Microsoft Word - code_ethics

Revised November 2003

Dear Toys “R” Us Colleague:

The reputation and success of Toys “R” Us, Inc. and its subsidiaries worldwide is based

upon many things, including the talent, work ethic and proper conduct of our associates.

Proper conduct includes a commitment to comply with our internal policies and

procedures and the letter and the spirit of the law. It also means that our associates must

act honestly and follow high standards of business and personal ethics.

We are committed to conducting “business with integrity.” To ensure that we continue to

live up to that commitment, we have created the attached Code of Ethical Standards and

Business Practices and Conduct, which outlines the way in which the Company will

conduct business. This Code is designed to assist the Board of Directors of Toys “R” Us,

Inc. and our management to better focus on areas of ethical risk, provide better guidance

to our associates to help them recognize and deal with ethical issues as they arise, provide

better mechanisms to report any unethical conduct and foster a corporate culture of

honesty and accountability.

All of our salaried associates are required to read the attached Code and to comply fully

with its requirements. If you have any questions as to the Code’s meaning, please seek

advice from your supervisor, the Executive Vice President responsible for your

department, Toys “R” Us, Inc.’s General Counsel, one of the Ombudspersons listed in the

“Ombudspersons Contact List” distributed with this Code, or anyone else that the Code

lists as a contact person for your questions. If you have issues that you wish to raise with

anyone at Toys “R” Us or its Board of Directors, please follow the suggestions in the

Code. There is no substitute for the exercise of common sense and good judgment.

Please also sign the attached Certificate of Compliance and, as soon as possible and in no

event later than three weeks after your receipt of this Code, return the Certificate to the

Ombudsperson named at the top of the Certificate. Your signature indicates that you

have read, understand and agree to comply with the Code. If you are an associate at or

above the “C” band level, or serving in a buying capacity, you will also be required to

certify your compliance with this Code on an annual basis to ensure your familiarity and

continued commitment to comply with the Code.

We appreciate your continued commitment to conducting “business with integrity,”

which has been a consistent foundation of our organization’s success through the years.

Sincerely,

[Facsimile Signature of John Eyler to be included here]

John H. Eyler, Jr.

Chairman of the Board, President and Chief Executive Officer

TOYS “R” US, INC. AND SUBSIDIARIES

CODE OF ETHICAL STANDARDS AND

BUSINESS PRACTICES AND CONDUCT

I. Introduction

Toys “R” Us, Inc. and its subsidiaries worldwide (referred to in this Code of

Ethical Standards and Business Practices and Conduct as the Company) are committed to

conducting “business with integrity.” To ensure that we continue to live up to that

commitment, we have created this Code, which outlines the way in which the Company

will conduct business. This Code is designed to assist the Board of Directors of Toys

“R” Us, Inc. (referred to in this Code as the Board) and management to better focus on

areas of ethical risk, provide better guidance to the Company’s associates to help them

recognize and deal with ethical issues as they arise, provide better mechanisms to report

any unethical conduct and foster a corporate culture of honesty and accountability. Each

member of the Board (referred to in this Code as a Board Member) and associate of the

Company (the word associate includes any salaried officer or employee) has an

obligation to obey this Code.

This Code requires each Board Member and associate to personally model the

behaviors described in the Code, as well as to report any observed or suspected

violations. To that end, the Company has outlined below a process for surfacing and

addressing any violations, concerns, issues or questions that a Board Member or associate

may have regarding the financial, ethical or legal affairs of the Company, without fear of

retaliation.

In order to protect associates who report potential instances of financial

misconduct or other violations of the law or this Code or who cooperate in any related

internal or external investigations, the Company has implemented a “no retaliation”

policy. This means that retaliation or retribution by the Company or an associate against

another associate for his or her compliance with any law, regulation or standard outlined

in this Code is prohibited and will result in serious disciplinary action, up to and

including immediate termination of employment. This policy applies even when an

allegation is ultimately proven groundless, provided the associate raised the issue in good

faith. However, if an associate was involved in improper activity, intentionally made a

false accusation or provided false information during the course of an investigation, he or

she may be appropriately disciplined to the extent permitted by applicable law, regulation

or Company policy, even if that associate was the one who reported the matter or

cooperated in the investigation.

This Code has been reviewed and approved by the Board, and the Board Members

endorse the Code and obey the Code themselves to the same extent as executive officers

of the Company. The Code requires that associates should contact or obtain approval

from the Chief Executive Officer, the General Counsel, a member of the Executive

Committee of the Company, an Executive Vice President, any other officer, an

Ombudsperson, any supervisor, or the Confidential Ethics Hotline described below. To

the extent that associates wish to report directly to the Board or to the outside directors of

the Company, they should address their concerns to the Chair of the Audit Committee of

the Board and may do so by calling the Confidential Ethics Hotline and requesting that

the information be delivered directly to the Board of Directors, or by having a sealed

envelope delivered to the General Counsel of the Company for delivery to the Board of

Directors. In each instance, the information will be conveyed, or the sealed envelope will

be passed on, unopened, to the Chair of the Audit Committee or, if requested, to the Chair

of the Corporate Governance and Nominating Committee. References to associates in this

Code are deemed to apply to Board Members as well and, whenever appropriate, Board

Members themselves should contact or obtain approval from the Board, the Chair of the

Audit Committee of the Board, the Chair of the Corporate Governance and Nominating

Committee of the Board or, where permitted by applicable law or regulation, the General

Counsel.

This Code is neither a contract of employment nor a guarantee of continued

employment.

II. Ombudspersons

To ensure that all associates fully understand this Code and have an opportunity

to address their concerns, if any, we have designated Ombudspersons to whom all

questions and concerns can be addressed. The Ombudspersons are listed in the

“Ombudspersons Contact List” distributed with this Code and can be contacted at the

address, telephone number and fax number included in that list. In lieu of contacting an

Ombudsperson, associates may, in the circumstances described below, contact the outside

ethics hotline (referred to in this Code as the Confidential Ethics Hotline) listed in Exhibit

A to this Code following the procedures described in that Exhibit.

III. General Business Guidelines

1. Compliance with Laws: All associates of the Company must obey all

applicable laws, rules and regulations and must observe the highest standards of business

ethics in conducting their business affairs. The use of the Company’s funds, services or

assets for any unlawful or improper purpose is strictly prohibited. No individual may

engage in the practice of purchasing privileges or special benefits on behalf of the

Company through the payment of bribes, gratuities or other forms of payoff. No

individual may accept payments from domestic or foreign companies in violation of any

law.

2. Compliance with Company Procedures and Policies: From time to time

the Company may adopt policies and standard operating procedures addressing the

manner in which the Company’s business should be conducted. Associates of the

Company must obey all policies and standard operating procedures of the Company

applicable to them in conducting their business activities. All associates of the Company

are responsible for ensuring that all associates and non-salaried employees under their

supervision have knowledge of and understand the importance of obeying all of the

Company’s policies and standard operating procedures applicable to them.

3. Political Contributions: No Company funds or services may be paid or

furnished to any political party or any candidate for (or incumbent in) any public office,

regardless of whether the contributions are legal, unless such contributions are legal and

authorized in writing by Toys “R” Us, Inc.’s Chief Executive Officer, the Chair of the

Audit Committee, the Chair of the Corporate Governance and Nominating Committee, or

the Board.

4. Commercial Bribery: No associate or agent of the Company may engage

in soliciting, receiving, or accepting, either directly or indirectly, any bribe, kickback or

other improper payment from any employee or agent of any supplier, landlord, lessee,

competitor or other person or company dealing with the Company. The activities of any

person or company, whether or not an associate of the Company, who engages in the

conduct described in this paragraph must be reported immediately to Toys “R” Us, Inc.’s

General Counsel or the Confidential Ethics Hotline following the procedures described in

Exhibit A.

5. Use of Vendors: The Company will not knowingly engage in business

with vendors, suppliers or manufacturers who are in violation in any significant respect of

any applicable laws relating to the production, manufacture or distribution of goods,

services or products or any applicable laws affecting labor usage, civil rights, child labor

or safety.

The Company has a separate Supplier’s Code of Conduct that is applicable to all

suppliers of the Company who sell products to the Company for the purpose of resale.

The Company will not knowingly engage in business with any supplier that violates in

any significant respect any provision in the Supplier’s Code of Conduct applicable to the

supplier.

6. Fair Dealing: Each associate of the Company must deal fairly with the

Company’s customers, suppliers, competitors and associates. No associate may take

unfair advantage of anyone through manipulation, concealment, abuse of privileged

information, misrepresentation of material facts or any other unfair dealing practice.

7. No Employment Contracting: As a general rule, the Company does not

utilize employment agreements for its operations within the United States. No associate

of the Company other than the Chief Executive Officer is authorized to enter into

employment agreements on behalf of the Company for its U.S. operations unless the

Company’s Standard Operating Procedures for Entering into Contracts authorizes the

associate to enter into the agreements.

Generally, no associate of the Company other than the Chief Executive Officer or

the President – Toys “R” Us International is authorized to enter into employment

agreements on behalf of the Company for its international operations unless the

Company’s Standard Operating Procedures for Entering into Contracts authorizes the

associate to enter into the agreements. However, where the laws of an individual country

require that employment agreements be entered into, the Country President/Managing

Directors/General Managers, or their designated representatives, responsible for that

jurisdiction may enter into the agreements that are required by law so long as any

agreement relating to the employment of an officer of the Company is also approved in

advance by the Chief Executive Officer or the President – Toys “R” Us International and

by Toys “R” Us, Inc.’s senior employment counsel.

In all situations, the procedures included in the Company’s Standard Operating

Procedures for Entering into Contracts must be followed prior to entering into any

employment agreement. Except as described above, all associates of the Company are

strictly forbidden from communicating in any way that any offers of employment for the

Company’s operations are contracts for employment.

8. Public Disclosure: It is the Company’s policy that all periodic reports

required to be filed by the Company with the Securities and Exchange Commission (for

example, the Company’s Form 10-K and Form 10-Q filings), and any public

communications by the Company concerning those reports, contain full, fair, accurate,

timely and understandable disclosures. It is also the Company’s policy that all required

financial filings made by the Company with the Securities and Exchange Commission

comply with the applicable regulations relating to those filings. All associates who are

involved with those filings or public communications must act in furtherance of this

policy.

IV. Professional Conduct

1. Dealings with Suppliers or Customers of the Company:

a) Acceptance of Gifts, Meals and Entertainment: The Company

generally prohibits the acceptance from suppliers or customers of the Company of any

gifts or gratuities, whether in the form of money, merchandise, services, meals,

entertainment, travel or any other form. If permitted by applicable law, a gift may be

accepted by an associate from a supplier or customer if the gift is (i) a perishable item

(for example, food) that has little or no resale value, (ii) any other noncash gift valued at

less than $50 provided the gifts are not received on a regular or frequent basis, (iii) a meal

or entertainment that is permitted by this paragraph, or (iv) approved by an

Ombudsperson on the basis that acceptance of the particular gift serves a legitimate,

business-related purpose. If gifts or gratuities prohibited by this Code are received by

an associate, the prohibited gift or gratuity must be returned to the supplier or customer

or, if appropriate, turned over to the Company, and the associate, his or her supervisor or

the Executive Vice President responsible for his or her department must request that the

supplier or customer stop giving prohibited gifts or gratuities in the future. If permitted

by applicable law, acceptance by an associate of a reasonable meal or reasonable

entertainment that is consistent with generally accepted and customary practices is not

prohibited, but an associate is not permitted to accept travel or vacation arrangements

unless an Ombudsperson and the Chief Executive Officer or the General Counsel

approves the arrangements in advance. Attending sports or theatrical events as a guest of

a supplier or customer involves an acceptable and customary business practice if kept

within reasonable limits. An associate must report to his or her supervisor and the

Executive Vice President responsible for his or her department any gift, meal or

entertainment that he or she accepts from a supplier or customer, other than a meal that is

valued at less than $50 and that is otherwise permitted by this paragraph.

Notwithstanding all of the above, an associate must never accept a gift that limits or

influences the associate’s business judgment in any way or could reasonably be perceived

to affect his or her business judgment.

If an associate has any concerns or questions about the appropriateness of

accepting a particular gift, meal or entertainment, he or she is responsible for checking

with his or her supervisor, the Executive Vice President responsible for his or her

department or an Ombudsperson in advance of accepting the gift, meal or entertainment.

b) Buying Merchandise and Other Tangible Property from or

Obtaining Services from Suppliers for Personal Use: With the prior written approval of

an Ombudsperson, associates may purchase items from suppliers not sold in the

Company’s stores or obtain services from suppliers at a price which is reasonable and no

less than the supplier’s normal cost. Associates must detail these purchases in writing to

an Ombudsperson prior to receiving the goods or services. Each Ombudsperson will

keep a record with full details of each transaction where he or she gives this approval to

ensure the purchases are not disguised gifts. These purchases by associates should be

infrequent and should be discouraged.

c) Selection of Vendors and Suppliers of Goods and Services: The

selection of a vendor or other supplier of goods or services to the Company must be

based on quality, need, performance and cost. In dealing with vendors, it is the

responsibility of all associates to promote the best interests of the Company, within legal

limits, through attention to opportunities and the obtaining of fair terms and treatment for

the Company, without any favoritism based on familial relationship, friendship, race, sex,

national origin or disability. In all situations, the procedures included in the Company’s

Standard Operating Procedures for Entering into Contracts must be followed prior to

entering into any agreement with a vendor or supplier. In addition, the procedures

included in the Company’s Standard Approval Policies and Procedures for Engaging our

External Auditors must be followed prior to engaging the Company’s outside auditors to

provide any services to the Company.

2. Consultants: Agreements by the Company with agents, representatives,

and consultants must clearly describe the actual services to be performed, the basis for

earning the fee involved, and all other significant terms and conditions. Payments must

be reasonable in amount and bear a reasonable relationship to the value of the services

rendered. The Company may not knowingly permit the agents, representatives and

consultants to take actions on behalf of the Company that would be in violation of this

Code. In all situations, the procedures included in the Company’s Standard Operating

Procedures for Entering into Contracts must be followed prior to entering into any

agreement with an agent, representative or consultant.

3. Competition: The Company believes in fair and open competition.

Associates are prohibited from entering into arrangements with competitors affecting

pricing, marketing or labor policies or affecting terms or conditions of sale. Any

questions concerning these prohibitions should be directed to an Ombudsperson, the

General Counsel or the Confidential Ethics Hotline following the procedures described in

Exhibit A.

4. Accurate Records; Payments to Government Personnel; Foreign

Corrupt Practices Act Compliance: The Company is committed to maintaining high

standards of business conduct in the U.S. and abroad. Each asset, liability, expense and

other transaction must be accurately recorded in the Company’s regular books of account

with an adequate description of its purpose or origin. The Company strictly forbids the

making of false or artificial entries in its books and records and the establishment or

maintenance of any unrecorded fund or asset for any purpose. No payment may be used

for any purpose other than the purpose described in the books and records of the

Company. No payment may be made directly or indirectly to obtain favorable action by

a government agency. Gifts or services to, or entertainment of, government personnel are

generally prohibited since they can be construed as attempts to influence government

decisions in matters affecting the Company. To ensure that the Company and its

associates obey applicable laws, government personnel may not be provided gifts or

services or entertained without the prior approval of the General Counsel. No associate

may engage in any arrangement that results in any transaction or act prohibited by this

Code or the Foreign Corrupt Practices Act.

5. Confidentiality of Information: The proprietary information, trade

secrets, business plans, budgets, projections, sales data, other financial data, business

trends, formulas, strategies and forecasts of the Company, the terms and conditions of the

Company’s merchandising arrangements, the names and/or addresses of customers,

prospective customers, suppliers or prospective suppliers, and any other types of

confidential data or information of the Company or any of the Company’s customers or

suppliers that associates obtain or create in the course of their employment with the

Company (together with the types of information described in the next sentence required

to be maintained in a confidential manner, referred to in this Code as Confidential

Information) are confidential. The Company also requires that information relating to

personal health, performance evaluations, promotability, and compensation data must be

maintained in a confidential manner for the protection of individual privacy to the extent

appropriate, and access to this type of information has generally been restricted to

authorized individuals within the Company. Each associate must protect and maintain

the confidentiality of any Confidential Information during the period of his or her

employment and indefinitely after his or her employment ends unless (i) the information

becomes known to the public or generally available to the public through no action by the

associate and no fault of the associate; (ii) an officer of the Company authorizes the

disclosure of Confidential Information for a legitimate, business-related purpose; or (iii)

disclosure of the Confidential Information is required by applicable law or regulation, the

associate has provided the Company with prompt notice of the disclosure requirement

and the associate has fully cooperated with any effort by the Company to obtain an

appropriate protective order permitting non-disclosure prior to making the disclosure.

Associates of the Company should address any questions they may have to an

Ombudsperson, the General Counsel, any other officer of the Company or the

Confidential Ethics Hotline following the procedures described in Exhibit A, as to

whether particular information is confidential and prohibited from disclosure.

Unauthorized theft or disclosure of Confidential Information by an associate, through

Internet “chat rooms” or other ways, may result in civil or criminal penalties and/or

disciplinary action up to and including termination of employment.

6. Insider Trading: It is illegal and in violation of the Company’s policy for

any associate of the Company or any other person who is aware of material, nonpublic

information relating to a company to purchase or sell the company’s stock or any other

securities of or relating to the company or to recommend trading to outsiders (including

friends and relatives) while having access to the material, nonpublic information. In

addition to potential legal liability to third parties and civil and criminal liability, the

Board and management are concerned with the adverse effect on the Company and its

stockholders resulting from such “insider trading.” Any associate of the Company who

trades or recommends trading on material, nonpublic information will be considered to

have engaged in gross misconduct and will be terminated from employment with the

Company.

Many associates have access to corporate information that is not generally

available to the public or that, due to the inadequate passage of time after public

disclosure, has not yet been digested by the securities markets. Significant legal risks,

including civil or criminal penalties, arise if this information would be, or has a

substantial likelihood of being, of “importance” to a “reasonable” investor. The

determinations of what is and what is not “important” and who is a “reasonable” investor

require the exercise of judgment. Because of the broad scope of the underlying concept,

it is impossible to identify a “rule of thumb” that applies in all situations. As a result,

common sense and good judgment must be the guiding principles.

In the case of the Company, a common example of material, nonpublic

information is sales or earnings information that is not yet publicly released -- buying or

selling the Company’s stock while in the possession of this type of information is strictly

prohibited. The prudent policy would be to delay all purchases or sales until twenty four

(24) hours after the regular public releases of this information. In addition, buying or

selling the Company’s stock or any other securities of or relating to the Company is

strictly prohibited during the months of November and December and until twenty four

(24) hours following Toys “R” Us, Inc.’s press release concerning its Holiday sales

information. This press release is typically issued in early January. These restricted

trading periods do not apply to systematic purchases through a Company stock purchase

plan where the election to purchase those shares was made at a date prior to the restricted

trading period, but this restricted trading period does apply to any sale of those shares.

The Company may also establish other limited exceptions where purchases that would

not be considered insider trading may be made by associates during restricted trading

periods.

Each executive officer of Toys “R” Us, Inc. must also follow the Amended and

Restated Policy Statement on Trading in Toys “R” Us Securities by Directors and

Executive Officers and any future amendments to the policy; all other officers of Toys

“R” Us, Inc. must also follow the Policy Statement on Trading in Toys “R” Us Securities

by Officers and any future amendments to the policy; and all international executives of

the Company must also follow the Policy Statement on Trading in Toys “R” Us

Securities by International Executives and any future amendments to the policy. All

associates must follow any trading policies applicable to them that the Company may

implement in the future to assist associates in obeying the insider trading laws. The

Company also prohibits associates of the Company from trading any “put” or “call”

options in the Company’s stock at any time, unless an equity compensation plan of the

Company approved by the Company’s stockholders permits the trading under the

circumstances in which the trade was made. Similarly, it is against Company policy for

associates to engage in any short sales of the Company’s stock, including sales against

the box, at any time. In addition, each associate is prohibited from trades at any time of

any other derivative type of security (other than stock options issued by the Company)

directly linked to the Company’s stock, except that any securities that are publicly issued

by the Company may be traded by an associate if he or she is not aware of any material,

nonpublic information and obtains the prior approval of Toys “R” Us, Inc.’s Chief

Financial Officer, General Counsel or Treasurer prior to making the trade.

Questions relating to whether information is material or nonpublic or relating to

the Company’s policies on trading stock, options or other securities should be addressed

to the Chief Financial Officer, General Counsel or Treasurer prior to making any trade.

7. Outside Interests: Company policy strongly discourages full-time

associates from holding a second job. An associate may not hold a second job, or own or

operate a business, that creates a conflict of interest or in any way interferes with the

associate’s job performance for the Company. Any associate must request authorization

from his or her immediate supervisor if he or she has or expects to have a second job.

V. Fraternization

The Company believes that fraternization (such as dating or other types of

repetitive socializing outside the normal business relationship) between associates where

there is a direct or indirect reporting relationship puts undue pressure on the working

relationship. Even if the fraternization is innocent, it can lead at the very least to claims

of favoritism and to potential claims of harassment or vindictiveness. Therefore,

fraternizing where there is a direct or indirect reporting relationship is strongly

discouraged.

An associate is required to report to his or her supervisor, the Executive Vice

President responsible for his or her department or an Ombudsperson any fraternization

between him or her and an associate who has a direct or indirect reporting relationship

with him or her. The Company will not initially discipline associates who fraternize with

other associates with whom they have a direct or indirect reporting relationship provided

that relationship has been disclosed to the Company as described above. However,

repetitive fraternization by an associate, after the Company has warned the associate to

stop the fraternization, shows poor judgment and can subject the associate to disciplinary

action up to and including termination.

Where fraternization occurs between associates who have a direct or indirect

reporting relationship, the Company will require that the fraternization end or that a

transfer occur. If the associates do not immediately end the fraternization upon a request

that they do so by the Company, the Company will work with both associates to arrange a

transfer which is acceptable to all concerned (including the Company). However, where

a transfer is not available, the Company will require that the fraternization end

immediately or that one of the two parties resign. In that situation, unless the

fraternization ends immediately or there is an agreement on the resignation, the Company

will terminate the least tenured of the two associates with the Company.

VI. Acts of Harassment or Discrimination

The Company has a long-standing policy against any acts of harassment and

discrimination due to a person’s race, religion, national origin, gender, age, marital status,

sexual orientation, disability, etc. The Company believes that all people have a right to

work in a comfortable environment free from harassment and discrimination and that

harassment or discrimination of any kind is a form of misconduct that undermines the

integrity of the employment relationship.

All complaints of discrimination will be treated confidentially to the extent

possible. Any associate who believes he or she has been harassed or discriminated

against should report the alleged action immediately to his or her supervisor, the

Executive Vice President responsible for his or her department, an Ombudsperson, the

General Counsel, or any other individual designated to receive these reports under

Company policy, including the Chief Executive Officer, or the Confidential Ethics

Hotline following the procedures described in Exhibit A. Prompt action will be taken to

investigate and act on complaints of conduct in violation of the Company’s policy. If a

claim has validity, appropriate discipline and corrective action up to and including

termination will be directed at the offending parties.

VII. Maintaining a Safe Work Environment

In the interests of maintaining a safe working environment for all associates,

Company policy requires a drug-, alcohol- and weapons-free work environment. We

have incorporated programs into our Health Plan to assist those individuals who have

drug or alcohol problems. At the same time, however, each individual is responsible and

accountable for his or her own actions regarding alcohol abuse or the use of illegal drugs.

Any individual under the influence of alcohol or illegal drugs at work or who

brings those items or any weapons onto Company property is subject to appropriate

disciplinary action up to and including termination of employment.

Each person has responsibility for monitoring his or her workplace and reporting,

within our Company guidelines, any potential issues with weapons, drugs or alcohol

involving his or her subordinates or of any other associates of the Company when he or

she becomes aware that these problems exist. All associates must share in this

responsibility if we wish to maintain a safe work environment at the Company.

VIII. Authorized Use of Company Property

As with all assets of the Company, telephones, computers, fax machines and

electronic mail are intended for authorized business use only and may not be used for

personal matters except on an occasional or extraordinary basis. For instance, frequent

use of the Company’s computers for personal shopping is prohibited. Each associate

must protect the Company’s assets and ensure their efficient use for legitimate business

purposes. Misappropriation of corporate assets and theft, carelessness and waste have a

direct adverse impact on the Company’s profitability and are therefore prohibited. No

associate may take for personal use any products or other property of the Company

without the prior approval of the Board or a committee of the Board.

Authorized Company personnel have access to all information stored on the

Company’s computers, including the voice and e-mail systems. This access may be used

for the purposes of receiving business information, trouble shooting, preventing system

misuse, assuring compliance with policies and any other authorized purpose. Therefore,

all documents and messages stored in Company files, disks, hard drives, storage areas, e-

mail (including deleted e-mail) or voicemail may be accessed and reviewed by authorized

personnel without notice.

IX. Information Systems Security

The Company’s information systems and the data they contain are critical to the

daily operation and success of the Company’s organization. Access to computer systems

and networks impose responsibilities and obligations on the user.

Users have the responsibility to ensure that electronic documents and files are

protected from unauthorized use and an obligation to report instances where unauthorized

access has been gained to any confidential data. In making acceptable use of information

resources, the following guidelines must be obeyed:

Information resources are to be used only for authorized business purposes;

Access should be made only to files and data that are your own, to which you

have been given authorized access or that are intended for public availability;

User IDs and passwords should be kept confidential and changed as needed to

maintain their confidentiality;

Users are responsible for all activities on their user ID or that originate from their

system;

Important data and documents should be backed up as often as necessary. You

are responsible for the backup of your data regardless of location. (The backup

frequency for data stored on a file server will vary depending on who is

administering the system; data stored on a local hard drive is not automatically

backed up.);

Only legal versions of copyrighted software should be used and that use must be

in compliance with vendor license requirements. Duplicating software or violating

the licensing agreement is considered to be a violation of these standards.

The above general guidelines obviously cannot cover all situations; protection and

security of data maintained electronically is everyone’s responsibility and requires good

judgment.

X. Conflicts of Interest; Corporate Opportunities; Investing in Suppliers and

Vendors

1. Conflicts of Interest: A “conflict of interest” occurs when an individual’s

private interest interferes (or even appears to interfere) with the interests of the Company

as a whole. A conflict of interest can arise when an associate takes actions or has

interests that may make it difficult to perform his or her work for the Company

objectively and effectively. Conflicts of interest also arise when an associate (or a

member of his or her family) receives improper personal benefits as a result of his or her

position in the Company.

Each associate must avoid “conflicts of interest.” Each associate must promptly

report to his or her supervisor, the Executive Vice President responsible for his or her

department, an Ombudsperson, or, in the case of a conflict of interest that is not the

reporting associate’s conflict of interest, the Confidential Ethics Hotline following the

procedures described in Exhibit A, the existence of any actual or potential conflict of

interest of which the associate is aware or in which the associate is involved. In the case

of a conflict of interest involving a member of the Board of Directors or a member of the

Company’s Executive Committee, the report will be forwarded to the Corporate

Governance and Nominating Committee of the Board of Directors. After receiving a

report of an actual or potential conflict of interest, the Corporate Governance and

Nominating Committee will decide whether a conflict of interest in fact exists and

whether steps should be taken to minimize any effects of a conflict.

Notwithstanding the above, any actual or potential conflict of interest involving

an associate who is also a Member of the Board of Directors must be reported and

addressed by following the procedures described in the “Conflicts of Interest” section of

Toys “R” Us, Inc.’s Corporate Governance Guidelines and any future amendments to

those Guidelines.

The Company is prohibited from making personal loans to any of its executive

officers. Additionally, loans to, or guarantees of obligations of, any other associate of the

Company or any member of his or her family should generally be avoided and may not

be made without the prior written approval of the Chief Financial Officer or Toys “R”

Us, Inc.’s senior officer of Human Resources.

2. Corporate Opportunities: Each associate of the Company is prohibited

from (a) personally taking for himself or herself opportunities that are discovered through

the use of corporate property, information or position; (b) using corporate property,

information or position for personal gain; and (c) competing with the Company. Each

associate of the Company owes a duty to the Company to advance the Company’s

legitimate interests when the opportunity to do so arises.

3. Investing in Suppliers and Vendors: In order to minimize potential

conflicts of interest, no associate may invest in any security (stocks, bonds, options, short

sales, etc.) of, lend money to, receive a loan from, or otherwise invest in, a supplier or

vendor of the Company or the supplier’s or vendor’s parent companies or subsidiaries

(together referred to in this Code as the Prohibited Suppliers or Vendors), other than

investments of under 1% of the outstanding securities of a public company. Investments

in broad based mutual funds that may invest in Prohibited Suppliers or Vendors is not

deemed to be a violation of this paragraph. Each associate of the Company must report

to an Ombudsperson any current investments in or loans to or from any Prohibited

Supplier or Vendor (other than investments of under 1% of the outstanding securities of a

public company). Following a discussion with the associate, the Ombudsperson will

decide whether the investment must be divested or whether the loan must be repaid to

avoid a conflict of interest. For the purposes of this paragraph, the term “invest” or

“investment” includes any investment personally owned or beneficially owned by family

members, nominees, or others where the effect is that the associate derives any benefit

from the investment.

You are prohibited from buying or selling any securities of any company,

including any Prohibited Supplier or Vendor, when you are aware of material, nonpublic

information relating to the company, as discussed above.

XI. Compliance Standards and Procedures

1. Anonymous/Confidential Reporting Process: Before getting into the

specifics of the reporting process itself, it is important for associates to understand the

issues they are required to report, versus those they are merely encouraged to raise, so as

to avoid any potential misunderstandings.

Any associate with knowledge of financial wrongdoing (i

.e., wrongdoing related

to any internal accounting controls or accounting, auditing or financial matters), illegal or

unlawful conduct or substantive violations of this Code is required

to report this

information to a member of the Executive Committee of the Company, the General

Counsel or the Confidential Ethics Hotline following the procedures described in Exhibit

A. This requirement is for the benefit and protection of our Company, our associates and

our stockholders. If the associate believes it more appropriate to report directly to the

outside directors of the Company, the associate may ask that his or her communication

via the Confidential Ethics Hotline or by sealed envelope directed to the General Counsel

be directed to the Chair of the Audit Committee of the Board of Directors. All such

requests will be honored. Because of the significant legal and business consequences at

stake, an associate’s failure to report this information may result in serious disciplinary

action, up to and including termination of employment.

To the extent associates have concerns or questions or need clarification or advice

regarding financial or ethical issues, the Company strongly encourages associates to

surface those concerns, questions or issues so that they may be addressed. Several

different options are available: Associates may speak directly with their supervisors; they

may raise the issues with the Executive Vice Presidents responsible for their departments;

they may contact one of the Company’s Ombudspersons or the General Counsel; or they

may contact the Confidential Ethics Hotline following the procedures described in

Exhibit A. The important point here is not which avenue an associate chooses, but rather

that the issue is surfaced so that it may be addressed and resolved appropriately.

To the extent associates have concerns or questions or need clarification or advice

regarding legal issues, the Company strongly encourages associates to surface those

concerns, questions or issues to the General Counsel, or to the Confidential Ethics

Hotline following the procedures described in Exhibit A.

Associates who report a violation or surface a concern or issue regarding the

financial, ethical or legal affairs of the Company may request anonymity. In those cases,

the Company will take all necessary steps permitted by applicable law and regulation to

protect the reporting associate’s identity.

2. Cooperating with Investigations: Linked with the obligation to report

financial misconduct and other violations of the law and this Code, is the obligation of all

associates to fully cooperate in any related investigations. Whether those investigations

are internal ones conducted by the Company or external ones conducted by a

governmental, regulatory or law enforcement agency, all associates are required to fully

cooperate. Again, given the potentially significant legal and business consequences

involved, an associate’s failure to cooperate in these investigations may result in serious

disciplinary action, up to and including termination of employment.

3. Certification of Compliance: Each new associate will be required to

certify his or her compliance with this Code at the beginning of his or her employment.

In addition, each associate at or above the “C” band level, or serving in a buying

capacity, will be required to certify his or her compliance with this Code on an annual

basis.

XII. Waivers.

An associate who would like to receive a waiver from any provision of this Code

must direct his or her request to the General Counsel. After proper investigation, the

General Counsel will forward the request to the Board of Directors, the Audit Committee

or the Corporate Governance and Nominating Committee. Any waiver from this Code

must be granted by the Board of Directors, the Audit Committee or the Corporate

Governance and Nominating Committee, and any waiver from this Code for an executive

officer of Toys “R” Us, Inc. will be promptly and fully disclosed to the extent required by

applicable law or regulation.

(Please return this Certificate of Compliance to

Deborah Derby, Executive Vice President – Human Resources, as soon as possible and in

no event later than three weeks after receipt of this Code)

CERTIFICATE OF COMPLIANCE WITH

REQUIREMENTS OF CODE OF ETHICAL

STANDARDS AND BUSINESS PRACTICES AND CONDUCT

I hereby certify that I have read and understand the Toys "R" Us, Inc. and

Subsidiaries Code of Ethical Standards and Business Practices and Conduct, dated

November 2003, and certify that I have complied with, and that I will continue to comply

with, this Code, except as noted below. I also certify my understanding that any failure

by me to comply with this Code may result in disciplinary action against me, up to and

including termination of employment.

(If you believe there are exceptions that pertain to you, please indicate by

checking the exception box below and supplying all details. The exceptions will be

reviewed by an Ombudsperson. You will be advised of the determination for any

exceptions so indicated.)

□ I believe that the attached exceptions pertain to me (see details attached).

Signature: ___________________________________________

Print Name: ___________________________________________

Job Title: ___________________________________________

Division: ___________________________________________

Dept-Location/Area-Store: _______________________________

Date: ___________________________________________

Exhibit A

Procedures for Calling the Confidential Ethics Hotline

The Company’s outside ethics hotline provider is a company named The Network, Inc.

If you are calling in the United States, you may call the outside ethics hotline at the

following toll free number: __________.

If you are calling in Canada, Puerto Rico or the U.S. Virgin Islands, you may call the

outside ethics hotline at the following toll free number: _________.

If you are calling outside the United States, Canada, Puerto Rico or the U.S. Virgin

Islands, you may call the outside ethics hotline by calling your local operator and

requesting that the operator place a call to the United States and reverse the charges. The

telephone number that should be provided to the operator for these purposes is the

following: ________. There will be a short delay in connecting the call to the United

States. Please be patient. The call is free, and the charges will be accepted by the outside

ethics hotline. If you wish to remain anonymous for your call, you may tell the operator

your name is Toys “R” Us so that the operator will connect you to the outside ethics

hotline.

When you call the telephone numbers described above, you will be greeted by an

interviewer. You do not need to provide the interviewer your name if you would like to

remain anonymous. If you do not speak English or Spanish, you should tell the

interviewer the name of the language you speak. You will then be asked to “please hold”

while an interpreter joins the call.

The interviewer will have a discussion with you and document your call. When you call,

you should try to have all of the relevant information available so that your report,

question or concern can be documented accurately. At the end of the call, the interviewer

will assign a reference number to you. If you are an anonymous caller, the interviewer

will ask you to make one follow-up call to the same telephone number at a future date.

You may also use the same telephone number and reference number at any time if you

would like to provide additional information to your original call. The information from

any of your discussions with the interviewer is then relayed to the Company’s

management to investigate or respond to your report, question or concern; or, if you so

request, the information will be delivered directly to the Chair of the Audit Committee of

the Board of Directors or to the Chair of the Corporate Governance and Nominating

Committee of the Board of Directors. Using that reference number and the scheduled

date given to you by the interviewer for the follow-up call, you may call the same

telephone number for the follow-up call, at which time you may be asked additional

questions or asked to provide additional information.

Associates must maintain the confidentiality of the name of the outside ethics hotline and

the telephone numbers referenced in this Exhibit A, unless disclosure of that information

is authorized by an Ombudsperson or the General Counsel.

Ombudspersons Contact List

Deborah Derby, Executive Vice President – Human Resources

Toys “R” Us, Inc.

One Geoffrey Way

Wayne, New Jersey 07470

Tel:

Fax:

Richard N. Cudrin, Vice President – Labor and Employment Counsel

Toys “R” Us, Inc.

One Geoffrey Way

Wayne, New Jersey 07470

Tel:

Fax: