Exhibit 10.37

409A Amendments

TOYS “R” US, INC.

Amendment No. 3 to the Amended and Restated Retention Agreement

with Deborah M. Derby

This Amendment No. 3 to the Amended and Restated Retention Agreement dated as of
November 1, 2004, as previously amended on February 11, 2005 and July 21, 2005
(collectively, the “Agreement”) between Toys “R” Us, Inc. (the “Company”) and
Deborah M. Derby (“Executive”) is made this 24th day of December 2008.

The Executive Committee of the Board of Directors of the Company and Executive
have determined that it is in their best interests to amend the Agreement to
include special provisions intended to ensure compliance with Internal Revenue
Code Section 409A relating to deferred compensation. In consideration of the
mutual covenants contained herein and the continued employment of Executive by
the Company, the parties agree as follows:

 

  1. Post-Termination Plan Participation. The Agreement is hereby amended by
deleting the first sentence of Section 7(a)(iii) thereof in its entirety and
substituting the following:

“(1) SERP. Subject to Section 24, the Company shall pay to Executive within
thirty (30) days following the Date of Termination (the actual payment date
within such period being at the election of the Company) a single lump sum
payment equal to the additional amount of Notional Contributions without regard
to Declared Interest (as such terms are defined under the “TRU” Supplemental
Executive Retirement Plan as in effect on the Date of Termination (the “SERP”))
which would have been credited to Executive under the SERP, calculated as if
(i) Executive had continued to be employed for a period of twenty-four
(24) months following the Date of Termination (the “Additional Period”) earning
her Base Annual Salary and target annual incentive bonus as in effect on the
Date of Termination, (ii) Executive was fully vested and continued to
participate in the SERP for the Additional Period, (iii) the rate of the
Notional Contributions during the Additional Period remained the same as the
Notional Contribution rate in effect on the Date of Termination, and (iv) such
additional credits were discounted to the date of payment at the short-term
applicable federal rate, compounded annually, published by the Internal Revenue
Service for the month in which the Date of Termination occurs.

(2) Savings Plan. Subject to Section 24, the Company shall pay to Executive
within thirty (30) days following the Date of Termination (the actual payment
date within such period being at the election of the Company) a single lump sum
payment equal to the additional amount of Matching Contributions and Basic
Contributions (as such terms are defined under the “TRU” Partnership Employees’
Savings and Profit

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Sharing Plan as in effect on the Date of Termination (the “Savings Plan”))
without regard to interest or earnings, which would have been credited to
Executive under the Savings Plan, calculated as if (i) Executive had continued
to be employed for the Additional Period earning her Base Annual Salary and
target annual incentive bonus as in effect on the Date of Termination,
(ii) Executive was fully vested and continued to participate in the Savings Plan
for the Additional Period with the same Savings Contribution election as in
effect on the Date of Termination, (iii) the rate of the Company’s Matching
Contribution and Basic Contribution during the Additional Period remained the
same as the Matching Contribution rate in effect on the Date of Termination and
the Basic Contribution last determined by the Company as of such date, and
(iv) such additional contributions were discounted to the date of payment at the
short-term applicable federal rate, compounded annually, published by the
Internal Revenue Service for the month in which the Date of Termination occurs.”

 

  2. Post-Termination Health Coverage. The Agreement is hereby amended by adding
the following sentences to the end of Section 7(a)(v):

“In no event shall the coverage provided pursuant to this Section 7(a)(v) extend
beyond December 31 of the year in which Executive reaches age 65. To the extent
that any portion of the benefits under this Section 7(a)(v) during the period of
coverage is provided pursuant to a self-insured arrangement as defined in
Internal Revenue Code Section 105 or is otherwise taxable, the benefits provided
in any one calendar year shall not affect the amount of benefits to be provided
in any other calendar year, and the reimbursement of an eligible expense must be
made no later than December 31 of the year after the year in which the expense
was incurred. Executive’s rights pursuant to this Section 7(a)(v) shall not be
subject to liquidation or exchange for another benefit.”

 

  3. Leased Automobile. The Agreement is hereby amended by adding the following
sentences to the end of Section 7(a)(vi):

“The benefits provided under this Section 7(a)(vi) in any one calendar year
shall not affect the amount of benefits to be provided in any other calendar
year. Executive’s rights pursuant to this Section 7(a)(vi) shall not be subject
to liquidation or exchange for another benefit.”

 

  4. Financial Planning Services. The Agreement is hereby amended by adding the
following sentences to the end of Section 7(a)(vii):

“The benefits provided under this Section 7(a)(vii) in any one calendar year
shall not affect the amount of benefits to be provided in any other calendar
year. Executive’s rights pursuant to this Section 7(a)(vii) shall not be subject
to liquidation or exchange for another benefit.”

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  5. Post-Retirement Health Coverage. The Agreement is hereby amended by adding
the following sentences to the end of Section 7(d):

“To the extent that any portion of the health insurance coverage under this
Section 7(d) is provided pursuant to a self-insured arrangement as defined in
Internal Revenue Code Section 105 or is otherwise taxable, the benefits provided
in any one calendar year shall not affect the amount of benefits to be provided
in any other calendar year, and the reimbursement of an eligible expense shall
be made on or before December 31 of the year after the calendar year in which
the expense was incurred. Executive’s rights pursuant to this Section 7(d) shall
not be subject to liquidation or exchange for another benefit.”

 

  6. Excise Tax Gross-Up and Cooperation with Tax Contests Requested by the
Company. The Agreement is hereby amended by adding the following sentences to
the end of Section 9:

“If Executive is required to make a payment of Excise Tax, then after following
the procedures set forth in Exhibit B, (i) the Tax-Gross-up payments shall be
promptly paid by the Company to or for the benefit of Executive, but no later
than December 31 of the year after the year in which Executive remits the Excise
Tax, and (ii) any payment or reimbursement by the Company to Executive of
expenses incurred in connection with any contest of a claim or suit for refund
as described in Exhibit B shall be made on a current basis, as incurred, and in
no event later than December 31 of the year following the calendar year in which
the taxes that are the subject of such contest are remitted to the taxing
authority, or where as a result of such contest no taxes are remitted,
December 31 of the year following the calendar year in which the contest is
completed or there is a final and nonappealable settlement or other resolution
of the context. The amount reimbursable by the Company under this Section 9 in
any one calendar year shall not affect the amount reimbursable in any other
calendar year. Executive’s rights pursuant to this Section 9 shall expire at the
end of 20 years after the Effective Date and shall not be subject to liquidation
or exchange for another benefit.”

 

  7. Assistance to the Company. The Agreement is hereby amended by adding the
following sentences to the end of Section 13:

“If Executive is entitled to be paid or reimbursed for any expenses under this
Section 13, the amount reimbursable in any one calendar year shall not affect
the amount reimbursable in any other calendar year, and the reimbursement of an
eligible expense must be made no later than December 31 of the year after the
year in which the expense was incurred. Executive’s rights to payment or
reimbursement of expenses pursuant to this Section 13 shall expire at the end of
20 years after the Effective Date and shall not be subject to liquidation or
exchange for another benefit.”

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  8. Legal Fees. The Agreement is hereby amended by adding the following
paragraph to the end of Section 17:

“If Executive is entitled to be paid or reimbursed for any expenses under this
Section 17, the amount payable or reimbursable in any one calendar year shall
not affect the amount payable or reimbursable in any other calendar year, and
the reimbursement of an eligible expense must be made no later than December 31
of the year after the year in which the expense was incurred. Executive’s rights
to payment or reimbursement of expenses pursuant to this Section 17 shall expire
at the end of 20 years after the Effective Date and shall not be subject to
liquidation or exchange for another benefit.”

 

  9. Section 409A. The Agreement is hereby amended by adding the following
Section 24:

“24. Section 409A of the Internal Revenue Code. This Agreement shall be
interpreted and administered in a manner so that any amount or benefit payable
hereunder shall be paid or provided in a manner that is either exempt from or
compliant with the requirements Section 409A of the Code and applicable advice
and regulations issued thereunder. Notwithstanding anything in this Agreement to
the contrary, to the extent that any amount or benefit that would constitute
non-exempt “deferred compensation” for purposes of Section 409A of the Code
would otherwise be payable or distributable under the Agreement by reason of the
occurrence of a Change in Control, or Executive’s separation from service, such
amount or benefit will not be payable or distributable to the Executive by
reason of such circumstance unless (i) the circumstances giving rise to such
Change in Control or separation from service meet any description or definition
of “change in control event” or “separation from service”, as the case may be,
in Section 409A of the Code and applicable regulations (without giving effect to
any elective provisions that may be available under such definition), or
(ii) the payment or distribution of such amount or benefit would be exempt from
the application of Section 409A of the Code by reason of the short-term deferral
exemption or otherwise. Also, to the extent that the time and/or form of payment
of any non-exempt “deferred compensation” would change based on whether or not a
Change in Control has occurred, the time and form of payment shall not change
unless the circumstances giving rise to such Change in Control meet any
description or definition of “change in control event” in Section 409A of the
Code and applicable regulations. This provision does not prohibit the vesting of
any amount upon a Change in Control or separation from service, however defined.
If this provision prevents the payment or distribution of any amount or benefit,
such payment or distribution shall be made on the next earliest payment or
distribution date or event specified in the Agreement that is permissible under
Section 409A.

Whenever in this Agreement the provision of a payment or benefit is conditioned
on Executive’s execution and non-revocation of a release of claims, such release
must be executed, and all revocation periods shall have expired, within 60 days
after the date of termination of Executive’s employment, but the Company may
elect to commence payment at any time during such 60-day period.

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If any amount or benefit that would constitute non-exempt “deferred
compensation” for purposes of Section 409A of the Code would otherwise be
payable or distributable under this Agreement by reason of the Executive’s
separation from service during a period in which she is a “specified employee”
(as defined in Code Section 409A and applicable regulations), then payment or
commencement of such non-exempt amounts or benefits shall be delayed until the
earlier of the Executive’s death or the first day of the seventh month following
the Executive’s separation from service.”

Except as expressly amended hereby, the terms of the Agreement shall be and
remain unchanged and the Agreement as amended hereby shall remain in full force
and effect.

IN WITNESS WHEREOF, the Company and Executive have caused this Amendment to be
duly executed.

 

TOYS “R” US, INC. By:   /s/ Richard N. Cudrin /s/ Deborah M. Derby Deborah M.
Derby