Exhibit 10.36

 

TOYS “R” US, INC.

SPLIT DOLLAR PLAN

 

Effective as of February 1, 1996

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TOYS “R” US, INC.

SPLIT DOLLAR PLAN

 

TABLE OF CONTENTS

 

ARTICLE

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   PAGE

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I.

   PURPOSE    1

II.

   PAYMENT OF PREMIUMS AND BENEFIT STATEMENTS    1

III.

   POLICY AND CERTIFICATE OWNERSHIP AND DIVIDEND APPLICATION    1

IV.

   BENEFICIARY PROVISIONS    2

V.

   CESSATION OF PARTICIPATION    3

VI.

   REORGANIZATION AND ASSIGNMENT OF POLICY OR CERTIFICATE OF INSURANCE    4

VII.

   NAMED FIDUCIARY AND ADMINISTRATION    5

VIII.

   CLAIMS PROCEDURE    7

IX.

   AMENDMENT    9

X.

   RIGHTS OF INSURER    9

XI.

   RIDERS AND SUPPLEMENTAL AGREEMENTS    9

XII.

   MISCELLANEOUS    10

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ARTICLE I

 

Purpose

 

The purpose of the Toys “R” Us, Inc. Split Dollar Plan (the “Plan”) is to
provide each eligible employee (subject to such requirements as may be
prescribed) of Toys “R” Us, Inc. (the “Company”) who participates in this Plan
(the “Participant”) assistance in obtaining and paying for life insurance
protection for his Designated Beneficiary (as defined in Article III).

 

ARTICLE II

 

Payment of Premiums and Benefit Statements

 

2.1 The Company shall pay the total amount of all premiums due under each life
insurance policy (a “Policy”) or certificate of insurance issued under any
master insurance policy (a “Certificate of Insurance” or “Certificate”)
maintained under the terms of the Plan. If any applicable Policy or Certificate
of Insurance provides for flexible premium payments such that premiums may be
varied as to the amount and timing, then the Company shall pay premiums at such
times and in such amounts as it may determine in its sole discretion. The
Company shall pay at least the minimum premium due in order to prevent any
Policy or Certificate of Insurance from lapsing or expiring.

 

2.2 The Administrative Committee (as defined in Article VII) shall provide each
Participant periodically, but at least once annually, with a benefit statement
which indicates the amount of insurance coverage maintained under any Policy or
Certificate of Insurance on the life of the Participant under the terms of the
Plan.

 

ARTICLE III

 

Policy and Certificate Ownership and Dividend Application

 

3.1 All Policies and Certificates of Insurance maintained pursuant to the terms
of the Plan shall be issued to the Company as the owner thereof. The Company
shall have and may exercise all ownership rights in any Policy or Certificate of
Insurance except as follows:

 

  (a) The Participant shall be entitled to specify in writing to the Company the
beneficiary or beneficiaries (the “Designated Beneficiary”) of that amount of
death benefit proceeds payable under any Policy or Certificate of Insurance,
maintained on a Participant’s life, which is in excess of the proceeds payable
to the Company, as provided in Article IV. Upon receipt of such written request,
the Company will promptly take such action as is necessary to evidence any such
change in the Participant’s desired beneficiary designation, which change shall
become effective as provided in the applicable Policy or Certificate of
Insurance; and

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  (b) Other than as provided in the split dollar agreement between each
Participant and the Company (an “Agreement”), the Company shall not, without the
written consent of the Participant, assign its rights in any applicable Policy
or Certificate of Insurance to anyone other than the Participant.

 

3.2 Dividends payable, if any, under a Policy or Certificate of Insurance will
be applied as provided in the application of such Policy or Certificate of
Insurance.

 

ARTICLE IV

 

Beneficiary Provisions

 

4.1 Upon the death of the Participant, the death benefit provided for in the
applicable Policy or Certificate of Insurance will be divided as follows:

 

  (a) The Company shall be entitled to receive an amount equal to the aggregate
premiums paid by it as of the date of the Participant’s death (including
premiums paid by loans charged automatically against the applicable Policy or
Certificate of Insurance), including any premiums paid for any supplemental
agreement or rider (see Article XI). In the event that the Company has paid
additional premiums attributable to a rider providing for waiver of premiums in
the event of the Participant’s disability, “premiums” as used in this Article
will not include any premiums waived pursuant to the terms of such rider.

 

  (b) The Designated Beneficiary then in effect under the applicable Policy or
Certificate of Insurance specified by the Participant, as provided in Article
III above, shall receive the balance of said death benefit remaining after (i)
payment to the Company of amounts under Section 4.1(a) hereof, if any, and (ii)
the discharge of any loans under such Policy or Certificate of Insurance,
together with unpaid interest accrued thereon and payment of any claim or claims
of any assignee or assignees against such Policy or Certificate of Insurance.
Notwithstanding the foregoing provisions of this Section 4.1(b), the Designated
Beneficiary shall not receive an amount which is in excess of five times the
Participant’s current Target Cash Compensation for the year in which the
Participant’s death occurred. “Target Cash Compensation” means the amount equal
to the sum of the Participant’s (i) annualized cash wages, (ii) target bonuses,
and (iii) target awards granted under the Toys “R” Us, Inc. Management Incentive
Compensation Plan.

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  (c) Any death benefit provided under the applicable Policy or Certificate of
Insurance which is in excess of (i) the amount payable to the Company under
Section 4.1(a), and (ii) the amount payable to the Participant’s Designated
Beneficiary, if any, under Section 4.1(b), shall be paid to the Company.

 

4.2 No Designated Beneficiary shall have any right to reimbursement or
contribution from the Participant’s estate or from the Company with respect to
the amount collected by the Company under any applicable Policy or Certificate
of Insurance.

 

4.3 Upon the death of the Participant, the Company shall take such action as may
be necessary to obtain payment from the issuing insurance company (the
“Insurer”) of the amounts payable under the applicable Policy or Certificate of
Insurance to the Designated Beneficiary, including, but not limited to,
providing the Insurer with an affidavit as to the amount to which the Designated
Beneficiary shall be entitled hereunder.

 

ARTICLE V

 

Cessation of Participation

 

5.1 A Participant shall automatically cease to participate in this Plan upon the
happening of any of the following events:

 

  (a) The Participant terminates employment with the Company for any reason,
other than Disability (as defined in Section 1.13 of the “TRU” Partnership
Employees’ Savings and Profit Sharing Plan), prior to death.

 

  (b) Express termination of the Participant’s Agreement by the Company at any
time upon ten (10) days written notice.

 

  (c) Death of the Participant, subject, however, to the provisions of Article
IV.

 

  (d) A lapse or termination of the applicable Policy or Certificate of
Insurance.

 

5.2 Subject to rules adopted by the Administrative Committee (as defined in
Article VII) or in accordance with Article VII, in the event of a termination
under Section 5.1(a) or 5.1(b), above, the Participant or his assignee may
purchase the Policy or Certificate of Insurance maintained on the life of the
Participant from the Company within thirty (30) days after said termination. The
Participant or his assignee may purchase such Policy or Certificate of Insurance
by paying the Company an amount equal to the greater of (a) the Policy’s or
Certificate’s cash value (including the cash value of any dividend additions or
dividend accumulations) without regard to any Policy or Certificate indebtedness
or the claims of any

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assignee, or (b) the aggregate of premiums paid by the Company, determined in
each case as of the date of such purchase; provided, however, that the greater
of (a) and (b) of this Section 5.2 shall then be reduced by the amount of any
applicable Policy or Certificate indebtedness (together with any interest
accrued thereon) and the amount of any claim or claims of any assignee or
assignees against any such Policy or Certificate of Insurance. If the
Participant makes an election to purchase the Policy or Certificate of Insurance
maintained on his life within said thirty (30) days, the Company shall execute
such documents as may be necessary to evidence the Participant as the sole owner
of said Policy or Certificate of Insurance.

 

5.3 If upon termination under Section 5.1(a) or 5.1(b) the Participant elects
not to purchase the Policy or Certificate of Insurance maintained on his life,
the Participant shall execute any documents required by the Insurer to transfer
or release any interest which he then owns in such Policy or Certificate of
Insurance to the Company. If the Participant fails to execute any documents
required by the Insurer to transfer or release any interest which the
Participant then owns in any such Policy or Certificate of Insurance, the
Company shall become sole owner of the Policy or Certificate of Insurance in
accordance with rules adopted by the Insurer under such Policy or Certificate of
Insurance and permissible under applicable law.

 

ARTICLE VI

 

Reorganization and Assignment of Policy or Certificate of Insurance

 

6.1 The Company shall not merge or consolidate with another Company or
organization, or permit its business activities to be taken over by any other
organization, unless and until the succeeding or continuing Company or other
organization expressly assumes the rights and obligations of the Company herein
set forth.

 

6.2 Nothing in this Plan shall preclude the Company from assigning its interest
in a Policy or Certificate of Insurance to a grantor trust which provides that
the assets of such grantor trust are subject to the claims of the Company’s
general creditors in the event of the Company’s insolvency.

 

6.3 Nothing in this Plan shall preclude the trustee of any grantor trust to
which the Company assigns its interest in a Policy or Certificate of Insurance
from exercising its powers and duties in accordance with the terms of such
grantor trust.

 

6.4 Nothing in this Plan shall preclude the Participant from assigning his
interest in a Policy or Certificate of Insurance and his rights under this Plan
or his Agreement to an insurance trust.

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ARTICLE VII

 

Named Fiduciary and Administration

 

7.1 A committee (the “Administrative Committee”) shall be established by the
Company’s Board of Directors (the “Board”) or the Management Compensation and
Stock Option Committee (the “Compensation Committee”). The Administrative
Committee shall consist of such number of members as shall be determined by the
Compensation Committee. The Administrative Committee will be the “named
fiduciary” and “plan administrator” of the Plan. The members of the
Administrative Committee shall be subject to removal by the Compensation
Committee at any time. Any member of the Administrative Committee may resign at
any time. No member of the Administrative Committee shall be entitled to act on
or decide any matter relating solely to himself or any of his rights or benefits
under the Plan. The members of the Administrative Committee shall not receive
any special compensation for serving in their capacities as members of the
Administrative Committee but shall be reimbursed for any reasonable expenses
incurred in connection therewith. Except as otherwise required by the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”), no bond or other
security shall be required of the Administrative Committee, the Compensation
Committee, or any member thereof, in any jurisdiction. Any person may serve on
the Administrative Committee, and any member of the Administrative Committee,
any subcommittee or agent to whom the Administrative Committee delegates any
authority, and any other person or group of persons, may serve in more than one
fiduciary capacity with respect to the Plan.

 

7.2 The Administrative Committee shall elect or designate its own chairman,
establish its own procedures and the time and place for its meetings, and
provide for the keeping of minutes of all meetings. A majority of the members of
the Administrative Committee shall constitute a quorum for the transaction of
business at a meeting of the Administrative Committee. Any action of the
Administrative Committee may be taken upon the affirmative vote of a majority of
the members of the Administrative Committee at a meeting or, at the direction of
its chairman, by fax or telephone, provided that all of the members of the
Administrative Committee are informed by mail or fax of their right to vote on
the proposal and of the outcome of the vote thereon.

 

7.3 As plan administrator, the Administrative Committee’s powers shall include,
but not be limited to the following:

 

  (a) operation and administration of the Plan in accordance with the terms of
the pertinent documents governing the Plan which are adopted from time to time;

 

  (b) decision of all questions concerning the Plan and the determination of
benefit eligibility and notification of such eligibility to the Insurer;

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  (c) establishment of procedures and adoption of uniform rules and regulations
as it deems necessary or appropriate for the effective administration of the
Plan;

 

  (d) hiring persons and organizations to provide legal, accounting, investment
advisory, actuarial, administrative and other services necessary to administer
the Plan;

 

  (e) issuing directions to pay any fees, taxes, charges or other costs
incidental to the operation and management of the Plan;

 

  (f) preparation and filing of all reports and returns required to be filed by
the Plan with any government agency;

 

  (g) compliance with all disclosure requirements imposed by state or Federal
law;

 

  (h) maintenance of all records of the Plan;

 

  (i) performance of all other acts required by law to be performed by the plan
administrator of the Plan; and

 

  (j) providing proper notice to the Insurer of any change of beneficiary
designation.

 

The Administrative Committee shall have, except as otherwise provided herein,
all powers necessary to carry out the provisions of the pertinent documents
governing the Plan and shall have the exclusive right to construe such documents
and to determine and resolve any question that may arise in connection with its
funding, application or administration.

 

7.4 The Administrative Committee may make use of such agents and clerical or
other personnel as it deems advisable for purposes of the Plan. The
Administrative Committee may delegate to any employee, director, agent, or to
any subcommittee or member of the Administrative Committee, its responsibility
to perform any act hereunder, including without limitation those matters
involving the exercise of discretion, provided that such delegation shall be
subject to revocation at any time. The Administrative Committee shall report to
the Compensation Committee at least annually with regard to the matters for
which it is responsible under the Plan.

 

7.5 To the maximum extent permitted by law, no member of the Administrative
Committee or Compensation Committee, nor any person to whom ministerial duties
have been delegated, shall be personally liable by reason of any contract or
other

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instrument executed by him or on his behalf in his capacity as a member of the
Administrative Committee or Compensation Committee nor for any mistake of
judgment made in good faith, and the Company shall indemnify and hold harmless,
directly from its own assets (including the proceeds of any insurance policy the
premiums of which are paid from the Company’s assets) each member of the
Administrative Committee or Compensation Committee and each other officer,
employee, or director of the Company to whom any duty or power relating to the
administration or interpretation of the Plan against any cost or expense
(including counsel fees) or liability (including any amount imposed in the form
of a money judgment, civil penalty, excise tax, or any sum paid in settlement of
a claim with the approval of the Company) arising out of any act or omission to
act in connection with the Plan unless arising out of such person’s own fraud or
bad faith. No such individual shall be liable with respect to a breach of
fiduciary duty if such a breach occurred before he became a fiduciary or after
he ceased to be a fiduciary.

 

ARTICLE VIII

 

Claims Procedure

 

The following procedures shall control the determination of benefit payments
under this Plan:

 

  (a) Filing of a Claim for Benefits

 

Any insured, Designated Beneficiary or other individual (“Claimant”) entitled to
benefits under the Plan, a Policy or Certificate of Insurance will file a
written claim request (“Claim for Benefits”) with the Administrative Committee
with respect to benefits under the Plan and with the Insurer with respect to
benefits under a Policy or Certificate of Insurance. The Administrative
Committee will, upon written request of a Claimant, make available copies of any
claim forms or instructions provided by the Insurer or advise the Claimant where
copies of such forms or instructions may be obtained.

 

  (b) Denial of Claim

 

A Claim for Benefits under the Plan will be denied if the Compensation Committee
determines that the Claimant is not entitled to receive benefits under the Plan.
Notice of a denial shall be furnished to the Claimant within a reasonable period
of time after receipt of the Claim for Benefits by the Administrative Committee.
In the case of benefits which are provided under a Policy or Certificate of
Insurance, the initial decision on the claims will be made by the Insurer.

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  (c) Content of Notice

 

The Compensation Committee shall provide to every Claimant who is denied a Claim
for Benefits written notice setting forth, in a manner calculated to be
understood by the Claimant, the following:

 

  1. The Compensation Committee’s specific reason or reasons for the denial;

 

  2. Specific reference to pertinent Plan provisions upon which the denial is
based;

 

  3. A description of any additional material or information necessary for the
Claimant to perfect the claim, and an explanation of why such material or
information is necessary; and

 

  4. An explanation of the Plan’s “Claim Review Procedure” as set forth below.

 

  (d) Claim Review Procedure

 

The purpose of the Claim Review Procedure is to provide a method by which a
Claimant may have a reasonable opportunity to appeal a denial of a Claim for
Benefits to the Compensation Committee for a full and fair review. To accomplish
that purpose, the Claimant (or his duly authorized representative):

 

  1. May require a review upon written application to the Compensation
Committee;

 

  2. May review pertinent Plan documents; and

 

  3. May submit issues and comments in writing.

 

A Claimant (or his duly authorized representative) shall request a review by
filing a written application for review with the Compensation Committee at any
time within sixty (60) days after receipt by the Claimant of written notice of
the denial of his claim.

 

  (e) Decision on Review

 

A decision on review of a denied claim shall be made in the following manner:

 

  1. The decision on review shall be made by the Compensation Committee, which
may in its discretion hold a hearing on the denied claim. Such decision shall be
made promptly, and not later than sixty (60) days after receipt of the request
for review, unless special circumstances (such as the need to hold a hearing)
require an

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     extension of time for processing, in which case a decision shall be
rendered as soon as possible, but not later than one hundred and twenty (120)
days after receipt of the request for review.

 

  2. The decision on review shall be in writing and shall include specific
reasons for the decision, written in a manner calculated to be understood by
Claimant, and specific references to the pertinent Plan provisions upon which
the decision is based.

 

ARTICLE IX

 

Amendment

 

9.1 The Board reserves the right at any time and from time to time by written
resolution to suspend or terminate the Plan or any Policy or Certificate of
Insurance, in whole or in part and for any reason, and to adopt any amendment or
modification thereto, without the consent of any Participant.

 

9.2 Any amendment or modification of the Plan which is permitted to be acted
upon by the Board may be adopted by the Administrative Committee or Compensation
Committee provided (i) such amendment or modification does not have any material
effect on the currently estimated cost of the Plan, or (ii) such amendment is
necessary to qualify or maintain the Plan.

 

ARTICLE X

 

Rights of Insurer

 

Notwithstanding any provision of this Plan to the contrary, any Insurer which
has issued a Policy or Certificate of Insurance which is subject to the
provisions of this Plan is hereby authorized to act in accordance with the terms
of such Policy or Certificate of Insurance as if this Plan did not exist, and
the payment or other performance of its contractual obligations by any such
Insurer, in accordance with the terms of any Policy or Certificate of Insurance,
shall completely discharge such Insurer from all claims, suits and demands of
all persons whatsoever.

 

ARTICLE XI

 

Riders and Supplemental Agreements

 

The Company may add to any Policy or Certificate of Insurance a rider providing
for the waiver of premiums in the event of the Participant’s disability or such
other riders or supplemental agreements which may be available from the Insurer.
Any additional premium attributable to such riders or supplemental agreements
shall be payable by the Company.

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ARTICLE XII

 

Miscellaneous

 

12.1 This Plan and all rights thereunder shall be governed by and construed in
accordance with the laws of the State of New Jersey.

 

12.2 Nothing contained in this Plan shall give any Participant the right to be
retained in the employment of the Company or restrict the right of the Company
to discharge the Participant, or restrict the right of the Participant to
terminate employment. The adoption and maintenance of this Plan shall not be
deemed to constitute a contract of employment between any Participant and the
Company.

 

12.3 If the Administrative Committee shall find that any person to whom any
amount is payable under the Plan is unable to care for his affairs because of
sickness or injury, or is a minor, or has died, then any payment due to him or
his estate (unless a prior claim therefor has been made by a duly appointed
legal representative) may, at the Administrative committee’s discretion, be paid
to his spouse, child, parent or other blood relative, a person with whom he
resides, an institution maintaining or having custody of such person, or any
other person deemed by the Administrative Committee to be a proper recipient on
behalf of such person otherwise entitled to payment. Any such payment shall be a
complete discharge of the liability of the Plan.

 

12.4 Neither the Company, the Administrative Committee nor the Compensation
Committee assumes liability or responsibility for payment of benefits, and each
Participant or other person who shall claim the right to any payment with
respect to benefits under the Plan shall be entitled to look only to the Plan
for such payment and shall not have any right, claim or demand therefor against
the Company, the Administrative Committee or the Compensation Committee, or any
member thereof, or any employee, officer or director of the Company.

 

12.5 If the Administrative Committee cannot ascertain the whereabouts of any
person to whom a payment is due under the Plan, and if, after three months from
the date such payment is due, a notice of such payment due is mailed to the last
known address of such person, as shown on the records of the Administrative
Committee or the Company, and within three months after such mailing such person
has not made written claim therefor, the Administrative Committee, if it so
elects, may direct that such payment and all remaining payments otherwise due to
such person be canceled, and upon such cancellation, the Plan shall have no
further liability therefor.

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12.6 All elections, requests, notices, instructions, and other communications
from a Participant or other person to the Administrative Committee, which are
required or permitted under the Plan, shall be in such form as is prescribed
from time to time by the Administrative Committee, shall be mailed by
first-class mail or delivered to such location as shall be specified by the
Administrative Committee, and shall be deemed to have been given and delivered
only upon actual receipt thereof by the Administrative Committee at such
location.

 

12.7 All notices, statements, reports and other communications from the
Administrative Committee to any Participant or other person which are required
or permitted under the Plan shall be deemed to have been duly given when
delivered to or when mailed by first-class mail, postage prepaid and addressed
to such Participant or other person at his address last appearing on the records
of the Company.

 

12.8 No term, condition or provision of the Plan shall be deemed to have been
waived, and there shall be no estoppel against the enforcement of any provision
of the Plan, except by written instrument of the party charged with such waiver
or estoppel. No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only as to the
specific term or condition waived and shall not constitute a waiver of such term
or condition for the future or as to any act other than that specifically
waived.

 

12.9 In the event the provisions of this Plan conflict with the terms of any
contract with an Insurer, the terms of such contract shall govern.

 

12.10 Whenever used in the Plan, the masculine gender includes the feminine.

 

12.11 The captions preceding the Articles of the Plan have been inserted solely
as a matter of convenience and do not define, modify or limit the scope or
intent of any provisions of the Plan.

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AMENDMENT TO

TOYS “R” US, INC.

SPLIT DOLLAR PLAN

 

WHEREAS, Toys “R” Us, Inc. adopted the Toys “R” Us, Inc. Split Dollar Plan
effective as of February 1, 1996; and

 

WHEREAS, Toys “R” Us, Inc. has established the Split Dollar Plan to provide
death benefit coverage to management and highly compensated employees covered
under the Toys “R” Us Supplemental Executive Retirement Plan.

 

NOW, THEREFORE, the Split Dollar Plan is amended effective as of November 5,
2003 as follows:

 

The next to last sentence of Section 4.1 (b) of the S.D.P shall be deleted and
replaced with the following:

 

“(b) Notwithstanding the foregoing provisions of this Section 4.1(b), the
Designated Beneficiary shall not receive an amount that exceeds the greater of
(i) the amount, if any, allocated to the Participant’s Account under the Toys
“R” Us, Inc. Supplemental Executive Retirement Plan (“SERP”) immediately prior
to the Participant’s death, provided the Participant was employed by the Company
or an affiliate that had adopted the SERP at that time, or (ii) five times the
Participant’s current Target Cash Compensation for the year in which the
Participant’s death occurred.”

 

IN WITNESS WHEREOF, this amendment has been adopted on December 2, 2003.

 

Toys “R” Us, Inc.

BY:

 

/s/ Deborah Derby

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ITS:

 

Executive Vice President –

   

Human Resources