EXECUTION COPY















                           RETENTION AGREEMENT

                               BETWEEN

                           TOYS "R" US, INC.

                                 AND

                           BRUCE W. KRYSIAK

                             DATED AS OF

                           FEBRUARY 12, 1998























                                <PAGE>


                            TOYS "R" US, INC.
                           RETENTION AGREEMENT

          AGREEMENT (this "Agreement"), by and between Toys "R" Us, 
Inc., a Delaware corporation (the "Company"), and BRUCE W. KRYSIAK (the 
"Executive"), dated as of February 12, 1998.  Capitalized terms used in 
this Agreement and in Exhibit A hereto that are not defined in the 
operative provisions shall have the meanings ascribed to them on Exhibit 
B hereto.

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

          2   Terms of Employment.  (a)  Position.  (i)  Commencing on 
the date hereof , the Executive shall be President and Chief Operating 
Officer of Toys "R" Us, Inc. and President - U.S. Toy Stores  Division.  
The Executive shall be elected to the Board of Directors immediately 
following the first Board Meeting following the Executive's start date.  
The Executive shall be based in Northeastern New Jersey.

                        (ii)   During the Employment Period, and 
excluding any periods of vacation and sick leave to which the Executive 
is entitled, the Executive agrees to devote full time during normal 
business hours to the business and affairs of the Company and to use the 
Executive's best efforts to perform faithfully and efficiently such 
responsibilities.  During the Employment Period, the Executive may, so 
long as such activities do not interfere with the performance of the 
Executive's responsibilities as an employee of the Company in accordance 
with this Agreement, continue the corporate directorships on which the 
Executive serves, if any, as of the date hereof and such other corporate 
directorships as are consented to by the Chief Executive Officer.  It is 
expressly understood and agreed that to the extent that any such 
activities have been conducted by the Executive with the knowledge of 
the Company prior to a Change of Control, the continued conduct of such 
activities (or the conduct of activities similar in nature and scope 
thereto) subsequent to a Change of Control shall not thereafter be 
deemed to violate this Agreement.

                  (b)   Compensation.  

                        (i)   Base Salary.  During the Employment 
Period, the Executive shall receive the Executive's Annual Base Salary 



                                <PAGE>


which will be paid in accordance with the Company's regular payroll 
policies as in effect from time to time.

                        (ii)   Incentive Bonus.  The Executive shall 
also be eligible, for each fiscal year ending during the Employment 
Period, to receive an annual incentive bonus with a target of 100% of 
Annual Base Salary and long-term incentive awards of 468,700 units for 
the cycle ending January 1999 and 664,000 units for the cycle ending 
January 2000 pursuant to the Company's incentive Plans and subject to 
the terms thereof and thereafter at a level commensurate with such 
grants and the Executive's position.  Each such incentive bonus shall be 
paid in accordance with the Company's incentive Plans. 

                        (iii)   Participation in Other Plans.  During 
the Employment Period, the Executive shall be eligible to participate in 
all other Plans at a level commensurate with the Executive's position.

                        (iv)   Stock Units.  As further inducement for 
the Executive to enter into this Agreement and to continue in the employ 
of the Company, the Company has granted to the Executive  stock units 
pursuant to the  Stock Unit Agreement executed and delivered by the 
Company on the date hereof.

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

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

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

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




                                <PAGE>


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

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

                       (ii)   the Company shall pay to the Executive in 
equal installments, made at least monthly, over the twenty-four months 
following the Date of Termination an aggregate amount equal to (1) two 
times the Executive's Annual Base Salary in effect on the Date of 
Termination, (2) two times the targeted amount of the annual incentive 
bonus that would have been paid to the Executive with respect to the 
Company's fiscal year in which such Date of Termination occurs and (3) 
two times the targeted amount of the long-term incentive award that 
would have been paid to the Executive with respect to such fiscal year;

                      (iii)   the Company shall continue to provide, in 
the manner and timing provided for in the Plans (other than provided in 
clauses (I), (ii), (iv) and (v)), the benefits provided under the Plans 
that the Executive would receive on an after-tax basis if the 
Executive's employment had continued for two years after the Date of 
Termination assuming for this purpose that the Executive's compensation 
is the amount paid pursuant to clause (ii) above, and the Executive 
shall be fully vested in any account balance and all other benefits 
under such Plans; provided, however that the benefits provided under 
this clause (iii) shall be limited to the amounts permitted by law or as 
would otherwise not potentially adversely impact on the tax 
qualification of any Plans; provided, further, that if such benefits may 
not be continued under the Plans, the Company shall pay to the Executive 
an amount equal to the Company's cost had such benefits been continued.

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


                                <PAGE>


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

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

                  (e)   Cause.  If the Executive's employment shall be 
terminated for Cause during the Employment Period or if the Executive 
voluntarily terminates employment during the Employment Period, 
excluding a termination for Good Reason, death, Disability or 
Retirement, the Employment Period shall terminate without further 


                                <PAGE>


obligations to the Executive other than the obligation to pay to the 
Executive all payments and benefits due, in accordance with the 
Company's Plans through the Date of Termination.  

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

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

          7.   Compensation and Benefits Following Change of Control. 

                 (a)   Notwithstanding any provision of this Agreement 
or any Plan, in no event shall any benefits, individually or in the 
aggregate, to which the Executive would be entitled be less favorable 
for the two years following a Change of Control than the Executive would 
have been entitled based upon the most favorable of the Company's Plans 
in effect for the Executive at any time during the 120-day period 
immediately preceding such Change of Control.

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

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




                                <PAGE>


          9.   Full Settlement; Legal Fees.  

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

                 (b)   Expenses of Contests.  

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

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

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

          10.   Certain Additional Payments by the Company.   Anything 
in this Agreement to the contrary notwithstanding, in the event that any 
actual or constructive payment or distribution by the Company to or for 


                                <PAGE>


the benefit of the Executive (whether paid or payable or distributed or 
distributable pursuant to the terms of this Agreement or otherwise) is 
subject to the excise tax imposed by Section 4999 of the Code or any 
successive Section of the Code (the "Excise Tax"), then the Company 
shall make the payments described on Exhibit C hereto.

          11.   Restrictions and Obligations of the Executive. 

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

                 (b)   Confidentiality.  The confidential and 
proprietary information and in any material respect trade secrets of the 
Company are among its most valuable assets, including but not limited 
to, its customer and vendor lists, database, computer programs, 
frameworks, models, its marketing programs, its sales, financial, 
marketing, training and technical information, and any other 
information, whether communicated orally, electronically, in writing or 
in other tangible forms concerning how the Company creates, develops, 
acquires or maintains its products and marketing plans, targets its 
potential customers and operates its retail and other businesses.  The 
Company has invested, and continues to invest, considerable amounts of 
time and money in obtaining and developing the goodwill of its 
customers, its other external relationships, its data systems and data 
bases, and all the information described above (hereinafter collectively 
referred to as "Confidential Information"), and any misappropriation or 
unauthorized disclosure of Confidential Information in any form would 
irreparably harm the Company.  The Executive shall hold in a fiduciary 
capacity for the benefit of the Company all Confidential Information 
relating to the Company and its business, which shall which shall have 
been obtained by the Executive during the Executive's employment by the 
Company and which shall not be or become public knowledge (other than by 
acts by the Executive or representatives of the Executive in violation 
of this Agreement).  After termination of the Executive's employment 
with the Company, the Executive shall not, without the prior written 
consent of the Company or as may otherwise be required by law or legal 
process, communicate, divulge or use any such information, knowledge or 
data to anyone other than the Company and those designated by it.  

               (c)   Non-Solicitation or Hire.  During the Employment 
Period and for a two-year period following the termination of the 
Executive's employment for any reason, the Executive shall not, directly 
or indirectly (i) employ or seek to employ any person who is at the Date 


                                <PAGE>


of Termination, or was at any time within the six-month period preceding 
the Date of Termination, an officer, general manager or director or 
equivalent or more senior level employee of the Company or any of its 
subsidiaries or otherwise solicit, encourage, cause or induce any such 
employee of the Company or any of its subsidiaries to terminate such 
employee's employment with the Company or such subsidiary for the 
employment of another company (including for this purpose the 
contracting with any person who was an independent contractor (excluding 
consultant) of the Company  during such period) or  (ii) take any action 
that would interfere with the relationship of the Company or its 
subsidiaries with their suppliers and franchisees without, in either 
case, the prior written consent of the Company's Board of Directors, or 
engage in any other action or business that would have a material 
adverse effect on the Company.

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

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

                       (y)   organize, establish, operate, own, manage, 
      control or have a direct or indirect investment or ownership 
      interest in a Restricted Business or in any corporation, 
      partnership (limited or general), limited liability company 
      enterprise or other business entity that engages in a Restricted 
      Business anywhere in the  Area; and

                       (ii)   During the Consulting Period, the 
Executive shall 

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

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

                         (iii)   Section 11(d) shall not bind the 
Executive during any period following the termination of the Executive's 




                                <PAGE>


employment if there has been a Change of Control irrespective of whether 
the Change of Control occurs before or after the Date of Termination.  

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

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

                        (i)   "Restricted Business" means the retail 
store or mail order business or any business, in each case if it is 
involved in the manufacture or marketing of toys, juvenile or baby 
products, juvenile furniture or children's clothing or any other 
business in which the Company may be engaged on the Date of Termination.

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

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

          12.   Successors.  (a)  This Agreement is personal to the 
Executive and without the prior written consent of the Company shall not 


                                <PAGE>


be assignable by the Executive otherwise than by will or the laws of 
descent and distribution.  This Agreement shall inure to the benefit of 
and be enforceable by the Executive's legal representatives.

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

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

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

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

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

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

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

                         (ii)   If to the Company, to it at Toys "R" Us, 
Inc., 461 From Road, Paramus, New Jersey 07652, Attention: Senior Vice 
President - Human Resources;

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

                (e)   Assistance to Company.  At all times during and 
after the Employment Period and at the Company's expense for significant 
out-of-pocket expenses actually and reasonably incurred by the Executive 
in connection therewith, the Executive shall provide reasonable 


                                <PAGE>


assistance to the Company in the collection of information and documents 
and shall make the Executive available when reasonably requested by the 
Company in connection with claims or actions brought by or against third 
parties or investigations by governmental agencies based upon events or 
circumstances concerning the Executive's duties, responsibilities and 
authority during the Employment Period.

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

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

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

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




                                <PAGE>



                  (j)   Resignation.  Without limiting the obligations 
of the Executive, or the rights of the Company, in connection with, or 
relating to, this Agreement, the Executive agrees that in order for the 
Executive to resign his employment with the Company or any of its 
Subsidiaries, the Executive shall provide the Company with six (6) 
months notice of resignation prior to the effective date of such 
resignation.

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

                                     BRUCE W. KRYSIAK


                                     /s/ Bruce W. Krysiak


                                     TOYS "R" US, INC.


                                     By:  /s/ Robert C. Nakasone
                                          Name: Robert C. Nakasone
                                          Title: Chief Executive Officer





























                                <PAGE>




                               EXHIBIT A
                    SEPARATION AND RELEASE AGREEMENT


           This Separation and Release Agreement ("Agreement") is 
entered into as of this __ day of _____________________________, 19__, 
between TOYS "R" US, INC. and any successor thereto (collectively, the 
"Company") and BRUCE W. KRYSIAK (the "Executive").

          The Executive and the Company agree as follows:

          1.   The employment relationship between the Executive and the 
Company terminated on __________________________________ (the 
"Termination Date").

          2.   In accordance with the Executive's Retention Agreement, 
the Company has agreed to pay the Executive certain payments and to make 
certain benefits available after the Termination Date.

          3.   In consideration of the above, the sufficiency of which 
the Executive hereby acknowledges, the Executive, on behalf of the 
Executive and the Executive's heirs, executors and assigns, hereby 
releases and forever discharges the Company and its members, parents, 
affiliates, subsidiaries, divisions, any and all current and former 
directors, officers, employees, agents, and contractors and their heirs 
and assigns, and any and all employee pension benefit or welfare benefit 
plans of the Company, including current and former trustees and 
administrators of such employee pension benefit and welfare benefit 
plans, from all claims, charges, or demands, in law or in equity, 
whether known or unknown, which may have existed or which may now exist 
from the beginning of time to the date of this letter agreement, 
including, without limitation, any claims the Executive may have arising 
from or relating to the Executive's employment or termination from 
employment with the Company, including a release of any rights or claims 
the Executive may have under Title VII of the Civil Rights Act of 1964, 
as amended, and the Civil Rights Act of 1991 (which prohibit 
discrimination in employment based upon race, color, sex, religion, and 
national origin); the Americans with Disabilities Act of 1990, as 
amended, and the Rehabilitation Act of 1973 (which prohibit 
discrimination based upon disability); the Family and Medical Leave Act 
of 1993 (which prohibits discrimination based on requesting or taking a 
family or medical leave); Section 1981 of the Civil Rights Act of 1866 
(which prohibits discrimination based upon race); Section 1985(3) of the 
Civil Rights Act of 1871 (which prohibits conspiracies to discriminate); 
the Employee Retirement Income Security Act of 1974, as amended (which 
prohibits discrimination with regard to benefits); any other federal, 
state or local laws against discrimination; or any other federal, state, 
or local statute, or common law relating to employment, wages, hours, or 
any other terms and conditions of employment.  This includes a release 


                                <PAGE>


by the Executive of any claims for wrongful discharge, breach of 
contract, torts or any other claims in any way related to the 
Executive's employment with or resignation or termination from the 
Company.  This release also includes a release of any claims for age 
discrimination under the Age Discrimination in Employment Act, as 
amended ("ADEA").  The ADEA requires that the Executive be advised to 
consult with an attorney before the Executive waives any claim under 
ADEA.  In addition, the ADEA provides the Executive with at least 21 
days to decide whether to waive claims under ADEA and seven days after 
the Executive signs the Agreement to revoke that waiver.  This release 
does not release the Company from any obligations due to the Executive 
under Section 4, 7(b), 9(b) or 10 of the Executive's Employment 
Agreement, the Executive's Indemnification Agreement with the Company or 
under this Agreement.

          Additionally, the Company agrees to discharge and release the 
Executive and the Executive's heirs from any claims, demands, and/or 
causes of action whatsoever, presently known or unknown, that are based 
upon facts occurring prior to the date of this Agreement, including, but 
not limited to, any claim, matter or action related to the Executive's 
employment and/or affiliation with, or termination and separation from 
the Company; provided that such release shall not release the Executive 
from any loan or advance by the Company or any of its subsidiaries, any 
act that would constitute "Cause" under the Executive's Employment 
Agreement or a breach under Section 9(b) or 11 of the Executive's 
Employment Agreement.

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

          5.   The Executive waives any right to reinstatement or future 
employment with the Company following the Executive's separation from 
the Company on the Termination Date.

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

          7.   The Executive shall continue to be bound by Sections 11 
of the Executive's Retention Agreement.

          8.   The Executive shall promptly return all the Company 
property in the Executive's possession, including, but not limited to, 
the Company keys, credit cards, cellular phones, computer equipment, 
software and peripherals and originals or copies of books, records, or 




                                <PAGE>


other information pertaining to the Company business.  The Executive 
shall return any leased or Company car at the expiration of the 
Consulting Period (as defined in the Executive's Employment Agreement).

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

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

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

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

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

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


                                     TOYS "R" US, INC.

                                     By:  ___________________________
                                          Name:
                                          Title:

                                     BRUCE W. KRYSIAK
                                     _______________________________
                                <PAGE>



                               EXHIBIT B


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

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

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

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

          For purposes of this provision, no act or failure to act, on 
the part of the Executive, shall be considered "willful" unless it is 
done, or omitted to be done, by the Executive in bad faith or without 
reasonable belief that the Executive's action or omission was in the 
best interests of the Company.  Any act, or failure to act, based upon 
authority given pursuant to a resolution duly adopted by the Board or 
based upon the advice of regular outside counsel for the Company shall 
be conclusively presumed to be done, or omitted to be done, by the 
Executive in good faith and in the best interests of the Company.  The 
cessation of employment of the Executive shall not be deemed to be for 
Cause unless and until there shall have been delivered to the Executive 
a copy of a resolution duly adopted by the affirmative vote of a 
majority of the entire membership of the Board at a meeting of the Board 



                                <PAGE>


called and held for such purpose (after reasonable notice is provided to 
the Executive and the Executive is given an opportunity, together with 
counsel, to be heard before the Board), finding that, in the good faith 
opinion of the Board, the Executive is guilty of the conduct described, 
and specifying the particulars thereof in detail.

          "Change of Control" - See Exhibit C.

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

          "Date of Termination" means (i) if the Executive's employment 
is terminated by the Company for Cause, or by the Executive for Good 
Reason, the date of receipt of the Notice of Termination or any later 
date specified therein, as the case may be (although such Date of 
Termination shall retroactively cease to apply if the circumstances 
providing the basis of termination for Cause or Good Reason are cured in 
accordance with the Agreement), (ii) if the Executive's employment is 
terminated by the Company other than for Cause, the Date of Termination 
shall be the date so designated by the Company in its notification to 
the Executive of such termination, (iii) if the Executive's employment 
is terminated by reason of death or Disability, the Date of Termination 
shall be the date of death of the Executive or the effective date of the 
Disability, as the case may be, and (iv) the last day of the Employment 
Period during which the Company shall have given notice to the Executive 
that the Employment Period shall not be extended.

          "Disability" means the determination that the Executive is 
disabled pursuant to the terms of the TRU Partnership Employees' Savings 
and Profit Sharing Plan, as amended and restated as of October 1, 1993, 
as the same may be amended from time to time.

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

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

                  (ii)   any failure by the Company to comply in any 
material respect with any of the provisions of the Agreement, other than 



                                <PAGE>


failure not occurring in bad faith and that is remedied by the Company 
within a reasonable time after receipt of notice thereof given by the 
Executive;

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

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

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

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

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























                                <PAGE>



                               EXHIBIT C
                  CHANGE OF CONTROL AND TAX GROSS-UP


          I.   Certain Definitions

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

                 (a)   The acquisition by any individual, entity or 
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the 
Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a 
"Person") of beneficial ownership (within the meaning of Rule 13d-3 
promulgated under the Exchange Act) of 25% or more of either (i) the 
then outstanding shares of common stock of the Company (the "Outstanding 
Company Common Stock") or (ii) the combined voting power of the then 
outstanding voting securities of the Company entitled to vote generally 
in the election of directors (the "Outstanding Company Voting 
Securities"); provided, however, that for purposes of this subsection 
(a), the following acquisitions shall not constitute a Change of 
Control:   (i) any acquisition by the Company or any of its 
subsidiaries,  (ii) any acquisition by any employee benefit plan (or 
related trust) sponsored or maintained by the Company or any subsidiary 
of the Company, (iii) any acquisition by any Person pursuant to a 
transaction that complies with clauses (i), (ii) and (iii) of subsection 
(c) below, or (iv) any acquisition by any entity in which the Executive 
has a material direct or indirect equity interest; or

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

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

                        (i)   all or substantially all of the 
individuals and entities who were the beneficial owners, respectively, 
of the  Outstanding Company Common Stock and Outstanding Company Voting 
Securities immediately prior to such Business Combination beneficially 
own, directly or indirectly, more than 60% of, respectively, the then 


                                <PAGE>


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

                         (ii)   no Person (excluding (A) any employee 
benefit plan (or related trust) sponsored or maintained by the Company 
or any subsidiary of the Company, or such corporation resulting from 
such Business Combination or any Affiliate of such corporation, or (B) 
any entity in which the Executive has a material equity interest, or any 
"Affiliate" (as defined in Rule 405 under the Securities Act of 1933, as 
amended) of such entity) beneficially owns, directly or indirectly, 25% 
or more of, respectively, the then outstanding shares of common stock of 
the corporation resulting from such Business Combination, or the 
combined voting power of the then outstanding voting securities of such 
corporation except to the extent that such ownership existed prior to 
the Business Combination, and 

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

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

            II.   Tax Gross-Up

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


                                <PAGE>


available in respect of any such tax (e.g., if state and local taxes are 
deductible for Federal income tax purposes in the relevant period, it 
shall be assumed that such taxes offset income that would otherwise be 
subject to Federal income tax at the highest marginal statutory rate in 
effect for such period).  

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

                   (c)   The Executive shall notify the Company as soon 
as practicable in writing of any claim by the Internal Revenue Service 
that, if successful, would require any Gross-up or indemnity payment.  
The Executive shall not pay such claim prior to the expiration of the 
30-day period following the date on which it gives such notice to the 
Company.  If the Company notifies the Executive in writing prior to the 
expiration of such period that it desires to contest such claim, the 
Executive shall take all actions necessary to permit the Company to 
control all proceedings taken in connection with such contest.  In that 
connection, the Company may, at its sole option, pursue or forgo any and 
all administrative appeals, proceedings, hearings and conferences in 
respect of such claim and may, at its sole option, either direct the 
Executive to pay the tax claimed and sue for a refund or contest the 
claim in any permissible manner; provided, however, that the Company 
shall pay and indemnify the Executive from and against all costs and 
expenses incurred in connection with such contest; provided further, 
however, that if the Company directs the Executive to pay such claim and 
sue for a refund, the Company shall advance the amount of such payment 
to the Executive on an interest-free basis and at no net after-tax cost 
to the Executive.  If the Executive becomes entitled to receive any 
refund or credit with respect to such claim (or would be entitled to a 
refund or credit but for a counterclaim for taxes not indemnified 
hereunder), the Executive shall promptly pay to the Company the amount 
of such refund (together with any interest paid or credited thereon) 
plus the amount of any tax benefit available to the Executive as a 
result of making such payment (any such benefit calculated based on the 
assumption that any deduction available to the Executive offsets income 
that would otherwise be taxed at the highest marginal statutory rates of 
Federal, state and local income tax for the relevant periods).










                                <PAGE>



                               ANNEX A

                         STOCK UNIT AGREEMENT

          STOCK UNIT AGREEMENT, dated as of  February 12th, 1998 (the 
"Unit Agreement"), between TOYS "R" US, INC., a Delaware corporation 
(the "Company"), and BRUCE W. KRYSIAK (the "Executive").


                         W I T N E S S E T H:

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

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

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

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

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

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

          2.    Stock Unit Grant.  Subject to the terms and conditions 
set forth in this Unit Agreement and in Section 10 of the Plan, the 
Executive is hereby granted 200,000 Stock Units.  Each Stock Unit 
represents the right to receive one share of Common Stock (collectively, 
the shares of Common Stock underlying the  Stock Units, the "Shares").

          3.   Forfeiture Conditions.  The  Stock Units granted to the 
Executive hereunder shall be forfeited in their entirety, subject to the 
terms of the Retention Agreement, if:

                  (i) the Executive's employment with the Company 
terminates prior to the fifth anniversary of the date hereof ; or


                                <PAGE>



                  (ii) the Performance Objective set forth on Exhibit A 
hereto is not achieved.

          4.   Payment of  Stock Units.  As soon as practicable 
following the fifth anniversary of the date hereof, the Committee shall 
determine whether the Performance Objective set forth on Exhibit A has 
been achieved.  If the Committee determines that such Objective has been 
achieved, as oon as reasonably practicable thereafter, Executive's 
Restricteed Stock Units, to the extent that such  Stock Units have not 
been forfeited pursuant to Section 3 hereof, shall be converted into an 
equivalent number of shares of Common Stock, which shall be delivered to 
the Executive entirely in the form of Common Stock unless the Executive 
has elected to defer receipt of such Shares in accordance with the terms 
and conditions of any deferred compensation program maintained by the 
Company.  

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

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

          7.   Severability.  If any provision of this Unit Agreement 
shall be held illegal or invalid for any reason, such illegality or 
invalidity shall not affect the remaining parts of this Unit Agreement, 
and this Unit Agreement shall be construed and enforced as if the 
illegal or invalid provision had not been included. 

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



                                <PAGE>



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

          10.   Notices.  All notices hereunder shall be sufficiently 
made if pesonally delivered to the Executive or sent by regular mail or 
telecopier addressed (a) to the Executive at the Executive's address as 
set forth in the books and records of the Company or any subsidiary, or 
(b) to the Company or the Committee at the principal office of the 
Company clearly marked "Attention: Management Compensation and Stock 
Option Committee."

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





































                                <PAGE>


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

                               TOYS "R" US, INC.


                               By:    /s/ Robert C. Nakasone
                               Title: Chief Executive Officer


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



                                /s/ Bruce W. Krysiak
                                BRUCE W. KRYSIAK


































                                <PAGE>