EXHIBIT 10X

                              SEPARATION AGREEMENT

      THIS SEPARATION AGREEMENT (this "Agreement"),  dated as of March 25, 1999,
is by and between TOYS "R" US, INC., a Delaware corporation (the "Company"), and
BRUCE W. KRYSIAK (the "Executive").

                                    RECITALS

      WHEREAS,  pursuant to a Retention  Agreement dated as of February 12, 1998
between the Company and the Executive (the "Retention Agreement"),  Executive is
a Director of the Company and is employed by the Company as President  and Chief
Operating Officer ("COO"), and as President - U.S. Toy Stores Division; and

      WHEREAS,  pursuant to a Stock Unit Agreement dated as of February 12, 1998
between the Company and the Executive (the "Stock Unit Agreement"),  on February
12, 1998, the Company granted Executive 200,000 Stock Units (the "Stock Units");
and

      WHEREAS,  pursuant  to the  Company's  1994 Stock  Option and  Performance
Incentive  Plan (the  "Plan"),  on May 4, 1998,  the Company  granted  Executive
options to acquire 300,000 shares of common stock (the "Initial  Grant") and, on
September 8, 1998,  the Company  granted  Executive  options to acquire  600,000
shares of common stock (the "September Grant"); and

      WHEREAS,  Executive  desires to resign his employment with the Company and
his position as President and COO and all other  director,  officer and employee
positions,  if any, held by Executive in the Company and any of its subsidiaries
effective as of March 26, 1999 (the "Termination Date"); and

      WHEREAS,  the  parties  desire to set forth  their  respective  rights and
obligations in respect of Executive's resignation from the above positions;

      NOW, THEREFORE, in consideration of the covenants and conditions set forth
herein and for other good and valuable  consideration,  the receipt and adequacy
of which are hereby  acknowledged,  the parties,  intending to be legally bound,
agree as follows:

                                    AGREEMENT

      1. Resignation.

      (a) Effective as of the Termination  Date,  Executive will resign from his
positions as a Director and President and COO, and all other  director,  officer
and employee positions,  if any, held by Executive in the Company and any of its
subsidiaries.  It is agreed by the parties  that,  on and as of the  Termination
Date,  all rights and  obligations  of Executive and the Company with respect to
such employment shall  terminate. 

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      (b) On the  Termination  Date,  Executive  will  deliver to the  Company a
letter of  resignation  in the form of  Exhibit A hereto  and a  certificate  of
release in the form of Exhibit B hereto.

      2.  Benefits.  In  consideration  of the  agreements of Executive  herein,
Executive will be entitled to the benefits set forth in this Section 2.

      (a) Salary.  From the Termination  Date through the Second  Anniversary of
the  Termination  Date  and  regardless  of  whether   Executive  obtains  other
employment,  the Company will pay Executive $800,000 per year, such amount to be
payable in accordance with the Company's  regular payroll  policies as in effect
from time to time.  All  payments to  Executive  under this Section 2(a) will be
less applicable  withholdings for federal, state and local taxes. 

      (b) Relocation Expenses.  If, during the two year period commencing on the
Termination  Date and regardless of whether  Executive  obtains other employment
during such period,  the  Executive  relocates  his family to an area other than
Northeastern  New Jersey,  the Company  will  purchase at fair market  value the
house currently being constructed for Executive in Ridgewood, NJ, subject to the
terms of the  Company's  relocation  policy as from  time to time in effect  and
provided that the Executive has taken possession of such house.

      (c) Health Benefits.  From the Termination Date until the earlier to occur
of (i) the Second Anniversary of the Termination Date or (ii) the date Executive
commences employment with another employer, the Company will permit Executive to
continue to  participate  in the medical,  prescription,  dental and  disability
plans maintained by the Company from time to time at a level  commensurate  with
the level at which senior executives of the Company participate.

      (d) Stock Units. Executive hereby forfeits all of the Stock Units in their
entirety, except that on the second anniversary of the Termination Date, subject
to the  achievement of the  performance  objective set forth on Exhibit A to the
Stock Unit Agreement, 40,000 of such units shall be converted into an equivalent
number of shares of common stock of the Company, which shares shall be delivered
to the Executive on the second  anniversary of the Termination  Date.  Except as
modified by the preceding  sentence,  the Stock Unit Agreement shall continue in
full force and effect.

      (e) Stock Options.  All Stock Options  granted to Executive as part of the
Initial Grant and the September  Grant are hereby  canceled,  except that of the
300,000  options  granted in the Initial  Grant,  Executive  shall retain 60,000
options and of the 600,000  options  granted in the September  Grant,  Executive
shall retain 120,000 options.  All stock options retained by Executive  pursuant
to this  paragraph (e) shall be subject to the terms and  conditions  (including
vesting requirements) of the original grants.

      (f) Life Insurance.  From the Termination  Date until the earlier to occur
of (i) the Second Anniversary of the Termination Date or (ii) the date Executive
commences employment with another employer, the Company will permit Executive to
continue to  participate  in the Company's  basic life  insurance and accidental
death  and  dismemberment  


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<PAGE>

policy  for a benefit  equal to two times the  annual  payment to be made by the
Company pursuant to Section 2(a) of this Agreement.

      (g)  Automobile.  Executive  will retain use of the  automobile  currently
leased  for him by the  Company  until the end of the term of the lease for such
automobile (i.e., February 28, 2001). (h) Executive  acknowledges that he is not
entitled to receive  benefits  from the Company  other than as set forth in this
Section 2, except for any benefits afforded  Executive by applicable law. (i) No
payments  shall be made  under  this  Section  2 until  this  Agreement  becomes
effective pursuant to Sections 20 and 24 hereof.

      3. Termination of All Existing  Agreements.  All rights and obligations of
the Company and the Executive  under any  employment  agreement,  arrangement or
understanding  and any other agreement between the Company and the Executive are
hereby canceled and terminated as of the Termination  Date without  liability of
any party  hereunder,  except that this Agreement,  the Stock Unit Agreement (as
modified by Section 2(d) above) and the Partnership  Option  Agreements dated as
of September 8, 1998 and May 4, 1998 between the Company and Executive  (each as
modified by Section 2(e) above) shall continue in full force and effect.

      4. No Solicitation of Executives or Customers. Executive hereby represents
and  warrants  that  during  the six  month  period  preceding  the date of this
Agreement he has not (i)  solicited  any customers of the Company or induced any
customer of the Company to enter into a business  relationship with Executive or
any other person or (ii) solicited for employment or induced any person employed
by the Company to terminate employment. During the two year period commencing on
the  Termination  Date, the Executive  shall not,  directly or  indirectly,  (i)
employ or seek to employ any person who is as of the Termination Date, or was at
any time during the six month period preceding the Termination Date, 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.

      5. Non-competition and Consulting.

      (a) During the two year period  commencing on tshe  Termination  Date (the
"Consulting Period"), the Executive shall not, directly or indirectly:

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


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      (y) organize,  establish, operate, own, manage or 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 Restricted Area.

      (b) 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  Company's  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 5(a).

      (c) Nothing in this  Section 5 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 the  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.

      (d) For purposes of this Section 5,  "Restricted  Business" shall mean the
retail store or mail order  business or internet  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 Termination  Date.  "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 Termination Date.

      6.  Retained  Property.  Subject  to  Section  2(g),  no  later  than  the
Termination  Date,  Executive  shall  return all  property of the Company in his
possession,  including,  but not limited to, credit  cards,  security key cards,
telephone  cards,  car service  cards,  computer  software or hardware,  Company
identification cards, Company records and copies of records,  correspondence and
copies of  correspondence  and other  books or  manuals  issued by the  Company.
Executive  also  warrants  that he has no debts to or  loans  from the  Company.
Notwithstanding  the  foregoing,  Executive  shall  have the right to retain (i)
duplicate  photocopies  of books and  records  of the  Company  that do not fall
within the category of  "Confidential  Information"  (as defined below) and (ii)
all personal property of the Executive located on the premises of the Company.

      7. Confidentiality. Executive acknowledges that he has had and through the
Termination  Date will continue to have access to  Confidential  Information (as
hereinafter  defined)  of  the  Company.   Executive  agrees  not  to  disclose,
communicate  or divulge  to, or use for the direct or  indirect  benefit of, any
person (including Executive),  firm, association or other 


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entity (other than the Company or its affiliates) any Confidential  Information.
"Confidential  Information" includes, but is not limited to, customer and vendor
lists,  database,  computer programs,  frameworks,  models,  marketing programs,
sales,  financial,  marketing,  training  and  technical  information,  business
methods,  business  policies,  procedures,  techniques,  research or development
projects or results, trade secrets (which Executive agrees include the Company's
customer and prospective  customer  lists),  pricing  policies,  business plans,
computer software, intellectual property, information 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,
and any other information not otherwise  available to the general public. If any
person (including any government employee) requests the disclosure or release of
Confidential  Information,  Executive  shall (i) promptly  notify the Company of
such  request so that the Company may pursue any  available  remedies to prevent
the disclosure or release of such Confidential  Information and (ii) furnish the
Company  a copy  of  all  written  materials  pertaining  to  such  request  for
Confidential Information as the Company shall deem appropriate.

      8. No  Inducements.  Executive  warrants  that he is  entering  into  this
Agreement  voluntarily,  and that,  except as set forth  herein,  no promises or
inducements  for this  Agreement  have been made,  and he is entering  into this
Agreement  without reliance upon any statement or  representation  by any of the
Company and its affiliates,  and its and their present and former  stockholders,
directors, officers, employees, agents, attorneys, successors and assigns or any
other person, concerning any fact material hereto.

      9. Entire  Agreement.  This  Agreement  constitutes  the entire  agreement
between the parties with respect to the subject  matter  hereof,  and supersedes
any and all prior agreements or  understandings  between the parties arising out
of or relating to the  Executive's  employment and the cessation  thereof.  This
Agreement may only be changed by written agreement executed by the parties.

      10.  Governing  Law. This  Agreement  shall be governed by the laws of the
State of New Jersey,  without  giving effect to the conflicts of law  principles
thereof.

      11. Representations and Warranties.  Each party represents and warrants to
the other party that (i) the execution  and delivery of this  Agreement has been
duly  authorized  and  all  actions  necessary  for the  due  execution  of this
Agreement have been taken, (ii) this Agreement  constitutes the legal, valid and
binding  obligation of the party, and (iii) this Agreement has been executed and
delivered  as its own free act and deed and not as the  result  of duress by the
other party hereto. Executive specifically acknowledges that he has been advised
to  consult  legal  counsel  prior to  executing  this  Agreement,  and has been
afforded the opportunity of at least 21 days to consider this Agreement.

      12. Non-Disparagement. Executive covenants and agrees not to engage in any
act or say anything 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 agrees that it will engage in
no act which is intended,  or may reasonably be expected to harm the reputation,
business or prospects of Executive.


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      13. Public  Announcement.  Except as required by law, Executive agrees not
to make any public disclosure with respect to this Agreement, the events leading
up to this Agreement, and the transactions contemplated by this Agreement.

      14. No Admissions. Nothing contained in this Agreement shall be considered
an admission by either party of any  wrongdoing or liability  under any Federal,
state or local statute,  public policy,  tort law,  contract law,  common law or
otherwise.

      15. Expenses.  Subject to the following sentence, each party shall pay its
own costs incident to the negotiation,  preparation, performance, execution, and
enforcement of this Agreement,  and all fees and expenses of its or his counsel,
accountants,  and  other  consultants,  advisors  and  representatives  for  all
activities  of such  persons  undertaken  in  connection  with  this  Agreement.
Notwithstanding the immediately  preceding  sentence,  solely to the extent that
the Executive is successful with respect thereto,  the Company agrees to pay all
reasonable  legal  fees and  expenses  of one  counsel  that the  Executive  may
reasonably incur as result of any contest by Executive, by the Company or others
of the validity or enforceability  of, or liability under, any provision of this
Agreement  (including  as a result of any  contest  by the  Executive  about the
amount of any payment pursuant to this Agreement).

      16.  Cooperation.  Upon reasonable  notice,  Executive agrees to cooperate
reasonably  with the  Company  and its  affiliated  corporation  entities in the
defense of any claim asserted against them and as to which Executive has, or may
have,  knowledge.  The Company agrees to reimburse Executive for any regular and
ordinary expenses incurred in connection with such cooperation.

      17. No Third Party Claims. Executive represents and warrants that no other
person or  entity  has,  or to the best  knowledge  of  Executive,  claims,  any
interest  in any  potential  claims,  demands,  causes of  action,  obligations,
damages or suits pursuant to this  Agreement;  that he is the owner of all other
claims,  demands,  causes of action,  obligations,  damages or suits pursuant to
this  Agreement;  that he has  full  and  complete  authority  to  execute  this
Agreement;  and  that  he has  not  sold,  assigned,  transferred,  conveyed  or
otherwise  disposed  of any  claim,  demand,  cause  of  action,  obligation  or
liability subject to this Agreement.

      18. No Third Party  Beneficiaries.  Except as expressly stated herein, the
parties  do not  intend to make any  person or entity who is not a party to this
Agreement a beneficiary  hereof,  and this Agreement  should not be construed as
being made for the benefit of any person or entity not  expressly  provided  for
herein.

      19.  Counterparts.   This  Agreement  may  be  executed  in  one  or  more
counterparts,  each of  which  shall  be  deemed  an  original  and all of which
together shall be one and the same instrument.

      20. Acceptance and Revocation. Executive shall have a period of twenty-one
(21) days from the date of receipt of this  Agreement  to review and accept this
Agreement.  Executive  shall have seven (7) days following his execution of this
Agreement  during  which time he may revoke  this  Agreement  by  providing  the
Company with  written  notice of the  revocation.  This  Agreement  shall become
effective  and  enforceable  after the  expiration  of seven 


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(7)  days  following  Executive's  execution  of  the  Agreement,   and  is  not
enforceable until after the seven-day revocation period expires.

      21. Future Employment.  Executive hereby waives any right to reinstatement
or future employment with the Company following the Termination Date.

      22. 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
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  references  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.

      23.  Merger,  Consolidation,  Sale of Assets by the  Company.  The Company
shall  not merge or  consolidate  with any  other  person  or sell or  otherwise
dispose  of all or  substantially  of its assets  unless (i) the  Company is the
continuing  person in such merger or  consolidation or (ii) the entity surviving
such  consolidation  or merger (if other than the Company) or to which such sale
or disposition is made assumes all of the  obligations of the Company under this
Agreement.

      24. Executive Committee  Approval.  This Agreement shall be subject to the
approval of the Executive Committee of the Company's Board of Directors. 1.


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      IN WITNESS WHEREOF,  the parties hereto have executed this Agreement as of
the day and year first above written.

                                         Toys "R" Us, Inc.

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

                                         EXECUTIVE

                                         /s/ Bruce W. Krysiak
                                         -------------------------------------
                                          Bruce W. Krysiak

Original Document issued to Bruce W. Krysiak on March __, 1999