Exhibit 10.38

PERFORMANCE-BASED
NONQUALIFIED STOCK OPTION AGREEMENT
OF
TOYS “R” US, INC.

THIS AGREEMENT (the “Agreement”), is made, effective as of the ____ day of
____________, 20__ (the “Grant Date”), between Toys “R” Us, Inc., a Delaware
corporation (the “Company”), and __________ (“Participant”).
R E C I T A L S:
WHEREAS, the Company has adopted the Toys “R” Us, Inc. 2010 Incentive Plan (the
“Plan”), which Plan is incorporated herein by reference and made a part of this
Agreement. Capitalized terms not otherwise defined herein shall have the same
meanings as in the Plan; and
WHEREAS, pursuant to that certain Employment Agreement dated as of _________ by
and between the Company and Participant (the “Employment Agreement”), the
Company agreed to grant certain performance-based stock options to Participant
pursuant to the Plan.
NOW THEREFORE, in consideration of the mutual covenants hereinafter set forth,
the parties agree as follows:
1.Grant of Option. The Company hereby grants to Participant the right and option
(the “Option”) to purchase, on the terms and conditions hereinafter set forth,
all or any part of ________ Shares, subject to adjustment as set forth in the
Plan. The purchase price of the Shares subject to the Option shall be $______
per Share, being the Fair Market Value of the Shares as of the Grant Date (the
“Option Price”). The Option is intended to be a non-qualified stock option, and
is not intended to be treated as an option that complies with Section 422 of the
Internal Revenue Code of 1986, as amended.
2.    Vesting. The Option shall be subject to both performance and service
vesting conditions, and will only be deemed fully vested when both the
performance and service conditions have been met in accordance with this Section
2.
(a)    Defined Terms for Vesting Provisions.
[TBD]
(b)    Performance Condition.
[TBD]
(c)    Service Condition. Of the Options that meet the performance-vesting
condition, the service-vesting condition will be met as follows, depending on
Participant’s continued employment as of the applicable date:
[TBD]

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(d)    Examples.
•
[TBD]

(e)    Designation. At any time, the portion of the Option that has become fully
vested as described above (or pursuant to Section 3(a) or (b) below) is
hereinafter referred to as the “Vested Portion.” At any time, the portion of the
Option which has not become vested is hereinafter referred to as the “Unvested
Portion.”
3.    Treatment of Option under Certain Conditions.
(a)    Termination of Employment Due to Death, Disability or Retirement. If
Participant’s employment with the Company is terminated due to death, Disability
or Retirement, the service-vesting condition (but not the performance-vesting
condition) shall be deemed to have been satisfied in full. Notwithstanding the
provisions of Section 13.6 of the Plan, if Participant’s employment with the
Company is terminated due to death, Disability or Retirement and before the
performance condition has been fully satisfied as to all ________ Options, then
the Option shall remain outstanding for a period of one year after the date of
Participant’s termination of employment for the sole purposes of determining
whether the performance condition will be met during that time period (the
“One-Year Performance Extended Period”). The Vested Portion of the Option, if
any, may be exercised during the One-Year Performance Extended Period. If the
performance condition is achieved (at any level) during the One-Year Performance
Extended Period, the Vested Portion of the Option will remain exercisable for a
period of one year after the Measurement Event resulting in such
performance-vesting. The Unvested Portion of the Option, if any, shall be
forfeited immediately upon the expiration of the One-Year Performance Extended
Period.
(b)    Other Termination of Employment. If Participant’s employment with the
Company is terminated for any other reason, the Unvested Portion of the Option
shall be canceled by the Company without consideration and the Vested Portion of
the Option shall remain exercisable for the period set forth in Section 4(a).
(c)    Change in Control. Upon the occurrence of a Change in Control, the
service-vesting condition (but not the performance-vesting condition) shall be
deemed to have been satisfied in full. Notwithstanding the provisions of Section
13.7 of the Plan, if the event resulting in the Change in Control is a
Measurement Event, then the performance condition may or may not be met,
depending on the proceeds to the Sponsors.
4.    Exercise of Option.
(a)    Period of Exercise. Subject to the provisions of the Plan and this
Agreement, Participant may exercise any or all of Vested Portion of the Option
at any time prior to the earliest to occur of:
(i)    the 10th anniversary of the Grant Date;
(ii)    one year following the date of Participant’s termination of employment
due to death, Disability or Retirement or termination without Cause after
reaching eligibility for Retirement;
(iii)    90 days following the date of Participant’s termination of employment
by the Company without Cause (except as provided in (ii) above) or by

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Participant for Good Reason; or, if later, 30 days after the Board’s next
determination of Fair Market Value (or confirmation of prior-determined Fair
Market Value) following Participant’s termination of employment, but such longer
period shall apply only if Participant had at least four years of Continuous
Service.
(iv)    30 days following the date of Participant’s termination of employment by
Participant without Good Reason; and
(v)    immediately on the date of Participant’s termination of employment by the
Company for Cause.
provided, in each case, the Unvested Portion shall be unexercisable and
immediately forfeited.
(b)    Method of Exercise.
(i)    Subject to Section 4(a), the Vested Portion of the Option may be
exercised by delivering to the Company at its principal office written notice of
intent to so exercise; provided that, the Option may be exercised with respect
to whole Shares only. Such notice shall specify the number of Shares for which
the Option is being exercised and shall be accompanied by payment in full of the
Option Price. The payment of the Option Price may be made at the election of
Participant (i) in cash or its equivalent (e.g., by check), (ii) to the extent
permitted by the Committee, in Shares having a Fair Market Value equal to the
aggregate Option Price for the Shares being purchased and satisfying such other
requirements as may be imposed by the Committee, (iii) partly in cash and, to
the extent permitted by the Committee, partly in such Shares or (iv) if there is
a public market for the Shares at such time, through the delivery of irrevocable
instructions to a broker to sell Shares obtained upon the exercise of the Option
and to deliver promptly to the Company an amount out of the proceeds of such
Sale equal to the aggregate option price for the Shares being purchased.
Alternatively, Participant may exercise the Option pursuant to a cashless
exercise, provided that the exercise date is within 30 days after a
determination of Fair Market Value (or confirmation of prior-determined Fair
Market Value) by the Board, but in no event later than the tenth anniversary of
the Grant Date. A cashless exercise shall be effectuated by the Company
delivering Shares to Participant having a Fair Market Value equal to (a) the
Fair Market Value of all Shares issuable upon exercise of the Option, minus (b)
the aggregate exercise price for such Shares and all taxes required to be
withheld. Participant shall not have any rights to dividends or other rights of
a stockholder with respect to Shares subject to an Option until Participant has
given written notice of exercise of the Option, paid in full for such Shares
and, if applicable, has satisfied any other conditions imposed by the Committee
pursuant to the Plan.
(ii)    Notwithstanding any other provision of the Plan or this Agreement to the
contrary, the Option may not be exercised prior to the completion of any
registration or qualification of the Option or the Shares under applicable state
and federal securities or other laws, or under any ruling or regulation of any
governmental body or national securities exchange that the Committee shall in
its sole discretion determine to be necessary or advisable.
(iii)    Upon the Company’s determination that the Option has been validly
exercised as to any of the Shares, the Company shall issue certificates in
Participant’s name for such Shares. However, the Company shall not be liable to
Participant for damages

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relating to any delays in issuing the certificates to him, any loss of the
certificates, or any mistakes or errors in the issuance of the certificates or
in the certificates themselves.
(iv)    In the event of Participant’s death, the Vested Portion of the Option
shall remain exercisable by Participant’s executor or administrator, or the
person or persons to whom Participant’s rights under this Agreement shall pass
by will or by the laws of descent and distribution as the case may be, to the
extent set forth in Section 3(a). Any heir or legatee of Participant shall take
rights herein granted subject to the terms and conditions hereof.
5.    Stockholders Agreement. Exercise of the Option shall constitute agreement
by Participant to be bound by all of the terms and conditions of the
Stockholders Agreement with respect to the Shares, or any other Company capital
stock, issuable to or held by Participant. All of the terms of the Stockholders
Agreement are incorporated herein by reference. For purposes of this Agreement,
the term “Stockholders Agreement” shall mean the Management Stockholders
Addendum, as amended, which is attached hereto as Exhibit A.
6.    Call Rights. Acceptance of the Option shall constitute agreement by
Participant to be bound by call rights set forth in Exhibit B hereto which is
incorporated herein by reference.
7.    No Right to Continued Employment. The granting of the Option evidenced
hereby and this Agreement shall impose no obligation on the Company or any
Affiliate to continue the employment of Participant and shall not lessen or
affect the Company’s or its Affiliate’s right to terminate the employment of
Participant.
8.    Legend on Certificates. The certificates representing the Shares purchased
by exercise of the Option shall be subject to such stop transfer orders and
other restrictions as the Committee may deem advisable under the Plan or the
rules, regulations, and other requirements of the Securities and Exchange
Commission, any stock exchange upon which such Shares are listed, and any
applicable Federal or state laws, and the Committee may cause a legend or
legends to be put on any such certificates to make appropriate reference to such
restrictions.
9.    Transferability. The Option may not be assigned, alienated, pledged,
attached, sold or otherwise transferred or encumbered by Participant otherwise
than as permitted by Section 13.3 of the Plan or by will or by the laws of
descent and distribution, and any such purported assignment, alienation, pledge,
attachment, sale, transfer or encumbrance which is impermissible shall be void
and unenforceable against the Company or any Affiliate; provided that the
designation of a beneficiary shall not constitute an assignment, alienation,
pledge, attachment, sale, transfer or encumbrance. No such permitted transfer of
the Option to heirs or legatees of Participant shall be effective to bind the
Company unless the Committee shall have been furnished with written notice
thereof and a copy of such evidence as the Committee may deem necessary to
establish the validity of the transfer and the acceptance by the transferee or
transferees of the terms and conditions hereof. During Participant’s lifetime,
the Option is exercisable only by Participant.
10.    Withholding. Participant may be required to pay to the Company or any
Affiliate and the Company shall have the right and is hereby authorized to
withhold, any applicable withholding taxes in respect of the Option, its
exercise or any payment or transfer under or with respect to the Option and to
take such other action as may be necessary in the opinion of the Committee to
satisfy all obligations for the payment of such withholding taxes. Without
limiting the foregoing, if at the time of such taxable event Participant would
be precluded from selling Shares on the open market, Participant may instruct
the Company, and the Company shall follow such

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instructions, to withhold Shares from the Option having a Fair Market Value on
the date of withholding equal to the minimum statutory amount required to be
withheld for tax purposes.
11.    Securities Laws. Upon the acquisition of any Shares pursuant to the
exercise of the Option, Participant will make or enter into such written
representations, warranties and agreements as the Committee may reasonably
request in order to comply with applicable securities laws or with this
Agreement.
12.    Notices. Any notice necessary under this Agreement shall be addressed to
the Company in care of its Secretary at the principal executive office of the
Company and to Participant at the address appearing in the personnel records of
the Company for Participant or to either party at such other address as either
party hereto may hereafter designate in writing to the other. Any such notice
shall be deemed effective upon receipt thereof by the addressee.
13.    Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO CONFLICTS OF
LAWS.
14.    Option Subject to Plan. By entering into this Agreement Participant
agrees and acknowledges that Participant has received and read a copy of the
Plan. The Option is subject to the Plan. The terms and provisions of the Plan as
it may be amended from time to time are hereby incorporated herein by reference.
In the event of a conflict between any term or provision contained herein and a
term or provision of the Plan, the applicable terms and provisions of the Plan
will govern and prevail.
15.    Signature. This Agreement may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of the
date first above written, which expressly includes Sections 5 and 6 of this
Agreement.
    
TOYS “R” US, INC.
________________________________________
By: ___________________________________

PARTICIPANT

_______________________________________
____________________________

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Exhibit A
MANAGEMENT STOCKHOLDERS ADDENDUM
This Management Stockholders Addendum (this “Addendum”) is hereby incorporated
in and made a part of that certain Performance-Based Nonqualified Stock Option
Agreement dated as of November 5, 2013 between Toys “R” Us, Inc. (the “Company”)
and Harry J. Mullany III (“Participant”) representing performance-based stock
options granted to Participant under the Toys “R” Us, Inc. 2010 Incentive Plan
(the “Plan”). Upon the grant of the Option, Participant shall, without any
action by Participant, automatically become bound by the terms hereof with
respect to the Award Stock issued or issuable upon exercise of the Option and
any other Company capital stock, issued to or held by Participant under the
Plan. Capitalized terms used herein and not otherwise defined shall have the
meanings ascribed to such terms in the Plan.
1.Definition. For purposes of this Addendum, the following terms shall have the
following meanings:
“Addendum” shall have the meaning set forth in the Preface.
“Approved Sale” shall have the meaning set forth in Section 4(b).
“Award Stock” with respect to a Participant, means any Stock issued to such
Participant upon exercise of any Options granted under the Plan and any Stock
issued to such Participant as Restricted Stock or Restricted Stock Unit. For all
purposes of this Plan, Award Stock will continue to be Award Stock in the hands
of any holder (including any Permitted Transferee) other than a Participant
(except for the Company and purchasers pursuant to a Public Sale), and each such
other holder of Award Stock will succeed to all rights and obligations
attributable to such Participant as a holder of Award Stock hereunder. Award
Stock will also include shares of the Company’s capital stock issued with
respect to shares of Award Stock by way of a stock split, stock dividend or
other recapitalization.
“Business Day” shall mean any day that is not a Saturday, a Sunday or other day
on which banks are required or authorized by law to be closed in the City of New
York.
“Executive Officer” shall mean any Management Stockholder who is an officer of
the Company (as defined in Rule 16a-1(f) under the Securities Exchange Act of
1934, as amended).
“Management Stockholder” shall mean any Participant (including Participants who
hold vested Options) and any other holder of Shares, in either case so long as
they hold any Shares.
“Participating Sellers”, with respect to Section 4(a), shall have the meaning
set forth in Sections 4(a)(ii), and with respect to Section 4(b) shall mean any
Management Stockholder that is Transferring Shares in an Approved Sale.
“Permitted Vornado Transfer” shall mean any Transfer of shares of the Company’s
capital stock by Vornado in order to ensure the preservation of its status as a
real estate investment trust under federal tax laws.
“Permitted Transferee” with respect to any Participant means such Participant’s
spouse and descendants (whether or not adopted) and any trust, family limited
partnership

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or limited liability company that is and remains at all times solely for the
benefit of such Participant and/or such Participant’s spouse and/or descendants,
in each case which transferee has executed and delivered to the Company the
documents required under Sections 13.3 or 13.4 of the Plan, as applicable.
“Piggyback Registration” shall have the meaning set forth in Section 5(a).
“Plan” shall have the meaning set forth in the Preface.
“Prospective Buyer” shall mean any Person, including the Company or any of its
subsidiaries, proposing to purchase or otherwise acquire shares in a Sale under
Section 4(a) or Section 4(b).
“Public Offering” shall mean a public offering and sale of Stock for cash
pursuant to an effective registration statement under the Securities Act.
“Public Sale” shall mean any sale pursuant to a registered public offering under
the Securities Act, any sale to the public through a broker, dealer or market
maker pursuant to Rule 144 promulgated under the Securities Act, or, after an
Initial Public Offering, any block sale to a financial institution in the
ordinary course of its trading business.
“Registrable Securities” shall mean (i) any share of Class A Common issued to or
otherwise acquired by any Management Stockholder and (ii) any equity securities
issued or issuable directly or indirectly with respect to any of the foregoing
securities referred to in clause (i) by way of stock dividend or stock split or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular shares constituting
Registrable Securities, such shares will cease to be Registrable Securities when
they have been (x) effectively registered under the Securities Act and disposed
of in accordance with the registration statement covering them, or (y) sold to
the public pursuant to Rule 144 under the Securities Act. For purposes of this
Addendum, a Person will be deemed to be a holder of Registrable Securities
whenever such Person has the right to acquire directly or indirectly such
Registrable Securities upon the exercise of Options, to the extent they are then
fully vested and exercisable.
“Rule 144” shall mean Rule 144 under the Securities Act (or any successor rule).
“Sale” shall mean a Transfer for value and the terms “Sell” and “Sold” shall
have correlative meanings.
“Securities Act” shall mean the Securities Act of 1933, as amended and in effect
from time to time.
“Securities Commission” shall mean the Securities and Exchange Commission, or
any successor regulatory body.
“Shares” means any shares of Award Stock under the Plan, and any other capital
stock of the Company issued to or held by a holder of Award Stock. For all
purposes of the Plan (including this Addendum), Shares will continue to be
Shares in the hands of any holder (including any Permitted Transferee), and each
such holder of Shares will succeed to all the rights and obligations
attributable to such Person as a Management Stockholder hereunder with respect
to such Shares, until such time as such Shares cease to be considered Shares
pursuant to the express terms of Section 3(b) of this Addendum.

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“Sponsor” shall mean any of Bain Capital (TRU) VIII, LP., Bain Capital (TRU)
VIII-E, L.P., Bain Capital (TRU) Coinvestment, L.P., Bain Capital Integral
Investors, LLC, BCIP TCV, LLC, Toybox Holdings, LLC, and Vornado, in each case
together with their respective Affiliates.
“Tag Along Deadline” shall have the meaning set forth in Section 4(a)(ii).
“Tag Along Holder” shall have the meaning set forth in Section 4(a)(i).
“Tag Along Notice” shall have the meaning set forth in Section 4(a)(i).
“Tag Along Offer” shall have the meaning set forth in Section 4(a)(ii).
“Transfer” shall mean any sale, pledge, assignment, encumbrance or other
transfer or disposition of any Shares to any other person, whether directly,
indirectly, voluntarily, involuntarily, by operation of law, pursuant to
judicial process or otherwise; provided that the sale, pledge, assignment
encumbrance or other transfer or disposition of the common shares or beneficial
interest, par value $0.04, of Vornado Realty Trust, a Maryland Realty Trust, a
Maryland real estate investment trust (or its successors), will not be deemed a
Transfer.
“Vornado” means Vornado Truck, LLC.
2.Voting Agreement. Each Management Stockholder, shall at all times cast all
votes to which such Management Stockholder is entitled in respect of such
Management Stockholder’s Shares, whether at any annual or special meeting, by
written consent or otherwise, in such manner as the Company may instruct by
written notice. Further, each Management Stockholder hereby grants to the
Company an irrevocable proxy coupled with an interest to vote, including in any
action by written consent, such Management Stockholder’s Shares as the Company
deems appropriate in its sole discretion, which proxy shall be valid and remain
in effect with respect to all Shares until they cease, to be Shares pursuant to
the terms hereof.
3.Transfer Restrictions.
(a)     General Transfer Restrictions. Each Management Stockholder understands
and agrees that any Shares issued to or held by such Management Stockholder on
the date hereof have not been registered under the Securities Act or under any
state securities laws or the securities laws of any country. No Management
Stockholder shall Transfer any such Shares (or solicit any offers in respect of
any Transfer of such Shares), except in compliance with the Securities Act, or
any applicable state or national securities laws and any restrictions on
Transfer contained in the Plan (including this Addendum).
(b)     Allowed Transfers. Until the expiration of the provisions of this
Section 3, no Management Stockholder shall Transfer any of such Management
Stockholder’s Shares to any other Person except as follows:

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(i) Permitted Transferees. A Management Stockholder may Transfer Shares to
Permitted Transferees solely to the extent provided by, and in accordance with
the terms of, Sections 13.3 and 13.4 of the Plan.
(ii) Participation in Drag Along and Tag-Along; Puts and Calls.
(A)Drag-Along. A Management Stockholder may Transfer such Management
Stockholder’s Shares to the extent required pursuant to Section 4(b) below.
(B)Tag-Along. A Participating Seller may Transfer Shares pursuant to and in
accordance with the provisions of Section 4(a) below.
Shares Transferred pursuant to this Section 3(b)(ii) shall conclusively be
deemed thereafter not to be Shares under this Addendum.
(iii) Public Transfers. A Management Stockholder may Transfer Shares: (a) in a
Public Offering pursuant to Section 5 below, or (b) (I) with respect to any
Executive Officer, from and after the two-year anniversary of the closing of the
Initial Public Offering, pursuant to Rule 144 or a block sale to a financial
institution in the ordinary course of its trading business or any other legally
permitted sale, or (II) with respect to any other Management Stockholder, from
and after the six-month anniversary of the closing of the Initial Public
Offering, pursuant to Rule 144 or a block sale to a financial institution in the
ordinary course of its trading business or any other legally permitted sale.
Shares Transferred pursuant to this Section 3(b)(iii) shall conclusively be
deemed thereafter not to be Shares under this Addendum.
(c)Impermissible Transfer. Any attempted Transfer of Shares not permitted under
the terms of this Section 3 shall be null and void, and the Company shall not in
any way give effect to any such impermissible Transfer.
(d)Notice of Transfer. To the extent any Management Stockholder shall Transfer
any Shares pursuant to Sections 3(b)(i) or 3(b)(iii), such Management
Stockholder shall, within three (3) Business Days following (or, in the case of
a Transfer to a Permitted Transferee, within three (3) Business Days prior to)
consummation of such Transfer, deliver notice thereof to the Company, which
shall then deliver such notice to the Sponsors.
(e)Period. Each of the foregoing provisions of this Section 3 shall expire upon
a Change in Control.
4.    “Tag Along” and “Drag Along” Rights.
(a)    “Tag Along” Rights. In connection with any Sale by a Sponsor of any
Shares of Stock to any Person (other than a Public Sale, a Permitted Vornado
transfer, or any Sale between or among the Sponsors, their Affiliates, or any
employee of the Company or any of its Subsidiaries):

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(i)    Notice. The Company shall, prior to any such proposed Sale, deliver a
written notice (the “Tag Along Notice”) to each Management Stockholder (each, a
“Tag Along Holder”), specifying the principal terms and conditions of the Sale
(including the number of shares of each class of the Company’s capital stock to
be Sold in such Sale).
(ii)    Exercise. Each Tag Along Holder may elect to participate in the Transfer
by delivering written notice (the “Tag Along Offer”) within five (5) Business
Days after the date of delivery of the Tag Along Notice to such Holder (such
date the “Tag Along Deadline”) (each Tag Along Holder so electing, a
“Participating Seller”). Each Tag Along Holder who does not make a Tag Along
Offer prior to the Tag Along Deadline shall be deemed to have waived all of such
holder’s rights to participate in such Sale. Each Tag Along holder will be given
the opportunity to exercise their vested Options prior to or in connection with
the consummation of a Sale pursuant to this Section 4(a) and the Award Stock
issued upon exercise of such vested Options will be Shares for purposes of this
Section 4(a).
(iii)    Number of Shares Sold. Each Participating Seller will have the right to
include in the Sale, on the same terms and conditions (subject to Section
4(c)(i)) with respect to each Share Sold as the Sponsor proposing such Sale, a
number of Shares of each class of Stock to be Sold in such Sale equal to the
product of (x) the number of shares of such class of Stock to be Sold in the
contemplated Sale, times (y) the quotient obtained by dividing the number of
Shares of such class of Stock owned by such Participating Seller by the number
of Shares of such class of Stock owned by such Participating Seller and any
other Persons participating in such Sale (including the proposing Sponsor and
any other Participating Sellers).
(iv)    Rule 144 Eligibility. Notwithstanding anything to the contrary herein,
after the two year anniversary of the Initial Public Offering, upon becoming
eligible to sell all of his or her shares pursuant to Rule 144, a Tag Along
Holder shall no longer be eligible to participate in the Tag Along rights
provided by this Section 4(a).
(b)    “Drag Along” Rights. If the Board approves a Change in Control (an
“Approved Sale”), each Management Stockholder hereby agrees, if and to the
extent requested by the Board, to Sell any or all of such Management
Stockholder’s Shares in such Approved Sale on the terms and conditions approved
by the Board.
(i)    Management Stockholder Actions. Each Management Stockholder will take all
necessary or desirable actions in connection with the consummation of any
Approved Sale (including, if such Approved Sale is structured as a merger or
consolidation, waiving any dissenters rights, appraisal rights or similar rights
in connection with such merger or consolidation).
(ii)    Conditions. The obligations of the Management Stockholders with respect
to an Approved Sale are subject to the satisfaction of the following conditions:
(i) upon the consummation of the Approved Sale, each Management Stockholder will
receive the same form and amount of consideration per share as received by the
Sponsors for the corresponding class of shares of the Company’s capital stock,
or if any Sponsor is given an option as to the form and amount of consideration
to be received in respect of shares of the Company’s capital stock of any class,
all Management Stockholders holding shares of the Company’s capital stock of
such class will be given the same option; and (ii) each holder of vested and
exercisable Options will be given the opportunity to exercise such rights prior
to or in

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connection with the consummation of an Approved Sale and the Award Stock issued
upon exercise of such vested Options will be Shares for purposes of this Section
4(b).
(c)    Miscellaneous. The following provisions shall be applied to any proposed
Sale to which Section 4(a) or 4(b) applies:
(i)    Certain Legal Requirements. In the event the consideration to be paid in
exchange for Shares in a proposed Sale pursuant to Section 4(a) or Section 4(b)
includes any securities, and the receipt thereof by a Participating Seller would
require under applicable law (A) the registration or qualification of such
securities or of any Person as a broker or dealer or agent with respect to such
securities where such registration or qualification is not otherwise required
for the Sale or (B) the provision to any Participating Seller of any specified
information regarding such securities or the issuer thereof that is material and
not otherwise required to be provided for the Sale, then such Participating
Seller shall not have the right to Sell Shares in such proposed Sale, and the
Sponsors proposing such Sale (in the case of Section 4(a)) or the Board (in the
case of Section 4(b)), as applicable, shall (x) in the case of a Sale that is
not a Change in Control, have the right, but not the obligation, and (y) in the
case of a Sale that is a Change in Control, have the obligation, to cause to be
paid to such Participating Seller in lieu of the issuance of such securities,
against surrender of the Shares which would have otherwise been Sold by such
Participating Seller to the Prospective Buyer in the proposed Sale, an amount in
cash equal to the Fair Market Value of such securities as of the date such
securities would have been issued in exchange for such Shares.
(ii)    Further Assurances. Each Participating Seller shall take or cause to be
taken all such actions as may be reasonably necessary or reasonably desirable in
order to expeditiously consummate each Sale pursuant to Section 4(a) or Section
4(b) and any related transactions, including executing acknowledging and
delivering consents, assignments, waivers and other documents or instruments;
furnishing information and copies of documents; filing applications, reports,
returns, filings and other documents or instruments with governmental
authorities: and otherwise cooperating with the Sponsor proposing such Sale or
the Board (as applicable) and the Prospective Buyer, provided, however, that
Participating Sellers shall be obligated to become liable in respect of any
representations, warranties, covenants, indemnities or otherwise to the
Prospective Buyer solely to the extent provided in the immediately following
sentence. Without limiting the generality of the foregoing, each Participating
Seller agrees to execute and deliver such agreements as may be reasonably
specified by the Sponsor proposing such Sale or the Board (as applicable) to
which other sellers will also be party, including agreements to (i)(A) make
individual representations, warranties, covenants and other agreements as to the
unencumbered title to its Shares and the power, authority and legal right to
Transfer such Shares, the absence of any adverse claims with respect to such
shares and the non-contravention of other agreements and (B) be liable as to
such representations, warranties, covenants and other agreements, in each ease
to the same extent (but with respect to its own Shares and with respect to its
own representations, warranties, covenants and other agreements) as the other
sellers, and (ii) be liable (whether by purchase price adjustment, indemnity
payments or otherwise) in respect of representations, warranties, covenants and
agreements in respect of the Company and its subsidiaries; provided, however,
that the aggregate amount of liability described in this clause (ii) in
connection with any Sale shall not exceed the lesser of (i) such Participating
Seller’s pro rata portion of any such liability, to be determined in accordance
with such Participating Seller’s portion of the aggregate proceeds to all
sellers

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in connection with such Sate and (ii) the proceeds to such Participating Seller
in connection with such Sale.
(iii)    Sale Process. The Sponsor proposing such Sale, in the case of a
proposed Sale pursuant to Section 4(a), or the Board, in the case of a proposed
Sale pursuant to Section 4(b), shall, in its sole discretion, decide whether or
not to pursue, consummate, postpone or abandon any proposed Sale and the terms
and conditions thereof. If any proposed Sale is postponed, abandoned or not
consummated, then the Sponsors or the Board, as applicable, shall comply with
the provisions of this Section 4 with respect to any subsequent proposed Sale.
No Company stockholder nor any Affiliate of any such holder shall have any
liability to any Management Stockholder arising from, relating to or in
connection with the pursuit, consummation, postponement, abandonment or terms
and conditions of any proposed Sale.
(iv)    Expenses. All reasonable costs and expenses incurred for the benefit of
all holders of Stock in connection with any proposed Sale shall be paid by the
Company (to the extent not otherwise paid by the acquiring party), subject to
the following sentence. Any costs incurred by or on behalf of any Participating
Sellers on their own behalf will not be considered costs of the Sale hereunder,
and will be borne by such Participating Seller(s).
(d)    Period. The provisions of Section 4(a) shall expire upon the earlier to
occur of (i) the Initial Public Offering and (ii) a Change in Control. Each of
the other provisions of this Section 4 above shall expire upon a Change in
Control.
5.    Registration Rights.
(a)    Right to Piggyback. Whenever the Company proposes to conduct an
underwritten registration of any of its securities under the Securities Act
(other than (i) in an Initial Public Offering or (ii) in connection with
registration on Form S-4 or Form S-8 or any successor or similar form) and the
registration form to be used may be used for the registration of Registrable
Securities (a “Piggyback Registration”), the Company will give prompt written
notice to all holders of Registrable Securities of its intention to effect such
a registration and, subject to Section 5(b), will include in such registration
all Registrable Securities with respect to which the Company has received
written requests for inclusion therein within 15 days after the delivery of the
Company’s notice.
(b)    Priority on Registrations. In any underwritten registration, if the
managing underwriters advise the Company that in their opinion the number of
Registrable Securities, or the total number of securities of the Company,
requested or proposed to be included in such registration exceeds the number
which can be sold in such offering without adversely affecting the marketability
of such offering, the Company will include in such registration the Registrable
Securities, and the other securities of the Company, that in the opinion of the
managing underwriters can be sold without adversely affecting the marketability
of such offering, as follows: (i) first, if the registration is a primary
offering on behalf of the Company, the securities the Company proposes to sell,
(ii) second, any securities of the Company requested to be included in such
registration by holders that have a contractual right to include securities in
such registration prior to the holders of Registrable Securities, (iii) third,
the Registrable Securities and any other securities of the Company requested to
be included in such registration, pro rata among the holders of such Registrable
Securities and other securities on the basis of the number of shares owned by
each such holder.

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(c)    Further Assurances. Each holder of Registrable Securities will take all
necessary or desirable action in connection with the consummation of any
Piggyback Registration. including (a) agreeing to sell such Person’s securities
on the basis provided in any underwriting arrangements approved by the Board;
(b) completing and executing all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such underwriting arrangements; and (c) providing in writing such
information and affidavits as requested by the Board in connection with any
registration statement or prospectus relating to such offering.
6.    Legends.
(a)    Restrictive Legend. Each certificate representing Shares shall have the
following legend endorsed conspicuously thereupon:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN TRANSFER
AND OTHER RESTRICTIONS PURSUANT TO THE TOYS “R” US, INC. 2010 INCENTIVE PLAN, AS
AMENDED (THE “PLAN”) INCLUDING THE MANAGEMENT STOCKHOLDERS ADDENDUM ATTACHED
THERETO AND MADE A PART THEREOF. A COPY OF THE PLAN WILL BE FURNISHED WITHOUT
CHARGE BY TOYS “R” US HOLDINGS, INC. TO THE HOLDER HEREOF UPON WRITTEN REQUEST.”
Any Person who acquires Shares which cease to be subject to the terms of the
Plan (including this Addendum) shall have the right to have such legend (or the
applicable portion thereof) removed from certificates representing such Shares.
(b)    Securities Act Legend. Each certificate representing Shares shall have
the following legend endorsed conspicuously thereupon:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED IN A PRIVATE
PLACEMENT WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
APPLICABLE STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED,
PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND SUCH LAWS OR QUALIFICATION FOR AN
EXEMPTION THEREFROM.”
(c)    Stop Transfer Instruction. The Company will instruct any transfer agent
not to register the Transfer of any Management Stockholder’s Shares until the
conditions specified in the foregoing legends and the Plan (including this
Addendum) are satisfied.
(d)    Termination of the Securities Act Legend. The requirement imposed by
Section 6(b) shall cease and terminate as to any particular Management
Stockholder’s Shares (i) when, in the opinion of counsel reasonably acceptable
to the Company, such legend is no longer required in order to assure compliance
by the Company with the Securities Act or (ii) when such Shares have been
effectively registered under the Securities Act or transferred pursuant to Rule
144. Wherever (A) such requirement shall cease and terminate as to any
Management Stockholders Shares or (B) such Shares shall be transferable under
paragraph (k) of Rule 144, the holder thereof shall be entitled to receive from
the Company, without expense, new certificates not bearing the legend set forth
in Section 6(b).

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7.    Notices. Notices required or permitted to be made under this Addendum
shall be made in the manner specified in the Plan.
8.    Section 16. The Company shall use its commercially reasonable efforts to
cause any acquisition of Options or Award Stock under the Plan to be exempt
under Rule 16b-3 promulgated trader the Securities Exchange Act of 1934.

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Exhibit B
CALL RIGHTS

This Exhibit is hereby incorporated in and made a part of that certain
Performance-Based Nonqualified Stock Option Agreement dated as of __________,
20__ between Toys “R” Us, Inc. (the “Company”) and ___________________
(“Participant”) representing performance-based stock options (the “Option”)
granted to Participant under the Toys “R” Us, Inc. 2010 Incentive Plan (the
“Plan”). Upon the grant of the Option, Participant shall, without any action by
Participant, automatically become bound by the terms hereof with respect to the
Shares issued or issuable upon exercise of the Option. Capitalized terms used
herein and not otherwise defined shall have the meanings ascribed to such terms
in the Plan or the Stockholders Agreement, which is Exhibit A to the
Performance-Based Nonqualified Stock Option Agreement.

1.1    Award Stock. For purposes of this Exhibit, the term “Award Stock” means
any Shares of Stock of the Company issued to Participant upon exercise the
Option. Award Stock will continue to be Award Stock in the hands of any holder
(including any Permitted Transferee) other than Participant (except for the
Company and purchasers pursuant to a Public Sale), and each such other holder of
Award Stock will succeed to all rights and obligations attributable to
Participant as a holder of Award Stock hereunder. Award Stock will also include
shares of the Company’s capital stock issued with respect to shares of Award
Stock by way of a stock split, stock dividend or other recapitalization. For
purposes of this Exhibit, the “Original Value” for each share of Award Stock
will be equal to the exercise price paid by Participant for such share of Award
Stock, as proportionally adjusted for all subsequent stock splits, stock
dividends, and other recapitalizations affecting the Award Stock.

1.2    Repurchase Option. In order to provide a market for Award Stock, in the
event that Participant is no longer employed by the Company or any of its
Affiliates for any reason, the Award Stock, whether held by Participant or one
or more transferees of Participant, will be subject to repurchase by the Company
and the Sponsors (solely at their option), by delivery of one or more Repurchase
Notices (as defined below) within the time periods set forth below, pursuant to
the terms and conditions set forth in this Exhibit (the “Repurchase Option”).
The Repurchase Option shall terminate on the first to occur of a Change in
Control or the first Public Offering occurring after the date the Option was
granted (an “Initial Public Offering”).
1.3    Termination Due to Death, Disability or Termination without Cause. If
Participant is no longer employed by the Company or any of its Affiliates as a
result of (i) Participant’s death or Disability, or (ii) termination by the
employer without Cause, then on or after the date of Participant’s termination
of employment (the “Termination Date”) the Company may elect to purchase all or
any portion of the Award Stock issued or issuable to Participant at a price per
share equal to the Fair Market Value thereof as of a date determined by the
Board that is the anticipated date of the Repurchase Closing (as defined in
Section 1.7 below).
1.4    Termination for Cause. If Participant is no longer employed by the
Company or any of its Affiliates as a result of Participant’s termination for
Cause, then on or after the Termination Date, the Company may elect to purchase
all or any portion of the Award Stock issued or issuable to Participant at a
price per share equal to the lower of the Fair Market Value or the Original
Value thereof. Fair Market Value shall be determined as of a date determined by
the Board that is the anticipated date of the Repurchase Closing (as defined in
Section 1.7 below).

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1.5    Resignation or Retirement. If Participant is no longer employed by the
Company or any of its Affiliates as a result of Participant’s resignation
(including Retirement), then on or after the Termination Date, the Company may
elect to purchase all or any portion of the Award Stock issued or issuable to
Participant at a price per share equal to the Fair Market Value thereof as of a
date determined by the Board that is the anticipated date of the Repurchase
Closing (as defined in Section 1.7 below). Notwithstanding the foregoing, in the
event Participant violates any of the restrictive covenants in Section 8 or 9 of
his Employment Agreement at any time within one (1) year after Participant’s
Termination Date, then the purchase price per share shall be the lower of Fair
Market Value or Original Value.
1.6    Option Repurchases. In the event the Company and/or the Sponsors, as
applicable, exercise the Repurchase Option with respect to any shares of Award
Stock before the Option has been exercised in full, then Participant shall be
required, promptly following receipt of a Repurchase Notice (as defined below),
to exercise the Option and purchase from the Company all shares of Award Stock
for which the Company and/or the Sponsors, as applicable, shall have delivered a
Repurchase Notice.
1.7    Repurchase Procedures. Pursuant to the Repurchase Option, the Company may
elect to exercise the right to purchase all or any portion of the Award Stock
issued to Participant by delivering written notice or notices (each, a
“Repurchase Notice”) to the holder or holders of the Award Stock at any time and
from time to time no later than 120 days after the Termination Date (or 180 days
in the case of Participant’s Disability, or 270 days in the case of
Participant’s death, or 375 days in the case of Participant’s resignation);
provided that such periods may be tolled in accordance with Section 1.10 below.
Each Repurchase Notice will specifically identify the Award Stock to be acquired
from such holder(s), the repurchase price of such Award Stock, the aggregate
consideration to be paid for such Award Stock and the time and place for the
closing of the transaction (each, a “Repurchase Closing”). In the event that the
Company elects to purchase a portion of the Award Stock pursuant to the terms of
this Section 1.7, if any of such Award Stock are held by transferees of
Participant, the Company shall purchase the shares elected to be purchased first
from Participant to the extent of such Award Stock then held by Participant and
second purchase any remaining shares elected to be purchased from such other
holder(s) of the Award Stock pro rata according to the number of shares of Award
Stock held by such other holder(s) at the time of delivery of such Repurchase
Notice (determined as nearly as practicable to the nearest share).

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1.8    Sponsor Rights.
(a)    If for any reason the Company does not elect to purchase all of Award
Stock issued or issuable to Participant pursuant to the Repurchase Option
pursuant to one or more Repurchase Notices, the Sponsors will be entitled to
exercise the Repurchase Option, in the manner set forth in this Section 1.8, for
the Award Stock the Company has not elected to purchase (the “Available
Shares”). As soon as practicable after the Company has determined that there
will be Available Shares, but in any event within 90 days after the Termination
Date (or 150 days in the case of Participant’s Disability, or 240 days in the
case of Participant’s death), the Company shall give written notice (each, an
“Option Notice”) to the Sponsors setting forth the number of Available Shares
and the price for each Available Share as determined pursuant to the provisions
of this Exhibit.
(b)    The Sponsors may elect to purchase any number of Available Shares by
delivering written notice (an “Election Notice”) to the Company within 20 days
after receipt of the Option Notice from the Company. If the Sponsors elect to
purchase an aggregate number of shares greater than the number of Available
Shares, the Available Shares shall be allocated among the Sponsors based upon
the number of shares of Stock owned by each Sponsor on a fully-diluted basis.
(c)    As soon as practicable, and in any event within ten days after the
expiration of the 20-day period set forth above, the Company shall notify the
holder(s) of the Award Stock as to the number of Award Stock being purchased
from such holder(s) by the Sponsors (each, a “Supplemental Repurchase Notice”).
At the time the Company delivers a Supplemental Repurchase Notice to the
holder(s) of the Award Stock, the Company shall also deliver written notice to
each electing Sponsor setting forth the number of Award Stock that the Company
and each Sponsor will acquire, the aggregate purchase price and the time and
place of the closing of the transaction.
1.9    Closing of Repurchase. The closing of the transactions contemplated by
this Exhibit will take place on the date designated by the Company in the
applicable Repurchase Notice or Supplemental Repurchase Notice, as the case may
be, which date will not be more than 60 days after the delivery of such notice.
The Company and/or the Sponsors, as the case may be, will pay for the Award
Stock to be purchased pursuant to the Repurchase Option by delivery of a check
payable to the holder(s) of Award Stock or a wire transfer of immediately
available funds. In addition, the Company may pay the repurchase price for such
Award Stock by offsetting such amounts against any bona fide debts owed by
Participant to the Company or any of its Affiliates. The Company and/or the
Sponsors as the case may be, will receive customary representations and
warranties from each seller regarding the sale of the Award Stock including, but
not limited to, the representation that such seller has good and marketable
title to the Award Stock to be Transferred free and clear of all liens, claims
and other encumbrances, and will be entitled to require all sellers’ signatures
be guaranteed by a national bank or reputable securities broker. In the event
that a repurchase is to take place at a price equal to Fair Market Value, and
the Fair Market Value of the Award Stock has increased or decreased from the
date on which it is determined to the date of closing pursuant to this Section
1.8, then the repurchase shall be consummated at such higher or lower price.
1.10    Restrictions on Repurchase. Notwithstanding anything to the contrary
contained in this Agreement, all repurchases of Award Stock by the Company shall
be subject to applicable restrictions contained in the Delaware General
Corporation Law and in the Company’s and its Affiliates’ debt and equity
financing agreements. If any such restrictions prohibit the repurchase of Award
Stock for cash and the Sponsors have not elected to acquire all Award Stock
which the Company and the Sponsors have a right to repurchase pursuant to this
Exhibit, the time periods provided in this Exhibit shall be suspended for a
period of up to twelve months, and the Company

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may make such repurchases as soon as it is permitted to do so under such
restrictions but in no event later than twelve months after the initial time
periods hereunder.

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