Exhibit 10.7

 

Amendment to the

Toys “R” Us, Inc. Amended and Restated

1994 Stock Option and Performance Incentive Plan

 

The Toys “R” Us, Inc. Amended and Restated 1994 Stock Option and Performance
Incentive Plan (the “Plan”) is hereby amended, effective as of March 16, 2004,
as follows.

 

1. A new Article 19 shall be added to the Plan, which reads as follows:

 

“ARTICLE 19

 

CHANGE OF CONTROL

 

19.1 Acceleration upon a Change of Control. Upon the occurrence of a Change in
Control (as defined below), all unvested Options, Stock Appreciation Rights, and
other awards in the nature of rights that may be exercised shall vest, all
restrictions on Restricted Shares and Restricted Units shall lapse, and any
performance-based criteria for Performance Units or other awards shall be deemed
to be satisfied at the greater of “target” or actual performance as of the date
of the Change in Control, unless, in connection with such transaction, (i) such
awards are to remain outstanding, (ii) such awards are assumed by the surviving
corporation or its parent, or (iii) the surviving corporation or its parent
substitutes awards with substantially the same terms for such awards.

 

A “Change of Control” shall mean: (a) 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

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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
such person has a material equity interest, or any “Affiliate” (as defined in
Rule 405 under the 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 Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or (b) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.”

 

19.2 Officer’s Employment. In the event the employment of an officer of the
Company is terminated (other than for cause), within the 12 months following a
Change of Control: (a) all unvested Options, Stock Appreciation Rights, and
other awards in the nature of rights that may be exercised, shall vest
immediately on the date of such termination and all such awards may be exercised
until the earlier of (x) the thirty-month anniversary of the date of termination
and (y) the expiration date of such awards; (b) all restrictions on Restricted
Shares and Restricted Units shall lapse as of the date of such termination, and
(c) any performance-based criteria for Performance Units or other awards shall
be deemed to be satisfied at the greater of “target” or actual performance as of
the date of such termination.”

 

2. Except as specifically amended hereby, the Plan shall remain in full force
and effect as prior to this Amendment.

 

The Corporation has caused this Amendment to be executed as of the day and year
first above written.