Exhibit 10H*

                                 STOCK UNIT PLAN
                                       FOR
                             NON-EMPLOYEE DIRECTORS
                                       OF
                                TOYS "R" US, INC.

                          (Effective as of May 1, 1997)

      1. Purpose. The purpose of the Stock Unit Plan for Non-Employee Directors
of Toys "R" Us, Inc. (the "Plan") is to provide certain directors of Toys "R"
Us, Inc. (the "Corporation") with a vehicle for acquiring shares of common
stock, $.10 par value per share, of the Corporation ("Common Stock") with
elective deferrals of compensation (as defined below) due to them for their
service and participation on the Board of Directors of the Corporation (the
"Board") or any Committee thereof, or in the capacity of Chairman thereon or
participation in meetings of the Board or any such Committee.

      2. Effective Date. The Plan shall become effective as of May 1, 1997.

      3. Eligibility. All directors of the Corporation who are not employees of
the Corporation or of any subsidiary of the Corporation at the date of any
Elective Deferral (as defined below) shall be eligible to participate in the
Plan with respect to such Deferral (each, an "eligible director").

      4. Source of Shares. Shares of Common Stock utilized pursuant to the Plan
shall be issued shares reacquired by the Corporation.

      5. Elective Deferral of Compensation.

      (a) Timing of Election. An Elective Deferral must be made prior to the
beginning of each fiscal year of the Corporation with respect to compensation
for such fiscal year, provided that any eligible director initially elected to
the Board shall be entitled to elect to defer his or her compensation for the
fiscal year (or remainder thereof) in which such election occurs by making an
Elective Deferral at any time prior to the date of such eligible director's
initial election as a director of the Corporation, and provided, further, that
each eligible director may elect to defer such director's remaining compensation
for the fiscal year in which the Plan is approved by the stockholders of the
Corporation if such election is made at any time prior to the next meeting of
the Board (or any Committee thereof of which such eligible director is a member)
held after such approval. An election made under this paragraph 5 shall continue
in effect until the end of the fiscal year of the Corporation (unless a longer
period is specified) or until the death, resignation, removal or "retirement"
(as defined below) of the eligible director, whichever shall occur first.
Deferrals under this paragraph 5 shall be known as "Elective Deferrals."

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      (b) Amount of Deferral. An eligible director may elect to defer receipt of
all or a specified portion of his or her (i) annual retainer, (ii) fees for
chairing a Committee, serving as a member of the Executive Committee and
attending meetings, and (iii) other similar compensation (collectively,
"compensation"), receivable by such director for service as a director of the
Corporation or on any Committee of the Board or as Chairman of any such
Committee.

      (c) Manner of Electing Deferral. An eligible director shall elect to make
an Elective Deferral by giving written notice to the Corporation in the form
attached hereto as Exhibit A. Such notice shall include the percentage or amount
of the Elective Deferral and the manner of payment of the Elective Deferrals
upon termination of service as a director in a single sum or in annual
installments not to exceed five.

      6. Deferred Compensation Account. The Corporation shall establish one or
more deferred compensation accounts for each eligible director as provided
below.

      (a) Stock Account. All Elective Deferrals shall be credited to a Stock
Account established and maintained on the books of the Corporation subject to
the terms and conditions set forth below. The Corporation shall credit to the
Stock Account that number of shares of Common Stock (also referred to as "Stock
Units") that are purchased with the portion of each deferred amount that the
Broker has acquired for the benefit of the eligible director with respect to his
or her Elective Deferrals, in the manner provided in paragraphs 7 and 8.

      (b) Dividend Account. On the date dividend payments are made on
outstanding shares of Common Stock (the "Dividend Payment Date"), an amount
equal to all dividends that would have been paid on shares of Common Stock
credited to an eligible director's Stock Account shall be credited automatically
to a Dividend Account established and maintained on the books of the
Corporation. Any credit balance in the Dividend Account shall be used by the
Broker to purchase additional shares of Common Stock in the manner provided in
paragraph 8.

      7. Designation of Broker and Account With Broker.

      (a) Broker. Subject to paragraph 14, the Corporation has designated Smith
Barney, Inc. (the "Broker") to open an account in the name of the Corporation
for the benefit of each eligible director (an "Account"). The Corporation
reserves the right to change such designation at any time without prior notice
to eligible directors, and the Broker has reserved the right to terminate its
services as Broker under the Plan at any time.

      (b) Allocation of Shares. Shares purchased by the Broker shall be
allocated to the individual Account established for the benefit of each eligible
director, in proportion to the respective amounts received for such eligible
director's Account. Allocations shall be made in whole shares and in fractional
shares.

      (c) Voting Rights. Shares of Common Stock held in an Account shall not be
voted and shall not be deemed to be outstanding.


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      8. Purchase of Common Stock. From time to time, but no later than the 15th
day of the month following the month any amounts would otherwise have been
payable, the Corporation shall forward to the Broker (i) funds equivalent to the
amount of each eligible director's Elective Deferrals, and (ii) funds equivalent
to the amount of each eligible director's Dividend Account. As soon as the
Broker considers it advisable, it shall apply such funds to the purchase of
Common Stock in the market or in private transactions at prevailing market
prices for the Accounts of the eligible directors.

      9. Value of Deferred Compensation Accounts. Within 90 days following the
close of each fiscal year of the Corporation a statement will be sent to each
eligible director as to the balance in the eligible director's Account as of the
end of such fiscal year, including the number of Stock Units and the market
price as of the close of such fiscal year with respect to the shares of Common
Stock held in the Account by the Broker.

      10. Payment of Deferred Compensation. An eligible director's Stock Units
shall be paid in shares of Common Stock in the manner elected in accordance with
the provisions of paragraph 5(c) above. If annual installments are elected, the
amount of the first payment shall be a fraction of the number of shares in the
eligible director's Account, the numerator of which is one and the denominator
of which is the total number of installments elected, rounded to the nearest
whole share. The amount of each subsequent payment shall be a fraction of the
number of shares in the eligible director's Account, the numerator of which is
one and the denominator of which is the total number of installments elected
minus the number of installments previously paid, rounded to the nearest whole
share. During any such installment payment period, the Corporation shall
continue to maintain the Account as provided above and shall on each Dividend
Payment Date transfer the credit balance from the Dividend Account to the Stock
Account as provided above. In the event the eligible director has not made an
election to have his or her Stock Units paid in installments before the time his
or her Stock Units becomes payable, his or her Stock Units shall be paid in a
lump sum in shares of Common Stock of the Corporation.

      11. Amount Payable on Death. In the event of an eligible director's death,
the shares of Common Stock in the eligible director's Account shall be
determined as of the date of death, and the shares shall be paid as soon as
reasonably possible thereafter in the manner elected by the eligible director in
accordance with the provisions of paragraph 5(c) above to the beneficiary or
beneficiaries previously designated by the eligible director. Any such
designation shall be in writing and delivered to the Corporation and may be
changed by a later-dated designation. If there is no designation in effect, the
Account shall be paid to the eligible director's estate.

      12. Resignation, Removal or Retirement. In the event of an eligible
director's resignation, removal or retirement from the Board, the balance in the
eligible director's Account shall be determined as of the effective date of such
resignation, removal or retirement, and the Account shall be paid as soon as
reasonably possible thereafter to the eligible director in the manner elected in
accordance with the provisions of paragraph 5(c) above. For purposes of 


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the Plan, retirement shall mean an eligible director's cessation of service on
the Board on or after such eligible director's attainment of age 60.

      13. Financial Emergency. Notwithstanding the provisions of paragraphs 11
and 12 to the contrary, if, upon the written application of an eligible
director, the Board determines that the eligible director has a financial
emergency of such a substantial nature and beyond the director's individual
control that payment of his or her Account is warranted, the Board may direct
the payment to the eligible director of all or a portion of the Account and the
time and manner of such payment, and the Board may direct such payments in other
circumstances if, in the exercise of its independent judgment, it determines
that circumstances beyond the eligible director's control warrant such action.

      14. Unfunded Promise to Pay: No Segregation of Funds or Assets. Neither
anything contained in this Plan nor the establishment or maintenance of the
Account shall require the segregation of any assets of the Corporation or any
type of funding by the Corporation of such Accounts or the amounts payable
therefrom, it being the intention of the parties that the Plan or the
establishment and maintenance of the Account, be an unfunded arrangement for
federal income tax purposes. No eligible director shall have any rights to or
interests in any specific assets or shares of Common Stock by reason of the
Plan, and his or her only rights to enforce payment of the obligations of the
Corporation hereunder shall be those of a general creditor of the Corporation.
In the event the Corporation establishes a trust or any other method of
providing for its payment of the obligations created hereunder, such trust shall
conform to the terms of the model trust described in Revenue Procedure 92-64,
and it is expressly understood that no eligible director will have any interest
therein other than as a general creditor of the Corporation.

      15. Changes in Capitalization. The number of Stock Units credited to each
eligible director's Stock Account shall be proportionately adjusted for any
increase or decrease in the number of issued and outstanding shares of Common
Stock resulting from a subdivision or combination of shares or the payment of a
stock dividend in shares of Common Stock to holders of outstanding shares or any
other increase or decrease in the number of such shares effected without receipt
of consideration by the Corporation. Appropriate adjustments shall also be made
to reflect any recapitalization, reclassification of shares or reorganization
affecting the capital structure of the Corporation. In the event of a merger or
consolidation in which the Corporation is not the surviving corporation or in
which the Corporation survives only as a subsidiary of another corporation, and
in such transaction the holders of Common Stock of the Corporation become
entitled to receive shares of stock or securities of the surviving corporation
or any affiliate thereof, the eligible director's Stock Account shall be
credited with that number of shares of securities of the surviving corporation
(or affiliate) that would be exchanged for the shares of Common Stock of the
Corporation in such transaction if such shares of Common Stock had been
outstanding, and any cash or other consideration that would be receivable if
such shares had been outstanding shall be paid to the eligible director.

      16. Compliance with Law. No shares of Common Stock shall be issued or
transferred to an eligible director pursuant to the Plan unless and until all
legal requirements 


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applicable to the issuance or transfer of such shares have been complied with to
the satisfaction of the Board.

      17. Rights Unsecured. The right of an eligible director to receive any
unpaid portion of the eligible director's Account shall be an unsecured claim
against the general assets of the Corporation.

      18. Nonassignability. The right of an eligible director to receive any
unpaid portion of the eligible director's Accounts shall not be assigned,
transferred, pledged or encumbered or be subject in any manner to alienation or
anticipation.

      19. Administration. This Plan shall be administered by the Board, which
shall have the authority to adopt rules and regulations for carrying out the
Plan and to interpret, construe and implement the provisions thereof. Any
decision of the Board in the administration of the Plan, as described herein,
shall be final and conclusive. The Board may act only by a majority of its
members in office, except that the members thereof may authorize any one or more
of their number or the Secretary or any other officer of the Corporation to
execute and deliver documents on behalf of the Board. No member of the Board
shall be liable for an act or failure to act by such member or by any other
member of the Board in connection with the Plan, except for such member's own
willful misconduct or as expressly provided by statute.

      20. Amendment and Termination. This Plan may be amended, modified or
terminated at any time by the Board, provided, that no such amendment,
modification or termination shall, without the consent of an eligible director,
adversely affect such eligible director's rights with respect to amounts
theretofore credited to the eligible director's Account.

      21. Governing Law. To the extent not preempted by Federal law, the Plan
shall be construed in accordance with and governed by the laws of the State of
New York.