  termination  of  the
            Executive's  employment  for any reason,  the  Executive  shall not,
            directly or indirectly:

                  (x)  Engage  in  any  managerial,  administrative,   advisory,
            consulting, operational or sales activities in a Restricted Business
            anywhere in the Restricted Area, including, without limitation, as a
            director or partner of such Restricted Business, or

                  (y) organize, establish, operate, own, manage, control or have
            a  direct  or  indirect   investment  or  ownership  interest  in  a
            Restricted Business or in


                                       10
<PAGE>

            any corporation, partnership (limited or general), limited liability
            company  enterprise  or other  business  entity  that  engages  in a
            Restricted Business anywhere in the Restricted Area; and

                  (ii) During the Consulting Period, the Executive shall:

                  (x) Be  available  to render  services  to the  Company  as an
            independent  contract  or/consultant  but not as an  employee of the
            Company; and

                  (y) perform  such  duties as may be  reasonably  requested  in
            writing from time to time during the Consulting  Period by the Chief
            Executive Officer; provided that such duties shall not conflict with
            the duties of the  Executive  for a new employer if such  employment
            does not violate the terms of Section 11(d)(i) hereof.

                  (iii) Section  11(d) shall not bind the  Executive  during any
            period  following the  termination of the  Executives  employment if
            there has been a Change  of  Control  irrespective  of  whether  the
            Change of Control occurs before or after the Date of Termination.

                  (iv) Nothing contained in this Section 11(d) shall prohibit or
            otherwise restrict the Executive from acquiring or owning,  directly
            or  indirectly,  for passive  investment  purposes  not  intended to
            circumvent  this  Agreement,   securities  of  any  entity  engaged,
            directly or indirectly,  in a Restricted Business if either (i) such
            entity  is  a  public  entity  and  such  Executive  (A)  is  not  a
            controlling  Person of, or a member of a group that  controls,  such
            entity and (B) owns, directly or indirectly,  no more than 3% of any
            class of equity securities of such entity or (ii) such entity is not
            a public entity and the  Executive  (A) is not a controlling  Person
            of, or a member of a group that  controls,  such entity and (B) does
            not own, directly or indirectly, more than 1% of any class of equity
            securities of such entity.

            (e) Definitions For purposes of this Section 11:

                  (i)  "Restricted  Business" means  Wal-Mart,  K-Mart,  Target,
            Kohl's, Noodle Kadoodle/Zany  Brainy,  e-toys, KB Toys, FAO Schwarz,
            Buy Buy Baby or any other business, including mail order or internet
            business,  if more than  one-third  of the  business'  revenues  are
            generated by the manufacture,  marketing or sale of toys (including,
            without  limitation,  video games and  computer  software  for kids,
            electronic  toys  and  wheel  goods),  juvenile  or  baby  products,
            juvenile furniture and children's clothing.

                  (ii) "Restricted  Area" means any country in which the Company
            or its  subsidiaries  owns or franchises any retail store operations
            or otherwise has operations on the Date of Termination.


                                       11
<PAGE>

            (f) Relief The parties hereto hereby acknowledge that the provisions
      of this Section 11 are  reasonable and necessary for the protection of the
      Company  and  its  subsidiaries.   In  addition,   the  Executive  further
      acknowledges  that the Company and its  subsidiaries  will be  irrevocably
      damaged if such covenants are not specifically enforced.  Accordingly, the
      Executive  agrees  that,  in  addition  to any  other  relief to which the
      Company may be  entitled,  the Company will be entitled to seek and obtain
      injunctive  relief  (without the  requirement of any bond) from a court of
      competent  jurisdiction for the purposes of restraining the Executive from
      any actual or threatened  breach of such covenants.  In addition,  without
      limiting the Company's  remedies for any breach of any  restriction on the
      Executive  set  forth in  Section  11,  except  as  required  by law,  the
      Executive  shall not be entitled to any payments set forth in Section 3 or
      4 hereof if the Executive breaches any of the covenants  applicable to the
      Executive  contained in this Section 11, the  Executive  will  immediately
      return to the Company any such  payments  previously  received upon such a
      breach,  and,  in the  event of such  breach,  the  Company  will  have no
      obligation  to pay any of the amounts  that remain  payable by the Company
      under Section 3 or 4.

            12. Successors

            (a) This  Agreement  is  personal to the  Executive  and without the
      prior  written  consent  of the  Company  shall not be  assignable  by the
      Executive  otherwise than by will or the laws of descent and distribution.
      This  Agreement  shall inure to the benefit of and be  enforceable  by the
      Executive's legal representatives.

            (b) This Agreement shall inure to the benefit of and be binding upon
      the Company and its successors and assigns.

            (c) The Company will,  within thirty days after a Change of Control,
      and the Company will require any successor (whether direct or indirect, by
      purchase, merger,  consolidation or otherwise) to all or substantially all
      of the business  and/or assets of the Company within thirty days after any
      such event of succession  to,  assume  expressly and agree to perform this
      Agreement in the same manner and to the same extent that the Company would
      be required to perform it if no such  succession had taken place.  As used
      in this  Agreement,  "Company"  shall mean the  Company  as herein  before
      defined and any successor to its business  and/or assets as aforesaid that
      assumes  and agrees to perform  this  Agreement  by  operation  of law, or
      otherwise.

      13. Miscellaneous

            (a) Governing Law This Agreement  shall be governed by and construed
      in accordance with the laws of the State of New Jersey,  without reference
      to principles of conflict of laws.

            (b)  Captions  The  captions of this  Agreement  are not part of the
      provisions hereof and shall have no force or effect.


                                       12
<PAGE>

            (c)  Amendment  This  Agreement  may  not  be  amended  or  modified
      otherwise  than by a written  agreement  executed by the parties hereto or
      their respective successors and legal representatives.

            (d) Notices All notices and other communications  hereunder shall be
      in writing  and shall be given by hand  delivery  to the other party or by
      registered or certified mail, return receipt  requested,  postage prepaid,
      addressed as follows:

                  (i) If to the  Executive,  to the  address  on file  with  the
            Company; and

                  (ii) If to the Company,  to it at Toys "R" Us, Inc.,  461 From
            Road, Paramus, New Jersey 07652,  Attention:  General Counsel; or to
            such other address as either party shall have furnished to the other
            in writing in accordance  herewith.  Notice and communications shall
            be effective when actually received by the addressee.

            (e)  Assistance  to  Company  At all  times  during  and  after  the
      Employment   Period  and  at  the   Company's   expense  for   significant
      out-of-pocket  expenses actually and reasonably  incurred by the Executive
      in connection therewith, the Executive shall provide reasonable assistance
      to the Company in the  collection of  information  and documents and shall
      make the Executive  available when reasonably  requested by the Company in
      connection  with claims or actions  brought by or against third parties or
      investigations by governmental agencies based upon events or circumstances
      concerning the Executive's duties,  responsibilities  and authority during
      the Employment Period.

            (f)  Severability  of Provisions  Each of the sections  contained in
      this Agreement shall be enforceable  independently  of every other section
      in this Agreement,  and the invalidity or nonenforceability of any section
      shall not invalidate or render  unenforceable  any other section contained
      in  this  Agreement.  The  Executive  acknowledges  that  the  restrictive
      covenants  contained in Section 11 are a condition of this  Agreement  and
      are  reasonable  and valid in  geographical  and temporal scope and in all
      other  respects.  If any court or  arbitrator  determines  that any of the
      covenants  in  Section  11,  or any part of any of  them,  is  invalid  or
      unenforceable, the remainder of such covenants and parts thereof shall not
      thereby be affected and shall be given full effect,  without regard to the
      invalid  portion,  if any court or arbitrator  determines that any of such
      covenants, or any part thereof, is invalid or unenforceable because of the
      geographic or temporal scope of such  provision,  such court or arbitrator
      shall  reduce  such scope to the  minimum  extent  necessary  to make such
      covenants valid and enforceable.

            (g)  Withholding  The Company may withhold from any amounts  payable
      under this Agreement such Federal,  state, local or foreign taxes as shall
      be required to be withheld pursuant to any applicable law or regulation.

            (h) Waiver The  Executive's or the Company's  failure to insist upon
      strict compliance with any provision hereof or any other provision of this
      Agreement or the failure to assert any right the  Executive or the Company
      may have hereunder shall not be


                                       13
<PAGE>

      deemed to be a waiver of such provision or right or any other provision or
      right of this Agreement.

            (i)  Arbitration  Except  as  otherwise  provided  for  herein,  any
      controversy  arising  under,  out of, in connection  with, or relating to,
      this Agreement, and any amendment hereof, or the breach hereof or thereof,
      shall be determined and settled by arbitration in Northeastern  New Jersey
      by a three  person  panel  mutually  agreed  upon,  or in the  event  of a
      disagreement  as to the selection of the  arbitrators,  in accordance with
      the  Employment  Dispute  Resolution  Rules  of the  American  Arbitration
      Association. Any award rendered therein shall specify the findings of fact
      of the arbitrator or arbitrators and the reasons for such award,  with the
      reference to and  reliance on relevant  law. Any such award shall be final
      and  binding on each and all of the  parties  thereto  and their  personal
      representatives,  and judgment may be entered  thereon in any court having
      jurisdiction thereof.

      IN WITNESS  WHEREOF,  the Executive has hereunto set the Executive's  hand
and the  Company  has caused  these  presents  to be executed in its name on its
behalf, all as of the day and year first above written.


                                                 ------------------------------
                                                 EXECUTIVE


                                                 TOYS "R" US, INC.

                                                 By:
                                                     --------------------------
                                                 Name:
                                                       ------------------------
                                                 Title:
                                                        -----------------------


                                       14
<PAGE>

                                    EXHIBIT A

                        SEPARATION AND RELEASE AGREEMENT

      This  Separation and Release  Agreement  ("Release  Agreement") is entered
into as of this ______ day of  _____________,  between Toys "R" Us, Inc. and any
successor thereto (the "Company") and ______________________ (the "Executive").

      The Executive and the Company agree as follows:

      1. The employment  relationship between the Executive and the Company will
be terminated effective __________________ (the "Termination Date").

      2. In  accordance  with  the  rights,  responsibilities,  and  obligations
contained in Executive's  Employment  Agreement  ("Employment  Agreement") dated
____________ and the rights, responsibilities, and obligations contained herein,
the Company agrees to pay the Executive  certain  payments after the Termination
Date as follows:

      a.    The Executive shall receive,  on _____________,  $__________,  which
            represents __________ percent (____%) of Executive's targeted annual
            bonus and  incentive  awards for the fiscal year of  _________.  The
            Executive  will receive an  additional  bonus for year ________ over
            the  pro-rata  period if the  calculated  bonus for the year  ______
            exceeds the targeted bonus for the year ______.

      b.    The Executive will receive a total of  $__________  payable in equal
            bi-weekly installments,  over the eighteen (18) months following the
            Termination  Date.  This total sum  represents  an aggregate  amount
            equal to (1) two times the Executive's  Annual Base Salary in effect
            on the  Termination  Date, (2) two times the targeted  amount of the
            annual incentive award and bonus for year ______.  The first payment
            of  $___________  shall  be  payable  with  the  pay  period  ending
            __________.

      c.    All unvested options held by the Executive shall continue to vest in
            accordance with their terms for two years after the Termination Date
            and all remaining  unvested options held by the Executive shall vest
            on the two year  anniversary of the  Termination  Date. All unvested
            profit shares  continue to vest in  accordance  with their terms for
            two years  after  the  Termination  Date.  Any  options  held by the
            Executive that are vested on the Termination Date or vest thereafter
            pursuant  to this clause may be  exercised  until the earlier of the
            thirty-month  anniversary  date  of the  Termination  Date  and  the
            expiration  date of such  options  and the  Executive  shall  not be
            entitled to any additional  grants of any stock options,  restricted
            stock, other equity based or long-term awards.

      d.    The Executive  will be eligible for  participation  in the Company's
            benefit plans,  as set forth in paragraphs  4(d) of the  Executive's
            Employment Agreement dated December 11, 2000.

      3. The Company  agrees to  discharge  and release  the  Executive  and the
Executive's heirs from any claims,  demands, and/or causes of action whatsoever,
presently  known or unknown,  that are based upon facts  occurring  prior to the
date of this  Agreement,  including,  but not limited  to, any claim,  matter or
action related to the Executive's employment and/or affiliation


                                       15
<PAGE>

with, or termination and separation from the Company  provided that such release
shall not release the  Executive  from any loan or advance by the Company or any
of its subsidiaries or affiliates or any act that would constitute "Cause" under
the Employment Agreement or a breach under the Employment Agreement.

      4. In  accordance  with  the  rights,  responsibilities,  and  obligations
contained within the Employment Agreement and the rights, responsibilities,  and
obligations  contained  within the Release  Agreement,  the Executive  agrees as
follows:

      a)    In  consideration of the rights,  responsibilities,  and obligations
            contained   in   the   Employment    Agreement   and   the   rights,
            responsibilities,   and   obligations   contained   in  the  Release
            Agreement,   the   sufficiency   of  which  the   Executive   hereby
            acknowledges,  the  Executive,  on behalf of the  Executive  and the
            Executive's  heirs,  executors  and  assigns,  hereby  releases  and
            forever discharges the Company and its members, parents, affiliates,
            subsidiaries,  divisions,  any and all current and former directors,
            Executives,  employees,  agents, and contractors and their heirs and
            assigns, and any and all employee pension benefit or welfare benefit
            plans of the  Company,  including  current and former  trustees  and
            administrators  of such employee pension benefit and welfare benefit
            plans, from all claims,  charges,  or demands,  in law or in equity,
            whether  known or unknown,  which may have  existed or which may now
            exist  from  the  beginning  of  time to the  date  of  this  letter
            agreement,  including,  without limitation, any claims the Executive
            may have arising from or relating to the  Executive's  employment or
            termination from employment with the Company, including a release of
            any rights or claims the  Executive  may have under Title VII of the
            Civil  Rights Act of 1964,  as amended,  and the Civil Rights Act of
            1991 (which prohibit  discrimination  in employment based upon race,
            color,  sex,  religion,  and national  origin);  the Americans  with
            Disabilities Act of 1990, as amended,  and the Rehabilitation Act of
            1973  (that  prohibit  discrimination  based upon  disability);  the
            Family and Medical Leave Act of 1993 (which prohibits discrimination
            based on  requesting or taking a family or medical  leave);  Section
            1981 of the Civil Rights Act of 1866 (which prohibits discrimination
            based upon race);  Section  1985(3) of the Civil  Rights Act of 1871
            (which  prohibits   conspiracies  to  discriminate);   the  Employee
            Retirement  Income Security Act of 1974, as amended (which prohibits
            discrimination with regard to benefits); any other federal, state or
            local laws against  discrimination;  or any other federal, state, or
            local statute,  or common law relating to employment,  wages, hours,
            or any other terms and  conditions  of  employment.  This includes a
            release  by the  Executive  of any claims  for  wrongful  discharge,
            breach of contract,  torts or any other claims in any way related to
            the Executive's  employment with or resignation or termination  from
            the Company.  This release also includes a release of any claims for
            age  discrimination  under the Age Discrimination in Employment Act,
            as amended ("ADEA"); New Jersey Law Against Discrimination Equal Pay
            Act of 1963; and, the Consolidated Omnibus Budget Reconciliation Act
            of 1985.  The ADEA requires that the Executive be advised to consult
            with an attorney  before the Executive  waives any claim under ADEA.
            In addition,  the ADEA provides the Executive  with at least 21 days
            to decide  whether to waive  claims  under ADEA and seven days after
            the Executive signs the Agreement to revoke that waiver.

      b)    The Executive waives any right to reinstatement or future employment
            with the  Company  or with any of it's  subsidiaries  or  affiliates
            following  the  Executive's  separation  from  the  Company  on  the
            Termination Date.

      5. This  Agreement  is not an  admission  by either the  Executive  or the
Company of any wrongdoing or liability.


                                       16
<PAGE>

      6. The  Executive  agrees not to engage in any act after  execution of the
Separation and Release Agreement that is intended, or may reasonably be expected
to harm the reputation,  business,  prospects or operations of the Company,  its
Executives,  directors,  stockholders  or employees.  The Company further agrees
that it will engage in no act that is intended, or may reasonably be expected to
harm the reputation, business or prospects of the Executive.

      7. The Executive agrees that he shall not disparage or comment  negatively
about the  Company to anyone,  including,  but not  limited  to, its  customers,
competitors  or members  of the  general  public  that may avail  themselves  of
services rendered by Company.  Likewise, the Company agrees that it will make no
disparaging remarks about Executive.

      8. The Executive and the Company agree that the Executive  will only speak
about the Company by means of a joint press  release  that shall be prepared and
approved, in advance, by both parties.

      9. The Executive and the Company  agree to keep the  existence,  terms and
conditions of this Release Agreement completely and strictly confidential except
as required by law, or provided by paragraph 8 above.

      10. The  Executive  and the Company  agree that certain  provisions of the
Employment  Agreement  including,  specifically,  those set forth in  paragraphs
9(a),  9(b),  11(b),  and 11(c), are binding and in full force and effect during
the period of time set forth in the Release Agreement.

      11.  The  Executive  agrees  that  for a two  year  period  following  the
Termination Date the Executive shall not, directly or indirectly,  engage in any
managerial,   administrative,   advisory,   consulting,   operational  or  sales
activities or organize,  establish, operate, own, manage, or control a direct or
indirect investment or ownership interest in Wal-Mart,  K-Mart,  Target, Kohl's,
Noodle Kadoodle/Zany  Brainy,  e-toys, KB Toys, FAO Schwarz, Buy Buy Baby or any
other  business,  including  mail  order  or  internet  business,  if more  than
one-third of the business' revenues are generated by the manufacture,  marketing
or sale  of toys  (including,  without  limitation,  video  games  and  computer
software for kids, electronic toys and wheel goods),  juvenile or baby products,
juvenile furniture or children's clothing.

      12. The Executive shall promptly return all the Company's  property in the
Executive's  possession,  including,  but not  limited to, the  Company's  keys,
credit cards, cellular phones, computer,  software and peripherals and originals
or copies of books,  records,  or other information  pertaining to the Company's
business. The Executive shall return any leased or Company car at the expiration
of the Consulting  Period (as defined in the Employment  Agreement),  or at that
time when he is  entitled to receive a car from his future  employer,  whichever
comes  first.  While the  Executive  is using the Company  car, the Company will
continue  to  reimburse  the  Executive  for  routine  automobile   maintenance,
automobile  repairs  and  automobile  insurance.  The  Executive  is  personally
responsible for all other costs associated with the use of the Company car.

      13. This Agreement  shall be governed by and construed in accordance  with
the laws of the State of New Jersey,  without  reference  to the  principles  of
conflict of laws.  Exclusive  jurisdiction  with respect to any legal proceeding
brought  concerning  any subject  matter  contained in this  Agreement  shall be
settled by arbitration as provided in the Employment Agreement.

      14. This Agreement represents the complete agreement between the Executive
and the


                                       17
<PAGE>

Company concerning the subject matter in this Agreement and supersedes all prior
agreements  or  understandings,  written or oral. No attempted  modification  or
waiver of any of the  provisions  of this  Agreement  shall be binding on either
party unless in writing and signed by both the Executive and the Company.

      15. Each of the sections  contained in this Agreement shall be enforceable
independently  of every other section in this  Agreement,  and the invalidity or
non-enforceability  of any section shall not invalidate or render  unenforceable
any other section contained in this Agreement.

      16. It is further  understood  that for a period of 7 days  following  the
execution of this  Agreement in duplicate  originals,  the  Executive may revoke
this  Agreement,  and this Agreement  shall not become  effective or enforceable
until the revocation period has expired.  No revocation of this Agreement by the
Executive shall be effective  unless the Company has received,  within the 7-day
revocation period, written notice of any revocation,  all monies received by the
Executive under this Agreement and all originals and copies of this Agreement.

      17. This Agreement has been entered into  voluntarily  and not as a result
of coercion,  duress,  or undue influence.  The Executive  acknowledges that the
Executive  has read and fully  understands  the terms of this  Agreement and has
been  advised to consult  with an  attorney  before  executing  this  Agreement.
Additionally,  the Executive  acknowledges  that the Executive has been afforded
the opportunity of at least 21 days to consider this Agreement.

      The parties to this  Agreement  have executed this Agreement as of the day
and year first written above.

                                                 TOYS "R" US, INC.
                                                 By:
                                                    ----------------------------
                                                 Name:
                                                 Title:


                                                 EXECUTIVE


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


                                       18
<PAGE>

                                    EXHIBIT B

      Capitalized  terms used in the Agreement that are not elsewhere defined in
the Agreement have the definitions set forth below:

      "Annual Base Salary"  means the annual base salary of the  Executive as of
the  date  of the  Agreement  as may be  increased  from  time  to  time  in the
discretion of the Committee.

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

"Cause" means:  (i) the conviction of, or pleading guilty or nolo contendere to,
a  felony  involving  moral  turpitude:   9Ii)  the  commission  of  any  fraud,
misappropriation  or misconduct which causes  demonstrable injury to the Company
or a  subsidiary;  (iii) an act of  dishonesty  resulting or intended to result,
directly or indirectly, in material gain or personal enrichment to the Executive
at the expense of the Company or a subsidiary;  (iv) any material  breach of the
Executive's  fiduciary duties to the Company as an employee or Executive;  (v) a
serious  violation  of the Toys "R" Us Ethics  Agreement  or any  other  serious
violation of a Company  policy;  (vi) the willful and  continued  failure of the
Executive to perform  substantially  the Executive's  duties with the Company or
one of its subsidiaries  (other than any such failure  resulting from incapacity
due  to  physical  or  mental  illness  resulting  in a  Disability),  within  a
reasonable time after a written demand for substantial  performance is delivered
to the Executive by the Board, which specifically identifies the manner in which
the Board  believes  that the  Executive  has not  substantially  performed  the
Executive's  duties;  (vii) the  failure  by the  Executive  to  comply,  in any
material respect, with the provisions of Section 11 of the Agreement;  of (viii)
the failure by the Executive to comply with any other  undertaking  set forth in
the Agreement or any breach by the Executive hereof that is reasonably likely to
result in a material injury to the Company.

For  purposes  of this  provision,  no act or failure to act, on the part of the
Executive,  shall be  considered  "willful"  unless it is done, or omitted to be
done,  by the  Executive  in bad faith or  without  reasonable  belief  that the
Executive's action or omission was in the best interest of the Company. Any act,
or failure to act,  based upon authority  given pursuant to the resolution  duly
adopted by the Board or based upon the advice of regular outside counsel for the
Company shall be conclusively presumed to be done, or omitted to be done, by the
Executive in good faith and in the best interests of the Company.  the cessation
of employment  of the  Executive  shall not be deemed to be for Cause unless and
until there shall have been  delivered  to the  Executive a copy of a resolution
duly adopted by the affirmative  vote of a majority of the entire  membership of
the Board at a meeting  of the Board  called  and held for such  purpose  (after
reasonable  notice is provided to the  Executive  and the  Executive is given an
opportunity, together with counsel, to be heard before the Board), finding that,
in the good faith  opinion of the Board,  the Executive is guilty of the conduct
described, and specifying the particulars thereof in detail.

      "Change of Control" - See Exhibit C.

      "Committee" means that Company's Management  Compensation and Stock Option
Committed  of the Board of  Directors  or any  successor  committed of the Board
performing equivalent functions.

"Date of Termination"  means (i) if the Executive's  employment is terminated by
the Company for Cause, or by the Executive for Good Reason,  the date of receipt
of the Notice of Termination or any later date specified  therein,  as the cause
may be (although such Date of Termination shall  retroactively cease to apply if
the  circumstances  providing the basis of termination  for Cause or Good Reason
are cured in accordance with the Agreement),  (ii) if the Executive's employment
is


                                       19
<PAGE>

termination by the Company other than for Cause,  the Date of Termination  shall
be the date so designated by the Company in its notification to the Executive of
such termination, (iii) if the Executive's employment is terminated by reason of
death or Disability,  the Date of Termination  shall be the date of death of the
Executive or the effective date of the Disability,  as the case may be, and (iv)
the last day of the  Employment  Period during with the Company shall have given
notice to the Executive that the Employment Period shall not be extended.

      "Disability"  means  the  determination  that the  Executive  is  disabled
pursuant  to the terms of the TRU  Partnership  Employees'  Savings  and  Profit
Sharing Plan, as amended and restated as of February 1, 1997, as the same may be
amended from time to time.

      "Good Reason" means,  without the Executive's  prior written consent,  the
occurrence  of any of the  following,  provided  that the  Executive  delivers a
Notice of Termination specifying such occurrence within 30 days thereof:

      (i) the assignment of the Executive to a position materially  inconsistent
with the  requirements  of Section  2(a) of the  Agreement,  excluding  for this
purpose an action not taken in bad faith and which is  remedied  by the  Company
promptly  after  receipt of notice  thereof  given by the  Executive;  provided,
however,  that the  foregoing  shall not  constitute  "Good Reason" if it is not
attendant to a reduction in the  Executive's  Annual Base Salary or total target
compensation, except that a request by the Company for the Executive to relocate
outside Northeastern New Jersey shall constitute "Good Reason";

      (ii) any failure by the Company to comply in any material respect with any
of the  provisions  of section  2(b) of the  Agreement,  other than  failure not
occurring  in bad faith and that is remedied by the Company  within a reasonable
time after receipt of notice thereof given by the Executive;

      (iii) any failure by the Company to comply with an satisfy  Section  12(c)
of the Agreement, or

      (iv) notice by the Company that it is not extending the  termination  date
of the

      (v)

      (vi) Employment period.

      "Notice of  Termination"  means a written  notice that (i)  indicates  the
specific termination provision in this Agreement relied upon, (ii) to the extent
applicable sets forth in reasonable detail the facts and  circumstances  claimed
to  provide a basis for  termination  of the  Executive's  employment  under the
provisions so indicated and (iii) if the Date of Termination  (as defined above)
is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty days after the giving of such notice).

      "Plans"  means all  employee  compensation,  benefit  and  welfare  plans,
policies  and programs of the Company,  which may include,  without  limitation,
incentive,  savings,  retirement,  stock option,  restricted stock, supplemental
Executive retirement, pension, medical, prescription, dental, disability, salary
continuance,  employee life,  group life,  accidental  death and travel accident
insurance  plans,  vacation  practices,  fringe  benefit  practices and policies
relating to the reimbursement of business expenses.

      "Retirement"  shall  have the  meaning  ascribed  to that term in the Plan
under which benefits are being sought by the Executive.


                                       20
<PAGE>

                                    EXHIBIT C

                                CHANGE OF CONTROL

I.    Certain Definitions

      "Change of Control" means, after the date hereof:

      (a) The acquisition by any individual, entity or group (within the meaning
of Section 13(dX3) or 14(dX2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) (a "Person") of beneficial  ownership  (within the meaning
of Rule 13d-3  promulgated  under the Exchange Act) of 25% or more of either (i)
the then  outstanding  shares of common stock of the Company  (the  "Outstanding
Company Common Stock") or (ii) the combined voting power of the then outstanding
voting  securities of the Company  entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
for  purposes of this  subsection  (a),  the  following  acquisitions  shall not
constitute a Change of Control: (i) any acquisition of the Company of any of its
subsidiaries,  (ii) any  acquisition  by any  employee  benefit plan (or related
trust)  sponsored or maintained by the Company or any subsidiary of the Company,
(iii) any acquisition by any Person pursuant to a transaction that complies with
clauses (i), (ii) and (iii) of subsection (c) below,  or (iv) any acquisition by
any entity in which the  Executive  has a  material  direct or  indirect  equity
interest; or

      (b) The cessation of the "Incumbent Board" for any reason to constitute at
least a majority of the Board.  "Incumbent Board" means the members of the Board
on the date  hereof and any member of the Board  subsequent  to the date  hereof
whose election,  or nomination for election by the Company's  stockholders,  was
approved by a vote of at least a majority of the directors  then  comprising the
Incumbent Board, except that the Incumbent Board shall not include any member of
the Board whose initial  assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other  actual or  threatened  solicitation  of proxies or  consents  by or on
behalf of a Person other than the Board.

      (c) The consummation of a reorganization,  merger or consolidation or sale
or other disposition of all or substantially all of the assets of the Company (a
"Business  Combination"),  in each  case,  unless,  immediately  following  such
Business Combination each of the following would be correct:

            (i) all or  substantially  all of the  individuals  and entities who
      were the  beneficial  owners,  respectively,  of the  Outstanding  Company
      Common Stock and Outstanding  Company Voting Securities  immediately prior
      to such Business  Combination  beneficially  own,  directly or indirectly,
      more  than 60% of,  respectively,  the then  outstanding  shares of common
      stock  and the  combined  voting  power  of the  then  outstanding  voting
      securities entitled to vote generally in the election of directors, as the
      case may be,  of the  Person  resulting  from  such  Business  Combination
      (including,  without  limitation,  a  Person  which  as a  result  of such
      transaction owns the Company or all or substantially  all of the Company's
      assets  either   directly  or  through  one  or  more   subsidiaries)   in
      substantially  the same proportions as their ownership,  immediately prior
      to such Business  Combination of the Outstanding  Company Common Stock and
      Outstanding Company Voting Securities, as the case may be, and

            (ii) no Person  (excluding (A) any employee benefit plan (or related
      trust)  sponsored or  maintained  by the Company or any  subsidiary of the
      Company, or such corporation  resulting from such Business  Combination or
      any  Affiliate  of  such  corporation,  or (B) any  entity  in  which  the
      Executive has a material equity  interest,  or any "Affiliate" (as defined
      in Rule 405 under the


                                       21
<PAGE>

      Securities  Act of 1933,  as amended) of such entity)  beneficially  owns,
      directly or indirectly, 25% or more of, respectively, the then outstanding
      shares of common stock of the  corporation  resulting  from such  Business
      Combination,  or the combined voting power of the then outstanding  voting
      securities of such  corporation  except to the extent that such  ownership
      existed prior to the Business Combination, and

            (iii) at least a majority of the  members of the board of  directors
      of the corporation  resulting from such Business  Combination were members
      of the  Incumbent  Board  at the  time  of the  execution  of the  initial
      agreement,  or of the action of the  Board,  providing  for such  Business
      Combination; or

      (d) Approval by the stockholders of the Company of a complete  liquidation
or dissolution of the Company.

II.   Tax Gross-Up

      (a) If  required  by  Section  10 of the  Agreement,  in  addition  to the
payments described in Sections 4 and 7 of the Agreement and the grants described
in the Stock Unit  Agreement,  the Company  shall pay to the Executive an amount
(the  "Gross-up")  such that the net amount  retained  by the  Executive,  after
deduction  of any  Excise Tax and any  Federal,  state and local  income  taxes,
equals the amount of such payments  that the  Executive  would have retained had
such Excise Tax not been imposed.  In addition,  the Company shall indemnify and
hold the Executive harmless on an after-tax basis from any Excise Tax imposed on
or  with  respect  to any  such  payment  (including,  without  limitation,  any
interest,  penalties and  additions to tax) payable in connection  with any such
Excise Tax. For purposes of determining the amount of any Gross-up or the amount
required to make an indemnity payment on an after-tax basis, it shall be assumed
that the  Executive  is subject to  Federal,  state and local  income tax at the
highest marginal  statutory rates in effect for the relevant period after taking
into account any deduction  available in respect of any such tax (e.g., if state
and local taxes are  deductible  for Federal income tax purposes in the relevant
period,  it shall be assumed that such taxes offset income that would  otherwise
be subject  to Federal  income tax at the  highest  marginal  statutory  rate in
effect for such period).

      (b) Subject to the  provisions  of  paragraph  (c) of this  Exhibit C, the
determination  of (i)  whether a  Gross-up  is  required  and the amount of such
Gross-up  and (ii) the amount  necessary  to make any  payment  on an  after-tax
basis,  shall be made in accordance  with the assumptions set forth in paragraph
(a) of this  Exhibit C by Ernst & Young LLP or such other  "Big Six"  accounting
firm designated by the Executive and reasonably acceptable to the Company.

      (c) The  Executive  shall  notify the  Company as soon as  practicable  in
writing of any claim by the Internal Revenue Service that, if successful,  would
require any  Gross-up or indemnity  payment.  The  Executive  shall not pay such
claim prior to the  expiration of the 30-day period  following the date on which
it gives such notice to the Company.  If the Company  notifies the  Executive in
writing  prior to the  expiration of such period that it desires to contest such
claim,  the Executive shall take all actions  necessary to permit the Company to
control  all  proceedings  taken  in  connection  with  such  contest.  In  that
connection,  the Company  may, at its sole  option,  pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences in respect of such
claim and may, at its sole option,  either  direct the  Executive to pay the tax
claimed  and sue for a refund or contest  the claim in any  permissible  manner;
provided,  however,  that the Company shall pay and indemnify the Executive from
and against all costs and expenses  incurred in  connection  with such  contest;
provided further, however, that if the Company directs the Executive to pay such
claim and sue for a refund, the Company shall advance the amount of


                                       22
<PAGE>

such payment to the Executive on an interest-free  basis and at no net after-tax
cost to the Executive.  If the Executive  becomes entitled to receive any refund
or credit with respect to such claim (or would be entitled to a refund or credit
but for a counterclaim for taxes not indemnified hereunder), the Executive shall
promptly  pay to the  Company  the  amount  of such  refund  (together  with any
interest paid or credited  thereon) plus the amount of any tax benefit available
to the Executive as a result of making such payment (any such benefit calculated
based on the assumption  that any deduction  available to the Executive  offsets
income that would otherwise be taxed at the highest marginal  statutory rates of
Federal, state and local income tax for the relevant periods).


                                       23
<PAGE>


                                    EXHIBIT D

                              STOCK UNIT AGREEMENT

      STOCK  UNIT   AGREEMENT,   dated  as  of   _________________   (the  "Unit
Agreement"),  between TOYS "R" US, INC., a Delaware corporation (the "Company"),
and ______________________ (the "Executive").

                                   WITNESSETH:

      WHEREAS,  the Company has approved an Amendment (the  "Amendment")  to the
Company's  1994  Stock  Option  and  Performance  Incentive  Plan  (the  "Plan")
providing  for  performance  criteria  that may be  utilized  by the  Management
Compensation and Stock Option Committee (the "Committee") in connection with the
grant of  Performance  Shares (as defined in the Plan and  referred to herein as
"Stock Units");

      WHEREAS, concurrently herewith, the Executive and the Company are entering
into an Employment  Agreement,  dated as of even date herewith (the  "Employment
Agreement");

      WHEREAS, as further inducement for the Executive to execute the Employment
Agreement  and  continue  in  the  employ  of the  Company,  the  Committee  has
determined  to grant the  Executive  the Stock Units as  described  in this Unit
Agreement; and

      WHEREAS,  the Board and the Committee desire that the compensation arising
from the Stock  Units  shall  qualify as  "performance-based  compensation"  for
purposes of Section 162(m) of the Internal Revenue Code of 1986, as amended.

      NOW, THEREFORE, in consideration of the covenants set forth herein and for
other good and valuable consideration, the parties agree as follows:

      1. Definitions Capitalized terms used herein without definition shall have
the meanings ascribed to them in the Plan.

      2. Stock Unit Grant Subject to the terms and  conditions set forth in this
Unit  Agreement and in Section 10 of the Plan,  the Executive is hereby  granted
10,000 Stock Units. Each Stock Unit represents the right to receive one share of
Restricted Stock (collectively, with other shares of stock relating to the Stock
Units and held in the  Executive's  account in the Trust (as  defined  below) in
respect  of the  Stock  Units,  the  "Shares").  The  Shares  shall be  promptly
deposited  after the date hereof in the grantor  trust  created  pursuant to the
Grantor  Trust  Agreement,  dated as of October 1, 1995  between the Company and
American  Express Trust Company,  a Minnesota  trust company  (together with any
grantor trust subsequently established by the Company, the "Trust") and shall be
allocated  by the  Trust  to the  Executive's  account  therein  subject  to the
forfeiture  conditions  of Section 3 below.  Any  property  attributable  to the
Shares,  including,  without  limitation,  dividends and distributions  thereon,
shall be  deposited  into  the  Trust,  shall  as  promptly  as  practicable  be
reinvested  in  shares  of stock,  and  shall be  allocated  by the Trust to the
Executive's  account therein  subject to the forfeiture  conditions of Section 3
below.

      3.  Forfeiture  Conditions  The  Stock  Units  granted  to  the  Executive
hereunder shall be forfeited:

            (i) in  their  entirety,  if the  Executive's  employment  with  the
      Company terminates prior to the second anniversary of the date hereof,


                                       24
<PAGE>

            (ii)  with  respect  to  50%  of  the  Shares,  if  the  Executive's
      employment with the Company  terminates on or after the second anniversary
      of the date hereof and prior to the third anniversary of the date hereof.

      4.  Investment  Representation  The Shares acquired by the Executive under
this Unit  Agreement  will be acquired for the  Office's  account and not with a
view to the distribution  thereof,  and the Executive will not sell or otherwise
dispose of the Shares unless the Shares are registered  under the Securities Act
of 1933, as amended (the "Act"), or the Executive shall furnish the Company with
an  opinion  of  counsel  reasonably  satisfactory  to  the  Company  that  such
registration  is not required,  and a legend to such effect may be placed on the
certificate for the Shares.

      5. Liability;  Indemnification No member of the Committee,  nor any person
to whom ministerial  duties have been delegated,  shall be personally liable for
any  action,  interpretation  or  determination  made with  respect to this Unit
Agreement,  and each  member of the  Committee  shall be fully  indemnified  and
protected  by the Company with  respect to any  liability  such member may incur
with respect to any such action, interpretation or determination,  to the extent
permitted  by  applicable  law  and  to the  extent  provided  in the  Company's
Certificate of Incorporation  and Bylaws, as amended from time to time, or under
any agreement between any such member and the Company.

      6.  Severability  Each of the Sections  contained  in this Unit  Agreement
shall  be  enforceable  independently  of  every  other  section  in  this  Unit
Agreement,  and the  invalidity  or  nonenforceability  of any section shall not
invalidate  or render  unenforceable  any other  section  contained in this Unit
Agreement

      7. Governing Law This Unit Agreement shall be governed by and construed in
accordance  with  the laws of the  State of New  Jersey,  without  reference  to
principles of conflict of laws. Exclusive jurisdiction with respect to any legal
proceeding  brought  concerning  any  subject  matter  contained  in  this  Unit
Agreement  shall  be  settled  by  arbitration  as  provided  in the  Employment
Agreement.

      8.  Captions  The  captions  of this  Unit  Agreement  are not part of the
provisions hereof and shall have no force or effect.

      9. Amendment This Unit Agreement may not be amended or modified  otherwise
than by a written  agreement  executed by the parties hereto or their respective
successors and legal representatives.

      10.  Notices All notices and other  communications  hereunder  shall be in
writing and shall be given by hand  delivery to the other party or by registered
or certified  mail,  return receipt  requested,  postage  prepaid,  addressed as
follows:

            (i) If to the  Executive,  to the address on file with the  Company;
      and

            (ii) If to the Company,  to it at Toys "R" Us, Inc.,  461 From Road,
      Paramus, New Jersey 07652, Attention: General Counsel;

            or to such other address as either party shall have furnished to the
      other in writing in accordance  herewith.  Notice and communications shall
      be effective when actually received by the addressee.


                                       25
<PAGE>

      11.  Interpretation  The  interpretation  and decision  with regard to any
question  arising  under this Unit  Agreement or with respect to the Stock Units
made by the Committee shall be final and conclusive on the Executive.

      12.  Successors  This Unit Agreement shall be binding upon the Company and
its successors and assigns.


      IN WITNESS WHEREOF, this Agreement has been executed by the Company by one
of its duly authorized Executives as of the date specified above.

                                                 TOYS "R" US, INC.

                                                 By:
                                                    ----------------------------
                                                 Name:
                                                 Title:

I hereby acknowledge  receipt of the Stock Units and agree to the provisions set
forth in this Agreement.



----------------------
EXECUTIVE


                                       26