Toys R Us Shareholders Meeting - Final.

Original Source: FD (FAIR DISCLOSURE) WIRE

JOHN EYLER, CHAIRMAN OF THE BOARD OF DIRECTORS AND CEO, TOYS "R" US, INC.: Good morning everyone. Welcome to our annual meeting of Toys "R" Us. And will the meeting please come to order.

I'm John Eyler, I'm Chairman of the Board of Toys "R" Us, Inc. I'd like to welcome you all here to our annual shareholders' meeting.

First of all, I'd like to introduce the ladies and gentlemen who are the board of directors of our company. And I might add that our entire board is made up of independent directors, other than myself. I'm the only inside director.

So if each of them would stand when I call their name: RoAnn Costin, RoAnn's been a director since 1996; Roger Farah, Roger's been a director since 2001; Peter Georgescu, Peter's been a director since 2001; Cinda Hallman, who's been a director since 2003; Calvin Hill, Calvin's been a director since 1997; Nancy Karch, who's been a director since 2000; Norman Matthews, a director since 1995; Arthur Newman, a director since 1997; and our newest director, Frank Noonan, who became a director earlier this year.

Before I talk about developments over this past year and our prospects for the future, I'd like to proceed with the official business of the meeting. Christopher Kay is our Corporate Secretary and he will act as secretary of the meeting. There are a number of things that we would like to cover in today's meeting. So first I'd like to address those issues involving the voting of our stockholders upon a variety of issues.

Chris, would you like to come and explain the voting?

CHRISTOPHER KAY, CORPORATE SECRETARY, TOYS "R" US: Good morning. On or about April 14, 2004 the notice of the annual meeting of the stockholders, together with the company's proxy statements, proxy card and annual report were mailed to all stockholders of record at the close of business on April 9, 2004.

I've submitted a certificate of mailing of the notice of the meeting and a complete list of stockholders entitled to notice of and to vote at this meeting has been on file and available for inspection during the ordinary business hours at our corporate headquarters, located at One Geoffrey Way, Wayne New Jersey for at least the past ten days and is now present and available for inspection by stockholders during this meeting.

Joseph Wolf (ph), seated in the back, is a representative from the American Stock Exchange and the trust company, is the company's stock transfer agent, and he is the judge of the election for this meeting.

If there are any stockholders present who hold proxies and have not submitted them to the Judge of Elections, would you please raise your hand so they may be collected?

We have two here on this side, Mr. Wolf, the lady in blue and this gentleman at the other end of the rope.

Are there any other proxies? Seeing that all the proxies have been collected, as will be certified by the Judge of Elections, there are present in person or represented by proxy, the holders of the majority of the 214,486,423 shares outstanding on the record date, entitled to vote at this meeting.

Accordingly a quorum is present and we may proceed with the business of our meeting. The judge has signed oath of office and certificate verifying this meeting's quorum, and the election results will be attached to the minutes of this meeting.

I now declare the annual meeting of the stockholders of Toys "R" Us Inc. to be officially convened. I declare the polls open at 8.37 am.

The first scheduled order of business is the election of directors. The Board of Directors has nominated each of the following individuals to serve as directors until the next annual meeting of stockholders, or until their successors have been elected and qualified.

The nominees are - RoAnn Costin, John H. Eyler Jr., Roger N. Farah, Peter A Georgescu, Cinda A. Hallman, Calvin Hill, Nancy Karch, Norman S. Matthews, Arthhur B. Newman and Frank R. Noonan.

No other persons have been nominated for election as a director in accordance with the bylaws of the company. Therefore, the nominations are declared closed.

If you would, please hold your general questions regarding the company for the question and answer period at the end of the meeting. However, if there are any questions regarding the proposal to elect the directors, please raise your hand and we can address it at this time.

Seeing none, we'll move to the second order of business. The second scheduled order of business is a stockholder proposal concerning voting. The company received timely notice of this proposal, which was printed, together with the proponent's supporting statement, and the company's recommendation against this proposal in the company's proxy statement for this meeting.

The united Brotherhood of Carpenters' pension fund proposed to the Board of Directors it initiate the appropriate process to amend the company's governance documents, those being the articles of incorporation and the bylaws, to provide the nominees standing for election to the board of directors must receive the vote of a majority of the shares entitled to vote in present in person, or by proxy, at an annual meeting of shareholders in order to be elected or reelected to the board of directors.

We have a representative from the United Brotherhood of Carpenters' Pension Fund present, and I will now recognize him for him to make a brief statement of no more that three minutes in length concerning this proposal.

RAYMOND CONTE, REPRESENTATIVE, UNITED BROTHERHOOD OF CARPENTERS' PENSION FUND: Mr. Chairman, I'm Raymond Conte (ph) representing the United Brotherhood of Carpenters. The Carpenters, along with building trades pension funds throughout the United States and Canada have over 200 billion in assets under management. Together, our funds hold 981 thousand shares in the company and we are committed long-time shareholders.

Thank you for this opportunity to present our shareholder proposal entitled "Director Election Vote Threshold Proposal." As a Delaware Corporation, the company can specify, in its certificate of incorporation or bylaws, the number of votes necessary for a directed nominee to be elected to the board of directors.

Toys "R" Us has chosen to use polarity vote standards for the election of board members. A polarity vote standard means that, in non-contested corporate elections such as we had here today at Toys "R" Us a director can be elected or reelected if he or she receives just one vote. And since all the directors hold some shares, a director only need vote for him or herself to be elected.

Under this system, no number of withheld votes for a director can keep that director from being elected. We strongly believe that corporate board elections would be a better accountability mechanism if a new, more demanding election vote threshold was established.

We feel a director should elect or reelected only if he or she receives a majority of the votes entitled to vote at a meeting or majority of the votes that actually vote at a meeting. Our proposal presents the higher vote threshold requirement, but a "majority of the vote cast" standard would also be reasonable and demand (ph).

A majority vote requirement for direct elections would se an appropriate threshold of shareholder support necessary for board membership. If there was a more demanding vote requirement for director elections such as we propose, directors would be more accountable to shareholders and shareholder votes, and corporate director elections would have meaning.

Given the considerable obstacles to shareholders initiating corporate director elections challenges, strengthening the director election vote threshold would be meaningful governance reform. To date, more candidates more candidates have won election or reelection with votes in excess of seventy-five percent of the votes cast.

Under the present system, however, the same directors could have been elected against the will of the overwhelming majority of the shareholders by receiving a single vote. Confident in the capabilities and qualities of the company's board candidates, Toys "R" Us should take a leadership role in advancing to more demanding standards for corporate elections.

We urge the company and the board to examine this issue and put the company in the forefront of the effort to bring greater accountability to corporate elections. To this end, we offer the following shareholder proposal.

Resolved that the shareholders of Toys "R" Us hereby request that the board of directors initiate the …