As filed with the Securities and Exchange Commission
on August 19, 1998
Registration No. 333-
==============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------
TOYS "R" US. INC.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
-------------------------
(State or other jurisdiction of incorporation or organization)
22-3260693
-------------------------
(I.R.S. Employer Identification No.)
461 From Road, Paramus, New Jersey 07652
- ------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
TOYS "R" US, INC. 1997 EMPLOYEE STOCK OPTION PLAN
-------------------------------------------------
(Full Title of the Plan)
Louis Lipschitz
Executive Vice President and Chief Financial Officer
TOYS "R" US, INC.
461 From Road
Paramus, New Jersey 07652
(201) 262-7800
-----------------------------------------------------------
(Name, Address and Telephone Number of Agent for Service)
Copy to:
Andre Weiss, Esq.
Schulte Roth & Zabel LLP
900 Third Avenue
New York, New York 10022
==============================================================================
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of Amount to be Maximum Maximum Amount of
Securities to Registered (1) Offering Price Aggregate Registration
be Registered Per Share (2) Offering Price(2) Fee
- ---------------- -------------- -------------- ----------------- ------------
Common Stock $15,000,000 $20.46875 $307,031,250 $90,575
par value
$.10 per share
<PAGE>
_______________________________
(1) The Registrant, Toys "R" Us, Inc. (hereinafter, the "Company"), a
Delaware corporation, adopted a Rights Agreement on January 7, 1998. Pursuant
to such stockholder rights agreement, each outstanding share of Common Stock
may be exchanged, under certain defined circumstances, for the right to
purchase additional shares of Common Stock at a significant discount. No such
rights are currently exercisable. Value attributable to such rights, if any,
is reflected in the market price of the Common Stock.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and (h)(1) under the Securities Act of 1933, as
amended (the "Securities Act"), based on the average of the high and low
prices of the Common Stock, as reported on the New York Stock Exchange on
August 13, 1998 ($20.46875), multiplied by the 15,000,000 shares that remain
available for grant under the Plans.
Page 2
<PAGE>
PART I
ITEM 1. PLAN INFORMATION.*
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ITEM 2 REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL
------ -----------------------------------------------
INFORMATION.*
------------
* The document(s) containing the information required by Part 1 of Form
S-8 will be sent or given to participants as specified by Rule 428(b)(1)
promulgated by the Securities and Exchange Commission (the "Commission") under
the Securities Act of 1933. Such documents are not being filed with the
Commission, but constitute (along with the documents incorporated by reference
into the Registration Statement pursuant to Item 3 of Part II hereof) a
prospectus that meets the requirements of Section 10(a)of the Act.
I-1
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents By Reference.
------ ---------------------------------------
The following documents which have been or will in the future be
filed by the Company with the Commission are incorporated in this Registration
Statement by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year
ended January 31, 1998, filed pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which
contains certified financial statements for the Company's fiscal year ended
January 31, 1998.
2. The Company's Notice of Annual Meeting of Stockholders and
Proxy Statement for its Annual Meeting of Stockholders held on June 3, 1998,
filed pursuant to Section 14 of the Exchange Act.
3. The Company's Quarterly Report on Form 10-Q for the
quarterly period ended May 2, 1998, filed pursuant to Section 13(a) or 15(d)
of the Exchange Act.
4. The description of the Common Stock contained in Item 1 of
the Company's Registration Statement on Form 8-A filed with the Commission on
June 13, 1979 pursuant to Section 12 of the Exchange Act, including any
amendments or reports filed for the purpose of updating such description.
5. The description of the Company's Common Stock purchase
rights described in the Company's Registration Statement on Form 8-A (File No.
1-11609) filed on January 16, 1998.
All reports and other documents subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then
remaining unsold shall be deemed to be incorporated by reference in and to be
a part of this Registration Statement from the date of filing of such reports
and documents.
Item 4. Description of Securities.
------ -------------------------
Not Applicable.
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<PAGE>
Item 5. Interests of Named Experts and Counsel.
------ --------------------------------------
Legal Opinion.
- -------------
The legality of the shares of Common Stock being registered hereby
is being passed upon by Schulte Roth & Zabel LLP, 900 Third Avenue, New York,
New York 10022, counsel for the Company. Andre Weiss, a member of Schulte
Roth & Zabel LLP, is the Secretary of the Company.
Experts.
- -------
The consolidated financial statements of Toys "R" Us, Inc. and
subsidiaries incorporated by reference in the Company's Annual Report (Form
10-K) for the year ended January 31, 1998 have been audited by Ernst & Young
LLP, independent auditors, as set forth in their report thereon incorporated
by reference therein and incorporated herein by reference. Such financial
statements are, and audited financial statements to be included in
subsequently filed documents will be, incorporated herein in reliance upon the
reports of Ernst & Young LLP pertaining to such financial statements (to the
extent covered by consents filed with the Commission) given upon the authority
of such firm as experts in accounting and auditing.
Item 6. Indemnification of Directors and Officers.
------ -----------------------------------------
Limitation of Directors' Liability.
- ----------------------------------
The Delaware General Corporation Law ("DGCL") provides that a
corporation's certificate of incorporation may include a provision limiting
the personal liability of a director to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a director. However, no
such provision can eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to the corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or knowing violation of the law, (iii) under Section
174 of the DGCL, which relates to liability for unlawful payments of dividends
or unlawful stock repurchases or redemptions, (iv) for any transaction from
which the director derived an improper personal benefit, or (v) for any act or
omission prior to the adoption of such a provision in the certificate of
incorporation. The Company's Restated Certificate of Incorporation contains a
provision eliminating the personal liability for monetary damages of its
directors to the full extent permitted under the DGCL.
I-3
<PAGE>
Indemnification and Insurance.
- -----------------------------
The DGCL contains provisions setting forth conditions under which
a corporation may indemnify its directors and officers. The Company's
Restated Certificate of Incorporation provides that a director or officer who
is a party to any action, suit or proceeding shall be entitled to be
indemnified by the Company to the extent permitted by the DGCL against
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement incurred by such director or officer in connection with such
action, suit or proceeding. The Company has entered into indemnification
agreements with each of its directors and intends to enter into
indemnification agreements with each of its future directors. Pursuant to
such indemnification agreements, the Company has agreed to indemnify its
directors against certain liabilities, including any liabilities arising out
of this Registration Statement. The Company maintains a standard form of
officers' and directors' liability insurance policy which provides coverage to
the officers and directors of the Company for certain liabilities.
Item 7. Exemption from Registration Claimed.
------ -----------------------------------
Not Applicable.
Item 8. Exhibits.
------ --------
The following is a complete list of exhibits filed as a part of
this Registration Statement:
Exhibit No. Document
---------- --------
4.1 Toys "R" Us, Inc. 1997 Employee Stock
Option Plan
4.2 Rights Agreement, dated January 7, 1998,
between the Company and American Stock
Transfer & Trust Company (attached as
Exhibit 1 to the Company's Registration
Statement on Form 8-A (File No. 1-11609)
filed on January 16, 1998 and
incorporated herein by reference).
5 Opinion of Schulte Roth & Zabel LLP with
respect to the legality of original
issuance of shares of Common Stock being
registered
23.1 Consent of Ernst & Young LLP
I-4
<PAGE>
23.2 Consent of Schulte Roth & Zabel LLP
(included in Exhibit 5)
24 Powers of Attorney (see pages II-1 and
II-2 of this Registration Statement)
Item 9. Undertakings.
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A. To Update Annually.
------------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the Registration
Statement;
provided, however, that paragraphs (A)(l)(i) and (A)(l)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to Section 13 or 15(d) of the
Exchange Act that are incorporated by reference in the Registration Statement;
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
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<PAGE>
B.Incorporation of Subsequent Exchange Act Documents by Reference.
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The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Indemnification of Officers and Directors.
-----------------------------------------
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
I-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8 and has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Paramus, State of New
Jersey, on this 19th day of August, 1998.
TOYS "R" US, INC.
By: /s/ Louis Lipschitz
--------------------------------
Louis Lipschitz
Executive Vice President and
Chief Financial Officer
POWER OF ATTORNEY
The Registrant and each person whose signature appears below
hereby appoint Robert C. Nakasone and Louis Lipschitz, and each of them, as
their attorneys-in-fact, with full power of substitution, to execute in their
names and on behalf of the Registrant and each such person, individually and
in each capacity stated below, one or more amendments (including post-
effective amendments) to this Registration Statement as the attorney-in-fact
acting on the premise shall from time to time deem appropriate and to file any
such amendment to this Registration Statement with the Securities and Exchange
Commission.
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
II-1
<PAGE>
Name and Signature Title Date
- ------------------ ----- ----
/s/ Robert C. Nakasone Chief Executive Officer August 19, 1998
- ----------------------
Robert C. Nakasone and Director
/s/ Bruce W. Krysiak President, Chief August 19, 1998
- --------------------
Bruce W. Krysiak Operating Officer and
President -- U.S. Toy
Stores and Director
/s/ Louis Lipschitz Executive Vice President August 19, 1998
- -------------------
Louis Lipschitz and Chief Financial
Officer
(Principal Financial and
Accounting Officer)
Chairman of the Board
- --------------------- and Director
Michael Goldstein
/s/ Robert A. Bernhard Director August 19, 1998
- ----------------------
Robert A. Bernhard
/s/ RoAnn Costin Director August 19, 1998
- ----------------
RoAnn Costin
- --------------- Director
Calvin Hill
/s/ Shirley Strum Kenny Director August 19, 1998
- -----------------------
Shirley Strum Kenny
- ------------------- Director August 19, 1998
Charles Lazarus
/s/ Norman S. Matthews Director August 19, 1998
- ----------------------
Norman S. Matthews
/s/ Howard W. Moore Director August 19, 1998
- -------------------
Howard W. Moore
- ------------------- Director
Arthur B. Newman
II-2
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Document Page
- ---------- -------- ----
4.1 Toys "R" Us, Inc. 1997 III - 1
Employee Stock Option Plan
4.3 Rights Agreement, dated
January 7, 1998, between
the Company and American
Stock Transfer & Trust
Company (attached as
Exhibit 1 to the Company's
Registration Statement on
Form 8-A (File No. 1-11609)
filed on January 16, 1998
and incorporated herein by
reference).
5 Opinion of Schulte Roth & III-10
Zabel LLP with respect to
the legality of original
issuance of shares of
Common Stock being
registered
23.1 Consent of Ernst & Young III - 12
LLP
23.2 Consent of Schulte Roth &
Zabel LLP (included in
Exhibit 5)
24 Powers of Attorney (see
pages II-1 and II-2 of this
Registration Statement)
II-3
<PAGE>
FORM TYPE S-8
Exhibit 4.1. Toys "R" Us, Inc. 1997 Employee Stock Option Plan
TOYS "R" US, INC.
1997 EMPLOYEE STOCK OPTION PLAN
The following is the complete text of the Plan, as amended.
ARTICLE 1
ESTABLISHMENT AND PURPOSE
1.1 Establishment and Effective Date. Toys "R" Us, Inc., a
Delaware corporation (the "Company"), hereby establishes a stock option plan
to be known as the Toys "R" Us, Inc. 1997 Employee Stock Option Plan (the
"Plan"). The Plan shall become effective as of September 9, 1997.
1.2 Purpose. The purpose of the Plan is to encourage and enable
all eligible employees (subject to such requirements as may be prescribed by
the Management Compensation and Stock Option Committee (the "Committee")) of
the Company and its subsidiaries to acquire a proprietary interest in the
Company through the ownership of the Company's common stock, par value $.10
per share ("Common Stock"). Such ownership will provide such employees with a
more direct stake in the future welfare of the Company and encourage them to
remain with the Company and its subsidiaries. It is also expected that the
Plan will encourage qualified persons to seek and accept employment with the
Company and its subsidiaries.
ARTICLE 2
AWARDS
2.1 Form of Awards. Awards under the Plan may be granted in the
form of stock options ("Options") that are not intended to qualify as
incentive stock options under Section 422 of the Internal Revenue Code.
2.2 Maximum Shares Available. The maximum aggregate number of
shares of Common Stock available for award under the Plan is 15,000,000
subject to adjustment pursuant to Article 8 hereof. Shares of Common Stock
issued pursuant to the Plan may be either authorized but unissued shares or
issued shares reacquired by the Company. In the event that prior to the end
of the period during which Options may be granted under the Plan, any Option
expires unexercised or is terminated, surrendered or cancelled without being
exercised in whole for any reason, the shares of Common Stock covered by such
Option shall be available for subsequent awards of Options under the Plan upon
such terms as the Committee may determine. In addition, shares of Common
Stock withheld in payment of taxes relating to Options, and the number of
shares of Common Stock equal to the number of shares surrendered in payment of
the exercise price of Options or taxes relating to Options, shall be available
for subsequent awards of Options under the Plan upon such terms as the
Committee may determine.
III-1
<PAGE>
2.3 Return of Prior Awards. As a condition to any subsequent
award, the Committee shall have the right, at its discretion, to require
employees to return to the Company Options previously granted under the Plan.
Subject to the provisions of the Plan, such new Option shall be upon such
terms and conditions as are specified by the Committee at the time the new
award is granted.
ARTICLE 3
ADMINISTRATION
3.1 Committee. Awards shall be determined, and the Plan shall be
administered by, the Committee.
3.2 Powers of Committee. Subject to the express provisions of the
Plan, the Committee shall have the power and authority (i) to grant Options
and to determine the purchase price of the Common Stock covered by each
Option, the term of each Option, the number of shares of Common Stock to be
covered by each Option and any performance objectives or vesting standards
applicable to each Option; and (ii) to determine the employees to whom, and
the time or times at which, Options shall be granted.
3.3 Delegation. The Committee may delegate to one or more of its
members or to any other person or persons such ministerial duties as it may
deem advisable. The Committee may also delegate to the Chief Executive
Officer of the Company the authority, subject to such terms as the Committee
shall determine, to perform any and all functions as the Committee may
determine. The Committee may also employ attorneys, consultants, accountants
or other professional advisors and shall be entitled to rely upon the advice,
opinions or valuations of any such advisors.
3.4 Interpretations. The Committee shall have sole discretionary
authority to interpret the terms of the Plan, to adopt and revise rules,
regulations and policies to administer the Plan and to make any other factual
determinations which it believes to be necessary or advisable for the
administration of the Plan. All actions taken and interpretations and
determinations made by the Committee in good faith shall be final and binding
upon the Company, all employees who have received awards under the Plan and
all other interested persons.
3.5 Liability; Indemnification. No member of the Committee, nor
the Chief Executive Officer, or any person to whom ministerial duties have
been delegated, shall be personally liable for any action, interpretation or
determination made with respect to the Plan or Options granted thereunder, and
each member of the Committee, the Chief Executive Officer and each person to
whom ministerial duties have been delegated shall be fully indemnified and
protected by the Company with respect to any liability he or she 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
III-2
<PAGE>
ARTICLE 4
ELIGIBILITY
under any agreement between such member, the Chief Executive Officer and the
Company.
Options may be granted to all employees of, and consultants and
agents to, the Company or any of its subsidiaries other than officers of the
Company. In determining the employees to whom Options shall be granted and
the number of shares to be covered by each Option, the Committee shall take
into account the nature of the services rendered by such employees, their
present and potential contributions to the success of the Company and its
subsidiaries and such other factors as the Committee in its sole discretion
shall deem relevant.
As used herein, the term "subsidiary" shall mean any present or
future corporation, partnership or joint venture in which the Company owns,
directly or indirectly, 40% or more of the economic interests.
ARTICLE 5
STOCK OPTIONS
5.1 Grant of Options. Options may be granted under the Plan for
the purchase of shares of Common Stock. Options shall be granted in such form
and upon such terms and conditions, including the satisfaction of corporate or
individual performance objectives and other vesting standards, as the
Committee shall from time to time determine.
5.2 Option Price. The purchase price per share under each Option
shall be specified by the Committee, but in no event shall it be less than 90%
of the Market Price on the date the Option is granted. In no case, however,
shall the purchase price per share of an Option be less than the par value of
the Common Stock ($.10).
The "Market Price" of the Common Stock on any day shall be
determined as follows: (i) if the Common Stock is listed on a national
securities exchange or quoted through the NASDAQ National Market System, the
Market Price on any day shall be the average of the high and low reported
Consolidated Trading sales prices, or if no such sale is made on such day, the
average of the closing bid and asked prices reported on the Consolidated
Trading listing for such day; (ii) if the Common Stock is quoted on the NASDAQ
inter-dealer quotation system, the Market Price on any day shall be the
average of the representative bid and asked prices at the close of business
for such day; or (iii) if the Common Stock is not listed on a national stock
exchange or quoted on NASDAQ, the Market Price on any day shall be the average
of the high bid and low asked prices reported by the National Quotation
Bureau, Inc. for such day.
III-3
<PAGE>
5.3 Exercise and Payment. Options may be exercised in whole or in
part. Common Stock purchased upon exercise of Options shall be paid for in
full at the time of purchase. Such payment shall be made in cash or, in the
discretion of the Committee, through delivery of shares of Common Stock or a
combination of cash and Common Stock, in accordance with procedures to be
established by the Committee. Any shares so delivered shall be valued at
their Market Price on the date of exercise.
5.4 Term. The term of each Option granted under the Plan shall be
determined by the Committee.
5.5 Rights as a Stockholder. A recipient of Options shall have no
rights as a stockholder with respect to any shares issuable or transferable
upon exercise thereof until the date a stock certificate is issued to such
recipient representing such shares. Except as otherwise expressly provided in
the Plan, no adjustment shall be made for cash dividends or other rights for
which the record date is prior to the date such stock certificate is issued.
5.6 General Restrictions. Each Option granted under the Plan shall
be subject to the requirement that, at any time the Board shall determine, in
its discretion, that the listing, registration or qualification of the shares
issuable or transferable upon exercise thereof upon any securities exchange or
under any state or Federal law, or the consent or approval of any governmental
regulatory body, is necessary or desirable as a condition of, or in connection
with, the granting of such Option or the issue, transfer, or purchase of
shares thereunder, such Option may not be exercised in whole or in part unless
such listing, registration, qualification, consent, or approval shall have
been effected or obtained free of any conditions not acceptable to the Board.
The Board or the Committee may, in connection with the granting of
any Option, require the individual to whom the Option is to be granted to
enter into an agreement with the Company stating that as a condition precedent
to each exercise of the Option, in whole or in part, such individual shall if
then required by the Company represent to the Company in writing that such
exercise is for investment only and not with a view to distribution, and also
setting forth such other terms and conditions as the Board or the Committee
may prescribe.
ARTICLE 6
NONTRANSFERABILITY OF OPTIONS
No Option may be transferred, assigned, pledged or hypothecated
(whether by operation of law or otherwise), except as provided by will or the
applicable laws of descent and distribution, and no Option shall be subject to
execution, attachment or similar process. Any attempted assignment, transfer,
pledge, hypothecation or other disposition of an Option not specifically
permitted herein shall be null and void and without effect. An Option may be
exercised by the recipient only during his or her lifetime, or following his
or her death pursuant to Section 7.4 hereof.
III-4
<PAGE
Notwithstanding anything to the contrary in the preceding paragraph,
the Committee may, in its sole discretion, cause the written agreement
relating to any Options granted under the Plan to provide that the recipient
of such Options may transfer any such Options other than by will or the laws
of descent and distribution in any manner authorized under applicable law.
ARTICLE 7
EFFECT OF TERMINATION OF EMPLOYMENT, RELOCATION EVENT,
DISABILITY, RETIREMENT, DEATH OR SPECIAL EVENT
7.1 General Rule. Except as expressly determined by the Committee
in its sole discretion, no Option shall be exercisable after thirty (30) days
following the recipient's termination of employment with the Company or a
subsidiary, unless such termination of employment occurs by reason of: (i) a
Relocation Event (as defined in Section 7.2); (ii) Retirement (as defined in
Section 7.3); (iii) death; or (iv) a Special Event (as defined in Section
7.5), provided that, in the case of a Special Event, the Committee shall have
modified such Option to remain exercisable as provided in Section 7.5.
Options shall not be affected by any change of employment so long as
the recipient continues to be employed by either the Company or a subsidiary.
The Committee may, in its sole discretion, cause any Option to be forfeited
upon an employee's termination of employment if the employee was terminated
for one (or more) of the following reasons: (i) the employee's conviction, or
plea of guilty or nolo contendere to the commission of a felony; (ii) the
employee's commission of any fraud, misappropriation or misconduct which
causes demonstrable injury to the Company or a subsidiary; (iii) an act of
dishonesty by the employee resulting or intended to result, directly or
indirectly, in gain or personal enrichment at the expense of the Company or a
subsidiary; (iv) any breach of the employee's fiduciary duties to the Company
as an employee; or (v) a violation by the employee of the Toys "R" Us Ethics
Agreement or any other serious violation of a Company policy. It shall be
within the sole discretion of the Committee to determine whether the
employee's termination was for one of the foregoing reasons, and the decision
of the Committee shall be final and conclusive.
7.2 Relocation Event. Options granted to an employee shall remain
outstanding after termination of such employee's employment with the Company
or a subsidiary, if such termination solely occurs by reason of a "Relocation
Event," which shall be deemed to occur if: (i) husband and wife are both
current employees of the Company; (ii) the Company transfers one spouse to a
new location; (iii) the Company is unable to offer the other spouse a position
that is substantially comparable to his or her current position; and (iv) as a
result, the other spouse's employment with the Company is terminated and the
other spouse, as recipient, holds outstanding Options.
In case of a Relocation Event, the Options held by a terminated
employee shall be exercisable for a period equal to the lesser of: (i) the
period such Options would be exercisable absent the termination of such
employee; and (ii) the period such Options would be exercisable if granted to
III-5
<PAGE>
the spouse continuing in the Company's employ on the date originally granted
to the terminated spouse.
7.3 Disability or Retirement. Except as expressly provided
otherwise in the written agreement relating to any Option granted under the
Plan, in the event of the Disability or Retirement of a recipient of Options,
the Options which are held by such recipient on the date of such Disability or
Retirement, whether or not otherwise exercisable on such date, shall be
exercisable at any time until the expiration date of the Options.
"Disability" shall mean any termination of employment with the
Company or a subsidiary because of a long-term or total disability, as
determined by the Committee in its sole discretion. "Retirement" shall mean a
termination of employment with the Company or a subsidiary either: (i) on a
voluntary basis by a recipient who is at least fifty-five (55) years of age
and who has at least ten (10) years of service with the Company or a
subsidiary; or (ii) otherwise with the written consent of the Committee in its
sole discretion. The decision of the Committee shall be final and conclusive.
7.4 Death. In the event of the death of a recipient of Options
while an employee of the Company or any subsidiary, Options which are held by
such employee at the date of death, whether or not otherwise exercisable on
the date of death, shall be exercisable by the beneficiary designated by the
employee for such purpose (the "Designated Beneficiary") or if no Designated
Beneficiary shall be appointed or if the Designated Beneficiary shall
predecease the employee, by the employee's personal representatives, heirs or
legatees at any time within three (3) years from the date of death, at which
time such Options shall terminate.
In the event of the death of a recipient of Options following a
termination of employment due to Retirement, Disability or a Special Event (as
defined in Section 7.5 hereof), if such death occurs before the Options are
exercised, the Options which are held by such recipient on the date of
termination of employment, whether or not otherwise exercisable on such date,
shall be exercisable by such recipient's Designated Beneficiary, or if no
Designated Beneficiary shall be appointed or if the Designated Beneficiary
shall predecease such recipient, by such recipient's personal representatives,
heirs or legatees to the same extent such Options were exercisable by the
recipient following such termination of employment.
7.5 Special Event. In the case of a Special Event, the Committee
in its sole discretion may elect to modify all or any lesser number of any
Options held by an employee terminated as a result of a Special Event which
are or are not exercisable on the date of termination, to provide that any of
such Options may continue to be exercisable for the term and in the manner
specified therein or for such other term and subject to such other provisions
and conditions (including, without limitation, acceleration of the time or
times at which any such Options may be exercised) as the Committee shall
specify. The Committee shall have the sole discretion to determine the
employees to whom and in the manner in which any such modification shall be
made. If the Committee does not elect to modify an Option, then only Options
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currently exercisable at the date of termination shall be exercisable as
provided in the first sentence of Section 7.1 hereof.
A "Special Event" shall mean: (i) the sale or other disposition of a
subsidiary or division of the Company; (ii) the closing or discontinuation of
a specific operation of the Company or any subsidiary; (iii) the elimination
of job categories; or (iv) a limited program of terminations in connection
with a personnel reorganization or restructuring of the Company or any
subsidiary of the Company scheduled to be completed on a date certain;
provided, however, that only those employees who meet the terms and conditions
as established by the Board or the Committee in its discretion shall be
eligible to receive accelerated vesting of Options.
7.6 Leave of Absence. In the case of an employee on an approved
leave of absence, the Options of such employee shall not be affected unless
such leave is longer than thirteen (13) weeks. The date of exercisability of
any Options of an employee which are unexercisable at the beginning of an
approved leave of absence lasting longer than thirteen (13) weeks shall be
postponed for a period equal to the length of such leave of absence.
Notwithstanding the foregoing, the Committee may, in its sole discretion,
waive in writing any such postponement of the date of exercisability of any
Options due to a leave of absence.
ARTICLE 8
ADJUSTMENT UPON CHANGES IN CAPITALIZATION
Notwithstanding any other provision of the Plan, the Committee may:
(i) at any time, make or provide for such adjustments to the Plan or to the
number and class of shares available thereunder; or (ii) at the time of grant
of any Options, provide for such adjustments to such Options as the Committee
shall deem appropriate to prevent dilution or enlargement of rights,
including, without limitation, adjustments in the event of stock dividends,
stock splits, recapitalizations, mergers, consolidations, combinations or
exchanges of shares, separations, spin-offs, reorganizations, liquidations and
the like.
ARTICLE 9
AMENDMENT AND TERMINATION
The Board or the Committee may suspend, terminate, modify or amend
the Plan at any time and from time to time. Any Plan amendment shall become
effective upon the date stated therein, and shall be binding on the Company,
except as otherwise provided in such amendment. If the Plan is terminated,
the terms of the Plan shall, notwithstanding such termination, continue to
apply to awards granted prior to such termination. No suspension,
termination, modification or amendment of the Plan may, without the consent of
the employee to whom an award shall theretofore have been granted, adversely
affect the rights of such employee under such award.
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ARTICLE 10
WRITTEN AGREEMENT
Each award of Options shall be evidenced by a written agreement
containing such restrictions, terms and conditions, if any, as the Committee
may require. In the event of any conflict between a written agreement and the
Plan, the terms of the Plan shall govern.
ARTICLE 11
MISCELLANEOUS PROVISIONS
11.1 Tax Withholding. The Company shall have the right to require
employees or their Designated Beneficiaries, personal representatives, heirs
or legatees to remit to the Company an amount sufficient to satisfy Federal,
state and local withholding tax requirements, or to deduct from all payments
under the Plan amounts sufficient to satisfy all withholding tax requirements.
The Committee may, in its sole discretion, permit an employee to satisfy his
or her tax withholding obligation either by: (i) surrendering shares owned by
the employee; or (ii) having the Company withhold from shares otherwise
deliverable to the employee. Shares surrendered or withheld shall be valued
at their Market Price as of the date on which income is required to be
recognized for income tax purposes.
11.2 Successor. The obligations of the Company under the Plan
shall be binding upon any successor Company or organization resulting from the
merger, consolidation or other reorganization of the Company, or upon any
successor Company or organization succeeding to all or substantially all of
the assets and business of the Company. In the event of any of the foregoing,
the Committee may, at its discretion prior to the consummation of the
transaction and subject to Article 9 hereof, cancel, offer to purchase,
exchange, adjust or modify any outstanding awards, at such time and in such
manner as the Committee deems appropriate and in accordance with applicable
law.
11.3 General Creditor Status. Employees shall have no right,
title, or interest whatsoever in or to any investments which the Company may
make to aid it in meeting its obligations under the Plan. Nothing contained
in the Plan, and no action taken pursuant to its provisions, shall create or
be construed to create a trust of any kind, or a fiduciary relationship
between the Company and any employee or Designated Beneficiary, personal
representative, heir or legatee of such employee. To the extent that any
person acquires a right to receive payments from the Company under the Plan,
such right shall be no greater than the right of an unsecured general creditor
of the Company. All payments to be made under the Plan shall be paid from the
general funds of the Company and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of
such amounts except as expressly set forth in the Plan.
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11.4 No Right to Employment. Nothing in the Plan or in any written
agreement entered into pursuant to Article 10 hereof, nor the grant of any
award, shall confer upon any employee any right to continue in the employ of
the Company or a subsidiary or to be entitled to any remuneration or benefits
not set forth in the Plan or such written agreement or interfere with or limit
the right of the Company or a subsidiary to modify the terms of or terminate
such employee's employment at any time.
11.5 Notices. Notices required or permitted to be made under the
Plan shall be sufficiently made if personally delivered to the employee or
sent by regular mail addressed: (i) to the employee at the employee's address
as set forth in the books and records of the Company or its subsidiaries; or
(ii) to the Company or the Committee at the principal office of the Company
clearly marked "Attention: Management Compensation and Stock Option
Committee."
11.6 Severability. In the event that any provision of the Plan
shall be held illegal or invalid for any reason, such illegality or invalidity
shall not affect the remaining parts of the Plan, and the Plan shall be
construed and enforced as if the illegal or invalid provision had not been
included.
11.7 Governing Law. To the extent not preempted by Federal law,
the Plan, and all agreements thereunder, shall be construed in accordance with
and governed by the laws of the State of New York.
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August 14, 1998
FORM TYPE S-8
Exhibit 5. Opinion of Schulte Roth & Zabel LLP
The Board of Directors
Toys "R" Us, Inc.
461 From Road
Paramus, New Jersey 07652
Ladies and Gentlemen:
We have acted as counsel to Toys "R" Us, Inc., a Delaware
corporation (the "Company"), in connection with the preparation and filing by
the Company with the Securities and Exchange Commission (the "Commission") of
a Registration Statement on Form S-8, filed by the Company with the Commission
under the Securities Act of 1933, as amended (the "Securities Act"), relating
to, among other things, the registration thereunder of 15,000,000 additional
shares of the Company's Common Stock, par value $.10 per share (the "Common
Stock"), to be issued pursuant to or reserved for issuance under the Company's
1997 Employee Stock Option Plan (the "Plan").
This opinion is delivered in accordance with the requirements of
Item 601(b)(5) of Regulation S-K under the Securities Act.
In connection with this opinion, we have examined and are
familiar with originals or copies certified or otherwise identified to our
satisfaction, of (i) the Plan; (ii) the Restated Certificate of Incorporation
and the Amended and Restated By-Laws of the Company, in each case as amended
to the date hereof; (iii) certain resolutions of the Board of Directors of the
Company relating to the adoption of the Plan and the issuance of the Common
Stock pursuant to or reserved for issuance under the Plan; and (iv) such other
documents as we have deemed necessary or appropriate as a basis for the
opinion set forth below.
In our examination, we have assumed the genuineness of all
signatures, the legal capacity of all natural persons signing or delivering an
instrument, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified or photostatic copies and the authenticity of the originals of such
latter documents. As to any facts material to the opinion expressed herein
which were not independently established or verified, we have relied upon oral
or written statements and representations of officers and other
representatives of the Company and upon certificates or other comparable
documents of public officials.
We are attorneys admitted to practice in the State of New York
and the opinion expressed below is limited to the laws of the State of New
York and the General Corporation Law of the State of Delaware. Andre Weiss,
Secretary of the Company, is a member of this Firm.
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Upon the basis of and subject to the foregoing, we are of the
opinion that the Company has the full power and authority under the General
Corporation Law of the State of Delaware, and under its Restated Certificate
of Incorporation and Amended and Restated By-Laws, to issue the Common Stock
reserved for issuance under the Plan, and that such shares of Common Stock are
validly authorized shares of Common Stock, and when issued and delivered in
accordance with the Plan, will be legally issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as an exhibit to
the Registration Statement and to the reference to our Firm in Item 5,
Interests of Named Experts and Counsel, of the Registration Statement. In
giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act or the
rules and regulations of the Commission promulgated thereunder.
Very truly yours,
Schulte Roth & Zabel LLP
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FORM TYPE S-8
Exhibit 23.1. Consent of Ernst & Young LLP
Consent of Independent Auditors
We consent to the reference to our firm under the caption
"Experts" in the Registration Statement (Form S-8) and related Prospectus
pertaining to the Toys "R" Us, Inc. 1997 Employee Stock Option Plan and to the
incorporation by reference therein of our report dated March 11, 1998, with
respect to the consolidated financial statements of Toy "R" Us, Inc. and
subsidiaries incorporated by reference in its Annual Report (Form 10-K) for
the year ended January 31, 1998, filed with the Securities and Exchange
Commission.
ERNST & YOUNG LLP
New York, New York
August 14, 1998
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